Owner of student accommodation block loses court battle over council tax being charged in respect of each bedroom rather than each flat

A Cardiff City Council listing officer was entitled to decide that a block of student housing comprised separate units for council tax purposes, the High Court has ruled.

HHJ Keyser rejected all five grounds argued by the block’s owner Howard Gardens Manco (HGM).

The case arose because HGM owns a block of 61 purpose-built student flats each with a number of en-suite bedrooms but with communal kitchen and dining facilities and living space.

It objected to the listing officer's decision not to exercise her discretion to aggregate the bedrooms within each flat. This meant council tax is charged for each bedroom rather than each flat.

The company argued that the flats were clearly constructed not for completely separate living but for occupation as part of a communal group within each flat, which pointed in favour of aggregation.

Student occupants typically lived in the same room for one year or less and the administration of hundreds of different council tax accounts would be complex and onerous, it said.

HGM said the need for consistency of decision making and equality of taxation made aggregation the only lawful decision because in many other equivalent properties the decision to aggregate had been exercised.

Its first ground of challenge was that the listing officer failed to have regard to structural alterations, a point HHJ Keyser rejected as irrelevant since none had taken place.

The second ground was that the listing officer had regard to the number of separately occupied bedrooms within each flat as a distinct factor, not merely in conjunction with the amount of communal space and facilities within each flat, and that as such it was not a relevant consideration.

HHJ Keyser said this amounted to a challenge to the rationality and legality, and “in my view, in any event, there is nothing irrational about this part of [Cardiff’s] policy”.

He said it was “both reasonable and pragmatic for the policy to focus on the number of rooms rather than the number of occupiers, because the former is unlikely to change significantly over time and provides an indication of the likely number of occupiers, whereas the latter is liable to fluctuate and constitutes a less useful factor for a consideration of whether or not to aggregate”.

Ground 3 was that the listing officer acted on the basis of a mistake of fact and therefore irrationally, which the judge dismissed as “merely a veiled disagreement with the decision”

He said ground 4, which argued the listing officer failed to follow the guidance concerning the relevance of shared facilities in Cardiff’s policy was “specious” as there was “no question of a decision not to aggregate being ipso facto a departure from Practice Note 6 just because the property in question has shared kitchen facilities”.

HHJ Keyser said the point about unfair treatment against comparable properties failed because “I see no error of law in the defendant's approach”.

He said: “The decision whether or not to aggregate was a matter for the discretion of the defendant. Where that discretion arose, as it did here, neither statute nor policy prescribed any particular answer.”

Mark Smulian