England and Wales Lands Tribunal

[2000] EWLands RA_22_1998 (17 January 2000)

RA/19-22/1998

(Consolidated)

LANDS TRIBUNAL ACT 1949

RATING - annual value - valuation - 1990 and 1995 rating lists - car showroom in cul-de-sac in village outside Doncaster - comparables - whether discount for size and mixed age - appropriate discount for poor location and layout - whether further discount to reflect absence of tenant competition - R.V. reduced from £46,000 to £39,500.

IN THE MATTER OF APPEALS AGAINST TWO DECISIONS OF

THE SOUTH YORKSHIRE VALUATION TRIBUNAL

BETWEEN F CROSS AND SONS LIMITED Appellant

and

MARTIN THRALE SPENCER Respondent

(Valuation Officer)

Re: Carr Garage

Old Thorne Road

Hatfield

Doncaster

South Yorkshire

DN7 6ER

BEFORE: N J Rose FRICS

Sitting in public at Barnsley County Court

on 11 and 12 November 1999

The following case is referred to in this decision:

Trevail(VO) v C & A Modes Ltd (1967) 13 RRC 204

Appearances Stuart Ward of Keeble Hawson Moorhouse, solicitors of Sheffield for the appellant.

Respondent in person with leave of the Tribunal.


 


DECISION

1. These four appeals, which were heard together, are from two decisions of the South Yorkshire Valuation Tribunal (the VT). Both decisions relate to a modern car showroom and premises known as Carr Garage, Old Thorne Road, Hatfield, Doncaster, South Yorkshire DN7 6ER. Appeals RA/20 and 21/1998 are against the decision determining the assessment in the 1990 rating list at rateable value £46,000. Appeals RA/19 and 22/1998 are against the decision determining the assessment in the 1995 rating list at the same figure. Both parties appealed against both decisions and the appeals were consolidated, the ratepayers to be the appellant.
2. Mr Stuart Ward of Keeble Hawson Moorhouse, solicitors of Sheffield appeared for the appellant, F Cross & Sons Ltd and called Mr Peter Malcolm Cross, the managing director of the appellant and Mr Peter Rogerson BSc ARICS and Mr Anthony Rogerson BSc ARICS ASVA, both partners in Rogerson and Associates, chartered surveyors of Hull. The respondent valuation officer, Mr Martin Thrale Spencer ASVA, appeared in person with leave of the tribunal and gave evidence. It was agreed that the material days for consideration of these appeals were 10 April 1992 for the 1990 list and 1 April 1995 for the 1995 list and that the level of values was the same for both lists. The appellant's case was that both assessments should be reduced to £31,000. The contention of the respondent was that they should both be increased to £50,000. In company with both expert witnesses I made a detailed inspection of the appeal property and a more or less detailed inspection of other premises referred to as comparables on 14 December 1999.

