Scottish Court of Session Decisions

At advising on 11th November 1965,—

LORD KILBRANDON .—There are in Kirkcaldy a number of houses of identical plan and construction. Some are heated by ordinary coal fires; others, including No. 15 Grampian Gardens, are partially heated by what is called the "electrical block storage system," which I will briefly describe later. It is the Assessor's practice, the propriety of which has not heretofore been challenged, when a house is fitted with full central heating either from a boiler, or from an electrical block storage system, to add 10 per cent to what the value of the house would have been, estimated of course by comparison, had there been no central heating, and to scale the 10 per cent down if the central heating is only partial. It is hardly necessary to point out that he does this on the footing that the hypothetical landlord would demand, and the hypothetical tenant would willingly pay, a higher rent for a house that had central heating provided by the landlord than for one which had not.

The question relating to No. 15 Grampian Gardens is whether the Assessor is justified in making an otherwise appropriate increment in respect of partial central heating which is generated, not by means of a boiler and hot water radiators, but by this system of electrical block storage. If he is not, which is what the Committee have found, the gross annual value should be £70; if he is, it should be £74. The house is owned and occupied by the respondent.

The heating system in the house in question works in this way. A special circuit of electric wiring is installed at a cost of about £50, and the current passing through it is controlled by a time clock, rented from the Electricity Board for a small sum. From the clock the current goes to a consumer unit, where there is a main switch and a fuse for each of the heater units. From each fuse an ordinary three-core cable is led to the point in the wall of the room at which connection with the heater unit is made. This point is called an "outlet plate," and it differs from an ordinary lighting or power point in as much as not only is the cable from the supply side wired into it, but so also is the cable connecting it with the heater. If you want to disconnect the heater you cannot do so by pulling a plug out of a socket. You have to remove the outlet plate with a screwdriver and then disconnect the cable from the terminal behind it. To attach any apparatus other than a storage heater to the terminals is unlawful.

The house has six outlet plates, each with its own switch, but only four of them are connected to heaters. These heaters, which cost about £22 each, store heat while the current is permitted by the time clock to flow into them, and then they release the heat to warm the rooms. In accordance with the provisions of the Purchase Tax (No. 3) Order, 1963, they weigh not less than 70 lb. per kw. We were not told their capacity, but if they are of 2 kw. they certainly cannot be very readily moved about from room to room. They can, however, be disconnected in the way I have described, and the appellant, the nature of whose vocation makes him liable to remove about every five years, selected this mode of heating so that when he removes he can take the heaters with him.

The contentions of the parties before the Committee show that the parties were not arguing from exactly the same premises. The respondent maintained that the storage heaters were not heritable; as for the wiring, while he did not maintain that it was moveable, he said that no tenant would give a higher rent for a house fitted with wiring in the absence of the moveable heaters. The Assessor, on the other hand, pleaded that the heating system (my italics) by means of storage heaters connected to an "off-peak" electrical circuit, was heritable. The question on either view of the controversy is whether the apparatus, to use a colourless word, is a pertinent of the house within the meaning of section 42 of the Lands Valuation (Scotland) Act, 1854.

If the Assessor's way of looking at the matter is the correct one, the case for the ratepayer must fail. Any central heating system, whether it be operated by a boiler or by an electrical heat storage installation, is surely a pertinent of any house, regardless of the fact that it is possible, by the use of a simple tool such as a wrench or a screwdriver, to remove the actual disseminators of heat, whether they be hot water radiators or storage heaters, from their attachment to the house, having previously emptied the distribution system of water in the one case or electricity in the other. If this be the correct view of the matter, as I think it is, the appeal must succeed.

