Suburban Taverns (glasgow) Limited V. The Assessor For Glasgow
| Jurisdiction | Scotland |
| Judge | Lord Clarke,Lord Justice Clerk,Lord Hodge |
| Neutral Citation | [2008] CSIH 5 |
| Court | Court of Session |
| Published date | 15 January 2008 |
| Year | 2008 |
| Docket Number | XA61/07 |
| Date | 15 January 2008 |
| LANDS VALUATION APPEAL COURT, COURT OF SESSION | |
| Lord Justice Clerk Lord Clarke Lord Hodge | [2008] CSIH 5 XA61/07 OPINION OF THE LORD JUSTICE CLERK In the Appeal by SUBURBAN TAVERNS (GLASGOW) LIMITED Appellant; against THE ASSESSOR FOR GLASGOW Respondent: ______ |
Act: Stuart; Drummond Miller WS
Alt: Clarke; Simpson & Marwick WS
15 January 2008
Introduction
[1] This appeal relates to a public house called Neeson's at 165 Allison Street, Glasgow. The subjects were entered in the Valuation Roll at the 2005 revaluation at a net annual value (NAV) of £22,500. The revaluation came into force on 1 April 2005. The tone date was 1 April 2003.
[2] The appellant acquired the subjects in July 2005 and appealed against the entry. On 31 May 2006 the local Valuation Appeal Committee refused the appeal. The appellant appeals against that decision.
[3] At the 2005 revaluation public houses were valued in accordance with the scheme of the Scottish Assessors' Association for the valuation of licensed premises. Under the scheme, public houses were valued on the basis of "hypothetical achievable turnover" or "fair maintainable turnover" at the tone date. For this purpose, actual turnover was adjusted in relation to certain specific elements of income and expenditure.
[4] In the course of the assessor's survey for the 2005 revaluation, the previous occupiers of the subjects submitted a return of turnover for the year to 31 March 2003. The figure for liquor sales was indistinct. It was either £256,000 or £250,000.
[5] The Committee found that in the year to 31 March 2002 liquor sales were £269,918. In the year to 31 March 2003 they were £256,114. In the year to 31 March 2004 they were £222,903.
The assessor's valuation[6] Although the Committee was to find that the true figure was £256,114, the assessor took liquor sales for the year to 31 March 2003 to be £250,000. Fruit machine income was £7,920. Applying the scheme to these figures, he brought out an adjusted figure as at the tone date of £257,920. He applied to that figure the agreed rate of 8.75 % to produce an NAV of £22,568, rounded to £22,500.
The appellant's valuation
[7] Mr Peter Henry FRICS submitted that the turnover for the year ending 31 March 2003 did not reflect the fair maintainable turnover for the appeal subjects. Notwithstanding an anomalous increase in fruit machine income in 2004, the turnover figures for 2001-2002 to 2003-2004 showed a pattern of decline. The 2002-2003 turnover figure used by the assessor was not sustainable. The assessor should have based his valuation on the post-tone date figures.
[8] Mr Henry based his valuation on turnover for the year to 31 March 2004. He took that turnover at a figure of £235,038. Applying the scheme to this figure, he came to an adjusted figure of £229,600 which, at the agreed percentage, produced an NAV of £20,090, say £20,100.
The decision of the Committee
[9] The Committee found that the figures for the year to 31 March 2003 set out the fair maintainable turnover of the subjects at the tone date. That was the only date at which fair maintainable turnover required to be assessed. No account could be taken of a fall in turnover after the tone date. Negotiations between a hypothetical landlord and tenant at the tone date could not take account of post-tone date figures. The essential point in the Committee's written reasons was that a pattern of decline in turnover known at the valuation date would affect the hypothetical tenant's decision as to the rent that he was prepared to pay; but that future turnover figures could not be known and therefore could not be relied on in a retrospective valuation as at the tone date.
The submissions for the parties
[10] Mr Henry has tabled nine grounds of appeal. Counsel for the appellant was prepared to argue only two. They are to the effect that the Committee erred in law in excluding from its consideration the evidence of turnover after the tone date.
[11] Counsel for the assessor submitted that he need look only at the fair maintainable, or hypothetical achievable, turnover at the tone date. It was not for the Committee to consider whether the turnover figures were sustainable in the period after that date. In the assessment of the hypothetical transaction between landlord and tenant the valuation had to be based on the fair maintainable turnover at the tone date. Events after that date were irrelevant. There was no evidence of a pattern of falling turnover at the tone date.
Conclusions
[12] The questions raised in this appeal are whether it is proper for a valuer, in valuing as at the tone date, to base his valuation on evidence coming into existence after that date; and, if so, in what circumstances and to what extent he may do so. These questions are familiar in valuation generally. In the case of valuation for rating, section 6(8) of the Valuation and Rating (Scotland) Act 1956 (the 1956 Act) requires the valuer to assess the...
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