Facts

3. From the agreed statement of facts and from the evidence I find the following facts. The appeal property is located on the eastern edge of Hatfield, a village approximately 6 miles to the east of Doncaster on the A18. Mr Fred Cross bought the original site on the A1146 Old Thorne Road in 1957. The original premises comprised a three pump petrol filling station and vehicle repair workshop. There have been substantial alterations to the property since that date. In 1964 a showroom was added to the premises to sell used cars; a new repair workshop was built around 1972; a new body shop and valeting bay were added in 1988; the old car showroom was demolished and a new purpose built car showroom and offices were constructed in 1989/1990. Subsequent to the material dates for consideration of these appeals further alterations comprising a new body shop (completed in August 1998) and a new service bay (completed in January 1999) have been added.
4. At the material dates the premises comprised a number of buildings. The purpose built car showroom (548.65 m²) is of brick walls and a profile metal roof on a steel frame. There is full glazing to the front and part of the side elevation. Internally there are fair faced brick walls and plastered walls and the ceiling is underdrawn with ducting for the warm air heating. There are three supporting columns down the centre of the showroom finished in fair faced brickwork. Offices are partitioned off from the showroom at both the side and rear. To the front of the showroom is a small amenity block comprising male and female toilets and a small kitchen of 8.6m², within which the walls are fully ceramic tiled and the ceilings underdrawn. On the ground floor two offices totalling 31.45 m² open directly into the showroom area, each having plastered walls, acoustic tiled ceiling and ducted warm air heating. The first floor offices of 99.75 m² are accessed by a staircase from the showroom.
5. The parts counter and reception area of 18 m² is open to the showroom and also links with a parts and workshop office of 49.8 m² which has plastered walls, acoustic tiled ceiling and warm air heating. The repair garage/workshop has brick walls and a profile metal sheet roof on a steel frame and measures 413.7 m². The floor is tiled concrete with ceramic tiled walls to a height of 1.5 m. Ducted warm air heating is provided. The parts store of 76.76 m² is partitioned off from the repair garage. At the rear of the parts store is a boiler room, housing an oil fired boiler which provides heating to the hereditament. There is a first floor parts storage area of 71.10 m², accessed by two separate staircases from the ground floor parts store below. The flooring is lightweight chipboard suspended by RSJs. The area is open to the underside of the main corrugated asbestos roof and natural light is provided by roof lights. Access from this area is also provided to a further parts storage area of 72.55 m² and a canteen of 41.14 m². The canteen is completed to a basic finish with brick or plasterboard walls open to the underside of the main roof with roof lights inset.
6. The spray shop is built of concrete block walls and a profile metal sheet roof on a steel portal frame and measures 359.1 m². A further area of the spray shop of 102.2 m² has a lower working height, due to the stores extension and canteen areas over as previously described. The lean-to valeting bay adjoining the spray shop is 154.44 m² under a sloping roof. To the rear of the repair garage the small workshop is constructed of concrete block walls with profile metal roof and tiled floor and totals 27.9 m².
7. The total floor area of the main buildings is 2,075.14 m². In addition, there is a tarmacadamed car display area of 1,183.3 m² at the front of the showroom and a customer parking area of 486.2 m² to the side of the showroom in front of the repair garage. At the rear of the premises the parking and storage area of 1,733 m² is concrete surfaced and partly compacted hard-core. There is a field storage area for the storage of vehicles and staff car parking. This area has concrete access strips and, after allowing for essential access and circulation, the area is 1,683 m². At the rear of the property is an open fronted store which is constructed partly of brick and partly of timber with a sloping asbestos roof and measuring 157.57 m².

History of 1990 rating list appeals

8. The appeal property was entered in the compiled 1990 rating list at RV £54,000 with effect from 1 April 1990. The assessment was increased to £63,000 with effect from 1 April 1991 to reflect alterations to the property. Following a proposal by Control Enterprises on behalf of the appellant, an assessment of £56,500 was agreed with effect from 1 April 1991.
9. On 20 February 1996 Rogerson and Associates made a further proposal on behalf of the appellant to alter the assessment, but the respondent contended that the proposal was invalid. Following discussions between Rogerson and Associates and the respondent it was agreed that this proposal should be dismissed on the understanding that the respondent would review the assessment. The proposal was duly dismissed by the VT on 1 November 1996. On 20 November 1996 the respondent made an alteration to the rating list, reducing the assessment to £53,750 with effect from 1 April 1991. On 10 December 1996 Rogerson and Associates submitted a proposal on behalf of the appellant, disagreeing with the respondent's proposed assessment and suggesting it should be reduced further. The VT heard the resultant appeal on 8 December 1997 and gave its decision on 20 January 1998 at RV £46,000 with effect from 1 April 1991.
10. On 6 February 1998 Rogerson and Associates gave notice of appeal to this tribunal against the VT decision. The reasons for the appeal were that:

"the decision of the South Yorkshire Valuation Tribunal does not have sufficient regard to the remote location and layout of the hereditament - RV should be reduced to £1 with effect from 1 April 1991".

This appeal constitutes reference RA/20/1998.

11. On 16 February 1998 the respondent lodged a notice of appeal to this tribunal against the VT decision. The reason for this appeal was that:

"the decision of the South Yorkshire Valuation Tribunal at Rateable Value £46,000 is incorrect and insufficient".

This appeal constitutes reference RA/21/1998.

History of 1995 rating list appeal

12. The appeal property was entered in the compiled 1995 rating list at RV £67,000 with effect from 1 April 1995. On 22 February 1996 Rogerson and Associates made a proposal on behalf of the appellant to reduce this assessment. The VT heard the resultant appeal on 8 December 1997 and gave its decision on 20 January 1998 at £46,000 with effect from 1 April 1995.
13. On 6 February 1998 Rogerson and Associates on behalf of the appellant gave notice of appeal against the decision of the VT. The reasons were that:

"the decision of the South Yorkshire Valuation Tribunal does not have regard to the remote location and layout of the hereditament - RV should be reduced to £1 with effect from 1 April 1995."

