Scottish Court of Session Decisions

The Poor Law Amendment (Scotland) Act 1845 (8 and 9 Vict. cap. 83), section 37, enacts—“In estimating the annual value of lands and heritages the same shall be taken to be the rent at which, one year

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with another, such lands and heritages might in their actual state be reasonably expected to let from year to year, under deduction of the probable annual average cost of the repairs, insurance, and other expenses, if any, necessary to maintain such lands and heritages in their actual state, and all rates and taxes and public charges payable in respect of the same …

The Burghead Harbour Company, Limited, 1 North Street, Elgin, complainers, brought a note of suspension and interdict against Joseph Stuart George, Collector of Poor Rates for the Parish of Duffus, in the county of Elgin, respondent, in which they sought to restrain him from proceeding further or enforcing a notice of assessment, dated 22nd November 1902, a sheriff's warrant authorising him to poind the complainers' goods for non-payment of the sum in the notice, and an execution of charge following thereon.

The notice of 22nd November 1902 intimated to the complainers that they were assessed for the year Whitsunday 1902 to Whitsunday 1903, under the different Acts of Parliament, as owners and occupiers of the following lands and heritages:— Burghead Harbour (Shore dues of).

1. Owner.

Poor Rate, … 9¾d.

School Rate,. 8¾d.

Cemetery Rate, ¼d 1s. 7d. per £1.

Registration Rate, ¼d.

Of the annual value of £310,10s. £24 11 7½

2. Occupier.

Poor Rate, … 9¾d.

School Rate, . 8¾d. 1s. 7d. per

Cemetery Rate, ¼.

Registration Rate, ¼d.

Of the annual value of £310,10s. 24 11 7½

Total £49 3 3

The annual value stated in the notice was arrived at by making a deduction of 50 per cent. for allowances under sec. 37 of the Poor Law Amendment (Scotland) Act 1845 ( v. sup.) from the valuation appearing in the valuation roll for the year to Whitsunday 1903. The complainers maintained that they were entitled to deductions which would give them total exemption from such rates and, inter alia, to the following:—

I. Repairs and Maintenance.

(1) Repairs and material, £11814 0

(2) Expenses of Dredging.

(a) Wages … 14215 8

(b) Upkeep of dredger 122 9 6

£265 5 2

(3) Lighting, &c. … 14 5 2

— £398 4 4

II. Insurance . … 8317 8

IV. Rates and Taxes.

Income Tax .…£43 2 6

Burgh Assessments . 157 0 7J

Poor, School, and other rates . …3511 7J

County Assessments . 15 11 4

251 6 1

The complainers pleaded—“(1) The amount stated in the valuation roll, made up by the assessor as the annual value of the undertaking of the complainers, is conclusive as regards the respondent, and he is not entitled to re-open that valuation or to inquire as to the basis upon which the same was made up. (2) The complainers being entitled to deductions under sec. 37 of the Act 8 and 9 Vict. cap. 83, for which the respondent refused to give them credit, the proceedings complained of ought to be suspended and interdict granted against the respondent as craved.”

On 26th May 1903 the Lord Ordinary ( Stormonth Darling), before answer, made a remit to John Stuart Gowans, C.A., Edinburgh “to consider and report with special reference to the statements and pleas of parties as to the probable annual average cost of the repairs, insurance, and other expenses, if any, necessary to maintain the complainers’ subjects assessed in their actual state, and the rates and taxes and public burdens payable in respect of the same, it being the object of this remit to ascertain the deductions to be made in terms of the 37th section of the Poor Law (Scotland) Act 1845, and to report upon any other matter which either party may consider material to the question at issue.”

On 28th June Gowans reported that having examined the complainers’ books, &c., in his opinion the annual average cost during tne five years ending 31st May 1903 of the repairs, insurance, and other expenses was £399, 16s. 6d., that in his opinion that sum was the deduction in respect of such repairs, &c., which fell to be made from the valuation before assessment in terms of section 37 of the Act, and that it included the average amounts paid by the complainers for “(1) Materials, wages, and tradesmen's accounts in connection with repairs of harbour and upkeep of dredger. (2) Wages in connection with dredger. (3) Coals and firewood for dredger. (4) Insurance, including insurance on dredger. (5) One-half of harbourmaster's salary.”

