Kenya Aid Programme v Sheffield City Council

This is an appeal by way of case stated arising from a decision of District Judge Browne in Sheffield Magistrates’ Court on 31^st October 2011 to make liability orders for non-domestic rates in respect of Units 1 and 2 Europa Way, Sheffield for the period 9^th September 2010 to 31^st March 2012 in the sums of £863,756.19 and £750,810.52 respectively.

The main appeal is by way of case stated pursuant to Section 111 of the Magistrates’ Court Act 1980. There is however a linked judicial review claim on identical grounds which has been listed for a permission hearing with a rolled-up hearing to follow pursuant to the order of Ouseley J dated 19^th June 2012.

There are also timing issues as both claims were lodged out of time.

The core issue in the case stated appeal is concerned with the question of whether the premises concerned were “wholly or mainly used for charitable purposes”. The case stated is in succinct form and is as follows:

“(1)

On 17 June 2011 a complaint was preferred by Sheffield City Council (the Respondent) against Kenya Aid Programme (“KAP”) (the Appellant) seeking liability orders for non-domestic rates in respect of (a) Unit 1 Europa Way Sheffield S9 1TQ (“Unit 1”) for the periods 09 September 2010 to 31 March 2011 and 1 April 2011 to 31 March 2012 in the total sum of £863,756.19 and (b) Unit 2 Europa Way Sheffield S9 1TQ (“Unit 2”) for the same periods in the total sum of £750,810.52. Pursuant to Regulation 12 of the Non-Domestic Rating (Collection and Enforcement)(Local Lists) Regulations 1989.

(2)

I heard the said complaint on 7 October 2011, 12 October 2011 and finally on 31 October 2011, when a written decision was handed down (appended).

(3)

The following matters were not in dispute:

a.

that the Appellant was, at all material times since 9 September 2010, a registered charity; and

b.

that the Appellant was, at all material times since 9 September 2010, in rateable occupation of both Unit 1 and Unit 2.

(4)

It was contended by the Appellant that:

a.

KAP was entitled to mandatory charitable relief pursuant to s.43 (6) of the Local Government Finance Act 1988, because Unit 1 and Unit 2 were wholly or mainly used for charitable purposes, and that accordingly the sums claimed were not due.

b.

The mandatory charitable relief due operated to reduce the amount of the rates claimed by 80%.

c.

Once it was accepted that KAP was (i) a charity and (ii) in rateable occupation, then – provided that the use to which the premises are being put is for charitable purposes only – that was really all that was required to fall within the relief provisions.

d.

The extent or efficiency of KAP’s use of the premises was not a relevant consideration.

e.

The correct approach to determine whether premises are being used wholly or mainly for charitable purposes is that set out in Glasgow v Johnstone [1965], below.

(5)

It was contended by the Respondent that:

a.

The Court should consider the content and context of the use of the premises, in order to determine whether the property was being used wholly or mainly for charitable purposes.

b.

Whether premises were being used wholly or mainly for charitable purposes was a question of fact for the tribunal to determine in all of the circumstances of the evidence before it.

c.

The correct approach to determine whether premises are being used wholly or mainly for charitable purposes is that set out by Lord Bonomy in English Speaking Union v City of Edinburgh Council [2010], below.

(6)

I was referred to the following case law:

a.

Glasgow v Johnstone [1965] AC 609, in particular, at 621-2.

b.

English Speaking Union v City of Edinburgh Council [2010] R.A. 227

c.

Oxfam v City of Birmingham District Council [1976] 1 AC 126

d.

Wynn v Skegness UDC [1967] 1 WLR 52.

(7)

I was of the opinion that:

a.

Liability orders should be made in the sum of £863,756.19 in respect of Unit 1 and in the sum of £750,810.52 in respect of Unit 2.

b.

The correct approach to determine whether premises are being used wholly or mainly for charitable purposes is that set out in English Speaking Union v City of Edinburgh Council [2010]. The Court should look at the whole evidence before it and decide on a broad basis whether the properties are wholly or mainly used for charitable purposes. I was obliged to give content to the full expression “wholly or mainly used” in relation to the use of the building as a whole.

c.

