AN BINSE LUACHÁLA
VALUATION TRIBUNAL
AN tACHT LUACHÁLA, 1988
VALUATION ACT, 1988

Comer International Limited APPELLANT
and
Commissioner of Valuation RESPONDENT

RE: Factory at Map Ref: 42Af, Townland: Ardnagappary, ED: Magheraclogher, RD: Dunfanaghy Co. Donegal
Quantum - Higher RV assessed than at first appeal

B E F O R E
Mary Devins - Solicitor Deputy Chairman
Fred Devlin - FRICS.ACI Arb. Deputy Chairman
Rita Tynan - Solicitor Member

JUDGMENT OF THE VALUATION TRIBUNAL
ISSUED ON THE 4TH DAY OF JULY, 1997

By Notice of Appeal dated the 29th July, 1996 the Appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of £1,300 on the above described hereditament.

The grounds of appeal as set out in the Notice of Appeal are that:-

"(1) The valuation is excessive and inequitable.
(2) The valuation is bad in law".

The Property:
The property is a factory premises located in an Udaras Na Gaeltachta Industrial Estate at Derrybeg, Co. Donegal. The factory is constructed as a single bay 570 feet long by 216 feet wide. The eaves height is 27 feet with a ceiling at 20 feet. The office accommodation is a two storey block projecting from the factory but not integral with it.

Valuation History:
The property was first assessed in November, 1994 at a rateable valuation of £1,300. No change was made to the valuation at First Appeal and it is against the determination of the Commissioner of Valuation in fixing a rateable valuation of £1,300 on the subject hereditament that an appeal lies to the Tribunal.

Written Submissions:
A written submission was received on the 23rd June, 1997 from Mr. Desmond Killen, FRICS, FSCS, IRRV, a Fellow of the Society of Chartered Surveyors in the Republic of Ireland and a Director of Donal O'Buachalla & Company Limited on behalf of the Appellant.

In his written submission, Mr. Killen said that while the valuation was disputed the area and valuation of the boiler were agreed:-

(a) Buildings
Office 557.5 sq.m. (6,000 sq.ft.)
Factory (incl. plant rooms & stores) 11,476.0 sq.m. (123,359 sq.ft.)
1st Floor - Stores/Canteen 549.5 sq.m. (5,916 sq.ft.)
Boiler House 96.0 sq.m. (1,033 sq.ft.)

(b) Plant
Boiler - Agreed RV £16
Motive Power - 3,752 HP

Mr. Killen indicated that in his opinion two methods of valuation were appropriate, one the rental method and two the comparison method.

(1) Rental Method
Mr. Killen indicated that there was a lease on the subject premises for a 9 year period from 8th December, 1994 to the 7th December, 2003. Mr. Killen said that
this averaged out at £250,500pa.

(2) Comparison Method
Mr. Killen said that the subject was much larger than any of the adjoining factories in Derrybeg but said that the best comparison in his opinion was Fruit of the Loom, Buncrana (VA90/1/009 - RV £2,200 affirmed). Mr. Killen said that at 1992 First Appeal parties agreed that the above RV of £2,200 should be devalued as follows:-

High Bay Warehouse (30ft) 111,000 sq.ft. @ £2.00 = £222,000
Offices 12,000 sq.ft. @ £2.00 = £ 24,000
Balance 125,600 sq.ft. @ £1.40 = £175,840
NAV £421,840
RV £2,657
Plant RV £50
Total RV £2,700

With Additions:
Ground Floor of 2 storey production 19,010 @ £1.40 = £26,614
First Floor of 2 storey production 17,400 @ £1.00 = £17,409
NAV £44,023
RV £277
Total RV at 1992 First Appeal - Agreed RV £2,975.

Mr. Killen said that there was no addition for plant and HP in the production area.

Mr. Killen also referred to two other comparisons in Donegal:-
(a) Gallagher Brothers, 31a Main Street, Killybegs, Co. Donegal.
RV £760 reduced from £850.
1992/4 First Appeal. Devalues at:-
Offices 4,025 @ £2.75
Production 27,810 @ £1.90

(b) Fish Industries/IAWS, Lot 52B, Killybegs, Co. Donegal.
RV £640 reduced from £760.
1992/4 First Appeal. Devalues at:-
Offices 3,179 @ £2.50 = £ 7,947
Production Area
(part tiled, part basic construction) 33,100 @ £1.35 = £44,685

Mr. Killen also supplied the Tribunal with a copy of the lease on the subject premises.

