Appeal No. VA06/1/013
AN BINSE LUACHÁLA
Peter Davis APPELLANT
RE: Supermarket at Lot No. Unit 2112, Airport Business
B E F O R E
JUDGMENT OF THE VALUATION TRIBUNAL
By Notice of Appeal dated the 1st day of March, 2006 the appellant appealed against the determination of the Commissioner of Valuation in fixing a rateable valuation of €175.00 on the above described relevant property.
The Grounds of Appeal as set out in the Notice of Appeal are:
"The RV is excessive inequitable and bad in law - it has not been
fixed in accordance with the terms of S49(1) of Valuation Act 2001. The
revision is unsound as the property was not revised in accordance with
S.49(1) of the Valuation Act 2001. On this basis the RV should be struck
By way of response on behalf of the Respondent Mr. Devlin said that the Commissioner was entitled to look at the "tone of the list" by looking at premises that were comparable in use, location, construction and in any other relevant manner. He was not obliged only to compare other "Spar" shops with the instant "Spar" shop. Mr. Devlin also submitted that in any event a Commissioner could only exclude property from the valuation list if either (a) the property was not rateable or (b) there was a global valuation. Neither of these situations applied here.
Mr. Devlin also submitted that even if the Revision Officer had acted incorrectly, if the matter was heard by way of case stated to the High Court, the High Court could only declare that he had acted incorrectly and send the matter back for reconsideration by the Revision Officer. The Tribunal does not have the power to remit a case to the Commissioner and can instead substitute its own Judgment.
By way of response Mr. Halpin on behalf of the Appellant claimed that because there was a fundamental error there was a gross unfairness in the process which took place. He contended that the error in question was an error of the order of magnitude that occurred in the D.I.D. Electrical case and the Banba Toymaster case and in the circumstances the property should be excluded from the valuation list.
The property is comprised of a new Spar convenience store with ancillary office canteen, W.C.'s and small store on the ground floor rear of a new two storey commercial/service block in the centre of the Airport Business Park.
Shop 232.5 sq. metres @ €90.00 per sq. metre = €20,925.00
Or Unit overall 281 sq. metres @ €80.48 per sq. metre = €22,615.00
@ 0.5% =
In support of his opinion of net annual value Mr. Halpin introduced three comparisons, details of which are set out in Appendix 1 to this judgment. He referred the Tribunal to the good quality map of the Airport Business Park which was appended to the Valuation Office submission.
By reference to the map and to his own photos, Mr. Halpin demonstrated that the main entrance to the Business Park was on the extreme right of the map. The subject property was located in an obscure area within the Park behind the Subway restaurant. It had a very poor profile and required considerable "juggling" to reach. Consequently there was little or no potential for passing trade. Furthermore the unit enjoyed limited trading hours and a 5.5 day trade. In general the rental values for retail units within the park were moderate with three unlet units available with asking rents €269.00 per sq. metre or €25.00 per sq. foot. Mr. Halpin added that the subject property was remarkably similar to another Spar convenience store located at City West, County Dublin, also the subject of a Tribunal appeal VA04/1/051 - Brian Smyth t/a Spar City West. Given, therefore, the location of the subject, the nature of business conducted in the Park and the absence of any residential development or evening or weekend passing trade, trading hours were restricted, by and large to normal commercial office hours. This, Mr. Halpin said, contrasted with the typical convenience store, which opened from early morning till late at night.
Mr. Halpin then contended before the Tribunal that there was no established tone of the list for convenience stores within the Airport Business Park. He emphasised that the use by the Commissioner of Valuation of non-comparable properties had seriously distorted the NAV in the subject case, before going on to review the comparisons in his own submissions viz Spar, Mount Oval Village, Scally's Supervalu, Blarney and The Grove, Broadale. In particular Mr. Halpin relied on his first comparison, Spar, Mount Oval Village. In his view this was the most relevant retail property to the subject and he expressed amazement that it was not included in the Valuation Office submission. It was almost, Mr. Halpin said, identical in area to the subject, 287 sq. metres v. 281 sq. metres with similar passing rents. It was located in a residential development, surrounded by pub, crèche, etc. and if anything was superior to the subject. It was impossible, Mr. Halpin added, to stray mistakenly into and yet its RV at €115.00 based on an overall rate of €80.48 per sq. metre, as against a rate of €125.00 per sq. metre for the subject, was vastly lower.
