Appeal No. VA92/3/020
AN BINSE LUACHÁLA James Conway APPELLANT RE: Sandpit and Workshop at Lot No. 1Aa.2 Kildavin,
B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By notice of appeal dated the 25th day of May, 1992, the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation on the above described hereditament at £61.00 (sandpit £56.00, workshop £5.00). The grounds of appeal as set out in the Notice of Appeal are that "the valuation is excessive, inequitable and bad in law". The Property: Written Submissions: In the written submission Mr. Nerney stated that it was apparent that the valuation of the pit had been determined in this instance by reference to a formula devised by the Commissioner for quarries about 25 years ago and amended slightly following the introduction of decimalisation. In the amended version the recommended unit rate for quarries with outputs not exceeding 50,000 tons was 0.28p per ton. Mr. Nerney said that years ago there may have been some validity in this
approach when there was a market for run of the pit material i.e. sand
or gravel. Now the demand is for washed sand and aggregate. He said that
sandpits are now obliged to instal screens and washing plants, the cost
of which does not leave much scope for profit on small outputs. Mr. Nerney
used the following methods in arriving at the N.A.V. and R.V.:- When buildings at accepted £5 valuation are included the overall
unit rate per ton is 0.175p viz: Mr. Nerney compared the subject property to a gravel pit in R.D. Westport, Co. Mayo which was reduced from £105 to £70 by Castlebar Circuit Court in December 1985 which equated at 35,000 tons output p.a. @ 0.2p = £70. The £70 was apportioned at £66.50 on pit. Mr. Nerney also referred to Appeal No. VA/92/2/50 Thomas Meehan -V- Commissioner of Valuation. In this case R.V. £36 (£1 buildings) was fixed on a sandpit in Co. Galway. Average annual output was 20,000 tons, production facilities were limited and there were five other pits and a quarry operating within a radius of a few miles. Mr. Nerney also set out the matters which he had regard to in arriving
at the valuation estimates in subject appeal:- Mr. Desmond Feehan presented a written submission on the 16th September,
1992 on behalf of the Respondent. In this submission Mr. Feehan described
the premises and set out the basis of the valuation of the sandpit as
follows:- Mr. Feehan also set out the basis for the use of the .28p per ton:- At the conclusion of the Roadstone judgement, Mr. Justice Kingsmill Moore
stated:- Mr. Feehan set out four comparisons:- 2. 1991 Co. Wicklow R.D. Baltinglass 3. 1991 Co. Galway R.D. Glenamaddy 4. 1984 Co. Carlow R.D. Carlow Oral Hearing: Mr. Nerney referred to his written submission dated 23rd September, 1992 and pointed out that the subject hereditament was a small sandpit which achieved relatively small prices for output because of its location in an area where there were several competitors. In this context Mr. Nerney said that, in his view, the decision in the Roadstone case of 1956 on which the respondent placed such emphasis, suggested that in areas where there were many competitors for business, the hypothetical tenant would pay less in terms of rent. If the .5% fraction were to be applied to N.A.V. in arriving at the Respondent's estimate of 0.28p per ton this would result in an N.A.V. of £0.56p per ton. Accepting the appellant's evidence in relation to his selling price of £1.00 per ton for gravel, this would, he said, result in a patently unfair estimate of N.A.V. Mr. Conway gave evidence that there were approximately 10 other sandpits in the immediate vicinity. He confirmed that he was getting around £1.00 per ton for gravel and around £3.75 for washed sand, which he might deliver in a radius of approximately 25 miles. Mr. Feehan referred the Tribunal to comparative properties in the vicinity, which are shown in the map appended hereto as Appendix A and pointed out that most of these comparisons were 1988 revisions and the R.V.'s had been arrived at by settlement and based on the application of 0.28p per ton. Mr. Feehan also furnished the Tribunal with a detailed analysis of the formula devised by the Commissioner of Valuation after the Roadstone decision in 1956. In his view, the increasingly high capital costs of running a very large operation justified the descending scale of R.V. percentage per tonnage. Findings In the instant case the subject hereditament is one of a group of sandpits, all in the same area, at least 5 of which have been recently revised and agreed, apparently on the basis of an R.V. of £0.28p per ton. Although Section 11 of the Valuation (Ireland) Act 1852 and its unequivocal
relation of Net Annual Value to rateable valuation may appear to be diluted
by Section 5 of the Valuation Act, 1986, nonetheless as Justice Barron
says in relation to the latter:- Mr. Justice Barron goes on to say that Subsection 2 of Section 5 of the
1986 Act: The application of £0.28p per ton on sandpits of up to 50,000 tons in output has been observed and largely uncontested for almost 30 years. It does not seem to take account of the essential and fundamental necessity of estimating Net Annual Value. While the Tribunal is conscious of the necessity for uniformity and equity among properties which are comparable, of similar function and recently revised the bedrock of Net Annual Value, whether actual or estimated, must be established. The subject property is a small scale operation, with an average annual output of 20,000 tons. It is surrounded by at least 10 competitors in the immediate vicinity. The appellant has given evidence that the lorries he owns are more lucratively used in the haulage business than in the transport of materials for the sandpit. The minimum capital investment for this type of business, even on a small scale is considerable. An organisation like Roadstone's with an output of 166,000 tons in 1956 is so vastly different in scale that its relevance in arriving at an estimated R.V. per ton is diminished. Regardless of the several comparative R.V.'s in the area, the Tribunal feels that an estimate of N.A.V. must be sought for the subject, and that such N.A.V. must be estimated on a realistic basis, taking into account the size of the hereditament, its location among competitors and the finite nature of the business itself. In all the circumstances the Tribunal is of the opinion that the correct R.V. of the subject hereditament is £52 (sandpit £47, workshop £5) and so determines.
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