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LANDS VALUATION APPEAL COURT, COURT OF SESSION
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Lord Justice Clerk
Lord Philip
Lord Kingarth
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[2007] CSIH 40
XA213/06
OPINION OF THE LORD
JUSTICE CLERK
in the Appeal by
MATALAN RETAIL
LIMITED
Appellant;
against
ASSESSOR FOR
RENFREWSHIRE VALUATION JOINT BOARD
Respondent:
_______
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For the appellants: Haddow, QC; Brodies LLP
For the respondent: S L Stuart
1 June 2007
The appeal
[1] This
began as an appeal against (1) a decision of the Valuation Appeal Committee for
Renfrewshire dated 26 April 2006 to refuse an application by the appellant's
agents, Montagu Evans, for a continuation of its appeal against the valuation
of its retail warehouse at Phoenix Retail Park, Paisley, in the current
Revaluation; (2) a decision of the Committee dated 27 April 2006 to dismiss the
appeal; and (3) a decision of the Committee dated 12 June 2006 to refuse an
application by the same agents for reinstatement of the appeal.
[2] The
appeal has been abandoned in relation to the decisions of 26 and 27 April. It is maintained in relation to the decision
of 12 June 2006 on the
ground that that was a decision that no Committee acting reasonably could have
reached.
The 1995 Regulations
[3] The
issue in this appeal arises from regulation 15 of the Valuation Appeal
Committee (Procedure in Appeals under the Valuation Acts) (Scotland)
Regulations 1995 (SI No 572). It provides
as follows.
"(1) If an appellant fails to
appear or be represented at the hearing of his appeal, the Committee may
dismiss the appeal.
(2) The appellant may, within
14 days from notification of a decision to dismiss the appeal under
paragraph (1) or such longer period as the Committee may in special
circumstances allow, represent in writing to the Committee that there was
reasonable excuse for his absence and the Committee may, if satisfied that
there was such excuse, recall the said decision and appoint a further date,
time and place for the hearing of the appeal, of which it shall give the
parties not less than 7 days' notice."
The history
[4] For
the purposes of the 2005 Revaluation there were discussions between the
Scottish Assessors' Association and a representative group of surveyor practices
regarding the principles of valuation of retail warehouses. The outcome of those discussions contributed
to the process of negotiation of individual revaluation appeals. The appellant's appeal was followed by negotiations
with the assessor that were conducted by its agent, Mr Tony McRitchie, a rating
partner of the firm of Montagu Evans.
[5] By
Notice dated 8 February 2006
the secretary to the Committee (the secretary) notified Montagu Evans that the
appeal would be heard on 27 April 2006
and cited the appellant to appear on that date.
[6] Pending
the hearing of the appeal the negotiations continued. By April the parties had failed to come to an
agreement. Several questions remained
unresolved, including the measurement of the floor area, the amount of a
quantum allowance and the effect on the rental evidence of a substantial entry premium
paid by the landlords to the appellant. All
of these were fundamental questions in a valuation of this kind (cf B & Q plc v Ass for Renfrewshire
Valuation Joint Board, [2004] RA 220;
B & Q plc v Ass for
Dunbartonshire and Argyle and Bute Valuation
Joint Board, 2007 SC 135). At this
time there was also an outstanding appeal relating to another unit within Phoenix
Retail Park
in which the appellants' agents were seeking a referral to the Lands
Tribunal.
[7] On
19 April Mr McRitchie faxed to the assessor a signed appeal form intimating
that he did not accept a proposed amendment to the valuation and that he was
making a continuation request to the Committee.
In a letter to the secretary of the same date he applied for that
continuation for the following reasons.
"In negotiations with the
Assessor we have not been able to resolve the issue that the assessment as
issued (and also in connection with a without prejudice offer) that the
assessments in question are still very much larger than the rental of the
premises [sic]. The main issue of contention is the quantum
allowance for this unit.
