The Court of Appeal has given an important judgment as to the approach to public benefit when considering mandatory charitable relief from non-domestic rates pursuant to s.43(6) of the Local Government Finance Act 1988.
The issue was defined by Nugee LJ (at para 130) as follows:
Where a registered charity (here Nuffield Health) uses a hereditament (here Merton Abbey) for a particular purpose (here providing gym and other facilities), what is the statutory question which determines whether it is entitled to mandatory rate relief as provided for by section 43(5) and 43(6)(a) of the 1988 Act? Is it:
(A) is the charity using that hereditament for a purpose which is one of its charitable purposes?
Or is it:
(B) is the charity using that hereditament for a purpose which is, taken by itself, a charitable purpose?
The majority of the Court of Appeal (Peter Jackson LJ and Nugee LJ) preferred formulation (A). They considered that this approach was supported to a greater degree by the language of the statute, its legislative history, previous caselaw and policy considerations.
The majority decided in favour of Nuffield Health that the question of public benefit did not need be assessed separately for each site on which a charity carries out its charitable activity. David Richards LJ dissented stating that the question of public benefit did need to be satisfied for each site.
Given the conclusion of the majority on this main issue, the London Borough of Merton’s appeal was dismissed.
A link to the Court of Appeal’s judgment is here.
Dan Kolinsky QC acted for Nuffield Health (instructed by BDB Pitmans).