Following that approach, taking into account the witness evidence as to the level of “use” (see written decision, paragraph 15), I was unable to conclude that the premises were being used by KAP wholly or mainly for charitable purposes. There was a marked absence of substantial use of the premises.

d.

As to the extent of the use made of the premises, in particular:

(i)

the way in which furniture was stored and spaced out, suggested that a more efficient approach to furniture storage would compress the space taken substantially. In the case of Unit 1, to between a third and one half of the space taken; for Unit 2, the furniture would compact down to a third or less;

(ii)

the occupation by the Appellant of a number of other similar properties in the North, North West and North East, contradicted the Appellant’s claim that Sheffield was the sole hub of their Northern operations;

(iii)

the volume or quantity of furniture actually shipped to Kenya was small, and the frequency of these shipments low.

e.

Despite the Lease between the Landlord and the Appellant specifying that the Appellant was to be liable for the payment of all non-domestic rates, the Appellant was according to its own evidence wholly dependent upon donations from the Landlord to meet this liability.

f.

One of the uses of Units 1 and 2 was to produce revenue for KAP by arrangement with the landlord.

8.

The questions for the opinion of the High Court are:

Substantially, whether in law, I applied the wrong approach to determine whether Unit 1 and Unit 2 were used wholly or mainly for charitable purposes; particularly:

a.

Whether I was correct to apply the test in English Speaking Union v City of Edinburgh Council [2010] R.A. 227, namely that the Court should look at the whole of the evidence before it and decide, on a broad basis, whether the premises were being used wholly or mainly for charitable purposes, so as to give content to the full expression “wholly or mainly used”, in the process taking account of and placing weight upon:

(i)

the extent to which the premises were used;

(ii)

the inefficiency of the furniture storage use which was taking place at the premises;

(iii)

whether there was a “necessity” for KAP to occupy both premises, when one building would have satisfied their present and future needs; and

(iv)

the mutual advantages to KAP and the Landlord of the letting to KAP as a consideration against KAP’s entitlement to mandatory charitable relief.

b.

Whether instead, I ought to have followed the approach set out by Lord Reid in the House of Lords’ decision in Glasgow v Johnstone [1965], namely by confining my analysis to whether such use as KAP made of the premises was for charitable purposes, given that:

(i)

it had been accepted on all sides that KAP was in rateable occupation;

(ii)

the statutory scheme contains no provision (by way of regulations made under s.66A of the Local Government Finance Act 1988 or otherwise) which requires or permits the facts on the ground to be disregarded; and

(iii)

there is no legal impediment to parties consciously structuring their arrangements so as to benefit from an established form of relief from non-domestic rates.”

The case stated refers to the District Judge’s written decision. This largely follows the case stated, but it is convenient to refer to some brief extracts in order to clarify the case stated itself.

At paragraph 15 the following appears:

“I have considered the following matters. Firstly, the use of the properties. I have seen photographs showing the way in which office furniture is stored.... It is a very unusual way to store furniture and makes poor use of the space available. The total internal floor space available in both properties is 58,120 square metres. The level of use is described by witnesses. Mr Hoyle estimates that 30-35% of Unit 1, and 25-30% of Unit 2 could be considered to be in use. It is hard to understand why Kenya Aid Programme has taken both of the units, when one would more than satisfy their present and predictable future needs.”

Paragraph 17 provides as follows:

“Kenya Aid Programme relies upon donations. The letting agreement with CBRE makes the charity fully responsible for all rates and utility charges. Mr Smith said that Kenya Aid Programme receives the 20%, being the amount of rates due after relief, from the landlord and also the landlord makes a donation to the charity. He did not specify how much, but in the previous letting agreement between the landlord and Kenya Aid Foundation this amounted to £17,000.00. The charity pays a peppercorn rent and the agreement is capable of termination on seven days notice. It is a match made in heaven.”

By Section 43(1) of the Local Government Finance Act 1988 as amended, a person shall be subject to a non-domestic rate if he is in occupation of all or part of a hereditament and that hereditament is shown in a local non-domestic rating list currently in force. However, pursuant to Section 43(6) of the Act, mandatory charitable relief against such rates reducing the amount claimed by 80% is available where the ratepayer is a charity and the hereditament is “wholly or mainly used for charitable purposes (whether of that charity or of that and other charities)”.