This appeal constitutes reference RA /19/1998.

14. On 16 February 1998 the respondent lodged notice of appeal to this tribunal against the VT decision on the grounds that:

"the decision of the South Yorkshire Valuation Tribunal at rateable value £46,000 is incorrect and insufficient."

This appeal constitutes reference RA/22/1998.

15. It will be convenient at this stage to summarise side by side the valuations of the appeal property as presented by Mr Anthony Rogerson and the respondent (Appendix 1). As will be seen, in effect the respondent valued the main showroom at £32.81 per m² and the repair garage, main spray shop and valeting bay at £19.69 per m². These values were based on starting figures of £37.50 and £22.50 respectively, less an end allowance for location and layout of 12.5%. He valued the section of the spray shop with reduced height at £17.50 per m² (£20.00 less 12.5%). Mr Rogerson's corresponding figures were £21.25 for the showroom, £10.63 for the repair garage and spray shop and £8.50 for the valeting bay, based on starting figures of £25.00, £12.50 and £10.00 respectively, less an allowance of 15% for location, layout and mixed age. The valuation which he defended at the hearing did not distinguish between the two sections of the spray shop with differing heights, although the valuation in his initial expert's report adopted a starting figure of £10.00 for the section with reduced height.
16. The respondent's starting figure was £25.00 for the kitchen, parts counter and parts workshop/office and £20.00 for the first-floor offices; Mr Rogerson's starting figure was £5.00 less in each case. For the parts store the respondent started at £20.00 (Mr Rogerson £10.00); for the first floor parts store and canteen he started at £7.50 (Mr Rogerson £5.00) and for the small workshop his starting figure was £15.00 (Mr Rogerson £7.50). There was no difference between the two experts on the value of the outside parking, car sales and field storage areas, but the respondent valued the open-fronted store at £788, based on £5 per m², whereas Mr Rogerson's figure was a nominal £100. Both valuers applied their respective end allowances to every element of the valuation.
17. There was thus very little common ground between the experts. The principal issues, however, are the values to be ascribed to the main showroom and the repair garage and spray shop. There are also subsidiary issues relating to the effect on value of the location and layout of the appeal property; whether there should be an allowance to reflect its size and mixed age; the extent of the demand for it in the hypothetical market and the value of various ancillary areas.

