Patricia Welsh V. Neil Brady
| Jurisdiction | Scotland |
| Judge | Lady Paton,Sir David Edward,Lord Nimmo Smith |
| Judgment Date | 11 November 2008 |
| Neutral Citation | [2008] CSIH 60 |
| Court | Court of Session |
| Published date | 09 July 2008 |
| Docket Number | XA94/08 |
| Date | 09 July 2008 |
| LANDS VALUATION APPEAL COURT, COURT OF SESSION | |
| Lord Justice Clerk Lord Kingarth Lord Clarke | [2008] CSIH 60 XA94/08 OPINION OF THE LORD JUSTICE CLERK on the STATED CASE in the appeal by THE ASSESSOR FOR LOTHIAN Appellant; against BELHAVEN BREWERY COMPANY LIMITED Respondent: _______ |
For the appellant: Clarke; Simpson & Marwick
For the respondent: No appearance
11 November 2008
Introduction
[1] This is an appeal by the assessor against a decision of the Valuation Appeal Committee at Edinburgh dated 13 March 2008 relating to the respondent's public house, the World's End, at 2-8 High Street, Edinburgh. The subjects were entered in the Valuation Roll at the 2005 Revaluation at a net annual value and rateable value of £51,000. The respondent appealed against the entry. The Committee allowed the appeal to the extent of substituting an NAV/RV of £47,000.
The subjects
[2] The World's End is a small public house situated in a prime tourist location on the Royal Mile. The Committee found that it has a welcoming and attractive appearance. The present manageress has created an attractive Scottish menu aimed at the tourist trade, with a high standard of service. She has cultivated the staff at local tourist sites and achieved a significant number of recommendations for her bar.
The valuations
[3] The assessor valued the subjects in accordance with the Scottish Assessors Association (SAA) scheme for the valuation of licensed premises in the 2005 Revaluation (cf Suburban Taverns (Glasgow) Ltd v Ass for Glasgow, 2008 SC 299). That brought out the figure entered in the Roll.
[4] The respondent's valuer, Mr Peter Henry FRICS, accepted the assessor's adjusted turnover figure and the percentage factor that she applied; but he relied on the SAA Practice Note 17 which recommended inter alia that if there was clear evidence from similar surrounding properties that the actual turnover differed considerably from the hypothetically achievable turnover by comparison with similar surrounding premises, an adjustment to the turnover might be appropriate. Mr Henry suggested that the remarkable turnover of the World's End indicated that there was over-performance resulting from the popularity of the manageress and her ability to cultivate business. He made an end allowance of 20% to reflect over-performance. That brought out an NAV/RV of £40,700.
The decision of the Committee
[5] The Committee considered that the closest comparable bars were the Albanach, which was also the subject of an appeal, and the Mitre. It made no finding in fact about the turnover of the Albanach, It found that the turnover of the Mitre, which was much larger, was £3971 psm. The turnovers of the Tass, the Whiski and the Royal Mile Bar, all located nearby, were £2,817, £4,342 and £3,771 psm respectively. The World's End had a turnover of £8,458.21 psm. The only bar that out-performed it was Deacon Brodie's, which was some distance away. The Committee rejected it as a comparison. It also rejected the respondent's comparisons.
[6] The Committee found that the World's End was well maintained and effectively managed, and had achieved a significant food turnover despite its relatively small size. It held that the turnover was beyond what a hypothetical tenant would expect to achieve. It considered that it was likely that the hypothetical tenant would allow for the fact that the turnover of the World's End was well established. It accepted that there was "some truth" in the view that a hypothetical tenant of the World's End would not easily persuade the landlord to discount the rent in light of its performance; but it considered that a hypothetical tenant would be concerned about the competition. It concluded that the performance of the World's End was "at least partly attributable" to the manageress, whom they described as "particularly good." A hypothetical tenant was "likely to doubt whether that success could be matched."
[7] The assessor's valuation produced a rate of £773 psm. The Committee acknowledged that, in the main, rates per square metre were variable and that there was no direct correlation between floor area and turnover. It thought that a hypothetical tenant would look for and probably obtain an agreement on a rate in the region of £700 psm. There was a minor dispute over the floor area. The Committee took a figure of 67 sm. That brought out a figure of £46,900, which it rounded up to £47,000 NAV/RV. That represented an end allowance of 71/2%.
Conclusions
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