The Assessfor Tayside Valuation Joint Board+the Assessor For Glasgow City Council V. Hutchison 3g (uk) Limited+orange Personal Communications Services Limited+t-mobile (uk) Limited+vodafone Limited+against A Decision Of The Lands Tribunal For Scotland
| Jurisdiction | Scotland |
| Judge | Lady Dorrian,Lord President,Lord Malcolm |
| Neutral Citation | [2014] CSIH 40 |
| Court | Court of Session |
| Published date | 02 May 2014 |
| Year | 2014 |
| Date | 02 May 2014 |
| Docket Number | XA126/13 |
| LANDS VALUATION APPEAL COURT, COURT OF SESSION | |
| [2014] CSIH 40 | |
| Lord President Lady Dorrian Lord Malcolm | XA126/13 OPINION OF THE LORD PRESIDENT in the Appeal by (1) THE ASSESSOR FOR TAYSIDE VALUATION JOINT BOARD and (2) THE ASSESSOR FOR GLASGOW CITY COUNCIL Appellants; against (1) HUTCHISON 3G (UK) LIMITED; (2) ORANGE PERSONAL COMMUNICATIONS SERVICES LIMITED; (3) T-MOBILE (UK) LIMITED and (4) VODAFONE LIMITED Respondents: against A decision of the Lands Tribunal for Scotland dated 18 April 2013 _______________ |
For the assessors: R Smith QC, Dunlop; Simpson & Marwick
For the respondents: Haddow QC; Shepherd & Wedderburn
2 May 2014
Introduction
[1] This is an appeal by two of the assessors against an order of the Lands Tribunal. It arises from the contractual arrangements between the various parties involved in the transmission system for mobile telephony. The appeal relates to the entries made in the respective valuation rolls at the 2005 Revaluation. In all of these entries the lands and heritages are described as "Telecommunications network." The central issue in these appeals relates to the cables, antennae and other pieces of equipment that are affixed by mobile phone networks to transmission masts that are not their own. At the 2005 Revaluation the assessors took a uniform approach on this question. In making the relevant entries, the assessors consolidated the multiplicity of the relevant sites within their respective valuation areas into a single entry for each network. Four test cases have been taken from each of the two valuation areas. The following is a typical entry taken from the 2005 Roll for Tayside:
| Telecommunications network within Perth and Kinross District | T-Mobile (UK) Ltd | £424,000 NAV | £424,000 RV | Effective date 1/4/05 |
[2] The respondents appealed against all of these entries to the Lands Tribunal. By order dated 18 April 2013 the Tribunal upheld the appeals; but substituted different values from those for which the respondents contended. That is the order appealed against.
The contractual and onsite arrangements
[3] The respondents are all of the mobile phone networks that operate in these valuation areas. There is a great diversity of mast types and of ownership of the sites; but in general it can be said that in the typical case there are three parties with an interest in the mast, namely the site owner, the host and the sharer.
The site owner
[4] The party who owns the mast and/or the land on which it is erected is referred to as the site owner.
The host
[5] The mast is generally occupied and controlled by one of the networks. The party that occupies the mast and controls the operation of it is known as the host. The host is usually the tenant of the site owner. The host may be either one of the networks or an independent service provider. There is no dispute that the mast and the surrounding ground that is occupied by the host is a separate rateable subject.
The sharer
[6] It is normal practice for the host to allow a number of networks to use the mast by fixing their equipment to it. A network that uses the host's mast is referred to as the sharer. It is standard practice for the host to pass on to the site owner part of the payment that it receives from the sharer. This payment is known as a payaway. In the typical case the sharer erects a cabin or a small cabinet close to the mast and runs a cable from it to the mast. The cable is then attached to the mast and is connected to the sharer's aerial and other equipment.
[7] There is no dispute that the cabin or the cabinet is heritable and is a separate rateable subject. There is no dispute that the cable when it is attached to the mast and the aerial and other equipment to which it leads are heritable by accession. By reason of the Valuation for Rating (Plant and Machinery) (Scotland) Regulations 2000 (SSI No 56) the aerial is not rateable. What is not agreed is whether the sharer is in rateable occupation of that part of the mast to which its cable and equipment are attached.
The agreements between host and sharer
[8] The form of the sharer's agreement with the host typically comprises three documents, namely; (1) a master site share agreement, (2) an agreed rate card and (3) a site specific agreement in the form of a site licence.
