The Commissioners of Customs and Excise and Another

JurisdictionEngland & Wales
JudgeLORD JUSTICE MEGAW,LORD JUSTICE CUMMING-BRUCE
Judgment Date13 December 1978
Judgment citation (vLex)[1978] EWCA Civ J1213-5
CourtCourt of Appeal (Civil Division)
Date13 December 1978

[1978] EWCA Civ J1213-5

In The Supreme Court of Judicature

The Court of Appeal

(Civil Division)

(On appeal from Order of The Divisional Court - Queen's Bench Division)

Before:

Lord Justice Megaw

Lord Justice Lawton and

Lord Justice Cumming-Bruce

In the Matter of an Application by Windsor Securities Limited for Orders of Certiorari and Mandamus

And In the Matter of a purported Decision of the Liverpool City Council: issued on the 25th day of September 1975

Mr. MATTHEW HORTON (instructed by Messrs. Hextall, Erskine & Co., Agents for Messrs. Laces & Co., Liverpool) appeared on behalf of the Appellant (Applicant).

Mr. IAN FOSTER (instructed by The City Solicitor, Liverpool City Council) appeared on behalf of the Respondent (Respondent).

LORD JUSTICE MEGAW
1

The first judgment will be delivered by Lord Justice Cumming-Bruce.

LORD JUSTICE CUMMING-BRUCE
2

Introduction

3

By the first of these two applications dated the 2nd May, 1977, Windsor Securities Limited seeks:

4

(i) an order of certiorari to quash a purported decision of the Liverpool City Council, acting through the Treasurer, made on 25th September, 1975, whereby he purported to refuse an application by the applicant under paragraph 3 (A) of the First Schedule to the General Rate Act, 1967, for relief on the ground of hardship from liability to pay the rating surcharge levied under section 17A of that Act, as amended, in respect of Peter's Buildings, Rumford Street, Liverpool; and

5

(ii) an order of mandamus directed to the Liverpool City Council to reconsider the application and determine it according to law.

6

By the second application the same company seeks:

7

(i) an order of certiorari to quash a decision of the Liverpool City Council acting through its General Services Committee - made on the 2nd September, 1976, whereby it refused an application by the applicant under the same provisions for relief on the ground of hardship from liability to pay both the unoccupied rate assessed pursuant to paragraph 1 of the First Schedule to the 1967 Act and rating surcharge in respect of the same buildings; and

8

(ii) an order of mandamus to reconsider the application and determine it according to law.

9

Before 1966 there was no liability for rates upon unoccupied property. By section 20 of the Local Government Act, 1966, re-enacted in section 17 of the General Rating Act, 1967, the law waschanged. Thereafter local rating authorities were empowered to levy rates upon unoccupied property. The liability was imposed upon the owner. The assessment was to be 50 per cent, of the assessment made on the hereditament when occupied, but by section 17 rating authorities were empowered to resolve whether to bring the liability to unoccupied rate into force in their areas, and to determine the date from which such liability was to be imposed. Under the 1967 Act, once a rating authority had resolved to enforce liability to unoccupied rate, the only discretion that it had was that given under section 53, which provided: "A rating authority shall have power to reduce or remit the payment of any rate on account of the poverty of any person liable to pay it". The Minister was given power by paragraph 3 of the First Schedule by regulations to provide that unoccupied rate should not be paid in respect of hereditaments of such descriptions as might be prescribed by the regulations or in such circumstances as might be prescribed. In 1967 the Minister made regulations (1967 Statutory Instrument No. 934) exempting certain classes of owner after death, bankruptcy or upon winding-up of a company. They do not apply in these cases.

10

The Liverpool City Council had not resolved to implement the provisions of section 17 of the 1967 Act when the applicant embarked upon a commercial adventure which had as its purpose the purchase of Peter's Buildings, Rumford Street, in Liverpool, its demolition, and the construction on the site of a new block designed as office accommodation which would be put on the market and let. The applicant is described as a limited company incorporated on 26th November, 1971, for the purposes of property development. Peter's Building is described in a letter from the applicant to the Chief Executive of the Council as comprising some 52 separate occupations in an old rambling office building which was wasteful of valuable city centre space. When it renewed its application in June, 1976,and submitted a Statement of Case drafted by counsel it described it as follows: "2. The building is a large building comprising basement, ground and three upper floors. It was purpose-built for shop, office and other commercial use but by the time of purchase by Windsor it had become old-fashioned and dilapidated. However, the site occupied by the building is an important one and Windsor considered it ripe for redevelopment. It was for this purpose that Windsor decided to buy the building and it was on this basis that the purchase price of £375,000 for the property was calculated.

