England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/05/2013

Mr Justice Sales :

Introduction

1. There are before the court three appeals by way of case stated from magistrates' courts which each raise the same central issue concerning the test for relief for charities from non-domestic rates in relation to the activities of the Public Safety Charitable Trust ("the PSCT"). The proceedings in each case concerned an application by the relevant rating authority to the magistrates' court for a liability order against the PSCT requiring payment of non-domestic rates by the PSCT in respect of commercial properties occupied by it. In this judgment I will refer to the rating authorities as "the Councils". In the first two cases (Milton Keynes and South Cambridgeshire) the Councils were successful and a liability order was imposed. In those cases, the PSCT is the appellant and the Councils are the respondents. In the third case (Cheshire West and Chester), the magistrates' court rejected the Council's application for a liability order. In that case, the Council is the appellant and the PSCT is the respondent. These cases are test cases. The PSCT has taken a large number of leases of commercial properties nationwide with a view to operating in the same way as in these cases and claiming relief from payment of non-domestic rates.

Factual Background

2. The PSCT has a basic method of operation common across all three cases. It takes a lease of commercial premises in respect of which the owner would be liable to pay non-domestic rates (since there is a liability to pay rates in relation to unoccupied commercial premises). It claims to be entitled to relief from payment of rates in respect of the premises. The lease is for a nominal or peppercorn rent; it is subject to a short notice period (say, seven days); and the landlord pays the PSCT a "reverse premium" in respect of its occupation. In this way, the saving in terms of relief from liability for non-domestic rates is shared between the landlord and the PSCT, the loser being the public purse.
3. The PSCT arranges for a broadcasting transmitter or transmitters, each similar in size to a domestic broadband box, to be placed at the premises. This equipment takes up a minimal amount of physical space at the premises. It is connected to the existing power supply. It provides free wireless internet access ("wifi") to anyone within range of the transmitter or transmitters, and they also broadcast Bluetooth messages on crime prevention and public safety related themes to willing recipients who are in range and have a Bluetooth enabled mobile phone. The provision of such a free wifi service and free messages is a service which is charitable in nature: the PSCT is a registered charity.
4. The equipment remains in operation without human assistance, apart from occasional maintenance visits. The premises are otherwise unused.
5. The PSCT becomes liable to pay non-domestic rates by reason of its tenancy of the premises. It claims relief on the basis that it is a charity in occupation of the relevant hereditament (i.e. the unit of property used for rating purposes) and the hereditament is "wholly or mainly used for charitable purposes" (section 43(6)(a) of the Local Government Finance Act 1988 – "the LGFA").
6. The Milton Keynes case concerns office premises at 1^st Floor, Marlborough Court, Sunrise Parkway, Milton Keynes. The premises were leased by the PSCT for one year from 1 April 2011. Four transmitters were installed. The Council, as billing authority, required the PSCT to pay £48,950.38 in rates for the period 1 April 2011 to 31 March 2012. The PSCT applied for 80% mandatory relief under section 43 of the LGFA and for a further 20% discretionary relief under section 47 of the LGFA in respect of those rates. Relief from rates was refused by the Council under section 43 on the basis that the hereditament was not wholly or mainly used for charitable purposes and under section 47 in the exercise of its discretion.
7. Recovery proceedings were commenced in December 2011 seeking the sum of £48,975.38 in unpaid rates from the PSCT. The PSCT resisted payment of 80% of that amount, relying on section 43 of the LGFA. It was common ground that the PSCT is a charity and that it was the rateable occupier of the premises at the relevant time. The issue dividing the parties was whether the hereditament was wholly or mainly used for a charitable purpose. DJ Matthews sitting in the local magistrates' court granted an order requiring the PSCT to pay the full sum. She accepted the Council's submission that the PSCT did not so use the premises.
8. In reaching that conclusion, DJ Matthews had regard to "the limited space within the hereditament used to further the charitable purposes (0.1% would be a realistic estimate), the time for which the hereditament is used for charitable purposes (24/7), the nature of the main use (i.e. empty space, or lack of use), the limited range of the provision of free wi fi and the fact that access is required to the premises infrequently" (para. [10] of her judgment, emphasis in original; also see para. [28]). At para. [30] she held:

