My Community Space v Ipswich Borough Council, Court of Appeal - Administrative Court, December 05, 2018, [2018] EWHC 3313 (Admin)

Resolution Date:December 05, 2018
Issuing Organization:Administrative Court
Actores:My Community Space v Ipswich Borough Council
 
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Case No: CO/3755/2017

Neutral Citation Number: [2018] EWHC 3313 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

ADMINISTRATIVE COURT

On appeal by case stated from liability orders made by

District Judge Celia Dawson sitting in South Suffolk Magistates' Court

following her judgment on 15 May 2017

Date: 5/12/2018

Rolls Building, 7 Rolls Buildings

Fetter Lane, London, EC4A 1NL

Before:

MR JUSTICE WALKER

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Between:

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JENNY WIGLEY (instructed by asb law llp) for the Appellant

TOM GOSLING (instructed by Greenhalgh Kerr Solicitors Ltd) for the Respondent

Hearing date: 13 June 2018

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Judgment

Table of Contents:

  1. Introduction 1

    A1 Introduction: general 1

    A2 Introduction: Ipswich BC's ``sham'' position statement 2

    A3 Introduction: MCS's position statement 2

    A4 Introduction: MCS's April 2017 skeleton argument 3

    A5 Introduction: Ipswich BC's April 2017 skeleton argument 4

    A6 Introduction: the judgment agreed facts section 5

    A7 Introduction: the case stated non-disputed facts 6

  2. The judge's findings 7

    B1 The judge's findings: introduction 7

    B2 MCS's charitable objects 7

    B3 The properties 8

    B4 Evidence of Ms Theresa Mann 8

    B4.1 Ms Theresa Mann: general 8

    B4.2 Visit by an inspector, 6 July 2016 8

    B4.3 Visit by Ms Mann, 8 August 2016 9

    B4.4 Visits by Ms Mann, 9 and 24 January 2017 9

    B4.5 Cross examination of Ms Mann 9

    B5 Evidence of Mr Jeffrey Powney 10

    B5.1 Mr Powney: general 10

    B5.2 Powney 1: the first occupation period 10

    B5.3 Powney 1: the second occupation period 11

    B5.4 Cross examination of Mr Powney 11

    B5.5 The judge's assessment of Mr Powney's evidence 12

    B6 Evidence of Mr George Cook 13

    B7 Findings as to lack of appearance, purpose or intent 15

    B8 Findings as to reactive dealings 16

    B9 The judge's assessment of the evidence 16

  3. Case stated questions & grounds of appeal 17

    C1 Questions identified in the case stated 17

    C2 Grounds of appeal 18

  4. Issues said to arise on the appeal 19

  5. Relevant legal principles 19

  6. Argument and analysis: case stated questions 26

    F1 Case stated questions: introduction 26

    F2 Q1 and Q2: argument and analysis 27

    F2.1 Q1.1, 2.1 and 2.3: change of objects 27

    F2.2 Q1.2 and Q2.2: number of advertisements 28

    F2.3 An additional factual challenge? 28

    F3 Q3: argument and analysis 28

    F3.1 Q3 relevant factors: introduction 28

    F3.2 Ipswich BC's primary response 29

    F3.3 Circumstances when Q3 factors could be relevant? 29

    F4 Q4 argument and analysis 32

  7. The grounds of appeal and the listed issues 33

  8. Conclusion 33

    Annex 1 34

    Mr Justice Walker:

  9. Introduction

    A1 Introduction: general

    1. This appeal by case stated concerns liability orders for national non-domestic rates. The orders were made by District Judge Celia Dawson (``the judge'') in the South Suffolk Magistrate's Court sitting at Ipswich following an adjudication by the judge in a written judgment on 15 May 2017.

    2. The appellant, My Community Space (``MCS'') is a registered charity and was the tenant of properties (``the properties'') forming part of St Clare House, Princes Street, Ipswich. The liability orders required MCS to pay Ipswich Borough Council (``Ipswich BC'') £87,773.49 as the balance of national non-domestic rates for the period 23 March 2016 to 31 March 2017.

    3. The judge found, and it is not now disputed, that MCS was in actual occupation of the property from 21 June to 9 August 2016 inclusive and 30 November 2016 to 25 January 2017 inclusive (``the occupation periods''). As to the occupation periods, MCS advanced a contention (``the MCS occupation periods contention'') that during those periods the properties were wholly or mainly used for charitable purposes. The basis for this contention lay in assertions that during the first and second occupation periods the properties were used for exhibitions in pursuance of MCS's charitable objects. If the MCS occupation periods contention were right then during those periods the chargeable amount would be 20% of what it otherwise would have been. On this aspect the judge concluded that MCS had not satisfied her that the use of the properties was, during the occupation periods, wholly or mainly for charitable purposes. The broad question arising on the appeal is whether the judge was entitled to reach that conclusion.

