Appeal No. VA05/2/012
AN BINSE LUACHÁLA
AN tACHT LUACHÁLA, 2001
VALUATION ACT, 2001
Lidl Ireland GmbH APPELLANT
Commissioner of Valuation RESPONDENT
RE: Supermarket at Lot No. 2Aa, Cahir Road, Sundry
Townlands, Cashel Urban, South Tipperary, County Tipperary.
PRELIMINARY LEGAL ISSUE: Concerning Section 49(1) of the Valuation Act
B E F O R E
John Kerr - BBS. ASCS. ARICS. FIAVI Deputy Chairperson
Michael F. Lyng - Valuer Member
Joseph Murray - B.L. Member
JUDGMENT OF THE VALUATION TRIBUNAL
ISSUED ON THE 10TH DAY OF OCTOBER, 2005
By Notice of Appeal dated the 12th day of April, 2005, the appellant
appealed against the determination of the Commissioner of Valuation in
fixing a rateable valuation of €524.00 on the above described relevant
The Grounds of Appeal as set out in the Notice of Appeal are: "The
R.V. is excessive in comparison to the level assessed on other supermarkets
in Cashel town."
Preliminary Legal Issue
The Tribunal dealt with the following as a preliminary issue. The issue,
which was raised at hearing by the witness for the Respondent, concerns
the true meaning and intent of Section 49 (1) of the Valuation Act, 2001
and also whether the words expressed in the plural in the section, values
and properties can also be construed in the singular.
Section 49 (1) and the "Tone of the List"
The section provides as regards a relevant property that determined valuations
.shall be made by reference to the values as appearing on
the valuation list relating to the same rating authority area as that
property is situate in, of other properties comparable to that property."
Here there is a clear obligation on the parties which is mandatory (with
the use of the word shall), to refer to the values of other comparable
properties appearing on the valuation list in the same rating authority
area. This obligation is conditional on the fact that a material change
of circumstances (MCC) takes place for the purpose of section 28(4).
Tone of the list
While section 49(1) makes no express reference to the "tone of the
list", it nevertheless lays the legal basis upon which a "tone
of the list" may be established with the use of the words "values,
as appearing on the valuation list..
., of other properties comparable
to that property". Precedents show that the "tone of the list"
was well established in valuation practice before the Valuation Act 2001
came into force. The tone of the list did not appear from nowhere but
originated in a legal instrument and today the legal basis is section
49(1) of the 2001 Act. Accordingly section 49(1) and the tone of the list
are effectively inseparable. Moreover, the values of other properties
on the list are no guarantee that a tone may be established, as they may
not be fully comparable to or similarly circumstanced as, the subject
property. However, it is in the interest of justice and equality before
the law that a tone should be established. The weight of the tone can
depend on a number of factors such as the number of comparisons involved
or the level attained in the appeal process. Rational common sense dictates
that a tone cannot be established with just one comparison and to rely
on one comparison would be folly. A tone is established by comparisons
and rental evidence of comparable or similarly circumstanced properties
and valuation practice bears this out. A High Court decision cited below
holds that when a tone of the list is established there is a legal obligation
on the parties to "arrive at a uniform figure having regard to the
tone of the list". This uniform figure should help one to arrive
at the correct Net Annual Value and accordingly the rental value which
the hypothetical tenant would expect to pay.
Irish Management Institute Case 1990 2IR 409
A uniform figure having regard to the tone of the list.
The Valuation Tribunal stated a case to the High Court on four questions
of law, two of which asked:
Whether the Tribunal properly applied section 5, subsection 2 of
the Valuation Act 1986.
Whether the Tribunal came to a uniform figure having regard to
the tone of the list.
Mr. Justice Barron held that the Tribunal did not properly apply section
5, subsection 2 of the 1986 Act. One of the grounds was that the Tribunal
had regard only to the most suitable comparison or comparable premises
and therefore did not come to a uniform figure having regard to the tone
of the list. In this case the Tribunal had regard to the Trinity College
Buildings only, and disregarded other comparisons. Judge Barron held that
this evidence was insufficient to support the valuation. The figure determined
should have uniformity with regard to the tone of the list and the tone
cannot be established with one comparison.
