The Mayor and Commonalty and Citizens of the City of London v 48th Street Holdings Ltd & Anor

Factual and Procedural Background

This appeal concerned a non-domestic rate mitigation scheme that used recurrent six-week occupations of otherwise unoccupied office premises by placing boxes with redundant contents in them, with the stated effect of reducing non-domestic rates liability by around two thirds. The Local Authority sued the Property Owner for unpaid rates and sought declaratory relief against both the Property Owner and the Scheme Promoter in relation to the Premises, which the Property Owner held as registered leasehold proprietor. The High Court judge held the scheme effective, dismissed the claims, and followed the earlier decision in R (Principled Offsite Logistics Ltd) v Trafford Council, which he did not regard as displaced by Rossendale Borough Council v Hurstwood Properties (A) Ltd. Permission to appeal was granted because the scheme was widely used and had not previously been considered by the Court of Appeal. [Para 32][Para 33][Para 36][Para 39]

Legal Issues Presented

1. Whether, on a purposive interpretation of the rating legislation informed by Rossendale and the Ramsay principle, the scheme’s six-week “reset” occupation counted as occupation for non-domestic rates purposes. [Para 159][Para 162][Para 166]
2. Whether the third Laing ingredient of rateable occupation was satisfied where the only asserted benefit of the occupation was the rate mitigation itself. [Para 159][Para 180][Para 182][Para 186]

Arguments of the Parties

Appellant's Arguments

• The High Court should have applied Ramsay-style purposive interpretation to hold that the reset was not engaged and the scheme was ineffective. [Para 159][Para 162][Para 166]
• The third Laing ingredient was not met because any supposed benefit depended entirely on the statutory rate exemption, not on any independent commercial or practical utility. [Para 159][Para 182][Para 186]

Second Respondent's Arguments

• The Scheme Promoter argued that occupation for the purpose of obtaining a future rates exemption could itself amount to beneficial occupation, and that motive was irrelevant. [Para 113][Para 115][Para 118][Para 120]
• It relied on section 65(2) of the 1988 Act and submitted that the common law meaning of occupation could not change merely because incentives had shifted. [Para 174]
• It also relied on the secondary-legislation context, including the 2024 amendment process, as showing that the line-drawing was for the legislature rather than the courts. [Para 192][Para 193][Para 201][Para 202]

Table of Precedents Cited

Court's Reasoning and Analysis

The court held that Rossendale requires rating legislation to be construed purposively, using the Ramsay approach where appropriate, so the question is whether the facts realistically answer the statutory description. [Para 162][Para 163][Para 164][Para 165]

Applying that approach, the court said the legislation was aimed at deterring owners from leaving property empty and encouraging return to use, so a scheme that makes two thirds of the charge effectively optional falls outside the intended class of cases. [Para 168][Para 169][Para 171][Para 172][Para 173]

The court rejected the argument that section 65(2) freezes the common law, holding instead that the common law must develop consistently with the statutory scheme and that the Ramsay principle is itself part of the interpretive rules that would have applied to the earlier legislation. [Para 174][Para 176][Para 177][Para 178][Para 179]

On the Laing test, the court accepted that occupation need not be substantial and that profit is not required, but held that the third ingredient still demands some independent utility, value, or benefit. [Para 181][Para 182][Para 183][Para 190]

Pure rate-mitigation occupation failed that test because the temporary presence of boxes had no utility apart from generating the statutory reset, so any supposed “benefit” was circular and entirely dependent on the legislation itself. [Para 182][Para 184][Para 185][Para 186][Para 187]

The court also rejected reliance on the 2024 Regulations, the Secretary of State’s inaction, PAG, and Franses, holding that none of them displaced the purposive analysis or fixed the meaning of occupation. [Para 192][Para 195][Para 200][Para 201][Para 202][Para 207][Para 212]

The court distinguished other “box shifting” cases, including Makro and PHE v Harlow, because those cases involved some independent practical value in the occupation, unlike the present scheme. [Para 108][Para 121][Para 124][Para 213]

Holding and Implications

Appeal allowed and POLL v Trafford overruled. The court held that section 45(1) of the 1988 Act and regulations 4(a), 4(b) and 5 of the 2008 Regulations do not treat temporary placement of items in an otherwise unoccupied hereditament as occupation where the sole aim is to generate occupation for those provisions, there is no commercial or business purpose beyond rate mitigation, and the alleged benefit is only the claimed rate saving. The direct consequence was that the High Court’s dismissal of the Local Authority’s challenge was reversed; the court did not set out any broader new rule beyond rejecting pure rate-mitigation occupation. [Para 215][Para 39]