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The Assessor For Lothian V. H & M Hennes & Mauritz Uk Limited And Others

Session Cases Cited authorities 8 Cited in 6 Precedent Map Related
Vincent
JurisdictionScotland
JudgeLord Clarke,Lord Malcolm,Lord Kingarth
Judgment Date02 July 2010
Neutral Citation[2010] CSIH 60
CourtCourt of Session
Published date02 July 2010
Docket NumberXA14/10
Date02 July 2010

Court of Session Inner House Extra Division

Lord Kingarth, Lord Clarke, Lord Malcolm

No 50
Assessor for Lothian
and
H & M Hennes and Mauritz UK Ltd

Valuation - Valuation for rating - Material change in circumstances - Tramworks - Whether there was a material reduction in the extent to which beneficial occupation of the premises could be enjoyed - Local Government (Scotland) Act 1975 (cap 30), secs 2(1)(d), 3(4), 37(1)

Section 2(1)(d) of the Local Government (Scotland) Act 1975 (cap 30) ("the 1975 Act") entitles the assessor, at any time while the valuation roll is in force, to alter the roll to give effect to any alteration in the value of any lands and heritages that is due to a material change of circumstances. Section 37(1) defines "material change of circumstances" as a change of circumstances affecting the value of such lands and heritages. Section 3(4) provides, "the proprietor, tenant or occupier of lands and heritages which are included in the valuation roll may appeal against the relevant entry but only on the ground that there has been a material change of circumstances since the entry was made … and, notwithstanding the definition of 'material change of circumstances' as set out in section 37(1) of this Act, if in an appeal under this subsection on the ground of a material change of circumstances it is proved that there has been a change of circumstances which has materially reduced the extent to which beneficial occupation of the lands and heritages can be enjoyed, the appeal shall not be refused by reason only that the change of circumstances has not been proved to have affected the value of the lands and heritages to any specific extent."

The respondents occupied shop premises in Princes Street, Edinburgh. They appealed to the Lothian Valuation Appeal Committee ("the committee") against the rateable values entered in the roll at the 2005 Revaluation in respect of the shop premises on the ground that there had been a material change of circumstances by reason of tramworks carried out in Princes Street in the course of 2009. They sought a 30 per cent reduction. The committee found in fact that the extent to which beneficial occupation of the shop premises could be enjoyed had been materially reduced during the period of the tram construction works. It noted that a large number of properties in the vicinity of the tramworks had been afforded a 20 per cent end allowance against rateable value during earlier periods when tramworks were undertaken outside these. It allowed the appeal and granted a 20 per cent reduction in respect of the period while the works were going on outside the premises. The assessor appealed to the Inner House.

It was argued for the assessor that the committee had erroneously proceeded on the basis that the assessor's established practice in relation to retail premises affected by the tramworks elsewhere placed a legal onus on the assessor to demonstrate that no allowance should be made. It was further argued that the evidence on which the committee proceeded was not such that it could reasonably have justified a finding of material change of circumstances. There was no evidence of falls in rents. There was no, or only limited, evidence of falls in turnover in the respondents' premises or of a drop in footfall affecting the premises. It was not sufficient to proceed on the basis of disruption, noise and general effect on the shopping environment.

Held that: (1) the committee based its conclusion that there had been a material change of circumstances primarily on evidence accepted from several surveyor witnesses relating to the particular effects of the tramworks on the shops directly affected in Princes Street and the reference to the assessor's established practice went to the level of discount rather than to whether there should be a reduction in principle (paras 11, 14); (2) in order to establish a material change of circumstances in terms of sec 2(1)(d) of the 1975 Act it is not necessary to adduce expert evidence, and the question requires to be approached, in any case, by the application of common sense (para 19); (3) while in certain respects the evidence produced by the respondents could be regarded as limited, on the basis of the available evidence and having found clear evidence of severe degradation of the shopping environment, it could not be said that it was not reasonably open to the committee to reach the conclusion that there had been a material change of circumstances (paras 18, 19); and appeal refused.

The Assessor for Lothian appealed against a decision of the Lothian Valuation Appeal Committee taken following a hearing on 29 October and 10 November 2009 to allow an appeal by the respondents against the rateable values entered in the roll at the 2005 Revaluation.

Cases referred to:

Ferguson v Assessor for Glasgow 1977 SLT 142

Fife (Assessor for) v AdamsonSC 1964 SC 384; (1964) 1 RICS 95

Lothian (Assessor for) v Ministry of Defence and Army Careers Office [2009] CSIH 89; [2010] RA 55; 2010 GWD 11-203

Lothian Region (Assessor for) v WilsonSC 1979 SC 341; 1979 SLT 93

Textbooks etc. referred to:

Armour, SB, Valuation for Rating (5th Clyde and Hope ed, W Green, Edinburgh, 1985), para 3.20

Grampian Assessor, "Scottish Ratepayers' Forum Newsletter" (Scottish Assessors Association, 3 November 2008) (Online: http://www.saa.gov.uk/resources/236343/SRF2008_12.pdf (6 Aug 2010))

The case called before an Extra Division, comprising Lord Kingarth, Lord Clarke and Lord Malcolm, for a hearing on the summar roll, on 11 and 12 May 2010.

At advising, on 2 July 2010-

Lord Kingarth- [1] This appeal relates to a number of shop premises occupied by the respondents in Princes Street, Edinburgh. Following a hearing on 29 October and 10 November 2009, the Lothian Valuation Appeal Committee allowed an appeal by the respondents against the rateable values entered in the roll at the 2005 Revaluation in respect of all of the subjects, on the ground that there had been a material change of circumstances by reason of works, forming part of the Edinburgh tramway project carried out in Princes Street in the course of 2009. Although the respondents had contended for a 30 per cent reduction, in the event, a 20 per cent reduction was allowed in respect of the period while the works were going on outside the premises. The assessor has appealed against that decision, and in particular the decision to allow any reduction.

[2] Of the respondents H & M Hennes and Mauritz UK Ltd, at 85 Princes Street, occupy a retail property extending over three floors, with retail space on the ground and first floor and an 11 metre frontage to Princes Street. BHS plc, at 64 Princes Street, occupy a store extending over six floors, with a 30 metre frontage to Princes Street. H & M Hennes and Mauritz UK Ltd also occupy premises at 41 Princes Street with a 23 metre frontage. The other respondents occupy shops which are similar, although there are variations in size. The premises are all in the same...

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