Section 5(1) of the 1986 Act provided that there should be a relationship
between the amount of the valuation and the valuation of other tenements
and rateable hereditaments. To ensure that such a relationship existed,
section 5(2) provided that regard should be had to the "valuations
of tenements and rateable hereditaments which are comparable and of similar
function." Section 49(1) of the Valuation Act 2001 relates to section
5(2) of the 1986 Act and to the legal principle of determining valuations
with reference to the values of comparable properties.
Tribunal Judgment VA96/4/035 - Ray Murray Ltd. Tone of the list.
The Tribunal stated that in order to establish a tone of the list it is
necessary to have a number of properties similarly circumstanced or which
can, with adjustments reasonably based, be so similarly circumstanced.
Having established a tone, the Tribunal went on the say, it is then necessary
to consider what weight should be given to that tone. The first criterion
in this regard which the Tribunal would consider is again the number of
properties involved. Again this case upholds the principle that a tone
cannot be established with just one property.
Interpretation Act 1937
Section 11 provides that every word importing the singular shall, unless
the contrary intention appears, be construed as if it also imported the
plural, and every word importing the plural shall, unless the contrary
intention appears, be construed as if it also imported the singular. The
Tribunal is of the view that the contrary intention does appear in section
49(1) and that the legislator intended that a tone of the list be considered
where possible and the section establishes the legal basis for such a
tone in providing that the determined valuation shall be made by referring
to values on the list of other comparable properties. This being the case
the words values and properties cannot be construed in the singular but
must be construed in the plural form. This is supported by the precedents
Teleological, Schematic or Purposive Approach
The Tribunal applies the literal meaning to section 49(1) and is satisfied
that the legislator intended that the relevant words be used in the plural
only. Without such construction a tone of the list could not be established
and this could prove to be prejudicial to the interests of justice.
From a teleological/schematic or purposive perspective the Tribunal comes
to the same conclusions, whether we look to the purpose of the 2001 Act
as a whole or to the particular section in question. The Act aims to establish
a better and fairer administration of rating law and valuations than had
hitherto been the case and section 49(1) helps to promote this end by
providing a basis to establish a tone. In the RAY MURRAY case cited above
the Tribunal stated that the tone of the list "is of considerable
assistance and considerable help in adjudicating upon what the correct
NAV should be and therefore the correct RV of any given property."(P.8(11)).
Accordingly an NAV estimated in this manner should result in a just and
fair valuation with a uniform figure in accordance with the tone of the
list. This fits into the general scheme of the Act as a whole.
The Respondent provided only one comparison, namely, Garveys Supervalu.
In view of our interpretation of section 49(1) the Tribunal cannot consider
the comparison in isolation. However, this does not mean that we reject
the evidence, on the contrary we say that the evidence should be considered
with other evidence, even if it means going outside the rating authority
area where the subject property is situate in. Section 49(2)(b) provides,
for the purposes of section 49(1), that if there are no comparable properties
in the same rating authority area (as the subject) in which an existing
valuation list is in force, then reference can be made to net annual values
of properties (as determined under the repealed enactments) on 1st November
1988 with adjustments. The Respondent did not exercise this option under
section 49(2)(b) to look for supporting evidence. If they had this evidence
could have been considered by the Tribunal together with that of Garveys
Supervalu to comply with section 49(1).
Considering the jurisprudence of the High Court and Tribunal cited above,
considering the purpose and objective of the Valuation Act 2001 and particularly
section 49(1) and also having considered the submissions of both parties,
we are of the view that the Respondent did not conform with the mandatory
provisions of section 49(1) in that they supplied only one comparison
contrary to the intention of the legislator. Moreover, we also hold the
view that the true meaning and intent of section 49(1) is to lay the legal
basis for the establishment of the tone of the list and a better administration
of justice. Accordingly words used in the plural in the context of section
49(1) cannot be construed in the singular.
In these circumstances we regard the Respondent's failure to comply with
the relevant section to be prejudicial to the interests of justice with
consequential effects for the Appellant. Accordingly, we determine the
valuation to be a nullity and the rate at the foot of the valuation also
a nullity and the rate to be struck out. The revision process commenced
under section 27 of the Valuation Act 2001 is therefore at an end.
And the Tribunal so determines.