Lands Tribunal for Scotland

OPINION

TDG plc v Fife Assessor

Summary

This an appeal against a decision of the local Valuation Appeal Committee not to refer two appeals relating to a cold store to the Tribunal. The appellants claimed that three of the statutory grounds for referral were established, in relation both to the method of valuation and also to an argument in relation to over-capacity. Having considered the extent of the issues which appear to arise in the substantive appeal, the Tribunal has not been satisfied that any of the tests which relate to complexity or to issues likely to give rise to a precedent in other cases is satisfied. We have therefore refused the appeal.

The Issues

Section 1(3A) of the Lands Tribunal Act 1949 authorises determination by the Tribunal of appeals referred to it by local valuation appeal committees. Section 1(3BA) confers on the Tribunal jurisdiction to hear appeals against decisions of valuation appeal committees not to exercise the power to refer.

Regulation 4 of the Valuation Appeal Committee (Procedure in Appeals under the Valuation Acts) (Scotland) Regulations 1995 provides for either the assessor or the appellants to seek referral. Regulation 5(1) provides as follows:-

“(1) Where an application under regulation 4(1) has been made, and it appears to the Committee that-

(a) the facts of the case are complex or highly technical;

(b) the evidence to be given by expert opinion is complex or highly technical;

(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 … ”

If any one of the grounds in Regulation 5(1) is established, the case must be referred. An appeal under Section 1(3BA) is ‘open’, in the sense that the Tribunal is not confined to considering whether the Committee erred in its decision but rather has to reach its own decision on the materials placed before it as to whether any of the grounds is established.

The subjects of appeal are a cold store at Faraday Road, Southfield Industrial Estate, Glenrothes, Fife. The appellants have two outstanding appeals against the entry in the Valuation Roll at £234,000 net annual value. Firstly, they have a revaluation appeal in which they contend for a valuation of £115,000 with effect from 1 April 2000. Secondly, they have a ‘running roll’ appeal in which they contend for a valuation of £80,000 with effect from 27 September 2002 on the ground of a ‘material change of circumstances’. The Valuation Appeal Committee refused their application to refer. They appealed timeously against that decision.

In their appeal, the appellants relied on grounds (a) and (b), in each case on the basis of complexity rather than ‘highly technical’, and on ground (d). The assessor opposed the appeal.

Procedure

The appeal was heard at an oral hearing. The appellants were represented by Anthony MacIver, Advocate, instructed by Messrs. King Sturge. The assessor was represented by Geoffrey Clarke, Advocate, instructed by Fife Assessor. In addition to the appellants’ written Grounds of Appeal, the Tribunal were provided with a letter outlining the assessor’s answers, a copy of the Committee’s reasons for their decision, a 1995 Memorandum of Agreement for England and Wales, and a schedule of comparisons which had previously been intimated by the assessor.

Submissions

Mr MacIver explained that the subjects were a specialist class of property. There was some limited rental evidence in England. There had been agreements between the Valuation Office and representatives of major cold store users in 1995 and 2000. The appellants understood that the 2000 Agreement, like the 1995 one, was to be applied in Scotland also. The 2000 agreement was not produced but was said to be similar but with larger allowances than in 1995. Mr MacIver described aspects of the Agreement, which involved an addition of 25% to the industrial tone rate for the locality (as to which basic scheme there was no particular area of dispute) with a system of allowances for layout, age and obsolescence depending on which of five categories described in the agreement the subjects fitted. Mr MacIver said the specifications of these categories were complex. The assessor and the ratepayers’ surveyor in fact agreed on the basic categorisation of the subjects, but ‘there was still some area of divergence’. There was in addition a system of height adjustments, but there was no material dispute on that issue.

Mr McIver also explained developments within the industry. There had been moves from food processing to cold stores, and from frozen to chilled foods, and also design and technological advances. Public cold stores, like the subjects, essentially involved distribution, and most were situated around the Birmingham area. The subjects were thus not well located. It was proposed to lead evidence, invoking Section 15 of the Local Government (Financial Provisions) (Scotland) Act 1963, in relation to the appellants’ around 15 cold stores across the country. The assessor had failed to interpret the 2000 Memorandum correctly. Harmonisation was another important aspect. The facts that cold stores were subject to a Memorandum of Agreement, and that a senior partner of King Sturge was involved, indicated complexity.

