Cardtronics UK Ltd and others v Sykes and others

Plant or machinery disregarded when calculating rateable value may still identify the land constituting a hereditament. A fixed ATM site designed or adapted for that use can therefore be a separate hereditament, although space occupied by an impermanent and moveable machine may not be.

Where a retailer remains in possession and occupation of an ATM site, the retailer and operator use it for the same or closely aligned purpose, and the facility advances the retailer’s business, the retailer may remain the paramount occupier. An external ATM does not become separately occupied merely because it serves the public outside opening hours. Paramount occupation depends on the parties’ position and rights, the purpose of occupation and the practical effect of retained control.

The appeals concerned ATMs installed in supermarkets and convenience stores. Most were fixed into external walls and available to the public independently of store opening hours. Others were internal, and one was a moveable machine within a Tesco store.

The Valuation Tribunal for England held that the ATM sites were separately occupied. The Upper Tribunal held that fixed sites were capable of constituting separate hereditaments. It treated the banks as the paramount occupiers of external sites, but the retailers as the paramount occupiers of internal sites. The Court of Appeal, in [2018] EWCA Civ 2472, held that none of the fixed ATM sites was in separate rateable occupation from the stores.

The issues were whether the ATM sites were capable of being separate hereditaments and, if so, whether the retailers or ATM operators were in rateable occupation.

1. The appeals were dismissed unanimously. Lord Carnwath delivered the judgment, with which Lord Reed, Lord Kerr, Lady Black and Lord Kitchin agreed. The Court of Appeal’s order that the ATMs were not in separate rateable occupation was upheld.

2. The Upper Tribunal’s factual findings and evaluative expertise carried particular weight. An onward appeal lay only on a point of law. A higher court therefore required more than a different evaluative assessment before intervening in its conclusions.

3. The exclusion of an ATM from the valuation calculation under regulation 2 of the Valuation for Rating (Plant and Machinery) (England) Regulations 2000 did not require the machine to be ignored when identifying the hereditament. The prescribed assumption concerns valuation. It does not govern the logically prior question whether a hereditament exists. The physical presence of an ATM could accordingly identify and delimit the relevant land.

4. A fixed site deliberately designed or adapted for an ATM could satisfy the geographical requirement of self-containment. Security, visibility, adaptation and permanence could distinguish it from the surrounding store. The moveable ATM at Tesco’s Nottingham store was different. Its essential qualities were impermanence and mobility, and the Upper Tribunal was entitled to find that its changing location was not a separate unit of property.

5. Rateable occupation requires actual occupation, exclusivity for the possessor’s particular purposes, benefit to the possessor and sufficient permanence. Where occupation is concurrent, the court determines whose occupation is paramount by considering the parties’ position and rights in relation to the particular premises, the purpose of their occupation and the practical effect of any retained control.

6. The retailers had not parted with possession or occupation of the fixed ATM sites. The retailers and banks derived direct benefit from using each site for the same or closely aligned purpose, and the ATMs furthered the retailers’ businesses. The retailers’ occupation therefore remained paramount. The Upper Tribunal erred in treating external machines differently merely because they served a wider market, operated beyond store hours and were physically separated from other store facilities. Those matters did not remove the sites from the retailers’ occupation or business.

1. United Kingdom Supreme Court: The Valuation Officers’ appeals were dismissed unanimously and the Court of Appeal’s order was upheld: [2020] UKSC 21.
2. Court of Appeal: The retailers’ appeals concerning external ATMs were allowed, and the Valuation Officers’ appeal concerning internal ATMs was dismissed. None of the machines was separately rateable: [2018] EWCA Civ 2472.
3. Upper Tribunal (Lands Chamber): The external fixed ATM sites were held to be in the banks’ separate rateable occupation. Internal sites remained in the retailers’ occupation. The moveable Nottingham ATM site was not a separate hereditament.
4. Valuation Tribunal for England: The ATM sites were held to be in separate rateable occupation.