Scottish Court of Session Decisions

On 25th October 1912 the Parish Council of the Parish of Glasgow (first parties) and Mungo Macdougal Graham, accountant, Glasgow, and another (second parties) presented a Special Case in which they craved the Court to determine, inter alia, whether the first parties were entitled, in virtue of the provisions of the House Letting and Rating (Scotland) Act 1911 (1 and 2 Geo. V, cap. 51), to levy on or recover from them occupiers' rates in respect of certain small dwelling-houses of which they (the second parties) were owners, and which at the commencement of the financial year were entered in the valuation and assessment rolls as empty.

The Case stated—“1. By section 33 of the Poor Law (Scotland) Act 1845 (8 and 9 Vict. cap. 83) it is provided—‘And be it enacted that it shall be lawful for the parochial board of any parish … to resolve

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that the funds requisite for the relief of the poor persons entitled to relief from the parish … shall be raised by assessment…

2. Section 34 of the same Act provides—‘ And be it enacted that when the parochial board of any parish … shall have resolved to raise by assessment the funds requisite, such board shall … resolve as to the manner in which the assessment is to be imposed, and it shall be lawful for any such board to resolve that one-half of such assessment shall be imposed upon the owners, and the other half upon the tenants or occupants, of all lands and heritages within the parish … rateably according to the annual value of such lands and heritages.…’

3. Section 40 of the same Act provides— ‘And be it enacted that before the expiration of one year from the date at which the first assessment under the provisions of this Act shall have been imposed as aforesaid in any parish … and yearly or half-yearly thereafter, the parochial board of every such parish … shall fix and determine the amount of assessment for the year or half-year then next ensuing, and shall make up or cause to be made up a book containing a roll of the persons liable in payment of such assessment, and of the sums to be levied from each of such persons, and the roll so made up shall be the rule for levying the assessment for the year or half-year then next ensuing… .’

4. By section 44 of the Education (Scotland) Act 1872 (35 and 36 Vict. cap. 62) it is provided that ‘the school board of each parish and burgh shall annually, and not later than the twelfth day of June in each year, certify to the parochial board or other authority charged with the duty of levying the assessment for relief of the poor in such parish or burgh, the amount of the deficiency in the school fund required to be provided by means of a local rate, and the said parochial board or other authority is hereby authorised and required to add the same under the name of school rate to the next assessment for relief of the poor, and to lay on and assess the same, one-half upon the owners and the other half on the occupiers of all lands and heritages, and to levy and collect the same along with the assessment for relief of the poor when that assessment is so imposed and levied, and to pay over the amount to the school board…’

5. In the practical working out of the foregoing Acts of Parliament and the Local Government(Scotland) Act 1894 (57 and 58 Vict. cap. 58), section 37, the first party, in the month of July yearly, proceed by resolution to raise the funds requisite for the poor and school expenditure in the current year by assessment on the owners and the tenants or occupants, one-half to be imposed on and payable by the owners as a class and one-half by the occupiers as a class. Who the owners and the tenants or occupants may be is not known at the time the assessment is made, because their names only appear on the valuation and assessment rolls to be made up later in the year. The first party on receipt of the valuation rolls after 30th September yearly make up under the above-quoted section 40 a parish assessment roll and proceed to levy the rates in conformity therewith by sending a demand note to each individual ratepayer intimating the amount payable by him and the date on which the same is payable. On default of payment a warrant for recovery is obtained. Although the rate is struck in July and the demand notes issued during October and November, the person whose name appears in the valuation and assessment rolls then current (made up from information obtained in the preceding months of May and June) is liable for the whole year's rates, although during the course of the financial year from May to May he has ceased to own or occupy the subjects in respect of which he was assessed. Such owner or occupier has, by decisions in the Sheriff Courts, been allowed relief against the succeeding owner or occupier for the portion of the year's rates applicable to the period during which the successor owned or occupied the particular subject. Apart from the House Letting and Rating (Scotland) Act 1911 (1 and 2 Geo. V, cap. 53), where a house is unlet no ‘occupier’ is entered under the existing Acts in the occupier column of the valuation roll or assessment roll, and no occupiers' assessment is or can be imposed, but in these cases the owners' assessment is imposed.

