Liability for council tax

December 7th, 2016 by James Goudie KC

Leeds City Council v Broadley [2016] EWCA Civ 1213 concerns liability to pay Council tax to the City Council in respect of dwellings let on assured shorthold tenancies. The issue is whether Mr Broadley or his tenant is “the owner” of the dwellings within the meaning of Section 6 of the Local Government Finance Act 1992 (“the 1992 Act”) when that dwelling had no resident for the period in dispute.  Liability turns upon the true construction and effect of the common form of tenancy agreement made between Mr Broadley and his individual tenants and upon how the 1992 Act applies to the agreement as so construed. The form of agreement is of a type that has long been in common currency. The crucial question is whether the tenant in these cases at the relevant times had “a material interest”, i.e. “a leasehold interest which was granted for a term of six months or more”.

The Court of Appeal construed the agreements as single grants for a fixed term of 6 or 12 months followed by a periodic tenancy thereafter. The Court of Appeal concluded that the agreements granted “a term of six months or more” constituting a “material interest”. McCombe LJ said (para 19):-

It is pursuant to that grant that the tenant holds throughout the tenancy, whether during the fixed term or thereafter, Accordingly, in my judgment, the Tribunal and the judge were correct in finding that the tenant’s liability continued while those tenancies subsisted as periodic tenancies and even if the tenant had gone out of occupation.”

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