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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Dunbartonshire and Argyll and Bute (Assessor) v Akram & Another [2011] ScotCS CSIH_79 (07 December 2011) URL: https://www.bailii.org/scot/cases/ScotCS/2011/2011CSIH79.html Cite as: [2011] CSIH 79, 2012 SC 235, [2011] ScotCS CSIH_79, 2012 GWD 1-6, [2012] RA 137 |
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LANDS
|
|
Lord Justice ClerkLord ClarkeLord Doherty
|
XA94/11 OPINION OF THE LORD JUSTICE CLERK
in the Appeal by Stated Case by
ASSESSOR FOR DUNBARTONSHIRE & ARGYLL AND BUTE Appellant;
against
MOHAMMED AKRAM and IFTEKHAR ALI Respondents: ______
|
For appellant: Miss Locke
For respondent: MacIver; McClure Naismith
7 December 2011
Introduction
[1] This is an appeal by the assessor against a
decision of the Valuation
Appeal Committee for Dunbartonshire and Argyll and Bute (the Committee) by which it allowed an appeal by the
respondents against the entry in the 2005
Valuation
Roll relating to the
Boulevard Hotel, Clydebank. The Committee heard the appeal
along with an appeal relating to the Roundabout Inn, Balloch, which it also
allowed (cf Ass for Dunbartonshire and Argyll and Bute
v
Hagen [2011] CSIH 80).
[2] The ground of appeal in this case was that there
had been a material change of circumstances affecting the value
of the subjects
during the currency of the Roll. The basis of the appeal was that in
preparation for the 2010 Revaluation the assessor had
valued
the subjects as at
1 April 2008, the tone date for that Revaluation,
at a lower rateable
value
than that which was entered in the 2005 Roll.
Therefore, the appellants argued, since the rateable
value
had fallen by 1
April 2008, which was within the currency of the 2005 Roll, it followed that
there had been a material change of circumstances affecting the
value
entered
in the 2005 Roll.
[3] The Committee accepted that proposition. It
varied
the entry accordingly with effect from 1 April 2009. The assessor contends that that
was an error of law.
Some general principles
[4] A valuation
roll continues in force until a new
roll is prepared after a further revaluation (Local Government (Scotland) Act
1975 Act, s.1(2)). Revaluations are based on
values
applying at a date two years
before the revaluation comes into force (
Valuation
Timetable (Scotland) Order). The two most recent
revaluations came into force on 1 April 2005 and 1 April 2010 respectively. They were based on
values
assessed as at 1
April 2003 and 1 April 2008 respectively, which were the tone dates for those
rolls.
[5] It is a cardinal principle of a revaluation that
the new roll should be based on a new assessment of the values
of the subjects
in the existing roll and not simply on an adjustment of those
values.
The
assessment in a revaluation is based on a fresh appraisal of the subjects
without any necessary regard to their earlier
values
(Whitwell
v
Ass
for Strathclyde Region 1986 SC 37, Lord Clyde at p 42). Each revaluation
is therefore a fresh start (Ass for Orkney and Shetland
v
Beattie 1987
SC 68, Lord Robertson at p.69; Belhaven Brewery Group plc
v
Glasgow
City Ass, 2003 SC 395, Lord Justice Clerk Gill at para [16]).
[6] An essential feature of the system
is that a
value
entered in the roll remains fixed for the duration of the roll unless during
its currency there should be a material change of circumstances affecting that
value
(Local Government (Scotland) Act 1975, ss 2(1)(d); 3(4); 37(1)).
[7] Since the assessor has to revalue the subjects for
the new roll at a tone date that invariably falls within the currency of the
existing roll, it follows that in almost every case, the new value
will be
different from that which is in the current roll.
[8] It is of critical importance that the values
in the
roll should be consistent with one another. Therefore, when a material change
of circumstances has been proved, the revised
value
must be adjusted to the
tone of the roll; that is to say, revised to the
value
that would have applied
at the tone date. In this way a common
valuation
base is maintained throughout
the currency of the roll.
The issue
[9] This brief survey of general principles provides
the framework in which we have to decide the key issue in this appeal.
[10] I would formulate the issue in the following way:
Where the assessor revalues the subjects for the purpose of a forthcoming
revaluation as at a tone date that is in an intermediate year, and where the
new value
is lower than that in the current roll, does the new
valuation
constitute
a material change of circumstances affecting the current
value?
