Appeal No. VA94/1/017
AN BINSE LUACHÁLA Ballygowan Spring Water APPELLANT RE: Factory & Land at Map Ref: 1CDF, Townland:
Castle Demesne (Part of), B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 4th day of May, 1994 the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of £545.00 on the above described hereditament. The grounds of appeal as set out in the Notice of Appeal are that:- The Property: Valuation History: Office 4,033sq.ft. @ £3.35 p.s.f. Following a revision request in 1992 by Limerick County Council the new high stack store was valued and the R.V. increased from £300.00 to £545.00. This was appealed but no change was made at First Appeal. It is against this determination of the Commissioner of Valuation that an appeal lies to the Tribunal. Written Submissions: " Sq.ft (Sq.m) (b) Offices (1st Floor) (c) Warehouse 168' 0" X 150' 0" = 25,200 (2,342) Mr. Mc Millan said that the only issue in contention in this appeal was the net annual value on the subject premises. He set out his estimate as follows:- "Offices 3,081 sq.ft. @ £2.50 psf £ 7,702 NAV £83,347 @ 0.5% = £417 He said that an analysis of the respondents valuation of £545.00 devalued at £2.16 per square foot overall or almost equivalent to top Dublin values which he felt was unsustainable. To support his valuation on the subject premises Mr. Mc Millan offered eight comparisons of industrial premises within the Limerick and Tralee area as summarised below:- (1) Factory at Ballysimon Road, Limerick. Offices 14,630 sq.ft. @ £1.75 (2) Industrial Unit at Marina Complex, Cork City. Production Area £1.55 psf (3) Factory at Courtstown Industrial Estate, Little Island, Cork. (4) Warehouse at Ballysimon Road, Limerick. Analysis of NAV:- (5) Warehouse at Clash East, Tralee, Co. Kerry. (6) Warehouse at Clash East, Tralee, Co. Kerry. Analysis:- (7) Warehouse at Cabra, Thurles, Co. Tipperary. Devaluation:- (8) Industrial Unit at Lisburnny, Nenagh, Co. Tipperary. Devalues:- A written submission was received on the 2nd November, 1994 from Mr.
Brian O'Flynn a District Valuer with 19 years experience in the Valuation
Office on behalf of the respondent. In his written submission, Mr. O'Flynn
described the subject and its valuation history and grounds of appeal.
He set out his calculation of the Net Annual Value and rateable valuation
on the subject premises as follows:- N.A.V. £113,656 @ 0.5% = £568.28 Say = £590.00" Mr. O'Flynn gave details of four comparisons within the area and these are summarised below:- (1) Kostal (Ireland) Limited, Lot 37Bab, Abbeyfeale West, Abbeyfeale,
RD: Newcastlewest. (2) Castlemahon Food Products Limited. (3) Pallas Foods, Lot 8c, Gortboy, Newcastle Urban, RD: Newcastlewest. (4) Lot On 9a Castlematrix, Rathkeale Urban. Oral Hearing: In advancing his case for a rateable valuation on the subject of £420, Mr. McMillan made the following points: (1) demand for large industrial buildings is notoriously poor in the
area Mr. McMillan indicated that the original factory building already rated was essentially a warehouse. Evidence was given that the premises was the warehouse area for Ballygowan Spring Water and that the source in the site of the premises had to meet stringent EC regulations. It was conceded that Ballygowan was a very strong trade name and that the name Ballygowan was now registered as linked to the site of the wells. Mr. McMillan submitted however, that the premises was being valued and not the trademark. By reason of the appeals pending in certain of the respondent's comparisons, same could not be taken into consideration. Mr. O'Flynn had argued that a certain Tone of the List had been established in relation to the letting values of industrial premises in and around the Newcastlewest area. As this tone seemed to differ from that suggested by the comparisons offered by Mr. McMillan, which were generally somewhat further afield (apart from the appellant's adjacent factory space) the Tribunal decided to adjourn the hearing for inspection. The subject, together with the originally valued premises of the appellant (which perhaps, unfortunately for comparison purposes was valued on the old square metre basis) and Pallas Foods and Castlematrix premises, were inspected by the members of the Tribunal on 13th day of April 1995. The hearing resumed for a short time in the subject premises. The inspection revealed a warehouse premises of high eaves height of standard construction in a state of very high maintenance and decoration. Office space was relatively cramped but well appointed and varied sufficiently to serve the needs of customers and staff. Of the two other premises inspected Pallas Foods offered the best comparison on the basis that it was still in the occupation of the owner who occupied same when rated and on the basis that it was reasonably within the vicinity. The Tribunal was of the view that the Pallas Food's premises offered a more intense set of possibilities in terms of manufacturing and had to comply with strict food manufacture and handling requirements. The Pallas Foods premises was also much smaller. Mr. O'Flynn referred to Ryde on Rating 14th Edition Section E[154] in relation to who may be the hypothetical tenant. This chapter refers to the judgment of Lord Esher MR in R v. London School Board 17 QBD 738, CA: "The real question is how the value is to be ascertained. The enquiry is not as to what rent is paid by the actual occupier. The mode of finding out the value is laid down in the Act, and it is to ascertain the rent which a tenant (not the tenant), taking one year with another, might reasonably be expected to pay; it is also implied that where the owner occupies he is to be considered as if he were a tenant. The directions given by the Act are equivalent to saying that one must look at all possible tenants, and the phraseology does not exclude an owner who himself occupies the premises.... It is said that the School Board ought to be excluded because it can never obtain any beneficial interest from its tenancy; but it can be a tenant; it has a duty to perform which may induce or force it to be a tenant. It follows therefore, that it would be wrong to exclude the School Board from the list of possible hypothetical tenants, whether it is in the position of owner or in that of occupier." The Tribunal considers that this is a fair expression of the law and
is consistent with the approach of the Tribunal to the valuation of outlying
industrial premises in provincial locations. The Tribunal appears to have
had this approach in mind when it analysed many of the comparisons available
through passing rents and sales in rural areas as arising from obsolescence
rather than any real market process in its decision in VA94/3/014 - NEC
v. Commissioner of Valuation. The Tribunal therefore considers that the
occupants of the subject premises should be taken into consideration in
analysing the range of hypothetical tenants available to take the subject
premises on a rental basis. However, the Tribunal must be careful to avoid
valuing the undoubted valued added arising from market promotion of Ballygowan
mineral water. Restraint is also indicated by the fact that many other
mineral waters have sprung up in Ireland seeking to emulate the market
success of Ballygowan in recent years and that obviously similar supplies
may be obtained elsewhere in the country to satisfy strict EC criteria
regarding quality. Similarly, no evidence was lead so as to indicate the
absolute uniqueness of the quality of the water. Indeed, quite the contrary
evidence was given by the Operations Manager of the occupier, Mr. Reid
in that he asserted that the major portion of value added attributable
to Ballygowan is due to its tremendous marketing success. Having regard to the foregoing and all the comparisons and evidence offered the Tribunal fixes the valuation of the subject at £500 and so determines.
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