The conventional starting point for determining whether premises are occupied for rating purposes is to apply a series of tests. There must be actual occupation. Such occupation must be exclusive for the particular purposes of the possessor. The possession must be of some value or benefit to the possessor, and it must not be for too transient a period.
R (Secretary of State for Health and Social Care) v Harlow District Council [2021] EWHC 909 (Admin); [2021] PLSCS 73 concerned a dispute about the rates payable by Public Health England in respect of a building in Harlow that it had purchased for redevelopment as its future headquarters. PHE had stored 30 or 40 crates containing documents and other items at the premises between 1 May and 27 June 2018, and during a subsequent six-week period starting in September 2018. But the rating authority refused its claim for empty rates relief.
The rating authority argued that PHE had intended to appear to be in occupation and that its use of the building was only trifling. But the court was satisfied that PHE had occupied the property during both six-week periods in question. The judge explained that actual use of a property – even minimal use, as in this case – combined with an intention to occupy will suffice, whether the motive is rates mitigation or not, so long as the occupier’s purpose goes beyond upkeep and maintenance. The use need not be substantial, as previous cases show. It need not be legally required. It may even be whimsical or eccentric, so long as it serves a purpose – such as obtaining a future rates exemption – of the occupier. But occupation will not be established by placing abandoned goods, which are not worth the trouble of removing, in a property.
PHE was entitled to store its documents and items somewhere. It did not matter that the goods in the crates did not precisely match its description of them. Nor did it matter whether the items were of value to PHE beyond being papers and other items yet to be disposed of and which needed to be stored somewhere until then.
The rating authority’s alternative argument was that PHE had been in actual occupation throughout the relevant period due to the presence of a model of the property, display boards, a boardroom table, tea- and coffee-making facilities and cleaning items, coupled with an intention to hold occasional meetings at the property. However, the judge ruled that the model and display boards did not indicate a present intention to occupy; they indicated an intention to occupy the building in the future, when it became operational. The furniture was acquired with the building, and the floor polishers and cleaning equipment were for the maintenance and upkeep of the property. And holding occasional meetings in the building to discuss its future development, and serving tea or coffee to participants, did not constitute rateable occupation; it was simply preparation for the future exploitation of the property.
It is worth adding that the judgment includes two annexes. The first sets out 12 brief statements of law, designed to help determine similar disputes. The second annex sets out a suggested protocol for the swift and efficient determination of such disputes. The judge explained that the 13 steps suggested in the annex are designed to save time and costs, and to reduce unnecessary controversy and litigation, and warned that parties who fail to comply could face costs sanctions.
Allyson Colby, property law consultant