"I find that the relevant part of the first floor was mainly redundant. Its main use was therefore not charitable. Marlborough Court had been designated as offices. The relevant part of the first floor office was but minimally in use and rarely attended by anyone. The operation did not require this amount of floor space, most of which was distinctly unused. I have already commented on the limited scope for use of the services. The constant transmission of messages and provision of free wi fi, and the constant use of electricity and phone lines does not detract from my view that the premises were not wholly or mainly used for charitable purposes" (emphasis in original).

9. The South Cambridgeshire case concerns four sets of industrial/business premises: Unit N, Peek House, Sawston; Unit C, 1^st Floor, Peek House, Sawston; Plot 2, The Grip, Linton; and Unit 10C, The Grip, Linton. The first and second were leased by the PSCT from 1 April 2011, the third and fourth from 1 July 2011. In each case, the lease was for 12 months at a rent of £1.
10. The PSCT applied to the Council for relief from rates under sections 43 and 47 of the LGFA. Relief under section 47 was refused by the Council in its discretion. Relief under section 43 was originally refused by the Council on the grounds that the relevant hereditaments were not used "wholly or mainly" for charitable purposes.
11. The Council also informed the Valuation Office Agency ("the VOA") about the nature of the PSCT's occupation of the premises, so that the VOA could consider whether the rating list should be amended. The VOA decided that the list should be amended, which it did on 14 September 2011 to list two distinct hereditaments for rating purposes in respect of each site: the premises ("the main hereditament") and the broadcasting equipment installed at the premises ("the wifi hereditament").
12. The PSCT again sought relief from rates in relation to both hereditaments at each premises. Discretionary relief was again refused. Mandatory relief was granted by the Council in respect of the wifi hereditaments (which the Council accepted were wholly or mainly used for charitable purposes) but refused in respect of the main hereditaments, again because they were not wholly or mainly used for charitable purposes. In January 2012 the Council issued proceedings in the local magistrates' court for a liability order in the sum of £35,339.18 in respect of unpaid rates in respect of the main hereditaments. On 29 March 2012 a bench of lay magistrates heard the case and made the order sought by the Council.
13. According to the statement of case prepared by the magistrates, at paragraph 7, they were of the opinion that:

"…

b) The statutory test as to whether the main hereditaments were used "wholly or mainly" is a question of common sense looking at all of the evidence before us and deciding on a broad basis whether the properties were used wholly or mainly for charitable purposes; further, the nature and intended use of the Units is also a factor to be taken into consideration.

c) The precise boundary between the two hereditaments in each Unit had not been specified, but in any event we did not think that the use of one or two sockets or plugs in the main hereditaments would satisfy the statutory test.

d) The Units are clearly business/industrial premises and the use of them for the charitable purposes of the Appellant was not their intended use.

e) Commercial Links do not have the manpower and time to visit daily the numerous premises the Appellant leases in Cambridgeshire never mind their premises in the rest of the country.

f) Commercial Links had visited the premises infrequently as they could access the wi-fi equipment remotely if required. Accordingly, the use made by the appellant of the Units during the period spanning the Respondent's complaint for liability orders was minimal.

g) Because the use of the main hereditaments was minimal, and not what the buildings were originally intended to be used for, we concluded that the four main hereditaments were not being used wholly or mainly for charitable purposes."

