“Let Out” in LGFA 1988 s.64(2) Means Simply the Conferral of an Advertising Right: No Paramountcy/Control Test

Case: Network Rail Infrastructure Ltd v List (Valuation Officer)
Citation: [2026] EWCA Civ 7
Court: Court of Appeal (Civil Division)
Date: 15 January 2026

1. Introduction

This appeal concerned the business rates treatment of advertising rights at two major London railway stations—Victoria Station (Westminster) and Liverpool Street Station (City of London)—granted by Network Rail Infrastructure Limited (“Network Rail”) to J.C. Decaux Limited (“Decaux”) under the “Rail Advertising Concession Agreement” dated 10 December 2010 (“the 2010 agreement”).

The core question was one of rating unit identification and consequent liability: should the advertising rights be assessed as part of Network Rail’s single “en bloc” central-list railway hereditament, or as separate local-list hereditaments for which Decaux is the ratepayer?

Parties and procedural history

• Network Rail: appellant before the Court of Appeal; contended the rights were not “let out” in the s.64(2) sense and remained within Network Rail’s central-list railway hereditament.
• Valuation Officer(s): respondents; contended s.64(2) creates a self-contained regime and that Decaux’s advertising rights are separately rateable on local lists.
• Decaux: the commercial advertising operator; aware of the proceedings but did not participate.

The Valuation Tribunal for England allowed Network Rail’s appeal and directed deletion of the local-list entries. The Upper Tribunal (Lands Chamber) reversed that outcome and restored the entries. The Court of Appeal dismissed Network Rail’s appeal, upholding the Upper Tribunal’s legal approach and result.

Key issues

1. Interpretation of LGFA 1988 s.64(2): does “let out” require only conferral of the right, or also a further qualitative separation/paramountcy test derived from general rating law?
2. Interaction with railway “en bloc” central rating: do the Central Rating List (England) Regulations 2005 (“the 2005 Regulations”) require these advertising rights to fall into Network Rail’s central-list railway hereditament?
3. Relevance of control and practical consequences: should longstanding VOA practice and alleged administrative disruption influence statutory construction?

2. Summary of the Judgment

The Court of Appeal dismissed Network Rail’s appeal. In essence:

• Ground 1 rejected: “let out” in s.64(2) is a straightforward reference to the creation/conferral of an advertising right. It does not import (even by analogy) tests of paramountcy of occupation or landlord control. Sections 64(2) and 65(8) are a distinct deeming code for advertising rights.
• Ground 2 rejected: the 2005 Regulations do not pull these rights into the central list where, by operation of s.65(8), Network Rail is not treated as the occupier of the advertising hereditament. The “excepted hereditament” language did not justify overriding the primary legislation.
• Ground 4 rejected: alleged practical difficulties and prior VOA practice could not displace the clear statutory language; in any event the evidence of disruption was insubstantial.
• Ground 3 did not arise (given failure on the statutory grounds), but the Court added it would not have found error in the Upper Tribunal’s alternative findings on control under the 2010 agreement.

The operative consequence is that the two advertising rights were properly entered on the relevant local rating lists as “advertising right” hereditaments with the stated rateable values, with Decaux treated as occupier by statute.

3. Analysis

3.1 Precedents Cited

The judgment is notable for a careful demarcation between (a) the general common-law framework for identifying rateable occupation and competing occupations, and (b) the special statutory regime for advertising rights.

A. Core principles of rateable occupation (general law)

B. Paramountcy of occupation: the railway “letting out” line

C. Modern “control” cases used by analogy (but not determinative under s.64(2))

D. Advertising rights statutory lineage and valuation timing

3.2 Legal Reasoning

A. The statutory architecture: general law vs “in addition” deeming code

The Court’s reasoning turns on the internal structure of LGFA 1988:

• General regime: s.64(1) (hereditament by reference to the GRA 1967 definition) and s.65(2) (occupation determined by pre-1967 case law), engaging the four ingredients of rateable occupation and—where relevant—paramountcy analysis.
• Advertising-right special regime: s.64(2) and s.65(8), expressly framed “in addition” to the general regime, deeming certain rights to be hereditaments and deeming who occupies them.

That contrast did most of the work. Once Parliament has chosen (i) to deem the right itself to be a hereditament and (ii) to deem the right-holder to be the occupier, there is no conceptual space for importing the general law’s evaluative tests (paramountcy, landlord control, rivalry) as a condition of whether the right has been “let out”.

B. “Let out or reserved” means conferral—confirmed by history and internal consistency

The Court treated “let out or reserved” as a description of the transactional fact of creating the right in another person, not a qualitative inquiry into separation from the host occupation.

Key supports for that reading were:

• Rating and Valuation Act 1961 s.9 (now mirrored in reg.15 of the 2009 Alteration of Lists Regulations): it speaks of the hereditament coming into existence at a time after the right constituting the hereditament has been let out or reserved. This sequencing presupposes that “let out or reserved” is an antecedent conferral event, not a conclusion reached after a broader control/purpose evaluation.
• Symmetry across s.64(2)(a) and (b): limb (b) applies where the land is unoccupied. Since there is no occupier and no rateable occupation to compare against, Network Rail’s proposed “sufficient separation from the host occupation” test could not sensibly operate in limb (b). The Court treated consistent meaning across both limbs as a decisive textual point.
• Role of s.65(8): Parliament already decided the liability question by deeming occupation in the person entitled to the right. A further overlay that could, in substance, reassign liability back to the host occupier would contradict the statutory mechanism.