The reporter further stated—“The reporter understands from reading the case of Edinburgh and Glasgow Railway Company v. Hall, 4 Macph. 301, that income tax is not one of the rates, taxes, and public charges payable in respect of land and heritages which under the 37th section of the Poor Law (Scotland) Act 1845 fall to be deducted in estimating the annual value of such lands and heritages. If that tax is deducted … the annual average of taxes paid during the four years ending 15tli May 1902 amount to £269, Is. Id., whereof there is applicable to owner £100, 17s. lid., and occupier £168, 3s. 2d.

“The respondent contends that an average of rates and taxes is not a proper deduction, but that the deduction should be the taxes of the year in question. He refers to the case above quoted of Edinburgh and Glasgow Railway Company v. Hall. The rates and taxes exclusive of income tax under Schedule D, but inclusive of property tax Schedule A, paid and assessed during the year ending 15th May 1903, are as follows:—

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Owner. Occupier. Total.

Paid—

Property Tax, £ s. d. £ s. d. £ s. d.

Schedule A . 1 13 6 … 113 6

County Assessments . . 10 12 8 4 0 6 14 13 2

Burgh Assessments . . 31 11 5 1 2 103 211 1 4 134 10 4 3 4

Parish Rates . 1 16 1 013 4 2 9 5

45 9 8 1 2 107 16 9 1 4 153 6 5 3 4 Unpaid, but consigned in Court—

Parish Rates . 24 11 7 1 2 24 11 7 1 2 49 3 3

Total, ,70 1 4 132 8 4 3 4 202 9 8 3 4

“The respondent further contends that only the owners’ proportion of taxes forms a deduction from the gross rental for the purpose of ascertaining the net rental, and quotes the case of Wilson v. Pumpherston Oil Company, 3 F. 1099.

In the course of the remit the respondent contended that it was the reporter's duty to ascertain what was the assessable value of the shore dues of Burghead Harbour which should be entered or which should have been entered in the valuation roll of the county of Elgin for the year ending at Whitsunday 1903, and that it was the reporter's duty to ascertain how the assessable value of £621 for the year ending at Whitsunday 1903, as averred in statement 2 of the statement of facts for the complainer, had been arrived at, and what deductions had been made in fixing that sum.

The reporter is of opinion that this matter is outwith the remit, and that in view of the cases The Magistrates of Glasgow v. Hall, 14 R. 319, and The Pumpherston Oil Compny, Limited v. Wilson, 38 S.L.R. 830, the respondent is bound to accept the valuation appearing in the valuation roll, and is debarred from inquiring what deductions fell to be made in making that valuation.

The sum of £621 is the yearly rent or value of the lands and heritages belonging to the complainers as fixed by the Assessor for the County of Elgin for the year ending Whitsunday 1903, although that sum is entered in the valuation roll as ‘ shore dues of Burghead Harbour.’

The respondent contends that the lands and heritages in respect of which the complainers are assessed consist of quays, wharves, sheds, buildings, and other heritages, but that the part of the sea below high-water mark, which is included within the boundaries of the harbour, is no part of the lands and heritages belonging to the complainers. Following on this contention he objects to any sums being deducted in respect of dredging operations.

The reporter has not been able to adopt this view.”

Both parties lodged objections and answers to the report.

The complainers maintained, inter alia, (1) that the probable average cost of insurance proposed to be allowed was insufficient inasmuch as for the first three of the five years taken by the reporter the dredger, which for the last two of the five years was insured and would in the future be insured at a premium of £80, had not been insured, and so £80 for each of the first three years should have been added, and (4) that ( a) an average of the rates and taxes should be taken to arrive at the deduction therefor, and ( b) the rates and taxes to be included should not be the owner's proportion only but both owner's and occupier's.

