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Biffa Waste Services LTD against The Scottish Ministers (Court of Session)
Factual and Procedural Background
The appeal concerns the site of an external automated teller machine (ATM) entered separately in the 2017 valuation roll for the valuation area administered by the Respondent with effect from 1 April 2017, the entry describing the address as [Number] Main Street, The City. The Appellant was entered as proprietor of the ATM site; the net annual value (NAV) of that site was £11,375. The ATM operator and the shop at the same premises were entered separately in the roll (the shop entry showed a separate NAV, later amended). No appeal was taken against the 2017 revaluation entries at that time.
In February 2023 (shortly before the 2023 revaluation), the Appellant appealed the 2017 separate entry for the ATM site alleging a material change of circumstances since the entry was made and seeking deletion of the separate site entry and inclusion of the site within the shop entry with an adjusted NAV (alternatively with effect from 22 May 2020). The Assessor did not accept that a material change of circumstances had occurred. The matter was transferred to the First-tier Tribunal (Local Taxation Chamber) (FTT) because the appeal was not heard before the valuation appeal committee final date. The FTT heard evidence and found that the rateable occupier of the ATM site from 1 April 2017 until January 2023 was Company C and thereafter Company D, that the site and shop had been in separate occupation since creation, and that the ATM site remained in separate occupation; the FTT refused the appeal. The Appellant appealed that decision to the Lands Valuation Appeal Court.
Legal Issues Presented
- Whether the decision of the United Kingdom Supreme Court in Company E v Person Sykes [2020] UKSC 21 constituted a "material change of circumstances" affecting the value of the ATM site within the meaning of section 37(1) of the Local Government (Scotland) Act 1975.
- Whether the definition of "material change of circumstances" in section 37(1) can treat a decision of the UK Supreme Court (or other courts/tribunals outside Scotland) as a "relevant decision" for Scottish rating purposes.
- If the UKSC decision were a material change, what date should the alteration to the valuation roll take effect (including the scope for use of section 2(1A)(b) and the proviso to section 2(2)(c) of the 1975 Act)?
Arguments of the Parties
Appellant's Arguments
- The UKSC decision in Company E v Person Sykes was a material change of circumstances because it provided clear guidance on the correct method of valuing external ATM sites and changed the legal landscape on identifying the rateable occupier where the retailer and ATM operator are different persons.
- The opening general words of the section 37(1) definition are broad enough to cover a UKSC decision; if necessary, words should be read into paragraph (a) to avoid absurdity so that the UKSC decision is a "relevant decision".
- The FTT's reasoning rejecting that decision as a material change was inadequate. The appeal should be allowed and the separate ATM entry deleted, with the shop NAV increased and the effective date of alteration fixed (preferably 1 April 2017 or, alternatively, 20 May 2020; if section 2(2)(c) governs, then 1 April 2022).
Respondent's Arguments (Assessor)
- The UKSC decision was not a "relevant decision" under the section 37(1) definition because the listed bodies in paragraph (a) are those with jurisdiction to determine values in Scotland; the expressio unius exclusio alterius principle applies and excludes UKSC decisions from that list.
- The definition of "material change of circumstances" should not be construed expansively; purposive construction requires the valuation roll generally be frozen between revaluations.
- Even if a UKSC decision could be relevant, Company E v Person Sykes did not decide a new legal principle but applied established principles to its facts and did not disapprove the reasoning in the earlier Scottish authority relied upon; the FTT's factual findings aligned with that Scottish authority and justified refusal of the appeal.