    4. As to the remaining periods (``the empty periods'') the judge found, and it is not now disputed, that the properties were unoccupied during those periods. MCS advanced a contention (``the MCS empty periods contention'') that when next in use the properties would be wholly or mainly used for charitable purposes. If that contention were right then during those periods the chargeable amount would be zero. On this aspect the judge concluded that MCS had not satisfied her that when next in use the properties would be wholly or mainly used for charitable purposes. This conclusion inevitably followed from the judge's rejection of the MCS occupation periods contention. Thus on this aspect, too, the question arising on the appeal is whether the judge was entitled to reach the conclusion that MCS had not satisfied her that the use of the properties during the occupation periods was wholly or mainly for charitable purposes.

    5. The appeal initially came on for hearing before Mrs Justice Lang on 13 February 2018. The matter did not proceed that day, however. This was because the case stated had not incorporated the judge's written judgment of 15 May 2017, with the consequence that the parties' skeleton arguments had not addressed findings in that judgment. Mrs Justice Lang directed that the case stated be amended and set a timetable for revised skeleton arguments.

    6. By the time of the hearing before me the case stated had been duly amended so as to incorporate the written judgment dated 15 May 2017. At the hearing before me Ms Jenny Wigley appeared for MCS and Mr Tom Gosling appeared for Ipswich BC, as they had done before the judge. I have been much assisted by their revised skeleton arguments and by their oral submissions.

      A2 Introduction: Ipswich BC's ``sham'' position statement

    7. Ipswich BC was the complainant at the hearing below. It produced an undated position statement in advance of that hearing. I set out below paragraph 8 of that position statement, with the last sentence italicised by me:

    8. The purported exhibitions arranged by the Respondent at the Properties from 21 June 2016 to 9 August 2016 and from 1 December 2016 to 25 January 2017 do not amount to rateable occupation of the Properties by the Respondent, and there is no evidence that such purported occupation was wholly or mainly for charitable purposes. Rather, these purported exhibitions were shams, set up for the purpose of trying to justify the Respondent's claim for mandatory charitable rates relief, ...

      A3 Introduction: MCS's position statement

    9. On 3 February 2017 MCS produced a position statement for the hearing below. It referred to the properties as ``the Property''. Paragraphs 2 to 8 stated:

    10. MCS is a registered charity (registration number 1125415). Its charitable objects include (but are not limited to) the following:

      ``To provide suitable buildings for the public benefit primarily in the United Kingdom for the provision of:

      [...]

      For the public benefit, the promotion of the efficiency and effectiveness of charities and the effective use of charitable resources, in particular, but not limited to, the provision of premises and work space for charitable use;

      [...]

      To promote any charitable purpose (charitable under English Law) for the benefit of the public as the trustees see fit, in particular, but not exclusively by the following means:

      [...]

      providing opportunities for individuals to volunteer, in particular, but not limited to communications, exhibitions and promotion events in general helping charities convey the opportunities, community contribution and benefits of volunteering.''

    11. MCS is a tenant of the Property pursuant to a lease with a start date of 23 March 2016. Since 23 March 2016, the Property has been unoccupied save as set out below.

    12. Pursuant to its charitable objects, MCS has held exhibitions at the Property from 22 June 2016 to 9 August 2016 inclusive and again from 1 December 2016 to 25 January 2017 inclusive.

    13. The exhibitions were advertised in the local press and publicised elsewhere (as will be detailed in evidence).

    14. During the periods of exhibitions, MCS was both in rateable occupation of the Property and was using the Property ``wholly or mainly for charitable purposes''.

    15. The effect of this in terms of rating liability is that for the periods of the exhibitions, MCS was entitled to mandatory charitable relief from occupied rates under s.43(6) Local Government Finance Act 1988 (``LGFA 1988'') and so was liable to pay only 20% of the full charge. These amounts have been paid.

    16. In terms of liability to unoccupied rates, during the periods when the Property was unoccupied MCS is entitled to zero rating under section 45A of [LGFA 1988].

      A4 Introduction: MCS's April 2017 skeleton argument

    17. MCS's skeleton argument for the hearing below (``MCS's April 2017 skeleton'') was dated 11 April 2017. In paragraph 29 it referred to previous decisions of the Court of Appeal and the High Court in order to justify the following propositions:

    18. Whether or not a party is arranging its affairs in a particular way so as to avoid tax is not a relevant matter and cannot be accorded any weight by the Judge in determining whether the charitable relief provisions apply ... . Nor can it be accorded any weight in considering whether an exemption from unoccupied rates ... should apply. ...

    19. At paragraph 36 MCS's April 2017 skeleton argument added:

    20. ... the Applicant's case is flawed by it placing weight on its perception that the use of the Property was a sham attempt to minimise rates liability (see para 8 of...

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