QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT from DISTRICT JUDGE BROWN
CHELTENHAM MAGISTRATES COURT 9 September 2013
Strand, London, WC2A 2LL
B e f o r e :
| PALL MALL INVESTMENTS (LONDON) LTD
|- and -
|GLOUCESTER CITY COUNCIL
Jenny Wigley (instructed by Bevan Brittan Solicitors) for the Respondent
Hearing date: 15 May 2014
Crown Copyright ©
Lord Justice Pitchford :
"1. Whether, in the absence of (i) a current applicable statutory provision directly prohibiting occupation, or (ii) a valid statutory notice prohibiting occupation, the court was correct to determine that both
(a) the fact that the properties were constructed as offices and were in disrepair; and
(b) the fact that the court had evidence from a surveyor that occupation of the properties for office use "would not comply with the numerous statutes covering general occupation and welfare, including provisions of the Health and Safety at Work Act etc. 1974, the Workplace (Health, Safety and Welfare Regulations 1992, and the Regulatory Reform (Fire Safety) Order 2005"
were insufficient grounds to support a conclusion that the owner of the properties was prohibited by law from occupying the properties or allowing them to be occupied within the terms of Regulation 4 (c) of the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 SI 2008/386 (the "Regulations").
2. In the alternative, whether on finding that there was no prohibition in law on occupying part of the properties by an alternative storage use and in the light of the evidence from the surveyor that areas of the properties "could form an internal store, similar in effect to a garage lock-up and potentially suitable for a limited amount of storage of boxes at the premises", the court could determine that the possibility of storage use alone meant that the owner of the properties was not prohibited by law from occupying the properties or allowing them to be occupied within the terms of regulation 4 (c) of the Regulations, or whether it would have been necessary for the court first to consider whether the areas in question could be defined as separate parts of the properties."
The statutory scheme
"3. Hereditaments prescribed for the purposes of Section 45(1)(d) of the Act
The class of non-domestic hereditaments prescribed for the purposes of Section 45(1)(d) of the Act consists of all relevant non-domestic hereditaments other than those described in Regulation 4."
Regulation 4 sets out those hereditaments not prescribed for the purposes of section 45(1)(d) and therefore exempted from the unoccupied rate. It states, so far as is relevant for present purposes:
"The relevant non-domestic hereditament described in this regulation is any hereditament –
(a) which, subject to regulation 5, has been unoccupied for a continuous period not exceeding 3 months;
(b) which is a qualifying industrial hereditament that, subject to regulation 5, has been unoccupied for a continuous period not exceeding 6 months;
(c) whose owner is prohibited by law from occupying it or allowing it to be occupied; [or]
(d) which is kept vacant by reason of action taken by or on behalf of the Crown or any local or public authority with a view to prohibiting the occupation of the hereditament or to acquiring it;
(e) – (m) ..."
For the purposes of paragraphs (a) and (b) of regulation 4, by regulation 5 a hereditament which has been unoccupied and becomes occupied on any day is to be treated as having been continuously unoccupied if it becomes unoccupied again on the expiration of a period of less than 6 weeks beginning with that day.
The appellant's case
"1.07 However the building has suffered extensive internal vandalism and theft of fittings, apparently since 2011. In particular the copper paths of the services installations have been forcibly stripped out and removed, including pipe work for parts of the heating and air cooling installations, hot and cold water supplies and drainage/wastes to the WC and welfare areas. Most of the electrical cabling throughout and taps/brassware to washbasins and radiator valves etc have all been stripped out and removed, and the associated appliances generally damaged/broken beyond repair throughout.
1.08 The internal finishes of suspended ceilings, partitions and carpets etc are also becoming generally derelict with waste and debris and damage beyond repair. Water from the vandalised/stolen water supply and heating pipe work services etc has flooded through to damage all floor levels, and in addition there are a number of significant current roof leak areas (cause unknown) causing continued water penetration to affect the second floor in particular, percolating downwards to the lower floor levels, and causing general dampness, humidity and moist air throughout the building, in turn leading to mould growth and further deterioration of the constructions and finishes."
"1.07 The building throughout has suffered systematic internal vandalism and theft of fittings, apparently since 2011. In particular the copper parts of the services installations have been forcibly stripped out and removed, including pipe work for parts of the heating and air cooling installations, hot and cold water supplies and drainage/wastes to the WC and welfare areas. Most of the electrical cabling throughout and tapes/brass ware to washbasins and heating valves etc have been stripped out and removed, and the associated appliances generally damaged/broken beyond repair throughout.