Mr McIver said that the appellants also had arguments relating to over-capacity. The subjects had been operating below capacity for some years. There was an issue about over-capacity in the revaluation appeal, but this particularly arose in the material change appeal, which was based on closures by two food companies who had used this cold store. In this connection, reference was made to Armour at 20-26, where cases involving claims to allowances for industrial depression were considered. In Colville & Sons v Assessor for Lanarkshire 1922 S. C. 460, at 486, Lord Cullen had referred to ‘very complex considerations of which it is very difficult for us, as for a Valuation Appeal Committee, to make a reliable appreciation … ’. There was a general issue, which would affect subjects such as a container terminal and flour mills, in relation to the 2000 revaluation, and also in relation to the more recent changes of circumstances. Over-supply had been considered and allowances made in English cases.

On behalf of the assessor, Mr Clarke said that these were very straightforward appeals. While there was no direct rental evidence for cold stores, there was general acceptance that the adaptation of industrial premises for this use produced a higher rent, but also increased potential for decrepitude, for which allowance had to be made. There had in fact been no discussion with Scottish assessors about the 2000 Memorandum, and Scottish assessors, in discussion with rating surveyors, had effectively used the scheme in the 1995 Memorandum. All other cold stores in Scotland had been agreed on that basis, including three with the ratepayers’ surveyor. In one of these, the Glasgow Assessor had been persuaded to give some allowance, but not for over-capacity. There was anyway no particular change in the 2000 Memorandum. The application of the scheme itself was not complex and in any event not understood to be much in issue. Any complexities were complexities of measurement which, if not agreed, would be suitable for the Committee.

Mr Clarke said that the issue of over-capacity, if it arises, will not be complex. It was accepted that part of the subjects was not being used. The Valuation Office Agency had indicated that further allowances had only been granted in relation to one particular category of apparently very obsolescent subjects. There was no general issue likely to be used as a precedent. Colvilles adjustments were not appropriate except when based on contractor’s valuations and not industry-specific, but some adjustment could be foreseen in special circumstances. Local committees dealt with material change appeals in relation to immediate events such as other premises closing.

Tribunal’s Consideration

We are of the clear opinion that this appeal fails.

We have to decide appeals such as this not on any view about the merits of either side’s position in the substantive appeals, but on our impression in relation to the statutory grounds. In this case, it seems to us that the arguments for complexity of fact, and also complexity of opinion evidence, fall away once the extent of matters in issue becomes apparent. Applying the statutory tests of complexity in the context of non-domestic rating appeals, we find it difficult to accept that any of the matters set out in the 1995 Memorandum of Agreement can properly be described as complex, but in any event there appears to be little or no disagreement on them. As far as over-capacity is concerned, the factual issues as described to us do not seem to be complicated. There is clearly an issue about disadvantages arising from the subjects’ location and there may have to be consideration as to whether that is already reflected in a valuation which takes as its starting point the local level of industrial value or whether it particularly affects subjects which must be valued as a cold store. The 1995 Memorandum does not refer to this issue and neither, apparently, does the 2000 Memorandum. We infer from that that this is not a significant national issue, and our impression is that as an issue arising locally, whether in the revaluation appeal or in the material change appeal, it raises local considerations of a type which quite often arises and which do not appear to us to be complex. Lord Cullen’s reference to complexity in the Colvilles case was not, we think, directed at such local issues.

As to ground (d), we are not persuaded that there is any fundamental or general issue in this case. The other cold stores in Scotland are all agreed at revaluation. The material change issue appears to us, as we have indicated, to be mainly a local one. We are not persuaded that a decision about over-capacity in this case would provide a precedent for other types of subjects. It is not suggested that the law is either uncertain or difficult to apply (ground (c)).

For these reasons, we have refused this appeal.