United Kingdom Atomic Energy Authority V. Assessor For Highland And Western Isles Valuation Joint Board
| Jurisdiction | Scotland |
| Judge | Lord Justice Clerk,Lord Kingarth,Lord Philip |
| Neutral Citation | [2006] CSIH 60 |
| Date | 22 December 2006 |
| Docket Number | XA49/06 |
| Court | Court of Session |
| Published date | 22 December 2006 |
| LANDS VALUATION APPEAL COURT, COURT OF SESSION | |
| Lord Justice Clerk Lord Philip Lord Kingarth | [2006] CSIH 60 XA49/06 OPINION OF THE LORD JUSTICE CLERK in THE STATED CASE FROM THE LANDS TRIBUNAL FOR SCOTLAND in the Appeal of UNITED KINGDOM ATOMIC ENERGY AUTHORITY Appellant; against ASSESSOR FOR HIGHLAND AND WESTERN ISLES VALUATION JOINT BOARD Respondent: _______ |
For the Respondent: Doherty, QC; Drummond Miller
22 December 2006
The appeal
[1] This is an appeal by stated case from a decision of the Lands Tribunal for Scotland dated 8 September 2005.
[2] The appellants are the owners and occupiers of the Nuclear Installation at Dounreay, Caithness. Until the 2000 Revaluation, the site was not in the Valuation Roll. It was subject to the system of Crown contributions assessed by the Crown Property Unit of the Valuation Office Agency.
[3] The assessor entered the subjects in the Valuation Roll at the 2000 Revaluation as "Premises" at a net annual value and rateable value of £2,100,000. The appellant contended inter alia that the premises should properly be entered in the Roll as "Premises in the course of decommissioning and demolition"; that the appellant was not in rateable occupation of them; that, in any event, it was not in rateable occupation of certain areas referred to by the Tribunal as the contaminated areas, and that, in any event, the costs of care and maintenance of the site were such that the subjects should be entered at a nil value.
[4] The Tribunal allowed the appeal to the extent of substituting an NAV/RV of £1,435,000.
The appellant and its functions, powers and duties
[5] The appellant was established under the Atomic Energy Authority Act 1954 (the 1954 Act) to develop the civil nuclear programme in the United Kingdom. The 1954 Act confers on the appellant the power inter alia to produce, use and dispose of atomic energy and carry out research into any matters connected therewith (s 2(2)(a)); to manufacture or otherwise produce, buy or otherwise acquire, store and transport any articles which in the opinion of the [appellant] are, or are likely to be, required for or in connection with the production or use of atomic energy or such research as aforesaid, and to dispose of any articles manufactured, produced, bought or acquired by them (s 2(2)(b)); and to manufacture or otherwise produce, buy or otherwise acquire, treat, store, transport and dispose of any radioactive substances (s 2(2)(c)).
[6] The Nuclear Installations Act 1965 (the 1965 Act) provides inter alia as follows
"1(1) Without prejudice to the requirements of any other Act, no person ... shall use any site for the purpose of installation or operating -
(a) any nuclear reactor (other than such a reactor comprised in a means of
transport, whether by land, water or air); or
(b) subject to subsection (2) of this section, any other installation of such
class or description as may be prescribed, being an installation designed or adapted for-
(i) the production or use of atomic energy; or
(ii) the carrying out of any process which is preparatory or
ancillary to the productions or use of atomic energy and which involves or is capable of causing the emission of ionising radiations; or
(iii) the storage, processing or disposal of nuclear fuel or of bulk
quantities of other radioactive matter, being matter which has been produced or irradiated in the course of the production or use of nuclear fuel,
unless a licence so to do ... has been granted in respect of that site by the [Health and Safety Executive] and is for the time being in force ...
7(1) ... where a nuclear site licence has been granted in respect of any site, it shall be the duty of the licensee to secure that-
(a) no such occurrence involving nuclear matter as is mentioned in
subsection (2) of this section causes injury to any person or damage to any property of any person other than the licensee, being injury or damage arising out of or resulting from the radioactive properties, or a combination of those and any toxic, explosive or other hazardous properties, of that nuclear matter; and
(b) no ionising radiations emitted during the period of the licensee's responsibility-
(i) from anything caused or suffered by the licensee to be on the
site which is not nuclear matter; or
(ii) from any waste discharged (in whatever form) on or from the
site;
causing injury to any person or damage to any property of any person other than the licensee.