It is our understanding that GL
Hearn have made an application for referral of the appeal for Focus at the same
retail park in order that this issue be heard by the Lands Tribunal in due
course.
Whether or not that application
is successful it would seem to me that it would be reasonable that this appeal
be continued in order to allow time for an application for a Lands Tribunal
referral to be made on the same basis for this appellant if the committee
should consider that the GL Hearn application should indeed be referred to the
Lands Tribunal.
Of equal fairness to both appellants
should the committee deem that the GL Heard application does not satisfy the
requirements of an application for the appeal to be referred to the Lands
Tribunal then the continuation of this appeal would allow further time for
negotiations with the Assessor and if ultimately that proved unsuccessful then
both appellants could take a case on the same date essentially on the same
argument which would seem to me a fair and reasonable outcome.
I have of course copied this
letter to the Assessor and I trust that this application can receive the
sympathy of the committee."
By letter to the secretary dated
20 April the assessor formally opposed the application for the following
reasons.
"The continuation is sought
because a smaller unit within the retail park is seeking referred to Lands
Tribunal, primarily on the grounds of the size of the unit.
I have formally objected to the
request for referral and see no reason why this case noted above cannot be
heard before the Valuation Appeal Committee on the cited date of 27 April 2006. I therefore request that the continuation
request be rejected.
It is correct that my assistant
Mr Pacitti and Mr MacRitchie have not agreed the value, however there
is no reason to prevent the case being heard before the committee for
resolution."
By letter to the secretary dated
25 April the assessor set out more detailed grounds of opposition to the
application as follows.
"Montagu Evans received a
citation from the appeal panel more than 70 days before the date of the hearing. They were also issued with a copy of the full
list of cases along with the name, phone number and e-mail address of the
member of my staff dealing with their appeal, again more than 70 days before
the hearing. They are part of a
consortium of agents who elected to have discussions on the appropriate
valuation rate to be used led by a lead agent who advised them on the progress
and outcome of these discussions. These
discussions had been ongoing prior to the cases being cited for hearing and all
of the issues have been discussed thoroughly and in detail. These discussions have now been concluded and
offers made where appropriate.
A meeting to discuss the specific
details and valuation of the appeal subjects was held on 30 March 2006.
If Montagu Evans considered that
the appeal met any of the criteria for referral to the Lands Tribunal and that
the appeal was appropriate for such a referral they were required by regulation
to seek such a referral more than 14 days before the date set for hearing
of the appeal. It is not appropriate to
seek a continuation of the appeal so that they can make a referral request that
they failed to make timeously.
Equally I consider that it is not
appropriate to continue this appeal on the basis that another appeal may or may
not be referred to the Lands Tribunal and may or may not proceed to hearing at
a later date. The issues in the case are
straightforward valuation matters, discussions have been concluded and there is
no prejudice to the ratepayer if the case proceeds for hearing as notified."
[8] On
26 April 2006, by
letter faxed to Montagu Evans at 12.11 pm,
the secretary intimated that the application for the continuation was
refused.
[9] On
27 April 2006 the Committee
met. Mr McRitchie failed to attend the
hearing and the appellant was not otherwise represented. The assessor intimated that, having
re-measured the subjects and having made an allowance for certain storage space,
he proposed to reduce the value entered in the Roll from £521,000 to £510,000
NAV/RV. The Committee dismissed the
appeal, subject to that reduction, in respect of the appellant's failure to
appear.
[10] Mr McRitchie failed to attend the hearing because he was on
business in England
that day. He was away from his office for
all of the previous day and did not see the letter intimating refusal of a
continuation until after the appeal had been dismissed.
[11] By letter faxed to the secretary to the Committee dated 24 May 2006, Mr McRitchie
applied for reinstatement of the appeal.
He recounted the history of the parties' negotiations and described the
unresolved issues. He then gave the
following explanation for his absence from the hearing.
