Bennett, R (on the application of) v Copeland Borough Council

LORD JUSTICE PETER GIBSON: I will ask Lord Justice Rix to give the first judgment.

LORD JUSTICE RIX: This is the appeal of Mr George Bennett from the decision of Mr Michael Supperstone QC, sitting as a deputy High Court judge. The issue before the judge was whether the decision of the Bedfordshire Valuation Tribunal of 2nd July 2002, that Mr Bennett had his sole or main residence at a property which he owned, known as Woodville Cottage, Beck Green, Distington, Cumbria, for the purposes of section 6(2)(a) of the Local Government Finance Act 1992 was correct.

The 1992 Act sets out the conditions under which persons were liable to pay council tax in respect of any chargeable dwelling. Section 6 provides as follows:

Section 11 of the 1992 Act makes provision for discounts in respect of the liability to pay council tax in respect of any chargeable dwelling, and by subsection (2) a discount effectively equal to 50 per cent is permitted where either:

It was Mr Bennett's case before the Tribunal in his challenge to his liability to pay council tax on the property that:

As for those tenants, the Tribunal found that because there was no formal lease they did not have exclusive possession of the property. That finding is still challenged on this appeal, but, for reasons which will become obvious in this judgment, I do not believe that it is necessary to reach that issue at all.

The Tribunal made the following findings in respect to Mr Bennett's case that he did not live at the property in Cumbria. It said:

The Tribunal had previously referred to a number of decisions which had been put before them and to which I will make further reference in this judgment. Apart from reciting the names of those decisions, the Tribunal did not enter into their facts or holdings. But it did say this with regard to them:

The Tribunal's decision was appealed by Mr Bennett to the judge, who upheld the Tribunal's decision. The judgment recited Mr Bennett's case on appeal as follows (at paragraph 3):

The judge, having recited relevant factual findings made by the Tribunal covering the same passages as I have already set out, turned to what he described as the four leading cases relied upon before him. Those cases were Frost (IT) v Feltham [1981] 1 WLR 452; Bradford Metropolitan City Council v Anderton [1991] 89 LGR 681; R (Navabi) v Chester Le Street District Council [2001] EWHC Admin 796; and Ward v Kingston upon Hull City Council [1993] RA 71. On the basis of those cases, the judge reasoned as follows (at paragraph 13):

In that paragraph the judge clearly accepted the submission that the proper way to read the findings of fact of the Tribunal was that, despite Mr Bennett's occasional visits to the property as set out in the Tribunal's findings, he had never lived at the property at all and did not live there.

In these circumstances, and having regard to those other factors which the judge listed in that paragraph and having dismissed Mr Bennett's attempt to show that his tenants had exclusive possession of the premises, the judge briefly concluded (at paragraph 19) that Mr Bennett had failed to show any error of law in the decision of the Tribunal and continued:

Since that decision on appeal by the learned deputy judge, and indeed since permission to appeal was given in this case, an important new authority has emerged from this court, R (Williams) v Horsham District Council, very recently reported in [2004] 1 WLR 1137.

There this court had to consider the case of a council taxpayer, Mr Williams, who owned a cottage called Pump Cottage in West Sussex, but for the material period of some four and a half years had been living, together with his wife, not very far away at a house called The Oaks, which had been provided to him by Hurstpierpoint College at which he was a housemaster. During the period of about three and a half years during which he was a housemaster, he and his wife lived in The Oaks as a term of his employment. For about a period of one year after he ceased to be housemaster, he made an arrangement with the college to continue to live in The Oaks upon payment of rent. The question before this court in that case was whether Pump Cottage was his sole or main residence, so that he would be liable for a full council charge rather than the 50 per cent discount for which he contended.

In the judgment of the court given by Lord Phillips of Worth Matravers MR, the same authorities, with the exception of Navabi (which no one today has suggested is an authority of any particular relevance), were reviewed by this court. In Frost v Feltham, Nourse J had emphasised that in a choice between properties as to which was the main residence, the matter was one of fact and degree.

In Anderton the question was whether the marital home of a seaman, who was only at home for three months a year, was his sole or main residence. It was found by the Tribunal that it was. It was his home where he had his settled and usual abode, and that decision was upheld by Hutchison J.