The issue before the District Judge before whom the local authority preferred its complaint was whether the Appellant charity qualified for such relief. As the case stated shows, he held that it did not.

It was common ground that the Appellant was at all material times a registered charity. It was also common ground that the Appellant was in rateable occupation of both units. Thus there was a single issue to be decided, namely whether the properties were being “wholly or mainly used for charitable purposes.”

The context of this litigation arises from a change in rating law taking effect on 1^st April 2008. Up to that point unoccupied property rates were not payable on warehouse-type hereditaments. From 1^st April 2008 by virtue of the Rating (Empty Properties) Act 2007 and regulations made thereunder, unoccupied rates became payable and were set at the same level as the full occupied rate. So, subject to an exemption for the first six months of non-occupation, the owner of an empty warehouse became liable for 100% unoccupied property rates when previously his liability had been zero.

If, however, the owner allowed a charity to occupy the warehouse, the charity became the rate payer and subject to meeting certain conditions, the charity would be entitled to 80% relief from occupied rates which since 1^st April 2008 have been set at the same level as unoccupied rates. The owner’s liability to rates will be zero.

Thus the District Judge’s comment “it is match made in heaven” at paragraph 17 of his written decision appears to recognise that it makes financial sense for a property owner not only to encourage a charity to occupy his premises rent free, but also to pay that charity to occupy those premises. He will still benefit financially if he pays to the charity the 20% liability which the charity incurs by its occupation, together with an additional donation. As long as the total amount paid is less than the 100% rates liability that the owner would otherwise incur, the owner benefits. From the charity’s point of view this represents a fundraising opportunity arising from the landlord’s donation in return for the resulting reduction in the landlord’s rates liabilities.

It is, however, the function of the court to interpret the legislation, (in this case Section 43(6)); the success or otherwise of what may be tax planning measures connected with the arrangements described above is not of direct concern to the court. The court’s responsibility is to determine whether or not in the circumstances described there is liability on the part of the occupier of the premises for rates, or, more specifically, whether Kenya Aid Programme is entitled to the benefit of the 80% charitable relief provision.

Mr Kolinsky, for the Appellant, challenged the District Judge’s decision. At the very core of his argument was the proposition that the District Judge was wrong to enter into considerations of the extent of use of the premises by Kenya Aid Programme. Putting his argument at its simplest, he said that once it was established that Kenya Aid Programme was in occupation of the premises (which was undisputed), then the only use to which the premises were being put was charitable, and accordingly Kenya Aid Programme was entitled to relief under Section 43(6). The “wholly or mainly” phrase should be construed as referring to the purpose of the use rather than to the amount or extent of the actual use made of the premises.

He placed strong reliance on Glasgow Corporation v Johnstone and Others, submitting that it demonstrated that in evaluating the nature of the use taking place at the property, this must be viewed from the standpoint of the occupying charity. This part of his submission was not controversial. However, he also submitted that the case demonstrated that it was not appropriate to look at the extent of the use of the premises taking place. This latter point was contested by the Respondent counsel.

Mr Kolinsky in further reliance on the Glasgow Corporation case was critical of the judge’s importation of considerations of the inefficiency of furniture storage use (see paragraph 8a(ii) of the case stated), and of whether there was a necessity for Kenya Aid Programme to occupy both premises (see paragraph 8a(iii)).

In relation to necessity he submitted that this was directly inconsistent with the decision in Glasgow Corporation. In relation to extent of use and efficiency of use he argued that there was no support within this jurisdiction for such an approach and that it was contrary to the approach of the House of Lords in Glasgow Corporation and also in Oxfam v Birmingham City Council.

It was further argued that the phrase “wholly or mainly used for charitable purposes” dates back to legislation in 1961 at a time when there was no rating for unoccupied premises. Accordingly, he argued that it would make no sense for the test under Section 43(6) to be concerned with the extent of the use taking place. Thus he argued that the language could only make sense if it was based on the nature of the use of the premises rather than the extent of use.

