Happy Feet Nursery And Out Of School Club Limited Against Assessor For Lanarkshire
| Jurisdiction | Scotland |
| Judge | Lord Malcolm,Lady Dorrian,Lord President |
| Neutral Citation | [2014] CSIH 87 |
| Docket Number | XA115/14 |
| Court | Court of Session |
| Date | 28 October 2014 |
| Published date | 28 October 2014 |
LANDS VALUATION APPEAL COURT
[2014] CSIH 87
XA115/14
Lord President
Lady Dorrian
Lord Malcolm
OPINION OF THE LORD PRESIDENT
in the appeal by
HAPPY FEET NURSERY AND OUT OF SCHOOL CLUB LIMITED
Appellant;
against
ASSESSOR FOR LANARKSHIRE
Respondent:
For the appellant: MacIver; Brodies LLP
For the assessor: Cleland; Simpson & Marwick
28 October 2014
Introduction
[1] This is an appeal against a decision of the Valuation Appeal Committee at Hamilton dated 19 March 2014. The subjects are a day nursery at 47/49 Claude Street, Larkhall. At the 2010 Revaluation the assessor entered them in the Roll at an NAV/RV of £43,000. The appeal against the entry was brought under sections 3 and 37 of the Local Government (Scotland) Act 1975 (the 1975 Act), as amended, on the ground that a decision of a committee drawn from the same valuation appeal panel relating to comparable subjects constituted a material change of circumstances affecting the valuation of the appeal subjects. The Committee refused the appeal.
The facts
[2] The subjects are situated on the main thoroughfare in Larkhall close to the town centre shopping area and the station. They are of attractive modern construction. They have parking for 12 vehicles. They are securely fenced and have a CCTV system. The subjects were built as a Job Centre and were used as such from 1996 to 2006. From 2006 to 2011 the subjects were vacant despite being actively marketed.
The assessor’s Guidance Note
[3] At the 2010 Revaluation the assessor analysed all of the available rental evidence for day nurseries throughout the valuation area. On that evidence he issued a Guidance Note. Section 3 of the Note is in the following terms:
“Nurseries situated in properties which, by virtue of their character or location (or both) have an obvious alternative use will have to compete with other potential occupiers. Rental analysis shows that the landlord will expect to receive a rent equivalent to the character of the property. In such situation the property should be valued in line with the prevailing rental levels for the appropriate alternative use. This is most commonly (but not exclusively) to be found in retail, office and industrial type properties/locations. Outwith these situations a rate of £50 per square metre should be applied to the GEA.”
The assessor’s valuation
[4] The assessor’s starting point was that from survey evidence day nurseries that had no obvious alternative use should be valued at £50 psm. He considered that the appeal subjects were in a mixed use area. Having regard to the general vicinity of the subjects and to the nature of the premises, he was satisfied that the subjects had an alternative use, namely office use, and that the occupier of a day nursery would pay a rent that reflected the possible alternative use. In valuing the subjects the assessor therefore took account of prevailing rental levels for the appropriate alternative use of the subjects, namely office use. He adopted a rate of £75 psm, which was consistent with the rates applicable to similar office subjects in Larkhall town centre. He applied the rate of £75 psm to other day nurseries that were comparable with the subjects of appeal in terms of construction and location. The rate of £75 psm had been the subject of professional agreement. That rate brought out a value of £40,035. To this the assessor made additions for air conditioning, car parking and CCTV. That brought out a total NAV/RV of £43,000.
The legislation
[5] Section 3(4) of the Local Government (Scotland) Act 1975 provides as follows:
“(4) Without prejudice to subsection (2) above, the proprietor, tenant or occupier of lands and heritages which are included in the valuation roll may appeal against the relevant entry but only on the ground that there has been a material change of circumstances since the entry was made or that there is such an error in the entry as is referred to in section 2(1)(f) of this Act; and, notwithstanding the definition of ‘material change of circumstances’ as set out in section 37(1) of this Act, if in an appeal under this subsection on ground of a material change of circumstances it is proved that there has been a change of circumstances which has materially reduced the extent to which beneficial occupation of the lands and heritages can be enjoyed, the appeal shall not be refused by reason only that the changes of circumstances has not been proved to have affected the value of the lands and heritages to any specific extent.”
[6] Section 37(1) of the 1975 Act provides as follows:
“’material change of circumstances’ means in relation to any lands and heritages a change of circumstances affecting their value and, without prejudice to the foregoing generality, includes any alteration in such lands and heritages any relevant decision of the Lands Valuation Appeal Court or a valuation appeal committee the members of which are drawn from the valuation appeal panel serving the valuation area in which the lands and heritages are situated or the Lands Tribunal for Scotland under section 1(3A) of the Lands Tribunal Act 1949, and any decision of that court, committee of tribunal which alters the net annual value or rateable value of any comparable lands and heritages.”
The Biggar Nursery case
[7] By decision dated 25 September 2012 in the appeal of Williams t/a Juniors v Ass for Lanarkshire (the Biggar Nursery case) a valuation committee drawn from the Lanarkshire valuation appeal panel dealt with the valuation of subjects in Biggar that had been purpose built as a nursery and crèche. The Committee was of the view that the character, nature and location of the day nursery in Biggar was such that it did not have an obvious alternative use. It approved in principle the assessor’s scheme and substituted an NAV of the subjects based on a rate of £50 psm.
The decision of the Committee
[8] The Committee concluded that the decision in the Biggar Nursery case raised no issue of principle that would serve to resolve the point at issue in this appeal. It was therefore not a relevant decision within the meaning of section 37(1) of the 1975 Act. On the merits the Committee distinguished the Biggar Nursery case on the ground that in that case there was no obvious alternative use. Having found in fact that the appeal subjects had an obvious alternative use as offices, it concluded that the rate of £50 psm could not apply. The appellant had therefore failed to discharge the onus of establishing that there had been a change affecting value.
The grounds of appeal
[9] The appellant contends (1) that the Committee erred in upholding a valuation that took into account the potential of the subjects for an alternative use as offices; and (2) that the potential for other uses being irrelevant, the effect of the decision in the Biggar Nursery case was that all day nurseries in Lanarkshire should be valued at £50 psm. That decision therefore represented a material change of circumstances in terms of section 37(1) of the 1975 Act (supra).
Conclusions
[10] Since this appeal is brought in an intermediate year on the basis of a material...
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...influence the rent at which the subjects would be let": Happy Feet Nursery and Out of School Club Limited v Assessor for Lanarkshire [2014] CSIH 87, para [14] per Lord President Gill. The restriction was therefore a relevant factor. The suggestion that the committee selected the valuation a......