Assessor For Scottish Borders Council V. Stobo Castle Health Spa Limited
| Jurisdiction | Scotland |
| Judge | Lord President,Lord Clarke,Lord Hodge |
| Neutral Citation | [2012] CSIH 94 |
| Court | Court of Session |
| Published date | 14 December 2012 |
| Year | 2012 |
| Docket Number | XA144/12 |
| Date | 14 December 2012 |
| LANDS VALUATION APPEAL COURT | |
| Lord President Lord Clarke Lord Hodge | [2012] CSIH 94 XA144/12 OPINION OF THE LORD PRESIDENT in the Appeal by Stated Case by ASSESSOR FOR SCOTTISH BORDERS COUNCIL Appellant: against STOBO CASTLE HEALTH SPA LTD Respondent: _______ |
For the appellant: Clarke QC; BTO
For the respondent: Haddow QC; Anderson Strathern
14 December 2012
Introduction
[1] This is an appeal by the assessor against a decision of the Scottish Borders Valuation Appeal Committee (the Committee) dated 20 June 2012 to allow the respondent's appeal against the entry made in the Valuation Roll at the 2010 Revaluation for the Stobo Castle Health Spa, Peebles. The assessor entered the subjects in the Roll at a net annual value (NAV) and rateable value (RV) of £540,000. The Committee substituted an NAV/RV of £470,000.
Preliminary question
[2] Counsel for the parties were dissatisfied with the stated case. They lodged a version of it with revisals to the findings in fact, the respondent's submissions and the Committee's reasons. They proposed that the appeal should be conducted on their revised version of the case.
[3] I agree with counsel that the stated case is unsatisfactory. The Committee has failed to state findings on facts, said by the parties to be material, that are not in dispute. I can understand why counsel should have asked us to decide the appeal on their revised version of the case. The question is whether that would be competent or appropriate.
[4] An appeal to this court is not an open appeal. Our function is to decide the questions of law that are set out in the case and to do so on the basis of the Committee's findings in fact. When the draft stated case is issued by the clerk to the Committee the parties have the opportunity to make representations for the deletion or alteration of any finding in fact or other statement, to propose that additional findings in fact or other statements should be included and to make observations on each other's representations (Act of Sederunt (Valuation Appeal Rules Amendment) 1982 (SI No 1506), para 6(1), (2)). The Committee may then revise the draft in the light of the representations and observations "or otherwise as they may think proper" (para 7(1)). Thereafter the Committee must state and sign the case and issue it to the parties (para 7(2), (3)). The procedure is straightforward. The draft case is not to be "bandied about between the parties inter se and between them and the clerk, as if it was intended to be a concerted statement" (Stein v Ass for Falkirk 1912 SC 853, Lord Johnston at p 856).
[5] Since our jurisdiction is limited to deciding the questions of law put to us, we cannot have our jurisdiction enlarged, even by consent of the parties, by the raising of new issues of law at the hearing of the appeal. Nevertheless, in relation to the facts we can, I think, take certain steps to supplement the findings in fact where they are deficient. The Committee's discretion as to its findings is not uncontrolled. Where there is uncontentious evidence on which either party founds, it is the duty of the Committee to make findings in fact in accordance with that evidence unless it is plainly irrelevant (Ass for Glasgow v Schuh Ltd 2012 SLT 904, at para [48]).
[6] A party who fails to make representations on the draft can have no complaint if material findings in fact are not stated or if the findings are not a true reflection of the evidence (Stirling Gaslight Co v Ass for Stirling (1899) 1 F 583); but if a party has made representations unsuccessfully for additional findings in fact on uncontentious evidence, it would be an injustice if this court were to insist that the appeal should be conducted on the basis of the case as stated.
[7] If the Committee fails to make a finding on a material factual issue on which there was conflicting evidence, or if the Committee wrongly declines to consider essential evidence, we cannot add a finding at our own hand. We are not a tribunal of fact. We must return the case to the Committee to make the finding (eg Magell v Dumfries and Galloway Ass 2005 SLT 453; Le Café Noir v Ass for Tayside Region 1991 SC 262). If the parties are agreed as to a finding that is missing from the case, we may in certain circumstances take the expeditious course of allowing them to set out the agreed finding in a joint minute with which we can supplement the signed case (Aberdeen District Lunacy Board v Ass for Aberdeenshire 1907 SC 737).