In Ward the question was whether the marital home of a man who spent most of the year in tied accommodation in Saudi Arabia where he was employed was his sole or main residence. Again the Tribunal found that it was. Auld J, relying on Anderton, said that the Tribunal's could not be said to be a Wednesbury unreasonable decision. Auld J emphasised, amongst other things, that his home was the marital home and that he only lived in accommodation in Saudi Arabia because it was tied to his work.

A further authority reviewed in Williams was the case of Doncaster Borough Council v Stark [1998] RVR 80. The question in that case was whether the marital home of an RAF corporal, who was required to live at an RAF base save when he was on leave, was his sole or main residence. The Tribunal again found that it was and Potts J agreed, relying on the two previous cases of Anderton and Ward, and pointing out that but for his work in the RAF he would be in his marital home.

In Williams the Tribunal had found that Pump Cottage was the sole or main residence of Mr Williams. Mr Williams had sought to distinguish the previous authorities on the basis that his wife had accompanied him into residence in the college property, and that at no time had he or his wife stayed overnight at Pump Cottage during the relevant years. The Tribunal, however, said that in their opinion neither of those factors could cause the balance of the scales to be tilted sufficiently in favour of the Williams, because the most important and persuasive criteria were the security of tenure in Pump Cottage compared with the college accommodation and the fact that there was an undoubted intention to return there when Mr Williams' employment at the college came to an end. They referred to what they considered was a "now well-established corpus of the law".

McCombe J, however, considered, allowing the appeal, that the Tribunal had erred in law in regarding two out of a number of possibly relevant factors as being of overriding importance, namely the factors of security of tenure and an intention to return. On the council's appeal to the Court of Appeal, Lord Phillips MR said that McCombe J "may well be right" in the position that he had adopted, and continued (paragraph 22):

In that case there were of course two candidates for sole or main residence, arising out of the fact that Mr and Mrs Williams had a matrimonial home, Pump Cottage, in which they had lived and to which they intended to return, but also another property in which they had solely lived for the relevant period of four and a half years.

Dealing with the assessment which had to be made as to which of those two properties could be said to be the sole or main residence, Lord Phillips continued as follows:

On this appeal Mr Peter Oldham, on behalf of the council, seeks to submit that the decision of Williams has made no difference to the previous jurisprudence under section 6(5) of the 1992 Act, and that in any event the present is a very different case from that of Williams. He submits that ultimately the test remains a matter of fact and degree upon consideration of all relevant factors, and that it is impossible to say that in this case the Tribunal was perverse or came to a legally impermissible conclusion.

As to the facts, he particularly relies upon the finding of the Tribunal that the cottage in Cumbria was the property to which Mr Bennett intended to retire. Mr Oldham submitted that in effect the Tribunal had found that Mr Bennett was tied to the cottage as his emotional home or hearth.

Mr Oldham also sought to rely upon the fact that a closer reading of the decision in Ward than that to be found in Lord Phillips' judgment indicated that the tribunal there had at first indicated a decision in favour of Mr Ward. It was only in the light of a further hearing and further submissions that they changed their mind, on the basis of a realisation that it was only in his matrimonial home that Mr Ward had any security of tenure, which he lacked in his employed accommodation in Saudi Arabia.

Mr Oldham also relied upon an additional authority, Cox v London (South West) Valuation and Community Charge Tribunal and Poole Borough Council Community Charge Registration Officer [1994] RVR 171.

So far as the aspect of security of tenure in Ward is concerned, I do not read Auld J's judgment as affirming that that factor is of critical and overriding importance. On the contrary, Auld J made reference to other factors, such as that the property in England was the matrimonial home, and concluded:

So far as the additional authority of Cox is concerned, I do not think that that takes the matter any further. That was another case in which the tribunal, and on appeal the court, had to consider a choice between two homes, in both of which the charge or taxpayer was resident. In Cox the particular facts were that there was a matrimonial home in Poole, but Mr Cox spent the majority of his time and had most of his possessions in a flat in London. Nevertheless, his wife and child lived all the time in Poole and he went there most weekends. The tribunal held, and Turner J upheld their decision, that the Poole residence could properly be regarded as the main residence. Turner J referred to the proposition at the end of his judgment that it may reasonably be presumed that the place where his wife and child lived was Mr Cox's main residence.

It seems to me that this case is indeed different from a case where a tribunal has to choose between two properties, in each of which the taxpayer may be said to be resident, for not one but two reasons which cumulatively make this case an easier case and what I might describe as an a fortiori case in favour of the taxpayer than the Williams case.