"On the basis of all the above
and the requirement for more time to clarify in particular the area of the
property and the background to the capital payment together with a
reconsideration of the level of quantum at a local level we discussed the
possibility of an application to the Valuation Appeal Committee for this appeal
to be continued in these particular circumstances. We have to state emphatically that having
discussed this with the Assessor's assistant we were lead [sic] to believe that there would be no objection by the Assessor to
a continuation request and that with both parties being in agreement on that
matter it would be normal procedure for the Valuation Appeal Committee to
assent to that request bearing in mind no objection from the Assessor. That continuation request was made on
19 April. Almost all of the points
outlined above were not mentioned in that continuation request because it was
our clear belief from our informal and without prejudice discussions with the
Assessor that there would be no opposition to that continuation."
This was the first mention by Mr
McRitchie of the allegation that he had been led to believe that the assessor
would not object to a continuation request or that both parties were in
agreement on that matter.
[12] By letter to the secretary dated 5 June 2006, the assessor opposed the application
and gave detailed reasons. In
particular, he denied the suggestion that any agreement to support an
application for a continuation was ever given by the assessor or his
staff.
[13] By letter to Montagu Evans dated 12 June 2006, the secretary to the committee intimated
that the application for reinstatement of the appeal had been refused.
[14] I should add to this history that it became clear in the course
of counsel's submissions that, despite having had over 70 days notice of the
hearing before the Committee, Mr McRitchie would not have been properly
prepared if the appeal had gone ahead, and that, although his application for a
continuation remained to be decided on, he left his office on 25 April without
having made arrangements within the office for any communication from the
secretary to be reported to him immediately.
Submissions for the parties
[15] Counsel for the appellant submitted
that the Committee's exercise of its discretion in refusing to reinstate the
Revaluation appeal was flawed for five reasons;
namely (1) that the assessor had not intimated to the appellant's agent
what floor areas he had adopted in the light of his discussions with him; (2) that
by 19 April the appellant's agent had been unable to give the assessor documentation
that he had undertaken to give relating to the premium paid by the landlord; (3)
that the appellant was not represented at the hearing either through a
misunderstanding by its agent or because its agent was misled by the assessor's
representative; (4) that at the date of the hearing there remained between the
parties a significant issue relating to the landlord's premium and its effect
on the quantum allowance; and (5) that the Committee said that it had been
unable to conclude whether or not the parties had agreed to a
continuation. The Committee had acted
unreasonably in refusing to reinstate the appeal without determining whether
the assessor had agreed to a continuation, and had confused its consideration
of the request for reinstatement with the earlier request for a continuation.
[16] Counsel for the assessor submitted that the unresolved
valuation issues were irrelevant to the question of reinstatement. None of the Committee's findings in fact
supported Mr McRitchie's alleged belief that the assessor had agreed to a
continuation. The initial request for
the continuation did not mention any such agreement. It was mentioned only after the appeal had
been dismissed. Mr McRitchie had
obviously arranged business in England
for the day of the hearing and had gone ahead with that business although he did
not know the outcome of his application for a continuation. Instead, he ran the risk that the hearing
might go ahead and that the appeal might be refused for his failure to
appear. He put in place no arrangements
to react to any notice of refusal that might be sent to his office. The issue for the Committee under regulation
15(2) was whether the appellant had made out any reasonable excuse for Mr
McRitchie's absence. Prejudice to the
appellant was irrelevant to that issue. The
prejudice to the appellant was said to lie in its inability to continue the
negotiations. That was not a proper
ground for reinstatement of the appeal.
It could not be said that no reasonable Committee, properly instructed,
could have refused to reinstate the appeal.
Conclusions
[17] In my opinion, this appeal is without merit. The first, second and fourth of the points
made by counsel for the appellant can be disposed of shortly. If the assessor had not given Mr McRitchie
his floor areas, it was for Mr McRitchie to ask for them or to leave the matter
to be resolved at the hearing of the appeal, where it would be the assessor's
duty to explain his valuation. If the
assessor had not been provided with details of the premium paid by the landlords,
it was Mr McRitchie's responsibility to obtain the details from his own
clients. That information was vital to
the interpretation of the rental evidence.