1.08 However, whilst the internal suspended ceiling finishes have been extensively damaged, these still remain intact in many of the areas. The building has also not suffered significant water damage or deterioration, and floor coverings, carpet etc and decorations remain generally in fair/reasonable order and generally dry. The building envelope also appears reasonably intact with no major roof leaks, although there is an amount of broken window glazing."
"No rates shall be payable … in respect of a hereditament for, or any part of the 3 months beginning with the day following the end of, any period during which (a) the owner is prohibited by law from occupying the hereditament or allowing it to be occupied."
The exemption was in materially identical terms to the current regulation 4(c). Since it was conceded that Europe House was a new building for the purpose of section 34 of the 1939 Act and, in the absence of a means of escape certificate, there was a prohibition against the occupation of the 5th floor of the building, St Katherine claimed that it was exempted by paragraph 2(a) of Schedule 1 to the 1967 Act from paying the unoccupied rate.
"No rates shall be payable under Part 1 of the Schedule in respect of a hereditament for, or for any part of the standard period beginning with the day following the end of, any period during which –
(a) the owner is prohibited by law from occupying their hereditament or allowing it to be occupied;
(b) the hereditament is kept vacant by reason of action taken by or on behalf of … any local or public authority with a view to prohibiting the occupation of the hereditament or to acquiring it."
The Divisional Court further held that after 21 May 1985 no exemption was due since implementation of the earlier planning permission was possible and occupation was not, therefore, prohibited by law. The rating authority appealed to the Court of Appeal in respect of the earlier period and the owner cross-appealed in respect of the subsequent period.
"Where the effect of a prohibition notice is proved to be that the hereditament may not be rateably occupied until some steps have been taken, is its occupation prohibited by law?"
Glidewell LJ reached the following conclusion:
"The factual position here was that the planning permission for use as an air terminal expired on the 31 March 1984. Thereafter during the period at issue, there was no use of the hereditament for that purpose for over two years after PanAm vacated. In order that the hereditament might be occupied for some other commercial purpose, the respondent company needed to return it firstly to its original condition as a shell. It was the work necessary to put it in that condition which was prohibited by the notice. This, therefore, had the inevitable effect of preventing rateable occupation until both the remedial work to cure the asbestos problem and the subsequent refurbishment work had been carried out. Since that was the inevitable effect, in my judgment the effect of the notice was to prohibit by law the occupation of the premises until the remedial work had been completed. That was on the 21 May 1985. It followed that the owner was exempt from the unoccupied rate for the period between 1 April 1984 and 31 May 1985."
"In my judgment, the law does not prohibit an owner or occupier of property from using it for a particular purpose simply because planning permission for that use is necessary under the Town and Country Planning Act 1971 and has not been granted. Such a use becomes prohibited if, and only if, an enforcement notice is served and takes effect, or a stop notice is served, or if by other processes an injunction is granted against that particular use."
It does not appear to have been argued, as here, that the property could not be occupied for its intended purpose because to do so would breach health and safety legislation. Accordingly, Glidewell LJ held that the Divisional Court had also been correct to rule that the unoccupied rate was payable after 21 May 1985. The other members of the court, Mann LJ and Sir Denys Buckley, agreed.
The respondent's case
i) The law prohibits occupation of the property; or
ii) A prohibition notice expressly or by necessary implication prohibits occupation.
It does not follow that occupation of numbers 67 and 69 London Road, Gloucester would, as a matter of law, create liability for a criminal offence. Furthermore, the offence on which the owner relies is not the act of occupation but breaches of duty that would or might arise, depending upon the facts, once occupation has been taken. The distinction between the present case and Regent Lion Properties Ltd is that, here, there has been no prohibition upon occupation pending the performance of specific works. Accordingly, it is submitted that the appellant failed to bring itself within the exemption provided by regulation 4(c).
"...if the statute is to be construed so as to exclude liability under these provisions in respect of property which for the time being is incapable of occupation, it would open the door to widespread abuse in that it would be open to any property owner anxious to keep his property unoccupied for a substantial period of time simply to remove, say, the sanitary fittings and part of the plumbing in order to be able to say that the property was for the time being incapable of occupation." (at page 415A)
Nicola Davies J: