Lands Tribunal for Scotland

OPINION

B & Q plc and Others
v
Assessor for Central Scotland

These appeals have been brought by several ratepayers against entries made in the valuation roll for the 1995 revaluation, effective from 1 April 1995, in respect of subjects at Springkerse, Stirling. These subjects of appeal comprise a group of eleven retail warehouse units and a car park. In addition an appeal has been brought against an entry made in the valuation roll, effective from 28 June 1996, in respect of a stand alone retail warehouse unit also at Springkerse.

The eleven units are located in a terrace of thirteen retail warehouse units together forming Springkerse Retail Park which are owned by CIN La Salle ('CIN'). The appellant ratepayers and relevant net annual values for these properties are:-

Unit 1-3 B & Q plc £315,000
Unit 4 Harveys Furnishing Group Ltd £65,000
Unit 5 A G Stanley (Homecharm) Ltd (t/a Fads) £65,800
Unit 6 R Terley Ltd (t/a Texstyle World) £104,000
Unit 7 Halfords Ltd £78,500
Unit 8 Scottish Power plc £87,500
Unit 9 Dixons Stores Group Ltd (t/a Currys) £88,400
Unit 10 Carpetright plc £87,200
Unit 11 Thomas Menzies Ltd £87,000
Unit 12 H & C Furnishings (t/a Cantors) £85,750
Unit 14 Reid Group plc £87,000

The two additional units in the row of retail warehouses, now let to Petsmart and Comet, were not occupied until 1997 and consequently are not part of these appeals.

CIN Properties Ltd (the predecessors of CIN La Salle) have been entered in the valuation roll as the owner and occupier of the customer car park which serves all the units in the terrace of retail warehouses: the net annual value of the car park is £81,000.

The other retail warehouse unit which is under appal is that occupied by Wickes Building Supplies Limited ('Wickes'): it is entered in the valuation roll at a net annual value of £230,000. This retail warehouse is located on a stand alone (or solus) site close to the retail park. It has its own customer car park. It is not owned by CIN and is physically separate from the other subjects of appeal.

The primary contention of the appellant ratepayers (other than Wickes) is that the entry in respect of the car park should be deleted from the valuation roll for the reason that the collective assessments of the retail warehouses include and reflect the whole value of the customer car park and that valuing it separately results in double assessment. Alternatively, if double assessment were established but the car park was not to be deleted from the roll in respect that it was in separate rateable occupation, it should be entered therein at nil value.

The contention of Wickes is that, in the event that the appeal by the other ratepayers is successful, in that the value of the car park is held to be included in the value of the units, then their retail warehouse should be valued directly in comparison with the units in the terrace of retail warehouses and that element of their net annual value attributable to car parking should be deducted.

At the hearing the ratepayers were represented by Mr A D D MacIver, Advocate, who led evidence from the following witnesses:-

Angus Matheson M.Phil, FRICS, a partner in a firm of Planning and Development Consultants;

Robert Fisher, FRICS, a partner in the firm of Mason Owen and Partners, chartered surveyors;

Nigel R L Thomson, FRICS, a partner in the firm of G L Hearn and Partners, chartered surveyors;

Steven J Groves, ARICS, Property Manager for B & Q plc;

Mark T Feltham, FRICS, Head of Property Management for DSG Retail Limited which company manages properties including those trading as Dixon and Currys;

Ms Diane E Rennison, an associate director of Progressive Partnership who carried out market research as to the use of the car park at Springkerse Retail Park;

Stephen J Spray BLE, ARICS, Investment Manager Scotland for CIN;

David W Cockburn, WS, solicitor and senior partner of Archibald Campbell and Harley, WS, Edinburgh, a specialist in commercial property and a member o the panel of The Law Society of Scotland which awards specialist accreditation in commercial leasing;

William F McKaig, ARICS, a senior surveyor with Conrad Ritblat, chartered surveyors, who are acting for Wickes in this appeal;

Anthony R McRitchie, FRICS, IRRV, a partner with Montagu Evans, chartered surveyors;

Charles C Marwick, BSc, ARICS, employed by Grimley, chartered surveyors who acted for the original developers, in the letting, and management of the retail park and its subsequent disposal to CIN.

Mr J N Wright QC appeared for the assessor and led evidence from the following witnesses:-

Mr Iain A Balance ARICS, IRRV, Depute assessor responsible for Stirling and Clackmannanshire Council areas;

Mr William A Gibson, ARICS, a valuer in the assessor's office.

At the outset of the hearing it was agreed that the evidence led should be held to be the evidence in each appeal. A Joint Minute of Agreement between the parties was helpfully lodged in the course of the hearing agreeing various facts including, inter alia the occupiers, areas, rentals and dates relating to the appeal subjects excluding Wickes, all as set out in appellants production No. 34. The Joint Minute also agreed upon a conditional basis, depending upon the disposal of the issues between the parties, the agreed net annual values appropriate to each disposal. The appropriate values agreed are set out in appellants' productions Nos. 35, 37 and 38. The Joint Minute together with the appellants' productions relative thereto are set out in Appendix I. We have also set out details of other undisputed facts in Appendix II attached hereto.

The retail park is situated at Springkerse, an area of recent development, on the eastern side of Stirling about two miles from the town centre. Development at Springkerse became possible after a conjoined Local Public Inquiry in 1988 that considered alternative possible sites for various out-of-town developments. The Secretary of State granted consent for such development at Springkerse, including a non-foot retail park, in 1990. That consent provided for the development to be controlled by a design brief (agreed in 1992) and a master Plan for the wider Springkerse area where industrial, recreation and business park developments were envisaged.

The development area within which the retail park is to be found is bounded on the west by Springkerse Industrial Estate and on the south by the Pelstream Burn and an area of open land. On the east the boundary is with the relatively new Eastern Distributor Road which links Causewayhead, north Stirling, Alloa and the Hillfoots area with the southern area of Stirling, Bannockburn and the M8/M9 junction.

The retail park lies along the western boundary of the development area. The common service yard, to the rear of the retail warehouse units, is adjacent to the Springkerse Industrial Estate. To the front of the units, and separated from them only by a covered pedestrian walkway, is the common car park.

The customer car park is bounded by one of two parallel service roads that together form a spine to the development area. On an island site formed by a strip of land between these service roads are two restaurants. One is occupied by 'Bella Pasta', and the other by 'Burger King'. Each has its own private car park. There is a vacant development site between the two restaurant developments. At each end of this island site the parallel service roads meet in roundabouts. From these two internal roundabouts access is provided to the various parts of the development area.

To the east of the spinal service roads there is a large area of vacant ground bounded on its east side by a planted embankment adjacent to the Eastern Distributor Road. Further development there, of a business park, is planned for.

At the north end of the development area is an owner/occupied Safeway supermarket which has its own customer car park and a petrol station. Access to the Safeway site is obtained from the roundabout at the north end of the island site. The customer car park o the supermarket shares a common boundary with the customer car park at the Retail Park. There is no direct means of vehicular access between them although pedestrians can move freely between the two sites. From that northern roundabout a service road links the development area with the Eastern Distributor Road at another roundabout on that road which also provides access to the Springkerse Industrial Estate.

Wickes are retailers of DIY and Building Supplies to the general public. Their warehouse and customer car park is located to the southeast of the southern internal roundabout and due south of the proposed business park. Details of the assessor's valuation of these subjects are shown in appellants' production No. 38 in Appendix I.

The Springkerse Retail Park is the largest single land use within the development area. It occupies an area of some 6 hectares (15 acres). While it shares access, via the service roads, with other land uses such as the Safeway supermarket or the Wickes warehouse, each land use is physically independent of the others. The common feature of all the land uses within the development area is that they are orientated to car borne shoppers, each having adequate facilities for customer parking to meet their individual requirements.

The terrace of thirteen units, associated customer car park, and common service areas which together make up the Springkerse Retail Park, were built in 1994 and, with the exception of the two units previously mentioned, were occupied by the appellant tenants in 1995. The retail warehouse units are of steel framed construction, mostly with blockwork and brickwork infill walls, and 'A' frame pitched roofs covered by profiled metal sheet cladding. The floors are concrete.

The total ground floor area of the terrace of units in the retail park is in the order of 15,000 square metres. The B & Q warehouse is located at the southern end of the row and is the largest warehouse with a ground floor retail area of some 3,700 square metres and with a large garden centre to one side. The other units range in size from about 700 square metres to about 1,100 square metres. The units were let in 'shell' condition, the tenants being responsible for fitting out to meet their trade requirements.

The customer car park serving all thirteen units consists of a 900 space tarmac surfaced and landscaped area to the east of and contiguous with the terrace of retail warehouse units. Access to and from the car park is provided at several points off the west side of the western spinal service road.

Along the whole length of the rear of the terrace of thirteen units is an extensive service yard area. It is reached by a separate route using the road network in the adjacent Springkerse Industrial Estate. The B & Q warehouse has its own enclosed service yard. The service area for the other twelve units is open and in common use. The service yard is used by the largest commercial vehicles and is designed to accommodate them with sufficient turning circles and areas of hard standing for parking and unloading. Each unit has vehicular doors accessing the service area immediately to its rear. In practice the area of service yard behind each unit tends to be used predominately by the occupier of that unit.

Springkerse Retail Park is an example of the latest manifestation of a type of retail provision that has evolved in recent years. The retail warehouse form of retailing first appeared in the late 1970s and early 1980s mainly in warehouse units on solus sites in industrial estates. The occupiers sold bulky domestic goods such as furniture, carpets and electrical appliances. Such locations provided inadequate parking facilities for customers and poor servicing arrangements for the retailers. Gradually these retailers developed a perception of mutual benefit to be derived from trading together and thus the first small retail park developments were created. As a consequence the concept evolved throughout the 1980s with purpose built non-food retail parks emerging where retailers of bulky goods could trade from large warehouse units with good shared car parking and servicing facilities.

Traders require that retail parks are located in prominent main road positions providing easy access from the areas from which they expect to attract custom. At such locations ample car parking is essential. A service yard area capable of receiving deliveries from the largest vehicles is also necessary with separate access to allow service and customer traffic to be separated.

The economic circumstances of the early 1990s saw a halt to retail park development but since 1993 it has resumed and the latest developments have attracted not only the bulky goods sector but also traditional High Street retailers who have found that they can attract their customers to shop in retail park locations away from the congestion of town centres.

To cater for these changes in retail provision and consumer behaviour the means of accommodating such developments through the planning system has also adapted.

National planning policy in respect of retail developments now recognises retail parks as a separate category of retailing. Retail parks are defined for this purpose as comprising of a number of complementary retailers trading together for their mutual commercial benefit. Retail parks are expected to be needed in areas of around 100,000 people where they will be located in prominent main road positions. They are normally confined to the sale of bulky goods (furniture, furnishings, DIY, electrical, car and garden goods) and the range of goods may be controlled by planning agreements, (although there is no such agreement at Springkerse Retail Park). For retail parks with building areas above 8,000m2 adequate car parking is defined as one space per 250m2 and segregation of goods traffic from customer traffic is expected.

Planning policy in the 1996 Draft Structure Plan for the Stirling area categorises shopping into three groups, "personal" (town centre shopping), "essential" (superstore and supermarket shopping) and "household") (DIY and bulky goods). Springkerse Retail Park is identified in the plan as a suitable location for the 'household' category of retailing.