It should have been obtained much earlier. Mr McRitchie obviously was not properly
prepared in this respect. The remaining
unresolved issue about the quantum allowance was exactly the kind of issue that
the Committee was there to resolve.
[18] I therefore turn to the important question in this appeal. It arises from the allegation that Mr McRitchie
was led to believe by the assessor's staff that the application for a
continuation would not be opposed. In
the grounds of appeal to this court it is said that at a meeting on 30 March
2006 between Mr McRitchie and Mr Renzo Pacitti, a member of the assessor's
staff, at which it was agreed that certain further steps would be taken by both
sides, " ... Mr McRitchie indicated he would seek a continuation, a proposal
which seemed acceptable to Mr Pacitti ('We won't oppose [a continuation
request] if you write in'). In the
written submission for the appellant the point is put rather differently. It is said that the appellant was not
represented at the hearing "for reasons which may involve a misunderstanding by
the appellants' agent of the assessors' representative's position or may
involve the appellants' agent being misled by what was said ... "
[19] It is regrettable that the presentation of this appeal has
involved criticism of the assessor's staff and of the Committee, because the
sole responsibility for the appellant's misfortune lies with Mr McRitchie.
[20] The starting point in this case is that the appellant was duly
cited to the hearing of the appeal and its appointed agent failed to
attend. Mr McRitchie had applied for a
postponement, but when he decided to undertake other business in England
on the due date, he did not know whether his application would be granted. He had no reason to assume that it would be
granted. He had every reason to think
that it might not. Unless he had formal
intimation from the Committee that the hearing had been postponed, it remained
his duty to attend. He received no such
intimation. In acting as he did, Mr
MacRitchie took a reckless gamble which has resulted in the refusal of his
client's appeal.
[21] One of the main arguments of counsel for the appellant was that
there was an irreconcilable conflict between Mr McRitchie and the assessor's
staff as to whether the assessor's staff had agreed that the appeal should be
continued. Counsel suggested that since
the Committee had been unable to reach a conclusion on that disputed question,
it acted unreasonably in refusing to reinstate the appeal. I do not agree.
[22] In terms of regulation 15(2) (supra) the onus lay on the appellant to establish that there was a
reasonable excuse for Mr McRitchie's absence on the day of the hearing. When Mr McRitchie applied for reinstatement
of the appeal, he advanced as a material consideration that, from discussions
with the assessor's assistant, he had been led to believe that the assessor
would not object to a request for a continuation. Mr McRitchie was unable to produce a single
document to support that allegation and it was strenuously denied by the
assessor. Moreover, if Mr McRitchie had
been led to believe that that was the assessor's position, that consideration,
in my opinion, would undoubtedly have been at the forefront of his letter of 19
April in which he applied for the continuation.
The letter made no mention of the point.
Furthermore, the assessor's letters of 20 and 25 April opposing the
application were incompatible with Mr McRitchie's alleged understanding. It is significant that Mr. McRitchie first
made his allegation only after the appeal had been dismissed. As soon as he made it, it was immediately denied
by the assessor.
[23] In these circumstances, in my opinion, the Committee would have
been justified in concluding that Mr McRitchie was not led to believe that the
assessor would not oppose the continuation; or that, if he did have that
belief, there was no objective basis for it.
However, it is sufficient for the purposes of this appeal to say that
that the Committee did not find that Mr McRitchie's representations in support
of the application had been established.
[24] In my opinion, however, the appellant's whole line of argument
on this point is misconceived, because even if the assessor had agreed not to
oppose a continuation, that did not justify Mr McRitchie in assuming that it
would be granted. The decision lay with
the Committee alone. The final sentence
of Mr McRitchie's letter of 19 April shows that he understood that. It follows therefore that until he heard from
the Committee, he could not responsibly decide to do other work on the date of
the hearing.