Case for the appellant

18. Mr Peter Malcolm Cross is the managing director of the appellant, which he first joined in about 1963. A substantial amount of his time has been involved in the financial planning of the business. This has increased in importance over the years, as the motor trade has become more competitive and margins have been reduced.
19. Mr Cross said that the most critical consideration for a business engaged in the sale or repair of motor cars was its location. He considered that the location of the appeal property was exactly the opposite of what was required for the purposes of selling or repairing cars. His father had purchased the site in about 1957, because it was situated on the busy A1146. That road was then the main south Yorkshire to Hull / east coast road and was at all times very busy, particularly in the summer months. Shortly after the used car showroom was added in 1964, his father decided to seek a motor manufacturer's franchise. In about 1966 he succeeded in obtaining a Toyota franchise, which the appellant had maintained to this day. It was much easier in the earlier days to obtain such a franchise. Motor manufacturers - particularly those from overseas - were desperate to obtain market share and so franchisees dictated terms to the manufacturers. The appellant was the longest serving Toyota franchisee in this country.
20. The construction of the M18 in about 1977 resulted in the severance of the A1146 and placed the appeal property in a cul-de-sac. The appellant realised that the blockage of the A1146 would be extremely detrimental to its business. The first thing to go was the petrol filling station. The appellant decided that if trade dropped off it would have to relocate. The problem was that it was not making large profits and it was therefore not viable for it to incur the substantial expense and risks that would result from relocating. Due to tremendous customer loyalty and, more importantly, the Toyota franchise, the appellant had been able to survive. The nearest Toyota franchises to the appeal property were at Scunthorpe and Sheffield. The retention of the customer base had been due to close attention being paid to customer satisfaction. The appellant prided itself on looking after its customers.
21. Attention to customer satisfaction came at a cost. The appellant had had to spend substantial sums on advertising and other items which were directly attributable to the poor location. It had been necessary to maintain a large fleet of courtesy cars which were split between the workshop and the body shop, at an annual cost of some £68,500. To this sum must be added insurance and other maintenance costs. In addition, the appellant's advertising costs were substantial. It spent £17 per annum more for each car sold on advertising than the average expenditure by Toyota franchisees in this part of the country. The expenditure on service courtesy cars as a percentage of sales was nearly twice the national average for Toyota dealers. The sole reason for the high level of these two overheads was the location of the appeal property.
22. In 1989 the appellant accepted an offer to sell the new Lexis executive saloon within the existing showroom facility. It was one of only 52 Toyota dealers to be offered this opportunity. It remains one of the top 20 Toyota dealerships in the country. Mr Cross attributed this success to the appellant's customer focus and goodwill which had been built up over many years. The location of the appeal property was, however, a constant drawback and was positively detrimental to the business.
23. Although franchisees used to dictate terms to the motor manufacturers, the situation had very much reversed. Manufacturers now expected their franchisees to occupy high-quality, prominent positions. This policy was evidenced by the way in which dealers had gone out of business or relocated to more popular, prominent locations. Wheatley Hall Road in Doncaster ("motor showroom alley") was such an example. In or about 1989 Toyota GB reviewed all its franchisees and at that time the appellant thought that it would be forced to relocate. Although Toyota GB was not happy with the location of the appeal property, because the appellant's sales were so good they allowed it to remain there and redevelop instead. Under normal circumstances Toyota GB would not have granted a franchise to a business located at the appeal property. Mr Cross was firmly of the opinion that the appellant simply could not survive without the Toyota franchise and it was only a matter of time before Toyota GB required it to relocate. The appellant had been investigating relocating for some time. This was not proving easy, because of the difficulty in finding a site which was sufficiently prominent to justify the expense and risk of relocating. Mr Cross was firmly of the opinion that the appeal property only had a value to the appellant. He considered that no other motor vehicle sales/repair business would have considered operating there and the appellant only did so for historical reasons.
24. The appeal property had been added to and altered over the years. This was because the appellant had never been able to justify the cost of completely demolishing the existing buildings and constructing a purpose-built showroom. Had the appeal property been located in a more prominent location elsewhere, he was sure that the piecemeal construction of the buildings would not have taken place.
25. Mr Peter Rogerson's evidence was confined to factual details of the rating assessments which he had agreed for two of the properties cited as comparables on behalf of the appellant, and of the rents payable for those properties.
26. Mr Anthony Rogerson (referred to in this decision simply as Mr Rogerson) gave expert evidence for the appellant. He joined the valuation office agency in Hull in 1987. He left the agency in 1995 to set up in practice on his own account. He has considerable experience of valuing motor trade properties and of rating throughout England and Wales.
27. He referred to the evidence of Mr Cross to the effect that the Toyota franchise was the only reason for the survival of the appeal property in its remote location and that the franchise had only been maintained because of the commitment of the appellant. Mr Rogerson considered that the location of the appeal property made it unique. In preparing his valuation, he had had regard to four rating assessments which had been agreed by his firm. They all related to purpose-built car showrooms and workshops, situated on busy roads. Although he had sought to rely on comparables in the same locality as the appeal property, all four of his comparables were in better locations.
28. One property, Chaceside, Doncaster Road, Hatfield, was occupied by the appellant and situated in the same village as the appeal property, although it was on a busy main road running between Thorne and Doncaster. The second was in Clay Lane West, in Doncaster close to the main Wheatley Hall Road. Although erected in about 1990, this property was demolished in 1997 as it was considered inappropriate for a Citroen franchise, which was transferred to Wheatley Hall Road. The remaining two comparables were situated in Rawcliffe Road, the main road into Goole and Flaxley Road, a busy road running through Selby. The agreed assessments for the two latter units were based directly on the rents payable for them.
29. According to Mr Rogerson's analyses, the major elements of these four properties had been agreed at the following values in the 1990 list:

	Overall size m2	Showroom £ /m2	Workshop £ /m2
F Cross & Sons Limited, Chaceside Garage, Doncaster Road, Hatfield	561.00	£35	£20
Dixon Motor Holdings plc, Clay Lane West, Doncaster	812.14	£35	£17.50
Dixon Motor Holdings plc, Rawcliffe Road, Goole	522.48	£25	£13
Dixon Motor Holdings plc, Flaxley Road, Selby	706.80	£30	£12

