CENTRIC COMMUNITY PROJECTS LTD AGAINST ABERDEEN CITY COUNCIL [2019] ScotCS CSOH

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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> CENTRIC COMMUNITY PROJECTS LTD AGAINST ABERDEEN CITY COUNCIL [2019] ScotCS CSOH_76 (10 October 2019) URL: http://www.bailii.org/scot/cases/ScotCS/2019/2019_CSOH_76.html Cite as: [2020] RA 52, [2019] ScotCS CSOH_76, 2019 SLT 1318, [2019] CSOH 76, 2019 GWD 33-529

[1] In the present case the petitioner sought judicial review of a decision by the

respondent dated 27 November 2018 refusing charitable rates relief from business rates (“the

[2] The petitioner is the tenant of Craigievar House, Howe Moss Road, Kirkhill

Industrial Estate, Dyce, Aberdeen conform to a lease between the petitioner and RR Sea

[3] In relation to the Property the respondent is the relevant rating authority.

[4] The petitioner is a charity registered in England and Wales with the Charity

[5] The petitioner is a charity registered in Scotland with the Office of the Scottish

Charity Regulator (“OSCR”) and is entered into the Scottish Charity Register.

[6] The petitioner is a charity for the purposes of the Local Government (Financial

[7] The petitioner advertises the availability of space at the Property to charities and

[8] The petitioner gave notice in writing to the respondent, by way of application for

charitable rates relief dated 11 July 2018, that the Property is occupied by a charity and is

[9] The respondent attended at the Property on or around 21 November 2018 in order to

[10] On 27 November 2018, Alison Blair, a team leader in the respondent’s Revenues and

Benefits division, sent an email to the petitioner on behalf of the respondent which read:

“Having had the opportunity to view the Property and speak to the onsite staff, it

cannot be agreed that property is wholly or mainly used for charitable purposes and

the decision has therefore been made not to award charitable relief in this instance.

… I trust this explains the position and unless the use of the Property is increased

substantially, I will not be in a position to reconsider my decision. I would further

[11] The statutory framework in terms of which the Challenged Decision was made is

section 4(2) of the Local Government (Financial Provisions etc) (Scotland) Act 1962 (“the

“If notice in writing is given to the rating authority that any lands or heritages (a) are

occupied by … a charity and are wholly or mainly used for charitable purposes

(whether of that charity or of that and other charities) … then, subject to the

provisions of this section, any rate leviable in respect of the lands and heritages …

shall not exceed one-fifth … of the rate which would be leviable apart from the

1. Whether the decision made by the respondent was within the statutory

2. Whether the respondent was entitled to conclude on the basis of the evidence

before it that the premises were not wholly or mainly used for charitable

3. Whether the petitioner is entitled to charity relief in accordance with the said

section 4(2) of the 1962 Act and if so whether declarator should be pronounced as

[13] Mr O'Rourke began his submissions looking at the issue of what is a charity and said

this: the decision in relation to the entry or removal of a body from the Scottish Charity

(Scotland) Act 2005. In particular it followed from this, that it is not for a local authority to

determine what is a charity and what is charitable. Any such attempt would be ultra vires. I

do not understand these submissions to be contentious. He then turned to examine the

charitable activities and purposes of the petitioner. The petitioner’s application to OSCR for

charitable status set out what its activities will be as follows:

• The provision of commercial space and premises on beneficial terms to charities

• The provision of commercial space and premises on beneficial terms to

• The provision of commercial space and premises on beneficial terms to the

[14] OSCR by letter dated 30 October 2013 acknowledged that these would be the

activities of the petitioner. OSCR having registered the petitioner had confirmed its

satisfaction that the petitioner’s activities are charitable. The petitioner’s charitable activities

“i. To promote the efficient and effective application of charitable resources by

charities and for charitable purposes by the provision of commercial premises,

support and related assistance to charities and for charitable objects;”

[15] It was Mr O'Rourke’s position that it was of critical importance in this case when

considering the issues before the court to have regard to the charitable purposes and

activities of the petitioner and he would return to this later in his submissions.

