Bridgeport Estates Ltd for Judicial Review of a decision of Highland Council (Court of Session)

Factual and Procedural Background

The Petitioner is the owner of premises at 14 Main Street in The City. On 1 August 2024, it entered into a lease of these premises to Company A, which subsequently sub-let them to Company B. The rent under these leases was nominal (£1), with the Petitioner retaining liability for utilities. Company B notified the Respondent, a local authority, that the premises would be used for religious worship. The Respondent issued a decision dated 13 November 2024, determining that the Petitioner was liable for non-domestic rates on the basis that the leasing arrangement was an artificial rates avoidance scheme designed to gain an advantage under the relevant legislation.

The Petitioner challenged this decision by petition for judicial review, arguing that the decision was unlawful and irrational, lacking evidential support and internally inconsistent. The Respondent opposed the petition, contending the decision was lawful and that the petition was incompetent because the Petitioner had an alternative statutory appeal remedy under the Local Government (Scotland) Act 1947 which it had failed to pursue.

The procedural history includes the Respondent issuing a notice of intention to treat the Petitioner as liable to pay non-domestic rates, the Petitioner making representations, and the Respondent issuing a final notice confirming liability. A demand notice for payment of rates was subsequently issued, but no appeal was lodged against it.

Legal Issues Presented

1. Whether the petition for judicial review is competent given the existence of an alternative statutory appeal remedy.
2. If competent, whether the Respondent's decision to treat the Petitioner as liable for non-domestic rates was unlawful and/or irrational.

Arguments of the Parties

Petitioner's Arguments

• The petition is competent despite the existence of an alternative remedy because the decision challenged is not subject to a statutory appeal and judicial review remains available in the absence of an effective alternative.
• The alternative remedy under section 238 of the Local Government (Scotland) Act 1947 is ineffective because the Respondent would be judge in its own cause, there is no right of appeal from its decision, and no discretion to allow late appeals.
• There are special or exceptional circumstances justifying the petition, namely the inadvertent forwarding of only the front page of the demand notice to the Petitioner’s agents, preventing timely appeal.
• The Respondent's decision was unlawful and irrational as it was based solely on the fact that the premises were advertised for rent at a higher figure, which is not evidence of rent reasonably obtainable on the open market.
• The Respondent’s reasoning was internally inconsistent, finding both that the arrangement conferred an advantage and that it was artificial, which the Petitioner argued could not logically coexist.

Respondent's Arguments

• The petition is incompetent because an effective statutory remedy was available and not pursued, as established by case law.
• The statutory appeal under section 238 is effective and allows a full reconsideration of the case, including evidence.
• The Respondent was entitled to consider the advertised rental figure as relevant evidence that the nominal rent was significantly below market value.
• The Respondent’s findings that the arrangement was artificial and aimed at gaining a rates exemption are compatible and rational.
• The alleged exceptional circumstances are insufficient as the failure to forward the full demand notice was the Petitioner’s own procedural error.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
British Railways Board v Glasgow Corporation (1976 SC 224)	Judicial review is generally incompetent where an alternative statutory remedy exists and is not exhausted, absent special circumstances.	Supported the finding that the petition was incompetent due to the availability of a statutory appeal remedy.
McGeogh v Electoral Registration Officer, Dumfries & Galloway (2011 SLT 633)	Judicial review availability is a matter of discretion, especially where alternative remedies exist.	Referenced by Petitioner to argue discretion should allow judicial review despite alternative remedy.
Tarmac Econowaste Ltd v Assessor for Lothian Region (1991 SLT 77)	Effectiveness of alternative remedy determines competency of judicial review.	Used to assess whether the statutory appeal was an effective alternative remedy.
Mensah v Secretary of State for the Home Department (1992 SLT 177)	Judicial review may be competent if a decision is a fundamental nullity.	Distinguished by the court as not applicable because the decision challenged was not a fundamental nullity.
McCue v Glasgow City Council (2014 SLT 891)	Common law remedies are not competent where statutory remedies exist and have not been pursued.	Supported the court’s conclusion on incompetency of petition.
Coalburn Miners Welfare and Charitable Society v Strathclyde Regional Council (1995 SLT 950)	Section 238 appeals involve a full reconsideration of rating decisions including evidence.	Demonstrated the effectiveness of the statutory appeal remedy.
Hope v Corporation of Edinburgh (1897) 5 SLT 195	Challenge to appeal mechanisms where the decision-maker is also the judge.	Rejected by the court as statutory appeal is effective despite the Respondent being judge in its own cause.
Carnwath (Ed), De Smith's Judicial Review (9th Edn 2023) paragraph 6.039	Requirement for evidential basis in administrative decisions to avoid unlawfulness and irrationality.	Referenced in relation to the Petitioner’s argument about lack of evidence supporting the Respondent’s decision.

Court's Reasoning and Analysis

The court first addressed the competency of the petition. It reaffirmed the established principle that judicial review is generally not competent where an effective alternative statutory remedy exists and has not been pursued, except in special or exceptional circumstances. The statutory appeal under section 238 of the Local Government (Scotland) Act 1947 was held to be an effective remedy, allowing a full reconsideration of the decision including evidence. The Petitioner’s failure to lodge such an appeal rendered the petition incompetent.

The Petitioner’s claim of exceptional circumstances, based on the partial forwarding of the demand notice, was rejected as a procedural error attributable to the Petitioner, not the Respondent, and thus not exceptional.

On the merits, the court considered the Respondent’s finding that the rent of £1 was significantly below the level reasonably obtainable on the open market. The court accepted that the advertised rent exceeding £32,500 constituted relevant evidence (an adminicle) supporting that conclusion, alongside the nominal rent itself. The Petitioner’s argument that the absence of a higher rent actually achieved undermined this finding was dismissed as premised on the incorrect assumption that the arrangement was bona fide.

The court also rejected the claim that the Respondent’s reasoning was internally inconsistent. It was logically coherent for the Respondent to find that the arrangement aimed to secure religious exemption relief and simultaneously conclude that it was artificial, as the relief depended on genuine religious use which was not established.

Holding and Implications

The court held that the petition for judicial review was INCOMPETENT due to the existence of an alternative, effective statutory appeal remedy which the Petitioner failed to pursue. Consequently, the court sustained the Respondent's pleas-in-law and refused the petition.

The direct effect of this decision is that the Petitioner must pursue the statutory appeal process to challenge the liability for non-domestic rates. No new legal precedent was established, and the decision reinforces the principle that judicial review is not available where an effective statutory appeal exists and has not been exhausted, absent exceptional circumstances.