14. The Cheshire West and Chester case concerns a four floor office building at 1 Heritage Court, Lower Bridge Street, Chester. The PSCT leased the premises from 12 December 2010 pursuant to a written lease completed on 7 February 2011. The rent was £1 p.a. with a reverse premium of £7,607.25 payable to the PSCT. There was a similar lease dated 14 February 2012 for the following year. The PSCT placed 13 transmitters in the building. The number could be increased or decreased as the PSCT saw fit, but it appears that the number of transmitters maintained at the building was constant over time.
15. Relief against rates was originally granted by the Council, but that decision was later reviewed. The Council informed the VOA about the nature of the PSCT's occupation of the premises, and the VOA decided to amend the rating list with effect from 12 December 2010 to distinguish between a main hereditament for the building and a wifi hereditament in respect of the PSCT's equipment at the site. The description of the wifi hereditament in the list was given as "wifi site", and its address was given as "wifi site at 1, Heritage Court, Lower Bridge Street, CH1 1RD." Its rateable value is listed as £100. By contrast, the rateable value of the building constituting the main hereditament is £52,500.
16. The Council allowed relief in relation to the wifi hereditament, but as in the other cases refused relief in relation to the main hereditament. The Council issued proceedings in the local magistrates' court for a liability order. The case was heard by DJ Sanders. In a written judgment dated 26 June 2012, he construed the wifi hereditament narrowly, as a hereditament comprising only one of the 13 transmitters at the building (he did not specify which of the 13 it was). That left the remaining 12 transmitters as located in the main hereditament. On that basis, he found that PSCT were using the main hereditament "wholly or mainly" for charitable purposes, there being no other use to which the main hereditament was being put.
17. DJ Sanders was doubtful about the validity of the wifi hereditament: "I struggle to define the WiFi hereditament …" (para. [49] of the judgment); "I can find no precedent for the sort of moveable, transient hereditament which forms the subject of these proceedings …" (para. [51]). He recognised that it was not open to him to determine whether the VOA's decision to list the main hereditament and the wifi hereditament separately was lawful or not, since there was a distinct procedural route available to the PSCT to challenge that decision (paras. [52]-[54]). However, his concerns about the wifi hereditament led him to construe the entry for it in the list narrowly:

"55. I am however faced with the difficulty of interpreting that determination, and that is clearly something which I am entitled to consider. For reasons which I have already outlined, the determination is poorly worded, vague and extremely hard to reconcile with the factual basis of this case.

56. It seems to me that, where there is ambiguity or lack of clarity in the definition of the hereditament, then fairness dictates that the hereditament should be construed narrowly so as to benefit the person liable to pay the rates and not the person seeking to collect the rates. In those circumstances, I have to be satisfied that a separate hereditament exists somewhere within the building and that it contains a Bluetooth/Wi-Fi transmitter. As a matter of fact, I find that the individual transmitters, whilst forming part of a wireless network, are not physically connected and are separate entities.

57. However the VOA did not seek to create 13 separate hereditaments which must mean that at least 12 of the transmitters are located in the wider hereditament which comprises the office building and which is the subject of the current application for a liability order."

18. In relation to the main hereditament, DJ Sanders identified the dispute between the parties as concerning whether the words "wholly or mainly used" in section 43(6) of the LGFA relate to "the amount of actual use of the hereditament" (as submitted by the Council) or "the purpose of the use of the hereditament" (as submitted by the PSCT): paras. [70]-[71]. After a review of authorities, he held that the latter approach is correct, and found that as the only use to which the PSCT put the hereditament was related to the provision of the Bluetooth/wifi service, which the Council accepted was a charitable purpose, the PSCT was entitled to mandatory relief from rates under section 43(6) of the LGFA: paras. [72]-[77].
19. Thus it may be seen that on the main point of interpretation of section 43(6) in issue on these appeals, DJ Sanders came to the view that the formula in that provision requires a focus on the purpose for which premises which constitute a hereditament are used, whereas the other courts below came to the different conclusion that the formula requires a focus on the actual extent of use for charitable purposes to which such premises are put. In all three cases, if the proper approach is to examine both the purpose of the use to see that it is charitable and the actual extent of use of the premises for such purpose ("the extent of use interpretation"), that use appears very slight by contrast with the general non-use of the premises for any purpose. As DJ Matthews put it in the Milton Keynes case, the relevant part of the premises are mainly redundant, and on this approach it can be said that the main use of the premises is not for charitable purposes. On the other hand, in all three cases, if the proper approach is to examine only the purpose of the use of the premises ("the purpose of use interpretation"), the only purpose for which they are being used is a charitable purpose (since leaving them vacant is not to use them for a purpose), and it is plausible to say that they are wholly or mainly used for that charitable purpose, as DJ Sanders held in the Cheshire West and Chester case. The proper interpretation of section 43(6), and the choice between these two contrasting approaches, is the main point of law which arises for determination on these appeals.
20. Other issues arise in each of the appeals. In the first two appeals, the PSCT submits that the magistrates' courts erred in law in certain respects, even if (contrary to the PSCT's primary submission) the extent of use interpretation is correct. In particular, it is said the courts erred by having regard to the nature or designation of the buildings in question, which is submitted to be an irrelevant consideration. In the third appeal, the Council submits that DJ Sanders erred in law in his approach to the wifi hereditament and, consequently, in his approach to the use of the main hereditament.