[16] Mr O'Rourke then turned to give a brief overview of the nature and extent of the

Property: it is an office block, formerly occupied by an oil and gas business. The petitioner

found the Property to be in good condition, able to be used immediately, and it was

accompanied by a large car park with excellent access for the disabled. The Property is three

floors in total, there is some open plan space and there are some smaller offices around its

[17] So far as the use of the Property Mr O'Rourke began by saying this: in furtherance of

its charitable purposes, the petitioner has advertised space at the Property to charities and

community interest groups. The petitioner advertises and makes available for use by

charities and community interest groups the whole of the Property.

[18] Moreover and in furtherance of its charitable purposes, the petitioner has licensed a

number of charitable bodies and community interest groups to occupy the Property.

However, these licences all post-date the date of the Challenged Decision.

[19] So far as the position as at the time of the inspection and of the Challenged Decision

Mr O'Rourke explained that the physical use of the Property was as follows:

• In furtherance of its charitable purposes, the petitioner has displayed on behalf of

the Equality Council UK, itself a registered charity, an exhibition. The exhibition

is organised by the Equality Council UK and focuses on issues in relation to the

disabled, the LGBT community and women in the workplace. The exhibition

explains the history of equality as set out in the Equality Act 2010.

• Space at the Property is used during office hours as well as in the evenings by

different charities and community interest groups. The petitioner provides staff

at the Property to greet and welcome visitors, including those from the charities

making use of the space and visitors to the Equality Council UK exhibition.

[20] As I understood it as at the material date the only community interest group which

was in fact using the Property was a pipe band once per week or once per fortnight.

[21] Against that factual background, Mr O'Rourke then turned to make what was his

critical submission in respect of the issues before the court: in order to be able to carry out

its charitable purposes the petitioner must take occupation of commercial property spaces

such as the Property. Because of the nature of the charitable activities carried out by the

petitioner in furtherance of its charitable purposes, it is inevitable that not all of the spaces at

the Property will be actively used at all times. The petitioner’s charitable purposes are to

make space available for charities and community interest groups. The availability of free

space accordingly is an integral element of the petitioner’s charitable function.

[22] Accordingly, he submitted the petitioner occupies the whole of the Property in the

performance of its charitable purpose. He emphasised that no part of the Property has been

[23] It was his submission that the respondent had failed in making the Challenged

Decision to understand the true nature of the petitioner’s charitable purposes, although

these had been explained to the respondent and accordingly the decision reached by the

[24] In elaboration of the above Mr O'Rourke submitted that in considering the

application for relief and making the Challenged Decision, the respondent had failed to take

[25] In support of the above contention Mr O'Rourke directed the court’s attention to a

number of authorities. Under reference to these he put forward a series of propositions:

 The Property does not need to be in active use all of the time in order to satisfy

the test for relief (see: English Speaking Union Scottish Branches Educational Fund v

 The Property may properly and fairly be described as being wholly used for a

particular purpose even though not every square metre of floor space is in

constant use all the time (see: Public Safety Charitable Trust v Milton Keynes

 The respondent should ask itself only whether the petitioner makes use of all or

most of the Property as part of its charitable activities (see: South Kesteven District

Council v Digital Pipeline Limited [2016] 1 WLR 2971). In order to do this, he

submitted, it was obviously necessary that the respondent correctly identified the

 The respondent should be concerned only with whether the petitioner occupies

the Property to facilitate the carrying out of its charitable purposes; the efficiency

or otherwise of it doing so is an irrelevant consideration (see: Kenya Aid

[26] Returning to the ESU case, Mr O'Rourke contended that although the case was

decided in favour of the local authority it could clearly be distinguished on its facts from the

circumstances in the present case. It was his position that the two cases could be

distinguished for this short reason: in the present case no part of the Property was

mothballed, whereas seven out of eight floors in the ESU case were mothballed. It was his

position that the determining factor in the Lord Ordinary’s decision the ESU case was that

the seven out of eight floors had been mothballed. He in particular drew my attention to

paragraph 12 of the Lord Ordinary’s opinion where he observed that the test in terms of

section 4(2) could be satisfied although the amount of space used in the premises varied

• The whole of the Property is offered to charities and community interest groups;

• Given the petitioner’s charitable purposes it was inevitable that not all of the

• The fact that all of the Property was not actively used all of the time and that

active use varied did not mean that the test in section 4(2) was not met;

• The respondents had erred in not having regard to the petitioner’s charitable

purposes and the whole circumstances surroundings its occupation and use of

• It had in particular not had regard to this: although not all of the Property was

actively used it was nevertheless on a proper understanding of the section used

• In the whole circumstances the respondents had not applied the correct legal test.