[8] Where the Committee's reasons are inadequate, we can return the case to it for elucidation (Whitwell v Ass for Strathclyde 1986 SC 37); but if the transcript makes clear to us what the parties' cases were, we may be able to decide the appeal without the need for a remit (Whitbread v Ass for Lothian Region 1996 SC 374). By these means we can avoid delay.
[9] In this case, I think that it is unnecessary for us to consider a remit to the Committee. Having read the transcript, I consider that the whole case for the ratepayer was misconceived. Even if the stated case were to be re-written as counsel propose, it would make no difference to the outcome of the appeal.
The proceedings before the Committee
The case for the ratepayer
[10] The parties agreed that the valuation should be based on turnover in the year 2007, that being the turnover evidence nearest in date to the valuation date, namely 1 April 2008. The evidence for the ratepayer from its managing director, Mr Winyard, and its valuer, Mr Peter Henry, was to the effect that the subjects were of an exceptional quality and amenity; that the buildings and furnishings were of the highest standard; that the ratepayer's business was without equal in terms of the service that guests received; and that the extraordinary commercial success of the subjects was attributable to the unique entrepreneurial and managerial skills of the managing director. There was evidence that Mr Winyard had built up a considerable following among the clientele by the force of his personality.
[11] Mr Henry started from a turnover figure for the year 2007 of £6,759,361. He rounded this down to £6,750,000. He discounted this figure by 15% to reflect what he called "perceived over-trading." That brought out a figure of £5,737,500. To this figure Mr Henry applied a factor of 7%. He adopted this figure instead of 7.5% to make an allowance of 0.5% for repairs and maintenance to that part of the subjects that was a grade A listed building. That brought out a figure of £401,625 which he rounded down to £401,600 NAV/RV.
[12] Mr Henry was asked by counsel for the ratepayer and by a member of the Committee to define what he meant by over-trading. He was unable to do so. In answer to both enquiries he simply added to his eulogistic description of the subjects and of Mr Winyard (Transcript, pp 46, 55). It is apparent that although Mr Henry thought that the subjects were over-trading, he had not considered what a normal turnover for the subjects would have been; nor had he taken account of the effect on turnover of other material factors; for example, the imposing buildings; the amenity of the rural setting, the accessibility on the subjects from the central belt and not least the fact that they are the only health spa of their kind in Scotland.
[13] I think that the burden of Mr Henry's evidence may fairly be summarised in his statement that he had been to properties of this kind throughout the world and had never experienced the quality that is presented to guests at Stobo (ibid, p 48). Mr Henry failed to mention section 6(8) of the Valuation and Rating (Scotland) Act 1956 (the 1956 Act) or to consider what implications it had for the agreed turnover performance of the subjects.
The case for the assessor
[14] The assessor submitted that the ratepayer's evidence proved only that the subjects were an outstanding commercial success. He arrived at the NAV/RV entered in the Roll by applying to a turnover of £6,750,000 a factor of 8%. At the hearing he produced a revised valuation. It was based on a figure for turnover for 2007 of £6,755,232. The assessor disaggregated from this figure the turnovers referable to the modern and the old parts of the subjects, to which he applied factors of 7.75% and 7.25% respectively. That brought out a figure of £508,173 NAV/RV. Alternatively, he took the same total turnover and applied to it a straight 7.5%. That brought out a figure of £506,462 NAV/RV. From these two valuations, the assessor contended for a value of £507,500 NAV/RV.
The issues before the Committee
[15] The three questions in dispute were therefore whether the agreed turnover should be discounted for over-trading; what percentage rate should be applied to whatever turnover figure was adopted; and whether there should be an end allowance in name of maintenance and repair.
The findings in fact
[16] The Committee's findings in fact, so far as relevant to this appeal, are as follows:
"1 Stobo Castle Health Spa is recognised as a top class destination health spa as is evidenced by the number of accolades bestowed on the health spa. It is unique in Scotland, although nowadays many top class hotels in Scotland have spas and provide treatments such as Stobo Castle does in competition with Stobo Castle, particularly in the case of the day visitors where the Sheraton Hotel in Edinburgh and the Blythswood Hotel in Glasgow are competitors for the same clients.
2 Stobo Castle could be classified as being in the top flight health farm as defined in the Valuation Office Agency (VOA) Practice Notes and Assessment of...
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