Magistrates of Perth v Assessor for Perth and Kinross
| Jurisdiction | Scotland |
| Judgment Date | 25 March 1937 |
| Docket Number | No. 46. |
| Date | 25 March 1937 |
| Court | Lands Valuation Appeal Court (Scotland) |
Lands Valuation Appeal Court.
Ld. Fleming. Lord Pitman. Ld. Robertson.
ValuationSubjectsAerodromeMethod of valuationAgreement with company for partial use of aerodromeCompany conducting school for reserve pilotsWhether agreement a lease.
ValuationSubjectsAerodromeMethod of valuationContractor's principleDeductionsAerodrome constructed partly in national interestUnproductive expenditure.
The Corporation of the City of Perth laid out an aerodrome with a landing ground, terminal building, hangars and dwelling-houses. Under an agreement with a company, which carried on a reserve training school for pilots, the company were allowed the use of the landing ground, terminal building and hangars, subject to the condition that such use must not interfere with the use of the aerodrome for the purposes of civil and commercial flying; and the houses were allocated for the use of the manager of the aerodrome and the pupils and staff of the company. One-third of the terminal building and two-thirds of the hangar accommodation were set apart for the exclusive use of the company, but the landing ground was open to all comers, who paid landing dues and hangar charges. The company were not entitled to use the aerodrome for any purposes except those of the school. In return for their rights under the agreement the company paid an annual sum to the Corporation.
In making up the Roll the Assessor made an entry of "Aerodrome, offices, and land (part use of)" at the yearly rent or value of the company's annual payment, under certain deductions (less the agreed-on valuations of the houses, which were separately entered and not disputed), his view being that the agreement was a lease, and that the annual payment was rent.
Held that the landing ground, terminal building and hangars formed a unum quid, the terminal building and hangars being accessories to the landing ground, and that the subjects must be valued as a unum quid; that the agreement was a grant of a privilege to use the subjects jointly with other users and was not a lease; and, accordingly, that the annual payment was not a rent conclusive of the annual value.
A valuation upon the contractor's principle approved at a percentage of approximately 2 per cent only on cost, in view, inter alia, of the fact that the aerodrome had been constructed partly in the national interest and, in consequence, at a cost which was in part unproductive.
The rubric in the report of Lochaber Power Co. v. Assessor for Inverness-shire, 1936 S. C. 288, so far as dealing with unproductive expenditure, commented on by Lord Pitman.
At a meeting of the Valuation Committee of the Counties of Perth and Kinross the Lord Provost, Magistrates and Councillors of the City and Royal Burgh of Perth appealed against the following entries in the Roll for the year ending Whitsunday 1937: [Case 698.]
The appellants craved that the entries in name of yearly rent or value for the portion of the subjects within the Parish of Scone should be 154 in place of the two sums of 2552, 10s. and 250; and that the valuation of the subjects within the Parish of St Martins should be 76 in place of the two sums of 180 and 20. They also craved that the entry of Airwork, Limited, in the Tenant and Occupier column of the Roll should be deleted.
The Committee having dismissed the appeals, the appellants craved and obtained a stated case on appeal to the Lands Valuation Appeal Court.
