Atos IT Services Ltd v Fylde Borough Council

JurisdictionEngland & Wales
CourtQueen's Bench Division
JudgeMr Justice Saini
Judgment Date18 March 2020
Neutral Citation[2020] EWHC 647 (QB)
Date18 March 2020
Docket NumberCase No: NOE06 MA 369

[2020] EWHC 647 (QB)





Manchester Civil Justice Centre

1 Bridge Street West, Manchester, M60 9DJ


Mr Justice Saini

Case No: NOE06 MA 369

Appeal Ref: M19Q142

Atos IT Services Limited
Fylde Borough Council

Jennifer Thelen (instructed by Head of Governance, Fylde Borough Council) for the Appellant

Cain Ormondroyd (instructed by WHN Solicitors Limited) for the Respondent

Hearing date: 12 March 2020

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

Mr Justice Saini Mr Justice Saini

This judgment is divided into 9 parts as follows:

I. Overview — paras [1–9]

I. Overview


This is an appeal against an Order made on 1 August 2019 by His Honour Judge Bird (“the Judge”), sitting in the County Court at Manchester. The main question decided by the Judge was a pure issue of law. It concerns the liability, if any, of a person for non-domestic (that is, business) rates in circumstances where the person said to be liable does not occupy the entirety of the unit of property (or, “the hereditament”) identified in the relevant rating list.


In outline, the Judge held for the detailed reasons set out in his judgment dated 31 July 2019 (“the Judgment”), that in considering whether a person occupies a hereditament for the purposes of the material rating legislation, the hereditament must be considered as a single, indivisible “unit”. The Judge concluded that a person is only in rateable occupation if he occupies the “unit” (as a whole) and, accordingly, on the facts before him (partial occupation of the unit), there was no liability at all for the rates.


The Judge's Order was made in CPR Part 8 proceedings issued on 23 November 2019 in the County Court at Manchester by Atos IT Services Limited (“Atos”), the Claimant below (the Respondent on appeal). By that claim, Atos sought a repayment of payment of £164,159.78 (“the Disputed Sum”) in respect of rates which it paid under protest to the Defendant (the Appellant on appeal), Fylde Borough Council (“the Council”).


Liability for such rates was disputed by Atos on the basis that parts of the hereditament in the rating list were leased and occupied by other companies during the relevant period. Accordingly, argued Atos, it was not in exclusive occupation of the hereditament shown in the list for that period, and therefore not in rateable occupation of it.


The Council did not accept that this was an arguable claim and applied for summary judgment and for an order striking out the claim. It argued that the remedy for Atos was to seek an amendment of the description of the hereditament in the rating list, and that the Council was obliged in law to collect the Disputed Sum.


For the reasons set out in the Judgment, the Judge dismissed the Council's applications. He held that there was an overpayment which in principle should be returned to Atos pursuant to a statutory right. The Judge also gave directions for the trial of the issue as to whether the Council could resist repayment under general principles governing the law restitution.


The Judge essentially accepted the submissions of Atos. The Council argues before me that he was wrong in law to do so. It argues that the Judge misconstrued the material legislative provisions, and failed to apply well-established authority. Atos seeks to uphold the Judge's decision for the reasons he gave in the Judgment but has advanced certain supplemental submissions. Atos says that the Judge acted wholly in accordance with precedent and that it is the Council which seeks a departure from the recent case law.


Each side accuses the other of inviting a radical departure from what is claimed to be the orthodox position in the world of rating law. I am grateful to both Counsel for their high quality, focussed and concise oral and written submissions.


As I explain below, I consider that the main issue raised in the appeal is relatively straightforward and is capable of resolution applying well-established principles. In my judgment, the Judge was right to dismiss the Council's applications for summary judgment and striking-out, and to hold that Atos was (in principle) entitled to repayment of the Disputed Sum.

II. The Facts


There was no material dispute of fact before the Judge and my summary of the facts below is taken from the Judgment. I have however added to the Judge's factual summary certain additional and uncontroversial evidence in the documents before me.


As stated above, the Part 8 claim related to non-domestic rates (commonly referred to as “business rates”) paid by Atos to the Appellant Council in respect of the period 7 October 2016 to 31 March 2017 (I will refer to this as “the Relevant Period”).


Atos has since 7 October 2016 held a head lease of Serco House (latterly known as Ribble House), Ballam Road, Lytham St Annes, Lancashire FY8 4LE (“Serco House”).


