FIRST DIVISION, INNER HOUSE, COURT OF SESSION
Lord President Lord Osborne Lord Hodge	[2011] CSIH 15 XA186/09 OPINION OF THE COURT delivered by LORD HODGE in Appeal by GEORGE DAVIDSON Appellant; against ASSESSOR TO THE CENTRAL SCOTLAND VALUATION JOINT BOARD Respondent: _______

Act: Party

Alt: Wallace; Wright Johnston & Mackenzie LLP

26 November 2010

Introduction

[1] Mr Davidson has appealed under section 82(4) of the Local Government Finance Act 1992 against a decision of the Central Scotland Valuation Appeal Committee ("the committee") dated 29 October 2009, by which it refused his appeal against the entry of his house at 93 Glentye Drive, Tullibody at band F in the Council Tax List ("the list").

The relevant statutory provisions

[2] The 1992 Act provides that the amount of council tax payable in respect of a dwelling is to be calculated by reference to the valuation band in which the dwelling is entered in the list. See sections 72-74. Section 84 requires the Assessor to compile on 1 April 1993, and thereafter to maintain, a valuation list showing each dwelling in the relevant area and the valuation band applicable to it. Section 86(2) provides that the valuation for this purpose shall be carried out on by reference to 1 April 1991 and on such assumptions and in accordance with such principles as may be prescribed.

[3] The Council Tax (Valuation of Dwellings) (Scotland) Regulations 1992 (SI 1992/1329) (as amended) provide:

"2(1) For the purposes of valuations under section 86(2) of the Local Government Finance Act 1992 and valuations carried out in connection with proposals for the alteration of a valuation list, the value of any dwelling shall be taken to be the amount which the dwelling might reasonably have been expected to realise if it had been sold in the open market by a willing seller on 1^st April 1991, having applied the assumptions mentioned in paragraph (2) below ..."

The assumptions in paragraph (2) include that the sale was with vacant possession, that the dwelling was sold free from any heritable security and that it was in a reasonable state of repair.

The background to this appeal

[4] The appellant's dwelling was built in 2008 as part of a development of detached villas in Muirside, Tullibody. The assessor listed it in valuation band F, namely within the range of values exceeding £80,000 but not exceeding £106,000.

[5] Several of the owners of dwellings in an earlier phase of the Muirside development, in which houses had been completed from about 2001 onwards, had appealed against the listing of their properties. In November 2004 the committee heard seven appeals from residents in the Muirside area. Those appeals included appeals by three owners of dwellings of the same house type as the appellant's. But the owners of that house type did not appear to support their appeals and the committee heard only appeals by owners of other types of house within the development which had a larger floor space. Nonetheless, it appears that in the course of those appeals a representative of the assessor gave evidence on his methodology, which included how he had calculated the valuations of the various dwellings in the development for the purpose of banding.

The hearing before the committee

[6] The appellant argued that the committee in considering the 2004 appeal had not considered properly his type of property. It had been incorrect to include his house type in valuation band F along with the larger dwellings. He sought to compare his dwelling with houses of comparable or larger size in developments in the south of Tullibody, namely Wood Avens, the Laurels and the Cedars. Thereafter, comparing the average price per square foot of properties in Rose Street, Muirside in 2003 with the price per square foot of his comparators on around 1991, he sought to show that there resulted a price reduction factor which, when applied to his type of property, brought its value significantly below the lower threshold of valuation band F. He conducted a similar exercise in relation to the sale of villas in Muirside in 2008-2009 compared with sales of his comparators in 1991-1993.

[7] In support of his valuation the assessor's witness cited as comparators three dwellings of the same house type on the Muirside estate. He explained that indicative valuations for that house type had been before the committee in 2004.

