John Menzies & Company v Assessor for Glasgow (Case 2)
| Jurisdiction | Scotland |
| Judgment Date | 05 February 1937 |
| Date | 05 February 1937 |
| Docket Number | No. 24. |
| Court | Lands Valuation Appeal Court (Scotland) |
Lands Valuation Appeal Court.
Ld. Fleming. Lord Pitman. Ld. Robertson.
ValuationSubjectsRailwayBookstall at railway stationWhether "so let out as to be capable of separate assessment"Whether to be entered in local RollRailways (Valuation for Rating) Act, 1930 (20 and 21 Geo. V, cap. 24), sec. 22 (9).
ValuationValueSubjects letLease of railway bookstallLease including monopoly right to sell papersWhether rent payable wholly for heritable subjects or in part for non-heritable monopoly.
By an agreement between a railway company, called therein the landlords, and a firm of newsagents, called therein the tenants, the landlords granted to the tenants the exclusive right to sell books and newspapers at the railway stations on their system for a period of ten years. There was no reference in the agreement to any specific bookstalls. In return the landlords were entitled to payment of a fixed annual sum, or, in their option, to a percentage on the gross drawings from sales.
Held, in a case relating to the bookstall at the Central Station, Glasgow, owned by the Railway Company and occupied by a firm of newsagents, (1) that the bookstall was "so let out as to be capable of separate assessment" within the meaning of sec. 22 (9) of the Railways (Valuation for Rating) Act, 1930, and must be entered in the local Roll; but (2) that, in determining its yearly rent or value, the Assessor must deduct from the payment made to the Railway Company such part of the payment as represented the value of the exclusive right of sale at the bookstall and the sales made on the station platforms.
At a meeting of the Valuation Committee of the City of Glasgow the London, Midland and Scottish Railway Company and John Menzies & Company, Limited, appealed against an entry in the Roll for the year ending Whitsunday 1937, under which "Bookstall, Central Station," was entered at the yearly rent or value
of 2602, 10s., with the Railway Company as proprietors and John Menzies & Company as tenants. They craved that the yearly rent or value should be reduced to 500, and, the Committee having fixed the value at 1867, the appellants craved and obtained a stated case on appeal to the Lands Valuation Appeal Court.1 [case 677].
The case set forth that the following facts were admitted or proved, or were within the knowledge of the Committee:"(1) The subjects to which the appeal related consist of a bookstall situated in the Central (High Level) Station, Glasgow, the principal station in the City of the appellants, the London, Midland and Scottish Railway Company. The bookstall, which is, and has been for many years, situated on a conspicuous site on the main concourse of the station and immediately adjacent to the entrances of the arrival and departure platforms of some of the principal trains, both long distance and local, belongs to the London, Midland and Scottish Railway Company (hereinafter called the Railway Company) and is occupied by John Menzies & Company, hereinafter called the tenants, in virtue of the provisions of the minute of agreement afterwards referred to. It is to the advantage of the tenants to occupy a conspicuous site, as they are thereby enabled to attract more easily the very large numbers of persons passing through the station daily to make purchases at the bookstall. (2) The said minute of agreement was entered into between the Railway Company (therein called the landlords) and John Menzies & Company (therein called the tenants) in January 1931. The said agreement is one applying to the whole of Scotland, and gives to the tenants the exclusive right and privilege of selling newspapers, books and the like, at all passenger stations in Scotland on the railway system of the landlords for a period of ten years. The clauses of the agreement to which more particular reference falls to be made are the following clauses:[The important provisions of these clauses will be found summarised by Lord Fleming in his opinion]. (13) In terms of their right under clause eleventh [by which the Railway Company were entitled to an option to take either a fixed annual sum or certain percentages on Menzies & Company's receipts] the Railway Company for the year 1935 took their payments from their tenants on the percentage basis set forth in the said clause. In electing to do so they had to take a percentage of the receipts over the whole railway system. They were not entitled, for example, to take a percentage payment, say, in respect of the bookstalls in the Central Station
