Cardtronics Europe Ltd & Ors v Syke & Ors (Valuation Officers)

For rating purposes, non-rateable plant such as an ATM may be considered when deciding whether a separate hereditament exists, although it is excluded when rateable value is assessed. A site must nevertheless be a sufficiently certain, self-contained unit of property with visual or cartographic unity. Physical adaptation is helpful but not invariably necessary. Where retailer and bank share occupation, the decisive question is whether the retailer retains general control, assessed objectively by contractual, physical and functional arrangements. The inquiry is not resolved by weighing which party has the dominant or primary purpose. On the facts, the retailers retained possession and general control of all the ATM sites.

The appeals concerned alterations to the 2010 rating list which entered ATM sites in supermarkets, shops and a petrol filling station as separate hereditaments, usually without reducing the rateable value of the host premises. The Valuation Tribunal for England refused the relevant appeals. The Upper Tribunal (Lands Chamber), in [2017] UKUT 0138 (LC), allowed Tesco’s appeals concerning three internal ATMs but dismissed the other appeals. Cardtronics, Tesco, Sainsbury, the Co-op and the Valuation Officers appealed. The central issues were whether ATM sites could constitute separate hereditaments and, if so, whether the retailer or ATM operator was in rateable occupation.

Disposition. The appeals of Sainsbury, Tesco, the Co-op and Cardtronics were allowed. The Valuation Officers’ appeal was dismissed.

1. The statutory valuation assumption concerning plant and machinery under the Valuation for Rating (Plant and Machinery) (England) Regulations 2000 applies when determining the rateable value of an existing hereditament. It does not require non-rateable machinery to be ignored when deciding whether a hereditament exists. The presence of an ATM may therefore be relevant to identifying the existence and extent of a separate site, although the ATM itself is not part of the hereditament for valuation purposes.
2. The geographical test in Woolway (Valuation Officer) v Mazars LLP [2015] UKSC 53 requires a sufficiently certain, self-contained unit of property capable of being shown as a single unit on a plan. Physical adaptation is not an absolute prerequisite. For mobile equipment, however, the operator must have a sufficient right of occupation of an identifiable unit rather than merely access to a machine wherever it happens to be placed.
3. The principles governing rateable occupation remain those stated in Westminster Council v Southern Railway Company Ltd [1936] A.C. 511. Where occupation is shared, the court must identify the paramount occupier. The decisive consideration is the owner’s retained general control over the occupied part, assessed in light of the parties’ rights, purposes and the objective facts. The degree of control required depends on the circumstances and need not be total. Purpose means the object of the activity, not the occupier’s commercial motive.
4. There was no justification for introducing a separate test of dominant or primary purpose. Where the retailer retained possession and actual occupation, shared a common purpose with the bank in providing ATM services, obtained a direct benefit, and retained contractual, physical and functional control, the retailer remained in rateable occupation. Those considerations applied to internal and external ATM sites alike. The Tribunal’s contrary approach to the external sites was legally erroneous.
5. The ATM sites were therefore not separately rateable in the occupation of the banks. The alterations to the rating list should not have been made or sustained.

• Court of Appeal (Civil Division). In [2018] EWCA Civ 2472, appeals by the retailers and Cardtronics were allowed and the Valuation Officers’ appeal was dismissed.
• Upper Tribunal (Lands Chamber). In [2017] UKUT 0138 (LC), Tesco’s appeals concerning three internal ATM sites were allowed, while the other appeals were dismissed.
• Valuation Tribunal for England. On 4 March 2016, the appeals against amendments creating separate ATM entries in the 2010 rating list were refused.