Cardtronics Europe Ltd v Chris Sykes and Others (Valuation Officers)
| Jurisdiction | England & Wales |
| Judge | Lord Carnwath,Lady Black,Lord Kitchin,Lord Reed,Lord Kerr |
| Judgment Date | 20 May 2020 |
| Neutral Citation | [2020] UKSC 21 |
| Date | 20 May 2020 |
| Court | Supreme Court |
[2020] UKSC 21
Lord Reed, President
Lord Kerr
Lord Carnwath
Lady Black
Lord Kitchin
Appellants
Timothy Morshead QC
Galina Ward
(Instructed by HMRC Solicitor's Office and Legal Services (Bush House))
Respondent (1)
Daniel Kolinsky QC
Luke Wilcox
(Instructed by DMH Stallard LLP (Crawley))
Respondent (2)
Timothy Mould QC
Guy Williams
(Instructed by Bryan Cave Leighton Paisner LLP)
Respondent (3)
Richard Drabble QC
Christopher Lewsley
(Instructed by Dentons UK and Middle East LLP)
Respondent (4)
Timothy Mould QC
Christopher Lewsley
(Instructed by Dentons UK and Middle East LLP)
Respondents:-
(1) Cardtronics UK Ltd (“Cardtronics”)
(2) Tesco Stores Ltd and Tesco Personal Finance Plc
(3) Sainsbury's Supermarkets Ltd and Sainsbury's Bank Plc
(4) The Co-operative Group Ltd
Heard on 11 and 12 March 2020
( with whom Lord Reed, Lord Kerr, Lady Black and Lord Kitchin agree)
The common subject matter of these appeals is the treatment for rating purposes of ATMs (or “automated teller machines”) situated in supermarkets or shops. That turns on two main issues: first, were the sites of the ATMs properly identified as separate hereditaments from the stores or shops? Secondly, if so, who was in rateable occupation? The present appeals have been designated as lead appeals. Appeals relating to some 10,000 other sites (amounting to some 34,000 appeals in all) have been stayed pending the final decision in these cases. For convenience I shall refer to the respondents collectively as “the retailers”, to include (where different) the companies operating the ATMs.
Different conclusions were reached at each level below. The Valuation Tribunal for England decided that in each case the sites of the ATMs were in separate rateable occupation. The Upper Tribunal (Lands Chamber) upheld that decision in respect of all the “external” machines, but not the “internal” machines. The Court of Appeal held that none of the machines, external or internal, were separately rateable.
These questions have attracted a wealth of learning below, and in this court. I would pay tribute to the comprehensive and insightful treatment of the complex legal and factual issues at all three levels: the Valuation Tribunal for England (92 paragraphs: Alf Clark, Vice-President); the Upper Tribunal (Lands Chamber) (195 paragraphs: Martin Rodger QC, Deputy Chamber President and A J Trott FRICS), and Court of Appeal (100 paragraphs: Lindblom LJ, with whom Gloster and King LJJ agreed).
It is important however to be clear where lies the primary responsibility for reviewing the Valuation Officer's decisions. Although the first appeal is to the Valuation Tribunal, and the Upper Tribunal acts as an appellate body, it does so by way of a full rehearing, not simply review, if necessary hearing evidence for that purpose ( Johnson v H & B Foods Ltd [2013] UKUT 539 (LC); [2014] RA 490 per Sir Keith Lindblom CP). By contrast, onward appeal to the Court of Appeal lies only on points of law. Accordingly, it is to the Upper Tribunal's judgment that we must look first for the relevant findings of fact and their evaluation. To justify intervention at a higher level it is necessary to identify something more than a difference of evaluative assessment. Further in this highly specialised area of the law the higher courts should give particular weight to the expertise which has been developed by the senior judges and members of the Upper Tribunal (Lands Chamber). That weight is not necessarily diminished by the fact that in this particular appeal, none of the parties before the court has seen it as in their own interests to defend the Upper Tribunal's decision in its own terms. This of course is not to overlook the expertise in this field of Lindblom LJ, himself a former President of the Lands Chamber.
The great majority of the ATMs in issue are “external”: typical “hole in the wall” machines fitted in the external walls of superstores or supermarkets belonging to the major national retailers, and as such available for use by the general public whether or not they are shopping there.
In each case the ATM itself was installed and operated, not directly by the retail company but under contractual arrangements with a related banking company. This separation, we were told, was necessary for regulatory reasons. Although the contractual arrangements vary between the different groups, as discussed in detail in the judgments below, I do not understand these differences to have played a significant part in the ultimate decisions. That seems to me correct. It would be surprising if the rating treatment of such standard items were to vary according to the particular organisational arrangements of the companies concerned. As I understood his submissions, Mr Morshead QC for the appellant Valuation Officers did not attach particular weight to those differences, but was rightly concerned to establish principles of general application.
Of the external ATMs, I can take as typical the ATM in Sainsbury's supermarket in Worcester, as described by Lindblom LJ (para 6). The store was first shown in 2010 as “Superstore and Premises” with a rateable value of £875,000. That was replaced, as a result of the decision now under appeal, by separate entries of £875,000 for the store alone and £8,300 for the ATM site. (These figures can be taken as broadly illustrative for all the cases. The figures are not agreed and subject to future determination. But it is not in dispute that separate treatment of the ATMs is liable to have a significant impact in financial terms both in individual cases, and particularly when multiplied by the number of cases awaiting decision.)
The Worcester ATM is in an external wall, next to the main entrance door, and can be used 24 hours a day. It sits on a metal plinth, is chained to the floor of the cash room in the store, and is connected to the supermarket's electricity supply. Sainsbury is the leasehold owner of the store, including the site of the ATM. An associated company, Sainsbury's Bank plc, has a contractual licence to install and operate the ATM, and for that purpose to enter the ATM site. The cash dispensed by the ATMs is owned by the bank, but is kept in the security room of the store, under the control of Sainsbury's staff. Maintenance is carried out daily by Sainsbury's staff during the opening hours of the store.
Some of Tesco's ATMs are described as “internal”, in that they are available for use only from within the store, and accessible only during store opening hours. Apart from that, and with one exception, the physical and organisational arrangements are for practical purposes the same as for the external machines.
The exception is the so-called “moveable” ATM on the first floor of the Tesco's store in Nottingham. It will be described later in this judgment. This difference led the Upper Tribunal to conclude that the site of this ATM, unlike all the others, did not qualify as a separate hereditament, so that the issue of rateable occupation did not arise.
The last category can be described as a “convenience store ATM”, represented by the Cardtronics ATM in a Londis convenience store in Harefield. It is similar to the other external ATMs, but the main difference is the much smaller floorspace of the store, so that maintenance and loading leads to greater interference with the ordinary working of the store. I take the description from Lindblom LJ (para 9):
“Cardtronics operates an ATM in a Londis ‘convenience store’ in Harefield, with about 60 square metres of floor space. The ATM is in an external wall, next to the entrance door. The ATM was placed in the store under a licence agreement with Londis, dated 26 March 2007, which makes provision for Cardtronics to gain access to it. It is owned, operated, maintained and loaded by Cardtronics. Maintenance and loading are undertaken within the store. Loading blocks an aisle, and the store is sometimes closed while it is being carried out.”
The Upper Tribunal gave further detail of the physical arrangement within the store (para 149):
“Within the store the machine is partially concealed from view by a pillar on one side but otherwise its metal cabinet is in plain sight, not being housed in any separate structure created for the purpose. The top of the cabinet is used to display magazines and other goods. The only adaptation to the store which has been undertaken to accommodate the ATM is the creation of a separate panel on the front of the building through which the display and keypad can be accessed and where we assume there would previously have been a window.”
I turn to the relevant statutory provisions, and the leading authorities. Section 64(1) of the Local Government Finance Act 1988 defines a hereditament as anything which would before the passing of the Act have been a hereditament for the purposes of section 115(1) of the General Rate Act 1967. That section in turn provides that “hereditament” means:
“property which is or may become liable to a rate, being a unit of such property which is, or would fall to be, shown as a separate item in the valuation list.”
Authoritative guidance as to the application of that definition has recently been given by this court in Woolway (Valuation Officer) v Mazars LLP [2015] UKSC 53; [2015] AC 1862.
As to rateable occupation, section 65(2) provides that “whether a hereditament … is occupied, and who is the occupier” are to be determined by reference to the rules which would have applied under the 1967 Act. They were well established long before the 1967 Act. The classic statement of the “ingredients” of...
To continue reading
Request your trial
-
Total Sprint Ltd v Swale Borough Council
...possession is of some value or benefit to the possessor; and that the possession is not too transient ( Cardtronics Europe Ltd v Sykes [2020] UKSC 21, [2020] 1 WLR 2184 at [13] approving the classic formulation of Tucker 13 The following provisions of the 1989 Regulations are of note. 14 ......
-
Hurstwood Properties (A) Ltd and Others v Rossendale Borough Council and another
...4 All ER 721, SC(E)Brown v City of London Corpn [1996] 1 WLR 1070; [1996] 1 BCLC 446Cardtronics UK Ltd v Sykes (Valuation Officers) [2020] UKSC 21; [2020] 1 WLR 2184; [2020] 4 All ER 253, SC(E)Collector of Stamp Revenue v Arrowtown Assets Ltd [2003] HKCFA 52; 6 HKCFAR 517; 6 ITLR 454Furniss......
-
London Borough of Southwark v Ludgate House Ltd
...a hereditament: one geographical or cartographical, and the other how it is occupied: Cardtronics Europe Ltd v Sykes (“ Cardtronics SC”) [2020] UKSC 21, [2020] 1 WLR 2185 at [15]. In addition, as Lord Carnwath noted at [26] and [27] the core concepts have not proved susceptible to precise ......
-
Michael Stanuszek v Dawn Bunyan (Listing Officer)
...longer formed part of it. Accordingly the main house was a new hereditament and dwelling. 36 Finally, in Cardtronics UK Ltd v Sykes (VO) [2020] UKSC 21, the Supreme Court had to consider the treatment for (non-domestic) rating purposes of ATM machines in supermarkets or other shops, access......
-
Real Estate non-COVID-19 Autumn 2020 round-up: a snapshot of England and Wales
...rates and cash machinesIn May 2020, the Supreme Court in Cardtronics UK Limited and others v. Sykes and others (Valuation Officers) [2020] UKSC 21 held that automated teller machines (ATMs) situated in supermarkets and other shops:a . were capable of being separate hereditaments in the righ......
-
Separate rateability of ATMs – ratepayers emerge victorious as the dispute draws to a close
...in favour of the ratepayers in the landmark decision of Cardtronics UK Limited and others v. Sykes and others (Valuation Officers) [2020] UKSC 21. Paramount and subordinate occupation The case of John Laing & Son Ltd v. Assessment Committee for Kingswood Assessment Area [1949] 1 KB 344 sets......