Preston City Council v Oyston Angel Charity

For zero-rating of unoccupied premises under section 45A(2) of the Local Government Finance Act 1988, it is not necessary to show that the owning charity will itself occupy the property when next in use. The statutory question is whether it appears that the hereditament will then be wholly or mainly used for charitable purposes, including the charitable objects of the owning charity, whether or not other charitable purposes are also pursued. The occupied-property regime and the unoccupied-property regime need not impose identical conditions. A court may adopt a purposive construction where appropriate, but it cannot add words to clear statutory language merely because the resulting scheme appears unusual or because another statutory regime is structured differently.

Oyston Angel Charity held several unoccupied commercial units under a licence which permitted sub-licensing for charitable services. Preston City Council sought liability orders for unpaid non-domestic rates. The Preston Magistrates’ Court concluded that the units were zero-rated under section 45A(2) of the Local Government Finance Act 1988, because their next use would be wholly or mainly charitable, and refused the orders.

The Council appealed by way of case stated. It argued that zero-rating required the owning charity itself to occupy and use the premises when next in use. The central issue was the proper construction of section 45A(2)(b).

1. Appeal dismissed. The magistrates had not erred in law. The case stated was answered “Yes”.
2. Section 45A(2)(b) asks whether, when next in use, the hereditament will be wholly or mainly used for charitable purposes. The phrase includes the charitable objects of the owning charity, whether or not those purposes are accompanied by other charitable purposes.
3. The provision does not require the currently owning charity to occupy the property when it is next used. Reading that requirement into the subsection would add words which Parliament had not used.
4. The statutory schemes for occupied and unoccupied premises are materially different. Under section 43, occupation by the charity and charitable use are legally discrete conditions for reduced rating. That does not mean that occupation by the owning charity is also a condition of zero-rating under section 45A(2), which concerns unoccupied premises and is directed principally to ownership and anticipated use.
5. The court accepted that it would be insufficient merely to show that the next occupier would be any charity, regardless of its objects. The anticipated use had to include the specific charitable objects of the owning charity. That issue had not been disputed before the magistrates and was outside the scope of the appeal.
6. The Council’s late appeal was admitted because the delay was short, explained, caused no real prejudice and involved an important point of statutory construction.

• High Court (Administrative Court): appeal by way of case stated from the Preston Magistrates’ Court dismissed. The magistrates’ refusal to make liability orders was upheld.