The Assessor For Lothian V. The Ministry Of Defence, The Arms Careers Office
| Jurisdiction | Scotland |
| Judge | Lord Hodge,Lord Gill,Lord Kingarth |
| Neutral Citation | [2009] CSIH 89 |
| Court | Court of Session |
| Published date | 02 December 2009 |
| Year | 2009 |
| Date | 02 December 2009 |
| Docket Number | XA62/09 |
| LANDS VALUATION APPEAL COURT, COURT OF SESSION | |
| Lord Justice Clerk Lord Kingarth Lord Hodge | [2009] CSIH 89 XA62/09 OPINION OF THE LORD JUSTICE CLERK on the STATED CASE in the Appeal by THE ASSESSOR FOR LOTHIAN Appellant; against THE MINISTRY OF DEFENCE, THE ARMY CAREERS OFFICE Respondent: _______ |
For appellant: Clarke QC; Simpson & Marwick
For respondents: Stuart QC; Morton Fraser
2 December 2009
Introduction
[1] This appeal relates to the respondent's premises at 67-75 Shandwick Place, Edinburgh. At the 2005 Revaluation the subjects were entered in the roll at a rateable value of £67,500. On 29 January 2009 the Lothian Valuation Appeal Committee allowed an appeal by the respondent on the ground that there had been a material change of circumstances since the entry was made. It reduced the rateable value by 5% for the period from March to August 2008. The assessor has appealed against that decision. The issue relates to the Edinburgh tramway project.
[2] The subjects are a suite of offices on the third and fourth floors. They are reached by a doorway between two ground floor shops one of which is occupied by the respondent as a recruiting centre. The subjects are used inter alia for following up recruitment enquiries made at the shop.
The tramway project
[3] From 1871 tramcars made their way along Shandwick Place. In 1956 the tram lines were dug up in the name of progress and the tramcars were replaced by buses.
[4] Between March and July 2008 Shandwick Place was dug up in the name of progress for the laying of a tramway. Metal security fences were erected on both sides of the street. On the south side, near the subjects, the fences were for a time erected on the pavement itself. The fences restricted pedestrian movement on the pavements and there was noise, vibration and dust from the work. Parking was suspended in nearby streets. Buses were re-routed. Retail trade in Shandwick Place was seriously affected. Further disruption was expected to occur in autumn 2009.
The assessor's response
[5] The assessor gave all shops, salons and licensed premises affected by the work, including the respondent's ground floor premises, a 20% allowance for the period of the disruption. One such salon was a hair salon at first floor level above the respondent's shop. The assessor declined to make any allowance for offices.
The respondent's appeal
[6] The respondent sought an allowance of 10% to reflect the likely effect of the disruption on the value of the offices. No other occupier of offices in the Shandwick Place area sought such an allowance on appeal.
The Committee's findings
[7] The Committee found that the noise and dust deterred retail, public house and salon customers who might normally have come to the area. It found that the landlords of a public house and a shop in Shandwick Place had given significant rent reductions for the relevant period and that the landlord of another shop had offered the tenant a 50% reduction in rent, on certain conditions that the tenant did not accept. It was not persuaded that these reductions were attributable purely to the tramway works.
[8] On the other hand, while it accepted that there had been disruption to the appeal subjects, it found that there was no evidence that the disruption had caused a reduction in the rents of any offices in Shandwick Place during the relevant period. Nevertheless, it found that such disruption, which was to be repeated later, would be reflected in the rental bid of a tenant.
[9] The Committee found that the impact on value was less than that sustained by retail outlets; but many offices, including the appeal subjects, also needed to attract the public, who were deterred from visiting the area during the relevant period. The Committee took into account the fact that the salon at first floor level had been given the assessor's allowance.
[10] The only evidence about the effects of the disruption on the appeal subjects was hearsay of a general report by the respondent to its valuation witness that both the offices and the shop were affected by dust, noise, vibration and access disruption, including disruption of deliveries. The Committee accepted this evidence.
Its finding 6 is as follows:
"The ratepayers' beneficial enjoyment of the offices was materially reduced during the period of the disruption in Shandwick Place. [The respondent's valuation witness] accepted, however, that the impact on value was less than incurred by the retail outlets. However, many offices, including these subjects, also need to attract the public who were deterred from visiting the area during the work."
The Committee's decision and reasons
[11] The Committee concluded that an allowance of 5% appropriately reflected the effect of the works on value. Its reasoning was as follows:
"In this case, however, the Committee thought that on the evidence the Army Offices were disrupted in a way which was likely to affect the value of the Offices to a range of office users. The fact that the Offices were functionally connected to the Army shop at ground floor level was not relevant to the generality of the value of the Office to the hypothetical user. However, the value is likely to be affected not only by this episode of disruption but by the knowledge that there is another disruptive episode coming when further work is required on the tramway preparations and the laying of the tramway.
All the disruption deterring people from coming to shops in the area was likely to deter also people coming to offices in the area, the access to which was off Shandwick Place. The Committee considered that the 10% claimed by [the respondent's valuation witness] could not be justified on the evidence but that a minimal allowance of 5% to recognise an effect on value was appropriate. The Committee took into account that Section 3(4) of the Local Government (Scotland) Act 1975 provides in relation to appeals arising from material change of circumstances that where...
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