Appeal By The Old Course Limited Against Fife Council Assessor
| Jurisdiction | Scotland |
| Judge | Lord Malcolm,Lord Doherty,Lord Justice Clerk |
| Judgment Date | 07 June 2016 |
| Neutral Citation | [2016] CSIH 40 |
| Court | Court of Session |
| Docket Number | XA22/16 |
| Published date | 07 June 2016 |
| Date | 07 June 2016 |
LANDS VALUATION APPEAL COURT
[2016] CSIH 40
XA22/16
Lord Justice Clerk
Lord Malcolm
Lord Doherty
OPINION OF THE LORD JUSTICE CLERK
in the Appeal
by
THE OLD COURSE LIMITED
Appellants;
against
FIFE COUNCIL ASSESSOR
Respondents:
Act: Haddow QC; Maclay Murray & Spens, Solicitors
Alt: Stuart QC; Clyde & Co, Solicitors
7 June 2016
[1] For the reasons given by Lord Doherty, I agree that this appeal should be refused. I have nothing further to add.
LANDS VALUATION APPEAL COURT
[2016] CSIH 40
XA22/16
Lord Justice Clerk
Lord Malcolm
Lord Doherty
OPINION OF LORD MALCOLM
in the Appeal
by
THE OLD COURSE LIMITED
Appellants;
against
FIFE COUNCIL ASSESSOR
Respondents:
Act: Haddow QC; Maclay Murray & Spens, Solicitors
Alt: Stuart QC; Clyde & Co, Solicitors
7 June 2016
[2] For the reasons given by Lord Doherty, I agree that this appeal should be refused.
LANDS VALUATION APPEAL COURT
[2016] CSIH 40
XA22/16
Lord Justice Clerk
Lord Malcolm
Lord Doherty
OPINION OF LORD DOHERTY
in the Appeal
by
THE OLD COURSE LIMITED
Appellants;
against
FIFE COUNCIL ASSESSOR
Respondents:
Act: Haddow QC; Maclay Murray & Spens, Solicitors
Alt: Stuart QC; Clyde & Co, Solicitors
7 June 2016
Introduction
[3] The Grand Hotel, St Andrews was built in about 1895 on a prominent corner site with elevations on The Scores and on Golf Place. On its website Historic Environment Scotland describes the building as having been constructed in a monumental Francois I style using Bute red sandstone. The edifice has 4 storeys, basement and attic, two distinctive corner towers and domes, and a mansard roof. It was purchased by the University of St Andrews in 1949 and was converted to use as a student hall of residence. It was renamed Hamilton Hall. It has been a listed building (category B) since 1999.
[4] The appellants purchased Hamilton Hall from the university. They renamed it Hamilton Grand. They converted, refurbished and developed it between 2010 and 2013. Twenty-six luxury apartments and associated facilities were formed within the building. The location of the development is prime, with spectacular views overlooking the Old Course (and in particular, the eighteenth green) and the West Sands. Prices for individual apartments range from £2,000,000 to £7,500,000. The appellants furnished two of the apartments - Apartments 5 and 7, 21 Golf Place - and used them as showhouses in order to facilitate sales of all of the apartments. With effect from 17 February 2014 the assessor entered Apartments 5 and 7 in the valuation roll as a single entry with the description “showhouse”, and with an NAV/RV of £240,000. Apartment 5 was sold on 13 June 2014. As from that date the entry in the roll was altered to reflect the fact that the showhouse now only comprised Apartment 7. The altered value was NAV/RV £120,000. Both entries were running roll entries. Upon their completion the other twenty-four apartments were entered by the assessor in the council tax valuation list (on the basis that they were dwellings). None of those apartments had been furnished by the appellants. None of them had been used as a showhouse. From the date of its sale Apartment 5 was entered in the valuation list as a dwelling.
[5] The appellants appealed against both of the entries in the valuation roll. They sought a referral of the appeals to the Lands Tribunal for Scotland. The valuation appeal committee declined to refer the appeals. The appellants appealed that decision to the Tribunal. On 6 March 2015 the Tribunal refused that appeal (The Old Golf Course Ltd v Assessor for Fife, 2015 S.L.T. (Lands Tr) 181). The appeals against the entries were then heard by the valuation appeal committee on 1 October 2015. At the hearing the assessor defended values of £200,000 and £100,000 respectively for the entries. The committee upheld the entries at those values.
[6] The single issue raised in this appeal is whether Apartments 5 and 7 were correctly entered by the assessor in the valuation roll as a showhouse. Before the valuation appeal committee, and on appeal to the court, the appellants contended that each of those apartments was a “dwelling” in terms of s. 72 (2) of the Local Government Finance Act 1992, and that they fell to be excluded from the valuation roll in terms of s. 73 (1). Before the committee and before the court the assessor maintained that the apartments were not dwellings and that they had been correctly entered in the valuation roll as a showhouse.
