Scottish & Newcastle Retail Ltd v Williams (VO), Court of Appeal - Lands Tribunal, February 22, 2000, [2000] EWLands RA_480_1993

Resolution Date:February 22, 2000
Issuing Organization:Lands Tribunal
Actores:Scottish & Newcastle Retail Ltd v Williams (VO)
 
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© CROWN COPYRIGHT 2000

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[2000] EWLands RA_480_1993 (22 February 2000) RA/480/1993

RA/484/1993

LANDS TRIBUNAL ACT 1949

RATING - valuation - rebus sic stantibus - public house and public house /licensed cafe/bar - standard units in covered shopping centre - potential for use as shops or restaurants - whether requisite physical alterations within rebus sic stantibus rule - the test for this - mode or category of use - the test for this - held both physical alterations and change of use would offend rebus sic stantibus rule - not to be valued by reference to rental values of shops and restaurants

IN THE MATTER OF TWO APPEALS AGAINST DECISIONS

OF THE BUCKINGHAMSHIRE VALUATION TRIBUNAL

BETWEEN SCOTTISH AND NEWCASTLE RETAIL LIMITED Appellant

and

R F WILLIAMS Respondent

(Valuation Officer)

Re: Public House & Premises known as The Rose and Castle,

122 Midsummer Arcade, Milton Keynes

and

ALLIED DOMECQ RETAILING LIMITED Appellant

and

R F WILLIAMS Respondent

(Valuation Officer)

Re: Public House Wine Bar and Premises known as City Fayre / City Duck

44 Midsummer Arcade, Milton Keynes

Before: The President and Mr P H Clarke FRICS

Sitting at 48/49 Chancery Lane

on 25-28 May, 20-24, 29-30 September and 1 October 1999

The following cases are referred to in this decision:

Couper (VO) v Aylesbury Brewery Co Ltd (1985) 275 EG 255

Fir Mill Ltd v Royton UDC and Jones (VO) (1960) 7 RRC 171

Midland Bank v Lanham (VO) [1978] RA 1

R v St Luke's Hospital (1760) 2 Burr 1053; 97 ER 703

R v Gardner (1774) 1 Cowp 79; 98 ER 977

Kempe v Spence (1779) 2 Black W 1244; 96 ER 733

R v Mast (1795) 6 TR 154; 101 ER 485

R v Liverpool Exchange (1834) 1 Ad & E 465; 110 ER 1285

R v Everist (1847) 10 QB 178; 116 ER 69

R v Grand Junction Railway Co (1844) 4 QB 18; 114 ER 804

North and South Western Junction Railway Co v Brentford Union Assessment Committee (1888) 13 App Cas 592

Great Western Railway Co v Kensington and Hammersmith Assessment Committees [1916] AC 23

Robinson Brothers (Brewers) Ltd v Houghton and Chester-le-Street Assessment Committee [1937] 2 KB 445; [1938] AC 321

Dawkins (VO) v Ash Brothers and Heaton Ltd [1969] 2 AC 366

British Bakeries v Gudgion (VO) (1969) 16 RRC 56

Lewis Vintners v Speight (VO) (1984) 272 EG 1177

Manchester Tennis and Racquet Club v Castle (VO) (1960) 6 RRC 269

Liverpool Corn Trade Association Ltd v Pritchard (VO) (1962) 9 RRC 358

Peter Dixon & Sons Ltd v Elliott (VO) (1967) 13 RRC 325

White v Grice (VO)[1975] RA 38

Marks v Tucker (VO) [1983] RA 221

Sheffield United Tours Ltd v Elliott (VO) [1983] RA 81

Westminster City Council v British Telecommunications Plc [1985] RA 87

Jones (VO) v Toby Restaurants (South) Ltd [1992] RA 87

Hope (VO) v Wellcome Foundation Ltd (1960) 6 RRC 287

Fletcher v Dyson (VO) [1965] 5 RVR 416

Croydon Corporation v Hardiman (VO) (1967) 9 RRC 382

Venis v Bullock (VO) (1966) 12 RRC 114

Re Appeal of Sheppard (1967) 13 RRC 139

Irving Brown and Daughter v Smith (VO) [1996] RA 53

Duckworth (VO) v Manchester Corporation (1970) 16 RRC 235

London Transport Executive v Croydon LBC and Phillips (VO) (1974) 19 RRC 299

James v Clee (VO) (1976) 20 RRC 304

Henriques v Garland (VO) (1977) 20 RRC 341

Florikic v Mummery (VO) (1977) 21 RRC 73

West Dorset DC v Auton (VO) (1979) 21 RRC 390

Vesta Launderettes Ltd v Smith (VO) [1979] RA 317

S & P Jackson (Manchester) Ltd v Hill (VO) [1980] RA 195

Tappenden v Stratford (VO) [1981] RVR 11

Mugridge v Daniels (VO) [1981] RVR 68

Jermy v Jones (VO) [1982] RVR 225

Re Johnson (VO)'s Appeal [1983] RA 157

Adams v Freeman (VO) (1984) 270 EG 855

Hearne v Bromley (VO) [1984] RVR 81

Re Chilton-Merryweather (VO)'s Appeal [1994] RA 417

Makro Self-Service Wholesalers Ltd v Brennan (VO) [1996] RA 341

Shah v Kubbinga (VO) (LT ref RA/59/98, 1 December 1998)

Assessor for Stirlingshire v Myles and Binnie 1962 SC 530

Assessor for Lanarkshire v Smith 1962 SC 517

R v London School Board (1886) 17 QBD 738

LCC v Erith Parish [1893] AC 562

Byrne v Parker (VO) [1980] RA 45

Metropolitan Water Board v Chertsey Union Assessment Committee [1916] AC 337

Port of London Authority v Orsett Union [1920] AC 273

Poplar Assessment Committee v Roberts [1922] 2 AC 93

Townley Mill Co (1919) Ltd v Oldham Assessment Committee [1936] 1 KB 585; [1937] AC 419