The respondent objected to the report, inter alia, on the following grounds:— (Obj. I). That the report did not contain information which would have enabled him to show that the deductions allowed by the reporter had already been taken into account by the assessor in stating the yearly rent or value of the subjects in the valuation roll at £621; for example, while the subjects were entered in the valuation roll for that year as “Shore dues of Burghead Harbour, £621,” the shore dues for that year amounted to £2251, 19s., while the profits in each of the preceding four years, on which income-tax had been paid, were as follows—1898–9, £705; 1900-1, £952; 1901-2, £804; 1902-3, £795. (Obj. II). The respondent also objected to the sum of £399, 16s. 2d. allowed by the reporter for deductions as excessive, and averred—“The lands and heritages at Burghead Harbour belonging to the complainers, entered in the valuation roll, consist of quays, wharves, sheds, offices, a steelyard, and a pier, these being the only subjects legally assessable. Of these, the sheds, offices, and steelyard are separately entered in the valuation roll, and the quays, wharves, and pier are the subjects covered by the entry therein of ‘Shore dues of Burghead Harbour,’ and are the subjects the assessment of which is in question in the present case … The complainers have right under their statutes, and subject to the supervision of the Board of Trade, to dredge and deepen the portion of the sea included within the boundaries of the harbour, but the sea within the harbour boundaries is no part of the lands and heritages belonging to the complainers. The respondent accordingly submits that there should be disallowed all items of expenditure which do not relate to the complainers' lands and heritages as above mentioned, and that the whole expenses connected with the dredger and with dredging should be disallowed in respect (1) they are ordinary working expenses and not repairs or expenses within the meaning of the statute, and (2) they are not operations upon the complainers’ lands and heritages assessed under the said entry. The respondent also maintains that the one half of the harbourmaster's salary which the reporter proposes to allow as a deduction under head 5 ought to be disallowed. The harbourmaster's salary is entirely an expense of the complainers’ business, and has no relation to the deductions allowed by the statute. It is in no sense an expense of the upkeep of the harbour as an assessable subject.” (Obj. III). The respondent maintained that the proper deduction for rates and taxes was ( a) not an average, but the rates and taxes for the particular year, and ( b) the proportion of

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the rates and taxes payable by the owner, and not both that payable by the owner and that payable by the occupier.

On 19th January 1905 the Lord Ordinary ( Stormonth Darling) pronounced an interlocutor repelling the complainers’ objections, and also objections 1 and 2 for the respondent, and sustaining objection 3 for the respondent.

Opinion.—“This suspension raises the question whether the complainers, as proprietors of the harbour of Burghead, in the parish of Duffus and county of Elgin, have received from the respondent the full amount of deductions to which they are entitled, under the 37th section of the Poor Law Amendment Act 1845, before being assessed for poor and other parochial rates (levied on the basis of the poor rate) for the year from Whitsunday 1902 to Whitsunday 1903. That section provides that … [quotes section] …

“The yearly rent or value of the lands and heritages belonging to the complainers was fixed by the Assessor for the County of Elgin, according to the valuation roll made up by him for the year ending at Whitsunday 1903, at the sum of £621; and the respondent as collector of poor and other rates for the parish of Duffus, intimated to the complainers that he had assessed them as owners and occupiers of lands and heritages of the annual value of £310, 10s., being a deduction of 50 per cent. from the amount appearing in the valuation roll, in respect of the allowances mentioned in the 37th section. The complainers, on the other hand, came into Court maintaining that, if the full statutory deductions were allowed, they would be entitled to total exemption from the rates.

I followed the usual course of making a remit to a man of skill—in this case Mr Gowans, C.A., Edinburgh—to examine the complainers’ books, and to report as to the items of expenditure mentioned in the statute. He reported that, in his opinion, the sum of £399, 16s. 2d. was the probable annual average cost of the repairs, insurance, and other expenses necessary to maintain the subjects of assessment in their actual state; and he further stated alternative views of the amount of rates, taxes, and public charges payable in respect of the same, the alternatives depending on whether these burdens were to be taken, like the repairs, on an average of years or for the year of assessment, and whether they were to include all rates or only rates payable by the owner. Both parties lodged objections and answers to his report; and I shall deal with these in their order, beginning with the objections made by the respondent, as being the most important. But before doing so I may make this general observation, that the whole matter is one of statute, as interpreted by decision. Counsel for the respondent indicated that the course of decision has resulted in deductions being allowed to so large an amount as practically, in the case of some industrial undertakings, to make the subjects not worth assessing. If so, I can only say that the remedy must be sought, not by asking the Court to go back on decisions which have been acted on for half a century, but by the action of Parliament.

