Cosmopolitan Bellshill Limited And Almondvale Investments (jersey) Limited V. North Lanarkshire Council
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2012] CSOH 141 |
| Court | Court of Session |
| Published date | 31 August 2012 |
| Year | 2012 |
| Date | 31 August 2012 |
| Docket Number | CA37/12 |
| OUTER HOUSE, COURT OF SESSION [2012] CSOH 141 | |
| CA37/12 | OPINION OF LORD HODGE in the cause COSMOPOLITAN BELLSHILL LIMITED AND ALMONDVALE INVESTMENTS (JERSEY) LIMITED Pursuers; against North Lanarkshire Council Defenders: ________________ |
Pursuer: Garioch, solicitor advocate; Morisons LLP
Defender: Stuart Q.C., Dunlop; Ledingham Chalmers LLP
31 August 2012
[1] This action raises the question whether a rating authority is entitled to levy non-domestic rates on the owner of a newly erected and unoccupied building without first having served on him a completion notice under schedule 3 to the Local Government (Scotland) Act 1966 ("the 1966 Act").
The undisputed facts
[2] The pursuers are part of the same group of companies. The first pursuer ("CB") is entitled to possess offices at Unit B, Innovation Park, 13 Melford Road, Righead Industrial Estate, Bellshill ("the office"). The second pursuer ("AIJ") has paid rates and penalties for late payment in relation to the office which was constructed between 2005 and 2006.
[3] The Assessor for Lanarkshire entered the premises in the valuation roll as an unoccupied office with effect from 1 December 2006 with a rateable value of £330,000 because the assessor's staff were satisfied that the office was complete and capable of beneficial occupation. The assessor sent a valuation notice dated 7 December 2006 to CB although the pursuers do not admit receipt of that notice. But the pursuers do not dispute that the office was complete at the time. D M Hall as their agents claimed empty property relief which the rating authority (NLC) granted with effect from 17 February 2007. Thereafter the office remained unoccupied until 5 January 2011. The pursuers did not appeal the entry in the valuation roll or the demands for rates over the following years.
[4] The pursuers now contend that the demands for rates were illegal because NLC had not served a completion notice on them in order to establish a deemed date of completion of the newly constructed but unoccupied office. They seek repayment of £289,329.50 on ground of unjustified enrichment because NLC had wrongfully charged rates and penalties in the five rating years from 2006/2007 to and including 2010/2011 while the office was unoccupied and AIJ had paid the rates in error.
The statutory provisions
[5] S. 1 of the Local Government (Scotland) Act 1975 ("the 1975 Act") provides:
"(1) The assessor for each valuation area shall, in respect of each year of revaluation, make up a valuation roll in the prescribed form which shall come into force on the first day of the year of revaluation. ...
The assessor must also alter the roll by entering any lands and heritages which have come into existence or occupancy since the roll was made up (s.2(1)(b)). The rating authority is required to levy rates by s. 7(1) of the 1975 Act which provides:
"Subject to the provisions of any other enactment, every rate levied by a rating authority for any year shall be levied in respect of all lands and heritages within the area to which the rate relates according to the rateable value of the lands and heritages as appearing in the valuation roll in force at the beginning of the year in respect of which the rate is levied:
Provided that where during any year the valuation roll has been altered under section 2 of this Act by inserting a new entry therein or altering an existing entry, the rate levied for the year or the part of the year after such alteration takes effect shall be according to the rateable value of the lands and heritages concerned as appearing in such new or altered entry."
To achieve that end the rating authority makes up and maintains an assessment roll
under s.233 of the Local Government (Scotland) Act 1947 ("the 1947 Act").
[6] S. 24(1) of the Local Government (Scotland) Act 1966 ("the 1966 Act") sets out the general rule that no rates are payable in respect of lands and heritages which are unoccupied. But that rule is subject to s. 24(2) of the 1966 Act which provides:
"The Secretary of State may by regulations prescribe a class or classes of lands and heritages such as are mentioned in subsection (1) above for which the rates payable shall be the rates mentioned in subsection (3) below."
[7] The Secretary of State prescribed the classes broadly in the Non-Domestic Rating (Unoccupied Property) (Scotland) Regulations 1994 ("the 1994 Regulations"),
Regulation 2 of which provides:
"The class of lands and heritages prescribed under section 24(2) of the 1966 Act is all relevant lands and heritages (other than lands and heritages to which any of the conditions specified in Parts 1 and 2 of the Schedule to these Regulations applies) which have been unoccupied for a continuous period of more than 3 months."
[8] S. 24(3) of the 1966 Act provides that the rate to be charged on unoccupied premises is one half of the amount of the non-domestic rate which would have been payable had the premises been occupied.
[9] The issue arises in this case because in s. 25 of and Schedule 3 to the 1966 Act Parliament enacted a regime for newly erected buildings. S. 25 provides:
"The provisions of Schedule 3 to this Act shall have effect, for the purposes of section 24 of this Act, with respect to the treatment of newly erected and altered buildings and the other matters there mentioned."
Paragraphs 2 and 3 of Schedule 3 to the 1966 Act provide:
"2. For the purposes of section 24 of this Act, a newly erected building, which is not occupied on the date determined under the following provisions of this Schedule as the date on which the erection of the building is completed shall be deemed to become unoccupied on that date.
3. (1) Where a rating authority is of opinion -
(a) that the erection of a building within their area has been completed; or
(b) that the work remaining to be done on a building within their area is such that the erection of the building can reasonably be expected to be completed within three months,
the authority may serve on the owner of the building a notice (in this Schedule referred to as "a completion notice") stating that the erection of...
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