The hearing before the committee and the committee’s decision
[7] The committee found that Apartments 5 and 7 were occupied and used by the appellants as a showhouse for the purpose of marketing for sale all of the apartments in the development. It found that the appellants decorated and furnished Apartments 5 and 7 to give potential purchasers of apartments in the development a good impression of the apartments for sale, and a realistic impression of what properties might look like once the purchaser moved in. The appellants looked primarily to an international market for sales. Viewing was strictly by appointment and after potential viewers had been vetted to check that they were genuine and had sufficient resources to complete a purchase. There were 75 viewings by potential purchasers from January 2014 to April 2015, and 35 viewings from April 2015 to 23 September 2015.
[8] The committee agreed with the assessor that having regard to their occupation and use Apartments 5 and 7 were not dwellings. It held that the subjects had been correctly entered in the valuation roll as a showhouse.
[9] Before the committee the parties were agreed that the estimated open market capital value of each of the two apartments had they been in existence at the tone date (1 April 2008) would have been £1.66 million. The values which the assessor defended (£200,000 for the initial entry and £100,000 for the altered entry) were 6% of the estimated open market capital values in accordance with the method of valuation set out in the Scottish Assessors Association Commercial Properties Committee Practice Note 27 “Valuation of Showhouses”. If it was correct for the subjects to be in the valuation roll as a showhouse the appellants maintained that the relevant entries should be £100,000 and £50,000. They relied upon indirect comparison with other categories of subjects in support of a rate of 3% being applied to estimated open market capital value. The committee accepted the values defended by the assessor and rejected the values proposed by the appellants.
Ground of appeal
[10] The appellants’ only ground of appeal to this court was that the committee erred in law in determining that Apartments 5 and 7 were not dwellings in terms of s. 72 (2)(a). In the event that there had been no such error it was not maintained that the committee had been wrong to uphold the assessor’s net annual values/rateable values for the entries.
Local Government Finance Act 1992
[11] Part II of the Local Government Finance Act 1992 provides:
“Part II
COUNCIL TAX: SCOTLAND
…
Dwellings chargeable to council tax
72. - (1) Council tax shall be payable in respect of any dwelling which is not an exempt dwelling.
(2) In this Part, “dwelling” –
(a) means any land and heritages –
(i) which consist of one or more dwelling houses with any garden, yard, garage, outhouse or pertinent belonging to and occupied with such dwelling house or dwelling houses; and
(ii)which would, but for the provisions of section 73(1) below, be entered separately in the valuation roll;
…
(4) The Secretary of State may vary the definition of dwelling in subsection (2) above by including or excluding such lands and heritages or parts thereof or such class or classes of lands and heritages or parts thereof as may be prescribed.
…
(6) In this Part –
…
“exempt dwelling” means any dwelling of a class prescribed by an order made by the Secretary of State…
Alterations to valuation roll
73. - (1) … dwellings shall not be entered in the Valuation Roll in respect of the financial year 1993/1994 or any subsequent financial year.
…”
Local Government Finance Act 1988
[12] Before its repeal s. 66 of the Local Government Finance Act 1988 (“the 1988 Act”) provided (for England and Wales):
“Domestic property
66. – (1) Property is domestic if –
(a) it is used wholly for the purposes of living accommodation,
…
(5) Property not in use is domestic if it appears that when next in use it will be domestic.
…”
Secondary legislation relied on by the appellants
[13] Regulation 5 of, and para. 2 of Schedule 2 to, the Council Tax (Dwellings)(Scotland) Regulations 1992 (SI 1992/2955) provide:
“Variation of definition of dwelling
…
5. There shall be excluded from the definition of dwelling any lands and heritages or parts thereof which fall within the classes specified in Schedule 2 to these Regulations.
…
Schedule 2 DEFINITION OF DWELLING - EXCLUSIONS
…
2. Self-catering holiday accommodation
Any lands and heritages–
(a) which are not the sole or main residence of any person; and
(b) which either–
(i) are made available by a relevant person for letting, on a commercial basis and with a view to the realisation of profits, as self-catering accommodation for short periods amounting in the aggregate to 140 days or more in the financial year; or
(ii) if they have not been made so available for letting in that year, are intended by a relevant person to be made so available for letting in that year and the interest of the relevant person in the lands and heritages is such as to enable him to let them for such periods.”
[14] Regulation 2 of the Council Tax (Dwellings) (Scotland) Regulations 1993 (SI 1993/526) provides:
“Variation of definition of dwelling
2. The definition of dwelling in section 72(2) of the Act is hereby further varied by excluding any lands and heritages which are timeshare accommodation within the meaning of the Timeshare Act 1992.”
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