6. The first party have been in the habit of preparing a supplementary assessment roll in virtue of the powers contained in the Glasgow Corporation Tramways Order 1903, section 21 … in the month of March yearly of all subjects not included, and of all subjects included but entered as unoccupied, in the valuation roll made up as at 15th August yearly, which may have come into existence or been in occupancy after the Whitsunday preceding. Advantage is taken of this supplementary assessment roll to supply omissions or make corrections on the preceding assessment roll. The first party recover poor and school assessments from the owners and occupiers appearing in said supplementary assessment roll….

7. By section 7 of the said House Letting and Rating (Scotland) Act 1911 it is provided—‘Subject as hereinafter provided, the provisions of all Acts applicable within the respective areas in which this Act may be in operation respecting the liability for, and the imposition and recovery by an assessing authority of, any assessment, shall subsist in full force and effect: Provided that within every such area —(1) The occupier of a small dwelling-house shall in no case be liable to pay occupiers' assessment therefor in respect of any period prior to the commencement or subsequent to the termination of his occupancy, but any liability to pay occupiers' assessment, which would by law be imposed on a person occupying the small dwelling-house throughout the year from Whitsunday to Whitsunday, shall

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be imposed on any such occupier or successive occupiers during the year, whether their names appear in the valuation roll or not, to such extent or in such shares as shall be proportionate to the period or periods of their respective occupancies of the small dwelling-house. (2) Subject as hereinafter provided, the owner of a small dwelling-house shall be responsible for all assessments liability to pay which is imposed on the occupier thereof, and the same shall not be recovered or recoverable by the assessing authority from the occupier, but shall be recovered by the assessing authority from such owner in the same manner as provided for under existing Acts with respect to the recovery of assessments from owners, and the assessing authority shall be entitled to recover occupiers' assessments from the owner for the year from Whitsunday to Whitsunday, notwithstanding that the house may not be occupied throughout the year, and for that purpose to issue to the owner through their collector or other officer appointed by them any notice, schedule, demand note, or intimation which under existing Acts may be issued in respect of the year's assessments to the occupier. (3) Notwithstanding any payment by the owner of occupiers' assessments in respect of the occupancy of a small dwelling-house, if, in respect of any period, rent or other consideration shall not be received by the owner for any small dwelling-house in respect of which such payment has been made, the owner shall, upon lodging, on or before dates to be fixed by the respective assessing authorities (one of which dates shall be fixed not earlier than the first or later than the twentieth day of May in each year), with the clerk to any such authority, … a claim for repayment, which shall set forth the period or periods during which the small dwelling-house was not let, or in respect of which, though the house was let, no payment of rent or other consideration was received by him, and a declaration to the effect that no rent or other consideration has been paid or given for such period or periods, be entitled to repayment without any unnecessary delay from such authority of the proportionate amount of such assessment for the said period or periods without prejudice to the right of the authority to make adjustments with the owner in respect of any such rent or other consideration subsequently recovered by him. … (6) Every assessing authority shall, in respect of the occupancy of small dwelling-houses, allow to owners from all occupiers' assessments levied on and recovered from them in place of the occupiers (less any repayments in pursuance of a claim under this section) a deduction, to cover cost of collection, on the following scale (that is to say)—In the city of Glasgow, two pounds ten shillings per centum.…’