[8] In his closing submission the assessor's representative argued that the appellant's house type had been before the committee in the 2004 appeal. He referred to the committee's conclusion in 2004 that the assessor had used a correct method of reaching an indicative valuation and expressed the view that it was important that the committee's decisions were consistent. He referred to the valuation of other properties in the Muirside development, including the properties in Rose Street which had been decided in the 2004 appeal. He argued that the committee had to be consistent in its decisions so that similar properties appeared in the same valuation band.

The decision of the committee

[9] The committee refused the appeal and set out its reasons as follows:

"1. The committee had previously dealt in 2004 with appeals against banding for council tax purposes of properties in Rose Street, Tullibody identical to and close to the subjects of appeal.

2. At that hearing, the committee had considered evidence of identical houses to the appeal subjects and had decided that the method of reaching an indicative value which had been used by the assessor was correct and that the sales evidence used by the assessor which had been obtained from open-market sales was sufficient to justify the banding.

3. No evidence was led by the tax payer which would have justified any alteration to the banding or considering (sic) that the method used in 2004 of reaching an indicative value was incorrect."

The Appellant's challenge and the Respondent's answer

[10] Mr Davidson advanced his appeal on five grounds. First, he submitted that the assessor had erred in law in taking as a starting point house prices in 2004 and seeking to calculate by reference to local data what the prices of those properties would have been in 1991. In so doing the assessor had relied on housing price indices, contrary to his statement in his own literature. Secondly, he submitted that the committee had erred by treating itself as bound by its previous decision of 11 November 2004, contrary to the decision of this Division in Assessor for the Highland & Western Isles Valuation Joint Board v Fraser 2001 SC 473. Thirdly, he submitted that, as a result, the committee had not considered his appeal on its merits and so had erred in law. Fourthly, he submitted that the committee had not reasonably considered the evidence which he had provided of sales of houses elsewhere in Tullibody at about April 1991. He also suggested that the committee had not been quorate but withdrew that suggestion when this court explained the relevant legislation.

[11] Mr Wallace for the respondent submitted that it was common ground that Assessor for the Highland & Western Isles Valuation Joint Board v Fraser required the committee to look at each appeal on its merits and not to treat itself as bound by a previous decision. He argued that the committee had given adequate reasons and that one could infer from paragraph 3 of its reasons that it had taken account of Mr Davidson's submissions. He emphasised that the evidence which had been before the committee in 2004 was available to it when it heard the appeal in 2009 and that the assessor had presented that evidence in summary form. He referred to Stefan v General Medical Council [1999] 1 WLR 1293 and Piglowska v Piglowski [1999] 1 WLR 1360, Lord Hoffmann at p.1372. The committee's decision was within the range of reasonable responses to the evidence which it had heard.

Conclusions

[12] We are satisfied that the committee has erred in law in its failure to give clear and sufficient grounds for its decision. It appears from the record of its decision that the committee has relied on the 2004 decision and has not properly addressed the issues which Mr Davidson raised in his appeal. This impression is strengthened when one has regard to the evidence led by, and the submission on behalf of, the assessor.

[13] Full allowance must be made for the exigencies of the committee's work, as Lord Hoffmann urged in Piglowska. But, in the light of the approach that the assessor invited it to take, we do not infer from paragraph 3 of its decision, which has a formulaic flavour, that the committee had, as Mr Wallace submitted, adequately addressed the appellant's submissions. Those submissions required the committee to address whether dwellings in developments in the southern part of Tullibody were properly comparable to those in the Muirside estate.

[14] Having reached this conclusion, we make no comment on the other arguments which Mr Davidson advanced against the committee's decision. It will be for the committee to decide, among other things, whether the comparators on which he relied are distinguishable because they are of houses in other parts of Tullibody, whether they can be used in a comparison with houses in the Muirside development to obtain an accurate differential of house prices between 1991 and 2001-2003, and whether the assessor's method of valuation is satisfactory in the light of Mr Davidson's criticisms.

[15] At the end of the hearing we allowed the appeal and remitted to the committee for reconsideration, intimating that we would in due course give our reasons in writing. This Opinion expresses those reasons.