Developers and investors have in the recent past begun to find the retail warehouse sector attractive as a result of the willingness of national public company retailers to accept 25 year full repairing and insuring leases. As a consequence, funding institutions and large retailers have been prepared to finance the developers of retail parks through the planning, land acquisition and construction process. The letting situation in retail parks is paradoxical since such 'institutional leases' of long duration and on full repairing and insuring terms have been receding from other sectors of the property market. The emergence of the institutional lease with substantial retail company covenants in the retail warehouse sector has the effect of raising capital values through the application of that valuation method which capitalises rent using an 'all-risks' yield. Before the advent of such leases retail warehouse developments would be seen as high risk with consequentially lower capital values. Retail parks are also classified as a distinctive category of property investment.

Units in retail parks are valued for rating purposes on a different basis from traditional shops (on an overall rate basis as against a zoning basis). Solus retail warehouses are valued for rating purposes on the basis of applying a value rate to the area of the building: that rate includes customer car parks, thus the assessment is an unum quid.

The rent paid for a retail warehouse unit includes both the right to occupy a building and the right for their customers to use an adequate level of adjacent car parking. This is true whether a unit is on a solus site with exclusive parking or is in a retail park with shared car parking. The rent for this package of retail facilities is expressed as a rate per square metre applied to the internal area of the building.

At Springkerse Retail Park the landlords only return from his development is the income from the rents of the warehouse units. The car park has no letting value burdened as it is with the tenants' common rights to the full and free use of the car park. The whole value of the car park is included in the rents received from the tenants of the warehouse units.

A warehouse unit in a retail park would not let without immediately adjacent parking of adequate capacity provided at no charge to customers. Because retail parks are self contained developments, not associated with other land uses, these car parks are used almost exclusively by customers visiting the retail warehouses, although there is nothing to stop them being used by any member of the public.

A survey was carried out by the Progressive Partnership, market research consultants, on Friday 3 and Saturday 4 April 1998 at Springkerse Retail Park. The purpose of the survey was to establish the reason for using the customer car park and to determine the extent to which people might park there for reasons other than visiting the retail warehouses. The weather on the Saturday was very poor and only a small sample of 28 shoppers was surveyed. On the Friday 100 users of the customer car park were questioned.

The results demonstrated that on the Friday 95% of those surveyed were visiting the retail warehouses while 5% were using the car park for other reasons such as visiting relatives who worked in or lived near the retail park. On the Saturday 100% were using the car park to visit the retail warehouses. The car park was provided for, and is almost exclusively used by, customers visiting the retail park.

The retail units in the terrace of warehouses which are the subject of appeal are let on 25 year leases with rent reviews every 5 years. The let subjects are in each case the building comprising each retail warehouse. In the case of B & Q the let subjects also include the external garden centre. Each warehouse unit is let, "Together also with a right in common with the landlord and any other tenant of other subjects forming part of the Landlord's Estate in and to the use of the Common Parts,". The Landlord's Estate covers most of the Springkerse development area, including the island site and Wickes' site, but excluding the Safeway supermarket site.

The 'Common Parts' are defined in the leases as, "the boundary walls, fences and other enclosures, car parks, footpaths, distributor road, access roads, verges, roundabouts, service roads, circulation areas, hardstandings, forecourts, canopies, pipes, cables, wires, conduits and other service media, trolley bays, landscaped areas, signage and any other common amenities within the Landlord's Estate …”

The Wickes' warehouse has planning permission for the sale of DIY or other household goods and otherwise is in general terms similar to that for the Retail Park. It is constructed of brick and concrete block with an insulated metal sheet roof and warm air heating. The ground floor, with a gross internal area of approximately 2,500 square metres, is used primarily for sales and storage. The first floor with an area of some 130 square metres is used as office accommodation and staff rooms. There is also an exclusive customer car park with 132 spaces.

The building was constructed by Wickes Developments Limited and completed in June 1996. Under a development agreement the warehouse, on completion, was sold to the Midland Bank Trust Company Limited (as trustee for the Abbey Life Assurance Company Limited) and leased back to Wickes Building Supplies Limited at an initial rent of £263,239.18 per annum. The lease commenced on 12 June 1996 and runs until 24 March 2021. The lease stipulates, in Clause 6.2.3, that rent reviews shall be determined as the "full open market rent at which the premises might reasonably be expected to be let in the open market at the relevant review date," which, if necessary shall be determined by arbitration. The initial rent fixed three years after the tone date, was calculated by applying a rate of £99.57m2 (being £9.25 per square foot) to the gross internal floor area: the rent was inclusive of the car park.

At the 1990 revaluation there was sufficient rental evidence related to solus retail warehouses to enable a common valuation methodology to be adopted by assessors and ratepayers. This was the application of a value rate on the floor area of the retail warehouse, that rate being inclusive of car parking and the service yard facilities. Additional amounts were added for other rateable areas such as garden centres. The method now proposed by the assessors for determining the net annual value of retail warehouse subjects has changed from the practice adopted by assessors in the previous revaluation. The respondent assessor now applies a value rate per square metres of floor space plus a rate for each car park space to arrive at his unum quid valuation.

At the 1995 revaluation agreement between ratepayers and assessors has been reached in certain other valuation areas in Scotland in respect of the rating assessment of retail warehouse developments. In these areas customer car parks shared by retail warehouses have not been separately entered in the roll on the basis that their value has been included in the net annual value of the retail warehouse units. These include properties at Aberdeen (Constitution Street), Dumfries (The Peel Centre) and Inverness (Old Perth Road and Telford Street).

Turning to the situation in England and Wales for the 1995 revaluation, the Valuation Office Agency, responsible for making up the valuation list, decided that where the rentals of units in retail parks include and reflect the benefit of car parking that car park will not be separately entered in the list. An illustration of this was the Greymoorhill Retail Park in Carlisle which was said to be similar to Springkerse Retail Park: the car park there serving the retail units, whose tenants included Texstyle World, Comet, General George Carpets and others, was not separately valued for rating.

The tribunal was also given the example of the Brent Cross Shopping Centre in London. That was the first major shopping centre to be developed outwith a town or city centre: it was built in the 1970s and has been enlarged at intervals since then. It is a very large complex with about 100 retail units and 3 large stores extending to over 75,000 square metres. The car parking was said to comprise 3,000 spaces of which 2,000 are in multi-storey buildings. At the 1995 revaluation the local Valuation Office Agency entered the car parks in the list at an assessment of £1,076,000. Following discussions concerning a general policy relative to car parking at shopping centres the Chief Valuer instructed that the assessment should be reduced to £1 from 1 April 1995.

The practice in England is that where rentals of retail units include the benefit of car parking then the car parking is not valued separately on the basis that the assessments of the retail units fully include the benefits of the car parking. The rating valuation methodology sought by the appellants is that used by certain assessors in Scotland, by the Valuation Office in England and Wales, and by private practice rating surveyors throughout the United Kingdom.

The assessor has valued the units at Springkerse Retail Park by application of the comparative method. He analysed the 'shall' rents fixed (mainly) in 1994 and adjusted these to the tone date of 1 April 1993, on the basis of rental movements in other retail parks, by deflating the rents at a rate of 0.75% per month (or 9% per annum) for the time between the tone date and the date when each rent was struck. This analysis produced an average rate per square metre on gross internal floorspace of £94.67.

The parties agreed that an addition of £5 per square metre should be added to the shell rent to reflect the tenants' fitting-out costs. In the case of B & Q minor additions were made in respect o the covered and uncovered areas of the garden centre, and a quantum allowance of 12.5% was made. In the case of the unit occupied by Currys a reduction factor was applied to their mezzanine floor. Accordingly the 'Adjusted Rent' f each unit shown in Appendix II reflects an agreed tone date back-dating and a fitting out addition.

After discussion with the various agents representing the ratepayers a rate of £94 per square metre was uniformly applied to arrive at the net annual values of the units in Springkerse Retail Park.

The ratepayers do not dispute these valuations of the retail warehouse units but resist the addition o the car park as a separate entry in the roll, with a net annual value of £81,000 based on £90 per car park space.

The assessor has valued the car park also on the comparative principle and has made his valuation comparison with other parks in Stirling town centre. He conceded there was a paucity of actual rental evidence but since the assessments of car parks in the central area of Stirling have been agreed at figures ranging from £835 to £170 per car parking space he decided a rate of £90 per space to be appropriate at the less central location of Springkerse. The rate applied per car parking space is therefore very much a matter of judgement. He has applied that rate to the car parks at the Safeway supermarket, Burger King and Bella Pasta, but without the benefit of rental evidence.

The assessor has valued Wickes as an unum quid and therefore its net annual value includes its car park. Background information is contained in Appendix III and his valuation is contained in Appendix I appellants' production No. 38. The rent passing is £263,239.18 as at 12 June 1996. Adjusting that to the tone date he derives a rent of £216,693.43. From that he has deducted £11,880 in respect of the 132 car parking spaces at £90, giving a net amount of £204,813.43, which he has equated to £79.30 per square metre. He rejects that figure as suitable for the basis of his valuation because the tenancy is based on a sale and leaseback transaction that may not, in his opinion, reflect market conditions. Instead he has applied the rate derived from the retail units (the subjects of appeal) of £94, to which a quantum allowance of 10% has been made to give £218,494. In addition he has added £11,880 for the car parking spaces included within the subject o give a total of £230,374. He proposes a net annual value at a rounded-off figure of £230,000.

Wickes contend that the actual rent fixed in 1996 was based on the going market rate for a retail warehouse building with car parks. There should be no separate addition for car parking. They maintain that the rent agreed under the sale and leaseback transaction is a market-derived rent. They contend that the market assumes adequate car parking and does not explicitly show the car-parking element within the rate from which the valuation is derived. They are prepared to agree a rate of £94 per square metre, which gives a net annual value of £218,500 but resist any additional assessment for the customer car park.

Mr Gibson spoke to the agreed assessments for the other properties at Springkerse ie the Safeway Supermarket and the units trading as Bella Pasta and Burger King. He confirmed that the supermarkets in Central Region were valued on the comparative principle using available rents. Only one rent in Falkirk was used but he obtained details of a number of supermarket rents passing in neighbouring valuation areas

The Safeway Supermarket was agreed at net annual value £585,000: the assessor's analysis of that figure is:-

Supermarket 5890 m2 @ £80 = £471,200
Petrol Station (valued on a 'throughput basis')   £58,587
Car Park 601 spaces @ £90 = £54,090
(corrected)   £583,877
NAV say   £585,000

Mr Gibson and Mr Balance accepted that, while £585,000 was the assessment agreed with the ratepayer's surveyor, the agent would probably report the basis of agreement to his clients as an overall rate for the supermarket including car parking plus the amount for the petrol station. (That rate was no mentioned but for completeness it is just over £89 per square metre.)

The assessor also justified his separate assessment of the customer car park with reference to agreed net annual values for Burger King and Bella Pasta which occupy island sites opposite the Retail Park. His analysis of these agreements is as follows:-

Bella Pasta
Restaurant 273.3m2 @ £165/m2 = £45,090
Car Park 56 spaces @ £90/space = £5,000
      £50,135
NAV say   £50,100
Burger King
Restaurant 302.02m2 @ £165/m2 = £49,998
Car Park 52 spaces @ £90/space = £4,680
      £54,678
NAV say   £54,600

These assessments were made using the method adopted by the Strathclyde Assessor which was to apply a rate in respect of the floorspace of the building plus a rate for car parking spaces. In these cases he applied £165 per square metre of floor space and £90 per car parking space. Mr Balance acknowledged that these values could be analysed on the basis of an overall rat which would be just over £180 per square metre.

