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Appeal No. VA06/3/048
AN BINSE LUACHÁLA Rathbeale Service Station Ltd. APPELLANT RE: Garage/Filling Station at Lot No.7b, Commons West,
Swords Lissenhall, Swords, County Dublin B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By Notice of Appeal dated the 5th day of August, 2006 the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of €680.00 on the above described relevant property. The grounds of Appeal as set out in the Notice of Appeal are: "On the basis that the valuation as assessed is excessive, inequitable and bad in law. The property has not been fairly assessed when compared with other comparable properties already in the list." The appeal proceeded by way of an oral hearing which took place in the offices of the Tribunal, Ormond House, Ormond Quay Upper, Dublin 7 on the 29th November, 2006 and on the 8th January, 2007. Mr. Proinsias O Maolchalain, BL, instructed by Mr. Eamonn Halpin, B.Sc. (Surveying), A.S.C.S., M.R.I.C.S., M.I.A.V.I., represented the appellant. Mr. Halpin and Mr. Eamonn Garrigan, owner of the subject property, gave evidence on behalf of the appellant. Mr. Colm MacEochaidh, BL, instructed by the Chief State Solicitor, represented the respondent. Mr. Damien Curran, B.Sc (Surveying), M.R.I.C.S., A.S.C.S., a Staff Valuer in the Valuation Office, gave evidence on behalf of the respondent. At the oral hearing both valuers, having taken the oath, adopted their respective précis, which had previously been received by the Tribunal, as being their evidence-in-chief. PRELIMINARY LEGAL ISSUE Written legal submissions on behalf of the appellant were lodged with
the Tribunal on the 14th December, 2006. While it may be true that the applicants may be out of time with their written legal submissions, nevertheless we feel it is important to address the issue for the sake of transparency, clarity and fairness and to apply the principle audi alteram partem (hear the other side). Appellant's submission In response to the applicant's legal submissions to establish whether or not the Commissioner is in breach of the Valuation Act, 2001 and fair procedures, we first look to the method of valuation and then the standard of valuation. Method of Valuation With regard to the subject property the Commissioner used two methods to obtain his NAV: the price per square metre on the shop area and a rate per gallon on the throughput on the pumps. This is not uncommon with regard to petrol stations - see VA04/3/013 - Ard Services Ltd. decided under the 2001 Act. The methodologies used by the Commissioner are compatible with section 48. Subsection 2 of section 48 states that section 48 is "without prejudice to section 49". What is important is that the valuer arrives at his NAV by reference to the values on the list for that rating authority area of other properties comparable to the subject property to satisfy the requirements of section 49. In the Orange Tree case the Tribunal found that the procedures used by the revision and appeal officers were flawed as rental values were deduced by reference to Jones Lang LaSalle retail rental index, and not by reference to values appearing on the list. This was a clear breach of section 49. In the present case the Commissioner did refer to "values" on the list. The Commissioner gave the RV assessed at 0.63% of the NAV in his comparisons. These are the values appearing on the list. The rate per square metre or the rate on throughput per gallon are methods or means to achieve the value and may not be values in themselves. Nevertheless, without them we could not arrive at a value. They are necessary for comparative evidence. The Commissioner has referred to RV values (NAV @ 0.63%) in each of his seven comparisons and these are the values appearing on the list. In doing so the Commissioner has fulfilled his obligations under section 49 of the Valuation Act. Accordingly, the Tribunal finds that the Commissioner, as regards his methodology, has acted intra vires his powers under sections 48 and 49 of the Valuation Act, 2001. Standard of Valuation Because of the subjective element involved valuers are often brought into conflict with each other on what is or is not a fair valuation. When this happens the issue is a matter of quantum, not law. Valuers may regard the valuation as excessive having regard to the tone of the list. If this is the case then it is a matter of quantum, not law. The Commissioner establishes a tone of comparable properties from the list. Equally, the appellant is free to establish his tone which may correspond with that established by the Commissioner in some cases. It is the Tribunal's job to decide if the valuation is fair with regard to the tone of the list. If we think the valuation is excessive and not in line with the tone we have jurisdiction to amend the valuation. In the present case the Tribunal finds that the Commissioner has complied with the law and that leaves before us the issue of quantum only. Moreover, it is beyond the remit of this Tribunal to deal with questions regarding the constitutionality of the Valuation Act, 2001 or its compatibility with the European Convention of Human Rights. THE QUANTUM ISSUE Agreed Areas Valuation History Appellant's case Mr. Halpin contended for a rateable valuation as set out below: Shop: 304.75 sq. metres @ €64.92 per sq. metre = €19,784.00 Mr. Halpin stated that the property is located on the Brackenstown Road, Swords, Co. Dublin. It is owned by the Garrigan family and trades as Rathbeale Service Station Ltd. It is a modern, re-developed, neighbourhood petrol filling station and convenience shop with customer car parking and car wash. It is independently owned and run as a family business. When the re-development was proposed, Statoil, who were their suppliers at the time, refused to become involved so the Garrigan family carried out the development themselves and are now supplied by Esso. Because they are a family business they are not part of any group, so they have to purchase their petrol at the standard rate which leaves them at a disadvantage, unlike their competitors, who are members of different groups. The fact that the subject property has planning restrictions, (i.e. closing
