This is an appeal under the provisions of Regulation 6(1) of the Valuation Appeal Committee (Procedure in Appeals under the Valuation Acts) (Scotland) Regulations 1995 against the refusal of the Valuation Appeal Committee to refer to the Tribunal appeals relating to three separate “health centres” in Lanark, East Kilbride and Forth respectively.
The criteria for referral appear in Regulation 5 which read short provides that where it appears to the Committee that —
“… (c) the law applicable to the case is uncertain or difficult to apply; [or] (d) the case raises a fundamental or general issue likely to be used as a precedent in other cases; …
the Committee shall refer the appeal to the Tribunal for determination, … ”.
It was not disputed that an appeal made to the Tribunal under the provisions of Regulation 6(1) is to be treated as an open appeal. In the present case, the Committee gave a careful statement of reasons. We have not been persuaded that they erred in any way, but we have to deal with the submissions as presented to us and, inevitably, have to consider the matter afresh.
The subjects were all buildings occupied by Primary Care NHS Trust as health centres. The productions and submissions disclosed a varied pattern of treatment of premises in Scotland occupied in this way. In nearly all cases valuations had eventually been agreed. There were, however, two outstanding appeals in Fife as well as the current subjects.
It was not disputed that if there was no proper comparative open market rental evidence, valuation should proceed on the contractor’s principle. The parties were in dispute as to whether there was any suitable comparative evidence. It emerged that the assessor proposed to rely on evidence of open market figures relating to General Practitioners' surgeries within the Lanarkshire area. Mr Clarke, for the assessor, made clear the assessor’s position that no attempt would be made to rely on any comparative exercise based on figures agreed in respect of health centres occupied by Primary Care NHS Trusts.
For the ratepayers, Mr Haddow submitted that an important issue would be that of categorisation. It would be necessary as a first stage in any comparative exercise to determine whether health centres and GP surgeries were properly to be viewed as falling within the same category for rental purposes. In the event, this was not disputed and it is unnecessary for us to deal with the preliminary legal submissions made on this point. Mr Haddow referred to Edinburgh Merchant Company Education Board v The Assessor for Lothian Region 1981 SC 377. The need for careful analysis of use was not disputed but we do not consider that the case, itself, provides any significant guidance. It was a case where parties had, apparently, agreed the existence of certain appropriate categories for application of different decapitalisation rates. The question was one which turned on the facts of the particular case. Certain dicta in the case pointed to the potential danger of categorisation. Mr Haddow did accept that this was an issue which required to be approached on a broad basis.
We heard no submission to suggest that the law was in any way in doubt. The Tribunal considered the principles to be applied in Spudulike Group Limited v Tayside Valuation Joint Board 2002 RA 91 at 114.
In the present case it would be contended for the ratepayers that the subject of appeal and the various GP surgeries to be relied on were not within the same category. It was accepted that there were elements of similarity. This meant that the task of identifying the relevant distinctions would not be straightforward. Issues of size, space and function would have to be assessed. It was contended that the legal principles would not be easy to apply.
It was also pointed out that the figures derived from the so called open market value rentals of GP surgeries were not necessarily reliable figures. General practitioners were funded by budget allowances. In particular they received a building allowance. Rent would be covered by that allowance. It was suggested that general practitioners in negotiating rents would not have the same incentive as a primary payer would have.
Mr Haddow pointed out that until 1995 health centres had been valued in agreement with the Treasury Valuer. Since that time there had been no uniformity. There had been no decided cases to give guidance. Even if the tribunal was not persuaded that the law would be difficult to apply within the meaning of head (c) of the Regulation, it was clear that the case would raise general issues, likely to be used as a precedent in other cases. This would be of relevance to the outstanding Fife cases and of guidance in any future revaluation.
Mr Clarke set out the assessor's position. It would be contended that there was no justification for a distinction of categorisation between health centres and GP surgeries. There would be differences in physical layouts but no essential difference in overall function. A Committee would have no particular difficulty in applying the law. The issue would turn on the evidence available in respect of particular subjects. A decision reached in respect of subjects in Lanarkshire would not necessarily be of assistance in regard to subjects in a different location.
We understood him to accept that the guidance provided by the Scottish Assessors Association was misleading in its description of the "Comparative approach". That did not reflect the need to identify appropriate categories of use. However, the guidance was not relied on by the assessor in the present case.
Both counsel recognised that in dealing with appeals under Regulation 6(1) it was inappropriate to attempt a full presentation of all the material which would ultimately require consideration by the body entrusted with the decision making role. The question before us relates to the proper means of procedure, not one which affects the substantive rights of parties.
We were obliged to counsel for the well focused and concise nature of the submissions. Although unexpected difficulties may, of course, arise, we are confident that the submissions gave us a reasonably clear picture of the nature of the issues which will fall to be determined in this case. Valuation Appeal Committees have a well established record in dealing with valuation for rating. In that context, we are not satisfied that the relevant law can be said to be likely to be “difficult to apply”. It is common place for Committees to have to examine and assess a range of evidence bearing on nature and use of allegedly comparable subjects. That is the exercise they will require to undertake in the present case. Our impression is that the facts will be fairly straightforward. Some nice questions may arise but these are likely to turn on the detail of particular circumstances rather than on any difficulty in applying the relevant law.
It can be accepted that a health centre could fall to be assessed in a different category from an old fashioned doctor's surgery or consulting room. However, different issues will arise in relation to more modern buildings. It appears to us, that in modern practice, GP surgeries take a variety of forms. It appears from the physical description of the health centres in question that health centres too may, come in a variety of forms. It is inappropriate in the present context for us to express any view on particular issues which may have a bearing on the merits. Plainly both the physical characteristics and the nature of the use of the different premises will require to be considered not only to determine whether distinct categories of use and occupation can be identified but to determine the weight to be given to the particular comparators.
It was agreed that the value which would be produced by assessment on the contractor’s basis would be very much lower than the figures presently contended for by the assessor. However, this cannot be viewed as an element of difficulty in application of the relevant law.
We accept that there is a sense in which the decision in the first case on any particular topic is likely to be of interest and to have a bearing upon subsequent cases in the same general area. However, as was said in B&Q v Renfrew Assessor (VA-2002-08), we consider that use of the terms "fundamental" and "precedent" in the context of head (d) require identification of a distinct issue with an appreciable bearing on valuation practice. It is not sufficient to say that the approach taken in one case might help throw light on the proper approach to other cases. The relative weight to be given to different bodies of evidence will normally be a matter which requires to be left to the discretion of the adjudicating body in any particular case.
In the whole circumstances it does not appear to us that the law applicable to the case is likely to be difficult to apply to the issues arising in relation to the particular subjects of this case nor that the case raises an identifiable fundamental or general issue likely to be used as a precedent. The appeal must, accordingly, be refused.