This preliminary observation has a special bearing on the first objection for the respondent, in which he complains that the report does not contain certain information which he thinks would have enabled him to show that the deductions allowed by the reporter had already been taken into account by the assessor in fixing his valuation of £621. But the case of Magistrates of Glasgow v. Hall, 14 R. 319, followed in Pumpherston Oil Company v. Wilson, 3 P. 1099, settled that this Court has no jurisdiction to review the assessor's valuation or to inquire into the process by which it was reached, and that the deductions allowed by the Poor Law Act must be made from the sum entered in the valuation roll. It seems to me, therefore, that the reporter was quite right to refuse the respondent's demand. Counsel for the respondent conceded that if the information were supplied neither I nor the Inner House could make any use of it. But he suggested that it might come to be useful if he carried the case further. That seems to me not a good reason for sustaining his objection. If the House of Lords should be appealed to, and should desire the information, their Lordships have ample power to make an order by which it can be obtained.

The respondent, by his second objection, takes exception to the items of expenditure allowed by the reporter for dredging the harbour, including the upkeep of the dredger itself and the wages paid in connection with it. The argument is that dredging is not an expense necessary to maintain in their actual state the lands and heritages which are the subjects of assessment, because the right of harbour, which is an incorporeal right, is not within the definition of ‘lands and heritages’ as contained in the Poor Law Act. That is quite true; and I hardly think it is a sufficient answer to that argument to say that the Valuation Act of 1854 does (by section 42) contain the word ‘harbour’ as within the enumeration of ‘lands and heritages.’ Moreover, it must be admitted that judicial opinion has not been uniform on this formal point. I call it so, for it is a point much more of form than of substance. It has twice at least been urged—in the Leith Dock Commissioners case and in the Clyde Trust case—and on both occasions on behalf of the harbour authorities, for the purpose of resisting assessment. It has never before, so far as I am aware, been urged by the rate-collector as a reason for refusing to allow harbour expenditure to be deducted from annual value.

In the Leith case (2 Macph. 1234) Lord Jerviswoode, who was the Lord Ordinary, expressed (at p. 1239) his concurrence with the opinion of Lord Rutherford in a former Leith Dock case to the effect that ‘ the interpretation clause of the Poor Law Act was not intended to be exclusive of all it did not contain,’ and therefore that a right of harbour granted by the Grown ‘ must be dealt with as heritage in the sense of the

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statute and as assessable accordingly. Lord President M'Neill, in moving that the Lord Ordinary's interlocutor should be adhered to, said simply (at p. 1242), ‘Then there arises an important question whether these subjects are in their own nature to be regarded as lands and heritages in the sense of the Poor Law Act. I have no doubt they are, so far as use is made of them.’ When the case went to the House of Lords, it appears from the report in 4 Macph. (H.L.), at p. 10, that Lord Advocate Moncreiff urged as part of his argument on behalf of the appellants that the Scotch Poor Law Act did not include harbours in the enumeration of assessable property, and that a right of harbour was an incorporeal right and could not be included in the corporeal property therein defined. But the respondent's counsel were not called upon, and Lord Chancellor Cranworth, apparently dismissing the idea that there was any difference between the laws of England and Scotland on that matter, said (at p. 18 of 4 Macph. H.L.), ‘It must now be held in Scotland, as in England, that the commissioners or trustees of docks, harbours, wharves, and everything of that sort, are liable to be rated, in respect of their receipts, whether in the form of dues or otherwise, and whatever be the purposes to which the receipts are applied.’ In the case of Adamson v. Clyde Navigation Trustees, 1 Macph. 974, it was decided that the trustees were not liable to be assessed in respect of the river and incorporeal right of harbour, as subjects apart from the wharf, quays, and other accommodation of which that harbour consisted, and Lord Justice-Clerk Inglis explained (at p. 987) that he did not read the Clyde Acts as vesting the trustees with any jus incorporale, by which they could be said to be, in the common law sense of the term, proprietors of the right of harbour. So far as that consideration affected his Lordship's opinion, it would not apply here, because the coinplainers undoubtedly represent the original grantee of the harbour of Burg-head. But it is right to add that his Lordship did not proceed entirely upon that view. Lord Cowan based his opinion solely on the ground that a right of harbour was not in express terms within the Poor Law Statute; Lord Benholme concurred with the Lord Justice-Clerk; and Lord Neaves held that an incorporeal right of harbour was no more assessable than a right of copyright. The case went to the House of Lords, but only on the general question whether the Clyde Trustees were exempted from assessment altogether by reason of their holding for public purposes, and the judgment of this Court was affirmed, without reference to this special point. If, therefore, the question were directly raised whether an incorporeal right of harbour was an assessable subject under the Poor-Law Act, it could not be said to be finally settled, there being conflicting opinions of eminent judges, resulting in a Second Division judgment one way in 1863 and a First Division judgment the other way in 1864, both of which were affirmed by the House of Lords, but without this particular point being raised at all in 1863, or very seriously considered in 1864.

