City of London v 48th Street Holdings and another; notes on judgment

Personally, I have just downsized. After years in a house, I’m now in a flat with commensurate pressure on storage space for my books. Which is why I now have only one volume of Lord Denning’s memoires; the others went to a street library. I know about cardboard boxes, their dimensions and capacity. Eventually, the books and the boxes in which they are stored will find good homes.

Owners of empty premises that are rateable also get to know boxes. They can be useful in seeking to mitigate liabilities for business rates on empty properties. One such owner was 48SHL, the ratepayer. This ratepayer engaged POLL to provide services at the premises in the City of London to reduce liability for unoccupied property rates in respect of those premises.

The plan was:

1. upon the premises becoming vacant, the effect of s.45(1) of the 1988 Act and the Non-Domestic Rating (Unoccupied Property) (England) Regulations 2008 (“the regulations”) is to confer an exemption from liability for unoccupied rates for three months;
2. upon expiry of that three-month period, 48SHL would grant POLL a lease of the premises, and contemporaneously, a break notice is served terminating the lease six weeks thereafter;
3. upon the grant of the lease POLL places boxes and their contents in the premises for those six weeks[i]. It claimed to be liable for occupied rates for that period;
4. at the end of the six weeks, the lease ends, and the boxes are removed;
5. on the basis that the placing of the boxes, in those circumstances, means that the premises were “occupied” within the meaning of regulation 5 for those six weeks, the ratepayer claimed a right to a further three-month exemption;
6. the result was a reduction in the ratepayers’s liability for unoccupied rates;
7. in return, POLL was paid a share of the savings achieved; and
8. the cycle could repeat as long as the premises are not leased to others for their beneficial occupation.

See also Fig1

It was agreed that:

1. the placing of the boxes was solely to attempt to generate “occupation” for the purposes of the regulations;
2. the placing of the boxes and their contents in the premises served no commercial or business purpose save for rate mitigation, which is the business purpose of POLL;
3. the benefit of the “occupation” is solely the claimed rate mitigation benefits;
4. the lease and other legal arrangements between POLL and the ratepayer were genuine.

As the billing authority, the City of London claimed that occupation by boxes in these circumstances did not amount to occupation so as to enable a new exemption period of three months to occur. It issued proceedings against the ratepayer and POLL claiming the rates due on the basis that the presence of storage boxes made no difference to the ratepayer’s liability.

The central issue was whether the rate mitigation scheme operated on behalf of the ratepayer by POLL at various office suites in a building were effective to generate repeating three-month periods of exemption from empty rates. That depended on whether, on a purposive construction of the legislation, the placing of boxes and their contents in the premises for six weeks meant that the premises were “occupied” within the meaning of the regulations for that six-week period, thus triggering a fresh three-month period of exemption.

The judge found that the purpose of the regulations did not require that one disregard occupation by boxes as in this case. The regulations provided not only for empty rates to be payable but also for relief from the rates by intermittent occupation.

The judge then had to consider whether occupation by boxes amounted to rateable occupation at all. The judge held that possession of value to the possessor is present where the value is the occupancy itself. This provided the necessary “benefit” for the ratepayer to occupy rateably. It did not matter that this is not realised until the next exemption period is triggered, and it does not require some other purpose beyond that of occupation itself. Rateable occupation does not depend on profitability.

The judge’s conclusion was that the City’s claim for rates payable failed as the ratepayer qualified for the relief the use of the boxes was intended to engage.

The decision was given by the High Court. It is not yet known whether the City will seek permission to appeal to the Court of Appeal.

For the time being, boxes can be as useful to owners of empty properties seeking relief from rates as they can to downsizers seeking to preserve treasured possessions.

If you have any questions about the areas covered in this article or need further advice, then please contact Roger Cohen or one of our expert Real Estate Dispute Resolution solicitors by email or call +44 (0)3333 231 580.

See: City of London v 48^th Street Holdings and another [2025] EWHC 1130 (KB)

[i] On the facts of the POLL case, six weeks occupation was needed to trigger a new relief period. Since then , the period has increased to 13 weeks.