The Legal Framework

21. The system of non-domestic rates is found primarily in the LGFA and subordinate legislation. The unit of rateable occupation is the hereditament. By virtue of section 64(1) of the LGFA read with section 115(1) of the General Rate Act 1967, to which it refers, a hereditament is defined as:

"property which is or may become liable to a rate, being a unit of property which is, or would fall to be, shown as a separate items in the valuation list."

There is a considerable body of case-law in relation to questions concerning hereditaments and rating law generally that has built up over a considerable period of time.

22. The LGFA establishes a dual set of responsibilities. Under section 41, the valuation officer for each billing authority is obliged to compile and maintain a local list of hereditaments for that authority's area. However, it is the billing authority (each Council in the present cases) which is responsible for issuing bills for rates and taking decisions about recovery of rates. The billing authority also has an obligation to inform a valuation officer of any matters which come to its attention which suggest that the local list might require alteration. In relation to the South Cambridgeshire and the Cheshire West and Chester cases, the local lists were amended in the light of information so provided by the Councils, so as to distinguish between the main hereditament and the wifi hereditament in each case.
23. A valuation officer has power to alter the local list as part of his duty to maintain it under section 41 of the LGFA. There are also regulations in place - the Non-Domestic Rating (Alteration of Lists and Appeals)(England) Regulations 2009 - which provide for a procedure under which any interested person may make a proposal for alteration of hereditaments set out in the list. Where a proposal is validly made, the valuation officer has to decide whether to make the proposed alteration or not. Where he does not, there is a procedure for the disagreement to be referred to the Valuation Tribunal for England as an appeal by the proposer against the valuation officer's refusal to alter the list. Appeals lie from that Tribunal to the Upper Tribunal (Lands Chamber). It was because of the availability of this proposal and appeal procedure that DJ Sanders in the Cheshire West and Chester case considered that he was not entitled to disallow or disregard the wifi hereditament in that case, since any challenge to the separate listing of that hereditament in the local list should be made using this procedure, rather than raised upon an application by a billing authority to a magistrates' court for a liability order: see para. [26] below.
24. Where a hereditament on the list is occupied, the ratepayer is the occupier: section 43(1) of the LGFA. Where a hereditament is not occupied, rates will continue to be payable by the owner (defined as "the person entitled to possession" of it) if it falls within a class prescribed in regulations: section 45(1) of the LGFA. All non-domestic hereditaments are prescribed, save for certain exceptions which are not relevant here. So if a commercial property is unlet and unoccupied, the owner of it will be liable (after a defined period) to pay rates in respect of it. This gives owners of such properties an incentive to let them for occupation by the PSCT and to pay a reverse premium in respect of such letting.
25. Section 45A of the LGFA provides that where section 45 applies, the chargeable amount shall be zero in certain cases, including "where (a) the ratepayer is a charity or trustees for a charity, and (b) it appears that when next in use the hereditament will be wholly or mainly used for charitable purposes (whether of that charity or that and other charities)" (section 45A(2)). This formula corresponds to that used in section 43(6), which is in issue on these appeals.
26. The collection and enforcement of non-domestic rates are governed by the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989. A billing authority issues demand notices to persons who are liable to pay rates and, where they are not paid, may apply to the magistrates' court for a liability order. Regulation 23(1) provides that any matter which could be raised as an appeal under section 55 of the LGFA may not be raised in proceedings for a liability order in the magistrates' court.
27. Section 43(1) of the LGFA (headed "Occupied hereditaments: liability") provides that a person shall be subject to a non-domestic rate if on the relevant day the person "is in occupation or all or part of the hereditament" (section 43(1)(a)), and the hereditament is shown for that day in the local non-domestic rating list (section 43(1)(b)). This formulation means that any degree of occupation of the hereditament is sufficient to give rise to a liability to rates on the part of a person occupying the property. Occupation is assessed according to long-standing principles, in particular as set out in Laing v Kingswood AAAC [1949] 1 KB 344.
28. Section 43(5) provides for a formula for the chargeable amount for a chargeable day which is to operate where subsection (6) applies. The effect of the formula is that in cases falling within subsection (6) there is mandatory 80% relief from non-domestic rates. There is also a discretion under section 47 for a billing authority to waive liability to rates, including for the additional 20% in these cases, but the operation of section 47 is not in issue on these appeals.
29. Section 43(6) of the LGFA provides in relevant part as follows:

"This subsection applies where on the day concerned –

(a) the ratepayer is a charity or trustees for a charity and the hereditament is wholly or mainly used for charitable purposes (whether of that charity or that and other charities) ..."

This is the provision in issue on these appeals.

30. Before 1955 there was no statutory provision for the granting of relief from rates to charities. Section 8 of the Rating and Valuation Act 1955 provided for relief in respect of "any hereditament occupied for the purposes of an organisation (whether corporate or unincorporated) which is not established or conducted for profit and whose main objects are charitable or are otherwise concerned with the advancement of religion, education or social welfare". There was no requirement that the hereditament be wholly or mainly used for charitable purposes.
31. The position was modified in 1961 to adopt the current formula. Section 11 of the Rating and Valuation Act 1961 provided for relief in respect of "any hereditament occupied by, or by trustees for, a charity and wholly or mainly used for charitable purposes (whether of that charity or of that and other charities)." Section 11 of the 1961 Act was repealed by the General Rate Act 1967, but re-enacted in section 40 of that Act. The 1967 Act was repealed and replaced by the LGFA.

Analysis

Construction of section 43(6) of the LGFA

32. The dispute between the parties whether the proper construction of section 43(6) is the extent of use interpretation or the purpose interpretation has been resolved in a recent decision of the Divisional Court in favour of the extent of use interpretation as contended for by the Councils: see Kenya Aid Programme v Sheffield City Council [2013] EWHC 54 Admin, [32]-[35] per Treacy LJ, with King J agreeing at [66]. Having reviewed certain authorities to which I was also taken in the course of argument, at [35] Treacy LJ set out his conclusion on the proper interpretation of section 43(6) as follows:

"35. In my judgment there is force in the difference of emphasis which [counsel for the billing authority] highlights between "occupation" in Section 43(1) and "use" in Section 43(6), and also in her submission that the qualifying adverbs "wholly" and "mainly" are important in looking at the context of the use. I would hold that there is no reason for limiting the ambit of the phrase in the way contended for by the Appellant. As was pointed out in the English Speaking Union case [English Speaking Union Scottish Branches Educational Fund v City of Edinburgh Council [2009] SLT 1051] and again in argument before us, the Appellant's construction would substitute the word "solely" for the word "wholly". I see no reason why the statute should be thus narrowly confined. The natural reading and meaning of the words used are, in my judgment, apt to cover not only consideration of the purpose of the use, but also the extent or amount of the actual use. It follows therefore that I would hold that the judge was right to take account of and place weight upon the extent to which the premises were used."

