1. News Corp UK & Ireland Ltd v Commissioners for HMRC
2. Aviva Investors Ground Rent GP Ltd and another v Williams and others
3. Fearn and others v Board of Trustees of the Tate Gallery

News Corp UK & Ireland Ltd v Commissioners for HMRC

An appeal heard on the 22^nd and 23^rd November 2022 in the Supreme Court.

Judgment handed down 22^nd February 2022.

The appeal was brought against a decision of the Court of Appeal which held that digital versions of newspapers were distinct from the print version in respect of the VAT rating. It is a long standing principle that under the Value Added Tax Act 1994 that VAT is not charged on newspapers as per section 30. They are “zero-rated.”

The question to be decided within this appeal was whether over a specified period of the 30^th August 2010 – 4^th December 2016 whether the digital editions of newspapers belonging to the Appellant were also “zero-rated” or whether VAT was due to HMRC. News Corp UK own and publish The Times, The Sunday Times, The Sun & The Sun on Sunday.

The law was clarified by means of a statutory instrument (No 2020/459) which stated as of the 1^st May 2020 all digital editions of newspapers are “zero-rated” and no VAT is due.

The appeal considered the law from 1940 to 1973, where newspapers were exempt from what was then called “purchase tax.” Upon accession to the European Economic Community “purchase tax” was replaced with VAT.

Directive 67/228 allowed member states to apply a reduced or zero rate to certain supplies or goods. Section 12 of the Finance Act 1972 was enacted to preserve the tax-free treatment of newspapers. This was further preserved by the Value Added Tax Act 1983 which at schedule 8, provides for “group 3” with item number 2 being newspapers.

The Supreme Court held in their Judgment that the term “newspapers” in the aforementioned Item 2, Group 3 at Schedule 8 of the VAT Act does not include the digital editions. The consequence therefore being that supplies of the digital editions by the Appellant in the specified period were not zero-rated and tax was therefore due and owed. The appeal was dismissed.

Aviva Investors Ground Rent GP Ltd and another v Williams and others

An appeal heard on the 8^th December 2022.

Judgment handed down on 8^th February 2023.

The appeal was brought against a decision of the Court of Appeal in respect of service charges by landlords under leases of residential property in respect of their expenditure upon repairs and the provision of other services. Lord Briggs in his judgment noted that has “long been controversial.”

The appeal centred around Section 27A of the Landlord and Tenant Act 1985 which attempted to alleviate the perception of unfair restriction of residential tenants’ access to justice in respect of such restrictions. The appeal raised the question as to how far Section 27A goes to restrain a parties general right to freedom of contract.

The question for the Court to answer was to how much Section 27A(6) cuts down a contractual provision in a lease that provides for the tenant to pay a fixed proportion of common costs “or such part as the landlord may otherwise reasonably determine.”

The particular leases within this case were residential units in Southsea, Hampshire by which the apportionment of the landlord’s service charge expenditure between the tenants in the building may be adjusted by the landlord. Clauses within the contact determined a percentage share of insurance, building and estate services costs or “such part as the Landlord may otherwise reasonably determine.”

The appeal was brought on the basis that the Respondent had demanded service charges on an apportionment different to the stated percentages. The appellants claimed that any contractual entitlement differing from the stated percentage values was rendered void by section 27A(6) of the aforementioned Act. There was a further claim that the obligation was unreasonable in of itself.

The Court considered the statute itself as well as general principles of statutory construction in contract. The Court further considered “relevant management decisions” made by the Respondent in reapportioning the costs claimed.

The Court held, repealing the Court of Appeal’s decision and agreeing with the initial decision of the First-Tier Tribunal, that the construction of the clause allowed the Respondent to trigger a re-allocation and to decide what that revised apportionment would be. Lord Briggs noted that the Respondent was contractually obliged to act reasonably in exercising both of these rights.

The Court therefore dismissed the appeal holding that the question for the First-Tier Tribunal had rightfully been where the re-apportionment was reasonable as opposed to whether there should have been re-apportionment and to which fractions. The Supreme Court upheld the Respondent’s application and restored the decision of the First-Tier Tribunal.

Fearn and others v Board of Trustees of the Tate Gallery

Appeal against the Court of Appeal’s judgment in respect of a private nuisance claim brought against the Tate Modern public art gallery in London by tenants of a neighbouring block of flats. The Applicants claimed that a new extension of the Tate Modern, the Blavatnik Building, opened in 2016, and its tenth-floor viewing platform allowed visitors to the gallery to see directly into the Applicant’s residential flats.

The Applicants sought an injunction to prevent the visitors viewing into their flats. They sought, in the alternative, an award of damages.

The claim had previously been dismissed by both the High Court ([2019] EWHC 246 (Ch)) and the Court of Appeal ([2020] EWCA Civ 104).

The Supreme Court upheld the appeal by a majority of 3 to 2 finding it did amount to nuisance. In the majority judgment, the High Court found that the trial judge had erred in three ways:

• Considering whether it was “unreasonable” use of land as opposed to its common and ordinary use; and
• Finding that the design of the flats, which have high walls of transparent glass, invited visual intrusion when in fact the abnormal use of the land, namely the tenth-floor viewing gallery, meant there was no answer to a claim that the flats could have used another material for the walls or opaque glass.
• Finding that the claimants ought to take measures to avoid being seen, such as putting up blinds or curtains. This was wrongly placed on the claimant’s as their responsibility when in fact the abnormal use of the land should have altered the Court’s approach.

Lord Leggat, supported by Lord Reed and Lord Lloyd-Jones, found in favour of the Applicants on the basis the Tate Modern Gallery was inviting its visitors to look out from the viewing gallery and they did so without imposing any restrictions the time of day or days of the week. On the facts found by the trial judge, they were wrong to find that this could not amount to liability for nuisance and in fact it was held it was private nuisance.

Written by Marc Luxford and Kim Gordhandas