Thirdly, he argued that there was no justification for interpreting the legislation so as to catch activity which was perceived as a tax planning measure. He submitted that the District Judge in applying the English Speaking Union decision had fallen into the trap created by that case where, in Mr Kolinsky’s submission, the decision was plainly formulated to catch what the judge perceived to be tax planning activity. In any event Mr Kolinsky argued that the circumstances in the English Speaking Union case were different from the present case. That case was concerned with an eight floor building, only one floor of which was in use, whereas in this case we are concerned with two open plan warehouses, both of which were in use. Moreover, the English Speaking Union case should be disregarded as wrongly decided, not least because it does not deal with the ratio of the Glasgow Corporation case, and in any event it is not a decision which is binding in England and Wales. The decision did not justify the District Judge’s approach of looking beyond the facts of use on the ground and considering how efficient the use which was in fact taking place was.

Lastly, it was submitted that the District Judge was wrong at paragraph 8a(iv) to take account of the mutual advantages to the parties as a consideration against Kenya Aid Programme’s entitlement to mandatory charitable relief. This was not a factor that should have weighed with the District Judge at all.

For the Respondent, Ms Wigley, contended that since on the District Judge’s findings less than 50% of the premises was actually in use for a charitable purpose, they could not be said to be wholly or mainly involved in such use. It was not sufficient to say that there was no other use being made of the premises.

Ms Wigley raised a second argument which was to the effect that even looking at the matter from the Appellant’s point of view, the purpose of the use of the premises (low volume furniture exports to Africa) was not the whole or main use. The funding arrangement with the landlord was also a use of the premises. However, as the Oxfam case shows, fundraising of this sort does not amount to a use of premises for a charitable purpose. In Ms Wigley’s submission, if either of these two grounds was made out, the claim for rate relief would fail.

Ms Wigley argued that under Section 43(6) there were two requirements to be met. Firstly, the property must have been “wholly or mainly used” during the relevant period, and secondly, that use must have been wholly or mainly for charitable purposes. According to her, the Appellant’s argument would involve ignoring the first requirement. The plain and ordinary meaning of the words “wholly or mainly used” is that the premises are used as a whole or to the full extent, alternatively used in the main part. In other words, a token or minor use of premises for charitable purposes would not attract relief since the Oxfam case made clear that relief was targeted only at direct charitable activity or activities which directly facilitate charitable objectives. It would not be surprising for the legislation to limit the grant of rate relief to circumstances where the property is in substantial use for those purposes and to exclude from relief property which is in the main unused.

It is clear that minor use will constitute rateable occupation for the purposes of liability to occupied rates under Section 43(1) – see for example Makro Properties Limited v Nuneaton and Bedworth BC [2012] EWHC 2250 (Admin). However, Section 43(6) is not concerned with the occupation of premises; it is concerned with the use of premises, and the use in the statute of the phrase “wholly or mainly used” indicates that the extent to which the property is used is relevant. Accordingly, the decision in the Scottish case of English Speaking Union was relevant. That permitted an examination of the extent of user of the premises rather than limiting the matter to a consideration of whether such user as there was, was wholly or mainly for charitable purposes.

Since the District Judge had found that less than 50% of each of the two units in this case could be considered to be in use, he rightly concluded that the properties were not being used wholly or mainly for charitable purposes and thus his conclusion that rate relief was not available was correct.

Ms Wigley placed particular reliance on part of paragraph 11 of the English Speaking Union case where Lord Bonomy said:

“However, counsel’s submission, that his [the judge’s] approach of concentrating exclusively of the question of “use” leads to the conclusion that, in all cases where a building is used for a single purpose, that sole use, however limited in extent within the building, is that for which the building is “wholly used”, is unpersuasive. “Wholly” in Section 4(2)(a) is not synonymous with “solely”. The notion that an office building which is unused for any purpose throughout seven of its eight floors is “wholly used” for the purpose for which the one floor is actually in use does not accord with common sense.”

Ms Wigley accepted that the judge should (and did) examine the nature of the use from the standpoint of the charity as the Glasgow Corporation case requires. However, she submitted that that decision and the Oxfam case were not involved with considerations of whether the properties in those cases were anything other than wholly or mainly in use. The question of the quantity or extent of use was not an issue under consideration in those cases. Accordingly, neither of those could assist in the determination of this appeal, nor was there anything in those decisions which militated against the approach taken in the English Speaking Union case.