The facts
[11] In the 2005 Revaluation the subjects were valued
as
a hotel in accordance with the 2005 Revaluation Scheme of the Scottish
Assessors' Association (SAA) (cf Suburban Taverns (Glasgow)
Ltd
v
Glasgow Ass 2008 SC 298). They were entered in the roll at a net annual
value/rateable
value
of £127,500. That figure was assessed as at 1 April 2003 on the basis of an adjusted turnover of £1,646,580 in
the tone year.
[12] In the 2010 Revaluation the subjects were valued
in
accordance with the SAA Revaluation Scheme for licensed premises/public
houses. They were entered in the roll at a NAV/RV of £102,500. That figure
was assessed as at 1
April 2008 on the basis
of an adjusted turnover of £1,115,076.
The hearing before the Committee
[13] The respondents submitted that as the
valuation
of the subjects in the 2010 Roll was based on a tone date of 1 April 2008, it was clear that at
that date the NAV/RV of the subjects was significantly less than that entered
in the 2005 Roll. The NAV/RV assessed for the 2010 Revaluation was calculated
on the same statutory definition as that assessed for the 2005 Roll. Therefore
if at a date in an intermediate year the NAV/RV of the subjects had fallen
significantly, that fall constituted a material change of circumstances
affecting the
value
of the subjects that was entered in the 2005 Roll.
[14] The assessor contended that the onus was on
the respondents to demonstrate there had been a material change in
circumstances. They had not discharged it. No evidence had been produced as
to what the change was, when it occurred, whether it was material and whether
it had affected value.
General
rental
values
had increased since the 2005 Revaluation. Although a fall in
turnover had been referred to in evidence, this was insufficient in itself to
establish a material change (Tesco Stores
Ltd
v
Ass for Fife 2011 SC 316). The
valuation
made for
the 2010 Revaluation had no bearing on the
validity
of the
values
on the 2005
Roll. A fresh approach was required for the 2010 Revaluation. If the
ratepayer's argument were correct, any revaluation that resulted in lower
values
for certain subjects at the tone date would trigger countless appeals
against entries in the current roll.
The decision of the Committee
[15] The Committee made the following finding in
both cases:
" ... clearly from the Assessor's actions [sc in
arriving at a lower valuation
for the 2010 Roll] it appears he believes that
the tone of the
value
from 1st April 2008 onwards is at a level lower than the
figure appearing on the
valuation
roll. There appears to have been a change of
circumstances affecting their
value
subsequent to revaluation 2005. This change
has affected the
value
of the particular subjects of appeal, hence the
Assessor's opinion of
value
as published for 1st April 2010"
It concluded as follows:
"The Assessor led no evidence in law to show that his information [sic] that the 2010 revaluation figure could not be used in the appeal.
Arriving at that point the Committee were of the view
that the evidence of downturn in turnover in both premises amounted to a
valid
material change in circumstances."
It varied
both entries with effect from 1 April 2009.
The grounds of appeal
[16] The assessor has three propositions; namely,
(1) that the Committee erred in allowing the appeal because (a) the grounds of
appeal did not identify the material change of circumstances that was alleged
to have occurred, and (b) no evidence was led as to what the change was,
whether it was material and whether it had an effect on value;
(2) that the
Committee erred in treating the 2010 Revaluation as constituting a material
change in circumstances, or at any rate as evidence relevant to that question; and
(3) that the Committee erred in treating a fall in turnover as a material
change of circumstances per se.
Conclusions
[17] The
respondents say that the publication of the assessor's revised valuation
of the
subjects as at 1 April 2008 demonstrates that, on the evidence available to
him, he accepts that there has been a significant fall in the net annual
value
of the subjects during the currency of the 2005 Roll.
[18] The respondents led no evidence of value.
They relied instead on the assessor's new
valuation
as proof per se that
the subjects had suffered a material change of circumstances affecting
value.
Counsel for the respondents accepted that if that was not so, the respondents'
case must fail (cf Tesco Stores
Ltd
v
Ass for Fife, supra).
[19] There is an attractive simplicity about the
respondents' argument; but in my opinion it is fallacious. The short question
in this appeal is whether the assessor's 2010 valuation
is proof per se of
a material change of circumstances within the meaning of that expression in
sections 3(4) and 37(1) of the 1975 Act. In my opinion, it is not.