[28] At the outset of his submissions Mr Burnett made it clear that certain issues were not

in dispute. In particular there was no challenge to the petitioner’s charitable status nor as to

the genuineness of its intentions. The sole issue was whether it had fulfilled the criteria as

[29] It was his position that when the factual matrix was considered in terms of the legal

[30] Mr Burnett advanced the following proposition in respect of the legal framework:

the question for the respondent as rating authority was whether the premises were occupied

by a charity and were “wholly or mainly used for charitable purposes”, (see: section 4(2) of

[31] He then turned to make a series of submissions as to how the test in section 4(2) of

[32] The “use” made of any subjects is primarily a question of fact for the relevant

authority. Where the determination made by the authority is one that the court considers

that it was entitled to make on the facts the court should not interfere with that decision (see:

[33] The relevant authority is required to consider the use actually made of a property as

a whole, consistent with the ordinary meaning of that phrase and determine whether the

Property is “wholly or mainly used for charitable purposes” (see: ESU at paragraph 12).

[34] He accepted that a property does not need to be in active use all of the time in order

to satisfy the test but it is a matter of fact for the authority to determine in the particular

circumstances whether a property is being used wholly or mainly for a particular purpose

[35] The purpose of the use and the extent or amount of the actual use are both relevant

to the determination of whether the test is made (see: Kenya Aid Programme v Sheffield City

[36] For the mandatory exemption from rates for a charity to apply it is reasonable to

assume that parliament intended that the charity be actually making extensive use of the

premises for charitable purposes (see: Public Safety Charitable Trust v Milton Keynes Council

[37] If the premises are being used wholly or mainly for charitable purposes, it does not

matter that they could have been run more efficiently or that only part of the premises need

be used (see: Kenya Aid Programme v Sheffield City Council at paragraph 36 and South Kesteven

[38] Mr Burnett then turned to respond to the specific grounds of challenge advanced by

Mr O'Rourke. He described the petitioner’s critical assertion in support of its legal challenge

in the following way: the petitioner claims that the availability of free space in the building

occupied by it is central to its ability to carry out its charitable purpose because it requires to

take occupation of commercial property spaces then advertise to other charities in order to

encourage them to take up the space. It therefore argues that its “occupation of the Property

in order to make space available to other charities is how the petitioner fulfils its charitable

purposes”. The petitioner then complains that the respondent has sought to determine its

application for charitable relief on the basis that the empty space at the Property is evidence

that the petitioner is not using the Property for charitable purposes. It further argues that

the respondent was wrong to do so because it fails to recognise that the availability of free

space is an integral element of the petitioner’s charitable function.

[39] He submitted that in addition as a secondary position the petitioner contended that

the question that the respondent ought to have asked is whether the petitioner occupies the

Property to facilitate its carrying out of its main charitable purpose and that the efficiency or

otherwise of the petitioner’s occupation of the Property is an irrelevant consideration and

the respondent has had regard to this irrelevant consideration. The respondent contends

that it was entitled and required to take into account the extent or amount of actual use of

the Property for charitable purposes and accordingly the decision was reasonable in all the

[40] His position in respect of the primary contention of the petitioner was a short one

and can be summarised as follows: the respondent is required to consider the use actually

made of the Property as a whole. The “provision of empty space” is not a “use” of the

Property for charitable purposes. The Property is only actually used for charitable purposes

if the petitioner fulfils its intention and actually finds a charity to occupy the premises.