Mr Gibson said that the net annual value of Bella Pasta had been agreed on separate rates for the building and car parking spaces. The evidence of Mr Thomson, who had acted for Bella Pasta, was that he had valued the subjects on the basis of an overall rate per square metre and that he had not agreed to any explicit itemisation of the car parking. The analysis on that basis by the assessor was therefore his own and did not represent the actual basis of the agreement.

Mr Balance made reference to a number of shopping centre locations which he had investigated, not to compare valuation rates, but "in the sense of looking at retail units in other areas and how the existence of car parking facilities might be reflected within the rateable values in each case …”

Mr Balance selected shopping centres where free car parking is provided. The factor of free car parking was given as the only criterion adopted by him in selecting these centres. He did not include any retail parks because most are under appeal.

In his selected retail centres (listed below) are ones where, he maintained, the terms of the leases for the retail shops within these centres are substantively the same as for the retail warehouses which comprise the appeal subjects.

Name and Location Type of Centre
The Olympia Shopping Centre
East Kilbride
New Town
Town Centre
Glenwood Centre
Glenrothes
New Town
Suburban centre
Clarkston Toll
Glasgow
Suburban Centre
Knightswood Centre
Glasgow
Suburban centre
Almondvale Centre
Livingston
New Town
Town Centre
Wester Hailes
Edinburgh
Suburban centre
Town Centre
Airdrie
Town centre
Town Centre
Coatbridge
Town centre
Town Centre
Motherwell
Town centre
The Plaza East
Kilbride
New Town
Town Centre

The method used in the analysis of these centres was to take a sample of retail units within the centre and to determine from their rents (making adjustments for shape, quantum etc.) what the zone A rate at the tone date in 1993 would be for that part of the centre. The resultant rents were compared with agreed net annual values for the same units. In all of these cases he was satisfied that the differences between the figures were slight. Since the car parks in each case are entered separately in the roll he was satisfied that the rents for the units in these shopping centres did not include the value of the car parks. He concluded from this survey that no adjustment had been made to the rents at any of these centres to allow for the benefit to the retail units of free car parking

Mr Balance drew a general conclusion from his survey that the provision of car parking within a collection of retail units was not an unusual occurrence and that the leasing of shops with rights in common with others to the use of a car park was also not unusual. He saw no reason for differentiating between the units at Springkerse Retail Park and the shops in the centres that he has surveyed simply because one is described as a 'retail unit' and the other as a 'retail warehouse', for the reason that they both carry out the same function of selling goods to the public. He also believed that developers of shopping centres and local authorities provide free car parking to maintain the rental value of the shops and to ensure vibrancy and growth in their centres. He did not see why the landlord of a retail park would not adopt the same practice.

The parties were agreed that the lease between Westerwood Ltd and Dixons Stores Group Ltd relating to Unit 5, Springkerse Retail Park could properly be taken as representing the terms on which the units were occupied. The lease contains the following provisions inter alia:-

“1.1.5 "The let subjects" means the subjects known as forming Unit 5, Springkerse Retail Park, Stirling, …; Together also with a right in common with the Landlord and any other tenant of other subjects forming part of the Landlord's Estate in and to the use of the Common Parts (as hereinafter defined); ….

1.1.7 "The Common Parts" mans the boundary walls, fences and other enclosures, car parks, footpaths, distributor roads, access roads, verges, roundabouts, service roads, circulation areas, hardstandings, … and any other common amenities within the Landlord's Estate (but excluding the buildings and other parts of the Landlord's Estate which are let or designed or intended for letting to an occupier having exclusive possession thereof).

GRANT OF LEASE
In consideration of the rents and other prestations hereinafter specified, the Landlord hereby lets to the Tenant ALL and WHOLE the let subjects together with the rights specified in Part I of the Schedule, ….

NO RESTRICTION ON DEVELOPMENT
Nothing herein contained or implied shall impose or be deemed to impose any restriction on the use of any land or building or premises belonging to the Landlord not forming part of the let subjects … but provided that the continued exercise of such use and/or the fact that such development has been carried out shall not have the effect of substantially interfering with or materially prejudicially affecting the full use and enjoyment of the let subjects by the Tenant as part of the Landlord's Estate with the benefit of the Common Parts for the purpose for which the Common Parts were originally intended.”

Part I of the Schedule to the lease sets out the rights granted to the tenant which include inter alia:-

“(7) The full and free right in favour of the Tenant, its employees, visitors and customers at all times to park private motor vehicles on the customer car park forming part of the Landlord's Estate but not to exercise such right so as to cause a nuisance to the Landlord and/or Tenants or occupiers of adjoining premises.

(8) The full and free right for the Tenant, its employees, visitors and suppliers for the purpose of loading and unloading goods vehicles and all other reasonable or necessary purposes to use the Service Area forming part of the Landlord's Estate as the said Service Area is shown delineated and shaded yellow on the Plan but not to exercise such right so as to cause a nuisance to the Landlord and/or any tenants or occupiers of adjoining premises.”

Part I of the Schedule also provides:-

“… without prejudice to the foregoing, in the case of all vehicles entering the Landlord's Estate, the users thereof shall park only in the bays allocated therefor and shall not obstruct the Common Parts and in particular the access roads, roundabouts, service roads and circulation areas within the Landlord's Estate and shall comply with all security arrangements, traffic directions and other regulations from time to time reasonably and properly imposed by the Landlord to the intent that the service areas and staff parking areas (if any) shall be used for only those respective purposes and the customer car parks shall be used for short term customer parking.”

Part II of the Schedule reserves to the Landlord power to erect a new building or to alter any building upon any land comprised in the Landlord's Estate but subject to the provision "… so as not to materially infringe or prejudice any of the rights granted to the Tenant in terms of the foregoing Lease, as the same as specified in Part I of this Schedule." Power is also given to the Landlord to vary the extent of the Landlord's Estate by excluding therefrom all or any part of the reserved areas after serving upon the Tenant an Exclusion Notice or any Inclusion Notice as the case might be. The Reserved Area does not include the car park and it is specifically provided that the exercise of this right shall not at any time operate so as to prejudicially affect inter alia:-

Part V of the Schedule sets out the Landlord's obligations which include inter alia:-

“(3) Throughout the Term to provide the services specified in Part VII of this Schedule as are necessary in accordance with the principles of good estate management and in the interest of the generality of the tenants in the Landlord's Estate provided that in performing its obligations hereunder the Landlord shall be entitled in its discretion to employ agents, contractors or such other persons as the Landlord may from time to time think fit …”

Part VI of the Schedule provides for the calculation of the service charge payable by the Tenant. It is provided that the expression "Service Expenditure" shall mean the total cost of the services undertaken by the Landlord in terms of Part VII of the Schedule but under deduction of:-

“(i) any income or revenue received by the Landlord in relation to the operation of the customer car park forming part of the Landlord's Estate less any charges and outgoings reasonably and properly incurred by the Landlord in this respect; …”

VII of the Schedule sets out the services to be provided by the Landlord in the following terms inter alia:-

The tenant's rights to car parking are not similarly protected in the four leases founded upon by the assessor.

The Olympia Centre is a covered shopping mall in the town centre of East Kilbride. It was the 1990 phase in the development of that town centre which already had other large shopping centres, offices and hotels together with entertainment and leisure facilities. The car park at The Olympia, one of seven in the town centre, was owned and occupied by the former East Kilbride Development Corporation.

The lease of the subjects forming Unit 5, The Olympia, between East Kilbride Development Corporation and Etam plc together with the relative Schedule thereto is contained in No. 7 of the assessor's producti8ons. The lease defines the "Common Parts" as follows:-

“1.(3) 'the Common Parts' means all parts of the Centre which do not from time to time comprise Lettable Units; the Common Parts shall, without prejudice to the foregoing generality, include all vehicle ways, loading and unloading bays, precincts, pedestrian ways and malls, ramps, courts, canopies, landscaped areas, car parking areas, entrances and exits, access roads, paths, pavements, stairways, escalators, lifts, toilet areas, notice and sign-boards, the Service Media and service and other areas.”

The leased subjects are defined by reference to the plan attached to the Schedule. Under reference to the "Common Parts" the lease goes on to provide inter alia:-

“7.1 IT IS HEREBY AGREED AND ECLARED that so far as the same shall not be leased by the Landlords or be or become the responsibility of the Local Authority:-

7(1)(a) The Common Parts shall at all times be subject to the exclusive control and management of the Landlords, and the Landlords shall have the right from time to time to alter, stop up or divert any part thereof leaving available for use by the Tenants reasonable means of access to the Leased Subjects.

7(a)(b) The Landlords shall have the right to construct, maintain and operate lighting, hearing, ventilating, cooling, security, fire alarm, smoke extraction and public address systems serving the Common Parts and to administer and police or procure the administration and policing of the same and from time to time to change the area, level, location and arrangements thereof and to restrict the parking and service areas and approach roads.

7.(2) To the extent that all or any of the Common Parts at any time become adopted by or in any other manner the responsibility of any local or other authority by virtue of its own or delegated statutory functions the Common Parts shall to that extent and from that time cease to be the responsibility of the Landlords for any purpose hereunder …”

Part I of the Schedule to the Lease further defines the leased subjects as "ALL and WHOLE those shop premises situate on Levels G and B of the Centre and known as Unit No. 5, The Olympia, East Kilbride …”

Part II of the Schedule defines the common rights granted to the tenant in the following terms:-

“1. Full and free right and liberty in connection with the permitted use of the Leased Subjects for the Tenants, their servants and duly authorised agents in common with members of the public and with the tenants of any Lettable Unit unless and until such time as the same become the responsibility of the Local Authority to use the Common Parts during such hours as the Centre shall be open as may be designated by the Landlords, acting reasonably, from time to time subject however to the terms and conditions of this Schedule and the foregoing Lease and to reasonable rules and regulations for the use thereof as prescribed from time to time by the Landlords and intimated to the Tenants and subject also, in the case of any car parking spaces included in the Common Parts, to the same being available and to the payment of the prescribed charges (if any) therefor”

Part VI of the Schedule of the lease sets out the common services to be performed by the Landlords in relation to the maintenance of the common parts. The services the Landlords are authorised to provide include inter allia:-

“5. Controlling traffic on service roads, service areas and others.

6. Providing for the maintenance, operation, supervision and running of the car parking areas (if any) forming part of the Common Parts including the maintenance and any necessary renewal of the surface thereof, … and, when necessary, renewal or replacement of all relative ticket machines, barriers, signs and associated equipment and all uniforms for the staff thereof …

8. The provision of a security and patrol service and of alarm and surveillance systems, including the provision, maintenance and, when necessary, renewal of suitable security, alarm, surveillance and other like equipment.”

The Glenwood Centre, Glenrothes was described by Mr Balance as a poor suburban shopping centre. It was built in 1971 and is situated in an area of largely local authority housing. In the vicinity of the car park there are various uses besides shopping.