[20] Where an appeal is based on an alleged
material change of circumstances affecting the net annual value
of the
subjects, as defined in the
Valuation
and Rating (Scotland) Act 1956 (s 6(8)),
the best evidence is evidence of actual rents (cf
Argos
Distributors
Ltd
v
Ass for Fife 2011 SC 272). A mere fall in turnover can never constitute
proof of a fall in
value
(Tesco Stores
Ltd
v
Ass for Fife, supra,
at paras [10]-[15]). The respondents therefore can succeed in their appeal
only if the assessor's new
valuation,
being based on rental evidence gathered
in the course of his pre-revaluation survey, is to be taken as proof not only
that there has been a material change but also that it has affected
value
(Ass
for Lothian
v
Ministry of Defence [2010] RA 55).
[21] In my opinion, the mere making of the new
valuation
does not have that probative effect. The assessor's published
revaluation of the subjects has no legal effect until the new Roll comes into
force. The new
valuation
is subject to reconsideration by the assessor up to
that date. Once the Roll comes into force, the
valuation
is open to challenge
by the normal process of appeal to the local committee or by a complaint by an
interested party under section 13 of the Lands
Valuation
(Scotland) Act 1854. Furthermore,
the SAA Revaluation Scheme for licensed premises is revised at each
revaluation. As a result, while the new
valuation
may follow the general
principle that the
valuation
is based on adjusted turnover (Ass for Lothian
v
Belhaven Brewery Co
Ltd
2008 SC 120, para [8]; Suburban Taverns
(Glasgow)
Ltd
v
Ass for Glasgow 2008 SC 298), the details of the
scheme may
vary
significantly from one
valuation
to the next (Belhaven
Brewery Group plc
v
Glasgow City Ass 2003 SC 395, para [16]; Suburban
Taverns (Glasgow)
Ltd
v
Ass for Glasgow, supra, paras
[13]-[14]). Each revaluation being a fresh start, I do not accept that it is
proper to use a
valuation
made under one revaluation scheme as a means of
challenging a
valuation
made under another. In particular, I do not accept
that a
valuation
carried out under the 2010 Scheme can be taken as proof of a
loss of net annual
value
in an entry in the 2005 Roll.
[22] Furthermore, it is significant that when the
Committee came to express its conclusion on both of these appeals, the words
that I have quoted suggest that it fell into the familiar error of treating
loss of turnover as a material change of circumstances per se.
[23] In this case, there is the added
consideration that at the 2005 Revaluation the subjects were valued
as a hotel;
whereas for the purposes of the 2010 Revaluation they have been
valued
as
licensed premises/public house. The new
value
is therefore no guide to the
value
of the subjects in the 2005 Roll.
[24] For these reasons, I consider that the
respondents' case fails for lack of proof of a change in value.
[25] Since this appeal involves a question of the
interpretation of the relevant provisions of the 1975 Act, the practical
implications of the respondents' case, if it were to be upheld, and in that
event the disruptive consequences that counsel for the assessor apprehends, are
irrelevant to our decision.
Disposal
[26] I propose to your Lordships that we should
allow the assessor's appeal, set aside the decision of the Committee and
restore the entry that it varied.
LANDS
|
|
Lord Justice ClerkLord ClarkeLord Doherty
|
XA94/11 OPINION OF LORD CLARKE
in the Appeal by Stated Case by
ASSESSOR FOR DUNBARTONSHIRE & ARGYLL AND BUTE Appellant;
against
MOHAMMED AKRAM and IFTEKHAR ALI Respondents: ______
|
For appellant: Miss Locke
For respondent: MacIver; McClure Naismith
7 December 2011
[27] I agree with your Lordship in the chair and there is nothing I can usefully add.
LANDS
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|
Lord Justice ClerkLord ClarkeLord Doherty
|
XA94/11 OPINION OF LORD DOHERTY
in the Appeal by Stated Case by
ASSESSOR FOR DUNBARTONSHIRE & ARGYLL AND BUTE Appellant;
against
MOHAMMED AKRAM and IFTEKHAR ALI Respondents: ______
|
For appellant: Miss Locke
For respondent: MacIver; McClure Naismith
7 December 2011
[28] I agree with your Lordship in the chair and I have nothing further to add.