Joanne Moore (Valuation Officer) v Caroline Bailey

For rating purposes, the geographical test is primary when identifying a hereditament. A functional analysis may divide a geographical unit only in appropriate cases, including where separable parts are used for materially different purposes. Geographically connected areas may be aggregated where necessary for the effective enjoyment of one another.

Where more than one person occupies premises, rateable occupation depends on actual, exclusive, beneficial and non-transient occupation. Exclusive occupation permits shared occupation where each occupier occupies for a particular purpose. The person with paramount occupation is identified by reference to the parties’ rights, control and the purpose of occupation.

The Valuation Tribunal for England decided that equestrian facilities at a farm comprised two hereditaments. The Valuation Officer appealed, arguing that the farm was one composite hereditament or, alternatively, that the two yards formed one hereditament distinct from the agricultural land.

The respondent argued that she occupied the licensed racing yard separately and that the point-to-point yard was separately occupied by her husband. The central issues were the geographical and functional identification of the hereditament, the parties’ rateable occupation, paramount occupation of the point-to-point yard, and whether the two yards were different modes or categories of occupation.

1. Appeal allowed. The Farm was a single, part-exempt composite hereditament. The rating list was to be amended to show a rateable value of £18,000, the figure agreed if the appeal succeeded.
2. Under Woolway (VO) v Mazars LLP [2015] UKSC 53, the geographical test is primary. The two yards were contiguous and readily accessible from one another. The farm surrounded them, and the gallops were necessary to the effective enjoyment of a licensed racing yard. There was therefore no basis for treating the areas as separate hereditaments.
3. Applying John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344, the partnership had actual, beneficial and non-transient occupation of the Farm. The partners jointly occupied the licensed yard for the partnership’s profitable business, notwithstanding that Mrs Bailey alone held the relevant licence and that some uses of the buildings were restricted to her.
4. Mr Bailey occupied the point-to-point yard with the partnership’s permission, but the partnership remained in paramount occupation. It retained the tenancy rights, could require him to leave without notice, maintained the buildings, paid the operating costs and received the economic benefit. Applying Hollywell Union and Halkyn Parish v Halkyn District Mines Drainage Co [1895] AC 117, Westminster Council v Southern Railway Co [1936] AC 511 and Ludgate House Ltd v Ricketts (VO) [2020] EWCA Civ 1637, Mr Bailey was not in rateable occupation.
5. The two yards were used for the same broad purpose: training and stabling horses. Different valuation approaches did not create different modes or categories of occupation. Following the approach in Hughes (VO) v Exeter City Council [2020] UKUT 7 (LC), specialised subdivisions should not be introduced without a sufficiently clear and coherent basis.

• Valuation Tribunal for England: held that the property comprised two hereditaments and assessed the licensed yard at rateable value £12,000.
• Upper Tribunal (Lands Chamber): allowed the appeal and directed amendment of the rating list to show a single rateable value of £18,000.