Karl List v Network Rail Infrastructure Limited

A right to use land for exhibiting advertisements which is let out to someone other than the land occupier is a separate advertising hereditament under Local Government Finance Act 1988, section 64(2). Section 65(8) then treats the person entitled to that right as its occupier.

The statutory regime is additional to, and independent of, the ordinary rules for identifying rateable occupation. It is therefore unnecessary to decide which party has paramount occupation under the landlord-control principle. “Let out” is not a technical proprietary term. It requires a conferral of the advertising right to another for that person's own purposes; a long-term exclusive commercial concession satisfies it.

Such a right is not occupied by Network Rail and cannot form part of its centrally rated railway hereditament.

The Valuation Officer appealed two decisions of the Valuation Tribunal for England, published on 1 June 2023. The tribunal had directed the deletion from local rating lists of entries for a static advertising display at Victoria Station and a digital display at Liverpool Street Station.

Under a 2010 Rail Advertising Concession Agreement, Network Rail granted J.C. Decaux UK Ltd the exclusive right to maintain, manage, promote and exploit specified advertising space at major stations. Network Rail contended that it retained paramount control and that the sites remained part of its central-list railway hereditament.

The central issue was whether the rights were separately rateable advertising hereditaments under Local Government Finance Act 1988, sections 64(2) and 65(8), or formed part of Network Rail’s centrally rated undertaking.

1. Appeals allowed. The two advertising rights were separate hereditaments. The entries in the local rating lists were to be restored.
2. Section 64(2) of the Local Government Finance Act 1988 creates an additional, self-contained category of hereditament: a right to use land for exhibiting advertisements which is let out or reserved to a person other than the land occupier. Section 65(8), to which the ordinary occupation rules are subject, deems the person entitled to such a right to be its occupier.
3. Accordingly, the ordinary inquiry into actual and paramount rateable occupation, including the landlord-control principle in Westminster City Council v Southern Railway Co Ltd [1936] AC 511, does not determine whether an advertising right has been let out under section 64(2). Applying that inquiry at the earlier stage would undermine the statutory deeming provision.
4. “Let out” is not a term of art requiring a demise or proprietary interest. In this setting it means that the person entitled to the right has conferred it on another to use for that other person's own purposes. Some practical degree of longevity and exclusivity may ordinarily be required, but no marginal short-term case arose. The five-year commercial concession, granting J.C. Decaux exclusive control of advertising and its commercial risks, met that description.
5. J.C. Decaux was therefore treated as occupying the advertising hereditaments. Network Rail did not occupy them, so they did not satisfy regulation 6(1) of the Central Rating List (England) Regulations 2005 and could not be included in Network Rail’s central-list assessment.
6. In any event, if the conventional occupation inquiry had applied, Network Rail’s limited withdrawal, suspension and operational-message rights would not have displaced J.C. Decaux’s paramount control. That alternative conclusion was unnecessary to the decision.

• Upper Tribunal (Lands Chamber): allowed the Valuation Officer’s appeals and restored the two local-list entries.
• Valuation Tribunal for England: on 1 June 2023, held that the advertising rights were not separate hereditaments and directed deletion of the local-list entries.