33. In accordance with usual principles of judicial comity, I should follow another first instance decision unless I am convinced that the decision is wrong: R v HM Coroner for Greater Manchester, ex p. Tal [1985] QB 67, 81. That constraint has particular force where a puisne judge is invited to depart from a decision of a unanimous Divisional Court.
34. Nevertheless, Mr Myerson QC for the PSCT did invite me to disagree with the ruling of the Divisional Court in Kenya Aid, and to adopt the purpose interpretation of section 43(6). I decline that invitation. Far from being convinced that the Divisional Court was wrong in adopting the extent of use interpretation of section 43(6), I think that it was right. It is worth mentioning that in my preparation for this case, before being referred to or reading the judgment in Kenya Aid, I had independently reached the same view as to the natural meaning of the words used as did Treacy LJ. In the context of this legislation and having regard to the language used, it is reasonable to infer that Parliament intended that the substantial mandatory exemption from rates for a charity in occupation of a building should depend upon the charity actually making extensive use of the premises for charitable purposes (i.e. use of the building which is substantially and in real terms for the public benefit, so as to justify exemption from ordinary tax in the form of non-domestic rates), rather than leaving them mainly unused.
35. Moreover, the same interpretation of the formula, as used in section 4(2) of the Local Government (Financial Provisions, etc.) (Scotland) Act 1962, was adopted by Lord Bonomy in the Court of Session in the English Speaking Union case. In that case, the council refused to grant charitable relief for an office building occupied by the English Speaking Union, on the grounds that it only used the first floor of an eight storey building as offices, with the other seven floors being left vacant, so that the building was not "wholly or mainly used for charitable purposes". The court upheld that decision even though, so far as the purpose of the use was concerned, it was entirely charitable. This is further persuasive authority which supports the extent of use interpretation of section 43(6). Separate judges sitting in three different cases have all formed the view that the natural interpretation of the words used in section 43(6) is the extent of use interpretation.
36. To my mind, the strongest of the arguments put forward by Mr Myerson against this construction of section 43(6) was that the extent of use interpretation would strip the word "wholly" of all sensible meaning in the context of that provision. He submitted that on the extent of use interpretation the issue would always resolve into a question of whether the hereditament is "mainly used" for charitable purposes, since buildings would typically be left unused at night, or areas within them would not be in actual use all the time. If that were right, and the word "wholly" were rendered meaningless upon this interpretation, it could be a strong textual indicator in favour of the alternative, purpose of use interpretation.
37. However, I do not think that the argument can be sustained. A building may fairly and properly be described as being wholly used for a particular purpose even though not every square metre of floor space is in constant use all the time. For instance, the whole of a room used as an office can be described as being wholly used as an office, even though it is spacious and not crammed with people working. I also think it can fairly be described as being wholly used as an office, albeit it is closed and left vacant during the night. Even if that is not right, it is possible to imagine buildings which indeed are in constant use the whole time for charitable purposes (e.g. a permanent soup kitchen to feed the destitute or an office staffed 24 hours a day by the Samaritans to be available to give advice to people who feel suicidal). So it cannot be concluded that the word "wholly" in the phrase "wholly or mainly used for charitable purposes" has no meaning or proper function if the extent of use interpretation of section 43(6) is adopted.
38. Mr Myerson also sought to argue that since the only use of the premises which constituted occupation of them by the PSCT was the installation and maintenance of the transmitters and wifi system, that should have been treated as the entire or only relevant use of the premises by the PSCT for the purposes of the test in section 43(6). I reject this contention as well. The concept of "occupation" as used in the LGFA, in particular in section 43(1), is different from the concept of "use" which appears in section 43(6). The terminology used is different. There is no good reason to equate the two in the way Mr Myerson sought to do. In fact, the condition for a liability to pay rates stated in section 43(1)(a) is that the ratepayer "is in occupation of all or part of the hereditament", which makes it clear that a person can have a liability to pay rates in respect of a hereditament even if they do not occupy the whole of it, but leave part of it unused. That language is again in strong contrast to the language in section 43(6), which states that the hereditament must be "wholly or mainly used for charitable purposes". There is no basis for reading the words used in section 43(6) as limited to consideration of the actual extent of occupation by the ratepayer.
39. None of Mr Myerson's arguments give any good grounds to justify departing from the interpretation of section 43(6) arrived at by the Divisional Court in Kenya Aid. Therefore, on the main issue in the three appeals, I am persuaded that the Councils are correct. In relation to the appeals in the Milton Keynes and the South Cambridgeshire cases, this means that the primary ground of appeal for the PSCT is dismissed; and in relation to the Cheshire West and Chester case, the primary ground of appeal for the Council succeeds.