Insofar as the Appellant relied on the fact that the wording used in the current statute dated back to 1961 before unoccupied rates existed, Ms Wigley argued that this did not assist. This was not a case where Parliament had legislated in a way which was predicated on there being a settled legal meaning of a phrase by reason of settled judicial construction of the words in question so as to give rise to a presumption that the words when re-enacted retained that meaning. In any event, even were there such a presumption, it is not a rigid rule and must yield to the primary rule that in construing statutes, the grammatical and ordinary sense of the word is to be adhered to. There was thus nothing to prevent the District Judge either in precedent or by reason of statutory interpretation from interpreting the phrase in Section 43(6) in the way in which he did.

She disputed that the decision was based on a desire to negate what was perceived as a tax planning measure. That can be seen from the fact that at paragraph 4 of the English Speaking Union case the recitation of potential fiscal consequences was neutral. It merely set out background and was not used as part of the underlying reasoning of the decision in that case any more than it was in the present. In Ms Wigley’s submission the factual differences between the English Speaking Union case and the present case did not mean that the approach to the wording of the corresponding legislation for England and Wales should be different. The factual differences could not affect the relevant principle.

Finally, Ms Wigley relied on the fact that the District Judge had found that there was another use of the premises by the charity, namely by fundraising in the form of donations from the landlord. She relied on the Oxfam case for the proposition that user for fundraising is not sufficiently directed to the actual carrying out of a charity’s purposes to be a use for charitable purposes within the meaning of Section 43(6) of the 1988 Act and its identically worded predecessors. Since the District Judge had found that this additional non-charitable use of the premises existed, he must rightly have concluded that the charitable purpose of facilitating shipments of furniture to Kenya was not the main purpose of the use of the properties.

Turning then to paragraph 8 of the case stated, it seems to me that the judge introduced an artificial dichotomy into the matter by treating the Glasgow Corporation and English Speaking Union decisions as being mutually exclusive in relation to the interpretation of the phrase “wholly or mainly used for charitable purposes”. In my view Ms Wigley is correct in submitting that the Glasgow Corporation and Oxfam cases were not concerned with the issue which arises here and did not address it. It is accepted by both sides that the use to which the premises are put is to be addressed from the viewpoint of the charity in occupation. The question to be asked is whether the use which the charity makes of the premises is directly to facilitate the carrying out of its main charitable purposes – see Oxfam.

As the later Oxfam decision shows, general fundraising does not come into that category. However, neither decision deals with the question of extent of use. What Glasgow Corporation does make clear, however, through the speech of Lord Reid at page 617G to 618B is that necessity is not a relevant criterion.

It seems to me therefore that the English Speaking Union decision (a decision in Scotland broadly equivalent to one of our own High Court), is open for consideration untrammelled by the two House of Lords decisions referred to above. Although Ms Wigley urged upon me considerations of judicial harmony and comity in relation to English/Welsh and Scottish taxation and rating cases, I prefer to approach the matter by having regard to the Scottish decision, but applying independent consideration of the meaning of our own statute. I do not therefore consider that the Glasgow Corporation authority means that this court is precluded from considering whether examination of extent of user is a relevant consideration in applying Section 43(6). I do consider that the approach in the English Speaking Union case requiring the court to look at the evidence before it and considering on a broad basis whether the premises were being used wholly or mainly for charitable purposes is a tenable approach.

In my judgment there is force in the difference of emphasis which Ms Wigley highlights between “occupation” in Section 43(1) and “use” in Section 43(6), and also in her submission that the qualifying adverbs “wholly” and “mainly” are important in looking at the context of the use. I would hold that there is no reason for limiting the ambit of the phrase in the way contended for by the Appellant. As was pointed out in the English Speaking Union case and again in argument before us, the Appellant’s construction would substitute the word “solely” for the word “wholly”. I see no reason why the statute should be thus narrowly confined. The natural reading and meaning of the words used, are, in my judgment, apt to cover not only consideration of the purpose of the use, but also the extent or amount of the actual use. It follows therefore that I would hold that the judge was right to take account of and place weight upon the extent to which the premises were used.

