Scottish Court of Session Decisions

The County Council of Fife, first parties, and the Provost, Magistrates, and Councillors of the Royal Burgh of Kirkcaldy, second parties, brought a Special Case for the determination of questions as to the liability of the first parties for owners and occupiers' rates in respect of the Sheriff Court Buildings, Kirkcaldy.

The Special Case set forth—“1. The County Council of the County of Fife, constituted under the Local Government (Scotland) Act 1889 (52 and 53 Vict. cap. 50), are charged with the statutory duty of providing court-house buildings for the county of Fife. The said County Council, formed in 1889, come in place of the commissioners of supply appointed under annual Acts of Supply dating from 1656, caps. 14 and 25, and under the Local Government (Scotland) Act 1889, section 11, sub-section 1, and section 42, are charged with a number of duties and functions formerly performed by the commissioners of supply, including the carrying out of statutes relating to the Sheriff Courthouse as contained in the statutes 23 and 24 Vict. caps. 28 and 29 and 47 and 48 Vict. cap. 42.

2. At a meeting of the first parties held on 17th October 1890 there was submitted a letter received from the Secretary for Scotland in terms of section 4 of the Sheriff Court-Houses (Scotland) Act 1860 (23 and 24 Vict. cap. 79) forwarding a representation signed by three county councillors, representing, as provided by section 3 of the said Act, that the court-house accommodation in Kirkcaldy for Kirkcaldy and district was inadequate, and requesting the Secretary for Scotland to make such investigation as might be thought necessary. At that meeting of the first parties it was found that the accommodation in Kirkcaldy for the Sheriff Court was inadequate, and it was resolved to proceed with the erection there of a court-house, and to represent to the Secretary for Scotland accordingly. Remit was made to the Finance and Property Committee of the first parties along with Major Oswald, then a member of the first parties, and four representatives from the second parties as a committee for this purpose. Plans were then obtained, and on 10th March 1891 the first parties resolved to acquire a site at South Fergus Place, Kirkcaldy, at a sum of £600, to approve plans which had been prepared, and to erect a court-house and relative accommodation at a cost of £5700. At a meeting of the first parties on 16th February 1892 it was resolved to remit to the County Councillors who should from time to time be members of the County Finance and Property Committee, along with Major Oswald and also three representatives from the second parties, the Town Clerk of Kirkcaldy, or such others as from time to time might be appointed by the second parties, and the Provost, Magistrates, and Council of Burntisland, as representatives of these burghs under the Sheriff Court-Houses (Scotland) Act 1860, as a special committee to accept estimates. The capital cost of the buildings was contributed

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by the first parties and the burghs in the said county subject to grant received from the Treasury. A sub-committee consisting of representatives of the first parties and four representatives of the second parties is appointed annually for the purpose of attending to the maintenance of the Sheriff Court buildings at Kirkcaldy and supervising the duties of the caretaker. The last meeting of that sub-committee was held on 25th July 1918. Representatives of the second parties attended that meeting. Representatives of the second parties were called to those meetings regularly and were called to the meeting in question. Matters such as expensive repairs, redecoration, keeper's salary, &c., are dealt with by the first parties through their Finance and Property Committee. Representatives of the second parties have not been called to meetings of the said Finance and Property Committee at which the Sheriff Courts were under consideration. The last meeting of the Finance and Property Committee dealing with the Sheriff Courts was held on 11th March 1919, when the question of decoration of the Sheriff Court buildings at Kirkcaldy was under consideration. The first parties annually at their statutory meeting on the third Tuesday of October levy assessments for the purpose, inter alia, of maintaining sheriff courts in the county. Representatives of the second parties have not in the past been called to those statutory meetings. There are no other meetings.

