UKSC Rating Decisions Do Not Constitute a Scottish “Material Change of Circumstances” (and Cardtronics Is Not a New-Valuation-Principle Trigger)

1) Introduction

This Lands Valuation Appeal Court decision concerns whether a judgment of the UK Supreme Court on rating law in another UK jurisdiction can, by itself, amount to a “material change of circumstances” (“MCC”) justifying an in-cycle alteration of the Scottish valuation roll.

The appellant, Waheeda Akram, sought deletion of a separate valuation roll entry for the site of an external automated teller machine (“ATM”) at 72A Raeburn Place, Edinburgh, contending that the site should instead be treated as part of the adjacent shop (72 Raeburn Place) and valued within that entry.

The core issue was whether Cardtronics UK Ltd v Sykes [2020] UKSC 21, [2020] 1 WLR 2184 (decided on 22 May 2020), which addressed rateable occupation of ATM sites in England and Wales, constituted an MCC affecting the value of the Scottish subjects—either as a “relevant decision” under the statutory definition, or under the definition’s general opening words.

2) Summary of the Judgment

The appeal was refused (Lord Doherty delivering the main opinion; Lords Malcolm and Ericht concurring).
The court held that the definition of MCC in section 37(1) of the Local Government (Scotland) Act 1975 must be construed purposively, consistent with the policy that the roll is generally “frozen” between revaluations, save for limited exceptions.
On the ordinary and natural reading of section 37(1), a UKSC decision on rating of hereditaments outside Scotland does not constitute “a change of circumstances affecting [Scottish subjects’] value”, and is not a “relevant decision” within paragraph (a) of the statutory definition.
Even if such a decision could theoretically qualify, Cardtronics did not establish a new valuation principle; it applied established principles to particular facts, and expressly treated the Scottish decision Assessor for Central Scotland Joint Valuation Board v Bank of Ireland [2010] CSIH 91, 2011 SC 265 as correctly decided on its facts.
The facts found by the tribunal aligned with Bank of Ireland rather than Cardtronics; accordingly, the ATM site remained in separate rateable occupation by the ATM operator, not the retailer.
The First-tier Tribunal’s reasons were held to be adequate and intelligible.
Had MCC been established, the court indicated the effective date would likely have been 1 April 2022 (the beginning of the year of written intimation), applying the proviso to section 2(2)(c).

3) Analysis

3.1 Precedents Cited

Assessor for Glasgow v Schuh Ltd [2012] CSIH 40, 2012 SLT 903 and Schuh Ltd v Assessor for Glasgow [2013] CSIH 93, 2014 SLT 184

These were central to the court’s interpretive approach. They establish that “material change of circumstances” should not be construed expansively; instead, it requires a purposive construction aligned with the “freeze” policy of the valuation roll between revaluations. Lord Doherty treated these cases as controlling guidance on how broadly section 37(1) can legitimately be read.

Assessor for Central Scotland Joint Valuation Board v Bank of Ireland [2010] CSIH 91, 2011 SC 265

This was the decisive Scottish authority on external ATM sites where the host premises and ATM operator are different persons. The court accepted that the present facts were materially indistinguishable from Bank of Ireland and, crucially, noted that Cardtronics did not disapprove it—indeed, Cardtronics treated Bank of Ireland as correctly decided on its own facts. The court therefore endorsed the tribunal’s reliance on Bank of Ireland to identify the ATM operator as the rateable occupier.

Cardtronics UK Ltd v Sykes [2020] UKSC 21, [2020] 1 WLR 2184

The appellant framed Cardtronics as having “changed the legal landscape”. The court rejected that characterisation for two reasons:

Jurisdictional/statutory relevance: it is not, on the statutory language and policy, the kind of decision that constitutes an MCC in Scotland merely by being decided.
Nature of the decision: it applied established principles of rateable occupation to facts (including findings of shared economic benefit and integration with the retailer’s business) that were expressly contrasted with Bank of Ireland. The tribunal’s findings here aligned with Bank of Ireland (“dead space” for the shop; no retailer control; ATM operator’s paramount occupation).

Assessor for Lanarkshire v Bonnybridge Silica and Fireclay Company 1963 SC 207 / Assessor for Lanarkshire v Bonnybridge Silica & Fireclays Co 1963 SC 207

This authority supplied a limiting principle: a decision that merely applies established valuation law to particular facts does not amount to an MCC. Lord Doherty applied that distinction to conclude that Cardtronics could not be an MCC trigger even on the appellant’s best case, because it was not a new rule of valuation, but an application of settled principles to specific facts.

Woolway (Valuation Officer) v Mazars llp [2015] UKSC 53, [2015] AC 1862

The appellant relied on Woolway to argue for harmonised UK rating principles. The court rejected that broad proposition, explaining that Woolway addressed identification of the unit of valuation and simply found Scottish reasoning persuasive in that context. It was not authority that Scottish rating law must track England and Wales, especially given different legislation and a distinct Scottish apex court on questions of value (the Lands Valuation Appeal Court).

Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586

This was invoked to support reading words into section 37(1) to avoid “absurdity” (so as to include UKSC decisions). The court held there was no absurdity: limiting “relevant decisions” to Scottish adjudicative bodies with jurisdiction over Scottish values is rational and consistent with the roll-freeze policy; therefore no interpretive supplementation was justified.