The case set forth that the following facts were admitted or proved or were within the knowledge of the Committee:"1. The appellants are owners of land situated partly in the Parish of Scone and partly in the Parish of St Martins, and have provided thereon a public municipal aerodrome, constructed so as to be fit for use by all types of aircraft and for the accommodation of an air training school. The area of the landing ground as now existing is 161 acres, while the total area of ground acquired by the appellants (including ground meantime let by them to agricultural tenants and an undeveloped area of moorland) is 282 acres. The agricultural value of the land included in the subjects under appeal is approximately 1 per acre. 2. The appellants have erected the following buildings:(a) terminal building, (b) hangar accommodation, (c) house for manager, (d) house for ground engineer, and (e) six houses for pupils, and have laid out a landing ground providing runways of 1000 yards in each direction to comply with the requirements of the Air Ministry. A separate valuation has been adjusted in respect of items (c), (d) and (e). This appeal, therefore, only applies to (1) the landing ground extending to 161 acres, and (2) the terminal building and the hangar accommodation. 3. The appellants have provided drainage, water, gas and electricity services for the buildings erected by them. The first arrangement with the Grampian Electricity Supply Company for the provision of a supply of electricity was by means of overhead lines, but in order to meet the requirements of the Air Ministry this arrangement was departed from and a supply of electricity provided by underground cables. The extra cost involved in providing these underground cables was 900. Airwork, Limited, in terms of the principal agreement after mentioned pay to the appellants interest at 5 per cent on this sum. 4. The cost of the scheme has not been finally adjusted, but the approximate cost is 60,000, made up as follows:
(a) Purchase of land |
10,167 0 0 |
(b) Layout thereof |
22,258 0 0 |
(c) Erection of terminal building and hangar accommodation |
10,054 0 0 |
(d) Erection of staff and pupils' houses |
5,447 0 0 |
(e) Roads, services, &c. |
7,204 0 0 |
(f) Consultants' fees, legal expenses, &c. |
4,870 0 0 |
60,000 0 0 |
|
In developing and equipping their landing ground and buildings the appellants had in view the future expansion and development of aviation, and they accordingly provided facilities in excess of immediate requirements. Part of this expenditure is meantime unremunerative. 5. The expenditure on the scheme was higher than was originally anticipated, the increase being due to the following considerations:(a) That the appellants had undertaken to have the facilities available to enable a training school to commence on 27th January 1936, and the Air Ministry insisted on the work being completed by that date. This necessitated considerable extra payments to the contractor in order to get the works hurried on and completed in time. (b) That, owing to the severity of the winter of 1935-1936, increased and more costly methods of construction had to be adopted. In particular, a considerable area of ground had to be turfed instead of that area being sown out with grass seed as had been originally intended. (c) That owing to the increasing landing speeds of civil and commercial aircraft the Air Ministry required longer runways, and to provide this it was necessary to take in and develop a larger area of ground than had been at first anticipated. This extra ground was largely moorland. 6. The appellants entered into an agreement dated 10th and 13th January 1936, with Airwork, Limited, (hereinafter referred to as the company), under which the appellants granted facilities to the company to carry on a reserve training school at the aerodrome on the terms and conditions therein stated, and for this purpose granted to the company the right to use the aerodrome and other facilities provided by or with the consent of the appellants in connexion therewith. It was provided by the agreement that this right should be exercised by the company so as not unreasonably to interfere with the use of the aerodrome for the purposes of civil and commercial flying. This agreement (herein referred to as the principal agreement) is printed in the appendix hereto, and is held to form part of this case.1 7. With regard to the buildings and erections on the aerodrome, the six houses for pupils are reserved for the accommodation of pupils attending the training school, one house is reserved for the staff of Airwork, Limited, and one for the manager of the aerodrome. The terminal building and hangar accommodation are available for use by Airwork, Limited, jointly with other users of the aerodrome, but certain parts of the terminal building and hangar accommodation are set apart for the special use of Airwork, Limited, as shown on plan attached to the principal agreement. The plan shows that approximately one-third of the accommodation in the terminal building and fully two-thirds of the hangar accommodation are set apart for the special use of the company. The portions of the terminal building and hangar accommodation so set apart are, during the currency of the said agreement, in the exclusive occupation of the company. The whole of the landing ground is open to all comers, who are charged landing dues according to a scale fixed by the appellants, and accommodation is also available in the hangar for visiting aircraft on payment of hangarage charges on a scale fixed by the appellants. 8. The principal agreement bears a stamp duty of 25, 10s., the stamp duty having been adjudicated by the Commissioners of Inland Revenue at that figure, representing a duty of 1 per cent on the sum payable under the agreement. 9. By letter from Airwork, Limited, to the town clerk dated 7th March 1936, and reply from the town clerk dated 10th March 1936 (hereinafter referred to as the supplementary agreement), Airwork, Limited, in consideration of the appellants extending the landing ground at the aerodrome, agreed during the remainder of the agreement to make an additional contribution of 1000 per annum, plus 2s. 6d. per flying hour for all flying done in excess of 6000 flying hours per annum. The supplementary agreement is printed in the appendix hereto, and is held to form part of this case. 10. By a separate agreement between the appellants and the company (of even...
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