The Assessor For Fife V. Mercat Kirkcaldy Limited And Others
| Jurisdiction | Scotland |
| Judge | Lord President,Lord Hardie,Lord Hodge |
| Judgment Date | 06 September 2012 |
| Neutral Citation | [2012] CSIH 67 |
| Court | Court of Session |
| Published date | 06 September 2012 |
| Docket Number | XA53/12 |
| Date | 06 September 2012 |
| LANDS VALUATION APPEAL COURT, COURT OF SESSION | |
| Lord President Lord Hardie Lord Hodge | [2012] CSIH 67 XA53/12 OPINION OF THE LORD PRESIDENT in the Appeal by Stated Case by THE ASSESSOR FOR FIFE Appellant; against MERCAT KIRKCALDY LTD AND OTHERS Respondents: ______ |
For the respondents: Haddow QC; Shepherd & Wedderburn
6 September 2012
Introduction
[1] This is an appeal by the assessor against a decision of the Valuation Appeal Committee for Fife (the Committee) [j1] by which it allowed 42 appeals by the respondents against the valuation of 26 shops in the Mercat Shopping Centre, Kirkcaldy (the Centre) at the 2010 Revaluation. The 2010 Revaluation took effect on 1 April 2010. The tone date for it was 1 April 2008.
[2] During the currency of the 2005 Roll, there were numerous appeals relating to shops in the Centre under section 3(4) of the Local Government (Scotland) Act 1975 (the 1975 Act). Those appeals were based on the contention that the fall in retail rental values caused by the economic recession constituted a material change of circumstances that had occurred after the Roll came into force. On 18 February 2010 the Committee found that there had been such a change and that it had caused a reduction in values of 20% with effect from 1 September 2009. On 10 December 2010, on the ratepayers' further appeal, this court substituted a reduction of 40% (Argos Distributors Ltd v Ass for Fife 2011 SC 272).
The legislation
[3] In my Opinion in Ass for Tayside VJB v Land Securities plc ([2012] CSIH 68), which we heard with this case, I have set out the relevant legislation.
The ratepayers' appeals
[4] In the present case the basis of each of the ratepayers' appeals was that since the rateable values entered in the 2010 Roll were assessed as at 1 April 2008, the Committee's finding that a material change of circumstances affecting the values in the 2005 Roll had occurred as at 1 September 2009 should be taken into account in the 2010 Revaluation, and that the values in the 2010 Roll should be reduced accordingly.
[5] In Ass for Tayside VJB v Land Securities plc (supra), in similar circumstances, the ratepayers' appeals were presented as revaluation appeals under section 3(2) of the Local Government (Scotland) Act 1975, as amended. In this case, the ratepayers' appeals were presented as "material change of circumstances" appeals under section 3(4) of the 1975 Act. The proposition for the ratepayers was that the values of the subjects in the 2010 Roll, struck at 1 April 2008, were excessive at the date on which the Roll came into force, by reason of a material change of circumstances that had occurred on 1 September 2009.
The Committee's findings in fact
[6] The Committee found that the Centre occupies the prime pitch on Kirkcaldy High Street. It has a total retail floorspace of around 20,000 square metres. In recent years tenant demand has fallen. The incidence of voids has increased. Units have been offered on licences at nil or negligible rents.
[7] The parties were agreed that the values assessed at the tone date were based on a Zone A rate of £690 psm; and that if the entries in the new Roll were to reflect the material change that occurred on 1 September 2009, the rate should be £350 psm. The parties were agreed that there had been no change in rental values after 1 September 2009.
[8] With one exception, the parties were agreed as to the appropriate values that should be entered in the Roll if the appeals should be allowed or should be refused. The exception concerned 22-24 The Mercat (HMV UK Ltd) where there had been an error in survey. It was agreed that that would be corrected by a new assessment in due course.
[9] The Committee found that entries of the subjects on the portal of the Scottish Assessors' Association had been made in June-August 2009, except for two subjects entered in March 2010. Most draft entries were intimated to the Scottish Ministers in August 2009. The Committee made no finding as to the date on which the entries were "made" for the purposes of section 3(4) of the 1975 Act.
The Committee's decision
[10] The Committee held that the obvious implication of the 1975 Act was that a material change in circumstances could occur at any point after the tone date, even a date before the roll came into force. Section 15 of the Local Government (Scotland) Act 1966 (the 1966 Act) and sections 1 to 3 of the 1975 Act were enacted in a time of stable or rising property values. Section 1(6)(c) of the 1975 Act allowed the assessor to give effect to any alteration in value that resulted from a material change arising between the date on which the roll was made up and the date on which it came into force. Section 2(1)(d) of the 1975 Act required the assessor to give effect to any alteration in value that resulted from a material change while the roll was in force. Section 3(4) permitted an appeal on the ground of a material change "since the entry was made." The Act did not provide for the occurrence of a fall in value after the tone date but before the roll came into force. The draftsman did not have such a possibility in mind. Parliament could not have intended that a dramatic downturn of the order of 40% would be ignored. Such an outcome was "unjust, absurd and contrary to the whole import of the rating legislation." In the view of the Committee it defied common sense. If the draftsman had foreseen this possibility, section 3(4) would instead have referred to a material change occurring...
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