Tallington Lakes Ltd, R (on the application of) v Grantham Magistrates Court

For liability to non-domestic rates, the ratepayer must be in rateable occupation of the hereditament identified in the rating list. Where the list identifies one hereditament, occupation of only part is insufficient. A company’s occupation may be established through the conduct of its director when he acts for that company, but conduct undertaken as director of another company cannot be cross-attributed between companies merely because the same individual controls them. Separate corporate identity remains applicable within a group. Findings of occupation or control unsupported by evidence, and based on such cross-attribution, may be perverse and unlawful on an appeal by way of case stated.

Tallington Lakes Limited appealed by way of case stated against four liability orders made by Grantham Magistrates Court for unpaid non-domestic rates totalling £132,784.12. The liability orders concerned the Tallington Lakes Leisure Park, which was entered in the rating list as a single hereditament.

Tallington Lakes Limited argued that Tallington Holdings Limited, rather than it, was the rateable occupier. The deputy district judge found that the companies operating at the site shared occupation, and that Tallington Lakes Limited had paramount control because the same individual was its sole director and the sole director of the other entities. The central issues were whether those findings were open on the evidence and consistent with the law.

1. Appeal allowed. The liability orders were set aside because the deputy district judge was wrong to find that Tallington Lakes Limited was the rateable occupier of the site.
2. Under section 43 of the Local Government Finance Act 1988, liability depends on occupation of the hereditament shown in the rating list. The four ingredients of rateable occupation are actual occupation, exclusive occupation for the possessor’s particular purpose, occupation of value or benefit, and occupation that is not too transient. Since the site was one hereditament, Tallington Lakes Limited had to occupy the entire site.
3. The evidence of Mr Morgan and Ms Jones stated that the various businesses occupied separate areas and that Tallington Lakes Limited was only one of the entities operating at the site. That evidence was unchallenged. There was no evidential basis for finding that Tallington Lakes Limited occupied the whole hereditament.
4. The concept of paramount control is directed principally to rival claimants to occupation. It did not resolve this case, which was closer to possible joint occupation. In any event, there was no evidence that all the entities jointly occupied the entire site.
5. The deputy district judge’s reasoning impermissibly treated Mr Morgan and Tallington Lakes Limited as one and the same. A director’s conduct may be attributed to a company when undertaken in his capacity as that company’s director. It cannot be attributed to another company merely because he is also its sole director. That cross-attribution breached the principle of separate corporate identity.
6. The findings that Tallington Lakes Limited occupied the whole site, that all the entities shared occupation, and that Tallington Lakes Limited had paramount control were findings which no reasonable district judge could have reached on the evidence and applicable principles. The appeal by way of case stated therefore succeeded under section 111 of the Magistrates’ Courts Act 1980.

• High Court (Administrative Court): The appeal by way of case stated was allowed. The findings of actual occupation, shared occupation and paramount control were held perverse and unlawful, and the liability orders were set aside.
• Grantham Magistrates Court: On 15 October 2009, four liability orders were made against Tallington Lakes Limited under Regulation 12 of the Non-Domestic Rating (Collection and Enforcement) (Local Lists) Regulations 1989.