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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
- 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]
- 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
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| R (Principled Offsite Logistics Ltd) v Trafford Council [2018] EWHC 1687 (Admin), [2018] RA 499 | Held by the High Court to support “box shifting” as effective occupation for rating purposes. | The Court of Appeal held it was wrongly decided and overruled it. [Para 36][Para 39][Para 215] |
| Rossendale Borough Council v Hurstwood Properties (A) Ltd [2021] UKSC 16, [2022] AC 690 | Purposive interpretation of rating legislation; the Ramsay approach applies in rating cases; “owner” analysis under section 65. | The court treated Rossendale as the governing framework and used it to reject pure rate-mitigation occupation. [Para 47][Para 102][Para 128][Para 140][Para 144][Para 148][Para 162][Para 166][Para 176] |
| John Laing & Son Ltd v Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344 | The four ingredients of rateable occupation, including that possession must be of some value or benefit to the possessor. | The court relied on Laing as the baseline common-law test but held that pure rate mitigation occupation did not satisfy the third ingredient. [Para 85][Para 87][Para 88][Para 190][Para 192] |
| Cardtronics UK Ltd v Sykes (Valuation Officers) [2020] 1 WLR 2184 / [2020] UKSC 21 | Reaffirmed the Laing formulation and confirmed section 65(2) refers to the common law rules. | The court used it to support the proposition that section 65(2) refers back to the common-law occupation rules, while still holding that purposive interpretation prevents pure rate-mitigation occupation from qualifying. [Para 85][Para 174] |
| Hare v Churchwardens and Overseers of Putney (1881) 7 QBD 223 | No occupation where the putative occupier cannot derive benefit because the property must be available to the public without charge. | Cited as part of the line of authority explaining the “beneficial” occupation requirement. [Para 92] |
| Churchwardens and Overseers of Lambeth Parish v London County Council [1897] AC 625 | Illustrates lack of occupation where benefit is absent; also cited on the additional nature of the third Laing ingredient. | Used to show that beneficial occupation is a distinct requirement, not redundant. [Para 92][Para 190] |
| Winstanley v North Manchester Overseers [1920] AC 7 | Contrast with cases where some benefit exists, such as receipt of burial fees. | Used to reinforce that the third Laing ingredient requires some genuine benefit. [Para 92][Para 190] |
| London County Council v Erith Churchwardens [1893] AC 562 | Occupation may be beneficial even if not profitable; the test is whether the occupation is “of value.” | Used to show that profit is not required, but that there must still be independent value or benefit. [Para 93] |
| Wimborne DC v Brayne Construction Co Ltd [1985] RA 234 | Distinction between purpose and motive in determining beneficial occupation. | The court used this distinction, but held that pure rate mitigation occupation still fails because the asserted “benefit” depends on motive and statutory effect. [Para 96][Para 191] |
| R v Melladew [1907] 1 KB 192 | Property kept available for storage can still be in occupation. | Included among examples where the activity had an independent utility. [Para 97] |
| Associated Cinema Properties Ltd v Hampstead BC [1944] 1 KB 416 | Property leased in case it was needed was held not occupied. | Used as an example of an intention-to-use case at the margin of occupation. [Para 97] |
| Arbuckle Smith & Co. Ltd. v Greenock Corporation [1960] AC 813 | Alterations to make a vacant warehouse suitable for future use did not amount to occupation. | Cited as part of the court’s survey of borderline occupation cases. [Para 97] |
| Minister of Transport v Holland (1962) 14 P&CR 259 | Property left with worthless chattels was still held not occupied. | Used as another example showing that mere presence of items does not automatically amount to occupation. [Para 97] |
| Makro Properties Ltd v Nuneaton and Bedworth BC [2012] EWHC 2250 (Admin), [2012] RA 285 | Boxes of documents placed in a warehouse for six weeks amounted to occupation where the documents had practical value. | The court distinguished it from pure rate-mitigation occupation because the storage there had independent practical benefit. [Para 108] |
| Furniss v Dawson [1984] 1 AC 474 | Cited in the context of the Ramsay principle and pre-ordained transactions. | Used as part of the Ramsay line of authorities explaining when schemes may be viewed as a whole. [Para 108][Para 132] |