Otherwise the premises would be completely unused and empty for any length of time and

the petitioner would claim that it was fulfilling its charitable purpose because it was

technically potentially available for a charity to occupy in accordance with its purposes. He

[41] What he submitted had to be established to satisfy the test was this: the Property

actually being used for charitable purposes and not just being made available for charitable

purposes. The charitable purpose of the petitioner properly understood was not to provide

space which was not taken up. When the act talks of “use” of premises it cannot have in

mind an empty building which is not used. It was his position that what had to be had

regard to was actual occupation and use of the Property. It was that which mattered. He

found support for this in the ESU case at paragraph 6 where the Lord Ordinary says this:

“Counsel founded particularly on the expression ‘or is available to be used’ as

indicative of ‘use’ encompassing areas where nothing was actually being undertaken

but could be. I do not find myself assisted by this reference which, if anything,

points in the opposite direction. The very fact that the expression ‘or is available to

be used’ appears in the sub-section suggests that that is something different from

[42] In response to the secondary argument, namely: that the respondent should have

ignored the fact that the exhibition for example could have been housed in a significantly

smaller area because the efficiency of the use of the Property was not relevant he said this:

in terms of the case law the principle of the efficiency of the use of the premises is irrelevant

in that it only arises if it is established the premises are in fact being wholly or mainly used

for a charitable purpose. The respondent was entitled to assess the actual use of the

premises in order to decide whether it was wholly or mainly being used for charitable

purposes and consider the matter as a whole. That included an assessment of whether the

use of the premises for the exhibition that the petitioner was mounting amounted to such

[43] In conclusion he said this: The respondent was entitled to reach the conclusion that

it did. The decision was reasonable in all of the circumstances. The respondent was entitled

to conclude that the Property was not being wholly or mainly used for charitable purposes.

Whether the Property is wholly or mainly used for charitable purposes is a matter of fact for

the respondent to determine. The court should not interfere with the respondent’s decision

unless the decision was not one which the respondent was reasonably entitled to make on

[44] He went on to set out the factual position which had been found as at the time of the

• At the time of the officers’ site visit on 21 November 2018, 2 of the 3 floors are

purportedly devoted to an exhibition. The officers found that an Equality

Exhibition spread across the ground floor and the first floor. It consisted of

roughly 8 boards per floor which were around 6ft tall and separated by about

8 feet from one another. A couple of meeting rooms were being used for storage

of baby items. Another room was full of items for re-use. One room was being

used to store office equipment. The majority of the smaller office rooms were

empty and unused. There was an out of order sign on a toilet door advising that

there was no water supply to the area. The heating was not working. The second

floor was completely empty. There was a taped circle on the floor and they were

advised that a pipe band practised on the second floor once a week, sometimes

fortnightly. There were a couple of sign-in sheets which consisted mainly of the

pipe band members signing in. They took several photographs during the

 During the site visit the respondent’s officers found that attendance to the

exhibition has been close to zero due to the location of the Property and the fact

that public transport to the area is infrequent and the location of the bus stop

means that the walking distance is substantial. With the exception of approx.

4 rooms which were being used for storage, the majority of the smaller offices

remained empty and unused. The second floor which accounts for an area of

over 1,600m², was being used by an average of 20 people on a weekly /

fortnightly basis with no requirement for that level of floorspace and with the

result that the space was on the whole, empty. The remainder of the building

was largely unused. In the circumstances, the respondent was entitled to

conclude that the building was not wholly or mainly used for charitable

[45] The starting point in considering the issues before the court is I believe the decision

[46] The relevant factual background in the ESU case was this, the building tenanted by

the charity was a large eight storey building, however, the charity used only the ground

floor and the remaining floors were left dormant. He held, given the foregoing, that the test

[47] Turning to the Lord Ordinary’s reasoning at paragraph 11 he first gives the following

guidance as to the proper construction of section 4(2)(a) of the act:

“’wholly’ in section 4(2)(a) is not synonymous with ‘solely’. The notion that an office

building which is unused for any purpose throughout seven of its eight floors is

‘wholly used’ for the purpose for which the one floor is actually in use does not

[48] He then goes on to observe at paragraph 12:“… in applying section 4(2)(a) a

committee … is obliged to give content to the full expression ‘wholly used’ in relation to the

[49] The above has been accepted as the correct approach to section 4(2) of the 1962 Act in

all of the subsequent cases to which I was referred by counsel: (see: for example Public

Safety Charitable Trust v Milton Keynes Council paragraph 32: Kenya Aid Programme v Sheffield

City Council at page 69 G-H and South Kesteven District Council v Digital Pipeline Limited at

[50] The Lord Ordinary then turns to apply the above analysis to the circumstances of the

“I consider that the respondents made a decision which is consistent with the

ordinary meaning of the language of section 4(2)(a). I find no fault with the

approach taken by the respondents and with their interpretation of the sub-section.