The respondent's argument, however, depends upon concentration on the nature of the storage heaters in isolation, and relies upon the fact that they are of their own nature moveable, and that they can be, and in this instance are intended to be, moved from the building. Whether things of their own nature moveable have become heritable by accession is a question which according to long-established practice—see Assessor for Dundee v. Carmichael & Co., Ltd .—falls to be settled by reference to the law as between heir and executor. It is unnecessary to decide whether, since the passing of the Succession (Scotland) Act, 1964, has rendered this law obsolete, the old test is still valid. I do not think the result would be different if a standard less rigorously in favour of the heritable character, i.e., the law of landlord and tenant, were adopted: see the authorities cited in Armour on Valuation for Rating. We have to remember that we are not, in the field of valuation, concerned primarily with the situation of these subjects as it is regulated by the occupation of the respondent. What we are to consider is the situation in a hypothetical tenancy. It is difficult to conceive of a relationship of landlord and tenant in which the landlord supplied a portion of a central heating system which could only be enjoyed by the tenant if the tenant introduced moveable fittings of an aggregate value greatly exceeding that of the landlord's fixtures. One can, on the other hand, conceive of a relationship where a landlord lets a house equipped with a partial central heating system on an electrical basis, and with the necessary heat storage units, for which he demands and easily obtains the same rent as for a house of exactly similar plan and construction equipped with a partial central heating system on a hot water basis.

Even, however, looking at the matter from the standpoint adopted by the respondent, that is, concentrating on the heaters rather than on the heating system, in my opinion the matter is concluded by the opinion of Lord Low in Cowans v. Assessor for Forfarshire 1910 SC 810 , with which I respectfully agree. His Lordship says that it is necessary to consider the purpose for which an article is fixed to a house, and the use which it is intended to serve. Then he goes on, "If it is an article which is designed or is necessary for the comfortable enjoyment of the house, then, generally speaking, it will, however slightly fixed to the house it may be, form part of the house, although in a question between heir and executor, or landlord and tenant, it may be removeable." These heaters are fixed to the house so definitely at least as to require a tool to detach them. Plainly they are designed for the comfortable enjoyment of the house, and for no other purpose. They are therefore heritable.

The Committee in their reasons proceed first upon a supposed analogy between storage heaters and electric light fittings, and conclude that, since the latter are not heritable, so neither are the former. The soundness of this conclusion is a condition precedent to the adequacy of their second reason. But the analogy breaks down when it is realised that electric light fittings may well be heritable. If they were fixed to the house, and designed or necessary for the comfortable enjoyment of the house, then they might be classed with the gas fittings and chandeliers in the case of Cowans, or the gas cookers in M'Ewan v. Assessor for Glasgow, or the portable glass lights in M'Donald's Nurseries v. Assessor for Fifeshire . What degree of attachment is necessary it is quite impossible to lay down in advance. The present case was argued for the Assessor on the footing that attachment by the common three-point plug being slipped into a socket would not be enough, and that may well be right, but I express no opinion on it. I have no doubt that in the present case the degree of attachment, together with the purpose for which they are fixed, renders the storage heaters heritable.

In my opinion the system should be looked at as a whole; since the internal wiring and the external heaters which are attached to it are a pertinent of the house, the system as a whole is heritable. In any event the heaters themselves, in the situation in which they are, are heritable for the reasons I have given. I do not consider it necessary to consider the application of the classic cases, relating to machinery, of Dixon v. Fisher and Dowall v. Miln . I would allow the appeal, and direct that the subjects enter the roll at a gross annual value of £74.

LORD FRASER .—I am of opinion that this appeal ought to succeed. The decision of the Committee appears to have been reached by considering the two main portions of the electrical off-peak storage installation separately in a manner that was, in my opinion, erroneous. The first sentence of the Committee's decision contains this statement:

"The Committee considered that the electrical off-peak storage heaters, being readily disconnected and removed … were not themselves heritable."

In the second sentence of the decision it is stated:

"As regards the wiring system in this case they considered it indistinguishable in principle from a standard power circuit, in respect of which no additional value has ever been proposed."

In my opinion senior counsel for the Assessor was well founded in submitting that the installation or system ought to be regarded as a whole. It consists partly of the special wiring circuit, which is clearly heritable, and partly of the heaters, which are attached to the circuit in the special way described in finding (5) in order to prevent any other appliances being run off that circuit. The purpose of the system is to heat the house, and it is at least highly convenient for the proper use of the house. It may, I think, not unreasonably be described as being "necessary for the comfortable enjoyment of the house," to use the phrase of Lord Low in Cowans v. Assessor for Forfarshire . The installation also seems to me to exhibit all the three elements referred to by Lord Cockburn in Dixon v. Fisher . The result is that the whole installation is, in my opinion, heritable.

