Network Rail Infrastructure Limited v Karl List

Advertising rights are separate rating hereditaments where the right to use land for exhibiting advertisements has been let out or reserved to someone other than the occupier or owner of the land, as applicable. Sections 64(2) and 65(8) of the Local Government Finance Act 1988 create a self-contained regime which displaces the ordinary law of rateable occupation. Paramountcy of occupation, landlord control and analogous tests are irrelevant to whether an advertising right exists as a separate hereditament. Railway central-list provisions do not alter that result. The appeal was dismissed.

Network Rail appealed against the Upper Tribunal (Lands Chamber), which had allowed the valuation officer’s appeal from the Valuation Tribunal for England and directed restoration of two local-list entries for advertising rights at Victoria Station and Liverpool Street Station.

The rights had been conferred on J.C. Decaux Limited under a concession agreement. The central questions were whether the rights had been let out within section 64(2) of the Local Government Finance Act 1988, whether they formed part of Network Rail’s single railway hereditament on the central rating list, and whether the contractual allocation of control and benefit required a different conclusion.

1. Appeal dismissed. The two advertising rights were properly treated as separate hereditaments in Decaux’s deemed occupation and were not part of Network Rail’s central-list railway hereditament.
2. Sections 64(2) and 65(8) of the Local Government Finance Act 1988 create a self-contained regime. Section 64(2) deems a qualifying advertising right to be a hereditament, while section 65(8) deems the person entitled to it to be the occupier. The ordinary principles of rateable occupation, including paramountcy of occupation and landlord control, have no role in that determination.
3. “Let out or reserved” describes the creation or conferral of the advertising right. It contains no additional qualitative requirement that the right be sufficiently separated from the host land, or that the right-holder be analogous to a rateable occupier. The same meaning applies under both limbs of section 64(2), including where the land is unoccupied.
4. The legislative history, including section 9 of the Rating and Valuation Act 1961 and regulation 15 of the Non-Domestic Rating (Alteration of Lists and Appeals) (England) Regulations 2009, confirmed that the relevant event is the creation of the right, not an assessment of paramountcy or control.
5. Regulation 6 of the Central Rating List (England) Regulations 2005 did not displace section 64(2). Once the advertising right was deemed to be occupied by Decaux, the provisions amalgamating hereditaments occupied by Network Rail and excluding central-list hereditaments from local lists were not engaged in relation to that right. The phrase “so let out as to be capable of separate assessment” arose in a different statutory context and could not modify the clear language of section 64(2).
6. Ground 3 did not arise as a necessary issue, but the court upheld the UT’s alternative findings. Under the agreement Decaux had exclusive advertising rights, controlled advertising and bore the commercial risk. Network Rail’s rights to withdraw or temporarily interfere with advertising space concerned termination or operational adjustment and did not establish paramount control while Decaux’s rights subsisted. Advertising was ancillary to Network Rail’s railway purposes, not a shared primary business purpose as in Cardtronics or Ludgate House.
7. Ground 4 also failed. Practical inconvenience, previous VOA practice and guidance could not alter the clear statutory language, and the appellant’s proposed test would itself create uncertainty.

• Court of Appeal (Civil Division): The appeal by Network Rail was dismissed. The court agreed with the Upper Tribunal’s interpretation of the statutory advertising-rights regime and its restoration of the two local-list entries.
• Upper Tribunal (Lands Chamber): [2024] UKUT 351 (LC). The valuation officer’s appeal from the Valuation Tribunal for England was allowed, and the two advertising hereditaments were restored to the local rating lists.
• Valuation Tribunal for England: The tribunal had allowed Network Rail’s appeals and directed deletion of the two entries, holding that the advertising rights formed part of Network Rail’s railway hereditament in the central rating list.