Symington v Assessor for Strathclyde Region 1983 SLT 660

Cited by the appellant to support breadth in interpretation. The court’s approach, however, was governed by the purposive “freeze” construction reinforced by Schuh, which constrained any argument for open-ended breadth.

Cardtronics Europe Ltd and others v Sykes and others (Valuation Officers) [2018] EWCA Civ 2472, [2019] 1 WLR 2281

Used to illustrate that Cardtronics was fact-sensitive and explicitly contrasted with Bank of Ireland. The Court of Session relied on the UKSC’s own quotation of the Court of Appeal’s “stark contrast” language to underline why Cardtronics could not be transposed onto materially different Scottish facts as a supposed change of circumstances.

3.2 Legal Reasoning

The statutory framework is designed to limit in-cycle roll changes. Section 2(1)(d) permits alteration only for value changes due to MCC; section 37(1) defines MCC. The court emphasised the legislative policy that rolls are generally frozen between revaluations, and used that policy to inform interpretation.
Section 37(1) must be read as a whole. The appellant relied on the “without prejudice to the foregoing generality” language to argue that the opening words could include UKSC decisions. The court rejected that as inconsistent with the careful listing in paragraph (a) of the adjudicative bodies whose “relevant decisions” can constitute MCC, and inconsistent with roll stability.
UKSC rating decisions for other jurisdictions do not “affect value” in Scotland by their mere existence. The court drew a sharp distinction between (a) a non-Scottish decision being persuasive in a Scottish appeal (where a Scottish tribunal/court decision could then become a “relevant decision”), and (b) the non-Scottish decision itself being the MCC event.
No “absurdity” requiring judicial insertion of words. Restricting “relevant decisions” to Scottish bodies with jurisdiction over Scottish valuation is a coherent legislative choice.
In any event, Cardtronics was not a new principle. Applying Bonnybridge, the court held that a fact-application decision does not constitute MCC. Further, on the tribunal’s findings, the case aligned with Bank of Ireland: the retailer’s payments/commission were treated as consideration for site use and ancillary services, not evidence that the retailer was in paramount occupation.
Reasons challenge failed. The tribunal’s reasoning was found sufficient; the appellant had not discharged the onus of proving MCC.

3.3 Impact

Clarifies the boundary of MCC in Scotland: a UKSC rating decision relating to England/Wales/Northern Ireland will not, simply because it exists, constitute an MCC for Scottish roll alteration.
Reinforces roll stability: the “freeze between revaluations” policy continues to operate as a strong brake on attempts to re-open valuations using later legal developments elsewhere.
Preserves Scottish autonomy in rating law: persuasive foreign-jurisdiction decisions may influence Scottish outcomes only through Scottish adjudication, not by automatic MCC effect.
ATM-site disputes: fact-finding on occupation/control/economic integration remains decisive. Where facts resemble Bank of Ireland (ATM operator’s uncontrolled occupation; host’s limited ancillary involvement), separate occupation and separate entry are likely to be upheld.
Effective-date guidance (obiter): even if MCC were established, written intimation timing can push the effective date forward (here, the court indicated 1 April 2022), limiting retrospective fiscal consequences.

4) Complex Concepts Simplified

Valuation roll / revaluation: the official list of properties and values used to calculate non-domestic rates; updated at revaluations (formerly 5-yearly, now usually 3-yearly).
Net annual value (NAV): a statutory valuation measure forming the basis for rating; it is not simply actual rent but a valuation construct.
Material change of circumstances (MCC): a limited gateway allowing in-cycle alterations where something has happened that truly affects value (as interpreted purposively to protect roll stability).
Relevant decision: a decision by specified Scottish bodies (as listed in section 37(1)(a)) that can, in some circumstances, trigger MCC consequences for comparable subjects.
Rateable/paramount occupation: the person in effective control and beneficial occupation for rating purposes; the central question in ATM-site cases is often whether the ATM operator or the host retailer is the paramount occupier of the ATM “site”.
Expressio unius est exclusio alterius: where a statute lists specific things, it may imply exclusion of things not listed; used here to support the conclusion that the UKSC is not within the “relevant decision” list.
Purposive construction: interpreting statutory words in light of the statute’s purpose—here, preventing frequent re-litigation of values between revaluations.
Plant and machinery point: while an ATM machine itself is not rateable plant under the Valuation for Rating (Plant and Machinery)(Scotland) Regulations 2000 (SSI 2000/58), the site can still be entered and valued if separately occupied as lands and heritages.

5) Conclusion

The court reaffirmed a strict, policy-driven approach to “material change of circumstances” in Scottish rating law: valuation rolls are not to be reopened mid-cycle simply because a persuasive appellate decision emerges elsewhere in the UK. A non-Scottish rating decision will not, of itself, be an MCC for Scottish lands and heritages; and in any event only decisions laying down genuinely new valuation principles (not fact-specific applications of settled law) can plausibly operate as MCC triggers. Applied to external ATM sites, the decision confirms the continuing centrality of Scottish authority—especially Assessor for Central Scotland Joint Valuation Board v Bank of Ireland [2010] CSIH 91, 2011 SC 265—where the facts disclose separate, uncontrolled occupation by the ATM operator.