The SPVs had no assets or business and it was never intended that they would pay NDRs. Although the leases on the face of it placed rent obligations on the SPVs, there was no intention to demand or pay such rent. In those circumstances, the schemes, which relied upon hoped-for administrative inertia on the part of local authorities, involved abuse of the legal process or insolvency legislation.
Taking a modern approach to statutory interpretation, the Court noted that the Act should be construed as a whole, in the light of its historical context, and with a view to giving effect to the intention of Parliament. The purpose of charging NDRs on unoccupied premises was to deter proprietors from leaving properties unoccupied for their own financial advantage and to encourage them to bring vacant premises back into use for the benefit of the community at large.
The Court interpreted the word ‘owner’, as used in the Act, as requiring more than an immediate legal right to physical possession of a property. Given that the SPVs had no real or practical ability to exercise their possession rights, and the fact that those rights were conferred for the sole purpose of avoiding NDRs, Parliament could not have intended that the SPVs would qualify as ‘owners’ within the meaning of the Act.
The Court found that, notwithstanding the leases, the entitlement to possession of the premises remained with their original proprietors. They, rather than the SPVs, had retained the real ability to decide whether to leave the premises unoccupied. There was thus a triable issue as to whether the original proprietors remained liable for NDRs throughout and the councils’ claims should not have been struck out.