The lease between Glenrothes Development Corporation and Michael Kennan, Jan Keenan and George Keenan relating to the subjects at 7 Glenwood Centre, Glenrothes is contained in assessor's production No. 10. The subjects of lease are defined by reference to a plan appended thereto and include:-

“(one) the building erected thereon known as shop number Seven Glenwood Centre, Glenrothes and …

(two) a right (in common with the landlord and all other persons having a like right from time to time) of access thereto and therefrom over the access roads …

(three) a right (in common with the landlord and all other persons having a like right from time to time) to use the yard areas lying generally to the east and west of the said Glenwood Centre to use for, the purpose of parking vehicles, the car parks lying generally to the north and south of the Glenwood Centre and the Central Courtyard thereof …”

The lease also provides for the Tenants to reimburse the Landlords a proportional share of all sums which the Landlords may from time to time pay or maintaining, repairing, and renewing the said access roads and car parks and yard areas. There is also reserved to the Landlords:-

“(SIXTH)(3)(b) power to issue from time to time general regulations as to the occupancy of property belonging to the Landlords in the New Town of Glenrothes and the Tenants shall be bound by acceptance thereof to act in conformity therewith as the said regulations shall be intimated in writing;”

Clarkston Toll near Glasgow is a suburban shopping centre on a main road with other shops nearby and is adjacent to the local railway station. The car park is situated on the roof of the parade of 17 shops built in the early 1970s.

The lease between Ravenseft Properties Limited and Lomond Clothing Company Limited relating to the subjects at Unit 5, Number 6 The Toll, Clarkston is contained in No. 13 of the assessor's productions. The subjects are defined by reference to a plan attached to the lease and are described in Part I of the First Schedule of the lease as:-

“(a) ALL and WHOLE THAT plot of ground lying at Clarkston - comprising part of the Building and being known as Unit 5 postal Number Six, The Roll, Busby Road, Clarkston …”

By Clause 2. The subjects are let to the Tenant together with the servitude and other rights specified in Part II of the First Schedule and include inter alia:-

“(2) Full and free right and liberty for the Tenant its servants and licensees (in common with the Landlord and all other persons who now have or shall hereafter have the like right or be authorised or permitted by the Landlord to use the same) at all times during the currency hereof subject to the Landlord's right to have either or both of the same taken over by the Local Authority and subject also to the following conditions to use the access stairs and the car park (until if and when taken over by the Local Authority as public) that the Tenant (i) shall comply with such reasonable directions as may from time to time be given by the Landlord in regard to the user of the access stairs and car park …”

The Lease defines "the car park" as "the car park area at roof level shown edged brown on the roof plan annexed hereto or so much of such area as shall from time to time be available for use as a car park”

The lease further grants power to the landlord to dedicate the car park to public use. By Clause 6(viii) it is provided inter alia:-

“(viii) If and when the Landlord shall desire at its absolute discretion to dedicate any one or more of the access stairs the access road and the car park for public use the Tenant shall make no objection thereto and shall at the request of the Landlord give any consent thereto which may be required.”

The Knightswood Shopping Centre is situated in Anniesland Road in the western suburbs of Glasgow. It was built in 1971 and contains two supermarkets, a public house and seventeen retail units. A doctor's surgery and a betting shop are adjacent. There are other shops nearby in Anniesland Road.

The lease between Ravenseft Properties Ltd and John (otherwise known as Sean) Dermod Forde and John Grahame Sparks relating to subjects at Unit 20, Anniesland Road, Glasgow forms No. 16 of the assessor's productions. The subjects let to the tenant are described in Part I of the First Schedule of the lease as comprising the ground floor shop being Unit 20, Anniesland Road, Glasgow defined by reference to a plan. In consideration of the rent the Landlords let to the tenant "ALL and WHOLE the subjects TOGETHER with the common and other rights and servitudes specified in Part II of the First Schedule … But always with and under the servitudes, exceptions and reservations and other rights specified in Part III of the First Schedule in favour of the Landlords …”

Part II of the First Schedule sets out the common and other servitude rights conferred as including, inter allia:-

“(1) Full right and liberty at all times during the currency hereof for the Tenant its servants and licensees (in common with all other persons having the like right from time to time) and for the purposes of ingress and egress to and from the subjects to pass and repass with or without vehicles over and along the service road, car parks and accesses thereto but subject to the Landlords right to have the service road, car parks and accesses thereto taken over by the Local Authority …”

The common rights as so conferred upon the Tenant are subject to the further provision, inter alia:-

“that if at any time during the foregoing Lease and in their absolute discretion the Landlords shall desire to alter, stoop-up or divert the car parks and service road and accesses thereto … or any part or parts thereof the Landlords shall have full right and liberty so to do but at their own expense and subject to the Landlords leaving available for use by the Tenant reasonable means of rear access to the subjects and subject also to the rights of way and drainage hereinafter referred to applying to any such substituted car parks, service road, and accesses or diverted drain or pipe.”

Subject to the foregoing provision the Tenant is granted inter alia:-

“(3) The right in common with the Landlords and all others having the like right to use the car parks, service road and accesses thereto.”

The Lease gives further power to the Landlords to dedicate the car park for public use. Clause Five provides inter alia:-

“(viii) If and when the Landlords shall desire at their absolute discretion to dedicate the pavements and the car park and service road or yard for public use the Tenant shall make no objection thereto and shall at the request of the Landlords give any consent thereto which may be required.”

By Clause Two (5) provision is made for payment by the Tenant to the Landlords of a proportionate service charge in respect of the costs incurred by the Landlord in providing services in connection with maintaining the common parts and providing the other services in connection therewith set out in the fourth Schedule to the Lease.

Submissions

On behalf of the appellants, being the various tenants occupying the warehouse units in the Retail Park, Mr MacIver submitted that the whole value of the car park was included in the rents passing for the retail warehouse units. Moreover, the car park was not in the separate rateable occupation of the landlord but was truly a pertinent of the leases granted by the landlord to the tenants of the retail warehouse units.

Should the appellants fail upon the issue relating to the separate rateable occupation of the car park, nonetheless, if double assessment is established, that in itself should justify the deletion of the separate entry for the car park.

Accordingly he submitted, firstly, that the separate entry for the car park shown as occupied by CIN and assessed at £81,000 should be deleted from the roll. In that event, with the car park deleted, the values of the respective adjoining warehouse units should be entered in the roll at the agreed net annual values set out in the appellants' production No. 35, in terms of the Joint Minute agreed between the parties.

He submitted secondly, that in any event, if double assessment was proved, yet the car park was held to be in the occupation of the landlords and a separate entry was required for the car park, it should be entered at a nil value. The values for the adjoining warehouse units would still be entered at the agreed net annual values set out in appellants' production No. 35.

Should the Tribunal be satisfied that double assessment had occurred, but that the car park should enter the roll at the full value of £81,000, then he submitted, thirdly, that the assessment for the adjoining warehouse units should be correspondingly reduced and entered at the agreed figures set out in appellants' production No. 37. This was simply an arithmetical adjustment.

Fourthly, he submitted that in the event it should be held that the value of the car park was not wholly included in the rents of the units, then it was agreed that the adjoining warehouse units should enter the roll at the net annual values as proposed by the assessor, and set out in appellants' production No. 38.

On behalf of CIN, Mr MacIver adopted the same submissions and moved that the car park entry should be deleted from the roll, or, in any event, the car park should be entered at a nil value.

On behalf of Wickes, Mr MacIver submitted, firstly, that the subjects occupied by them had been valued by the assessor upon a direct comparison with the rentals of the adjoining retail warehouse units. Any adjustment made to the net annual value of the adjoining retail warehouse units should be reflected correspondingly in the valuation of Wickes. Accordingly, if the full value of the car park was included in the valuation of the adjoining retail warehouse units, then, as the same rate was applied to Wickes, there should be no addition for the car parking at Wickes. Upon that basis the valuation of Wickes was correctly stated in appellants' production No. 35 showing a net annual value of £218,500.

Secondly, he submitted that in the event that double assessment was established for the retail warehouse units but that a separate entry for the car park at full value was required, then the net annual value for Wickes would fall to be assessed at the same reduced rate as applied to the retail warehouse units. However, in the case of Wickes there would be the value of Wickes' car park to be added back, resulting in the same net annual values of £218,500, as set out in appellants' production No. 37.

Finally, he submitted that if the appellants' approach was entirely rejected then the net annual value of Wickes should be entered at £230,000 as proposed by the assessor and set out in appellants' production No. 38.

Mr MacIver then summarised the evidence which had been led for the appellants and also referred to the assessor's evidence.

In support of the case that double assessment was established he referred to the evidence of Mr Matheson and Mr Fisher showing the history and development of retail parks as a novel and distinctive genus of retailing. This had developed firstly from single warehouses upon stand alone sites in industrial locations, then through clusters of warehouses with shared parking leading to the present design of retail parks at out of centre locations as at Springkerse Retail Park. At retail park locations various retail warehouse units shared a common car park dedicated to serve the adjacent units. The concept of the retail park was now recognised as a distinct genus or category of retail development both for planning purposes and also for investment purposes. Provision of adequate common car parking was a fundamental requirement for this type of development.

Mr MacIver then referred to the evidence from the tenants, Mr Groves and Mr Feltham. Both witnesses gave clear evidence that the tenant of a retail park required the same degree of assured parking for customers as obtained at a solus site. Without that assurance in the lease the tenant would not take the tenancy. Adequate parking for customers was essential for out of centre destination shopping. The level of rent whether at a solus site or at a retail park was set inclusive of the parking provided.

The evidence of Ms Rennison explained that the market research survey which had been carried out showed that the vast majority of users of the car park were customers of the retail warehouse units.

Mr Cockburn had narrated the development of three distinct styles of modern commercial lease. The first style was a lease where all that the landlord owns, both building and ground, is let to a single tenant. The second style was a style at the other end of the spectrum, a lease where the landlord was letting a shopping centre or office block to a number of tenants and the let subjects were confined to the air space and the area within the interior plasterwork. The third style was in the middle of the spectrum, where the landlord was letting a retail park or row of industrial units. In that situation the let subjects would include the unit structure but not the unbuilt upon areas which were shared in common. The Springkerse leases were closer to this style of lease. The overall intent of the lease, in relation to the car park, was to provide free customer car parking for the duration of the lease. The granter to the tenant of a "right in common in" as well as a right "to the use of" the common parts emphasised the strength of the tenants' position. For the purposes of the present appeal this distinction was not critical.

Mr Cockburn's evidence that the tenants' right to free car parking was an essential pertinent of the lease was not challenged by the assessor. It was important to notice that the provisions in the lease which had been referred to by Mr Cockburn defining the purpose of the use of the car park by the tenants "for short term customer parking", and the provisions that the landlords shall "ensure that at all times there will be reasonably sufficient vehicular and pedestrian access and car parking available for the general public visiting the let subjects …", were not to be found in the leases relating to the comparisons relied upon by the assessor. At Springkerse Retail Park the landlord had no right to retain any part of the car park for his own individual benefit. The landlord did reserve the right to confer upon another the right to use the common parts including the car park. This was a necessary power in order to deal with a let to a new tenant.

The evidence of Mr Spray had confirmed that the return to the landlord was measured solely upon the income stream to be derived from the rental from the retail warehouse units. The supporting infrastructure of service yards, lighting, pedestrian walkways, landscaping and car parking served to create an environment to enable the passing rental levels to be achieved. The fact that the lease contemplated that the landlord might levy a charge for car parking did not affect the tenants and their customers' right to free car parking for the duration of the lease. Moreover, any charge raised by the landlord required to be offset against the service charge payable by the tenants. The witness knew of no retail park in Scotland where charges were made for customer car parking at a retail park. He did not consider that the car park and other common parts were capable of being separately let.

The evidence of Mr Marwick showed that the landlord had no physical presence at the retail park. There was no office for the landlord upon the premises. There was no security contract. Any matter requiring attention was brought to the landlords' notice by the tenants as and when it arose. The landlords' agents visited the retail park upon a monthly basis, taking a drive round the common parts with an occasional visit to the retail warehouse units themselves in order to gain an impression of how well they were trading. The landlord had two contracts with local companies in respect of the collection of litter and the maintenance of the landscaped areas.