They decided that, where a self-contained area comprising roughly one-eighth of the

subjects was devoted to charitable purposes and the remaining separable

seven-eighths of the subjects were kept vacant and out of active use, the subjects

[51] I consider on the facts that the present case can easily be distinguished from the ESU

case for the following reasons: no parts of the Property “were kept vacant” (emphasis

added) rather those parts of the Property which were not being actively used by charities or

community groups in furtherance of the petitioner’s charitable purposes were being offered

by the petitioner for use by such groups in furtherance of its charitable purposes. There was

no part of the Property which had been “mothballed” by the petitioner, which was the

critical finding by the Lord Ordinary as to what had occurred in the ESU case (see:

[52] The circumstances in the present case for the foregoing reasons are materially

[53] Rather the circumstances in the present case I believe are very similar to the

circumstances which the Lord Ordinary in the ESU case having dealt with the factual

[54] He commences his further consideration by making it clear that his foregoing

observations on the proper construction of section 4(2)(a) and the proper approach of an

“not for a moment mean that subjects must be in active use all the time or for most of

the time to satisfy that test. It is possible to envisage circumstances in which a local

authority might justifiably decide that subjects were wholly used for charitable

purposes where a large part of them lay vacant for substantial periods of time.”

[55] Both parties directed my attention to this part of the Lord Ordinary’s opinion and

[56] The Lord Ordinary thereafter considers a number of examples of situations which

“the petitioners (ESU) might find that the demand for studying English as a foreign

language varies from term to term. Or another charity might find that at certain

times of the year far more working space is required than at others. In these and

other similar examples the charity’s circumstances might be such that the only way

in which the necessary space for storage or administrative work or teaching or

counselling sessions would for sure be available when required would be if it had

appropriate premises available throughout the year. An examination of the

circumstances in such instances might well lead the authority to the conclusion that

[57] What I believe can be taken from the entirety of the analysis by the Lord Ordinary in

the ESU case and the authorities which have followed the reasoning contained in it is this:

 An authority is required to consider the use actually made of the Property

consistent with the ordinary meaning of that phrase and determine whether the

 The purpose of the use and the extent or amount of the use are both relevant to

the determination of whether the test in terms of section 4(2) is satisfied.

 Crucially for the purposes of the present case the mere fact that a property is not

all of the time in active use or even for most of the time, large parts of it are not in

active use does not mean that the test in section 4(2) cannot be satisfied. I am

persuaded that it follows from the foregoing that in reaching its decision as to

whether section 4(2) is satisfied an authority requires to have regard to the

charity’s whole circumstances. In considering the charity’s whole circumstances

it may be relevant for the authority to have regard to a number of factors and not

to confine its consideration to the single factor of active use of the Property.

[58] Applying the above analysis to the circumstances of the present case I observe that

the charitable purpose of the petitioner is the provision of space for charities and community

interest groups. Given that charitable purpose the amount of space which will be in active

use at any given time will be dependent on the amount of space required by charities and

other groups. Accordingly the amount of space in the Property in active use is likely to

fluctuate. The situation in the present case is I believe very similar to the example given by

the Lord Ordinary in ESU, namely: finding that the demand for the charity’s services may

vary from time to time and accordingly the amount of space in active use varies from time to

time. Thus in the present case the demand by charities and others for space varies from time

to time. This variation in demand was a relevant factor and accordingly the respondent

[59] Moreover, I believe that the situation in the present case is very similar to the other

example given by the Lord Ordinary of a charity finding at various points in time: “more

working space is required than at others”. Thus depending on uptake of the space being

offered in the Property the amount of working space in active use will vary.

