1. This is an appeal by NHS Grampian against a decision of the Moray Valuation Appeal Committee (“the Committee”) dated 4 March 2020 whereby the Committee rejected the appellants’ application under reg. 4(1) of the Valuation Appeal Committee (Procedure in Appeals under the Valuation Acts) (Scotland) Regulations 1995 (“the Regulations”) for referral of this case to the Tribunal.
2. The subjects with which the case is concerned are Leanchoil Hospital, St Leonard’s Road, Forres. It was closed in 2018 due to “a persistent and significant inability to staff the facility” (Minute of Meeting of the Moray Integration Joint Board dated 29 November 2018) following which the appellants applied to the Grampian Assessor (“the Assessor”) to have the valuation in the Valuation Roll amended with effect from 1 April 2019 on the basis that the closure amounted to a material change of circumstances (“MCC”) in terms of sec 3(4) of the Local Government (Scotland) Act 1975 (“the 1975 Act”). (There is confusing information in the papers submitted whereby it is suggested on behalf of the Assessor that the closed state of the hospital had already been reflected in an agreement between the Assessor and the ratepayer’s agent which was the basis of the entry in the 2017 revaluation, but that cannot be the case if closure only took place in 2018, unless the 2018 decision merely formalised earlier de facto closure. However none of that matters for the purposes of this appeal.)
3. The Assessor having refused, the appellants appealed to the VAC under sec 3(4) of the 1975 Act and followed that up by asking the Committee to refer the matter to this Tribunal in terms of reg 4(1) of the Regulations.
4. In asking the Committee to make that referral, the appellants relied on paras (c) and (d) of reg 5(1) of the Regulations, which read as follows:
“(c) the law applicable to the case is uncertain or difficult to apply;
(d) the case raises a fundamental or general issue likely to be used as a precedent in other cases”
5. By its foresaid decision the Committee refused the request, holding, in relation to (c), that “the facts in this case are straightforward and the Committee do not consider the law applicable to this case to be either uncertain or difficult to apply” and, in relation to (d), that “the case is a simple matter of determining whether the mere closure of this subject constitutes a material change of circumstances”.
6. The appellants have now appealed that decision to us under reg 6(1). Parties have agreed that we can decide the appeal on the basis of their written submissions. These submissions have been prepared by Mr Christopher Haddow QC for the appellants and by Mr B. J. Gill, advocate, for the respondent.
Assessor for Glasgow v Schuh Limited 2012 SLT 904
B & Q Plc v Assessor for Renfrewshire LTS/VA/2003/2 decision of 22 Jan 2003
NHS Greater Glasgow & Clyde v Assessor for Renfrewshire 2014 SLT (Lands Tr) 52
Tesco Stores v Fife Council Assessor 2016 SLT 1260
The Old Golf Course Ltd v Assessor for Fife 2015 SLT (Lands Tr) 181
United Kingdom Atomic Energy Authority v Highland Assessor LVAC,  RA 65
Armour on Valuation and Rating, 5th ed
7. The appellants submit that the Committee was wrong in holding that neither ground of referral was satisfied.
8. With reference to (c) they state, somewhat baldly, that “[t]here is plainly uncertainty about the position in law about the valuation of hospitals which have become partially or wholly redundant, particularly between revaluations”. The rest of what they have to say, however, relates to the merits of the substantive appeal and to making out the case that closure of Leanchoil amounts to an MCC rather than to the allegedly uncertain state of the law or any difficulty in its application. They also produce evidence of other hospital closures which have resulted in changes to the relevant entries on the Valuation Roll. They argue that if closure can result in amendment of the entry at revaluation “the rationale for it not amounting to a material change of circumstances between revaluations is … a matter which would require to be examined to determine the law applicable to the current valuation of the appeal subject”.
9. With reference to para (d) the appellants submit that the (allegedly) different practice being followed by the Assessor in this case (different, that is, from the practice of other Assessors in Scotland) means that a decision in this case would be likely to be used as a precedent in other appeals across Scotland; in other words that this conflict in Assessors’ practices requires to be resolved by an authoritative decision one way or the other which would then be followed in other cases.
10. They refer to other situations involving partial redundancy of subjects which have been valued, as hospitals are, on the contractor’s principle, such as United Kingdom Atomic Energy Authority v Highland Assessor. The relevance of the reference to the contractor’s principle for the appellants’ argument is (i) that subjects are valued on that principle only because there are no comparable subjects for which rental evidence can be led, (ii) that what that means, in turn, is that there is only one possible hypothetical tenant for such subjects, (iii), that if that tenant has no further use for the subjects there is no other hypothetical tenant left and (iv) that that results in a material change of circumstances.