and a fixed payment in respect of the rest of the system. Returns were made by the tenants showing the gross receipts from each stall. The Railway Company then calculated the percentages due to them in terms of the said clause. It was agreed that" judge=" for the year 1935, 12 per centum of the gross receipts credited to the said bookstall in the Central Station was 2969. It was on the basis of this figure that the Assessor made up the valuation which appeared in the Roll. The said sum included the appropriate percentage of the sales made by boys from baskets and barrows (supplied with newspapers, &c., from the bookstall) on the station platforms in virtue of clause sixth of the agreement, amounting to 100, 19s. The Assessor, in making up his valuation, added to the sum of 2969 the sum of 3 in respect of the consideration other than rent involved in the obligations of maintenance undertaken by the tenants. He did not make any allowance for the sales on the platforms, but deducted an agreed sum of 369, 13s. as the value in the said year of the free travelling facilities granted to the tenants' representatives. There was thus produced the net figure of 2602, 10s., entered in the Valuation Roll. At the commencement of the hearing, however, it was intimated that the Railway Company had given to their tenants an undertaking to give them an abatement for the year 1936-1937 equal to the amount of any occupiers' rates falling to be paid by them. The Assessor thereupon agreed to the deduction from the proposed valuation of such an amount of rates as would, when added to the valuation, produce a figure of 2602, 10s. The result of this concession was to make the amount of the annual value arrived at by the Assessor 1867. (14) The appellants disputed the propriety of the Assessor's method of estimating the yearly rent or value of the said bookstalls, and proposed a valuation said to be based on the comparative principle. They adduced as comparisons other subjects within the precincts of the Central Station actually let to tenants, and certain other subjects outside the station[Here followed a description of these subjects]. (16) It is practically certain that the tenants would not have agreed to pay the percentages fixed by clause eleventh of the agreement if they had not been assured of obtaining the monopoly conferred on them by the agreement. The percentage of 12 per centum which the tenants pay in respect of the bookstall is payable only in respect of the bookstall, of three other bookstalls situated in the Central (High Level) Station, and of the bookstall situated in Princes Street Station, Edinburgh. The occupation of these bookstalls is, accordingly, more valuable to the tenants than that of any other bookstalls throughout the railway system of Scotland. The rights for which payments are made by the tenants to the Railway Company so far as the Central Station is concerned include rights of selling from the bookstalls and from baskets and barrows on the platforms. The boys who sell from baskets and barrows obtain their supplies from the bookstalls. The practice of paying very high rent for favourable sites by persons engaged in particular trades is noticeable, and is one with which the Committee was very familiar, it having been brought sharply to their notice in recent years, particularly in the case of confectioners and newsagents who desire especially to catch passing trade. (17) The granting of an exclusive privilege of carrying on a particular trade to the tenants of particular subjects is by no means uncommon. For instance, in leases of shops situated in housing schemes belonging to the Corporation of Glasgow it is a common stipulation that the Corporation will not lease another shop in the same range of shops to another trader in the same line of business. This in effect means that each trader has a monopoly in his particular line of business in that portion of the housing scheme served by that particular range of shops. No reductions from the stipulated rent in respect of such clauses are made by the Assessor in valuing such subjects. It is also not unknown for a number of premises situated in different localities to be let out under one lease. In some cases the rent for each particular property is specified, but occasionally only one rent is stipulated to cover all the properties. In such cases the Assessors of the various districts in which the properties are situated have to meet together in order to allocate the proportions of the cumulo rent to be attributed to the subjects in each district. It is also not unusual to find a rent based on drawings. In most mineral leases the rents are based on tonnage output. (18) Reference was made by the appellants to the fruit-stall tenanted by Malcolm Campbell, Limited, fruit merchants. Their premises are somewhat similar to the bookstall, and are situated not far from the latter and also in a position between two platforms. The fruit-stall, however, being set back somewhat from the position occupied by the bookstall does not strike the eye so conspicuously as the latter, which is full in view of persons entering the station either by the Gordon Street or the Union Street entrance. There is not the same demand by the travelling public for the products of fruitstalls or other retail shops as for the goods sold by the appellants. The valuation placed by the Assessor...
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