However, that is not an end of the matter. It is clear from paragraph 8a(ii) and (iii) of the case stated that the judge also took into account the “inefficiency of the furniture storage use” and the “necessity for Kenya Aid Programme to occupy both premises”. As to the latter, that appears to me to have been an irrelevant consideration which should not have been taken into account in the light of the observations of Lord Reid in the Glasgow Corporation case referred to above. It seems to me additionally that taking into account questions of the inefficiency of the furniture storage use are in a similar position. In this context questions of inefficiency seem to me to be closely related to questions of necessity.

I note that at paragraph 7d of the case the District Judge reached his conclusion that in each unit the furniture stored there would take up less than half of the available space by means of a process of compressing the space which would be occupied by storing the furniture more efficiently. In my judgment this was not a legitimate exercise. I hold that it falls foul of the approach set out in Glasgow Corporation.

At paragraph 8a(iv) the District Judge also took account of the mutual advantages to the charity and the landlord as a consideration against Kenya Aid Programme’s entitlement to mandatory charitable relief. I find the phraseology used to be somewhat unclear. If the District Judge meant that the parties were indulging in tax avoidance, I do not consider that this is a matter to which weight should have been attached. See for example the observations at paragraph 56 of Makro Properties Limited referring back to Gage v Wren [1903] 67 JP 32.

If what the judge was referring to was his finding at paragraph 7f that one of the uses of the units was to produce revenue for Kenya Aid Programme, then it seems to me that if such an arrangement does amount to a use of the premises, (which may be open to argument), the judge has failed to give any indication of how this use (which would not count as use for charitable purposes in accordance with the Oxfam decision), affects the question of whether the storage of furniture at the units was the whole or main use. If fundraising of this sort was a use of the premises, the mere fact that it was taking place cannot of itself mean that furniture storage was not the whole or main use; some additional assessment of the position needs to be made.

Accordingly, although I conclude that the District Judge was entitled to take account of the extent to which the premises were used by approaching the question in the manner indicated in the English Speaking Union case, I am also of the view that he took into account other factors which he should not have or which he did not analyse sufficiently.

Having reached that conclusion I can briefly state that I did not find the Appellant’s recourse to the history of the legislation persuasive. It seems to me that Ms Wigley’s riposte to the point was correct; as was her analysis of paragraph 4 of the English Speaking Union judgment regarding tax avoidance. See paragraph 30 above. Nor do I consider that the factual differences between this case and the English Speaking Union case prevent a consideration of the extent of use of the premises.

For these reasons I do not consider that the decision of the District Judge can be sustained.

As mentioned early in this judgment, an issue arises as to timing. The case stated was lodged out of time on 15^th February 2012. The decision had been given on 31^st October 2011. The signed case was provided to the parties and the Appellant’s solicitors sought to lodge it with the High Court towards the end of January 2012 at a time which would have been in accordance with the Practice Direction to CPR Part 52. However, although the case was lodged, a number of formalities had not been complied with. The position was not corrected until after expiry of the relevant period.

The Respondent realistically accepts that the irregularities involved were minor and that there has been no prejudice suffered by it. Ms Wigley takes no point against the Appellant in this respect. I consider that she is right to do so, and to the extent that it is necessary, extend time in relation to the case stated.

As stated above there is also a parallel application for Judicial Review in relation to this matter. The Claim Form frankly states that the sole purpose of the proposed Judicial Review proceedings is to allow for the possibility that the issues raised in the appeal by way of case stated may be of sufficient importance that a further appeal to the Court of Appeal is considered appropriate. Accordingly, permission to bring Judicial Review is sought.