- If Company E v Person Sykes were a material change, the effective date should be no earlier than 1 April 2022 (the year in which the Appellant first gave written intimation).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Company E v Person Sykes [2020] UKSC 21, [2020] 1 WLR 2184 | Whether that decision constituted a material change of circumstances by giving guidance on valuation of external ATM sites and identifying the rateable occupier. | The court held it did not amount to a material change of circumstances in this case: it applied established principles to its facts, which differed from the facts here. |
| Assessor for Central Scotland Joint Valuation Board v Company C [2010] CSIH 91, 2011 SC 265 | Application of established principles on rateable occupation of external ATMs and when such sites form part of a retailer's hereditament. | The court treated that decision as applicable to the facts here and distinguished it from Company E v Person Sykes on factual grounds; the FTT's reliance on it was upheld. |
| Assessor for Lanarkshire v Bonnybridge Silica & Fireclay Company 1963 SC 207 | Authority that a decision applying established law and principles to particular facts will not constitute a material change of circumstances. | Used to support the proposition that Company E did not introduce a new principle and therefore was not a material change. |
| Assessor for Glasgow v Schuh Ltd [2012] CSIH 40, 2012 SLT 903 | Construction of "material change of circumstances" and caution against expansive readings. | Relied on to endorse a purposive, restrained construction of the definition consistent with freezing the roll between revaluations. |
| Schuh Ltd v Assessor for Glasgow [2013] CSIH 93, 2014 SLT 184 | Further authority on construing "material change of circumstances" narrowly and purposively. | Reinforced the approach that the term is not to be given an unrestricted meaning. |
| Inco Europe Ltd v First Choice Distribution [2000] 1 WLR 586 | Illustrative authority cited in argument on reading words into legislation to avoid absurdity. | The court rejected the Appellant's submission that words should be read into section 37(1) to include UKSC decisions; Inco was referenced but the court found no absurdity requiring such reading. |
| Woolway (Valuation Officer) v Mazars llp [2015] UKSC 53, [2015] AC 1862 | Discussion whether valuation principles should differ between Scotland and other UK jurisdictions. | The court held Woolway did not support the broad proposition that Scottish and English valuation law/practice must always align; it was not persuasive for the Appellant's construction. |
| Company E Europe Ltd and others v Person Sykes and others (Valuation Officers) [2018] EWCA Civ 2472, [2019] 1 WLR 2281 | Court of Appeal reasoning on facts/occupation relevant to Company E appeals. | Referred to for factual and reasoning context in Company E; the Lords' reasoning in Company E was read against the factual findings in that case. |
Court's Reasoning and Analysis
The court proceeded from the statutory framework: the valuation roll is produced for each revaluation and is to remain generally fixed between revaluations, with limited statutory exceptions for alterations due to material change of circumstances (Local Government (Scotland) Act 1975, section 2(1)(d) and the definition in section 37(1)). The court emphasised (following Schuh authorities) that the definition must be construed purposively in light of the policy of maintaining a frozen roll between revaluations.
On construction, the court held that the ordinary and natural reading of section 37(1) does not contemplate that decisions of courts or tribunals in England, Wales or Northern Ireland (including the UKSC on matters of rating outside Scotland) will, of themselves, constitute a material change of circumstances affecting the value of lands and heritages in Scotland. The express listing of adjudicative bodies in paragraph (a) (the Lands Valuation Appeal Court, valuation appeal committees drawn from the relevant valuation appeal panel, and the Lands Tribunal for Scotland) pointed strongly against treating the UKSC as a "relevant decision" issuer for Scottish rating purposes. Reading words into the provision to include the UKSC was unnecessary and unjustified; there was no absurdity to avoid by so doing.
Even if a UKSC decision could in principle be a material change, the court held that it would have to decide an important principle of valuation law or practice, not merely apply established principles to particular facts. Company E applied established law on rateable occupation to the facts found by the Upper Tribunal; it did not disapprove the Scottish Bank of Ireland authority and its facts differed materially from those here. The FTT had found here facts indistinguishable from Bank of Ireland (the Appellant provided ancillary maintenance and received payments for site use; Company C retained paramount occupation); those findings supported the FTT's application of Bank of Ireland. The court therefore agreed with the FTT that Company E was not a material change of circumstances affecting the value of the ATM site.
The court also rejected the Appellant's submission that valuation principles must be identical across UK jurisdictions in a way that would render Company E determinative for Scottish rating: while cross-jurisdictional reasoning may be persuasive in limited contexts, different legislative and appellate structures in Scotland meant the UKSC's rating decisions in other jurisdictions do not automatically alter value in Scotland.
Holding and Implications
APPEAL REFUSED
Direct effect: the Lands Valuation Appeal Court refused the Appellant's appeal and upheld the FTT's decision that the UKSC decision (Company E v Person Sykes) did not constitute a material change of circumstances affecting the value of the ATM site; consequently no alteration to the 2017 valuation roll was ordered on that basis. The court noted that, had Company E been held to be a material change, the appropriate effective date would have been that indicated by the proviso to section 2(2)(c) (1 April 2022), but this did not arise on the facts. No new precedent altering the scope of "material change of circumstances" in Scottish rating law was established beyond the reasoning endorsed from existing authorities.
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