The PSCT's further grounds of appeal in relation to the Milton Keynes and South Cambridgeshire cases

40. In my judgment, none of the other grounds of appeal relied on by the PSCT is made out. I can detect no error of law or assessment in the decisions of the magistrates' courts in either of these cases.
41. In relation to the Milton Keynes decision, Mr Myerson was critical of DJ Matthews for failing to have regard to technological advances, and the fact that what could now be achieved employing transmitters and minimal physical use of the building would formerly have required much more extensive use of the premises by staff and/or placement of bulkier equipment. He also said that her judgment did not contain a proper assessment of the evidence and that she erred by treating as relevant and giving weight to the fact that Marlborough Court had been designated as offices.
42. I do not consider that there is any substance in any of these criticisms. The suggestion that the District Judge should have assessed the position by reference to what the PSCT might have had to do in years gone by to achieve delivery of a similar service is misconceived. She properly and correctly assessed the actual facts in the case before her. In the context of her judgment, her reference to the purpose for which Marlborough Court had been designated was an appropriate way of emphasising just how little actual use of the building the PSCT was in fact making. On a fair reading, it does not indicate any error of law or approach on her part.
43. In relation to the South Cambridgeshire decision, Mr Myerson made a similar criticism in relation to the magistrates' references to the nature and intended use of the Units as a factor to be taken into consideration (see sub-paragraphs b), d) and g) of paragraph 7 of the Case Stated, set out above). In my view, however, the answer is the same as in relation to the judgment in the Milton Keynes. In the context of the decision, the reference to the nature and intended use of the Units was an appropriate way of emphasising just how little actual use of the buildings the PSCT was in fact making. Once again, on a fair reading of the reasons, it does not indicate any error of law or approach on the magistrates' part.

The Council's further ground of appeal in the Cheshire West and Chester case: the extent of the wifi hereditament

