Rossendale Borough Council v Hurstwood Properties (A) Ltd & Ors

Rossendale Borough Council v Hurstwood Properties (A) Ltd & Ors

Neither the doctrine of piercing the corporate veil nor the Ramsay principle applies to defeat the NDR avoidance schemes in question. The SPVs were validly incorporated, the leases were not shams, and the statutory definition of 'owner' for NDR purposes is satisfied by the grant of a valid lease, regardless of motive or commerciality. There was no existing liability evaded by the interposition of the SPVs, and the statutory scheme does not admit of a purposive construction that would disregard the leases.

Parties
Claimant/respondent: Rossendale Borough Council; Defendant/appellant: Hurstwood Properties (A) Limited; Defendant/appellant: Hurstwood Properties (C) Limited; Defendant/appellant: Hurstwood Properties (I) Limited; Defendant/appellant: Hurstwood Properties (R) Limited; Defendant/appellant: Hurstwood Properties (Y) Limited; Defendant/appellant: Hurstwood Group 1 Limited; Claimant/respondent: Wigan Council; Defendant/appellant: Property Alliance Group Limited
Jurisdiction
England and Wales
Judgment Date
07 March 2019
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) on Applications to Strike Out Claims
Outcome
Appeals by defendants allowed; appeals by claimants dismissed; proceedings struck out in their entirety.
Legal Topics
Piercing the Corporate Veil, Statutory Interpretation, Tax Avoidance Schemes, National Non Domestic Rates (ndr), Landlord and Tenant Law
Company Law Tax Law Local Government Law Piercing the Corporate Veil Statutory Interpretation Tax Avoidance Schemes National Non Domestic Rates (ndr) Landlord and Tenant Law

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Parties

Rossendale Borough Council

Claimant/respondent

Hurstwood Properties (A) Limited

Defendant/appellant

Hurstwood Properties (C) Limited

Defendant/appellant

Hurstwood Properties (I) Limited

Defendant/appellant

Hurstwood Properties (R) Limited

Defendant/appellant

Hurstwood Properties (Y) Limited

Defendant/appellant

Hurstwood Group 1 Limited

Defendant/appellant

Wigan Council

Claimant/respondent

Property Alliance Group Limited

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) on Applications to Strike Out Claims

Legal Issues

  1. 1 Whether the doctrine of piercing the corporate veil applies to SPVs used in NDR avoidance schemes
  2. 2 Whether the Ramsay principle (purposive statutory construction) applies to disregard leases to SPVs for NDR liability

Ratio Decidendi

Neither the doctrine of piercing the corporate veil nor the Ramsay principle applies to defeat the NDR avoidance schemes in question. The SPVs were validly incorporated, the leases were not shams, and the statutory definition of 'owner' for NDR purposes is satisfied by the grant of a valid lease, regardless of motive or commerciality. There was no existing liability evaded by the interposition of the SPVs, and the statutory scheme does not admit of a purposive construction that would disregard the leases.

Court Disposition

Appeals by defendants allowed; appeals by claimants dismissed; proceedings struck out in their entirety.

Orders

  • Defendants' appeals allowed.
  • Claimants' appeals dismissed.