Turning to the valuation evidence concerning the general issue of double assessment, Mr MacIver relied firstly upon the evidence of Mr Thomson. The double assessment arose in respect that the assessor proposed a separate entry for the car park, while at the same time, the full value of the car park was included in the assessor's valuation of the retail warehouse units.

A direct comparison could be made with the Peel Centre, Dumfries where five retail warehouses shared rights in common to the car park. The three leases produced relating to the subjects were in similar terms to one another. The rights in common which the tenants enjoyed in the shared car park were similar to the rights enjoyed by the tenants at Springkerse Retail Park. Mr Thomson confirmed that the copy of the relevant entry in the valuation roll of Dumfries and Galloway, showed that only the five warehouse units were entered in the roll. There was no separate entry for the car park. A similar direct comparison should be made with the five retail warehouse units at Telford Street, Inverness and the two warehouse units at Old Perth Road, Inverness. In each case the tenants shared rights to the common parts including the car park. The witness referred to the relative leases and to the net annual values relating to the subjects which had been agreed with the assessor's Department. There was no separate entry in the valuation roll for the car parks at either location.

Evidence to similar effect concerning double assessment had been given by Mr McRitchie. He had confirmed that the lease held by B & Q was in similar, although not identical, terms to the leases of the other tenants at Springkerse Retail Park. He had outlined the history of the development of out of centre retail parks and the history of the treatment of retail warehouse units for rating purposes.

He had referred, in addition to the direct comparisons spoken to by Mr Thomson, to the site at Constitution Street, Aberdeen where B & Q occupied one retail warehouse unit beside a similar unit occupied by Terley Ltd. The car park was shared between the two warehouse units and no separate entry for the car park had been made by the assessor for Aberdeen. The subjects had each been entered in the valuation roll at full value with no separate entry for the common car park.

The witness had then referred to the treatment of retail parks in England and Wales. The practice of the Valuation Office Agency could be seen by reference to the Greymoorhill Retail Park at Carlisle. This retail park was similar to the retail park at Springkerse. The retail units had been assessed inclusive of car parking. There was no separate entry for the common car park. The same practice had been followed at Brent Cross Shopping Centre, outside London.

In the opinion of the witness, these comparisons demonstrated the correct practice that should be adopted when the valuation of the subjects included the full benefit of the car park. In order to avoid double assessment there should be no separate entry for the car park. The witness had further illustrated the mistake he claimed was inherent in the assessor's approach in the present case, by reference to a hypothetical example of two identical and adjacent retail warehouses let out at the same rent. Should the car parks for each warehouse be separated by a boundary then each warehouse would be valued as a unum quid and the rent passing would be held to include the benefit of the car park in each case. Neither of the two car parks would enter the roll. However, if the boundary that separated the two car parks were taken away, so that the car park was then shared between the two warehouse units, then, in addition to taking the passing rents as the value for the retail warehouse units, the assessor would further enter the car park separately calculated at £90.00 per space. It was very odd that the overall value of identical subjects should be so increased simply by the removal of a car park boundary.

Mr MacIver then turned to outline and to criticise the evidence led by the assessor. Mr Balance had accepted in giving his evidence that the common rights enjoyed by the tenants at Springkerse were pertinents of the lease. He had also gone on to state that in his opinion these common rights to the service yard and other common parts were of little worth to the tenant. Yet at the same time he agreed that the use of the service yard was essential to the operation of the retail warehouse units.

He further agreed that the use of the service yard and the car park was essential to the operation of the retail warehouse unit and without them the retail warehouse unit would be unlettable. He had very frankly stated in the course of his evidence that he could not envisage the car park being let while subject to the tenants rights to free car parking. The assessor had further accepted that the values of the car park and service yard were linked to the level of the rentals for the units. It should be concluded that he had, in effect, accepted that there was a double counting in the separate assessment of the car park as the assessment of the retail warehouse units had been measured by the rental level passing. The right to use the common parts were included in the value of the rental for the retail warehouse units.

Mr MacIver further submitted that the comparisons founded upon by the assessor to justify a rate of £90 per car park space were of little assistance. The three nearby solus sites occupied by Safeway, Bella Pasta and Burger King did not support a separate rate of £90 per car space. The net annual values were no doubt agreed by agents, but the likelihood was that the agreement related simply to the total of the assessment and not to the assessor's particular analysis by treating the car parking as a separate element of valuation.

Beyond that he submitted that the many other comparisons founded upon by the assessor had no application to the situation of a retail park. They related to general car parks located in town centres and new town shopping centres where the adjacent tenants did not enjoy comparable rights to the tenants at Springkerse Retail Park.

He referred to the terms of these leases in detail and submitted that upon a closer inspection the apparent rights conferred upon the tenants to the use of the car park and common parts was entirely at the discretion of the landlord. In the lease for the subjects at the Olympia Centre, East Kilbride, the common parts, which included the car park, were subject to the exclusive control and management of the landlords who had the power "to alter, stop up or divert any part thereof.”

In the lease for the subjects at the Glenwood Centre, Glenrothes the landlords reserved, inter alia, the power "to issue from time to time general regulations as to the occupancy of property belonging to the landlords …”

In the lease for the subjects at The Toll, Clarkston the landlords reserved the right to dedicate the car park to public use, to have the car park taken over by the local authority and to alter it.

As for the lease in relation to the subjects at Knightswood Shopping Centre at Anniesland Road, the landlords reserved the right to have "the car parks taken over by the local authority," and "to stop up or divert the car parks”

In effect he submitted the rights which the tenants enjoyed under these leases were merely the right to use the car parks so long as the landlord should chose to provide them. That was very far from the position at Springkerse Retail Park.

The further subjects which had been referred to by the assessor as suggested comparisons were of even less assistance. The subjects at the Almondvale Centre, Livingston, the Plaza Centre, East Kilbride and the Wester Hailes Shopping Centre, Edinburgh were general car parks serving a wide variety of nearby subjects which had not been included in the respective analyses made by Mr Balance. In any event the situation was not comparable at all with the subjects under appeal. The same considerations applied to his comparison with town centre car parks at Airdrie, Coatbridge, Motherwell and Stirling.

In answering the problem posed by the hypothesis put forward by Mr McRitchie, of the two identical warehouses with adjoining car parks, the assessor had merely avoided the difficulty by refusing to accept the hypothesis.

In relation to the appeal of Wickes, Mr MacIver referred to the evidence of Mr McKaig. The witness had relied upon the agreed areas and net annual values referred to in the Joint Minute. The net annual values arrived at for the adjoining warehouse units analysed out at £94 m2. This valuation included the benefit of parking. The same rate that was applied to the adjoining warehouse units should also be applied to Wickes and, as the rate was inclusive of the value of parking, there should be no addition to the value for Wickes in respect of car park spaces. As with the adjoining warehouse units the benefit of car parking was already included in the rentals and in the net annual value derived therefrom. The value proposed by the assessor in respect of Wickes was over expressed as a result of the double counting of the retail warehouse units and the separate entry for the car park. This double counting was carried across to Wickes. The assessor had first deducted the value of the car parking in his analysis of the value of Wickes. He had then applied the rate derived from the adjoining warehouse units, which included the benefit of car parking, to reach a value for Wickes before finally adding a value for the car park spaces available to Wickes.

Turning to the law, Mr MacIver submitted that two issues arose. Firstly, whether the car park was a pertinent of the leases of the various tenants of the retail warehouse units and thus occupied by them in their use of the common parts or whether, as the assessor contended the car park was in the separate rateable occupation of the landlords. The second issue was whether the separate entry of the car park upon the roll as proposed by the assessor constituted a double counting since the whole value of the car park, as the appellants contended, was entirely included in the rentals paid for the retail warehouse units and thus included in the net annual values calculated thereon.

He submitted that the issue of rateable occupation in the present case turned primarily upon the terms of the leases of the retail warehouse units. The terms of the specimen lease to Dixons, were quite different from the leases elsewhere relied upon by the assessor. The common rights to the car parks and service area for the use of the tenants and their customers at Springkerse Retail Park were clearly valuable pertinents of the lease. Indeed this was accepted by the assessor. The landlord had no power to remove or stop up the car park. The tenants and their customers had the right of full and free use of the car park for the purpose of short-term customer car parking. For these purposes the landlords had the responsibility of organising the maintenance arrangements, but beyond that, the landlord had no physical presence or office at their car park nor any security arrangements. He referred to Armour: On Valuation for Rating; Chap. 14 passim and to the cases there cited. He submitted that the four elements of rateable occupation were set out in the opinion of Lord Guest in the case Assessor for Renfrewshire v Old Consert Co. Ltd 12960 SC 226 at p.241, namely,

“… (1) occupation is not synonymous with legal possession. Rateability depends not on the title to occupy, but on the fact of occupation. (2) Rateable occupation must include some actual possession, and it must have some degree of permanency. (3) Where there is a rival occupancy, the question must be one of fact - namely, whose occupation is paramount and whose occupation is subordinate, and this must be considered in relation to the premises and in regard to the purpose of occupation of these premises. (4) The question of control over the premises must be examined in the light of the facts of each case, and the degree of control must be examined in relation to the extent to which its exercise would interfere with the enjoyment by the occupier of the premises for the purpose for which he occupies them, or would be consistent with his enjoyment of them to the substantial exclusion of all other persons.”

As to occupation, this was principally a question of fact and not of title. It was essential that there should be some amount of actual use of the subjects. The person who was actually using the subjects was to be taken as the occupier. Exclusive occupation did not mean that no other person had any rights to the premises. He referred to Armour: Op Cit. paras. 14.05-14.07. While the landlords had a form of de iure right of occupation in common with the tenants, together with the right to factor the subjects, the position remained that the landlords have not occupied the car park as a matter of fact. They have no physical presence, no office, no staff; they simply drive around once every month or two to monitor their investment. The conclusion must be that they are not in de facto occupation of the car park.

If it were to be suggested that there was a rival occupancy of the car park, as between the landlords and the tenants, then the test to be applied was whose occupation was subordinate and whose occupation was paramount, both in regard to the premises and the purpose of the occupation of the premises. In judging the issue of paramount occupation in relation to the control over the premises exercised by one or other party, what was significant was whether the control interfered with and cut across the use and enjoyment of the premises by the occupier and was inconsistent with the purpose for which he occupied, or whether the control merely restricted or limited the occupier's user in some way. Reference was made to Armour Op. Cit. paras. 14.15-14.20, and to the opinion of Lord Sands in the case Assessor for Renfrewshire v Old Consort Co. Ltd cit supra at p.237. It is only insofar as the landlords control obstructs the user of the subjects that the landlords could be said to be in paramount occupation of the car park.

At Springkerse Retail Park there is no evidence of any interference by the landlord to the prejudice of the tenants common rights in the car park. On the contrary, such control as was exercised by the landlords was in the interests of the tenants of the retail warehouse units and in the interests of good estate management. It followed therefore that the tenants were the paramount occupiers. The landlords' role was a subsidiary one and was subject inter alia to the purpose of the car park, namely to provide adequate short term parking for the tenant's customers. One must look not simply at the terms of the lease but at the substance of the transaction.

Further support for the correctness of this view could be derived from the fact that the tenants had undertaken to pay the service charge for the maintenance of the common parts including the car park. It would be odd for the tenants to accept this cost if they were not in occupation. He referred to Armour: Op. cit, paras 14.21-14.24, and to the opinion of Lord Patrick in the case Assessor for Renfrewshire v Old Consort Co Ltd cit supra at p.234.

