Principled Offsite Logistics Ltd, R (On the Application Of) v Trafford Council

Rateable occupation does not require an independent commercial purpose beyond occupation itself. The applicable question is whether the four elements identified in John Laing & Sons Ltd v Kingswood Area Assessment Committee are present: actual occupation, exclusivity for the possessor’s purposes, value or benefit to the possessor, and occupation that is not too transient. The benefit may consist in occupying the premises for reward, even where the underlying motive is rates avoidance. The court must apply a morally neutral analysis and must not impose a requirement that goods be stored for a separate business purpose. A billing authority’s decision is judged when made. A decision based on a tenable, though ultimately incorrect, view of unclear law will not necessarily be quashed.

Principled Offsite Logistics Ltd operated a business involving short-term leases of empty commercial premises. It was paid by landlords to occupy the premises, with the arrangements intended to reduce the landlords’ national non-domestic rates liability. Trafford Council decided that the claimant was not in rateable occupation where its purpose was limited to occupying the premises for rates mitigation and laid informations seeking liability orders on an unoccupied-rates basis.

The claimant sought judicial review of the decision concerning premises at Stretford Mall and declarations concerning Trafford’s general approach. Trafford argued that the issue should be determined in the magistrates’ court, that the claim was academic and out of time, and that occupation required a further business purpose such as storage. The central issue was whether occupation for its own sake, undertaken for reward and to secure rates savings, could be beneficial occupation in law.

1. Permission. Permission to apply for judicial review was granted. Although rating liability issues could ordinarily be determined by magistrates with an appeal by case stated, the Administrative Court was the more suitable forum for resolving the common issue of legal principle affecting numerous stayed or adjourned proceedings. The claim was not academic and was brought in time. Even if academic, the circumstances would have justified hearing it in the public interest.
2. Applicable test. The relevant framework was the four-part test articulated in John Laing & Sons Ltd v Kingswood Area Assessment Committee: actual occupation; exclusivity for the possessor’s particular purposes; possession of some value or benefit to the possessor; and occupation that is not too transient. The facts of individual properties remained for determination by the magistrates.
3. Meaning of beneficial occupation. The earlier authorities provided context but did not decide the new question of occupation undertaken solely to secure rates savings. Genuine rates-avoidance transactions must be given their legal effect without moral judgment or distortion of ordinary language. No additional commercial or business purpose was required. Where the business of the putative occupier was occupation itself, the benefit could be the occupancy itself, including occupation for reward. The claimant therefore succeeded on its primary legal contention.
4. Relief. The decision to lay the informations was nevertheless lawful. It was taken in good faith on a tenable view of an unclear area of law, and its legality had to be judged when made. The decision was not perverse, irrational or obviously ill-founded. The facts might also ultimately establish that the claimant was not in occupation, for example because the occupation was too transient. No declaratory or quashing relief was granted. The judgment itself was considered a sufficient judicial response.