I must apologise, however, for being decoyed by professional interest into a discussion which, as regards the question here, is really academic. For what does it matter to the deduction for dredging whether the coinplainers are assessable on the incorporeal right of harbour or not? They are undoubtedly assessable on the physical structures connected with the harbour, which are expressly mentioned (as quays, wharves, and so on) in the Poor Law Act, and which derive their whole use and value from being pertinents of a harbour. The entry in the valuation roll of ‘Burghead Harbour (Shore Dues of) ’ may not be very accurate, for the dues are not the assessable subject, they are the source of value which the subject possesses. But the respondent can hardly complain of the entry, for he accepts it, and is bound to accept it, as conclusive of value, and without it there could be no assessment. What he does say is that no expenditure can be allowed as a statutory deduction unless it is made on the actual physical structure which is the subject of assessment. But where does he find the warrant for that in the language of section 37? It does not say that the ‘repairs, insurance, and other expenses’ must be made on the actual lands and heritages, but that they must be ‘ necessary to maintain such lands and heritages in their actual state.’ Now, what is more necessary to maintain quays and wharves in their actual state (that is, in a state to command the hypothetical rent) than an operation which is intended to prevent the accumulation of silt, and so to keep the way open for ships to reach the wharves and quays? How coidd their value, which it is proposed to assess, be preserved without such an operation? I quite agree that dredging might be carried much further than the mere preservation of the status quo. It might really mean deepening or enlarging. But then we have the uncontroverted statement of the reporter that he has allowed nothing of the nature of capital expenditure, and therefore I have come to the conclusion that in fixing the sum of £300, 16s. 2d. he has rightly apprehended the nature of the inquiry with which he was charged, and that the second objection for the respondent must also be repelled. There might have been a question about the half of the harbourmaster's salary, but it appears that he acts as skipper of the dredger, and therefore this proportion of his salary is in the same position as other wages in connection with the dredger, and is truly part of the cost of working it.

This is the natural place at which to notice the firstobjection for the coinplainers, which seeks to enlarge the allowance of £300,16s. 2d., of which I have just expressed my approval. The objection is that the reporter, in taking, with the assent of the parties, five years as a reasonable period from which to strike an average, has stated the premiums of £80 paid for insuring the