Upon the meaning of the term "pertinent" he referred to the Stair Memorial Encyclopaedia, Vol. 18, para. 200 and adopted the proposition that "… 'pertinents', comprise those rights which are exercised in association with the land but beyond its boundaries.”

The evidence of Mr Cockburn, should be accepted when he stated that in this type of commercial lease the common rights conferred upon the tenant were essential pertinents of the lease. Once it is accepted that the common right to the use of the car park is a pertinent of the lease then the car park should not enter the roll. The lease, including all its pertinent rights, was valued by the tenant in the rent he agreed to pay. the tenants at Springkerse Retail Park were paying for their common right to the use of the car park. The car park so burdened with these rights was unlettable. The whole value of the car park was included in the level of the rentals for the retail warehouse units. Those rentals formed the basis of the assessor's rate in fixing the proposed net annual value of the retail warehouse units. Accordingly any separate entry for the car park in addition to the units must constitute double assessment. He referred to Assessor for Dunbartonshire v Baird 1926 S.C. 479, and to Assessor for Central Region v Springbank Gardens Residents' Association 1992 S.C. 346.

Concerning the issue of double assessment, Mr MacIver submitted that this arose from the assessor applying the valuation rate for the retail warehouse units at £94 m2 and then entering the car parking in addition at the value of £81,000. The assessor had frankly admitted that no adjustment had been made to the rate for the retail warehouse units to deduct the element of car parking included in the rental level. In his view the value of the car park was not wholly included in the level of the rentals for the retail warehouse units.

However, the whole weight of the evidence was against him upon this point and there was no rental evidence from comparisons to support his position. The shopping centre comparisons were not relevant. The evidence relating to the three adjacent solus sites did not assist.

The assessor conceded that the car park was unlettable while subject to the current rights for the tenants and their customers to park free of charge. Further he had agreed that the service charge arrangement in the tenants' leases was not designed to result in any profit to the landlords. The retail warehouse units are fully valued and include the benefit of the car parking. There is no other source of value beyond the retail warehouse units at the Retail Park. There was no evidence to suggest that anyone would pay £81,000 to rent the car park. The conclusion must be that the separate entry for the car park at the value of £81,000 constituted a double assessment. Reference was made to Armour; Op Cit para. 20.05B and to the cases there cited.

The case of East Kilbride Development Corporation v Assessor for Strathclyde Region 1995 SLT (Lands Tr) 27, and on appeal, Lands Valuation Appeal Court, unreported, 31 March 1995, was a case dealing with the issue of whether a car park formed part of a covered shopping mall and accordingly was not of assistance in the present case. The case of Assessor for Lothian Region v Livingston Development Corporation 1984 SLT 42 was distinguishable as there was no finding in fact in that case that the rents included the car parking and beyond that, the lease provided that after five years car parking could be subject to a charge.

Some assistance could be derived, however, from the case of Assessor for Central Region v Samuel Properties (Developments) Ltd, Lands Valuation Appeal Court 14 June 1985, unreported. In that case both parties were agreed when the case was called before the Lands Valuation Appeal Court that the Mall should enter the roll and the dispute was about value. The Court held that the Livingston case could be distinguished. The whole value of the Mall was reflected in the rental and the values of the shops and there was no evidence to establish that the Mall had any separate value. Accordingly the value was confirmed at nil.

The case of Scottish Development Agency v Assessor for Fife Region 1987, S.C. 139 was clearly distinguishable in that there was no question of the car park either being included in the rental of the factor units or being a pertinent of the units.

Support for the appellants position could be found, however, in the observations made in the case of Ravenseft Properties Ltd v Assessor for Strathclyde Region, 1991 R.A.576; affirmed on appeal 1991 S.C.266. It was to be noted that the lease under consideration in that case was not in fact the same lease as is produced and founded upon by the assessor in the present case.

In that case the Tribunal did find that the whole value of the car parking was included in the rents for the appeal subjects, but went on to find that there was no double assessment as the net annual values proposed by the assessor were comparable to the assessment of adjacent shops in Anniesland Road which did not enjoy any common parking rights. It was to be noted that the rights to parking conferred under the leases in that case were distinguishable from the rights conferred by the leases in the present case. Before the Lands Valuation Appeal Court the issue raised by the appellants was not valuation but whether the car parks were pertinents of the appeal subjects. The Court held that this was not established. The observations in the opinion of Lord Clyde at p.269 are apt upon the topic of double assessment in the present case.

Mr MacIver, submitted that at Springkerse Retail Park the facts of the paramount occupancy of the tenants of the retail warehouse units and the fact of double assessment had both been established.

In his submission on behalf of the assessor, Mr Wright advanced three distinct propositions; (Firstly) the car park was a separate rateable subject in respect of which CIN were the occupiers; (Secondly) the car park had a positive value and (Thirdly) the value of the car park was not wholly included in the rateable value of the retail warehouse units.

The arguments advanced by the appellants in the present case were familiar ones which had previously been considered and rejected by the Lands Valuation Appeal Court. The differences in the leasehold structures founded upon by the appellants were only a matter of degree and Mr Cockburn had acknowledged that the leases for the retail warehouse units were similar to the category of lease that applied to a shopping centre. The level of rental proposed by the assessor for the car park was at the very lowest level for an out of town car park, being merely £90 per space. What the appellants sought to do was to create a great anomaly in relation to the rating of car parks.

Following the case of Assessor for Lothian v Livingston Development Corporation supra the matter was considered by Parliament but the scope of the subsequent legislation was restricted to the exclusion of covered shopping malls. The general practice was that car parks entered the roll at value. It would be quite anomalous to have large subjects, occupied beneficially, and either not entered upon the Roll or entered at a nil value. It would be odder still for the tenants to obtain a £5 per square metre reduction in the rate of £89 per square metre apparently unrelated to any change in the value of the retail warehouse units. The corollary would be that the higher the value of the car park, then the lower the value of the unit.

The position of the assessor which he set out in his evidence was that the car park and the retail warehouse units were separate subjects. The car park was not a pertinent of the units and was not to be confused with the common service area. It was a matter of fact that the car park was occupied by CIN. They had the regulation and control of the car park. The tenants merely shared rights. The question was not whether the right to use the car park was a pertinent of the lease, but whether the car park was a pertinent of the retail warehouse units. The car park had a positive value separate from the value of the units. The fact that no charge was made for the car park was irrelevant. The assessed net annual value of the retail warehouse units no doubt reflect the advantage of the location of the car park but they do not include the value of the car park. There is a benefit to the landlord from the car park which is distinct to that of the tenant. It was an unproved assumption to suggest that the value of car parking provided at a solus site was the same as car parking provided at a shared site.

From the evidence, he submitted that it should be found established that the car park comprised a very large subject of considerable value. It was used as a car park. Car parks occur generally at a variety of different locations and, to a greater or lesser degree, serve other properties and may affect their value.

In connection with retailing, car parks may be attached to a solus site, or a shopping centre of the open air variety, or a shopping centre with a mall, or may be attached to a retail park or indeed may serve general shopping in a town centre. It was not relevant whether a parking charge was raised or not, for the function of the car park remained the same, namely, as a storage place for cars. Car parks had agreed values depending upon location, from £56 per space at the Glenwood Centre, Glenrothes to £385 per space in Stirling Town Centre.

He submitted that the Springkerse car park was not a part of the units. Car parks were generally used by shoppers and sometimes by other users. At Springkerse the car park was generally, but not exclusively, used by shoppers.

As to control of the car park, he submitted that the landlords CIN retained control of the car park. The landlords organised the repair and the maintenance of the common parts, including the car park, and had the power to make regulations about the use of the car park. It was accepted that the degree of control retained by the landlords at Springkerse was not at the same level as the control retained by the landlords at The Olympia Centre, East Kilbride, but the difference was simply one of degree.

At Springkerse the landlord was not merely a factor for the tenants. The landlord derived a benefit from the control of the car park; beyond that there was the possibility of revenue from the imposition of a parking charge and there was the advantage of the control over development. In the same way as a tenant upon a solus site could, for example, allow a fast food van on to the car park, so could the landlord at Springkerse. This position could be contrasted with the position of the tenants. No tenant had any substantial voice in the management of the car park. The tenants had no right to any designated parking spaces but shared the car park with the general public as well as with the landlord. The right to park could only be exercised if there was a space available. At a solus site the tenant could control his own car park and perhaps use it for storage or the placing of bottle banks. Such uses were under the control of the landlord at Springkerse.

It was conceded on behalf of the assessor that the tenants at Springkerse were protected against development adverse to the use of the car park but this was not of special significance. The same applied in practice at other car parks serving retail shops. Generally it would not be in the landlord's interest to develop the car park as this would devalue the shop rentals. In any event planning permission would not generally be likely to be granted.

Moreover the landlord was bound to give peaceable enjoyment to the tenant as a matter of implication at common law. Reference was made to the Stair Memorial Encyclopaedia Vol.13 , para. 250 "The possession to be given does not necessarily include enjoyment of every right which the landlord had in relation to the subjects. On the other hand, it does include the enjoyment of incorporeal rights ancillary to the lease, where these are essential to its purposes”

Accordingly, he submitted that the leases referred to by the assessor may not expressly grant protection for the tenants' car parking as at Springkerse, but in effect there was no material difference. In any event the leasehold structure did not set the level of value. The witness, Mr Feltham had stated that without the rights to the car park they would not have taken the lease. However that may be, the rights granted in the lease did not set the value of the subjects, that was set by the market as a whole. The tenant accepted a package deal, if he wanted to occupy a unit in a retail park, then that was the sort of lease that he got.

He submitted that what was a pertinent of the lease should not be confused with what was a pertinent of the retail warehouse units. It was the proximity of the car park that attracted the value at Springkerse as it did at other retail situations where the tenants had no express rights in the car parking.

He referred to the terms of the specimen lease to Dixons, and emphasised the distinction between the extent of the "let subjects" comprising the retail warehouse unit on the one hand, and the rights in common with the landlord and any other tenant in and to the use of the "common parts" upon the other hand. While it was accepted that it might appear there were significant differences in the terms of this lease to the leases at shopping centres, nonetheless it was arguable that the so called rights reserved to the landlords at shopping centres to divert or stop up the car parks was to cut across the tenant's implied right to peaceable enjoyment at common law. He referred to and adopted the passage in Stair Memorial Encyclopaedia Vol. 13, para. 589 "In return for the various obligations undertaken by the tenant, discussed above, the landlord's obligations are to allow the tenant quiet possession, and to warrant the lease at all hands and against all mortals.”

Concerning the assessment of car parks generally, the assessor's evidence was clear as to his universal practice. If the car park was included within a stand alone site then the whole subjects were valued upon an unum quid basis with other comparable subjects. However, in reaching his assessment the assessor would value the car park and the building as separate elements in his overall valuation. Whereas, if the car park was a separate subject in separate occupation then that would be assessed upon the comparative principle and entered in the roll whether or not the car park was a directly commercial car park or whether no charge was made.

This was the practice adopted by the assessor and applied whether the car park was a separate subject or whether it was exclusively occupied by a supermarket, a restaurant or an office block. That was the general practice of assessors throughout Scotland, although it was recognised that the retail parks to which this practice was presently applied were currently under appeal. Only the minority of assessors, referred to by the appellants, followed the practice which they advocated. There was no evidence of any car park occupied as a separate subject and associated with shopping which was not entered in the roll.