3. In accordance with the said resolutions the said Sheriff Court buildings were duly erected, and they comprise the whole corner block at South Fergus Place, Kirkcaldy. These buildings were and still are used for (first) the Sheriff Courts of the Kirkcaldy District Division of Fife, and (second) Justices of the Peace Licensing Courts for the said Kirkcaldy Division, (third) meetings of Kirkcaldy District Committee of the Fife County Council, all for the performance of their statutory duties, and (fourth) Justice of the Peace Criminal Courts. During the war a room in the buildings was, when not required for the purposes of the business of the Sheriff Court, occasionally used for meetings of the Kirkcaldy District (Military Service) Tribunal and of the County (Military Service) Appeal Tribunal, and two rooms were, when not required for the said purposes, used by the Civil Liabilities Commissioner for Fife, all also for the performance of their respective statutory duties. A room was also occasionally used, when not required for the said purposes, by the Fife Food Control Committee for conferences in connection with its official business. The said meetings and conferences were almost without exception held in the Sheriff Courtroom. Accommodation is provided within the buildings for the offices of the Depute Sheriff-Clerk for Kirkcaldy district and his staff. There is also a dwelling-house consisting of three rooms occupied by the caretaker of the buildings, who is a servant of the first parties and is not liable to them for rent in respect of his occupancy.

4. Under section 14 of the Sheriff Court-Houses (Scotland) Act 1860 the County Council have power to make arrangements with respect to the use of the court-house or any part thereof with any persons or corporations desiring the use of same on such terms and conditions as may be agreed upon. In 1916 the number of meetings of the Sheriff Court was 104, of Justices of the Peace Licensing Court 16, and of the said District Committee 22 in the said buildings. These figures represent the average yearly number of meetings of the said Courts and Committee in the said buildings. No rent has ever been or is received from or stipulated to be paid by Kirkcaldy District Committee or from the said Justices of the Peace, nor was any rent received or stipulated to be paid in respect of the said meetings of Tribunal or in respect of the occupancy by the Civil Liabilities Commissioner, or in respect of the said Food Control Committee's conferences. Kirkcaldy District Committee pay a sum of £5 annually to the first parties towards the cost of lighting and cleaning the premises. If the first parties had not used the Sheriff Court buildings for their own various purposes as enumerated under heads second, third, and fourth in the preceding article, they would have required to pay a substantial rent to obtain the necessary accommodation else-where.….

10. The first parties up to the year 1915–16 paid local assessments on owners and occupiers in respect of the said buildings on the assumption that they were legally liable for them, but in September 1916 they were advised that the rates leviable by the second parties upon owners and occupiers of property cannot be legally charged against them.

11. In respect of their ownership of the said Sheriff Court buildings the first parties were assessed by the second parties for the year 1916–17 for burgh rates on a rental of £279, the assessment amounting to £48, 4s. 11d. as the amount of owners and occupiers' proportion of rates. In the year 1917–18 the first parties were similarly assessed, the claim being £50, 3s. 1d.

12. The said Sheriff Court buildings were entered in the valuation roll for the years 1916–17 and 1917–18 for the burgh of Kirkcaldy as follows:—

Description and Situation of Subjects.	Proprietor.	Tenant.	Occupier.	Inhabitant Occupier.	Annual Value.	Yearly Rent or Value.
Sheriff Court Buildings, Whyte's Causeway	County Council of Fife, per W. D. Patrick, Cupar	..	Proprietors	…	..	£270
House	Do.	..	Do.	Joseph Wilson, caretaker	£9	£9

13. The Commissioners of His Majesty's Treasury have offered to make to the second parties a contribution in respect of occupiers' rates on a rental of £200. Such contribution by His Majesty's Treasury is made to local assessing authorities in lieu of occupiers' poor and school rates, and municipal assessments in respect of all property occupied by Government departments. No account is taken by the Treasury of the rates leviable upon owners. The second parties have not meantime accepted the offer.”

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The first parties contended—“(1) That the entry in the valuation roll shows accurately the description of the said buildings, and that the buildings are used in connection with the government of the country and the administration of justice. (2) That the said buildings are vested in the first parties for purposes required and created by Government for the administration of the government of the country and of justice. (3) That the Justices of the Kirkcaldy District of the County of Fife and the Kirkcaldy District Committee, who occasionally occupy a room in the said buildings, have no tenure, and occupy a room in the buildings only for the administration of the government of the country and of justice, and only when accommodation is available by reason of the room not being required at the time for the business of the Sheriff Court; and that the occupancy of the said Tribunals, Civil Liabilities Commissioner, and Food Control Committee was also for the administration of the government of the country and of justice, and was subject to the qualifications before mentioned. The first parties consequently contend that they are not liable for any local rates in respect of the said buildings, and in particular for the rates levied by the second parties.”