[25] In these circumstances, the Committee cannot be said to have
acted unreasonably in holding that the appellant had failed to establish a
reasonable excuse for its default.
Disposal
[26] I propose to your Lordships that we should refuse the appeal.
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LANDS VALUATION APPEAL COURT, COURT OF SESSION
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|
Lord Justice Clerk
Lord Philip
Lord Kingarth
|
[2007] CSIH 40
XA213/06
OPINION OF LORD
PHILIP
in the Appeal by
MATALAN RETAIL
LIMITED
Appellant;
against
ASSESSOR FOR
RENFREWSHIRE VALUATION JOINT BOARD
Respondent:
_______
|
For the appellants: Haddow, QC; Brodies LLP
For the respondent: S L Stuart
1 June 2007
[27] Under Regulation 15 of the Valuation Appeal Committee
(Procedure in Appeals under the Valuation Acts) (Scotland) Regulations 1995 a
Valuation Appeal Committee may, in its discretion, recall a decision to dismiss
an appeal, made on the ground of an appellant's failure to appear or be
represented at an appeal hearing, if it is satisfied that there was a
reasonable excuse for the appellant's absence.
The Committee may then appoint a further date for a hearing.
[28] In this appeal the question for this court is whether the
Valuation Appeal Committee for Renfrewshire erred in law in refusing the
appellant's application for reinstatement of the appeal following upon the
failure of their agents to attend the appeal hearing on 27 April 2006, as a result of which the
appeal was dismissed.
[29] The circumstances in which the appellant's agents were absent
from the hearing on 27 April 2006
were as follows. On 19 April they faxed
a written request for a continuation of the hearing to the secretary to the
Committee. It was said on the
appellant's behalf that they did so understanding that the Assessor would not
oppose their request. In fact that
understanding was not soundly based, as evidenced by the fact that the Assessor
wrote to the secretary to the Committee on 20 April opposing any
continuation. The secretary to the
Committee intimated the Committee's refusal of the request to the appellant's
agents by fax at midday on
26 April. The partner of the
appellant's agents responsible for the case was absent from his office at the
time as he had arranged to attend to other work in England on 27 April despite
having received no notification of the Committee's decision on the request for
a continuation. He was not informed of
the refusal since no arrangements had been made for him to be informed of any
communication from the Committee and consequently no appearance was made on
behalf of the appellants at the hearing.
[30] The question for the Committee was whether there was a
reasonable excuse for the appellant's failure to appear or be represented at
the hearing. After hearing submissions
from the parties, the Committee were unable to conclude that the Assessor had
at any stage agreed to the appellants' request for a continuation. The appellant's agent made a decision not to
attend the hearing, although he had not received any confirmation that his
request for a continuation had been granted.
In these circumstances there were ample grounds upon which the Committee
were entitled to conclude that no reasonable excuse had been established. I therefore agree with your Lordship in the
chair that this appeal should be refused.
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LANDS VALUATION APPEAL COURT, COURT OF SESSION
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Lord Justice Clerk
Lord Philip
Lord Kingarth
|
[2007] CSIH 40
XA213/06
OPINION OF LORD
KINGARTH
in the Appeal by
MATALAN RETAIL
LIMITED
Appellant:
against
ASSESSOR FOR
RENFREWSHIRE VALUATION JOINT BOARD
Respondent:
_______
|
For the appellants: Haddow, QC;
Brodies LP
For the respondent: S L Stuart
1 June 2007
[31] I have
had the advantage of reading your Lordship in the chair's Opinion in draft and
I agree that the appeal should be refused.
[32] In
circumstances where, on any view, Mr. McRitchie had received no intimation from
the Committee that the application for a continuation had been granted, it
cannot, in my view, be said that no reasonable Committee could have been other
than satisfied that a reasonable excuse for his failure to attend had been made
out.
[33] In any
event, for the reasons given by your Lordship in the chair, it cannot be said
that the unresolved issues were such that any reasonable Committee was bound to
exercise its discretion in favour of reinstatement of the appeal.