The position in England and Wales concerning the rating of retail parks was not wholly irrelevant, and it was not disputed that their car parks at retail parks did not enter the valuation list.

Brief reference was made to the English cases of Hodgkinson (VO) v Strathclyde Regional Council Superannuation Fund [1996] R.A. 129; and to Church Commissioners of England v Mr Beauchamp (Valuation Officer), Lands Tribunal, unreported, 7 April 1998. He accepted that both cases were of little assistance to the present case.

As to comparisons which the appellants sought to draw with the treatment of the common service area, Mr Wright submitted that the area was a mere pertinent of the units. It was accepted by the assessor that the area cost a certain amount to construct, but it fell upon the other side of the line so far as value was concerned. The assessor conceded that the value of the service area was included in the value of the shops. This was standard practice everywhere. It was recognised that the car park was capable of having a value in its own right but that the service area was not.

The evidence established that car parks everywhere were valued upon the comparative principle. In the present case the assessor acknowledged that there was not a great deal of rental evidence. The position as to the two solus island sites occupied by Burger King and Bella Pasta was not entirely clear, however there was positive evidence that the assessor's rate of £90 per space had been accepted at the adjoining solus site occupied by Safeway.

The rental level for the retail warehouse units was agreed at £94 per m2, the issue was whether this rate included the value of the car parking. He submitted that it did not. There was no evidence for the hypothesis put forward by Mr McRitchie, that the same rent would be paid for shared parking as for exclusive parking. While the evidence of Mr Groves suggested that this was the case as between two similar sites occupied by B & Q, one at a solus site in Ayr and one with shared parking in Kilmarnock, it was not established that the market level for the two locations was the same. No assistance was sought to be drawn from the rental levels either at Dumfries or at Inverness. Accordingly the only comparative evidence, such as it was, supported the assessor.

There were difficulties associated with the valuation proposed by the appellants in relation to the site occupied by Wickes. These lease was part of the sale and leaseback arrangement and the rent was set some 2¾ years after the tone date. The value proposed by the assessor upon a direct comparison with the rate for B & Q should be accepted.

It was well settled in law that a car park was a subject which should be entered in the roll. Reference was made to Assessor for Ayrshire v Troon Town Council 1964 S.C. 424; Assessor for Tayside Region v Angus District Council LVAC, unreported, 29 September 1981. As to the suggestion advanced by the appellants, that the car park was in the rateable occupation of the tenants, the same argument had been advanced and was rejected by the Court in the case Assessor for Lothian Region v Livingston Development Corporation supra. The assessor did not seek to derive assistance from the case Scottish Development Agency v Assessor for Fife Region supra, since the rights of the tenants in that case were not comparable at all to the present. The arguments put forward by the tenants were again considered and rejected by the Court in the case Ravenseft Properties Ltd v Assessor for Strathclyde Region supra. The case was only before the Court upon the question of rateable occupation and the arguments presently advanced by the tenants were rejected. The same result was reached when similar arguments were again advanced in the case East Kilbride Development Corporation v Assessor for Strathclyde supra.

The correct approach to the matter of rateable occupation could be illustrated from the early sewage cases. Reference was made to the cases Inveresk Paper Co v Assessor for Musselburgh 1907 SC 747, and to Assessor for Aberdeen v Magistrates of Aberdeen 1913 SC 712. Where the pertinent was in separate occupation then it must be separately entered on the roll. The case of Assessor for Central Region v Samuel Properties (Developments) Ltd, supra was distinguishable and stood upon its own special facts as in that case no use was made of the mall.

Whether a right was a pertinent of a lease did not assist in determining who was in rateable occupation. He referred to Assessor for Lothian Region v Lowland Leisure Ltd 1990 SLT 353.

The contention for the assessor was that the landlord was in paramount occupation of the car park. That did not entail exclusive occupation. Where there was rival occupation the determining factor was who had paramount control of the subjects. He referred to Armour: cit supra, 14.06 and 14.08. It was the landlord who was in beneficial occupation of the car park. It was not relevant to the landlord's occupation that no profit was in fact made. The subjects were valuable subjects capable of yielding a profit. He referred again to Armour: cit supra paras. 15.08-15.10. He submitted that the appellants derived no assistance from the decision in the case Assessor for Central Region v Springbank Gardens Residents' Association supra as the only persons entitled to use the premises forming the subjects of appeal in that case were the owners of the dwellinghouses. Accordingly there was no rival occupancy.

Concerning double assessment, Mr Wright conceded that if that were to be established, then effect should be given to that finding. However, he submitted that it was not established. The case of Dunbartonshire Assessor v W Baird & Co supra had no application to the present case. No one beyond the ratepayers in that case could use the sewers or be charged for their use. No question arose as to the control of the use of the sewer. In that case it was found that the tenants had right to the sewage facility and this was included in the rents paid. Moreover, the level of rent was related to the capital cost so that the value of the rentals was not separable from the value of the sewer. Furthermore the ownership of the houses and the ownership of the sewer was in the same person, and upon that basis Lord Hunter distinguished the earlier cases Magistrates of Dundee v Assessor for Forfarshire 1912 SC 848 and Assessor for Aberdeen v Magistrates of Aberdeen supra. Finally he submitted there was no finding in that case of any benefit to the landlord.

Similarly the appellants could derive no support from the case Assessor for Central Region v Samuel Properties (Developments) Ltd, LVAC, supra. The case was distinguishable from the present in that the mall was an entirely different type of subject from a car park and there was no evidence that the mall had any separate value. Beyond that the general practice of assessors at that time was not to enter a shopping mall in the roll.

The case Assessor for Dunbartonshire v Baird & Co supra was considered and distinguished in the case Assessor for Fife v Fife County Council 1953 SC 193. In the latter case the rents for the houses did not include the value of the central hearing which was paid for as an extra and Lord Keith stated in his opinion at p.199, "It cannot be said in the present case that the annual value of the installation is reflected in the rents taken from the tenants of these houses." The central hearing undertaking was identified as a distinct heritable subject with a value of its own and must be entered upon the roll. In the present case, the same result should follow. It was not sufficient for the appellants to show that some of the value of the car park was reflected in the passing rents. They must show that the whole value of the car park was included in the rents before it could be held that double assessment had been established. that was not the true position at Springkerse Retail Park. There was some separate and distinct benefit obtained by the landlord from the landlord's control and occupancy of the car park. That being so, the car park must enter the roll.

Decision

In considering the evidence and the submissions made we deal first with the issue of double assessment which was the primary submission of the appellants. This turned upon the issue of whether the whole value of the car park was included in the rentals paid for the retail warehouse units.

The evidence led, in particular from Mr Matheson, Mr Fisher, Mr Thomson and Mr McRitchie was to the effect that retail parks are a relatively recent and distinct form of retailing where the provision of adequate car parking is essential. They referred to the special planning requirements for retail parks and their history and development since 1980.

That a retail park is a distinctive category for retailing was recognised also in the evidence of Mr Spray. According to his evidence, out of town retail parks had been particularly successful often at the expense of city centre locations. He attributed this success to their ease of access, unit size and availability of car parking. He judged the parking provision as perhaps the most important consideration and often the unique feature not available in town centre locations.

This evidence relating to the historical development and planning requirements for a retail park was not challenged by the assessor but he did dispute that this represented a distinct or unique category of retailing. According to his account, no distinction should be made between retailing at a retail park and retailing in a shop in a town centre. Upon this topic we prefer the evidence led for the appellants. Retail parks at out of town locations are a recent and distinctive development and the type of goods traded are for the most pat bulky in nature. This sets a particular importance upon the use of a car and the availability of car parking.

For the appellants it was contended that the landlords sought and obtained their whole return on their investment in the retail park from the rents from the retail units and from no other source. Evidence to this effect was led in particular from Mr Thomson and Mr McRitchie. It was confirmed also by Mr Spray on behalf of the landlords. This evidence was not challenged by the assessor and accordingly we accept it. The assessor's position upon this was to the effect that it was entirely for the landlords to decide how best to secure a return upon their investment, but that did not affect the value of the subjects for rating purposes.

The appellants maintained that the levels of the rentals fixed for the various retail units included the benefit of adequate space for customer car parking. They relied for this upon the valuation evidence given by Mr Thomson and Mr McRitchie; both witnesses were unshaken in their evidence that this was so. They referred to the terms of the lease and stated that in their opinion the provisions relating to customer car parking were valuable provisions for the tenant and this value was included in the level of the rentals.

Their evidence on this was supported by the evidence of Mr Groves. He stated that the benefit of parking at a site was reflected in the rent paid.

Likewise Mr Feltham, gave evidence to the effect that the rent paid by the tenant for the units was paid not only for the unit itself but also for the benefit conferred by the ancillary rights. In all cases in which his company was involved either at the stage of acquisition or rent review, the rent agreed included the fact that there was sufficient car parking. The two were inseparable. The policy of his company was to ensure that car parking was either included within the demise of the premises or that the lease provided for specific rights over the car park. Without the rights to adequate car parking at Springkerse, it was inconceivable that his company would have taken the lease. His company would not take a store if they did not have rights to customer car parking for the duration of the lease.

In his turn the assessor gave evidence to the effect that the existence of convenient car parking would enhance the rents of the units, but this was also the case at town centre locations and at shopping centres where the tenants had no particular rights in the car park. It was his opinion that tenants at a retail park had to accept the terms of the lease offered by the landlord.

We are satisfied that the evidence of the appellants correctly states the position. No tenant so dependent upon the customer having ready access by motor car would sensibly engage in a twenty five year lease without the assurance of the right to adequate parking for the duration of the lease. It is a matter of the greatest importance at an out of town location such as Springkerse, and we are convinced that the benefit of this important facility is wholly included in the rent paid for the leases of the warehouse units.

The appellants contended further that there was no independent value attributable to the car park capable of being realised, burdened as it was with the rights of the tenants and their customers to enjoy the full and free use of the car park at all times. Mr McRitchie gave evidence to this effect, stating his opinion that the car park at Springkerse was not capable of being separately let at any level of value. The assessor in the course of cross-examination agreed that standing the tenants' common rights in the car park, the car park could not be let. Accordingly the tribunal find it established that the car park has no independent value subject as it is to the terms of the leases held by the appellants.

On behalf of the appellants it was maintained that adequate car parking was an integral constituent of a retail park. Provided there was adequate car parking, there was no difference in the rents between an out of town store at a solus site with an exclusive parking area and one with a shared parking area. The rents for both stores would reflect the fact that there was adequate parking available. Mr McRitchie gave evidence to this effect and sought to illustrate the truth of the proposition by posing the hypothesis of two adjoining identical stores upon solus sites, each store having its own parking area separated by a common boundary. According to the assessors current practice each store would be valued as an unum quid upon the basis that the rents included the respective car parks. But, take away the common boundary separating the car parks, thereby making the parking area a shared parking area, and with no other change to the subjects, the assessor would immediately make a new entry in the roll for the common car park at a net annual value in addition to the value of the warehouses.

In considering their hypothesis, the assessor rejected it as based upon an assumption likely to be false, in that the rents achieved for stores with the shared parking were unlikely to be the same as the rents for stores with their own parking area. At a solus site the tenant had more control over the car park. The evidence of Mr Groves, however, was to the effect that there was no difference between the rental levels paid for the occupation of a solus site occupied by B & Q at Ayr and the rental levels paid for a B & Q store at a retail park in Kilmarnock with common parking. The evidence supports the appellant's proposition.

Most assessors in Scotland follow the practice of making a separate entry for the common car park at retail parks but the assessor conceded that most are under appeal.

