Edinburgh and Leith Gas Commissioners v Assessor for Edinburgh
| Jurisdiction | Scotland |
| Judgment Date | 12 March 1909 |
| Date | 12 March 1909 |
| Docket Number | No. 109. |
| Court | Court of Session |
Lord Low, Lord Dundas, Lord Mackenzie.
Valuation Acts—Value—Subjects unlet—Revenue Principle—Gasworks—Non-profit Earning Undertaking—Deductions—Landlord's Share of Expenses of Management—Edinburgh and Leith Corporations Gas Acts, 1888 to 1902.—
Gas Commissioners were empowered by their private Acts to supply gas at a price which would cover expenses, and provide a reserve fund to meet any deficiency of income or extraordinary claims or renewals, but no more. In assessing on the ‘revenue principle,’ the Assessor allowed as a deduction the share of expenses of management applicable to a tenant, but not that applicable to a landlord.
Held that the undertaking fell to be valued as a non-profit earning subject, and that the whole expenses of management ought to be deducted.
Leith Harbour and Dock Commissioners v. Assessor for Leith, 1907, S. C. 751, distinguished.
Valuation Acts—Allocation of Assessed Value—Gas Undertaking in three rating areas—Allocation according to structural cost—Wayleaves for gas mains and pipes.—
Where the total valuation of a gas undertaking, extending into three different rating areas, had to be allocated for rating, held (1) that it must be allocated according to the capital cost, and not the value, of the works in each area; and (2) that consequently the value of wayleaves for gas-pipes was not to be taken into account in the allocation when no price had been paid therefor.
At a Court of the Magistrates of the city of Edinburgh, held on 23d September 1908, to dispose of appeals against valuations made by the Burgh Assessor for the year ending Whitsunday 1909, the Edinburgh and Leith Gas Commissioners appealed against the following entry in the Valuation-roll of the burgh of Edinburgh:— [Case 264]
| Description and Situation of Subjects. | |||
| Proprietor. | Occupier. | Yearly rent or value. | |
| Description. | Situation. | ||
| Gas undertaking. | Edinburgh and Leith Corporations Gas Commissioners, James M'Gregor Jack, S.S.C., Clerk. | Proprietors. | £94,393 |
The appellants craved that the valuation of £94,393 in the Roll should be reduced to £87,745. This depended upon two questions—(1) whether in valuing their undertaking on the revenue principle the whole expenses of management should be allowed as a deduction from the gross revenue, or merely the proportion thereof applicable to a tenant, as had been allowed by the Assessor; (2) whether or not in allocating the total valuation over the three rating areas in which the undertaking lay, there fell to be taken into account the value of the land occupied by the appellants' pipes.
The parties were agreed that if the first question were decided in favour of the appellants and the second in favour of the Assessor, the amount to be entered in the Roll would be £90,166; and that if both questions were decided in favour of the appellants, the amount to be entered in the Roll would be £87,745.
The Magistrates sustained the Assessor's valuation, and dismissed the appeal.*
The appellants took a case for appeal in which the following facts were set forth as admitted, or held as proved, or within the knowledge of the Magistrates:—
‘1. The Edinburgh and Leith Corporations Gas Commissioners are a statutory body constituted by the Edinburgh and Leith Corporations Gas Act, 1888 (51 and 52 Vict. cap. cxxix.), (hereinafter called the Act of 1888), for the purposes of manufacturing and supplying gas within the limits of supply authorised by the Act. The appellants act under the Act of 1888 and certain Acts explaining and amending the same, which are known as the “Edinburgh and Leith Corporations Gas Acts, 1888 to 1902.” The present limits of supply include the city of Edinburgh, the burgh of Leith, and certain districts of the county of Midlothian.
‘2. The undertaking of the appellants is situated partly in the city of Edinburgh, partly in the burgh of Leith, and partly in the county of Midlothian. So far as this case is concerned, the portion within the city of Edinburgh consists (apart from the subjects referred to in the second question raised in this case) of works at Granton and at other places within the city and the supply-pipes within the streets of the city. The portions of the undertaking within the burgh of Leith and county of Midlothian consist (apart from the second question raised in the case) of the works in Leith and the supply-pipes laid in the streets and roads within these respective areas.