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dredger only for the two years 1902 and 1903, in which these premiums were actually paid, and that he ought to have added, contrary to the fact, £80 for each of the first three years of the period, with the result of increasing the total average from £399, 16s. 2d. to £447, 16s. 2d. All I can say is that if the reporter had done so I think he would have gone wrong. The complainers cite the case of Glasgow Gas Light Company v. Adamson, March 23, 1863, 1 Macph. 727, in which apparently a sum was allowed for insurance although nopremiums were paid, on the footing that the company were their own insurers. But it appears from the Lord Ordinary's interlocutor (p. 729) that a sum was annually laid aside to meet the risk of destruction by fire. That being so, it may have been correct to describe the company as ‘their own insurers’; but I should demur altogether to such a phrase being used where the owners of perishable subjects neither insure nor make any provision in lieu of insurance but simply take their risk of fire. I fail to see why in such a case they should get any deduction under the head of insurance. And where a period of years has been adopted as affording a fair basis for an average I think it would be wholly misleading to take any but the actual figures which the books of the owners supply. No doubt the phrase in the 37th section is ‘ the probable annual average cost,’ but the word ‘probable’ must be read in connection with the word ‘ average,’ and if an average of years is to be taken, it must be taken correctly as affording a test of probability. The complainers say that it is their intention to maintain this insurance in future. That may be; and if they carry out their intention they will be entitled to get the benefit of it at the end of five years from the time when they began to insure at that figure. But at present the experience of the five years down to 1903 is against them, and, having assented to that period as a fair test of actual outlay, and accepted it as regards some items of expenditure, they are not entitled to repudiate it as regards other items merely because imaginary figures would suit them better. I shall therefore repel the first objection for the complainers. They did not press their second and third objections, and these also I shall repel.

That only leaves the third objection for the respondent, which may be taken along with the fourth objection for the complainers. Both refer to the reporter's method of dealing with the deduction allowed by section 37 for all rates, taxes, and public charges payable in respect of the lands and heritages. He has not expressed an opinion as to the proper method of dealing with these, but he has given alternative figures which enable me to dispose of the question between the parties. The contention of the respondent, as stated in his third objection, is twofold. He says (1) that the rates, taxes, and public charges to be deducted under section 37 are not to be estimated on any annual average but are to be those actually payable for the year of valuation; and (2) that it is only the owner's taxes that ought to be deducted. I agree with the respondent in both of these contentions. With regard to the first point, I think that the grammatical construction of the section requires you to hold that the words ‘all rates, taxes,’&c., are governed by the words ‘under deduction of,’ and not by the words ‘ the probable annual average cost of.’ I also think that the presumable intention of the section points to the same conclusion, for the taxes actually payable for the year are capable of precise ascertainment, and there is no necessity for resorting to a hypothetical estimate, as there is in the case of repairs and expenses of maintenance. That was the judgment of Lord Kinloch in the case of Edinburgh and Glasgow Railway Company v. Hall, January 19,1866, 4 Macph. 301, at p. 306, and that part of his Lordship's interlocutor was not reclaimed against.

The second part of the respondent's contention may be more doubtful, and there is no decision on the point, although it is significant that in Pumpherston Oil Company (Limited) v. Wilson (supra cit.) the company, who were owners and occupiers of chemical works, admitted that only owner's and not occupier's taxes fell to be deducted from the valuation. The complainers also refer to that case for certain observations made by Lord Kinnear about the difficulty of distinguishing between the outlay which a landlord ought to make and the outlay which a tenant ought to make in repairing a complex heritable subject. But there is no such difficulty about public charges, which are separately imposed upon owners and occupiers, even when the owner happens to be in occupation. Lord Kinnear conceded ‘ that as a rule the deductions contemplated by the statute are those required by the outlays of the proprietor.’ In saying so his Lordship had specially in view the deductions allowed for repairs and other expenses. But it seems to me that the same may be said of the deductions allowed for public charges, because the intention is the same in both cases, viz., to get at the burden on the gross rental hypothetically received by the landlord. In short, the whole conception of the section is that there is an imaginary tenant, and that the sum in the valuation roll is the rent which he might be expected to pay. If this be so I think it would be absurd to deduct from the amount supposed to be received by the landlord not merely his own rates and taxes, which are, properly speaking, ‘payable in respect of the lands and heritages,’ but also the rates and taxes payable by the occupier in respect of his occupation. The complainers argue that the section makes no distinction between owner and occupier, and that consequently all rates and taxes must be deducted. But that argument goes too far, because it was held in the second case of Edinburgh and Glasgow Railway Company v. Hall, June 29, 1866, 4 Macph. 1006, 2 S.L.R. 159, that, notwithstanding

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the generality of the words used in the section, property and income-tax charged on income derived from lands and heritages is not deductible. In short, the section must be read consistently with its manifest purpose, and that purpose being to ascertain the amount of nett receipts which the owner would draw from the subjects if he had a tenant, it seems to me that only the owner's rates and taxes for the year ending Whitsunday 1903 can be deducted. I shall therefore sustain the respondent's third objection and repel the complainers’ fourth objection.