(2) The occurrences referred to in subsection (1)(a) of this section are-
(a) any occurrence on the licensed site during the period of the licensee's
responsibility, being an occurrence involving nuclear matter ..."
Since the contraction of the nuclear research programme in the late 1980s, the appellant's primary role has become that of decommissioning and environmentally restoring nuclear sites such as Dounreay.
The valuation hypothesis
[7] Section 6(8) of the Valuation and Rating (Scotland) Act 1954 (the 1954 Act) provides that the net annual value of any lands and heritages shall be the rent at which the lands and heritages might reasonably be expected to be let from year to year, on certain assumptions that need not concern us.
Description of the site
[8] The site extends to about 137 acres on which there are 309 separate heritable items consisting of three redundant nuclear reactors, fuel processing and re-processing plants and stores, offices, laboratories, waste pits, a fire station and numerous minor facilities such as car parks and bus shelters. The nuclear parts of the site are no longer in operation as such. They are in the course of a lengthy decommissioning process.
[9] The Tribunal has usefully classified the site as at the valuation date into four categories (para 68). The first (the ordinary parts) consists of the office, laboratory and other support facilities that were not affected by contamination. Some of this category was redundant and was not valued by the assessor; but much of it was in ordinary use and was agreed to have a positive value.
[10] The second category (proper storage) consists of the areas that were designed and were used for storage, whether temporary or permanent, of radioactive materials. In general, such areas are agreed to have positive values.
[11] The third category (the contaminated parts) consists of a variety of buildings, including some of the highly specialised plants such as reactors, which still contained radioactive fuel or waste that was being actively decommissioned or was awaiting decommissioning or further decommissioning processes. These are in effect buildings whose original purposes had been spent and in which waste was being contained. The DFR Pond (item D1120) is an example. It was designed for the storage of fuel tubes in racks, but was being used mainly for the containment of contaminated waste or sludge.
[12] The fourth category (the redundant parts) consists of buildings and plant that no longer contained radioactive materials, but had been part of the active nuclear processes and therefore still required specialist care and maintenance and monitoring.
The history of the site
[13] The appellants own and occupy the site. It was chosen in 1954 for the establishment of a large scale experimental fast breeder reactor. The work at the site was later expanded to include experimental work in nuclear fuel manufacture and reprocessing and, later still, research in decommissioning and the safe management of nuclear waste. The site has throughout been predominantly experimental in its purpose. It has never been operated with a view to profit.
[14] The original Dounreay fast reactor ceased to operate in 1977. The Dounreay materials test reactor (DMTR), which was constructed at the same time, ceased to operate in 1969. The prototype fast reactor (PFR) ceased to operate in 1994. The reprocessing of fast reactor fuel ceased in 1996.
[15] For some years before 1998, the Nuclear Installations Inspectorate (NII) had expressed concerns about safety management at the site. In May 1998 a safety incident occurred in which power to the fuel cycle area was cut off for an unduly long period. By Direction No 2, dated 11 May 1998, the NII directed the appellant to shut down all processing activities in the fuel cycle area other than those operations and activities that were necessary to maintain it in a safe condition. There was then a major audit of safety management at the site.
[16] Direction No 2 remained in force at 1 January 2000, the valuation date in this case. By that date, all processing and reprocessing of nuclear fuel had ceased. The primary focus of activity was then on decommissioning and on the safe management of the site, including the containment of radioactive waste and the storage or disposal of radioactive materials. At that date it was expected that the restrictions imposed by the Direction No 2 would be lifted within the course of 2000. The first resumption was not permitted until February 2000. After that, other restrictions were lifted in stages. It was also expected at the valuation date that the Government would soon decide to refurbish the PFR reprocessing plant for the resumption of fuel reprocessing; but in June 2001 the Minister announced that no further PFR fuel would be reprocessed and that limited fuel manufacturing would be continued to honour existing contracts only. Following this decision, the DMTR fuel element production facility restarted in October 2001 and finally closed in March 2004.
Nuclear fuel and waste
[17] There are around 109 tonnes of nuclear fuels and fissile materials on the site. There is also a large quantity of radioactive waste. According to the appellant's inventory, 9,000 cubic metres of radioactive waste are in storage and 33,000 cubic metres of it have already been disposed of in facilities on the site. The Low Level Waste (LLW) has been put into a disposal...
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