C. Railway central list: why the 2005 Regulations did not “override” s.64(2)

Network Rail’s “central list” argument depended on the proposition that advertising at stations is a “railway purpose” (reg.6(4)) and that “premises or rights so let out as to be capable of separate assessment” in the “excepted hereditament” definition (reg.6(4)(c)) implied a Southern Railway-style paramountcy threshold for advertising rights.

The Court’s response was layered:

• Reg.6(1) amalgamates Network Rail’s hereditaments only where Network Rail “occupies” (or owns unoccupied) them. But if s.64(2) applies, s.65(8) deems the advertising right occupied by the right-holder (here, Decaux). That prevents the advertising right being treated as occupied by Network Rail for reg.6(1) purposes.
• Southern Railway is contextually inapposite: it pre-dated the 1948+ advertising-right deeming regime and addressed the carving-out of corporeal premises based on general occupation principles.
• Case v British Railways Board [1972] RA 97: treated the “so let out as to be capable of separate assessment” phrase as surplusage in the railway context; the Court used this to diminish the interpretive force of reg.6(4)(c), especially against the “plain language” of primary legislation.

D. Practical consequences and “VOA practice” as interpretive aids

Network Rail argued that the VOA’s longstanding practice of treating station advertising as centrally rated should influence construction (and avoid disruption). The Court treated that as subordinate to clear statutory language, and additionally noted the evidential weakness of the disruption case and that historical guidance appeared to have assumed a different contractual model (management rather than conferral of exclusive rights).

3.3 Impact

A. Immediate operational impact for non-domestic rating

• Advertising concessionaires can be local-list ratepayers for “advertising right” hereditaments where the right is conferred to them and they are not the occupier/owner of the underlying land.
• Network operators (including Network Rail) cannot avoid s.64(2) by arguing shared purpose, ancillary statutory purposes, or retained operational controls typical of functioning infrastructure sites.
• Risk allocation shifts to contract: parties will likely deal expressly with business rates in concession fees/indemnities (the judgment itself notes the commercial capacity to price in liability).

B. Doctrinal impact: clearer separation between “deemed” and “common law” rating concepts

The decision strengthens a methodological point with broader reach: where Parliament has enacted an “in addition” deeming regime (here, ss.64(2) and 65(8)), courts should be slow to import common-law rating concepts through the back door via interpretive gloss on ordinary words like “let out”.

C. Likely effects on future disputes

• More focus on legal form: whether arrangements are a “letting out”/conferral of an advertising right (triggering s.64(2)) or a management/agency model (potentially not).
• Reduced scope for fact-heavy paramountcy disputes in advertising-right cases, because the key questions become: (i) is it a right to use land for exhibiting advertisements, and (ii) has it been let out/reserved to a non-occupier/non-owner?
• Potential reassessments of portfolios where advertising concessions exist across multiple sites, especially within larger centrally rated infrastructures (transport hubs, ports, utilities) where the host’s operational controls are significant but no longer determinative for s.64(2).

4. Complex Concepts Simplified

Hereditament

A “hereditament” is the basic unit of property that can be separately assessed for business rates. Usually, it aligns with a physical unit of occupation (a shop, an office, a floor), but Parliament can also deem certain rights to be hereditaments.

Rateable occupation (the “four ingredients”)

Under the general law (reflected via LGFA 1988 s.65(2)), rateable occupation typically requires: (1) actual occupation, (2) exclusivity, (3) benefit/value to the occupier, and (4) occupation not too transient.

Paramount occupation / landlord control

Where two parties appear to “occupy” the same space, rating law often attributes occupation to the party whose occupation is “paramount” (e.g., a landlord in control of a lodging house, rather than individual lodgers). This concept is central to cases like Westminster City Council v Southern Railway Company [1936] AC 511 and Cardtronics UK Limited v Sykes (Valuation Officer) [2020] UKSC 21; it was held not to govern s.64(2) advertising-right cases.

Advertising right as a “deemed” hereditament (LGFA 1988 ss.64(2), 65(8))

Parliament created a shortcut: if a right to use land to exhibit advertisements is “let out or reserved” to someone other than the land occupier (or, if the land is otherwise unoccupied, to someone other than the owner), then that right is itself a hereditament. It is treated as “occupied” by the person entitled to it (even if they would not meet the ordinary “exclusive occupation” test).

Local list vs central list (“en bloc” rating)

Most properties appear on local rating lists and are billed by local authorities. Certain large networks (like Network Rail’s) are centrally rated “en bloc” under the central list regulations, producing a single assessment for the undertaking. This case shows that centrally rated status does not automatically absorb advertising rights if s.64(2) deems those rights to be separately occupied by the right-holder.

5. Conclusion

Network Rail Infrastructure Ltd v List (Valuation Officer) [2026] EWCA Civ 7 is a decisive affirmation that the advertising-right provisions in LGFA 1988 ss.64(2) and 65(8) operate as a self-contained deeming code. The Court of Appeal rejected attempts to reintroduce general-law concepts—paramountcy of occupation, landlord control, shared purpose, and operational control—through an expanded reading of “let out”.

The practical message is straightforward: where an exclusive advertising concession confers a qualifying right on a third party, that right is ordinarily a separate local-list hereditament, with statutory occupation (and hence liability) falling on the right-holder. The doctrinal message is broader: “in addition” deeming regimes should be applied according to their text and structure, not reconfigured to mirror common-law rating tests.