Various parts of Serco House were let to, and occupied by, subtenants throughout the Relevant Period.


These subtenants included the following entities:

a) Inenco Group Limited (“Inenco”) leased and occupied the First, Second and Third Floors of Block E, including 129 parking spaces, pursuant to an underlease dated 17 April 2014;

b) Guardian Companies Services Limited and Guardian Linked Life Assurance Limited (together “Guardian”) leased, and one or both of them occupied, the First Floor of Block D, pursuant to an underlease dated 5 November 2015;

c) Guardian also leased and occupied the Second, Third and Fourth Floors of Block D and 120 parking spaces pursuant to an underlease dated 24 October 2012;

d) Aegon UK plc (“Aegon”) leased and occupied Part Ground Floor (known as Block F) together with 42 parking spaces, pursuant to an underlease dated 5 November 2012.


With effect from 1 April 2015 and until 31 March 2017, Serco House was shown in the rating list maintained by the Valuation Officer under a series of entries, as follows:

a) ‘Serco House’ at £685,000 RV;

b) ‘GRE 2 nd Flr Block D Serco House’ at £46,500 RV;

c) ‘GRE 3 rd Flr Block D Serco House’ at £44,250 RV;

d) ‘GRE 4 th Flr Block D Serco House’ at £44,250 RV;

e) ‘Inenco, 1 st Flr Block E Serco House’ at £56,500 RV;

f) ‘Inenco, 2 nd Flr Bock E Serco House’ at £56,500 RV;

g) ‘Inenco, 3 rd Flr Block E Serco House’ at £56,500 RV;

h) ‘Aegon, Gr Flr Blocks F & G Serco House’ at £97,500 RV.


The summary valuation of the ‘Serco House’ hereditament (to which I will refer as “the Main Hereditament”, adopting the Appellant Council's definition) published on the Valuation Office Agency's website justified the rateable value of £685,000. It is important to note that it included a line entry for the 1 st floor of block D (which was let to Guardian, as set out above) and included 449 parking spaces. 126 of these parking spaces were demised to Inenco, 120 were demised to Guardian and 42 were demised to Aegon. Together, these items accounted for some £68,000 of the rateable value of the Main Hereditament. The evidence before me is that they are not accounted for in any of the descriptions (or associated valuations) of other hereditaments shown in the list.


The Main Hereditament as shown in the rating list thus included the 1 st floor of block D and the 288 parking spaces demised to Inenco, Guardian and Aegon. It is common ground that these parts are not occupied by Atos.


The Appellant Council is the billing authority for the rating area within which Serco House is situated.


By emails dated 31 October 2016 and 21 November 2016 Atos' agents informed the Council that other parties were in occupation of parts of the Main Hereditament. Atos stated that (until such time as the list was modified so as to exclude those parts of the Main Hereditament not in its occupation) it was not liable to pay rates in respect of the Main Hereditament.


On or around 15 February 2017 the Council served a demand notice upon Atos. This related to the Main Hereditament and required payment of sums in respect of Atos' claimed liability for non-domestic rates for the Main Hereditament for the period 7 October 2016 to 1 April 2017. Atos' liability for the Main Hereditament for this period was said to be £164,159.78.


Atos paid the Disputed Sum to the Council on 3 April 2017.


In due course, on 15 June 2018, Atos demanded a repayment of the Disputed Sum. The Council did not repay the Disputed Sum and it made no response to Atos' pre-action protocol letter of 16 October 2018. That led to the present Part 8 claim which the Appellant Council applied to dismiss by way of Part 24 summary judgment and/or striking out under CPR 3.7.

III. Statutory Framework and Caselaw


Non-domestic or business rates are a tax on the occupation and ownership of property. A form of taxation of this nature has existed in various forms since the Poor Relief Act 1601. Over the last 150 years or so there have been a number of cases which are central to the issues in the appeal. Those cases have principally arisen in the context of disputes concerning the issuance or execution of distress warrants and the concept of “rateable occupation”.


I will need to review that case law in some detail because it is at the core of this appeal and is relied upon by both parties. In particular, the Appellant Council relies strongly upon what it calls the “ Headlam principle” (referring to the case Manchester Overseers v Headlam (1888) 21 QBD 96, as explained and later applied in Camden LBC v Herwald [1978] 1 QB 626). I will begin however with the current statutory framework.


The principal...

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