London borough loses High Court claim over disputed £1.6m Community Infrastructure Levy liability for floating hotel

The London Borough of Newham has a lost a £1.6m case over an attempt to judicially review a decision by HM Revenue & Customs (HMRC) on whether a floating hotel is a building for Community Infrastructure Levy (CIL) purposes.

Mrs Justice Lang in the High Court dismissed the application on the basis that the Good Hotel London was a vessel not a building even though it is moored long term in the Royal Docks.

Newham had challenged HMRC’s view that the Good Hotel was not a building and so was not required to pay the council a CIL levy of £1,601,719.96.

The hotel was granted planning permission as a “mooring of a 160 room hotel on a floating platform with associated access, car parking and landscaping”.

HMRC held the Good Hotel was “a floating concrete non-propelled accommodation platform moored in the Royal Victoria Dock”.

It said Newham’s planning consent was for mooring the hotel - not the erection or building of a hotel -  and the facility was not a building under the CIL Regulations.

Newham challenged this on five grounds:

• failure to heed the purpose of the legislation to ensure that costs incurred in supporting the development of an area can be funded by owners and developers of land;
• failure to heed that the meaning of ‘building’ in CIL Regulations was not the same as its meaning under the Town and Country Planning Act 1990;
• misinterpretation of Skerritts of Nottingham Limited v. Secretary of State for the Environment, Transport and Regions (No.2) [2000] 2 PLR 102;
• wrongly concluding that a vessel could not be a building;
• failure to consider alternative dictionary interpretations of ‘building'.

Lang J said the first two grounds were unarguable as HMRC had correctly identified and applied the statutory framework.

The third ground was also unarguable, she said, as the Good Hotel had been brought on site ready made and - although intended to remain for 30 years - could be quickly removed and relocated and so did not meet any test of permanence.

Lang J also found the fourth ground unarguable as HMRC’s ‘appointed person’ - who reviewed the case - found the Good Hotel remained a vessel and had not become a permanent fixed thing and “her exercise of judgment does not disclose any arguable error of law”, the judge said.

She also dismissed the final ground as unarguable saying the verb 'to build' could apply to barges, coaches or birds nets for example, but none of these could constitute a building for CIL purposes.

Mark Smulian