R (Edison First Power Ltd) v Central Valuation Officer
| Jurisdiction | UK Non-devolved |
| Judge | LORD STEYN,LORD HOFFMANN,LORD MILLETT,LORD SCOTT OF FOSCOTE |
| Judgment Date | 10 April 2003 |
| Neutral Citation | [2003] UKHL 20 |
| Date | 10 April 2003 |
| Court | House of Lords |
and another
[2003] UKHL 20
The Appellate Committee comprised:
Lord Bingham of Cornhill
Lord Steyn
Lord Hoffmann
Lord Millett
Lord Scott of Foscote
HOUSE OF LORDS
I have the misfortune to differ from the majority of the House, and would for my part allow the appeal. Since my opinion cannot affect the outcome, I shall state the reasons for it briefly, adopting the helpful accounts of the facts and the relevant legislative provisions given by Carnwath J at first instance ( [2000] RA 1), by the Court of Appeal (Simon Brown, May and Dyson LJJ, [2001] RA 229; [2001] EWCA Civ 1096) and by my noble and learned friend Lord Millett.
I take as my starting point what is, I think, a trite proposition of law, that rates are a form of tax imposed on the occupier of a hereditament. In some circumstances rates may also be imposed on an owner, but the potential liability of a non-occupying owner plays no part in this case and can for present purposes be ignored. Unless there are joint occupiers, there can be only one occupier of a hereditament at any one time, and accordingly there can ordinarily be only one party liable to pay rates on that hereditament in relation to a given period. As a general rule of construction it will be presumed that a statute does not intend to tax or rate, or authorise the imposition of a tax or rate, on more than one occupier in relation to occupation of a hereditament during a given period. The juridical basis of this presumption may be open to argument. It may rest, in this context, on the legal nature of rates. But I do not think the existence of the presumption can be doubted. The cases cited by Simon Brown LJ in paragraphs 30-32 of his judgment are good authority for it: Smith & Son v Lambeth Assessment Committee (1882) 9 QBD 585 at 593; Westminster City Council v Southern Railway Co [1936] AC 511 at 565; Brook v National Coal Board [1975] RA 367 at 371. The general presumption against rating two parties in relation to the same hereditament was described by Simon Brown LJ (paragraph 30 of his judgment) as "well-established", and I did not understand the existence of the presumption to be challenged.
But it is of course no more than a presumption. It is not conclusive or irrefutable. Parliament is sovereign. Since, however, the presumption exists (like the presumption against double taxation) for the protection of the citizen and operates to curb the power of the state to exact payment from the citizen, the presumption will be displaced only if "sufficiently clear express words are used" or there are "circumstances surrounding the enactment of the particular legislation which lead to an inevitable inference that Parliament intended, in using the words that it did" that the presumption should be displaced. I did not understand either party to question the correctness of the approach indicated in these quotations from the opinion of Lord Oliver of Aylmerton in R v Inland Revenue Commissioners, Ex p Woolwich Equitable Building Society [1990] 1 WLR 1400 at 1412-1413.
In the judgments below, and in argument before the House, somewhat differing views were expressed on whether the facts of this case were such as to engage the presumption at all: whether (in other words) it is a case of double recovery. I would for my part adopt both the analysis and the conclusion of Dyson LJ in paragraphs 70-74 of his judgment. It is not in doubt that Edison paid non-domestic local list rates to the two relevant billing authorities in respect of occupation of the two transferred power stations for the period from 19 July 1999 until 31 March 2000. During the same period PowerGen continued to be liable to pay rates on a basis calculated so as to take account of their occupation of the two power stations. The transfer of the power stations did not reduce their liability in any way. Thus in effect the Secretary of State received payment twice, once from PowerGen and once from Edison. It was therefore a case of double recovery. The presumption was engaged.
