Assessor for Highland and Western Isles Valuation Joint Board v Barratt International Resorts Ltd
| Jurisdiction | Scotland |
| Judgment Date | 08 July 1997 |
| Date | 08 July 1997 |
| Docket Number | No 53 |
| Court | Court of Session |
SC
LVACLord Prosser, Lord Coulsfield and Lord Gill
ValuationSubjectsValueTime-share holiday unitsRateable occupationComparative principleWhether units fell to be classified as dwellinghousesAbolition of Domestic Rates Etc (Scotland) Act 1987 (cap 47), sec 2(1) and (3)1Local Government Finance Act 1992 (cap 14), secs 72(2) and 73(3)1
Section 2 of the Abolition of Domestic Rates Etc. (Scotland) Act 1987 excluded domestic subjects from the valuation roll. The Local Government Finance Act 1992 created liability for council tax in respect of any dwelling as defined in sec 72(2), and provided that dwellings should not be entered in the roll in respect of the financial year 1993/94 or any subsequent financial year. Lands and heritages which had by then been excluded from the roll because they constituted domestic subjects as defined in the 1987 Act but were not dwellings as defined in the 1992 Act were restored to the roll by sec 73(3) of the latter Act. By the Council Tax (Dwellings) (Scotland) Regulations 1993 the Secretary of State for Scotland excluded from the definition of dwelling time-share accommodation within the meaning of the Timeshare Act 1992.
Time-share holiday units had been built by a company. Their occupation and use constituted that of dwellinghouses. The assessor argued that the units should be valued by comparison with dwellinghouses. The Lands Tribunal for Scotland, however, held themselves debarred from referring to lettings of dwellinghouses as comparison transactions on the view that because time-share units were not dwellings for the purposes of the relevant legislation, they were not dwellinghouses either. In those circumstances they held that the valuation of the units was to be made by a comparison with self catering accommodation. The assessor appealed to the Lands Valuation Appeal Court. The ratepayers cross appealed on the question of deductions to be made to figures assessed.
Held (rev judgment of the Lands Tribunal for Scotland) (1) that dwellinghouses were a broad category of subjects for the purposes of valuation and the use of expressions such as domestic subjects or dwellings in legislation which altered liability to local taxation of one kind or another or to rating was entirely deliberate, making it possible to continue recognition of dwellinghouses as a broad category of subjects, without necessarily or precisely using that category of subjects to define the scope of liability to either rating or any particular local tax; (2) that the fact that dwellings did not appear in the valuation roll and that most ordinary dwellinghouses were dwellings and as such did not appear in the valuation roll, did not alter the fact that time-share units were, in terms of their use, dwellinghouses, or the fact that that made the actual rents of other dwellinghouses the most appropriate comparison when trying to obtain an appropriate value for time-share units which had to enter the valuation roll; so that (3) although the subjects were not dwellings for the purposes of the council tax legislation, they nevertheless had the physical characteristics of dwellinghouses and were occupied and used as such and were, accordingly, the proper comparison to be used in assessing value; and appealallowed.
Held further that (1) the contention that if all the time share units were regarded as available for letting, the rental value of the units, as dwellinghouses, would drop was fallacious as the court had to assume that no one held lands and heritages on any tenure other than a letting on the statutory terms in which hypothetical world the proprietor of subjects was assumed to be a possible tenant of them and it had to be assumed that demand was available to meet supply; and (2) that, although the court agreed to the assessor's contention that a 7 per cent deduction from the base figure relative to the effect of business rates fell to be deducted, the court reserved its opinion on the validity of the assessor's contentions on the point, either generally or in relation to this case.
Forest Hills Trossachs Club v. Assessor for Central Region 1992 SLT 295 applied.
Barratt International Resorts Limited and Others appealed against the entries in the valuation roll by the assessor for Highland and Western Isles Valuation Joint Board in respect of certain time share holiday units. A reference of the determined valuation was made to the Lands Tribunal for Scotland who held themselves no longer bound by the decision in Forest Hills Trossachs Club v. Assessor for Central Region 1992 SLT 295 and valued the units in accordance with a comparison with self catering accommodation.
The assessor appealed to the Lands Valuation Appeal Court.
Cases referred to:
Assessor for Kirkcaldy v. HubbardSC 1954 SC 491
Assessor for Stirling v. Myles & BinnieSC 1962 SC 530
Forest Hills Trossachs Club v. Assessor for Central Region 1992 SLT 295
London County Council v. Churchwardens of ErithELR [1893] AC 562
Wyre Forest District Council v. Stokes (VO) [1974] RA 36
Textbook referred to:
Ryde, Rating and the Community Charge para 254
The cause called before the Lands Valuation Appeal Court, comprising Lord Prosser, Lord Coulsfield and Lord Gill for a hearing.
At advising, on 8 July 1997
LORD PROSSERThis appeal relates to an entry in the valuation roll, effective from 1 April 1993, in respect of 89 timeshare holiday units at Dalfaber, Aviemore. The units appeared in the roll at a net annual value of 200,000. The 89 units, of seven different types, were all built as part of a timeshare development. The complex within which the units are located contained, as at 1 April 1993, not only the 89 units, but a country club with various facilities, a golf course and tennis courts. These are all in separate rateable occupation. The construction of the timeshare development began in 1981, and was undertaken by the company whose name is now Barratt International Resorts Limited. Initially, the rights to all the timeshare weeks at Dalfaber were held by the company. By March 1996, there were only about 300 unsold weeks at Dalfaber, out of a total of 4,450 weeks. The appellants are the company and the other owners of rights to occupy individual units during specific weeks in the year.
When the matter came before the Lands Tribunal, the position of the assessor was that the appropriate method of valuation was by application of the comparative principle, with a separate entry in the roll for each unit, valuation of each unit being carried out by comparison with subjects used and occupied as dwellinghouses. The parties were agreed that upon this approach, the appropriate total value of the subjects of appeal would be 158,100, subject to two modifications contended for by the ratepayers. The contention for the ratepayers was that the comparative principle was indeed appropriate, but that the subjects should be valued by comparison not with dwellinghouses, but with self-catering accommodation. On that hypothesis, the appellants contended that the valuation should be reached by applying a figure of 240 per bed space; while the assessor contended that the appropriate rate would be 360 per bed space. The parties were however agreed that in the event of the tribunal deciding that the timeshare units should be valued by comparison with self-catering accommodation, the self-catering units most appropriate for comparative purposes were units nearby at Dalnabay, Aviemore. At Dalnabay the assessor proceeded on the basis of a bed space rate of 240. However, having regard to amenity, charges for accommodation and occupancy rates, the assessor contended that if self-catering comparisons were appropriate, a 50 per cent increase above the Dalnabay rate would be required at Dalfaber, producing a figure of 360. The Lands Tribunal concluded that self-catering accommodation, rather than dwellinghouses, provided the appropriate comparison. They adopted the Dalnabay bed space rate of 240 as the starting point, but considered it appropriate to add 10 per cent to that figure to take account of the attractiveness and amenity of the Dalfaber development. This brought out a figure of 264 per bed space, which the Tribunal rounded off to 265. They rejected the assessor's contention that there were other grounds for increase. Allowing for a lower rate per bed space for certain types of unit, the total net annual value brought out by the tribunal is 82,700. On the hypothesis, which they had rejected, that valuation should be by comparison with dwellinghouses, they held the appropriate net annual value to be 158,100, rejecting arguments for downward...
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