Mr. Killen submitted a supplementary précis to the Tribunal on the 27th June, 1997 based on information supplied by the Respondent. In his supplementary submission Mr. Killen supplied a detailed breakdown of the analysis of Fruit of the Loom at 1994 revision as follows:-

"(a) 1994 Revision
Factory 102,960 sq.ft. @ £ 1.75 = £ 180,180
Kitchen 3,024 sq.ft. @ £ 1.40 = £ 4,234
1st Fl Office 2,066 sq.ft. @ £ 2.00 = £ 4,132
Loading Bay 1,280 sq.ft. @ £ 1.00 = £ 1,280
Canopy etc. 1,990 sq.ft. @ £ 0.50 = £ 995

NAV £ 190,820
RV £ 1,202
Add Boiler £ 66
Boiler £ 244
HP 1,302 sq.ft. @ £ 0.05 = £ 65
Pipeline £ 20
£ 1,597
OV £ 2,975
£ 4,572
Say £ 4,580

(b) 1995 Revision
Factory 84,331 sq.ft. @ £ 1.50 = £ 126,497
Office 3,789 sq.ft. @ £ 2.00 = £ 7,578
Water Tank 890,000 gals = £ 16,450
W T Plant Buildings 2,295 sq.ft. @ 1.50 = £ 3,442
£ 153,967 @ 0.63% = £ 970"

As a result of the information received in relation to his primary comparison, Fruit of the Loom, Mr. Killen amended his assessment of net annual value and rateable valuation and said that in his opinion the correct net annual value for the subject premises is as follows:-

"
Clear Span Factory 8,154.5 m2 / 87,775 ft2 @ £ 1.50 = £ 131,662
Grd Floor of 2/S Section 549.5 m2 / 5,916 ft2 @ £ 1.25 = £ 7,395
1st Floor of 2/S Section 549.5 m2 / 5,916 ft2 @ £ 1.00 = £ 5,916

Balance of Factory 2,747.0 m2 / 29,568 ft2 @ £ 1.35 = £ 33,917
Boiler House 96.0 m2 / 1,033 ft2 @ £ 1.00 = £ 1,033
Offices 6,000 ft2 @ £ 1.80 = £ 10,800

NAV £ 196,723
RV @ 0.5% = £ 984
Add HP 3,752 ft2 @ 0.05 £ 188
Boiler £ 16
Total RV £ 1,188"

In relation to motive power, Mr. Killen submitted that if the total amount of the motive power was to be valued, the valuation would be 3,752 HP at 5p or £188 RV. On the other hand he said that if it was treated in like manner to Fruit of the Loom then the amount for plant would be considerably less.

Accordingly, Mr. Killen submitted that the maximum rateable valuation to be assessed on the subject is:-
Buildings £1,000
Boilers £ 16
HP £ 187
Total £1,203
Say £1,200

A written submission was received on the 18th June, 1997 from Mr. Christopher Hicks, a District Valuer on behalf of the Respondent.

In the written submission, Mr. Hicks described the subject premises. He said that it had been constructed in 1993 at a total cost of £5.5m excluding site. This devalued at £40 psf overall and indicated the high quality of the building. He said that the factory had an exceptionally wide clear span giving an unusually large unobstructed floor area, allowing for a higher density of machines then would otherwise be the case. He said that the construction resulted in a floor space which was more useful and versatile because of its lack of supporting columns.

By way of comparison Mr. Hicks also offered the Fruit of the Loom factory in Ballymacarry, Buncrana, Co. Donegal as a suitable comparison. He said that the Fruit of the Loom factory had been the subject of two appeals to the Tribunal and a subsequent appeal to the Commissioner of Valuation which resulted in an agreed breakdown as set out in his written submission. Mr. Hicks said that the Fruit of the Loom factory cost approximately £20 psf while the subject cost double that figure.

In the light of these considerations Mr. Hicks assessed rateable valuation on the subject premises as follows:-
"Clear Span Factory 87,775 ft2 @ £2.00 = £175,550
Ground fl. of 2/s section 5,916 ft2 @ £1.40 = £ 8,282
1st fl. of 2/s section 5,916 ft2 @ £1.00 = £ 5,916
Balance of Factory 29,568 ft2 @ £1.75 = £ 51,744
Boiler House 1,033 ft2 @ £1.50 = £ 1,550
Offices 6,000 ft2 @ £2.00 = £ 12,000
£255,042

NAV: £255,042 @ 0.5% = £1,275
Horse Power 3,752 @ 5p = £ 188
Boiler 6,500 lbs/hour @ £2.50 = £ 16
£1,479"

Oral Hearing:
At the oral hearing which took place in the Courthouse, Letterkenny, Co. Donegal on the 4th day of July, 1997 the Appellant was represented by Mr. Des Killen of Messrs. Donal O'Buachalla & Company Limited and the Respondent by Mr. Christopher Hicks of the Valuation Office.

Determination:
The Tribunal has taken careful note of the written précis including the addenda of both parties in this case and has also considered the comments, applications and objections made at the oral hearing today. Its noteworthy that the same comparison namely Fruit of the Loom has been used by both Appellant and Respondent and that there is agreement in relation to the devaluation of that comparison with the exception of the matter relating to horsepower and whether or not that was included in the several valuations arrived at in respect of the Fruit of the Loom premises.

The Tribunal, somewhat reluctantly, but necessarily must refer to the Respondent's valuation on page 4 of his written précis which is of somewhat limited assistance to the Tribunal in that it advances an argument for a figure which is not the figure appealed against and which touches on an area which has been dealt with comprehensively by the Tribunal in an earlier case (VA95/1/108 - Dunnes Stores Limited v. Commissioner of Valuation). This appeal lies against the figure of £1,300 and it is that figure which the Tribunal has considered.

Therefore, taking into account the rental evidence which is incontestable, the comparative evidence of Fruit of the Loom and also noting, the situation in relation to the query over horsepower in the comparative evidence the Tribunal determines that the correct rateable valuation of the subject is £1,250.