Service occupancy: must the occupancy be necessary or is it enough that it be required by the employer?

In Glasgow Corporation v Johnstone ([1965] A.C. 609, HL) a full-time church officer was required by the terms of his employment to occupy a house next to the church. The house was part of the same physical structure as the church and one could only get to the house through the church. The question, for rating purposes, was whether the house was occupied for the charitable purposes of the church. This question had two parts: (i) was the house occupied by the church or the employee? and (ii) , if occupied by the church, whether it was occupied for charitable purposes. The House of Lords held that the house was (i) occupied by the church, (ii) for its charitable purposes.

The first question was like asking whether the church or the employee had exclusive possession of the house. The House of Lords decided that the church had exclusive possession if either the terms of employment required the employee to occupy the house or the occupation was necessary for the performance of his duties. Lord Guest emphasised that the obligation imposed on the employee to occupy the house must not be capricious; it must be imposed for the more efficient performance of the employee’s duties.

The majority of the House of Lords thought that, since the house was occupied by the church then it was for the purposes of its charitable activities. Lord Hodson said that, given the answer to the first question, this question had to be considered from the church’s point of view.

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