On the assumption that the Committee's method of considering the two portions of the installation separately was appropriate, I do not think that it would lead to the conclusion reached by the Committee. The fact that the heaters are "readily disconnected and removed" was treated by the Committee as a conclusive reason for holding that they were not heritable. But as Lord Cockburn said in Dixon v. Fisher, "the mere possibility, or even facility of removal, certainly does not decide the question." It is necessary also to have regard to the purpose for which the articles are fixed to the heritage, and in this case I am of opinion that the purpose is the convenient use of the heritage itself. A further point arises upon the first paragraph of the Committee's decision, where they state that the heaters are removable "in much the same way as in the case of electric light fittings." It is not clear what kind of electric light fittings they had in view. Some electric light fittings, such as chandeliers, are or may be heritable—see Cowans. If the Committee intended the comparison to be with the normal type of electric fire, which is referred to in their finding (10), then it seems to me that there is a material difference in that the normal type of electric fire can be disconnected merely by pulling out the two or three-pronged plug from the familiar socket, whereas these heaters can only be disconnected with the aid of a screwdriver in the way described by finding (7). At one stage of the argument before us it appeared that the case for the Assessor was to be rested entirely on this difference in the method of disconnecting the heaters from the wiring circuit, together perhaps with the fact that the heaters are comparatively large and heavy objects. If it had been necessary to decide the question on that ground, I am inclined to think that I would have been in favour of allowing the appeal. But, for the reason I have already stated, I am of opinion that the proper course is to consider the installation as a whole.

The second paragraph of the Committee's decision which I have already quoted states that "no additional value has ever been proposed" for a standard power circuit, but there is no finding in fact on which that statement can be based. I would have expected that a house which is wired with a standard power circuit would be valued more highly than one without any such circuit. Certainly, I do not think that the contrary can be assumed without proof. I therefore regard the reason given by the Committee for this part of their decision also to be unsatisfactory.

For these reasons I would allow the appeal.

LORD AVONSIDE .—The subjects in this case were valued gross by the Assessor at £74 and the respondent successfully contended before the Appeal Committee that that figure should be reduced to £70. It is found as a fact that the difference in figures arose by reason of the Assessor having added to the basic value of £70 the sum of £4 "in respect of what is known as an electrical off-peak block storage installation."

That installation is described in the case, and, in summary, consists of a special circuit of electric wiring connected to a time-clock unit which switches current off and on. Power from the time-clock unit goes to a consumer unit which has six fuses. From each of these fuses a power cable leads to special outlets to which storage heaters are or may be connected. The connection is not of a simple plug-in nature, but requires the connection of the heater to the power to be made at the back of an outlet plate and involves a certain amount of adjustment. This connection can be made, and undone, without any structural damage or any alteration other than that involved in using a screwdriver. It would seem, from the account given this Court, to involve an operation probably better trusted to the mechanically minded, but in no way beyond the capacities of an intelligent user. The whole purpose of this apparatus, as its description suggests, is to store and eventually use electricity available cheaply at off-peak periods. The reason for the special nature of connecting power and heater is that the suppliers of the electricity do not wish the cheap power to be used by other, and perhaps more ordinary, electrical appliances.

The Committee gave as their reasons for upholding the appeal, firstly, that the electrical off-peak storage heaters, being readily disconnected and removed, in much the same way as in the case of electric light fittings, were not themselves heritable and, secondly, that the wiring system was indistinguishable in principle from a standard power circuit in respect of which no additional value had ever been proposed. I shall speak later of the criticism to which that reasoning has been subjected. At the moment I draw attention to the fact that the Committee have considered as separate elements the heaters and the wiring and other installations from which these heaters derive power.

