Edison First Power Limited v Secretary Of State For the Environment, Transport & Regions

A central-rating valuation scheme may use an annual, global valuation even though a hereditament moves during the year from a central list to a local list and the result is that rates are paid by both the former and new occupier. The presumption against double assessment is not absolute. It may be displaced by the statutory scheme and the circumstances surrounding its enactment. The court must consider whether Parliament authorised the precise statutory result, rather than treat double assessment as an automatic legal prohibition. A valuation order made under the Local Government Finance Act 1988 was therefore lawful and its exercise was neither irrational nor unfair.

Edison acquired long leases of two electricity power stations from Powergen on 19 July 1999. Edison became liable for local non-domestic rates, while Powergen remained liable under the central rating list for the balance of the 1999/2000 rating year. Edison had also agreed contractually to reimburse Powergen for the latter liability.

Carnwath J held that the resulting double assessment was permitted by the Local Government Finance Act 1988, and rejected challenges based on irrationality and the European Convention on Human Rights. Edison appealed. The central issues were whether the Electricity Supply Industry (Rateable Values) Order 1994 was authorised by the Act despite the possibility of double assessment, and whether its making was unlawful on public-law or Convention grounds.

1. Appeal dismissed by a majority. Simon Brown LJ delivered the leading judgment. May LJ agreed with him on the double-assessment issue and on the remaining grounds. Dyson LJ dissented on the vires issue but agreed that the Order was not irrational or improperly exercised.
2. The correct question was whether Parliament authorised an order in the terms of the 1994 Order producing the two payments. The presumption against double taxation or double assessment is a rebuttable principle, not an absolute rule. Its force depends on the nature of the payments and the statutory scheme.
3. The central and local rating systems were materially different. Central hereditaments were rated en bloc and valued as a whole. Central liability depended on the person’s name appearing in the central list, while the annual valuation did not necessarily adjust for changes during the rating year. Paragraph 3(2) of Schedule 6 was sufficiently wide to authorise that method.
4. The case was closely analogous to Milford Haven Conservancy Board v IRC. The payments were not properly treated as Powergen continuing to be rated on hereditaments no longer occupied. Rather, Powergen’s valuation for its remaining hereditaments continued to reflect the earlier global valuation until annual recalculation. The statutory scheme contemplated an artificial valuation and temporary anomalies.
5. The Order was reviewable despite affirmative parliamentary approval and its connection with public financial administration. Nevertheless, annual rather than daily recalculation was not irrational, confiscatory, discriminatory or unfair. The disadvantage to Edison arose from its contractual undertaking to reimburse Powergen and did not establish a breach of article 1 of the First Protocol.
6. Dyson LJ considered that there was double assessment in substance and that the Act did not clearly authorise it. He would have allowed the appeal, while declining to quash the entire Order because parties had regulated their affairs on its basis. His view did not command the majority.
7. The appeal was dismissed. Edison was ordered to pay the respondent’s costs. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): [2001] EWCA Civ 1096. Appeal from the Administrative Court and Divisional Court dismissed by a majority.
• Administrative Court and Divisional Court: Carnwath J dismissed the challenge, holding that the double assessment was permitted by the statutory scheme and was not irrational or contrary to the European Convention on Human Rights.