Cash machines in supermarkets not separate hereditaments for rating purposes: Supreme Court

The Supreme Court has upheld a Court of Appeal ruling that ATM machines are not rateably occupied separately from the host stores.

This ruling applies to appeals relating to some 10,000 other sites which were stayed pending its outcome.

The case was brought by valuation officers ‘Sykes and others’ against Cardtronics, which supplies the machines.

Lord Carnwath said the two main issues were whether the ATM sites were separate hereditaments and, if so, who was in rateable occupation of them.

Each ATM was installed and operated under contracts with banks rather than by the host retailer.

The Valuation Tribunal for England held that all the ATMs were situated on hereditaments rateably occupied separately from the host stores.

This was overturned by the Upper Tribunal (Lands Chamber) which held that that - apart from moveable ATMs - all were situated on hereditaments separate from the host stores but only external ones were rateably occupied separately from the host stores.

That in turn was overturned by the Court of Appeal which held that none of the ATMs were rateably occupied.

The Supreme Court unanimously dismissed the valuation officers’ appeal.

Giving the judgment of the court in Cardtronics UK Ltd and others v Sykes and others (Valuation Officers) [2020] UKSC 21 (20 May 2020) Lord Carnwath said the retailers' retained occupation of the ATM sites but had conferred on the banks rights which substantially restricted the retailers’ use of those sites.

Both the parties derived a direct benefit from the use of the sites and shared the economic fruits.

“This is sufficient to support the conclusion that the internal ATMs remained in the occupation of the retailers,” he said.

“That an external ATMs is available [more widely] and is physically separated from the other facilities in the stores, does not detract from the Upper Tribunal’s finding that the retailers remained in occupation of the ATMs, nor that they were any less a part of the retailers’ businesses.”

Mark Smulian

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