8. By section 8 of the said House Letting and Rating (Scotland) Act 1911 it is provided—‘Every payment of an assessment by an owner under or in pursuance of the provisions of the immediately preceding section shall, notwithstanding any deduction which the assessing authority is required to allow therefrom, be deemed a payment of the full assessment or (where the owner pays by instalments) of a proportionate amount of the assessment, as the case may be, by the occupier for the purpose of any qualification or franchise which depends on such payment: Provided that, where an owner who is responsible therefor omits or neglects to pay any such assessment, or where, having paid the same, he has claimed repayment thereof in respect of any period during the occupancy of the said occupier, the occupier may pay the same to the assessing authority and deduct the amount from the rent due or accruing due to the owner, and the receipt for such assessment shall be a valid discharge of the rent to the extent of the assessment so paid.…

10. In conformity with the interpretation put upon the foregoing sections of the above-mentioned Acts of Parliament, and in particular of the said House Letting and Rating (Scotland) Act 1911, by the Local Government Board for Scotland, the first party, being an assessing authority within the meaning of section 1 of the said Act, have made up a parish assessment roll for the year 1912–13, in which they have entered the yearly rent or value of small dwelling-houses as determined by the burgh and county valuation rolls, and have imposed for the poor and school rates an assessment, one-half on owners as a class and one-half on occupiers. The second parties are owners of certain small dwelling-houses not occupied by them, and entered in the valuation roll and in the parish assessment roll for said year as empty. Demand notes for occupiers' assessments for the year from Whitsunday 1912 in respect of these small dwelling-houses have been intimated to each of them … [ the houses were stated]… The above houses were unlet and unoccupied on 28th May 1912, and were accordingly entered in the valuation roll and in the parish assessment roll as empty. The above houses are ‘small dwelling-houses’ in terms of section 1 of the said House Letting and Rating (Scotland) Act 1911, to which reference is hereby made.

11. The said small dwelling-house of one room and kitchen situated in the property 9 Glenpark Street, East, Glasgow, has been let by the said William Clark Faulds to James Cunningham, tenant there, who now occupies it as from 28th August 1912 on a monthly contract of let at a rent of 17s. 9d. terminable by either party thereto on eleven days' notice. The first party have intimated that in the event of the first question of this case being answered in the negative they will hold the said William Clark Faulds liable in payment of oocupiers' assessments for poor and school rates in respect of said house, and that for the period of nine months at a rent for that period of £6, 11s., being three-quarters of an annual rent of £8,15s., calculated on the basis of the monthly rent payable by the said James Cunningham, and that whether the said dwelling-house

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and the name of the said James Cunningham as occupier be entered in the said supplementary roll or not.”

The contentions of parties as stated in the Case were as follows—“The first party, in accordance with the interpretation put upon said Act by the Local Government Board, maintain that the effect of section 7 of the House Letting and Rating (Scotland) Act above quoted is to place upon owners of small dwelling-houses the liability to pay all tenants or occupiers' rates, both in the case where an occupier's or tenant's name appears in the valuation and assessment rolls and where such houses are entered as unlet and unoccupied, subject to subsequent adjustment with the rating authority, in terms of sub-section 3 of that section of the Act. In the event of a negative answer to the first question in this case, the first party contend that under the statutory provisions foresaid they are entitled to assess such small dwelling-houses as are entered as unlet and unoccupied in the valuation and assessment rolls and have become let or occupied for periods either prior to the supplementary roll, but do not appear therein, or have become occupied after the date of the completion of the said supplementary roll, and to demand occupiers' assessments in respect thereof from the proprietors for the whole financial year, or otherwise for the whole portion of the financial year remaining after the date when said small dwelling-houses become so let or occupied.

The second parties maintain that the first party is not entitled to recover from them occupiers' rates for the year or any proportion thereof in respect of small dwelling-houses which are entered in the valuation and assessment rolls as unlet and unoccupied at the commencement of the year and are not included in the supplementary roll.