| Sunderland CC v Stirling Investment Properties LLP [2013] EWHC 1413 (Admin), [2013] RA 411 | Minimal use of a property can still amount to occupation. | Noted as a different arrangement from the present pure rate-mitigation scheme. [Para 110][Para 112] |
| R (Secretary of State for Health and Social Care (on behalf of Public Health England)) v Harlow DC [2021] EWHC 909 (Admin), [2021] 4 WLR 65 | Minimal use combined with an intention to occupy can be sufficient; occupation may be for rates mitigation. | The Court of Appeal distinguished the case because it involved real utility in the retained documents, not purely circular rate-mitigation occupation. [Para 121][Para 124][Para 125][Para 213] |
| Barclays Mercantile Business Finance Ltd v Mawson [2004] UKHL 51, [2005] 1 AC 684 | Ramsay is a purposive approach to statutory construction. | The court relied on it as part of the interpretive framework governing rating legislation. [Para 128][Para 133][Para 140][Para 162][Para 195] |
| UBS AG v Revenue and Customs Comrs [2016] UKSC 13, [2016] 1 WLR 1005 | The purposive approach can disregard tax-avoidance steps and is not limited to tax legislation. | Used to support the broader proposition that purposive interpretation can disregard irrelevant steps or contingencies. [Para 128][Para 212] |
| Collector of Stamp Revenue v Arrowtown Assets Ltd (2003) 6 ITLR 454 | The “ultimate question” is whether the provision, construed purposively, was intended to apply to the transaction viewed realistically. | The court adopted this formulation as central to the analysis of the scheme. [Para 130][Para 162][Para 163] |
| Inland Revenue Comrs v Burmah Oil Co Ltd [1982] STC 30 | Earlier authority on pre-ordained steps in the Ramsay line. | Cited in explaining that a scheme may be considered as a whole. [Para 132] |
| Inland Revenue Comrs v Scottish Provident Institution [2004] UKHL 52, [2004] 1 WLR 3172 | A risk that a scheme may fail does not prevent it from being viewed as a whole if it was intended to operate that way. | Used to support the approach that commercially irrelevant contingencies can be ignored. [Para 132][Para 213] |
| MacNiven v Westmoreland Investments Ltd [2003] 1 AC 311 | The paramount question is the interpretation of the statutory provision and its application to the facts. | Used to reinforce the purposive interpretive task under the rating legislation. [Para 139] |
| Secretary of State for Business, Innovation and Skills v PAG Management Services Ltd [2015] EWHC 2404 (Ch), [2015] BCC 720 | Considered in the context of a winding-up petition and public interest in rate mitigation schemes. | The court held that its comments did not control the present Ramsay analysis and were in a different context. [Para 154][Para 204][Para 206][Para 207] |
| Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997 | Discretionary powers must be exercised to promote the policy and objects of the Act. | Cited to reject the argument that secondary legislation or inaction by the Secretary of State could alter the statutory meaning of occupation. [Para 198] |
| Attorney-General v Clarkson [1900] 1 QB 156 | Later legislation may, in some circumstances, “fix” the meaning of earlier ambiguous legislation. | The court held that no such ambiguity or legislative signal existed here. [Para 202] |
| Comr of Inland Revenue v Hang Seng Bank Ltd [1991] 1 AC 306 | Discussed the limited circumstances in which later legislation may indicate the interpretation of earlier legislation. | Cited with Clarkson to show that the 2024 Regulations did not fix the meaning of occupation. [Para 202] |
| R (N) v Walsall Metropolitan Borough Council [2014] EWHC 1918 (Admin), [2014] PTSR 1356 | Modern statement of the “later legislation” point in interpretation. | The court used it as further support for rejecting reliance on the 2024 Regulations as interpretive guidance. [Para 202] |
| Wigan Council v Property Alliance Group Ltd [2025] EWHC 2336 (Ch), [2025] RA 361 | Applied Rossendale to a later rating dispute. | Cited as an example that Rossendale continues to govern rating cases. [Para 208] |
| S Franses Ltd v Cavendish Hotel (London) Ltd [2018] UKSC 62, [2019] AC 249 | On a different statutory test, a firm and settled intention was required and a conditional intention was insufficient. | The court found it of limited assistance because it concerned a different statutory context and did not address Ramsay. [Para 210][Para 212] |
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]
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