ATOS IT Services Ltd v Fylde Borough Council

For non-domestic rating, occupation of part of a hereditament is insufficient where other parts are separately occupied by third parties. Rateable occupation must be actual, beneficial, exclusive and non-transient. A person who occupies only part of a hereditament entered in the rating list as one unit is not liable for rates on that hereditament unless the occupation is joint or the list description can be satisfied without including property outside that person's occupation.

The billing authority's duty to collect rates arises only where a person is in fact liable under Local Government Finance Act 1988, s 43. Where rates have been overpaid, repayment may be sought under the applicable collection and enforcement regulations without challenging the contents of the rating list.

Atos occupied part of Serco House, which was entered in the rating list as a main hereditament. Other parts were separately let and occupied by third parties. Atos nevertheless paid £164,159.78 in non-domestic rates to Fylde Borough Council under protest and sought repayment.

The County Court held that Atos was not in rateable occupation and dismissed the Council's applications for summary judgment and striking out. The Council appealed, contending that partial occupation created liability, that the County Court lacked jurisdiction, and that repayment could not be ordered without altering the list. The central issues were whether Atos occupied the hereditament for the purposes of s 43 of the Local Government Finance Act 1988, and whether the court could determine liability in repayment proceedings.

1. Appeal dismissed. The County Court was right to dismiss the applications for summary judgment and striking out and to hold that Atos was, in principle, entitled to repayment of the disputed sum.
2. Under ss 43(1) and 65(2) of the Local Government Finance Act 1988, occupation is determined by the common-law rules of rateable occupation. The occupation must be actual, beneficial, exclusive and non-transient.
3. Where parts of a hereditament are separately let and occupied by different persons, none of those persons is in exclusive occupation of the hereditament. Occupation of part does not amount to rateable occupation of the whole. Joint occupation is different, because joint occupiers may occupy the whole hereditament jointly. Verrall v Hackney LBC, Ford v Burnley and London Borough of Croydon v Maxon System Inc Ltd supported that conclusion under the statutory scheme.
4. The Manchester Overseers v Headlam principle was consistent with that result. If the description in the rating list cannot be satisfied without including property not occupied by the person rated, liability cannot arise. Camden LBC v Herwald was not determinative because it did not address exclusive occupation.
5. Atos's case relied on the existing list rather than seeking its alteration. It was therefore open to the court to determine whether Atos was liable. The prohibition on challenging the list in liability proceedings did not deprive the court of jurisdiction over a claim for repayment based on the existing list.
6. The collection and enforcement regulations conferred an entitlement to repayment of an overpayment. The Council's statutory duty to collect rates arose only if a person was actually liable. Any remaining statutory or common-law restitution issues, including the possible application of the Woolwich principle, were left for determination by the Circuit Judge.

• High Court (Queen's Bench Division): On appeal from the County Court at Manchester, HHJ Bird's order and judgment were upheld. The appeal was dismissed.
• County Court at Manchester: The Council's applications for summary judgment and striking out were dismissed. Atos was held, in principle, entitled to repayment of the disputed rates, subject to later arguments concerning restitution.