[2024] UKUT 204 (LC)

The appellant’s case is that she is the lessee of the Unit and that she runs two totally separate businesses from it, in two self-contained units; it is because she is the occupant that the landlord is content to have the two separate businesses operating there despite the terms of the lease. Neither business needs the other in order to operate. Legal title to occupy is irrelevant, the point is that the businesses are completely independent. They have no staff in common. Temporary staff at the warehouse do not access the reception or the office. The sharing of an electricity supply, of water and of security arrangements are commonplace in shared buildings between separate hereditaments, and QNP Toys pays QPL for its occupation.

The respondent’s case is that this is a single hereditament, with QPL as lessee in occupation of the whole. Insofar as QNP is in occupation then QPL remains in paramount occupation (we explain that term below) and therefore remains in rateable occupation, but that in any event these are not really two distinct businesses because both are engaged in retail. They share a single building, the parts not being self-contained, and in the building they share utilities, CCTV, an alarm system, a land-line telephone and a letter box. They are operated by common personnel, namely the appellant and Mr Dumare.

The question in the appeal is simply whether the Unit is one hereditament (that being the unit of assessment for rating purposes) or two. We first make some findings of fact, and then to explain why we regard this as a single hereditament in light of the authorities.