Upper Tribunal: barristers’ chambers a single hereditament

On 4 September 2024, the Upper Tribunal (Lands Chamber) ruled against a set of chambers that argued rooms occupied by individual barristers each represented a separate hereditament. The Upper Tribunal held that the barristers occupied the Jockey’s Fields premises with the “shared purpose” to carry out their individual practices under a “collective identity” and to benefit from “the joint provision of support and administrative services”. Therefore, the barristers jointly occupied the premises as a whole, representing a single hereditament. This meant that the barristers could not benefit from small business rate relief.

Facts

Pump Court Tax Chambers, headed up by the appellant, Mr Kevin Prosser KC, has premises at both Bedford Row and an annex over two floors in Jockey's Fields. The latter premises was the focus of this appeal

The local non-domestic rating list entered the Jockey’s Fields premises as a single hereditament with a rateable value of £152,000 on 1 April 2017. Mr Kevin Prosser KC argued that the list should be altered to split the premises into six separate hereditaments as the barristers’ rooms were in the “sole or paramount occupation” of six self-employed sole practitioners. The respondent Valuation Officer asserted that on 1 April 2017 the chambers’ members were in “sole or paramount occupation of the whole” and the premises was correctly listed as a single hereditament.

The chambers hoped to benefit from small business rate relief enabling ratepayers occupying single hereditaments with rateable values of £12,000 or less to obtain a 100% reduction in their bill.

The chambers’ constitution did not require each member to have a room, but in practice they each did and rarely changed to a different room. Each member had a key to their own room but did not have a key, nor were they permitted to use, each other’s rooms due to the confidential nature of their work; however, clerks and cleaners had keys to all rooms.

The Upper Tribunal considered detailed evidence of the professional practice of the chambers. When instructions arrive to the chambers they are addressed to individual barristers which could suggest separate hereditaments / rateable occupiers. However, when those barristers are unable to accept those instructions, the Upper Tribunal recognised that clerks recommend other barristers which suggests a single hereditament with a joint beneficial interest.

The Upper Tribunal's decision

The parties agreed that the barristers’ rooms were “capable in law of forming a separate hereditament if the facts justif(ied) that conclusion”. Therefore, the Upper Tribunal did not dwell on the legal definition of a hereditament.

The Upper Tribunal’s assessment focused on the identity of the person in legal occupation of the individual rooms because non-domestic rates are payable by the occupier of a hereditament under s65 Local Government Finance Act 1988. Here, the parties disagreed.

The appellant argued that the barristers were in occupation of the individual rooms and the chambers as a whole occupied the common parts of the premises; whilst the respondent argued all members of the chambers were in joint occupation of the whole.

The Upper Tribunal felt the appellant erred in focusing his evidence on the individual rooms, and considered the wider context of the premises was important. Two important features were highlighted:

1.     The chambers’ constitution contractually bound all the members and imposed obligations and conferred rights; and

2.     Amongst those rights was an “equitable interest”, under the trust of land in which the leases of the premises were held pursuant to clause 46 of the constitution, providing chambers’ property was held on trust for all the members.

The Upper Tribunal concluded clause 46 created “an equal and joint beneficial interest” in every part of the premises. The leases themselves included a “declaration that the Tenant holds the property on a trust of land.” Under the trust, all members had an equal right to occupation of any part of the premises.

Despite arguments from the appellant that the allocation of individual rooms changed the joint occupancy of the whole to single occupancies of each room, the Upper Tribunal concluded the purpose of the occupation of the premises was a “shared purpose” to enable sole practitioners to carry on their practices under a “collective identity” and “benefit from the joint provision of support and administrative services and the sharing of expenses”. In essence, allocation of parts of the premises to individuals was necessary to achieve the shared purpose.

As it was not disputed that joint tenancy of the whole of the premises would satisfy the conditions for rateable occupation, the Upper Tribunal ruled the six barristers were not in rateable occupation of individual rooms but in joint occupation of the whole of the annex at Jockey’s Fields. The rating list remained unchanged and the chambers could not benefit from the small business rate relief.

Case comment

The question over single or multiple hereditaments has exercised the minds of the Courts and Tribunals over the past few years and has been seen in cases involving the likes of ATMs, self-storage units and serviced offices. Even when you can put a ‘red line’ around a property, that is not necessarily the end of the story – the Courts and Tribunals have shown that they place firm emphasis on shared or common purpose between occupiers which can lead to a finding of a single hereditament.

For further information please contact our leading business rates team:

Richard New   Sam Maw   Laura Woodward James Myers  Fintan Corkerry