[60] A further point is this: given the petitioner’s charitable purpose it is an integral

element of its function that there is from time to time space available in order for it to

continue to fulfil its function of offering and providing space to other charities. Accordingly

in reaching its decision this is a further relevant circumstance and accordingly the

[61] What is clear in the present case, is that the entire property is not in active use at all

times. However, given the nature of the charity, its charitable purposes and the use to

which the Property is to be put that on its own does not mean that the test in section 4(2) is

[62] I now turn to apply the above analysis to the question: Was the decision made by the

[63] For the following reasons I am satisfied that the decision made was one that the

[64] First the decision appears to have been based solely on the extent to which the

Property was in active use. That appears to have been the sole criterion to which the

respondent has had regard given the terms of the Challenged Decision and given the terms

[65] The charitable purposes of the petitioner and what effect that would have on

whether at any given point the whole property would be in active use appears not to have

been considered. In particular no consideration was given to the amount of active use

varying due to the factors which I identified earlier in this opinion. Moreover, no

consideration appears to have been given to the fact that the petitioner offered, by way of

advert, space throughout the whole of the Property for use by charities and community

interest groups. Accordingly there was no part of the Property which was “mothballed”,

which as I have already said made the circumstances in the present case entirely different

from that in ESU. In order to fulfil its charitable purpose to provide property to charities the

petitioner necessarily requires to offer property to charities. Thus the offering of the

Property is a circumstance of the petitioner to which regard must be given by the

respondent. It gave no consideration to this factor. It was argued by Mr Burnett that the

offering of the Property was not a relevant factor. With that contention I disagree for the

[66] I am persuaded, given the foregoing, that in making its decision and applying the

test the respondent has failed to have regard to material relevant factors, namely: the

petitioner’s charitable purposes and activities. Rather, the respondent has focused solely on

one consideration in terms of the test, namely: the extent to which the Property is in active

use and has failed to take account of the obvious explanation for the Property not being in

its entirety in active use, namely: the petitioner’s particular charitable activities and

purposes. In reaching its decision the respondent has not applied the test in terms of

section 4(2) correctly. It has taken as the starting point and the end point of its decision the

extent of the active use of the Property. It has failed to have regard to the observations of the

Lord Ordinary in ESU to the effect that the test could be met where: “for most of the time”

“it is possible to envisage circumstances in which a local authority might justifiably

decide that the subjects were wholly used for charitable purposes where a large part

I believe the circumstances in the present case are such that the above observations of the

Lord Ordinary in ESU are applicable and the respondent has failed to have any regard to

[67] In conclusion I am satisfied that the respondent has reached a decision which on the

facts it was not entitled to reach. It has misconstrued the test in section 4(2) and accordingly

has not had regard to material relevant matters. As above identified its approach to its task I

[68] The respondent argues that the position advanced by the petitioner is one which will

lead to an absurd result. It is contended on its behalf (in its note of argument) that if the

“could be completely unused and empty for any length or period of time and the

petitioner would claim that it is fulfilling its charitable purpose because it is

technically potentially available for a charity to occupy in accordance with its

I do not think this argument is correct. An authority has to have regard to all of the

circumstances including the active use made of the Property as a whole. In its consideration

it is obliged to give content to the expression “wholly used”. If the Property were lying

“completely unused and empty” for lengthy periods this would be a factor to which the

respondent would be entitled to have regard. Moreover, it would in my view be a very

powerful factor in holding that the test for relief was not satisfied. However, it does not

follow that an authority is entitled not to have regard to the whole evidence and

circumstances and in particular in the present case not to have regard to the charitable

purposes and activities of the petitioner and the effect of these on the active use of the

Property at any given time. The position which the respondent puts before the court in its

above submission was not the position which it faced when making the Challenged

“The provision of empty space is not a ‘use’ of the Property for charitable purposes.

The Property is only actually used for charitable purposes (if) the petitioner fulfils its

intention and actually finds a charity to occupy the premises.”

[70] I am of the view that the above argument is misconceived. Taken to its logical

conclusion what is being said is that the observations of the Lord Ordinary to which I have

already referred in the ESU case are wrong. I have already said that I regard those

observations as being correct and Mr Burnett in the course of his submissions accepted that

they were correct. The above argument is in effect saying: that a property must be in active

use all the time or for most of the time to satisfy the test. I consider that a clear

[71] For the above reasons I would answer the questions posed for determination by the

[72] Given I have answered the above two questions in the negative I will reduce the

[73] In respect of the third question posed given the basis upon which I have held that the

Challenged Decision should be reduced, I will have the matter put out by order in respect of

the third question to hear further submissions. I reserve all questions of expenses.

Scottish Court of Session Decisions