In the argument before us both parties appeared to derive comfort from what was said in the well-known judgments of Lord Cockburn in Dixon v. Fisher and Lord Justice-Clerk Moncreiff in Dowall v. Miln, wherein are discussed the aids to the classification of objects as heritable or moveable. The subject is so complex that it is not difficult to present differing images by analysing in detail what was said in those cases, and, in the field of valuation law, I would prefer to have regard to the application of principle expressed in this Court in Cowans v. Assessor for Forfarshire . There the dispute was as to whether grates, gasfittings, chandeliers, blinds, curtain poles and picture rods were "lands and heritages" within the meaning of the 1854 Act. Lord Dundas expressed the desirability of there being some general rule or understanding about the matters involved in the case and, in concurring with the judgment of Lord Low, said that what was said therein would afford a good measure of guidance. Lord Low's judgment is well known and I risk summarising the salient part thus:— There are two considerations to have in mind in determining whether or not an article is heritable or moveable, firstly, whether, although fixed, it can be removed without injury to itself or the building, and, secondly (and more importantly), the purpose for which it was fixed and the use intended for it. In relation to the second consideration:

"If it is an article which is designed or is necessary for the comfortable enjoyment of the house, then, generally speaking, it will, however slightly fixed to the house it may be, form part of the house, although in a question between heir and executor, or landlord and tenant, it may be removeable."

It is, I think, in point to notice how that decision was followed in M'Ewan v. Assessor for Glasgow in dealing with the heritable or moveable nature of a gas cooker.

I am of opinion that in this case two results follow from what was said in Cowans.

In the first place, on the facts found, I consider that the Committee were wrong in holding the storage heaters to be moveable and that their error is demonstrated in the first reason for their decision, which seems to concentrate on the point of removeability to the exclusion of the question of the purpose for which the heaters were designed and installed. These heaters are of a special type designed for the special purpose of using stored cheap electricity to heat a house and are attached to the fabric of the house, albeit through the use of internal wiring, in a special way. No doubt they can be moved without injury to themselves or the house, but they are fixed for the purpose of being used for the comfortable enjoyment of the house by transmitting stored heat bought at a cheap rate to the area in which they are situated and only these heaters, so fixed, can be so used. In my view, therefore, the Committee erred in holding them to be moveable for valuation purposes.

I have so approached the matter in the first place in answer to the argument of the respondent which found favour with the Committee. But, in my opinion, the second approach to be derived from the reasoning in Cowans is at once more satisfactory and also based on common sense. Counsel argued forcibly for the respondent that there was a vast number of electrical appliances, of which storage heaters were only one example, and that it was quite wrong to suggest that their mere attachment to a source of supply rendered them heritable. I venture to think that arguing from analogy is more often productive of speculation than principle, however attractive it may at first appear. In any event this approach, to my mind, underlines the cardinal error which appears to have influenced the Committee. It is not to the point that a space heater is without use unless supplied with power and that it is only used to translate power to heat and therefore merely lives, so to speak, to be attached to a source of power, and more than that the wiring circuit, time-clock and consumer unit are without use unless the energy they control and channel is translated into heat by a heater. The subject to be considered is not a heater divorced from its essential circuit mechanism any more than it is that mechanism divorced from the heater. The proper subject is "an electrical off-peak block storage installation," which necessarily comprises all these elements. So looked at, and I believe this to be the proper approach to this case, there can be no question, in my view, but that that installation is heritable. I think counsel for the Assessor was right in his approach to the question on the basis of considering the installation as a whole and that he is correct in his contention that he derives powerful support from the decision in M'Donald's Nurseries v. Assessor for Fifeshire .

I am not concerned by arguments in terrorem as to the possible consequences of the view I have expressed. This is a decision on its own facts, and its effect, if any, on other circumstances is for the future.

Finally I should say that, had it been necessary, I would have regarded the reasons given by the Committee as insupportable. The first is a mis-statement of law, even assuming that the phrase "electric light fittings" is translated to mean the practice adopted in relation to normal electric fires in houses with fire-places. The second is a statement of fact which, in my opinion, is nowhere supported by the findings in the case.

I would allow the appeal.