The result, I suppose, will be to add the sum of £68, 7s. 10d. to the sum of £399, 16s. 2d. (together £408, 4s.) as the total sum to be deducted from the valuation of £621.”

The respondent reclaimed against the Lord Ordinary's interlocutor in so far as it repelled 1 and 2 of his objections.

Argued for reclaimer—The assessment here was on “lands and heritages” in terms of the Poor Law Act of 1845 (8 and 9 Vict. cap. 83), and the deductions allowed were those specified in sec. 37 thereof. Two questions arose, viz., (1) Did the incorporeal right of harbour fall under “lands and heritages”; and (2) were the expenses deducted such as sec. 37 contemplated, i.e., those necessary to keep the subject in its actual state, or such as it did not, i.e., expenses incidental to the carrying on of a business? The subjects assessable were “lands and heritages,” and it must be presumed that the assessor had valued the appropriate subjects. From dicta in the following cases it appeared that an incorporeal right such as a right of harbour was not assessable— Adamson v. Clyde Navigation Trustees, January 27, 1860, 22 D. 606; June 26,1863, 1 Macph. 974; affirmed June 22, 1865, 3 Macph. (H.L.) 100; Clyde Navigation Trustees, July 22, 1866, 4 Macph. 1143. No deduction was therefore to be made for expense incurred in connection with the incorporeal right of harbour and the cost of dredging must come out. Further, the statute contemplated expenses incident to keeping the harbour in its actual state, not such as were incidental to making it a profitable or revenue-earning subject. Esto that the harbour was assessable, the only deductions which the complainers were entitled to make were the expenses of keeping the docks, wharves, and quays in their actual state—Poor Law Act 1845, secs. 34 and 37; Valuation Act 1854, sec. 41; and actual state meant physical state. What was being dredged here was the solum below low-water mark. That was not part of the harbour as entered in the valuation roll. The only repairs deductible were such as were actually made on the quays, wharves, &c., i.e., the actual subjects. These subjects alone were assessable as lands and heritages. As to repairs, &c., the cost of which was deductible under sec. 37 of the Poor Law Act, reference was made to Edinburgh and Glasgow Railway Company v. Meek, December 10, 1864, 3 Macph. 229; Magistrates of Glasgow v. Hall, January 14, 1887, 14 R. 319, 24 S.L.R. 241; and Pumpherston Oil Company (Limited) v. Wilson, July 19, 1901, 3 F. 1099, 38 S.L.R. 830.

Argued for the complainers—The Lord Ordinary was right. The assessor had followed the usual practice of valuing the harbour as a whole. The harbour fell to be regarded as a unum quid—Ayr Harbour Trustees v. Assessor for Ayr, May 25, 1894, 21 R. 807, 31 S.L.R. 726. That course was warranted by section 42 of the Valuation Act of 1854. The theory that there was an incorporeal right of harbour which was not assessable was negatived by the House of Lords in Leith Dock Commissioners v. Miles, March 12, 1866, 4 Macph. (H.L.) 14, 1 S.L.R. 213; also in Gardiner v. Leith Dock Commissioners, June 17,1864, 2 Macph. 1234. Reference was also made to Cuninghame v. Assessor for Ayrshire, March 30, 1895, 22 R. 596, 32 S.L.R. 453; and Mersey Docks v. Liverpool, November 19,1873, L.R. 9 Q.B. 84. The dredging was necessary to keep the harbour open, and was not done merely for profit-earning purposes. The duty of keeping their harbour open was a common law obligation on those having a grant of harbour—Bell's Prin. 654; Officers of State v. Christie, February 2, 1854, 16 D. 454.

At advising—