Mr. Halpin concluded his evidence to the Tribunal by reciting the findings in Brian Smyth t/a Spar City West for the benefit of the Tribunal and reiterated that they had particular application here.
Mr. Halpin was then cross-examined by Mr. James Devlin, BL, for the respondent, with regard to the relative levels of passing rents obtaining in Mount Oval and the Airport Business Park. He replied that they were moderate in both cases. Pressed further to comment on turnover, Mr. Halpin stated that while he had no precise details, his sources informed him that Mount Oval enjoyed higher turnover and had a superior lunch time trade.
Replying to further questions put to him by Mr. Devlin touching on the tone of the list, Mr. Halpin argued that simply because no tone had been established for convenience stores within the Airport Business Park did not justify the Commissioner of Valuation introducing non-comparable properties differing in function as comparisons with resultant distortions to the subject NAV. Mr. Halpin was particularly referring to the Subway restaurant which was located next door to the subject property and was rated at €130.00 per sq. metre. Neither would Mr. Halpin accept that the Irish Shell Service Station included at Comparison 4 of the Valuation Office submission and rated at €153.90 per sq. metre was a valid comparison. That property comprising a shop and service station on the road in from Cork Airport was open 24 hours a day and had high visibility. In any event, Mr. Halpin added that 50% of the RV was attributable to the shop while the remainder related to the service station.
€95.23 per sq. metre for areas up to 10,000 sq. ft.
He relied on this background local knowledge and methodology when valuing the Subway restaurant in 2004. In that case, as a rule of thumb, Mr. Dineen applied a premium of 50% onto the rate per sq. metre applicable to offices as exemplified in Altera Trading and Digisoft TV (€95.66 per sq. metre and €95.23 per sq. metre respectively). Mr. Dineen was of the view that retail units were entitled to such a loading over office space and so initially a rate of €150.00 per sq. metre was applied to the Subway unit. On appeal this was reduced to €130.00 per sq. metre. Accordingly, when the Spar unit came to be valued in 2005 Mr. Dineen indicated that he was hugely influenced by the rate set for Subway which was adjacent to Spar in the Airport Business Park and valued it at a rate of €125.00 per sq. metre.
Drawing comparison with Spar, Mount Oval where no tone had been established and which was valued at €80.48 per sq. metre overall, Mr. Halpin cross-examined Mr. Dineen as to how he valued the subject where equally no tone had been established and yet was valued at €125.00 per sq. metre. Mr. Dineen in response said he took into consideration the asking rents of the two units initially let. Those were of the order of €22/23 per sq. foot but Mr. Dineen acknowledged however that the rents achieved for those units were lower at approximately €18.00 per sq. foot.
Mr. Halpin put it to Mr. Dineen that he was inconsistent with his valuation treatment of the subject vis-a-vis the Spar, Mount Oval which both accepted was a comparable property by applying a 36% differential in the former and only 4% in the latter, despite the fact that both units were less than 10,000 sq. ft. in area. Mr. Dineen replied that Spar, Mount Oval was a special case as the developer was in financial difficulties. At all events Mr. Halpin put it to Mr. Dineen that the scheme he had adopted was mainly for office valuation and had no proper application to retail units and cited again the findings in Brian Smyth t/a Spar City West in support of his argument for retail convenience stores.
On the basis of that judgment, Mr. Halpin argued that Mr. Dineen should have looked at appropriate comparisons outside the Business Park given that no tone for convenience stores existed within it.
Mr. Halpin concluded his cross-examination of Mr. Dineen by putting it to him further that his valuation approach and methodology was at variance with the spirit of Section 49(1) of the Valuation Act, 2001 by the Valuation Office use of non comparable properties.
Shop 232.5 sq. metres @ €100.00 per sq. metre = € 23,250.00
And the Tribunal so determines.