In Langley v Appleby ([1976] 3 All E.R. 391) the question (for tax purposes) was whether police officers were ‘occupiers’ of rent-free accommodation provided by the police force. There was no express requirement that the officers should live in a police house and not all officers did. Officers understood, when joining the force, that they would have to live in property indicated by the chief constable. The court found that this was for reasons that were for the better performance of their duties (was integral to the contract of employment). The officers were not the occupiers.
Fox. J. reviewed the authorities and said:
‘[T]he authorities lead me to the following conclusions. First, the correct formulation is that of Lord Upjohn in Northern Ireland Comr of Valuation v Fermanagh Protestant Board of Education ([1969] 3 All ER 352 at 359, [1969] 1 WLR 1708 at 1722), namely that it must be established either (a) that it is essential to the performance of the duties of the servant that he should occupy the particular house or (b) that it is an express term of the employment that the servant shall occupy the premises, and that by doing so he can better perform his duties as a servant to a material degree.
Secondly, it does not seem to me that the employer’s entitlement to move the servant out of the premises is a factor of much consequence in favour of representative occupation. If the servant only has a licence he can be required to move out whatever his status (beneficial or not) for present purposes. Indeed, it is only if the servant is a representative occupier that it might not be possible for the employer to require him to move out, since it might then constitute repudiation of the contracts in a case where it is essential for the servant to reside on the premises to perform his duties.
Thirdly, I agree with counsel for the taxpayers that in order to constitute representative occupation the premises need not be the only suitable premises for the employee to occupy in order to perform his duties. That, I think, is accepted by Lord Reid in Glasgow City Corpn v Johnstone ([1965] 1 All ER 730 at 735, [1965] AC 609 at 621) and in Fox v Dalby ((1874) LR 10 CP 285 at 293, 295) by Lord Coleridge CJ and by Denman J. But I think that this limitation must be placed on that proposition. If it is asserted that it is essential for the servant to occupy the house in order to perform his duties, it seems to me that the servant must establish affirmatively that for the performance of his duties he must live in that house and in no other.
Fourthly, counsel for the taxpayers contends that benefit to the servant by occupation of the premises is not inconsistent with representative occupation. That, I think, is correct. Fifthly, counsel for the taxpayers contends that the premises need not be part of or physically connected with the premises of the employer. That is correct, but it is not, I think, of much significance. The fact that the premises do form part of other premises belonging to the employer may, I think, be a circumstance in determining how far the residence is essential for or assists in the performance of the servant’s duties. This circumstance is not, however, it seems to me, of consequence in the present case.’ (413)
The fact that residence was advantageous to the officers was irrelevant if they had been required to live in the houses as a result of their terms of service and this was a material advantage to them in performing their duties.
