Multi-Link Leisure Developments Ltd v North Lanarkshire Council [2009] CSIH 96l; [2010] PLSCS 8 concerned land let to a tenant to operate a pay-and-play golf course. The tenant’s lease was for 50 years from 1 June 1999 and included an option to purchase the freehold reversion. The purchase price was to be fixed by the council. The amount payable was the full market value for “the proposed purchase…of agricultural land or open space suitable for development as a golf course”.
At the time, strict planning controls prevented building. However, the council subsequently identified the potential for housing-led expansion in the area and, when the tenant exercised the option, the council valued the land at £5.3m on the basis of that development potential. The tenant challenged the valuation, arguing that the option required the council to value the land solely by reference to its use as a golf course.
The issue to be determined was whether the valuation of the land as agricultural land, or as open space suitable for development as a golf course, was the sole basis for valuation, or whether, as the council argued, it should also take account of the development value of the land for other purposes.
The Inner House of the Court of Session rejected the tenant’s arguments. It ruled that the tenant’s lease was for a term of 50 years, and much could happen in that time. Why should it be assumed that the parties had intended that all uses that might become possible within that time-frame, other than for agriculture or open space, were to be ignored?
This did not mean that the land should be valued on the basis that it was ready for residential development. The structure and local plans did not enable the tenant to develop the land for such purposes, and the planning authority could take the view that the pay-and-play golf course should be retained as a valuable amenity in a residential area.
The court indicated that the council’s valuation was not necessarily correct. Unfortunately, however, the tenant had not challenged the landlord’s valuation as being excessive. It fought the case solely on the basis that the land must be valued as agricultural land or as open space suitable for development as a golf course. Consequently, its challenge failed.
This case bears a remarkable similarity to
The decisions confirm that wording must be unambiguous when directing valuers to depart from reality in pricing land.
Allyson Colby is a property law consultant