[9] The master site share agreement specifies and controls the rights of occupation enjoyed by the sharer. It specifies the equipment that the sharer may place on the host mast and sets out the conditions to be observed by the sharer regarding access, maintenance, health and safety and so on.
[10] The rate card outlines the fee paid by the sharer for the placing of equipment on the mast and for the occupation of the site with a cabin or cabinet.
[11] The site specific agreement is a licence setting out the contractual relationship between the host and the sharer on each individual site. The rights granted by it typically allow the sharer access to the mast to "install, inspect, maintain, operate, repair and renew" the agreed equipment on the mast. The site specific agreements in this case provided in various forms of words that there was no relationship of lease between the host and the sharer. The wording of one of the agreements serves as an example. In the Tower Share Agreement between Gridcom (UK) Ltd and Orange Personal Communications Services Ltd, clause 15.1 provides inter alia
"The Operator (sc Orange) acknowledges that nothing in this Agreement shall confer on the Operator any right to exclusive occupation or use of or create a tenancy of or otherwise create any right or interest in any part of the Site at which the Equipment is located pursuant to this Agreement and the Operator undertakes and agrees that it will not make any claim in this respect and further acknowledges that the Company (sc Gridcom) may permit other Operators to share occupation of the Site on such terms as the Company shall in its absolute discretion determine."
Valuation and Rating (Scotland) Act 1956 (the 1956 Act)
Section 6A of the 1956 Act provides inter alia as follows:
"(1) The [Scottish Ministers] may by order provide that, for all purposes of the Valuation Acts -
(a) lands and heritages specified in the order which would apart from
the order be treated as justifying separate entries in the valuation roll shall be treated as justifying only one such entry ... "
The Non-Domestic Rating (Telecommunications and Canals) (Scotland) Order 1995 (the 1995 Order)
Article 2 of the Order provides inter alia as follows:
"Any lands and heritages in Scotland which would (apart from this Order) be treated as justifying separate entries in the valuation roll shall be treated as justifying only one such entry if they are -
(a) within a single new local government area;
(b) occupied by or, if unoccupied, owned by the same person; and
(c) occupied by posts, wires, fibres, cables, ducts, telephone kiosks, towers, masts, switching equipment, other equipment, or by servitudes or wayleaves (being property used for the monitoring, processing or transmission of communications or other signals for the provision of electronic communications services) ... "
According to the Explanatory Notes to the Order -
" ... [article 2] makes provision for the treatment as a single valuation unit for non-domestic rating purposes of certain property in Scotland which would otherwise be treated as several such units. The property involved is certain telecommunications property (art 2) ..."
The proceedings before the Lands Tribunal
[12] The Lands Tribunal was presented with six possible interpretations of the facts on various assumptions as to rateability and valuation methodology. The decision as to the appropriate interpretation turned on the nature of the sharer's interest in the mast.
The nature of the sharer's right
[13] In its consideration of the nature of the sharer's right, the Tribunal was referred to cases relating to transmitters that came before this Court between 1967 and 1977 (ITA v Ass for Lanarkshire 1968 SC 249; Ass for Aberdeenshire v Pye Telecommunications Ltd 1973 SC 157; Scottish Gas v Ass for Fife LVAC 14 April 1977). This was its conclusion:
"[218] In several of these cases, consideration of the differing methods of valuation - contractor's based on the cost of, in particular, the mast, or comparative, based on 'sharer's payments' - in a sense helps to focus the issue as between corporeal and incorporeal rights. At all events, we think it must be taken from these cases that the sharer's rights, viewed in isolation, do not themselves involve any rateable occupation of the mast. They do not comprise a separate incorporeal right which is itself heritable or rateable. Lord Avonside's minority view in ITA that they could amount to a wayleave has not found favour and the balance of authority appears to be against it. The right to share use of the mast appears wider than a right to lead pipes, cables or whatever across the land or subjects of a different character. (See also Ass for Lothian v Lowland Leisure Ltd 1990 SLT 353, at 357B-C; 358K-L; 359L-360A). We do not consider that the reference to "wayleaves" either in the 1995 Order, or in the course of consideration of the "Code" rights, adds to that argument."
The Tribunal recognised that in all of the cases except ITA v Ass for Lanarkshire there was no rateable occupation of land and buildings by the sharer. However, the Tribunal also considered that even where the ratepayers were in occupation of land or buildings, the question would remain whether the rights under consideration were really pertinents of the land and buildings (John Menzies Ltd v Glasgow Ass, 1937 SC 288; Perth Magistrates...
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