The second parties contended—“(1) The buildings are substantially occupied for purposes other than the administration of justice, and as there is no exclusive Crown occupancy there can be no exemption from rating. (2) If there were exclusive Crown occupancy the exemption would only be from occupiers' rates. The Crown is not the owner, and the owner if sued could not put forward the defence of the impossibility of suing the Crown. (3) That the County Council are bound to credit separate accounts for the buildings with an adequate rent in respect of their occupation for all purposes other than holding Sheriff Courts.”

The questions of law were—“1. Are the first parties liable for ( a) owners' and/or ( b) occupiers' rates sought to be imposed on them by the second parties in respect of the said buildings? (2) Are the first parties bound to credit separate accounts with an adequate rent in respect of their occupation of the buildings for purposes other than the holding of Sheriff Courts?”

Argued for the first parties—The buildings in question were originally required and were built to serve Government purposes, viz., the administration of justice.. There was no suggestion that their size exceeded what was required for that purpose, or that they were capable of being separated into different apartments, some of which were used for an alien purpose. The dominant use had remained throughout use for the administration of justice, and the sole question in the case was whether the subsidiary purposes for which the buildings were used were sufficient to eliminate the exemption from taxation. The use of the buildings for licensing courts was a use for the administration of justice, for the licensing courts were courts of the land; they took evidence on oath; counsel appeared; and there was an appeal from their decisions. The remaining uses were intermittent and were not productive of rent. The dominant purpose was not affected or displaced by such uses, but remained operative as the basis for exemption from taxation— Coomber v. Justices of Berkshire, 1882, 9 QBD 17, per Grove, L.J., at p. 27, 1883, 9 A.C. 61, per Lord Blackburn at p. 65 and p. 66—in which case there was intermittent use for county council and committee meetings. Glasgow Courthouse Commissioners v. Glasgow Parish Council, 1913 S.C. 194, 50 S.L.R. 97, applied in principle, but was distinguished on the facts. In Surveyor of Taxes v. Smith, 1901, 4 F. 31, 39 S.L.R. 20, there was a complete separation of tenements within the buildings, some being used for Government purposes and some being used exclusively for other purposes. In Edinburgh Parish Council v. Magistrates of Edinburgh, 1907 S.C. 1079, 44 S.L.R. 811, the predominant use was not for Government purposes; use for the administration of justice, &c., was merely a subsidiary use. In Edinburgh Parish Council v. Schulze, 1917 S.C. 679, 54 S.L.R. 577, the owner was a private individual; the occupier was the Crown, but occupation by the Crown had nothing to do with owner's rates. Section 14 of the Sheriff Court-Houses (Scotland) Act 1860 (23 and 24 Vict. cap. 79) indicated that a court-house still remained a court-house in spite of grants for use for other purposes. If an agreement under that section was productive of rent the exemption would still apply in its entirety (the rent might formerly have been credited to the Treasury under section 16, which was now repealed) or the exemption would be wholly withdrawn. Question 1 should be answered in the negative when it was unnecessary to answer question 2.

Argued for the second parties—Such exemption as was here in question was originally based on the principle that the Crown, not being mentioned in Taxing Acts, was exempt. That was applied to all sorts of corporations charged with the duty of administering public purposes. That extension culminated in the Mersey Dock and Harbour Board v. Jones, 1865, 3 Macph. (H.L.) 102, footnote. To let in the application of that principle there must be substantially exclusive use for police (in the narrow sense) purposes, or for the administration of justice. Mere exceptional or intermittent use for other purposes came under the rule de minimis. In Smith's case ( cit.), per Lord President Kinross, at p. 33, and in Parish Council of Edinburgh v. Magistrates of Edinburgh ( cit.), per Lord M'Laren at p. 1087 and p. 1089, that was the ratio of the decision. The payment of rent was irrelevant— Schulze's case ( cit.). Comber's case ( cit.) was distinguished; it raised questions of income tax, which could only be imposed if there was a rent, and there being no rent no tax could be imposed whatever the facts as to use were. In the present case alien uses were substantial. The licensing courts were not courts for the administration of justice or police; their functions were part of the ordinary county business. They were on the same footing as valuation courts, and neither had ever been held

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exempt from taxation. But in any event, apart from the licensing courts and the justice of peace criminal courts, the use of the buildings for county purposes was enough of itself to destroy the exemption. If the first parties in administering the county had had to find premises for themselves, such premises would not have been exempt. The occupation and use of part of the court-house equally should not be exempt. The first question should be answered in the affirmative.