Scottish Court of Session Decisions

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Cite as: [1883] ScotLR 20_431, [1883] SLR 20_431

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SCOTTISH_SLR_Court_of_Session

Page: 431↓

Court of Session.

Saturday, February 24. 1883.

20 SLR 431

Gosnell, Appellant.

Subject_1Valuation Cases
Subject_2Lease
Subject_3Meliorations by Tenant.
Facts:

Subjects were let for 21 years for business premises'at a fixed rent, the tenant to have right to erect additional buildings on the ground during the lease, but not to be liable in any rent for such additional buildings. The tenant having erected such buildings, held that their value was not to be added to the sum stipulated in the lease in assessing the annual value of the subjects.

Headnote:

The 6th section of the 17th and 18th Vict. cap. 91 provides—“In estimating the yearly value of lands and heritages under this Act, the same shall be taken to be the rent at which, one year with another, such lands and heritages might in their actual state be reasonably expected to let from year to year; …. and where such lands and heritages are bona fide let for a yearly rent, conditioned as the fair annual value thereof, without grassum or consideration other than the rent, such rent shall be deemed and taken to be the yearly rent or value of such lands and heritages in terms of this Act: Provided always that if such lands and heritages be let upon a lease the stipulated duration of which is more that twenty-one years from the date of the same, or in the case of minerals more than thirty-one years from such date of entry, the rent payable under such lease shall not necessarily be assessed as the yearly rent
Page: 432↓
or value of such lands and heritages, and such yearly rent or value shall be ascertained in terms of this Act irrespective of the amount of rent payable under such lease.”

At a meeting of the Magistrates and Town Council of the burgh of Edinburgh on the 11th September 1882, for the purpose of hearing and disposing of appeals against valuations made by the assessor for the year from Whitsunday 1882 to Whitsunday 1883, Mrs Elizabeth Gosnell, Reigate, Surrey, appealed against a valuation of £180 made by the assessor in respect of the house and workshop known as “Whiteford House,” and situated in Galloway's Entry, 53 Canongate, in the burgh of Edinburgh, and which belonged to her, and was occupied by The Marr Typefounding Company (Limited).

The subjects in question were let upon a lease for twenty-one years from Whitsunday 1878, at an annual rent of £120, and under the lease the tenants had the power to erect additional buildings on the ground for the purposes of their typefounding business. For these buildings, if erected, the proprietrix was to receive no rent or consideration. No obligation was imposed upon the tenants to build.

Buildings of considerable value were erected by the tenants in virtue of the power given them to build. The assessor had arrived at his valuation by valuing these buildings, and maintained that the subjects actually upon the ground were the proper subjects of valuation, though no rent for them was payable under the lease. The appellant maintained that the actual rent stipulated by the lease must be taken. The Magistrates and Council confirmed this valuation of the assessor. The appellant took a Case for the Valuation Appeal Court.

Authority— Coltness Iron Co., 1 March 1882, 19 Scot. Law Rep. 566.

At advising—

Judgment:

Lord Lee—The statute requires the assessor, where subjects are bona fide let for a yearly rent, conditioned as the fair annual value thereof, to take such rent as the value to be entered on the roll, unless the lease exceeds twenty-one years, or in the case of minerals thirty-one years. In this case the subjects are let under a lease not exceeding twenty-one years. It is not alleged by the assessor that the lease is not bona fide, or that the rent payable under the lease is not conditioned as the fair annual value. All that the assessor says in support of his valuation is that it is the value of the subjects actually upon the ground at the time of the valuation which must be taken. He assumes it to be a matter of course that if any additions have been made the lease must be disregarded. I am unable to reconcile this view with the terms of the statute. It is only where the subjects are not bona fide let, or where the rent is not conditioned as the fair annual value, or where the lease exceeds twenty-one years, that the lease can be disregarded. If additions are made under an obligation in the lease, then of course the stipulated money rent ceases to represent the fair annual value, and the subjects must be valued apart from the rent. But where as in this case additions have been made by the tenant without any obligation, and where the stipulated rent is in part paid for the power or liberty to make such additions, the statute requires the rent to be taken. This is the principle applied in the Coltness case (1882), and in the cases there referred to; and it appears to me to rest upon a very obvious and substantial foundation in reason. The subjects here would not have yielded the rent of £120, but for the power and liberty of making these alterations.

I therefore think the determination of the Commissioners wrong.

Lord Fraser concurred.

The Court was of opinion “that the determination of the Magistrates and Council was wrong, and that the value should be entered at £120.”

Counsel:

Counsel for Appellant— Jameson. Agent— John Milligan, W.S.
1883