11. The respondent invites us to refuse the appeal.
12. It is said on his behalf that much of what the appellants say is relevant only to the substantive appeal – to the question whether the closure amounts to an MCC – and not this one.
13. With reference to ground (c) of reg 5(1), the respondent says the law is neither uncertain nor difficult to apply. Instead this is an area in which “there is sufficient authoritative guidance on the law, and the issue … is relatively clear cut, with the result that neither part of ground (c) is satisfied; NHS Greater Glasgow & Clyde v Assessor for Renfrewshire, para . He points out that the appellants do not explain why the law is said to be uncertain or difficult to apply. Attention is drawn to the appellants’ assertion that there is a settled practice among other Assessors in Scotland on this question as being at odds with their assertion that the law is uncertain or difficult to apply.
14. The question whether an MCC exists in a particular situation is, says the respondent, always a question of fact and degree (Tesco Stores v Fife Council Assessor, para ) and it would not, therefore, be open to the Tribunal to decide any general question as to whether the declared redundancy of a hospital is an MCC.
15. Further and in any event, the legal principles applicable to the determination of whether an MCC exists are, it is said, clear and well established, having recently been examined authoritatively in Assessor for Glasgow v Schuh Limited. The submissions go on to identify four principles which, it is said, are clear, viz that:
(a) to constitute an MCC there must be a change of circumstances affecting the value of the subjects (Armour, para 3-17);
(b) the onus of demonstrating such a change is on the appellant (Armour, para 3-19);
(c) what is required is “some new and significant event fundamentally altering the nature of the subjects” (Schuh, para ); and
(d) the scope of an MCC is therefore “severely limited” (Schuh, para )
16. It is also submitted that it is clear that voluntary sterilisation of subjects by their occupier falls to be disregarded in making a valuation (Armour, paras 18-11 and 18-16). The subjects must be valued on the hypothetical basis that beneficial use is being made of them. Determining whether this is a case of voluntary sterilisation is something the Committee is, it is submitted, easily capable of doing.
17. Likewise it is argued that criterion (d) is not met. In order to meet it a distinct issue with an appreciable bearing on valuation practice has to be identified; it is not sufficient to say that that a decision might throw light on the proper approach to be followed in other cases; The Old Golf Course Ltd v Assessor for Fife, at para 42.
18. The Assessor also submits that, because an MCC is always a matter of fact and degree, no single case is capable of being a precedent in other cases; Tesco, para .
19. Dealing first with uncertainty, the issue in this case is whether the closure of a hospital for the reasons given in this case amounts to an MCC. There is, say the appellants, a conflict of practice among Assessors on that matter, with the present respondent being out of step with the rest, or much of the rest, of Scotland. That is not, however, tantamount to the law being uncertain: the law can be perfectly clear yet a maverick Assessor might take a different view. Indeed the thrust of the appellants’ case is to that effect: it is argued that it is the unanimous, or near unanimous, (and correct) view of other Assessors that hospital closures can indeed amount to MCCs. That is not an assertion of the law being uncertain: only an assertion of one Assessor being out of line.
20. In our view, where this ground is being relied upon an appellant should be able to identify how the law is uncertain – what it is that is uncertain about the law – and explain what the competing interpretations of the law are. All we have here is a description of allegedly different practices and that is not enough to persuade us that there is such uncertainty as to the law as would merit removing the case from the Committee. Indeed we consider that the law as to what constitutes an MCC is very clearly laid down in the Schuh and Tesco cases, along the lines set out in the respondent’s submissions.
21. As to difficulty in applying the law, the appeal does not draw attention to any particular difficulty: only that the respondent is not applying the correct law. This limb of the ground is therefore not really relied upon by the appellants and it certainly does not avail them anything. There is no suggestion that determining whether an MCC has happened in this case is going to be any more difficult than in any other case.
22. What is looked for here is a “distinct issue with an appreciable bearing on valuation practice”; B & Q Plc v Assessor for Renfrewshire. Given the unanimity, or near unanimity, of practice among other Assessors, described by the appellants, if they are successful in establishing an MCC in this case, it will affect practice only in the Grampian area and a decision upholding the substantive appeal will only, therefore, be of limited effect. Moreover, we think there is some force in the respondent’s submission that MCC cases are, by their nature, highly dependent on their own particular facts, and that a decision in one is therefore unlikely to be determinative of other cases. Hospitals might be closed for a variety reasons and not always for the ones which led to the closure of Leanchoil. For instance, closure might be a result of the buildings having become obsolete or unusable – a physical change in the subjects themselves - which would give rise to rather different considerations from the voluntary sterilisation with which this case is concerned.
23. For those reasons we cannot identify any fundamental or general issue which is likely to be used as a precedent in other cases.
24. Neither of the grounds of appeal having been made out, the appeal is refused and the matter remitted to the Committee.