|
Appeal No. VA92/6/062 AN BINSE LUACHÁLA Aer Lingus APPELLANT RE: Cargo Terminal No. 1 (Part of) at Lot No. 5A/1
Townland of Corballis (Dublin Airport), B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 30th October, 1992, the appellants appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of £1,560 on the above described hereditament. The grounds of appeal as set out in the Notice of Appeal are that:- The Property Valuation History Written Submissions Mr. O'Donnell gave details of the letting agreement between Aer Lingus
and Aer Rianta. He said that prior to 1986 there was no formal agreement,
but in 1986 Aer Rianta appointed Lisney & Company and Aer Lingus appointed
Jones Lang Wootton to negotiate and agree commercial rents for the various
properties. The schedule of agreed rents, while fixed in 1986, applied
retrospectively to 1984 with five-yearly rent reviews incorporated into
the agreement. A copy of the Memorandum of Understanding was attached
to the written submission. The memorandum provided for rent reviews on
the multi-user accommodation at rents based on the average increase of
the Consumer Price Index and Building and Construction Wholesale Price
Index. It also provided that the agreed quantum allowance of 20% should
apply to rent reviews on multi-user accommodation. Rent for the Cargo
Terminal, he said, was agreed on the basis of 100% of the full open market
rental value of the exclusively occupied areas and 80% of the full open
market rental value of the shared multi-user areas. This 20% allowance,
in respect of the multi-user areas was to take account of quantum and
shared usage. Mr. O'Donnell said that the rent on Cargo Terminal No. 1
was reviewed in 1989 at £224,296 per annum effective from 1st April,
1989. He said, that this figure had been agreed between Lisney & Company
and Jones Lang Wootton and was calculated as follows:- Mr. O'Donnell submitted to the Tribunal that the review provisions of
the Memorandum of Understanding had the practical effect of fixing the
reviewed rent at the level of open market rent for the review date. Rental
levels as at the valuation date of November, 1988 were lower than in 1989
and Mr. O'Donnell submitted that the deduction of 7.5% had been agreed
with the Commissioner of Valuation to take account of this. In his opinion,
he said, the Net Annual Value as at November, 1988 was therefore £238,000.
He set out his calculation of the £238,000 in the written submission
as follows:- Mr. O'Connor commenting on the grounds of appeal, stated, that the R.V. here was in line with other recently revised R.V's in County Dublin and had been assessed at .63% on the estimated N.A.V. as of November, 1988. Mr. O'Connor set out his calculation of the Rateable Valuation on the property as follows:- "Valuation: Rent payable at 1/4/89 was £225,712 £224,296 is the "agreed rent" after a 20% reduction has been granted by Aer Rianta as a quantum allowance, on account of the large amount of space which Aer Lingus rents in Dublin Airport. Therefore, the rent to any other tenant would be:- Aer Lingus is actually paying as of 1/4/89: Rent after 20% quantum allowance £224,296 Any other tenant would pay as of 1/4/89 Rent before 20% quantum allowance £280,370 For Valuation purposes £281,786 was deemed a fair rent at 1/4/89 and also at November, 1988. A quantum allowance of circa 12% was granted, reducing the rent at 1/4/89 from £281,786 to an N.A.V. of £248,000 at November, 1988." Oral Hearing At the outset, the Tribunal dealt with the issue as to whether the letter from Frank O'Donnell and Company, Valuer for the appellants constituted evidence of a concluded written agreement between the parties in relation to the valuation of £1,560 in respect of the subject property. The Tribunal was referred to the letter of the 17th September, 1992 from Frank O'Donnell and Company to the Commissioner of Valuation which set out that the agreement was made in respect of this valuation and the several other valuations set out in the letter of the 15th September, 1992 on the basis that if the Commissioner of Valuation in his decision, on First Appeal, differed on any individual case, the right to re-open and pursue further or other cases should be available to the Appellants. Mr. O'Donnell indicated that the incentive to the appellant to enter into this type of arrangement was to ensure that certain cash flow advantages would be available at an early date to the appellant. The agreement envisaged that the Commissioner of Valuation would continue adjudication in relation to appealed cases. Mr. Mc Kechnie, also indicated that the parties were not ad idem in relation to the basis of the valuation and in particular the appellants proceeded on the basis of an understanding that the rents in respect of the subject apart from the office building were reduced by 20% in respect of a quantum factor and that they could be increased validly up to 100%. Mr. Frank O'Connor, Valuer for the Respondent indicated that a certain number of the valuations referred to in the letter of the 15th September, 1992 were agreed by him only subject to the approval of the Commissioner of Valuation. The Tribunal by the agreement of the parties adjourned to consider the matter as a preliminary issue and decided that the correspondence did not show a concluded agreement. While, the arrangement proposed might have had much to recommend it to the parties, the Tribunal is of the view that an arrangement of such complexity and of such a flexible nature should be set out in more detailed terms if it is to be held to be a binding agreement by the Tribunal. The Tribunal, has in many instances, held that agreements between valuers in such instances are binding where the expressed or ostensible authority of the valuers is to effect such settlement. The hearing proceeded on the basis of the resolution of three issues
which were set out by the Tribunal without protest from the parties as
follows:- 2) Whether the passing rent for the office building which was described
as a multi-use building ought to be increased to 100% having been pitched
at 80% by agreement between Aer Lingus and Aer Rianta. In relation to the first issue, Mr. Frank O'Donnell, Valuer for the Appellant opined that, rents had improved between 1988 and 1989, and that by April, 1989 they had improved on average by 7.5% from November, 1988. He added, very fairly, that indicating such increases was not an accurate science. He was cross examined vigorously by Mr. O'Caoimh in relation to this proposition who offered the Jones Lang Wootton index increase of 1% over the same period as being the more objective criterion. The Tribunal is prepared to accept that perhaps the real increase might well have been somewhere between the two figures. The Appellant applied to have the calculations of N.A.V. amended by the addition of £1,416 site value, and this has been taken into account by the Tribunal in its determination. In relation to the second issue of the quantum allowance of 20% for the offices, Mr. Frank O'Connor, Valuer giving evidence on behalf of the Respondent suggested that 20% was altogether too excessive in respect of a quantum allowance and suggested that experience in Manchester and Belfast Airports indicated that a 5% allowance was more appropriate. He was challenged on his own use of a quantum allowance of 12% in his precis of evidence. There followed a similar debate in relation to the third issue arising from the apparent mistake of the parties in treating the quantum allowance as being applicable to the exclusive use properties. The Tribunal concludes that the Memorandum of Understanding setting out the rents of the property is a document which fairly assesses market rents and while there was some difficulty in assessing the square footage of the premises involved, on any interpretation the rents per square foot were in the commercial area. The Tribunal therefore decides having regard to the foregoing considerations and all the evidence offered that the rateable valuation of the subject premises ought to be established at the rounded up figure of £1,350. The parties had agreed that the Tribunal would take the arguments advanced in the case VA/92/4/29 Rainbow Bookshops -V- Commissioner of Valuation as having been advanced by both sides in relation to the rateability issue arising from the description of the premises at Revision Stage as being in Dublin Airport and the Tribunal accepts these arguments as having been raised and responded to and finds for the Respondent in relation to same in the same manner as was decided by the Tribunal in the Rainbow Bookshops case.
|