Kenya Aid Programme v Sheffield City Council

For mandatory charitable rate relief, the court must consider both the charitable purpose of the use and the extent of the actual use of the hereditament. The purpose is assessed from the standpoint of the occupying charity and must directly facilitate its main charitable purposes. The court may adopt a broad assessment of the evidence, but it must not test the charity’s entitlement by asking whether occupation of particular premises was necessary or whether storage was efficient. Fundraising or other revenue-producing use requires separate analysis to determine whether it affects the whole or main use. A High Court decision on a case stated appeal is ordinarily final, so judicial review is not a route to create a further appeal to the Court of Appeal.

Kenya Aid Programme, a registered charity in rateable occupation of two warehouse units, appealed by way of case stated against liability orders for non-domestic rates. It contended that the units were wholly or mainly used for charitable purposes and that it therefore qualified for mandatory relief under section 43(6) of the Local Government Finance Act 1988.

The District Judge concluded that the premises were not used wholly or mainly for charitable purposes, relying on the limited extent and inefficiency of the storage, the lack of necessity for both units, and the financial arrangement with the landlord. The charity also sought permission for judicial review, intending to preserve a possible route to the Court of Appeal.

The issues were whether the District Judge adopted the correct approach to “wholly or mainly used for charitable purposes”, and whether parallel judicial review proceedings were permissible.

1. Case stated appeal allowed and matter remitted. The High Court held that the statutory test under section 43(6) of the Local Government Finance Act 1988 requires consideration of both the purpose and the extent of the actual use of the premises. The use must be assessed from the viewpoint of the charity and must directly facilitate the carrying out of its main charitable purposes, as explained in Oxfam v Birmingham City Council [1976] 1 AC 126.
2. The District Judge was entitled to consider the whole evidence and to adopt the broad approach described in English Speaking Union v City of Edinburgh Council [2010] R.A. 227. “Wholly” does not mean “solely”, and the statutory words permit consideration of the amount of actual use. The distinction between “occupation” under section 43(1) and “use” under section 43(6) was material.
3. However, the District Judge wrongly considered whether it was necessary for the charity to occupy both units. Glasgow Corporation v Johnstone [1965] AC 609 established that necessity was not a relevant criterion. Assessing how efficiently the furniture could have been stored was closely related to necessity and was also illegitimate.
4. The financial advantages to the charity and landlord could not themselves justify refusing relief. If fundraising or revenue production amounted to a use of the premises, the District Judge had to assess how that use affected whether charitable storage was the whole or main use. General fundraising was not use for charitable purposes within the principle in Oxfam v Birmingham City Council.
5. The court lacked the whole evidential basis needed to determine the extent of use itself. The case was therefore remitted to the District Judge for reconsideration in accordance with the judgment, including further submissions on the financial arrangement.
6. Permission for judicial review was refused. The appropriate procedure for challenging liability orders was case stated appeal. Sections 18 and 28A of the Senior Courts Act 1981 showed a legislative intention that the High Court’s decision on such an appeal should be final. Farley v Child Support Agency [2005] EWCA Civ 869 concerned exceptional circumstances, while Revenue and Customs Commissioners v Berriman [2008] 1 WLR 2171 was not persuasive on parallel proceedings.

• Sheffield Magistrates’ Court: On 31 October 2011, the District Judge made liability orders and held that the premises were not wholly or mainly used for charitable purposes.
• High Court (Administrative Court): The case stated appeal was allowed and remitted for reconsideration. Permission for judicial review was refused.