- Bookmark
- Share
- CaseIQ
Woolway v Mazars
Factual and Procedural Background
Company A occupied the second and sixth floors of an eight-storey office block in The City. For rating year 2005 the Valuation Officer entered each floor as a separate hereditament, following the ordinary practice of treating non-contiguous accommodation under common occupation as distinct units. In 2010 Company A applied to merge the entries, contending that the two floors, although physically separate, were functionally inter-dependent. The Valuation Tribunal for England agreed, merged the assessments and gave a small fragmentation allowance. On appeal, the Upper Tribunal (Lands Chamber) upheld the merger (removing the allowance). The Valuation Officer (“Appellant”) pursued a further appeal. Company A had no remaining financial interest and did not appear; Advocate Attorney Forsdick was appointed to assist the court. The Supreme Court, constituted by Judge Sumption and concurring judges, delivered the present judgment.
Legal Issues Presented
- Whether two non-contiguous floors occupied by the same ratepayer within a single building constitute one hereditament or two separate hereditaments for the purposes of non-domestic rating.
- More broadly, how the geographical (“cartographic”) and functional (“use-based”) tests interact in identifying the correct unit of assessment under the Local Government Finance Act 1988.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bank of Scotland v Assessor for Edinburgh (1890) 17 R 839 | Primary geographical test; functional link relevant only to unite geographically separate subjects when necessary to enjoyment. | Relied on as the starting point for the “geographical primacy” principle. |
| Bank of Scotland v Assessor for Edinburgh (1891) 18 R 936 | Premises under same roof but without internal communication can be separate hereditaments. | Used to illustrate that contiguity without intercommunication is insufficient for unity. |
| University of Glasgow v Assessor for Glasgow 1952 SC 504 | Confirmed geographical unity as the basic test; functional factors secondary. | Cited as authoritative reinforcement of the Scottish approach adopted by the court. |
| Midlothian Assessor v Buccleuch Estates Ltd [1962] RA 257 | Refused to aggregate widely scattered lands despite business connection. | Quoted to emphasise that rating is a tax on property, not on businesses. |
| Hambleton DC v Buxted Poultry Ltd [1993] AC 369 | English approval of the Midlothian statement. | Invoked to show consistency of Scottish and English authorities. |
| Burn Stewart Distillers plc v Lanarkshire VJB [2001] RA 110 | Functional link alone insufficient; appearance and geographic separation decisive. | Supplied modern restatement of the geographical test. |
| Gilbert v S Hickinbottom & Sons Ltd [1956] 2 QB 40 | Suggested functional considerations could prevail over geography. | Critiqued as confused and unsatisfactory; not followed. |
| John Leng & Co v Assessor for Dundee 1929 SC 315 | De-rating context where functional link was pressed. | Referred to as example of decisions coloured by de-rating, not valuation. |
| North Eastern Railway Co v Guardians of York Union [1900] 1 QB 733 | Functional differences may justify splitting one geographical unit. | Illustrates converse use of functional test – to divide, not to aggregate. |
| British Railways Board v Hopkins (VO) [1981] RA 328 | Treated different storeys under common occupation as one hereditament, but on other grounds. | Noted as offering no reasoning on the present point. |
| Trunkfield (VO) v Camden LBC [2011] RA 1 | Practical significance of identifying the correct unit of assessment. | Mentioned to show financial impact of merger decisions. |
| Edinburgh Merchant Co Education Board v Assessor for Lothian 1982 SC 129 | Strict application of geographical test where two schools lay on opposite sides of a road. | Cited in Judge Gill’s concurring analysis. |
| Roxburghe Estates v Assessor for Scottish Borders Council [2004] RA 15 | Necessary interdependence can unite otherwise separate subjects (castle and gift-shop). | Used as example of legitimate functional aggregation. |
| London County Council v Wilkins (VO) [1957] AC 362 | Fixtures and plant may determine hereditament boundaries. | Quoted in Judge Neuberger’s discussion of occupation and valuation. |
Court's Reasoning and Analysis
The Supreme Court articulated three governing principles:
- Geographical primacy: A hereditament is normally defined by visual or cartographic unity; absence of internal communication and the need to traverse property outside the ratepayer’s control strongly indicate separate hereditaments.
- Limited functional aggregation: Geographically distinct premises may be united only when the occupation of one is necessary for the effectual enjoyment of the other, commonly tested by asking whether they could reasonably be let separately.
- Objective character: Necessity is assessed by reference to the property itself, not to the particular business needs or preferences of the occupier.
Applying these principles, the court found:
- The second and sixth floors were separated by common parts over which Company A had only a licence; they lacked internal communication and could plainly be let independently.
- The Upper Tribunal’s reliance on “single occupation within the same building” introduced an arbitrary vertical/horizontal distinction unsupported by law.
- The earlier English authority of Gilbert was criticised for blurring geography and function; it could not justify the merger ordered below.
The court therefore concluded that the statutory concept of a hereditament required separate entries for the two floors.
Holding and Implications
APPEAL ALLOWED.
The orders of the Valuation Tribunal and the Upper Tribunal were set aside. The second and sixth floors occupied by Company A must be entered in the rating list as two separate hereditaments. The decision re-establishes the primacy of geographical unity in English rating law, aligning it with Scottish authority and limiting the circumstances in which functional considerations can aggregate distinct premises. No novel doctrine was created, but prior uncertainty stemming from Gilbert has been clarified, providing clearer guidance for valuation officers and ratepayers.
Alert