Council wins court battle over "sham" business rates documents

The High Court has found in favour of Sheffield City Council in a dispute over a £62,514 business rates bill that involved “untrue” and “nonsensical” documents.

In Broxfield Ltd v Sheffield City Council [2019] EWHC 1946 (Admin), Mr Justice Mostyn said a purported lease between two companies involved was “a sham”.

Giving judgment, he said that a district judge who heard the original case had on the balance of probabilities established that the document produced to the local authority was a sham.

This was criticised by lawyers for Broxfield, the owner of the building concerned, which claimed it had let the building to a firm named Busy Bodies, which was therefore responsible for the rates bill. Broxfield argued that the district judge’s findings were insufficiently full and rendered after too great a delay.

Mostyn J said: “The second criticism is completely groundless. It was not as if the district judge was giving this judgment from scratch.

“Her findings had been promptly rendered after the request for a case stated had been served. The only delay was in her analysis of her findings in the context of the allegation of sham. In any event I am not satisfied that the degree of delay comes remotely close to the level where it can be said that a fair trial has been compromised.”

He went on: “The first criticism is equally groundless. Judgments nowadays are generally much too long. In my opinion this judgment cannot be criticised for having been insufficiently expressed.”

Looking at the original case, Mostyn J said: “No reasonable judge could have reached a decision other than this one [reached]. It was an overwhelming case of sham. There was never any bona fide intention to pass rateable occupation to the man of straw that was Busy Bodies.

“Busy Bodies never had the means to pay the rates nor was it ever intended that it should do so. The arrangements that were set up were not bona fide and untrue evidence was given to the court.”

Mostyn J noted that when Sheffield asked to see a copy of the purported lease between Broxfield and Busy bodies it was sent a document that both stated the intended use of the property was as offices for subletting, but which also prohibited subletting.

“Although the document proclaimed itself to be a lease it did not contain any contractual term,” he said.

“No contractual term was granted anywhere by the lease. It was an internally inconsistent and nonsensical document.”