The underlying reason for bringing the Judicial Review claim is that Section 18 and Section 28A of the Senior Courts Act 1981 provide that there is no right of appeal to the Court of Appeal from a decision of the High Court on appeal by way of case stated from the Magistrates’ Court. As Auld LJ stated at paragraph 13 of Westminster City Council v O’Reilly [2003] EWCA Civ 1007:

“…the words of Section 28A and of Section 18 of the 1981 Act mean what they say. When a decision is declared final by statute, then this court [the Court of Appeal] has no jurisdiction to hear it by virtue of that provision and by Section 18 of the 1981 Act…”

The Appellant submits that the present case is suitable to proceed by way of Judicial Review because there is a point of law of sufficient importance such that it might be appropriate for the Court of Appeal to be able to consider it. The point of law is identified as being “how the question of “wholly or mainly used for charitable purposes” should be construed where a charity occupies property which would otherwise be vacant”. In addition it is pointed out that in this case substantial sums of money are at stake. It is pointed out the charity could have instigated Judicial Review proceedings against the Council’s refusal of relief or sought a declaration as to its entitlement from the court.

Moreover, Section 28A(4) does not preclude all complaints heard in the Magistrates’ Court from progressing beyond the High Court; where the Magistrates’ Court refuses to state a case on the basis that it is frivolous, that refusal can be appealed to the High Court and, if unsuccessful, a further appeal can be made to the Court of Appeal. Accordingly, there is no good policy reason why the issue in the present proceedings should not be capable of consideration by the Court of Appeal.

The Respondent resists the application for permission on the basis that an appeal by way of case stated is the most appropriate procedure for challenging liability orders made by the Magistrates’ Court. It is not appropriate to permit a parallel Judicial Review claim to proceed when there is an alternative remedy, and where to do so would frustrate the clear intention of Parliament as expressed in the Senior Courts Act 1981.

In addition the application for Judicial Review was brought out of time and there is no justification for the delay or any good reason to grant an extension of time.

Both parties referred us to Farley v Child Support Agency [2005] EWCA Civ 869 and Revenue and Customs Commissioners v Berriman [2008] 1 WLR 2171. Farley was a highly unusual case. The Court of Appeal having erroneously heard an appeal against the decision of the High Court in an appeal by way of case stated, retrospectively reopened its decision and allowed a claim for Judicial Review to be made so as to be able to issue a declaration in the terms of its original decision made without jurisdiction. Clearly the purpose of this procedural device was to save the decision which had been made. In so doing the court recognised that the circumstances were exceptional and Lord Philips MR made the point that in any usual circumstances, the procedure adopted by the court would amount to an abuse of process. Lord Woolf CJ and Lord Philips MR respectively described Auld LJ’s reasoning in Westminster City Council v O’Reilly as “wholly convincing” and “plainly correct”. This case plainly does not come within the sort of exceptional or extraordinary circumstances existing in Farley.

The Berriman case was one in which the Divisional Court permitted parallel case stated and Judicial Review proceedings to take place before it. However, it is apparent that there was no debate as to the propriety of parallel procedures. Nor does the court appear to have given any consideration of its own motion to the correctness of such a course. In those circumstances I cannot regard Berriman as persuasive.

It seems to me that the appropriate procedure for challenging decisions relating to liability orders is by way of a case stated appeal. See R (Magon) v London Borough of Barking and Dagenham [2004] R.A 269 (Judgment 7 May 1998), where Mummery LJ refused permission to seek Judicial Review on the ground that the case stated procedure is the appropriate one available to question the correctness of a liability order made by the Magistrates’ Court. See also R (Brighton and Hove Council) v Brighton and Hove Justices [2004] EWHC 1800 (Admin) where Stanley Burnton J said that he had no doubt that the appropriate procedure for challenging decisions relating to liability orders is by way of case stated. He expanded on his reasons at paragraph 23 of his judgment.

Quite apart from the fact that appeal by way of case stated is the appropriate remedy, it seems to me that to permit parallel Judicial Review proceedings would fall foul of the fact that case stated is a suitable alternative remedy and, importantly, would be to go behind the clear provisions of Sections 18 and 28A of the Senior Courts Act 1981. Those provisions clearly intend that a decision of the High Court in relation to a case stated appeal should be final so that the Court of Appeal has no jurisdiction to hear an appeal against a High Court decision.

This case has not taken a route which could involve the dispute reaching the Court of Appeal and so should be approached by the rules which apply to it. It does not seem to me that the argument that this case may be special because the issues may be of sufficient importance that a further appeal to the Court of Appeal is appropriate is correct. If the prohibition on case stated appeals from the High Court proceeding to the Court of Appeal did not exist, High Court case stated appeals would be second appeals which could only proceed if “the appeal would raise an important point of principle or practice; or if there is some other compelling reason for the Court of Appeal to hear it”. See Section 55 of the Access to Justice Act 1999 and CPR Part 52.13(2).