11

"3. As is often the case in a purchase of this, vacant possession was not provided by the vendor. There were 58 tenancies expiring at various times up until 30th November 1978. Windsor expected to be able to arrange with the tenants for the surrender of their leases, this also being standard commercial practice in a purchase of this kind".

12

In August, 1973, the applicant agreed a price with its vendors. In October, 1973, contracts were exchanged. Completion took place in March, 1974. Meanwhile, on 8th February, 1974, the provisions of the Local Government Act, 1974, came into force. They changed the law relating to unoccupied rate charge in three relevant respects:

13

(a) By section 15 power was conferred on rating authorities to assess the charge at different percentages of the occupied rate for different classes of property, up to 100 per cent.

14

(b) By section 16 a new levy called Surcharge was imposed on unoccupied commercial buildings which had been empty for six months, the surcharge to be levied by doubling the normal rates for the first twelve months, to treble them for the second twelve months, to quadruple them for the third twelve months, and so on progressively while the period of non-use lasted.

15

(c) By section 15 (5), which amended the First Schedule tothe General Rating Act, 1967, by introducing the new paragraph 3A, rating authorities were given power to reduce or remit both the unoccupied rate and the surcharge if they considered that the payment would cause hardship to the person liable for those rates.

16

On 13th March, 1974, the Liverpool City Council resolved to levy a rate of 100 per cent, on all classes of empty property for two years from 1st April, 1974. Thus from 1st April the applicant, which had become the owner of Peter's Buildings by completion of the purchase in March, 1974, became liable to pay both Tin-occupied rate at 100 per cent, on any hereditament in the building which was unoccupied for six months after 1st April, 1974, and in addition a surcharge of a further 100 per cent, on any hereditament which was unoccupied for a period of six months after 8th February, 1974.

17

The action taken by the applicant after acquiring the building is described in paragraphs 5 and 6 of its Statement of Case for relief to the Countil dated 23rd June, 1976:

18

"5. Having purchased the building Windsor have sought to implement its intentions as expeditiously as possible. On 29th July 1974 an application was made for outline planning permission and on 14th December 1974 permission was granted, thus demonstrating the City's support for the principle of redevelopment. Approval of details was sought in March 1975, but Windsor have had to wait until April of this year" (1976) "for the issue of the approval. No criticism is made of this delay in so far as Windsor see it as confirmation by the City of the importance they attach to having the site redeveloped in a way which will yield the greatest having the site redeveloped in a way which will yield the greatest benefit.

19

"6. Contemporaneously with the obtaining of planning permission Windsor have been using every endeavour to obtain vacant possession of the whole of the building since it has always beentheir wish to implement the planning permission immediately following its issue. Unfortunately unexpected difficulties have arisen in this respect and 11 tenants still remain in the building. This unfortunate situation is attributable to economic factors outside Windsor's control. In particular interest charges have risen; building costs have soared without any commensurate rise in rental values; and capital values have dropped severely. Windsor did not, and could not have been expected to, foresee these events at the time of their purchase. In consequence of that, however, Windsor has had to revise the economics of the re-development project. Accordingly their ability to pay compensation to their tenants in return for the surrender of their lease has been drastically restricted".

20

In 1975 the City Council as rating authority served notice upon the applicant of assessment to unoccupied rate and rating surcharge in respect of such hereditaments in Peter's. Buildings as qualified for assessment under the 1967 Act as amended by the 1974 Act. On 18th February, 1975, the applicant applied (the first application) for relief from the imposition of the surcharge on the ground of hardship in a letter addressed to the Chief Executive of the Council. No application was then made for relief from the unoccupied rate charge imposed in respect of the same buildings.

21

It is not necessary to consider in detail the documents or correspondence in connection with the first application, set out in Bundle 1 before us. The reason why that is unnecessary is that it is conceded before us on behalf of the respondent rating authority that the decision, made by them on the...

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