Watts v Preston City Council

For council tax purposes, where a genuine, non-sham joint tenancy sets out liability for rent, its terms ordinarily determine whether the tenants are liable for rent in respect of the dwelling as a whole. A tribunal may depart from those terms only where the agreement has been varied, or exceptional circumstances show that the written terms do not represent the parties’ true arrangement. Subsequent payment practices are insufficient if they are consistent with the agreement. A tribunal must give reasons sufficient to show the evidential basis for its conclusion. The particular circumstances in The UHU Property Trust v Lincoln City Council do not justify treating every joint tenancy as an arrangement limited to individual rooms.

The claimant landlord appealed against a decision of the Lancashire Valuation Tribunal holding him liable for council tax on a property occupied by students and former students. The Tribunal treated the property as a house in multiple occupation under Class C(b)(ii) of the Council Tax (Liability for Owners) Regulations 1992, as amended. It concluded that the tenants were liable only for their individual shares of the rent, despite accepting that they had entered into a genuine joint tenancy agreement containing an express joint and several liability clause.

The appeal concerned whether the Tribunal had erred in determining liability by reference to the tenants’ subsequent payment arrangements and whether the unresolved question under Class C(a)—whether the property had been constructed or adapted for occupation by persons who did not constitute a single household—should be remitted.

1. Appeal allowed. The Tribunal’s decision under Class C(b)(ii) was quashed and the Class C(a) issue was remitted to the Lancashire Valuation Tribunal. The claimant was awarded costs of £200.
2. Under Class C(b)(ii), the question was whether a tenant was liable to pay rent or a licence fee in respect of the dwelling as a whole. A genuine joint tenancy agreement, entered into on the basis that it reflected the parties’ contractual intentions, ordinarily regulated liability between landlord and tenants.
3. That contractual position could cease to govern if the parties had agreed a variation. Variation could not be inferred merely from practices which were not necessarily inconsistent with the written agreement. Monthly payments by some tenants, or continued payment by a tenant after leaving, did not by themselves establish that the tenants had been released from joint and several liability.
4. The UHU Property Trust v Lincoln City Council was confined to its exceptional facts. It involved conflicting documentary material, individual room allocations, needy occupants dependent on housing benefit, and practical arrangements under which occupants paid only their own shares. It did not establish a general principle that a tribunal could disregard a genuine written joint tenancy whenever later payment arrangements differed.
5. The Tribunal had relied principally on the fact that one tenant continued paying his share after leaving. That fact was equivocal and did not justify contradicting the tenancy agreement. A tribunal could not reach a conclusion expressed merely as a belief without explaining the grounds, since an appellate court must be able to identify whether relevant considerations had been taken into account.
6. The Tribunal had not decided the separate Class C(a) issue, although it had been raised and could be decisive. That issue therefore required remission. In considering whether the property was constructed or adapted for occupation by persons who did not constitute a single household, the Tribunal could take account of Rogers v Islington, whose observations provided strong indicative support for treating students who join together to occupy a house for an academic year as a single household.

• High Court (Administrative Court): appeal from the Lancashire Valuation Tribunal allowed. The Tribunal’s decision under Class C(b)(ii) was quashed, and the Class C(a) issue was remitted to the Lancashire Valuation Tribunal under [2009] EWHC 2179 (Admin).