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Principled Offsite Logistics (POL) – Update

POL Scheme

POL is a well-known company whose principal form of business is seeking NNDR mitigation for landlords by operating a variety of “Makro” schemes.

Over the last 2 years we have been acting for a council in Greater Manchester who have a number of ongoing matters with POL involving two large shopping centres, owned by companies which rely on POL for their business rates mitigation.

The difficulties in dealing with POL will be familiar to most. Failure by POL to co-operate with council on enquiries to establish the nature of POL occupations;  POL claiming to be storing goods for third parties but refusing to provide corroborative information; POL refusing to allow inspectors to see inside any of the boxes stored or even to touch them.

In those circumstances the council felt it appropriate to issue NNDR bills on an unoccupied basis and to refuse the landlord the relevant exemption. Eventually 59 summonses for liability orders were consolidated to be tried together.

Settlement

Those proceedings were settled before trial. We are unable to provide details of the actual terms of settlement because of a confidentiality clause but it can be said that the council were very satisfied with the financial terms of settlement.  It is believed that these terms were imposed on POL by their landlord clients who were becoming increasingly concerned about the nature of the evidence and the direction of the proceedings.  Those proceedings were concluded in late March 2017.

Since the end of 2016 POL have altered their scheme.  They no longer claim to be storing goods for third parties during occupation.  POL now claim that it is their own property they are storing.  Information obtained by the council confirms that the goods stored are of negligible commercial value, bought in bulk.  These are goods which have not been bought to trade or sell on but to be utilised by POL solely for the purpose of storage in order to enable their landlord clients to claim rates mitigation.

The council does not accept that storage of such goods qualifies as beneficial occupation on the basis that their only value is to provide the mechanism to facilitate a “Makro” scheme.  Expert Counsel has advised that the existing legal authorities do not deal with such circumstances.  A number of the occupations in the settled proceedings come into this category and it would therefore have fallen to the Magistrates’ Court, in those proceedings, to rule on this legal point as to beneficial occupation.  However no ruling was made because the proceedings were settled.

Judicial Review

The council has now received from POL’s solicitors a formal Pre-Action Protocol Letter seeking Judicial Review.

There are two main strands to the Judicial Review sought.  Firstly, POL feel that their treatment by the council is singular and questions the decision-making processes.  Secondly, and more importantly they seek review of their practice of storing their own property which has no value other than it affords the mechanism for a “Makro” scheme.

In the Pre Action Protocol Letter POL argue that there are no Interested Parties to the proposed Judicial Review proceedings. In essence, every Local Authority which has ever experienced a Makro scheme has an interest in the outcome. Even if POL do not operate in their territory, the principle they seek to establish will have an effect if other operators apply the same principle, which will be widely reported.

The obvious danger for local authorities is that if POL’s scheme is effectively approved by the Court, it will not only be rolled out by POL, but other Makro scheme operators.

We will keep you posted with developments, but if you have any specific questions or concerns, please feel free to get in touch: richard.kerr@greenhalghkerr.com or warren.usden@greenhalghkerr.com.