A further question has arisen, viz., whether in regard to all occupiers' assessments leviable on the second parties, the second parties are entitled to deduct from the amount of said assessments at the time of payment the allowance of 2 1 2 per cent. payable to them by the first party in terms of section 7, sub-section 6, of the said Act. The second parties claim that such deduction falls properly to be made on payment of the assessments levied on them. The first party, on the other hand, in accordance with the Local Government Board's interpretation of said Act, contend that such allowance is not to be made by way of a deduction from the rates when paid by the second parties, and does not fall to be made till the close of the financial year, when the net amount of the assessments actually in their hands shall have been ascertained.”

The questions of law were—“1. Is the first party entitled to recover from the second parties occupiers' rates for the whole financial year ending Whitsunday 1913 (subject to any right to repayment of any portion thereof under section 7, sub-section 3, of said Act) on the said small dwelling-houses entered as unlet and unoccupied in the valuation and assessment rolls? 2. In the event of the first question being answered in the negative, is the first party entitled, in virtue of the provisions of the last-mentioned Act, to recover from the said William Clark Faulds occupiers' rates in respect of the said small dwelling-house situated at 9 Glenpark Street, East, Glasgow (subject to any right of repayment as aforesaid) ( a) for the whole financial year, or ( b) for the portion of the financial year remaining after the date when said small dwelling-house has become let or occupied, where said small dwelling-house is not entered in the said supplementary roll? 3. Are the second parties entitled to deduct from the assessments recoverable from them the allowance of 2 1 2 per cent. in terms of section 7, sub-section 6, of the said Act at the time of payment; or does such allowance fall to be deducted after the net amount of assessments received from the second parties has been ascertained at the close of the financial year?”

Argued for the first parties— ( Questions 1 and 2)—Entry on the roll was an irrelevant consideration, for the effect of the Act was to impose on owners liability for occupiers' assessments irrespective of the fact whether any occupiers' names appeared on the roll or not—House Letting and Rating (Scotland) Act 1911 (1 and 2 Geo. V, cap. 53), sec. 7 (1) and (2). The Act created a pro rata constructive liability for occupiers' assessments and transferred that liability to the owners. It was not a condition-precedent that there should be an actual occupier at the date when the roll was made up, for the words were “any such occupier or successive occupiers”—not the first and succeeding occupier. “Occupancy,” and not “entry on the roll,” was the criterion of eventual liability, for if the premises were never let the owner who had paid the assessments was entitled to recover them at the end of the year—section 7 (3). ( Question 3)—The deduction to cover cost of collection fell to be made from the net sum after deducting the rebate allowed to the owner—section 7 (6). It could not therefore be determined until the close of the financial year.

Argued for second parties—( Questions 1 and 2)—The Act imposed no liability on owners where there was no liability on occupiers. It only transferred to owners the liability presently on occupiers. Where therefore there was no occupier there was no liability to transfer, and there could not be liability where, as here, there was no entry on the roll at the date when it was made up. What was assessed was not property but persons— Adamson v. Clyde Navigation Company, June 26, 1863, 1 Macph. 974, per Lord Neaves at p. 991; Argyll County Council v. Walker, 1909, S.C. 107, per the Lord President at p. 109, 46 S.L.R. 107—and that implied entry on the roll at the time it was made up. The Act did not create any new liability. It merely spread the liability imposed by the Poor Law (Scotland) Act 1845 (8 and 9 Vict. cap. 83), section 40, over all the actual

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occupiers instead of leaving it as formerly on the occupier at the time the roll was made up. The object of the Act was to adapt the existing liability to short lets. The words in section 7 (1) “whether their names are in the valuation roll or not” were not inconsistent with that view, for they meant that though the name of the occupier at the date when the roll was made up was necessarily on the roll and the names of succeeding occupiers were as necessarily not on it, liability was hence-forth to be imposed on all of them pro rata. ( Question 3)— The question was one of impression. The words “shall …. allow …. from all occupiers' assessments …. a deduction,” meant a deduction from the gross sum actually paid over by the owners to the rating authority, and not a deduction from the net sum.

At advising—