GE Bowra Group Ltd v Thanet District Council

For the purposes of the exemption from unoccupied property rates, a hereditament cannot be required to be literally named in a list of listed buildings. Where a hereditament is wholly included within a listed building, the reference to property being included in a list under the relevant regulations is satisfied. The court should adopt a construction that avoids an unreasonable result and reflects the distinction between buildings and hereditaments. Separate hereditaments within a listed building may therefore qualify separately for exemption when unoccupied.

Thanet District Council prosecuted GE Bowra Group Ltd for non-domestic rates relating to unoccupied first and second floors of a listed building. The magistrates held that the hereditament was not itself included in a list compiled under section 54 of the Town and Country Planning Act 1971 and ordered payment of the rates.

On appeal by way of case stated, the central issue was whether regulation 2(2)(d) of the Non-Domestic Rating (Unoccupied Property) Regulations 1989 required the hereditament itself to be named in the list, or whether it was sufficient for it to be wholly included within a listed building.

1. Appeal allowed. The magistrates’ decision and the resulting liability for rates were quashed and set aside. The issue was one of law and no remission was required.
2. The relevant statutory scheme begins with the definition of “hereditament” in section 115(1) of the General Rate Act 1967, adopted for the purposes of the Local Government Finance Act 1988 by section 64(1). A hereditament is a unit of property shown, or falling to be shown, as a separate item in the valuation list.
3. Regulation 2(2)(d) of the Non-Domestic Rating (Unoccupied Property) Regulations 1989 refers to a hereditament being included in a list compiled under section 54 of the Town and Country Planning Act 1971. Strictly, however, it is buildings, rather than hereditaments, which are listed.
4. Following the approach in Debenhams v Westminster City Council [1987] AC 396, the court rejected a construction producing an unreasonable result. The word “included” therefore had to be given a more liberal meaning than “named”. It was sufficient that the hereditament was wholly included within a listed building.
5. That construction was supported by language, common sense and policy. Different hereditaments within one building are treated separately for valuation and collection when occupied. They should likewise be capable of separate treatment when unoccupied. The exemption consequently applied to the unoccupied first and second floors.

The respondent was ordered to pay the appellant’s appeal costs, summarily assessed at £8,933.08. The judgment records that the appeal was final subject to any application for a leapfrog appeal.

• High Court (Administrative Court): On 23 April 2007, the appeal by way of case stated was allowed. The magistrates’ decision and the associated penalty were quashed and set aside.
• Justices for the County of Kent sitting in Thanet: On 13 March 2006, the justices found GE Bowra Group Ltd liable for non-domestic rates and ordered payment of £373.79, with costs of £70.