Fife Assessor v Hall Construction Services
| Jurisdiction | Scotland |
| Judgment Date | 22 November 2017 |
| Date | 22 November 2017 |
| Docket Number | No 10 |
| Court | Court of Session (Inner House) |
[2017] CSIH 71
Lands Valuation Appeal Court
Valuation Appeal Committee
Anstruther's Trs v Assessor for Lanarkshire 1927 SC 435; 1927 SLT 150
Dunbartonshire (Assessor for) v Cloybank Minerals Ltd 1958 SC 587; 1958 SLT 272
Glasgow (Assessor for) v Schuh Ltd [2012] CSIH 40; 2012 SLT 904; [2012] RA 245
Hurll v Assessor for Glasgow 1917 SC 494; 1917 1 SLT 106
Scammell v Assessor for Highland and Western Isles Valuation Joint Board 1997 GWD 29–1495
Schuh Ltd v Assessor for Glasgow [2013] CSIH 93; 2014 SLT 184; [2014] RVR 62
Tesco Stores Ltd v Fife Council Assessor [2016] CSIH 76; 2016 SLT 1260; [2017] RA 83
Armour, SB, Valuation for Rating (5th Haddow and Docherty ed, W Green, Edinburgh, 1985), para 20.33
Scottish Assessors Association, Practice Note no 7: Valuation of Coal (R 2010 IC PN 7) (Scottish Assessors Association, July 2010) (Online: https://www.saa.gov.uk/wp-content/uploads/2017/01/Coal.pdf (30 January 2018))
Valuation — Subjects — Material change of circumstances — Opencast coalmine becoming exhausted — Whether material change of circumstances — Local Government (Scotland) Act 1975 (cap 30), secs 2(1)(d), 3(4)
Hall Construction Services ltd appealed against an entry in the valuation roll by the Assessor for Fife in respect of subjects of which it was the tenant. Following a hearing, the valuation appeal committee upheld the appeal. The assessor appealed against that decision to the Lands Valuation Appeal Court.
Section 2(1)(d) of the Local Government (Scotland) Act 1975 (cap 30) (‘the 1975 Act’) provides that the assessor for any valuation area shall alter the roll to give effect to any alteration in the value of any lands and heritages which is due to a material change of circumstances. Section 3(4) provides that an appeal may be made against an entry in the roll, inter alia on the ground that there has been a material change of circumstances since the entry was made.
An entry for subjects at an opencast coal site on the valuation roll was altered with effect from 1 April 2013, to reflect the beginning of coal extraction, so that a net annual value of £336,000 and rateable value of £186,000 were substituted. Of the net annual value, £300,000 was arrived at by applying a royalty rate of £2 per tonne to an estimated average annual output of 150,000 tonnes, with the remaining £36,000 representing the annual value of the plant, machinery and buildings at the site. In April 2015 coal extraction ceased when the mine became exhausted. Processing of coal stockpiled at the site was completed by September 2015 and, following sales of coal, the last coal left the site in February 2016. The ratepayer appealed against the entry in the roll on the basis that a material change of circumstances occurred on 21 April 2015 when extraction ceased, and also on the basis that a further material change of circumstances occurred on 29 February 2016 when the last stockpiled coal left the site. The second appeal settled and the first proceeded to a hearing before the valuation appeal committee. The appropriate rateable value should a material change of circumstances be found to have occurred was agreed between the parties. The committee upheld the ratepayer's first appeal. The assessor appealed.
Counsel for the assessor submitted that the committee had erred in law because the subjects had continued to be used after the coal reserves had become exhausted. The relevant date for a material change of circumstances was the date the last coal was weighed and left the site, not the date it was extracted from the ground.
Counsel for the respondent submitted that although commercial activity had continued on the site beyond date of the last extraction, it had been on a vastly reduced scale which was akin to a permanent extinction rather than a mere part of the ebb and flow of a dynamic industry.
Held that: (1) although incremental reduction of mineral reserves or variation of output did not constitute a material change of circumstances, where the drop in output was not temporary but was attributable to extraordinary or exceptional factors (such as a fundamental change in the subjects) the position was likely to be different (paras 1, 6, 17, 18); (2) the complete exhaustion of extractable coal reserves was an extraordinary and fundamental change amounting to a material change of circumstances (paras 1, 2, 4, 6, 23); and appeal refused.
Observed (per Lord Malcolm) a foreseeable or expected event can qualify as a material change of circumstance (para 4).
Assessor for Dunbartonshire v Cloybank Minerals Ltd 1958 SC 587 and Hurll v Assessor for Glasgow1917 SC 494applied and Anstruther's Trs v Assessor for Lanarkshire1927 SC 435distinguished.
The cause called before the Lands Valuation Appeal Court, comprising Lord Malcolm, Lord Glennie and Lord Doherty for a hearing on 4 October 2017.
At advising, on 22 November 2017—
[1] Lord Malcolm— I have had the advantage of reading a draft of Lord Doherty's judgment. I agree with it, and with the proposed disposal of this appeal. I add only a few words of my own.
[2] Counsel for the appellant described the ‘key issue’ as follows: should fluctuations in the output of a mine be characterised as part of the ‘ebb and flow’ of an industrial activity? As posed, the question answers itself. The difficulty for the appellant is that the exhaustion of recoverable reserves is a different thing from a fluctuation in output. This is so even if there remains a stockpile of coal which, over a period of months, is used for ongoing processing and sale. Cessation of extraction is a circumstance far removed from the realms of market forces, commercial decisions, and similar factors which may influence the annual output from a mine.
[3] The valuation appeal committee adopted the phraseology used in Scammell v Assessor for Highland and Western Isles Valuation Joint Board in stating:
‘It is hard to imagine a more significant or fundamental change than a mine which has been exhausted of its minerals or coal. Such subjects would be totally undesirable to the hypothetical tenant, particularly where obligations to restore the ground were involved.’
[4] It was contended that there can be no material change of circumstances until coal stops passing the weighbridge. In my opinion there is no warrant for such a restrictive approach to the statutory test in sec 3(4) of the Local Government (Scotland) Act 1975 (cap 30). I would also reject the submission that a foreseeable or expected event cannot qualify. A number of previous decisions were cited on behalf of the appellant, but it is axiomatic that each case must be judged upon its own facts and...
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