Scottish Court of Session Decisions

At a meeting of the Income-Tax and Inhabited House Duty Commissioners for the county of Dumfries, held at Dumfries on November 21st, 1900, the Union Bank of Scotland, Limited, appealed against an assessment of £2, 12s. 6d. made upon them for inhabited house duty for the year 1900–01, at the rate of 9d. per £ on £70, the annual value of “bank” and “house” situated at No. 8 English Street, Dumfries, of which they were proprietors and occupiers.

The Commissioners were of opinion “that the assessment had been properly made on the subjects entered in the valuation roll as ‘bank and house’ of the annual value of £70,” and dismissed the appeal.

The appellants required the Commissioners to state a case.

The following were the facts set forth in the case as found or admitted:—“1. The whole premises at No. 8 English Street, Dumfries (of which the subjects of appeal form part), are owned by the bank, and entered in the valuation roll of the burgh of Dumfries (Fourth Ward) for the year 1900–1901 as follows:—

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No.	Description and situation of subject.		Proprietor.	Tenant.	Occupier.	Inhabitant Occupier.	Yearly Rent or Value
	Description.	Situation.
807	Bank and house	8 English Street	Union Bank of Scot. (Ltd.), per Francis W. Gibb, agent	&	Proprietors	Geo. Powrie Mitchell, accountant	£ 70
808	Office	do.	do.	Craig & Geddes, solicitors	James Geddes, solicitor	&	30

“2. The whole premises above described (Nos. 807 and 808 of the valuation roll) are under one roof, and are correctly shewn on the plans, which are docqueted by the Commissioners in reference hereto, and made part of this case. These premises consist of four floors, viz., sunk, ground, first, and second floors. Of these the second and ground floors and the whole of the sunk floor, with the exception of a store, which form the subjects of appeal, are occupied by the proprietors, i.e., the bank, while the first floor and a store on the sunk floor are let to and occupied by a firm of solicitors, all in manner after described:—(1) Access to the ground floor from English Street is obtained by the front door of the building. This door opens into a vestibule. From this vestibule a stair, afterwards called the front stair, leads to the first floor of the building, a door opens into the telling-room of the bank, and another door opens into a passage from which access is obtained ( a) to the agent's room; ( b) to a washing-house; (c) to the stair connecting the ground and sunk floors; ( d) to the back stair which connects the ground and second floors; and ( e) to the back doors of the building. The bank safes are situated between the agent's room and the telling-room, and there is a door forming a direct access between those two rooms. (2) The second floor wholly consists of a dwelling-house occupied by the bank accountant ex officio. From this dwelling-house a door opens on to the back stair, which forms the communication to the ground floor. This stair gives access to the second floor only. From the bank accountant's house on this floor there is a bolt in connection with the lock of the bank safe for the cash, which bolt controls the opening of the safe. (3) The sunk floor consists of (a) a store-room used in connection with the bank offices; ( b) a coal cellar; ( c) a wood cellar; ( d) a small cellar not assigned to any special use; and ( e) a storeroom used by the firm of solicitors who are tenants of the office on the first floor. (4) The washing-house upon the ground floor is used by the accountant as part of the premises occupied by him ex officio as his dwelling-house, and he has, along with the bank, the joint use of the coal cellar and the wood cellar on the sunk floor. 3. The whole of the first floor (with the exception of the space occupied by the back stair leading from the ground floor to the second floor) is let as an office to and is occupied by a firm of solicitors. From this floor a door opens on to the front stair, which forms the access to the vestibule on the ground floor. This stair gives access to the first floor only, and the occupiers of the office on that floor have the exclusive use of it. Half-way up this stair there is a door communicating with the back stair, but it has been kept locked continuously for the last two years, i.e., since the first floor ceased to be occupied by the former agent of the bank. Inhabited house duty has not been charged on the rent of the first floor since it has been separately let as an office.”

The following were the contentions of the parties:—“For the Bank it was contended (1) that the premises occupied for the business purposes of the Bank are not an inhabited dwelling-house within the meaning of the Acts 48 Geo. III. cap. 55, and 14 and 15 Vict. cap. 36; and (2) that even if the premises occupied for the business purposes of the bank were assessable under 48 Geo. III. cap. 55, and 14 and 15 Vict. cap. 36, they are exempted from inhabited house duty by the Act 41 and 42 Vict. cap. 15, section 13 (2), as being (a) occupied solely for the purposes of the business or profession of banking, or ( b) as being either a separate ‘house’ or a separate ‘tenement’ occupied solely for the purposes of the business or profession of banking within the meaning of the Act 41 and 42 Vict. cap. 15, section 13 (2). For the Crown it was contended (1) that the premises which form the subject of appeal are liable under 48 Geo. III. cap. 55, schedule B, and 14 and 15 Vict. cap. 36; and (2) that they do not fall under any of the exemptions granted by 41 and 42 Vict. cap. 15, section 13, inasmuch as ( a) exemption 1 requires that the property should be let in different tenements, while here there is no letting, and ( b) exemption 2 requires that the house or tenement should be occupied solely for the purposes of a trade or business, while here a part is occupied for residential purposes.”

Argued for the appellants—The bank premises occupied for the business purposes of the bank did not fall to be assessed. The true principle upon which to decide the question was whether this part of the premises was in fact occupied solely for business premises. The opinions of the House of Lords in Grant v. Langston, May 28, 1900, 2 F. (H.L.) 49, left open to consideration the point whether this was not a truer test to use in deciding the question than physical division of the house into different tenements. In other words, occupation was of more importance than physical structure. The definition of “tenement” by the Lord President in Russell v. Coutts, December 14, 1881, 9 R. 261, at 265, as “a part of a

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house so divided and separated as to be capable of being a distinct property or a distinct subject of lease” applied precisely to the premises occupied by the bank for business purposes, and accordingly they fell under the exemption in section 13, subsection 2 of the Act of 1878— Corke v. Brims, July 7, 1883, 10 R. 1128. In Smiles v. Crooke. March 6, 1886, 13 R. 730, where the exemption conferred by section 13, sub-section (1), of the Act was held to apply, there was less physical separation of the tenements than here.

Argued for the respondents—The point differentiating this case from that of Grant v. Langston, supra, was that here there was internal communication between the floor occupied by the accountant and the bank premises proper. There was clearly also identity of occupation between the two. The case accordingly was analogous to Russell v. Coutts, cit, rather than to Corke v. Brims. See also Clerk v. British Linen Company, June 17, 1885, 12 R. 1133; Campbell v. Inland Revenue, February 21, 1880, 7 R. 579.

At advising—