The first reason is that although Mr Bennett relied upon an alternative property in Bedfordshire, it is plain from the findings of the Tribunal that they considered they had only one property to concentrate on and that was the property in Cumbria. The other factor is that upon the findings of the Tribunal, as emphasised in the judgment of the deputy judge, Mr Bennett had never lived at that single property.

In those circumstances, I believe that the answer to the issue in this case is to be determined by the point of construction which Lord Phillips described as the more fundamental point in Williams; and that is that the language of the statute by referring to a "resident" and a "sole or main residence" is looking to something which can amount to actual residence. I emphasise and refer again to the important first sentence of paragraph 26 of Lord Phillips' judgment (cited in paragraph 20 above). It was on the basis of that holding as to the proper construction of section 6(5) that Lord Phillips added (in the last sentence of paragraph 29 of his judgment) that in that case it could have been argued that for the relevant period The Oaks was Mr and Mrs Williams' sole residence.

In this case, therefore, there is no question as to whether one of two homes has to be regarded as the main residence. Nor is there a question, as there was in Williams, as to whether one home which had been plainly a residence had ceased to be a sole or main residence for a period, which no doubt can also be a matter for assessment and fact or degree, albeit one in which, as is plain from Williams, the factor of actual residence looms very large.

In our case, on the contrary however, the essential fact is that Mr Bennett has never lived in the property which he owns. He has never been resident there. When in the light of Williams one therefore considers the reasoning in the Tribunal and of the judge below, one finds in my judgment that there has been an error of law at each level. The Tribunal's error can I believe be best identified in the middle of page 3 of their decision, where, having referred to Mr Bennett's fairly nomadic life and to the finding that no other property could be considered to be his sole or main residence, the Tribunal continued:

So far as the judgment below is concerned, it again follows that the judge erred in the critical paragraph 13 which I have cited above, to proceed from accepting that the facts of the case were that Mr Bennett had never lived at the property at all, to go on to disregard that critical finding and to permit the possibility that other factors could be of predominant relevance. In my judgment, for the purposes of section 6(5) of the 1992 Act, a person cannot be a resident of a property in which he has never at any time lived.

That conclusion is in my judgment fortified by the distinction drawn in the statute itself between the case of a resident, in for instance sub-paragraph (a), and the case of a mere owner in sub-paragraph (f). If an owner who has never lived in the property which he owns can be described as a resident just because he has no other property where he resides, there could be no distinction between an owner and a resident.

For these reasons, I would allow this appeal.

LORD JUSTICE LONGMORE: Mr Oldham's gallant argument for Copeland Borough Council amounted to a submission that a person of no fixed abode who owns a house must have his sole or main residence in that house even if he has never lived there. That submission is inconsistent with the recent decision of this court in Williams v Horsham District Council [2004] 1 WLR 1137, which decided that the words "sole or main residence" refer to premises in which the taxpayer actually resides.

I agree with Lord Justice Rix that this appeal must be allowed.

LORD JUSTICE PETER GIBSON: The deputy judge in his judgment of 13th March 2003, like the Tribunal before him, did not have the benefit of the judgment of this court in Williams, which was only decided on 21st January 2004. In that decision it is made clear that "residence" in the statutory phrase "sole or main residence in the dwelling" refers to premises in which the taxpayer actually resides. This court had immediately before referred to the definitions of "resident" and of "reside" to be found in the 3rd Edition of the Shorter Oxford English Dictionary, "reside" being defined as:

This court then went on to consider the qualification "sole or main", which addressed the possibility that a person may have more than one residence. It was pointed out that it was probably impossible to produce a universal test appropriate to all circumstances, but a test which was usually appropriate was then provided. What this court said about "main residence" in no way detracts from the necessity of satisfying the test of "residence" as the premises in which the taxpayer actually resides. If a person owns a dwelling but never actually lives in it, that dwelling cannot in my judgment be his sole or main residence as it is not his residence at all. That in effect is the argument put forward by Mr Gore for Mr Bennett.

In my judgment, on the facts of this case Mr Bennett never actually resided in the subject property, even though he intends to reside in it when he retires, as the Tribunal found. The Tribunal in my judgment erred in holding that it was not necessary for the taxpayer to reside in the subject property, as did the deputy judge in holding that the fact that the taxpayer did not live at the property was just one factor to be taken into account.

For these as well as the reasons given by my Lord, Lord Justice Rix, I too would allow this appeal.