‘3. The method which has been followed in arriving at a valuation of the undertaking from its commencement in 1888 to the present year has been to adopt what is known as the “revenue” principle. The figures which have been inserted in the Valuation-rolls of the city of Edinburgh, the burgh of Leith, and the county of Midlothian in each year were by arrangement among the three Assessors interested, fixed in the following way:—The Assessor for the city of Edinburgh obtained on application to the Commissioners details of the revenue and expenditure of the undertaking during the immediately preceding year, and also a note of the total cost of the undertaking within the respective areas. On the revenue principle the Assessor arrived at the valuation of the whole undertaking by deducting from the total
revenue (1) the amount of the expenditure less certain items; (2) an allowance in respect of tenant's floating capital; and (3) an allowance in respect of tenant's chattels. The sum thus arrived at was treated as the value of the whole undertaking. The Assessor further allocated the total valuation over the city of Edinburgh, the burgh of Leith, and the county of Midlothian in proportion to the amount of the capital cost of the works of the undertaking in these respective areas. The Assessor for the city of Edinburgh then intimated to the Assessors for the burgh of, Leith and county of Midlothian the figures thus arrived at, and, until the present year, these Assessors accepted the figures and entered the amount applicable to their respective areas in the Valuation-rolls made up by them. These figures were acquiesced in by the Commissioners.
‘4. The portion of the Assessor's valuation for the year ending Whitsunday 1909 allocated by him to the city of Edinburgh was £94,393; to the burgh of Leith £3078; and to the county of Midlothian £2296. In making up the valuation of the undertaking in previous years, the Assessor allowed as a deduction from the total revenue the whole expenses of management, but in the present year he only allowed as a deduction 60 per cent of the expenses of management holding that the remaining 40 per cent or £4394 represented expenses of management incurred by the appellants as landlords of the undertaking, and that such did not fall to be allowed as a deduction. The Assessor in making up his valuation did not allow any deduction in respect of tenant's profits, and the appellants did not take exception to the valuation on this account.
‘5. The total expenses of management of the undertaking for the year from Whitsunday 1907 to Whitsunday 1908 amounted to £10,985, and the parties agreed for the purposes of the first question raised in this case that the proportions thereof applicable to landlord and tenant are £4394 and £6591 respectively.
‘9. The Commissioners are at present empowered to borrow sums not exceeding £1,400,000. Under the powers conferred by their Acts the Commissioners have formed a reserve fund, which, as at 15th May, amounted to £11,315, 2s. 10d.*
‘10. In virtue of the powers conferred by section 6 of the Gasworks Clauses Act, 1847 (10 Vict. cap. 15), which is incorporated with the Act of 1888, the Commissioners have laid down and placed in the streets and roads within the said limits of supply, pipes and service pipes, and from time to time repaired, altered, and removed the same, subject to the provisions of sections 8 to 12 of the said Gasworks Clauses Act, 1847. No sums in name of wayleave, servitude, or otherwise have been paid by the Commissioners at any time, in respect of the laying down of any pipes in the said roads and streets.
No person, other than the Commissioners, is entitled to alter or interfere with the said pipes but the Commissioners have, from time to time, altered the position of the pipes in various streets and. roads, to suit the convenience of themselves and other authorities having works in the streets and roads. Whenever alterations have been made to suit the convenience of other parties, such alterations have been made by the Commissioners at the expense of those parties.
‘11. For the purposes of this case the parties hereto admitted that the length of the appellants' pipes within the city of Edinburgh was 196 miles, within the burgh of Leith 371/2 miles, and within the county of Midlothian 24 miles; that the value of the land occupied by the pipes should be held to be at the rate of £1000 per mile so far as within the city of Edinburgh and the burgh of Leith, and £500 per mile so far as within the county of Midlothian. The total value of the land occupied by the said pipes is therefore (1) within the city of Edinburgh, £196,000; (2) within the burgh of Leith, £37,500; and (3) within the county of Midlothian, £12,000—in all, £245,500.*
‘12. This year the Assessor for the county of Midlothian accepted the calculation of the Assessor for the city of Edinburgh of the proportion of the valuation of the undertaking in the county, and entered the sum brought out in the Valuation-roll made up by him. The appellants objected to this entry, and appealed against the same, but the appeal was too late. The Assessor for the burgh of Leith did not, however, accept the figure given to him by the Assessor for the city of Edinburgh, but when entering in the Valuation-roll made up by him the portion of the undertaking within the burgh of Leith, he added a sum of £2000 to the figure brought out...
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