at 10.30 pm) is also a militating factor against their business. The property
is located on a minor road and most of its business is local (from the
Swords area) because they have lost substantial business due to the opening
of the M1 motorway by-passing Swords. They have also lost business due
to Statoil being developed locally and Tesco supermarket discount-fuel
operation close by on the Malahide Road. Mr. Halpin also stated that even
though car numbers have increased substantially over the years, the gross
profit per gallon has declined since the late 1980s. The current gross
margin runs from about 4.5 cent per litre to as low as 1 cent per litre
for discount operators. Mr. Halpin also stated that, in valuing filling stations, throughput should always be considered as he felt that filling stations with similar throughput should have similar values. Mr. Halpin's comparisons are at Appendix 1 hereto. Cross-examination Evidence was then given by Mr. Eamonn Garrigan, one of the owners of
Rathbeale Service Station Ltd. He stated that the business was family
owned. They were unaware that Tesco were considering entering the petrol
business when they carried out the development of the property. He also
stated that since Tesco opened, their business was seriously adversely
affected. The business was located beside a very large supermarket (J.C.'s
Supermarket) and therefore their retail business was mainly confined to
convenience foods. He stated that the throughput at the time of valuation
was 18,000 to 19,000 gallons per week or approximately 990,000 gallons
per annum. The old valuation was €114 and it was now proposed to
increase this six times to €680, which he felt was a huge increase.
He also told the Tribunal that the turnover from the petrol was about
50% higher than that of the shop in terms of income. The gross profit
from the business was about 4% from petrol sales and 20% from sales from
the shop. He assessed the rateable valuation of the subject property as follows: Shop: 304.75 sq. metres @ €123.00 per sq. metre = €37,484.25 RV @ 0.63% = €682.26 He said his rateable valuation was assessed at 0.63% of net annual value, which was in line with the basis adopted for the determination of value for other revised properties in the locality. The valuation was made by reference to the values of comparable properties appearing in the valuation list for the Fingal County Council area. The property comprised a modern purpose built filling station with a single storey shop and stores. It had an extensive site with a large area to the front and rear incorporating a car wash. Mr. Curran told the Tribunal that the approach to valuing filling stations was to compare filling stations with other filling stations and therefore he would not consider retail properties as comparable properties. There were, he said, two elements to valuing filling stations, one was throughput and the other was to value any retail element attached. So you compare throughput with other filling stations' throughput and you compare the retail area with other filling stations' retail areas. With regard to the significant difference in the valuation levels between himself and Mr. Halpin, he stated that his comparison number one, Statoil, Dublin Road, Swords (a common comparison) is located, together with the subject, on one of the two main roads into Swords. He would not accept that the traffic coming into Swords from the Dublin Road is greater than the traffic coming from the Ashbourne area. He felt that the only way to value those two properties was by the throughput method, and as both properties had almost identical throughput and are located in the same area, Statoil was an ideal comparison for the subject. Mr. Curran stated that Mr. Halpin and himself had, between them, produced ten comparisons in the Fingal rating area and seven of the ten were at 5 cents per gallon, one at 6.3 cents per gallon, one at 4.5 cents per gallon and one at 4 cents per gallon. He therefore felt that the tone was well established for valuing filling stations in the Fingal area at 5 cents per gallon with a few exceptions. He felt that four of his comparisons - Lusk, Lanestown, Blakes Cross and Carrolls, Dublin Road, Skerries - were all in inferior locations to the subject. In regard to the increase in valuation for the subject, Mr. Curran stated that the original valuation, carried out about 1988, referred to a property that no longer exists and the present valuation refers to a far superior new property, which now replaces the old building. In response to the Chairperson, Mr. Curran said he was happy to accept
Mr. Garrigan's figure of 990,000 gallons per annum. Cross-examination Findings and Determination 1. The throughput method is the method applied to petrol stations. We
refer to Ard Services Ltd. cited above which was decided under the Valuation
Act, 2001. Any method that is applied must be based on the tone of the
list. While we appreciate that some competitors may buy in cheaper than
others, nevertheless it is the rate on the volume of throughput which
guides us. In view of the foregoing, the Tribunal determines the net annual value of the subject property to be as follows:
Say RV €587 And the Tribunal so determines. |