J D Wetherspoon Plc v Lothian Regional Assessor
| Jurisdiction | Scotland |
| Judgment Date | 27 February 2003 |
| Docket Number | No 29 |
| Date | 27 February 2003 |
| Court | Lands Valuation Appeal Court (Scotland) |
LANDS VALUATION
Valuation - Subjects - Valuation - Public house premises over-performing due to policy of trading on low margins - How valued
The Assessor valued a public house on the basis of hypothetical achievable turnover. The appellants appealed to the Valuation Appeal Committee on the basis that by reason of the appellant's trading policy of achieving high turnover on low margins, the subjects were over-performing and the valuation should be based on a turnover lower than actual turnover. The appellant proposed that the valuation should be made on one or the other of two methods, ie (1) by basing it on the hypothetical achievable turnover of a similar public house in the vicinity, or (2) by comparing the profit margin of the appellant's public houses UK-wide with its competitors UK-wide and adjusting the actual turnover of the appellants accordingly. The Committee decided to take the appellant's over-performance into account by making an end allowance. The appellant appealed to the Lands Valuation Appeal Court by way of stated case.
The appellant argued that the Committee had erred in law in that, having accepted the evidence that the subjects were over-performing, it had applied an arbitrary end allowance instead of adopting one or other of the appellant's valuations. The respondent accepted that there was over-performance, but argued that the making of an end allowance was the appropriate way to allow for over-performance.
Held that: (1) in this context, under-performance and over-performance mean where a public house achieves a lower turnover than it is capable of or a higher turnover than expected, and where the quality of its performance cannot be explained on objective criteria such as location, layout atmosphere, cleanliness and so on, the valuer is entitled to adjust the actual turnover to reflect the potential achievable turnover (p 402G-H); (2) over-performance exists if an individual ratepayer by a commercial strategy of trading on low margins achieves a turnover which is out of line with that of its competitors, in which case some allowance should be made in the estimation of the hypothetical achievable turnover of the subjects (p403A) and (3) the Committee was right to reject the appellant's valuations and was entitled to adopt the assessor's methodology but allow for over-performance by making an end allowance (p 403D-G), and appeal refused.
J D WETHERSPOON plc appealed against the valuation of a public house at 62-66 George Street, Edinburgh. On 28 May 2001 the Valuation Appeal Committee at Edinburgh allowed the appeal but rejected the valuations put forward by the appellants. The appellants appealed to the Lands Valuation Appeal Court by way of stated case.
Cases referred to:
Assessor for Lothian v BAASC 1981 SC 141
Belhaven Breweries Group plc v Glasgow AssessorSC 2003 SC 395
Haggart v Assessor for LeithENR 1912 SC 784
The case was heard before the Lands Valuation Appeal Court, comprising the Lord Justice-Clerk (Gill) , Lord Philip...
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