Scottish Court of Session Decisions

The appellants Select Service Partner Limited (formerly Travellers Fare Limited) appealed against certain entries in the Valuation Roll in respect of premises occupied by them at Glasgow Central Station, and Glasgow Queen Street Station. At each station, three separate entries had been made in the Roll, corresponding to premises where the appellants trade, under three separate names. At each station, there was a Burger King and an Upper Crust, and at each station there was a bar - at the Central Station, Coopers Bar, and at Queen Street, the Clyde Bar.

At each station, the primary contention of the appellants was that all three premises should appear in the Roll as a single unum quid. At Queen Street, where Burger King and the Clyde Bar were connected internally, the Valuation Appeal Committee held that these two establishments should appear as a single unum quid entry. At the Central Station, where Burger King and Coopers Bar were adjacent to one another but without any internal connection, the Committee held that there should be separate entries for these two establishments. At both stations, the Committee held that the Upper Crust subjects, which were not immediately adjacent to the other subjects and were described in each case as a "kiosk", should be entered separately. In this court, the assessor did not seek to disturb the single entry for Burger King and the Clyde Bar. On behalf of the appellants, it was submitted that the Committee had erred in not holding that there should be a single entry for all three subjects, at each station. Questions of value also arise, to which we shall come in due course.

We are not persuaded that there is any substance in the contention that the Committee have erred on the question of unum quid entries. The Committee have made very full findings in fact, and have discussed matters in some detail in their decision. At each station, the Upper Crust kiosk is not merely separate geographically, but is treated by the Committee as a different type of establishment from Burger King or the bar. At each station, the appellants devote part of their Burger King premises to "back-up" uses, for the Upper Crust kiosk. Equally, at each station the Burger King premises have certain areas which are used in connection with the appellants' other premises at that station. But the difference in character and location of the Upper Crust outlet at each station is plainly such that the Committee were well entitled to hold that the kiosk was not unum quid with other premises. And at the Central Station, the degree of separation between Burger King and the bar was in our opinion likewise such that the Committee were well entitled to regard the bar as requiring a separate entry in the Roll. While premises which are physically separate can properly be treated as unum quid, on the basis of their functional relationship, as in Rootes Motors v The Assessor for Renfrewshire, 1971 S.L.T. 67, the analogy between that case and the appellants' premises is not at all close, and we are not persuaded that the uses to which they put parts of the Burger King premises make it appropriate, far less necessary, to treat the various outlets as a single unit for valuation purposes. The appeal accordingly fails in that respect, and separate entries are appropriate, except in the case of Burger King and the Clyde Bar at Queen Street, which the Committee have held to constitute a single unit of valuation.

On the basis that there are to be three separate entries for the subjects at the Central Station, there is no dispute as to the appropriate value for Coopers Bar. As regards Burger King, the appellants relied upon Zone A rates of £500 per square metre which had been applied to other subjects at the Central Station. Premises occupied by John Menzies had a Zone A rate of £525. The Committee applied this latter rate to Burger King, referring in particular to the advantages of its site. There is a finding to the effect that John Menzies have a national agreement for their railway station outlets, with gross turnover figures for a particular region being submitted to the landlord, and the rent then being paid on a percentage of that gross turnover. On the basis that the John Menzies Zone A rate had been reached against the background of this national agreement, rather than on a comparison with other subjects in the same station, it was submitted that the Committee had erred, and that the figure of £500 was appropriate. We are not persuaded that there has been any error: with other rates of £500, and Burger King (like John Menzies) being in one of the best locations, adoption of the figure of £525 was in our view entirely legitimate.

At Queen Street, there was an agreed figure for the value of the Clyde Bar if it had been appropriate to value it as a separate unit of valuation. Equally, if the Burger King premises there had required to be valued separately, it was not disputed that the appropriate approach would be to fix a Zone A rate, as was done for other shops at the station. The Valuation Committee, having decided that Burger King and the Clyde Bar constituted a single unit of valuation, decided that the appropriate value for that single unit was simply the aggregate of the appropriate figures for the Clyde Bar and Burger King respectively. For the Burger King premises, they adopted the £525 figure used for Burger King at the other station. On behalf of the appellants, it was submitted that the Committee had erred in valuing the combined subjects by aggregating values which related to individual parts. Moreover, it was submitted that there was no basis for using the £525 Zone A figure for Burger King. There was comparative material showing that an appropriate Zone A rate would be £400 per square metre.

As regards aggregation, it is of course true that the Committee were obliged to value the combined subjects, and that where that has to be done, it may well be that aggregation of values relating to individual parts will not provide the right answer. But upon the basis of the facts found in the present case, with the two establishments operating as a bar and a Burger King restaurant largely separate from one another despite the degree of sharing which we have mentioned, it appears to us that the separate values can properly be seen as an appropriate starting point. It might of course have been argued or shown that aggregation was no more than a starting point, and that the combination of the two sets of premises in a unum quid would require adjustment from that figure, upwards or downwards, to reflect the proper view of the subjects as a single entity. But in this case, there appears to be no material pointing in either direction, and we are satisfied that adoption of simple aggregation involved no error. As regards the Zone A rate, counsel for the assessor was unable to give any real rationale for adopting the figure which was applicable at the other station. It was acknowledged that there was material pointing to a rate of £400 per square metre for premises in a good location at Queen Street Station, or perhaps £300 in a less good location. Burger King was in one of the best locations in the station. We are satisfied that for Burger King, on its own, a Zone A rate of £400 would have been appropriate and that in reaching the aggregate figure, that Zone A rate should have been used for the Burger King part of the combined premises.

In relation to the Upper Crust premises, at each station, the Valuation Committee held, as we have noted, that the premises were kiosks rather than shops. They make findings as to the different ways in which shops and kiosks are operated, the relevance of size in relation to shops but not necessarily to kiosks, and the actual passing rents at the Upper Crust units in each station. The appellants had taken a rate per square metre for these premises, and the Committee decided that this was not appropriate for a kiosk. The assessor had adopted figures in line with the passing rent. The Committee say that they were aware that the passing rent was not determinative of the value, but was evidence which could be taken into account and to which appropriate weight could be given. They concluded that they preferred the approach of the assessor, and that the figure put forward by him should stand. While we would note that this approach results in high values for the kiosks, if one compares these with the values of shops where a rate per square metre is adopted, the fact is that the figure adopted for the kiosks reflects passing rent, and we do not feel able to hold that this difference, observable when one compares premises which are ex hypothesi different in nature, reveals any error.

In these circumstances the appeal succeeds in relation to the Zone A rate for Burger King at Queen Street, where a £400 rate is appropriate; but otherwise the appeal fails.