Neither party suggested that the presumption was displaced by sufficiently clear express statutory words. Thus the question is whether the circumstances surrounding the enactment of the particular legislation were such as to raise an inevitable inference (not just a reasonable or a not unlikely inference, but an inevitable inference) that Parliament intended, in using the words that it did, to displace the presumption. But here again the task of interpretation is made easier by the common approach of the parties. The Secretary of State did not contend that the Local Government Finance Act 1988 raised an inevitable inference that Parliament intended there to be double recovery in a situation where a hereditament formerly part of a class of hereditaments included in the central list was transferred mid-year to a non-designated person and so was included in a local list from the date of transfer, obliging that person to pay local list rates. Rather he contended that the 1988 Act raised an inevitable inference that Parliament intended to authorise the Secretary of State to introduce a scheme for central rating which would have that effect. It is this contention which Edison challenges. The answer must be found in the statute, read of course as a whole and in context.
Sections 41-51 inclusive of the 1988 Act made provision for the local rating of non-domestic hereditaments not included in a central non-domestic rating list. The fine detail of the scheme is not important for present purposes. It is however clear from sections 43 and 44 that the amount chargeable in rates for each chargeable day was to be reached by multiplying the rateable value shown for the day (calculated in accordance with section 56(1) and Schedule 6) by the non-domestic rating multiplier for the financial year (calculated in accordance with section 56(2) and Schedule 7) and dividing the result by the number of days in the financial year. The product of that calculation, multiplied by the number of days during which the ratepayer has occupied the hereditament during the financial year, will represent the ratepayer's liability: the sum per day times the number of chargeable days.
The central rating list scheme established by sections 52-54 of the Act was clearly intended to provide a simple and efficient means of imposing rates on and collecting rates from ubiquitous utilities with hereditaments in numerous local authority areas. So specified hereditaments occupied by designated persons were to be centrally rated en bloc, and instead of specific rateable values applied to individual hereditaments the rateable value of these centrally rated hereditaments was to be shown in the list as a whole (section 53(1)(2) and (3)). By section 54 the chargeable amount for each chargeable day was to be reached by multiplying the rateable value shown for the day in the central list against the ratepayer's name (calculated in accordance with section 56(1) and Schedule 6) by the non-domestic rating multiplier for the financial year (calculated in accordance with section 56(2) and Schedule 7) and dividing the result by the number of days in the financial year. Allowance being made for the aggregation of hereditaments inherent in the scheme of central list valuation, the formula was very similar to the local list formula. It was clearly contemplated that there was some purpose to be served by finding the chargeable amount of rates for each chargeable day. So far, one finds no indication that a designated person was to remain liable to pay the full amount of rates even though a hereditament or hereditaments whose value was included in the aggregated central list value of hereditaments occupied by that person had ceased to be owned or occupied by that person but had become subject to local list rates as a result of its occupation by a person subject to such rates. It is not, as it seems to me, inherent in a scheme for centralised rating en bloc of hereditaments in a certain class that rates should continue to be paid in the same amount even though the hereditaments comprised in the class have significantly changed.
Counsel for the Secretary of State placed considerable reliance on section 67(9):
"A hereditament shall be treated as shown in a central non-domestic rating list for a day if on the day it falls within a class of hereditament shown for the day in the list; and for this purpose a hereditament falls within a class on a particular day if (and only if) it falls within the class immediately before the day ends".
This provision, read on its own, might be thought to warrant the imposition of rates on a designated person in respect of a broadly-defined class of hereditaments whether or not the person ceased to occupy or own them at any stage in the financial year. But this reading is undermined by subsection (9A), which reads:
"In subsection (9) above 'class' means a class expressed by reference to whether hereditaments-
(a) are occupied or owned by a person designated under section 53(1) above, and
(b) fall within any description prescribed in relation to him under section 53(1)".
This would suggest to me that a designated person does not remain liable to pay rates calculated by reference to a valuation insofar as it is based on the valuation of hereditaments he no longer owns or occupies, the more so (given the presumption) where the hereditaments are owned or occupied by another party liable to pay local list rates.
The crux of the argument between the parties turned on the proper construction of Schedule 6 to the Act, entitled "Non-Domestic Rating: Valuation". Its effect, as stated in paragraph 1, was to determine the...
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