Given that the only appeals that could otherwise proceed to the Court of Appeal are those of sufficient importance as set out above, the clear Parliamentary intention of Sections 18(1)(c) and Section 28A(4) of the 1981 Act is that case stated appeals which would otherwise have been of sufficient importance to proceed to the Court of Appeal should nonetheless be subject to final determination in the High Court. To my mind the provisions of the 1981 Act operate as a bar and thus provide an overwhelming reason as to why permission to proceed with a Judicial Review claim should be refused. Whilst it may be that, in a truly exceptional case, such a claim could be allowed to proceed, there is no feature of this case which could justify such a course.

In the course of argument on this point the Appellant drew attention to observations in Westminster City Council v O’Reilly. The Appellant sought to draw comfort from the fact that Lord Woolf LCJ appears at paragraphs 18 to 21 of the judgment not to have treated a Judicial Review claim in circumstances where fresh proceedings before Magistrates were in contemplation, (after an unsuccessful appeal by way of case stated on an earlier licensing application), as necessarily amounting to an abuse of process. Having considered the passage I do not consider that it advances the Appellant’s argument. The point was not subject to detailed consideration and no clear conclusion was reached. Lord Woolf recognised that if and when a court in the future had to determine whether it would be an abuse of process to permit a Judicial Review claim so as to enable the possibility of an appeal to the Court of Appeal, one of the two matters for the court to take into account would be the fact that a decision by the High Court on a case stated appeal is treated as final by the legislation.

Accordingly, for the reasons given above I would refuse permission to seek Judicial Review.

Having considered that there is no basis on the merits for such a claim to proceed, I would only add that the claim for Judicial Review was lodged out of time on 15^th February 2012. There is no justification for this, and whilst the Respondent does not claim that it has suffered prejudice through the delay, my conclusion on the substantive point leads me to decide that I should additionally refuse the necessary extension of time.

In my judgment the decision of the District Judge was flawed. Whilst the judge was entitled to have regard to the English Speaking Union case and to look at the whole of the evidence before him and decide on a broad basis whether the premises were being used wholly or mainly for charitable purposes, and whilst the judge was correct to take into account the extent to which the premises were used, he also wrongly took account of other factors.

In particular he took account of the efficiency or otherwise of the furniture storage use at the premises and also the necessity for Kenya Aid Programme to occupy both premises. The latter consideration runs contrary to the Glasgow Corporation case; the former consideration is allied to the latter and, in my judgment, illegitimate. This consideration is of particular importance because it may be that by having compressed what the judge regarded as inefficient use of the premises to a level which he regarded as efficient use, the judge arrived at figures for uses of the two units which meant that the efficient use was less than 50%.

We do not have available to us the whole of the evidence on the topic of use which was available to the District Judge. He heard witness evidence and was provided with photographs. It is not in the circumstances possible for us to form our own judgment as to where the evidence properly weighed takes this case. Accordingly, we allow the appeal by way of case stated and remit it to the District Judge for further consideration in the light of this judgment.

In addition to reconsidering the points just alluded to, the District Judge will also need to reconsider the matter at paragraph 8a(iv) of the case stated in relation to which he may benefit from additional submissions from the parties in view of the observations made earlier in this judgment.

As to the questions posed, as will be apparent from this judgment, the matters set out at paragraph 8 of the case require a nuanced answer rather than one in the affirmative or negative. Those issues have been addressed in the course of this judgment. In answer to the primary question posed at paragraph 8 as to whether in law the District Judge applied the wrong approach to determine whether Unit 1 or Unit 2 were used wholly or mainly for charitable purposes, the short, un-nuanced answer is “yes”; however, for a fuller understanding of that answer this judgment needs to be read in full.

The application for permission to seek Judicial Review is dismissed.

I agree that the appeal by way of case stated should be allowed and that the application for permission to seek judicial review should be dismissed for the reasons given by my lord, Lord Justice Treacy.