Consett Iron Co Ltd v Assessment Committee for No.5 Area Durham [1931] AC 396

R v Fletton Overseers (1861) 3 E & E 450; 30 LJMC 89

Rozel Motor Co Ltd v Clark [1983] RA 70

Edmondson (VO) v Teesside Textiles Ltd (1985) 83 LGR 317

Clement (VO) v Addis Ltd [1988] 1 WLR 301

Hoare (VO) v National Trust [1998] RA 391

Black v Oliver [1978] 1 QB 870

Jones v Mersey Docks and Harbour Board (1865) 11 HL Cas 443

Kingston Union Assessment Committee v Metropolitan Water Board [1926] AC 331

Staley v Castleton Overseers (1865) 5 B & S 505

Great Eastern Railway Co v Haughley Overseers (1866) LR 1 QB 666

Commissioner of Rating and Valuation v Lai Kit Lau Mutual Aid Committee [1986] HKLR 93

K Shoe Shops v Hardy (VO) [1983] 1 WLR 1273

Stirk & Sons Ltd v Halifax Assessment Committee [1922] 1 KB 264

Double v Southampton Assessment Committee [1922] 2 KB 213

Ladies Hosiery and Underwear Ltd v West Middlesex Assessment Committee [1932] 2 KB 679

Garton v Hunter (VO) [1969] 2 QB 37

Robinson v Le Grys (VO) [1969] RA 63

Burling v Escott (VO) (1968) 14 RRC 319

Cyril Fogelman Ltd v York (VO) [1966] RA 306

R v London & South Western Railway Co (1842) 1 QB 558

Liverpool Corporation v Chorley Union Assessment Committee [1913] AC 197

Talargoch Mining Co v St Asaph Union (1868) LR 3 QB 478

Sculcoates Union v Kingston-upon-Hull Dock Co [1895] AC 136

Harter v Salford Overseers (1865) 6 B & S 591

Arbuckle Smith & Co Ltd v Greenock Corporation [1960] AC 813

R v Melladew [1907] 1 KB 192

Tomlinson (VO) v Mills (1959) 6 RRC 146

Coventry and Solihull Waste Disposal Co Ltd v Russell (VO) [2000] 1 All ER 97

Barras v Aberdeen Steam Trawling and Fishing Co Ltd [1933] AC 402

David Widdicombe QC and Michael Druce instructed by J P Scrafton for the Appellants

David Holgate QC and David Forsdick instructed by Solicitor of Inland Revenue for the Respondent

DECISION

Introduction

Under the law of rating it is established that every hereditament must be valued (on the basis of an assumed tenancy from year to year) taking account of its existing use and physical state. The requisite assumptions as to use and physical state comprise two limbs of what is known as the rebus sic stantibus rule. Although the existence of the two limbs of the rule is established, there is, however, controversy as to their nature and, in particular, as to whether (and, if so, to what extent) prospective changes that a possible tenant might make in the use or the physical state of the hereditament can be taken into account.

(At the start of the hearing we raised with counsel whether the latinism "rebus sic stantibus" could not usefully be replaced by something in English, but they did not think it could be. As simply the name of a rule, the contents of which depend not upon the meaning of the Latin words themselves but upon the decisions that interpret it, rebus sic stantibus serves no function that could not be performed by some substitute words. The abbreviation "rebus" that is frequently used has the merit of brevity and the demerit of meaninglessness, and we do not think that the English version of it - "the things rule" - has much to commend it. The term used in Scotland - "the actual state rule" - could, we believe, usefully be adopted, and we hope that in future it may be. To use it in this decision, however, might be distracting, and so, for the present, we stick to the words ``rebus sic stantibus''.)

These appeals concern two units in the central Milton Keynes covered shopping centre. The centre was opened in 1979 and contains in the region of 100,000 sq metres of retail space divided between about 160 individual traders, including department stores, the major retailers, banks and other financial institutions, building society offices, restaurants/cafés and two public houses. The appeals relate to the two public houses. One, the Rose and Castle public house, was entered in the 1990 valuation list as ``Public House and Premises'' and the other, the City Fayre / City Duck, as ``Public House, Wine Bar & Premises''. The values ascribed to them in the list reflected the valuation officer's view that, vacant and to let on the rating hypothesis, these premises would have commanded the same rents as retail shops, because the potential tenants would have included retailers who would look to strip the units down to their shells and then fit them out and use them as shops. The issue between the parties is whether this is the proper approach to valuation. The appellants contend that the hereditaments should be valued in their existing physical state as public houses and that they should not be assessed at the rents that they would have commanded if they were to be let as shops. Rateable values are agreed on the alternative bases advanced by the parties: for the Rose and Castle £29,500 if the appellants are correct and £132,000 if the respondent is correct; for the City Fayre / City Duck £50,000 on the appellant's basis, £210,000 on the respondent's. The appeals thus raise in a very stark fashion the dispute on the two limbs of the rule.

That the differences between the valuations are so great is a reflection of the very considerable increase in shop rents in the Milton Keynes shopping centre since it was opened in 1979, and the very much lower increase in the rents of public houses. Both premises, although each occupies a shell no different from that of the shops in the centre, are let on leases of 35 years and 25 years respectively that provide that the rent on the 5 yearly reviews is the rent ``for use as a public house'' (in the case of the Rose and Castle) and ``for licensed purposes'' (in the case of City Fayre / City Duck). Both leases are the original leases of the premises, and it appears that...

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