Argos Distributors Limited+c & J Clark International Limited+hmv Uk Limited V. Fife Council Assessor
| Jurisdiction | Scotland |
| Judge | Lord Justice Clerk,Lord Hardie,Lord Malcolm |
| Judgment Date | 10 December 2010 |
| Neutral Citation | [2010] CSIH 92 |
| Court | Court of Session |
| Date | 10 December 2010 |
| Published date | 10 December 2010 |
| Docket Number | XA105/10 |
| LANDS VALUATION APPEAL COURT, COURT OF SESSION | |
| Lord Justice Clerk Lord Hardie Lord Malcolm | [2010] CSIH 92 XA105/10 OPINION OF THE LORD JUSTICE CLERK in the Appeal by (1) ARGOS DISTRIBUTORS LIMITED (2) C & J CLARK INTERNATIONAL LIMITED (3) HMV UK LIMITED Appellants; against FIFE COUNCIL ASSESSOR Respondent: (Subjects: Shops, The Mercat Centre, Kirkcaldy) _______ |
For appellants: Haddow, QC; Semple Fraser, LLP
For respondent: Stuart, QC; Simpson & Marwick
10 December 2010
Introduction
[1] The appellants are occupiers of shops in The Mercat Centre, Kirkcaldy. They appealed under section 3(4) of the Local Government (Scotland) Act 1975 (the 1975 Act) against the rateable values entered in the Valuation Roll on the ground that the economic recession, reflected in the number of vacant units in the Centre, was a material change of circumstances. By a decision dated 18 February 2010 the Valuation Appeal Committee for Fife allowed the appeals and reduced the rateable value by 20% in each case with effect from 1 September 2009. That is the decision appealed against.
The subjects
[2] The Mercat Centre is on the east side of High Street and is accessed from it. The first appellant is the tenant of 1 The Mercat. At the 2005 Revaluation it was entered in the Roll at a rateable value of £124,500. That represented a rate of £555 psm. The first appellant appealed against the entry on the basis that the rateable value should be £71,750, a rate of £320 psm.
[3] The second appellant is the tenant of 5-6 The Mercat. These subjects were entered in the Roll at a rateable value of £80,000. That represented a rate of £560 psm. The second appellant appealed against the entry on the basis that the rateable value should be £45,700, a rate of £320 psm.
[4] The third appellant is the tenant of 22-24 The Mercat. These subjects were entered in the Roll at a rateable value of £128,000. That represented a rate of £645 psm. The third appellant appealed against the entry on the basis that the rateable value should be £69,400, a rate of £350 psm.
The proceedings before the Committee
[5] The appellants' valuer lodged a schedule of 12 rent transactions. Eight related to units within the Mercat Centre and four related to shops in the High Street, one immediately next to the Centre and three on the opposite side of the street. These transactions were effected between June 2008 and June 2009. Three of the transactions related to upward only rent reviews which were not in the event instigated by the landlord. One was an upward only rent review which resulted in a nil uplift. One transaction was a lease renewal as at September 2009 where the new rent was 39% less than the previous rent. Two of the transactions were new contracts for the granting of short term licences at reductions of 60% and 63% respectively. It was agreed that no great weight could be attached to these two transactions.
[6] Five of the transactions were new lettings. One was concluded in August 2009; three were concluded in September 2009, the terms having been agreed in one of them in April 2009; and one was transacted in December 2009.
[7] The figures in the schedule were not in dispute. In each case the rent agreed had been adjusted for incentives, such as rent-free periods, premiums and the like. If only the lease renewal and the new lettings were taken into account, there had been falls in rental value of between 26.5% and 61.5% and an average fall of 47.1%.
[8] The reductions in rateable value sought by the appellants were 42.5%, 42.8% and 45.8% respectively. The appellants proposed that the reductions should be back-dated to 1 January 2009.
[9] The assessor's case was in essence that the appellants had failed to prove that there had been a material change of circumstances within the meaning of section 3(4) of the 1975 Act (cf Ass for Lothian v Ministry of Defence 2009 CSIH 89). The assessor himself did not rely on any other comparison transactions.
The Committee's findings in fact
[10] The Committee made findings in accordance with the evidence of the appellants' valuer in relation to eleven of the transactions in his schedule. It is accepted that the twelfth transaction was of no significance. I need not recite the findings. The Committee concluded that the fall in rental values in the area was attributable to the significant number of vacant units there; to the loss of custom linked to the credit crisis since 2008, and to the loss of retail custom from the centre to out of town retail estates and to shops outwith Kirkcaldy.
[11] It found that in similar appeals in other valuation areas, assessors had agreed to reductions. For example, for the shops at Cameron Toll, Edinburgh a 57% reduction had been agreed, and at Paisley a 47% reduction had been agreed, both with effect from April 2008.
The decision of the Committee
[12] The Committee was satisfied that there had been a material change of circumstances. It concluded that the reductions sought by the appellant were "far too high in light of the evidence actually adduced" and that "the maximum possible reduction" should be 20%. It decided that the revised rateable values should be effective as from 1 September 2009.
The appeals
[13] The appellants have appealed on the grounds that the reductions allowed by the Committee are insufficient and that the effective date of the reductions should be 1 January 2009.
Submissions for the appellants
[14] Counsel for the appellants...
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