44. Mr Ormondroyd for the Council submitted that DJ Sanders also erred in his assessment of the extent of the main hereditament and the extent of the wifi hereditament. He said that the District Judge should have assessed the facts on the basis that the wifi hereditament comprised all 13 transmitters located in the building, and that none of the transmitters formed part of the main hereditament. Subject to such marginal matters as the use of electric sockets and such part of the physical structure of the building as supported the transmitters when they were put in position, this should have indicated that the extent of use of the main hereditament for charitable purposes was minimal.
45. With all respect to DJ Sanders, I consider that this further ground of appeal is made out.
46. Mr Ormondroyd took me to authority which indicated that the District Judge's concerns about the validity of the wifi hereditament were misplaced. Two hereditaments may be found to exist even if there is no clear physical dividing line between them: see e.g. Lancashire and Cheshire Telephone Exchange Co. v The Overseers of Manchester (1884-85) LR 14 QBD 267; Gilbert v Hickinbottom [1956] 2 QB 40, 53-54 per Parker LJ. Physical permanence in terms of attachment to the land is not required: see e.g. Thomas (Valuation Officer) v Witney Aquatic Co. Ltd [1972] RA 493 (a boat was a hereditament) and Field Place Caravan Park Ltd v Harding [1966] 2 QB 484 (caravans as hereditaments). The same land may be subject to rateable occupation for different purposes, on the footing that distinct hereditaments may exist in relation to the same land: R v Mayor of London (1790) 4 TR 21; Bartlett (Valuation Officer) v Reservoir Aggregates Ltd [1983] RA 254. There is no absolute requirement for physical contiguity in order for a single hereditament (such as the wifi network in this case) to exist - it may be sufficient that there is an essential functional link and a substantial degree of propinquity: Edwards v BP Refinery (Llandarcy) [1974] RA 1. These cases strongly suggest that it is lawful and proper for a valuation officer in cases of user of premises by the PSCT as in the present cases to identify the wifi network as a distinct hereditament.
47. However, the basis on which I find that this ground of appeal is made out is that I consider that it was not properly open to the District Judge to question or set aside the wifi hereditament (as he himself acknowledged), and that on proper and ordinary construction of the entry for the wifi hereditament in the local rating list he should have held that it covered the entire wifi network installed at the building, not just a single transmitter thereof.
48. As explained in paras. [23] and [26] above, there is a separate dedicated avenue available to the PSCT to challenge the identification of a wifi hereditament as a hereditament distinct from a main hereditament at a building, by making a proposal for amendment of the list and pursuing an appeal to the Valuation Tribunal for England and the Upper Tribunal if necessary. The validity of a hereditament is not open to challenge in enforcement proceedings in the magistrates' court.
49. In the context of this statutory regime, in enforcement proceedings it is incumbent on the magistrates' court to give a fair and proper interpretation to the description of any relevant hereditament as set out in the list, so that all legal issues arising in relation to that hereditament - which might, for example, include whether it is used in particular ways at particular times, and the extent of such use, as may be relevant under section 43(6),(6B), (6C) and (6D) of the LGFA - can be properly addressed. If the magistrates' court does not examine the issues before it on the basis of a proper interpretation of the description of the hereditament or hereditaments in question, it will err in law. Until such time as the designation of a hereditament in the list is challenged by the proper avenue and changed, it is conclusive in law as to the meaning of the hereditament.
50. In the present case, I consider that the District Judge erred in giving the wifi hereditament the extraordinary and limited interpretation which he preferred. On a fair reading of the description of the wifi hereditament in the rating list, in the context in which it had been created, it applied to the whole wifi system installed at the address. The very fact that it did not identify a set number of transmitters is a strong indicator that it was not intended to delimit the hereditament by reference to any particular number of transmitters, but rather to designate the entire wifi network installed at the site as the hereditament. By necessary implication from reading the entries for the wifi hereditament and for the main hereditament in the list, the entire wifi network was not part of the distinct main hereditament at the site.
51. Although this is sufficient to find that this ground of appeal is made out, I should add that I also think that there is force in the submission by Mr Ormondroyd that the District Judge erred in para. [56] of his judgment in saying that "fairness dictates that the hereditament should be construed narrowly". In the context of interpretation of the extent of a hereditament, fairness provides no sound basis for assuming that a narrow construction should be adopted. Sometimes a narrow construction may be beneficial to the taxpayer, but at other times a wider construction may be beneficial to the taxpayer. The true meaning of a hereditament as described in the list cannot vary depending on whether, on the particular circumstances of a case, it might suit the taxpayer to argue for a wider or narrower construction. The task for the magistrates' court, rather, is to construe the description of the hereditament in the list in an objective way which is neutral as between the billing authority and the taxpayer. There is no special reason of fairness why a different approach should be adopted: if the taxpayer is dissatisfied with the description in the list, he can make a proposal for a different or clearer description, and may then appeal to the Valuation Tribunal for England if that proposal is not accepted.
52. The District Judge should therefore have approached the question of the application of section 43(6) to the main hereditament on the footing that the main hereditament did not include any part of the wifi network at the site. Since, however, he treated 12 of the 13 transmitters as being part of the main hereditament, this amounted to a further material error of law on his part.

Conclusion

53. For the reasons given above, I dismiss the appeals in the Milton Keynes case and the South Cambridgeshire case. I allow the Council's appeal in the Cheshire West and Chester case.
54. There was debate with counsel at the hearing what the proper course should be relation to the Cheshire West and Chester case. Since issues of occupation and extent of use might arise in relation to the main hereditament which may possibly require further examination of relevant facts, it was agreed that I should remit the case to the magistrates' court for it to examine the case afresh on the basis of a correct legal approach.