The appellants were able to obtain support for their position by comparison with retail parks where the values of the units were agreed and included the value of a shared car park, and where there was accordingly no separate entry for the car park. This is the case at the Peel Centre, Dumfries; at Telford Street, Inverness; at Old Perth Road, Inverness and at a site at Constitution Street in Aberdeen. The assessor acknowledged that the car parks at these locations did not enter the roll but nonetheless, he adhered to his position.

These comparisons founded upon by the appellants whilst not conclusive, nonetheless they are factors to which weight can properly be attached as showing that the argument based on very similar facts and circumstances has been accepted.

Furthermore, in the course of the evidence various witnesses for the appellants referred to a general practice existing in England and Wales in which the car park at a retail park is not separately entered in the list. The net annual value of the retail warehouse units includes the value of the car park.

Mr McRitchie testified to this general practice and illustrated it by reference to the particular example at Greymoorhill Retail Park, Carlisle. This evidence was supported by the evidence of Mr Groves who confirmed that B & Q had retail warehouses at 100 retail parks in England and in no case did a common car park enter the list. Mr Feltham stated that his company had 250 units in England, Wales and Northern Ireland all situated at retail parks, and the common car parks were not separately entered in the list. For his part, Mr Balance acknowledged that this evidence represented the practice in England but he suggested it might be reviewed in the future.

The tribunal considers that the general practice in England provides cogent support for the appellants' contention that the rent and the net annual values of the warehouse units at a retail park include the value of the common car park.

The assessor sought in his evidence to justify the separate entry for the car park by referring to the agreed assessments for the three adjoining solus sites at Safeway, Bella Pasta and Burger King. He maintained that in his system of valuation each car park at these three sites had been valued at £90 per space and this was accordingly an agreed and settled rate for adjacent car parks. It is to be noticed, of course, that there is in fact no separate entry for a car park at any of these properties.

The tribunal does not attach much weight to this chapter of evidence. All three sites are solus sites which are valued as unum quid subjects upon a comparative basis with other unum quid subjects, and where no separate entry is made in the roll for car park areas. Moreover in the case of Burger King and Bella Pasta Mr Gibson conceded that the agreement extended only to the figure of net annual value and did not include the methodology adopted by the assessor. We consider little support can be derived from the valuation of a non-comparable unum quid subject when, as was made clear in evidence, the agent negotiating the settlement is primarily concerned with the final figure of net annual value.

In seeking support for his position the assessor maintained that there was nothing unique about retail parks. It could be demonstrated that the rents of retail units at other shopping centres did not include the value of an adjacent car park.

This was a large chapter of evidence, but again the tribunal do not find this evidence convincing as the subjects referred to are not comparable with the situation at a retail park either in terms of location or leasehold structure or in any other relevant respect. As retail shops they have customers but beyond that there was no nexus between the subjects and the nearby car parks.

In those cases where it was sought to demonstrate a nexus, by reference to a lease where the tenant was given common rights to use the car park, in the leases founded upon by the assessor, namely at East Kilbride, Glenrothes, Clarkston and Knightswood, an examination of the terms of the leases reveal that the tenant's common right to use the car park is in effect at the discretion of the Landlord. The position is not comparable with the position t Springkerse Retail Park where the tenants are in effect given the assurance of "reasonably sufficient" free car parking for themselves and their customers for the duration of the let. The tribunal is satisfied that the evidence provided by the assessor from shopping centres has no bearing on the particular circumstances at Springkerse Retail Park.

On the issue of double assessment the tribunal is in agreement with the submission of the appellants that the value of the car park at Springkerse Retail Park is wholly included in the rents paid for the retail warehouse units. The situation which obtains is as figured in the observation of Lord Clyde in the case of Ravenseft Properties v The Assessor for Strathclyde Region supra at p.269 where he observes:-

“This conflict of principle can occur in cases where the occupiers of a number of separate subjects enjoy certain rights in a common area and the whole annual value of that common area is included in the values of the separate subjects. In these circumstances the ordinary rule for the treatment of a distinct land and heritage has to give way to the principle of avoiding double assessment and the subject has t5o be given a nil value or as a matter of practical convenience omitted altogether.”

We now turn to consider the appellants' further argument to the effect that the car park fell to be deleted from the roll in respect that it was a pertinent of the leases held by the tenants and was occupied by them and not by the landlord CIN. The question is whether the facts and circumstances support this position.

We are satisfied upon the evidence that the predominant beneficial use of the car park is by the tenants of the warehouse units. The tenants' customers are able to park their cars conveniently and visit the retail warehouses. In his evidence the assessor described this user as being simply use by members of the general public parking their cars, so that neither the tenant nor the landlord could be said to use or occupy the car park. We reject this characterisation of the occupation of the car park. The function of the car park is dedicated in the lease for the purpose of providing the tenants' customers with facilities for short-term customer car parking. In this context it is unnecessary to investigate at what point a member of the general public becomes a customer of the retail park. The number of persons using the car park for purposes other than visiting the retail warehouse units is negligible. It may be noticed that a similar argument was advanced by the assessor and rejected in the case East Kilbride Development Corporation v Assessor for Strathclyde Region supra.

Notwithstanding the tenants' beneficial use of the car park, it does not follow that the car park is a pertinent of the units. The fundamental test for rating purposes is occupation. This is well settled. In the case Assessor for Lothian Region v Livingston Development Corporation supra the Committee had held that three car parks 'occupied' by the Corporation were pertinents of adjacent shops in the Almondvale Shopping Centre and should be deleted from the roll. The shops were in the course of being let by the Corporation to a property development company under a lease which was still in draft. Under the draft lease the car park was to be available to the general public free of charge for five years. Thereafter a nominal or commercial charge could be made. Lord Avonside summarises the Committee's decision at p.42:-

“Put at its best, the Committee appear to have reasoned in this manner: the car parks were used almost exclusively by shoppers: the existence of convenient car parks was reflected in the rents which shop tenants paid to the developers: if there were no car parks tenants could not be found for the shops: therefore the car parks were provided for the customers of the shop tenants and thus, in reality these tenants had the benefit and enjoyment of the car parks.”

The Court held that notwithstanding that the provision of car parks should be essential to the conception of the shopping centre, it did not follow that they were pertinents of the shops. The Committee had found that the car parks were 'occupied' by the Corporation. The Corporation were the rateable occupiers and the car parks were properly entered in the roll.

Similar questions arose before the Lands Valuation Appeal Court in the case of Ravenseft Properties Ltd v Assessor for Strathclyde Region supra. The appeal concerned two car parks serving the Knightswood Shopping Centre in Glasgow. The ratepayers were the landlords who had let out various shops and other subjects in the centre. It would found by the Lands Tribunal that they also owned and 'occupied' the two car parks. It was found also that the landlords had an absolute discretion, inter alia, to stop up the car parks. The ratepayers relied upon the terms of their leases which included the right in common together with the landlords to the use of the car parks. They relied also upon the fact that car parking was required in order to obtain planning permission for the development; and they relied upon the necessity of the car parks to enable the shops to trade effectively. The Court refused the appeal holding that notwithstanding the common rights to the car park and the need for car parking, it did not necessarily follow that the car parks were pertinents of the shops. Although the issue of paramount occupation was not thoroughly explored before the tribunal, the findings made clear that the car parks were in the separate rateable occupancy of the landlords and must enter the roll.

Those cases may properly be distinguished from the present in respect of the very different terms contained in the leases and the express findings there made as to the occupancy of the car parks. The question that arises in relation to the car park at Springkerse is the decision as to who has the paramount occupancy. The contention for the assessor was that the landlord was in control of the car park and 'occupation' by monthly visits was all that could reasonably be expected or was necessary to maintain that control.

There is no doubt that the car park has value, but the contention for the appellants is that this value has been wholly transferred to the tenants for the duration of their leases. The extent of the control exercised by the landlord in no way interfered with the tenants beneficial enjoyment of the car park. On the contrary the landlord's responsibility for arranging the maintenance of the common parts including the car park was directed to establishing good estate management and was in the interests of the generality of the tenants in the landlord's estate. The landlord's efforts are to be directed to serving the interests of the tenants and in the securing of good estate management.

In considering the matter it is important to examine to what extent, if any, the landlord can control or frustrate the tenants' enjoyment of the use of the car park. In this connection little importance can be attached to the power given to the landlord to direct traffic or arrange the positioning of skips. These matters are ancillary to the securing of good estate management and the proper administration of the common parts of the landlord's estate.

What is of greater importance is the landlord's reserved right to erect a new building and "the right to deal with any property adjoining, opposite or near to the said buildings as the landlord may think fit, …". It would appear to follow from these provisions that the landlord could, for example, increase or diminish the size of the car park. This at first sight indicates a considerable degree of control over the car park.

But it is significant that neither the area, nor the location of the car park is specified in the lease. What is assured to the tenant is "reasonably sufficient" car parking. The landlord's rights to develop are subject always to the provisions protecting the tenants interest in the common parts for the purposes for which they were intended. The most significant protection of the tenants' position in relation to the car park is the landlord's obligation to "ensure that at all times there will be reasonably sufficient vehicle and pedestrian access and car parking available for the general public visiting the let subjects and other parts of the Landlord's Estate." Accordingly, no matter how the landlord may chose to deal with the land comprised in the landlord's estate, "reasonably sufficient" car parking is secured for the tenants and visiting customers for the duration of the tenants' lease. We are satisfied upon the evidence, and upon our own inspection of the subjects in use, that the present area is reasonably required to serve the warehouse units. Were the situation to change, then of course the matter would have to be assessed upon the facts and circumstances then existing.

Upon this issue we consider that some assistance can be had from the decision in Assessor for Renfrewshire v Old Consort Co. supra. The question in that case concerned the rateable occupancy of a cocktail bar, coffee bar and shop in the terminal building at Renfrew Airport. The Ministry of Transport and Civil Aviation was in control of the terminal and beyond that had a degree of control in the supervision of the conduct of the ratepayers' business by way of approving prices, advertising material, and the like. In the result the Court held that the ratepayers had the paramount occupancy and the subjects must enter the roll with the ratepayers as occupiers. Lord Patrick in the course of his opinion, reviewed certain English authorities bearing upon the topic of competing occupancy. He quoted a passage from Lord Russell of Killowen in Westminster Council v Southern Railway Co 1936 A.C. 511 as follows: "In certain cases there may be a rival occupancy in some person who, to some extent, may have occupancy rights over the premises. The question in every such case is one of fact - namely, whose position in relation to occupation is paramount and whose position in relation to occupation is subordinate: but in my opinion the question must be considered and answered in regard to the position and rights of the parties in respect of the premises in question." Lord Patrick concluded at p.234 "It is, in short, the quality of the occupation of the tenant which has to be considered." We accept the submission made on behalf of the appellants that the landlord exercises no control that interferes with the tenant's enjoyment of the car park. We accept that the landlords' reservation of rights to the car park is insufficient to detract from the tenants paramount occupancy. Accordingly we find that the tenants are the occupiers in rateable occupation of the car park.

We conclude for all these reasons that the entry for the common car park at Springkerse Retail Park should be deleted from the valuation roll and the net annual value for each retail warehouse unit entered in the valuation roll in terms of the Joint Minute for the parties and set out in appellants production No. 35 in Appendix I.

We regard the appeal in respect of the subjects occupied by Wickes as consequential, turning as it does upon the rate determining the net annual values of the warehouse units in the retailark. We confirm that the subjects occupied by Wickes should be entered in the appropriate valuation roll at net annual value £218,500.