These properties were all very much smaller than the appeal property. The agreements showed that, for the purposes of the 1990 list, modern purpose-built and well located showrooms of limited size were worth between £25 and £35 per m². In arriving at his valuation of £25 per m² , he had reflected the fact that the appeal property was unique in this country, by virtue of location and scale. An allowance for quantum was an accepted valuation tool. It was not relevant in Doncaster where there was considerable demand by manufacturers to be represented by franchisees, particularly in "motor showroom alley". In a village location such as Hatfield, however, manufacturer demand was limited and this resulted in larger properties being proportionately less valuable. As a consequence, his main showroom and workshop rates incorporated an in-built quantum allowance. He then made an end deduction of 15% to reflect the poor location, layout and mixed age of the premises, producing a total value of £31,087.05, which he rounded down to £31,000 as being the appropriate value for the 1990 list.

Case for the respondent

30. Mr Martin Thrale Spencer is a senior valuer with the valuation office agency. He has had 26 years experience of rating, all with the valuation office, serving in the Mansfield, Nottingham, Hammersmith, Doncaster and Sheffield offices.
31. He accepted that the appeal property was not ideally located for a car showroom, but he did not think it was as bad as suggested by Mr Rogerson's valuation. He explained that at the hearing before the VT he had valued the showroom at £32.50 per m², which incorporated an implicit allowance for location and layout. When preparing for the hearing before this tribunal, he had decided to make an explicit allowance for these factors in the form of an end allowance, which was equivalent to 10% for location and 2.5% for layout.
32. At both material dates Wheatley Hall Road was the best location for car showrooms in the Doncaster area. It was the main arterial road running north-east from Doncaster (A630) and it had become even more popular with motor dealers by the second material date. Wheatley Hall Road benefited from visibility to large numbers of passing vehicles; accessibility to the centre of Doncaster and the surrounding road network and agglomeration - the large number of car showrooms there provided excellent customer choice. By comparison, the appeal property was in a cul-de-sac in a village location.
33. Normally, one would have expected car showrooms to have increased in value between 1 April 1988 and 1 April 1993 - the two relevant antecedent valuation dates. He had agreed that the same level of assessment should apply to the appeal property at both dates to reflect its location and the increasing movement of motor retailers to Wheatley Hall Road subsequent to the first material day.
34. The respondent drew attention to the appellant's substantial financial investment in progressively developing the appeal property after the closure of Old Thorne Road to through traffic in about 1977. This indicated that the appellant had confidence in the types of vehicles sold, its own reputation and the trading locality. If the site was as bad as Mr Rogerson suggested, the appellant would not have invested there on the scale it had; Toyota and Lexis franchises would have been withdrawn and a planning application would not have been submitted in September 1999 to construct a stand-alone Lexis showroom on the adjoining site.
35. Advertising was an essential tool for selling cars irrespective of the location of the showroom. It was relevant to consider the appellant's expenditure on advertising, not by reference to other Toyota dealers elsewhere, but by reference to other garages in the Doncaster locality. The appellant did not appear to take more advertising space than its competitors in Doncaster. Moreover, purchasers demanded courtesy cars from whichever garage they purchased their vehicles. The appellant operated a successful and expanding business at the appeal property, conducted from substantial modern accommodation on an extensive site of approximately 3.5 acres. The hypothetical letting market would include the actual occupier and a rent would be agreed in the light of the respective bargaining strengths of the parties. The actual occupier would be aware that he had invested substantial sums in developing the property. It would also recognise the availability of suitable premises elsewhere and would make its rental bid accordingly.
36. Although the showrooms in Goole and Selby were useful, being based on actual rental evidence of which there was little available, they were situated in a different rental market, much further from Doncaster than the appeal property, in areas of lower rental value.
37. The respondent did not produce any rental evidence. He relied on the 1990 list assessments agreed for nine motor showroom/workshops in Doncaster and the immediately surrounding area, together with a motor workshop in Hatfield. He said that these settlements demonstrated the established tone for car showrooms and workshops in the Doncaster valuation area. Although the agreements were generally reached without prejudice to the make-up of the valuation, the valuation office had analysed the major elements in the valuations as follows:

Address	Overall size m2	Showroom £/m2	Workshop £/m2
BMW Wheatley Hall Road Doncaster	1173.6	55 50 on lower headroom	27
Perry's Motor Sales Wheatley Hall Road Doncaster	1800.0	50	22.5
Carnells Marshgate Doncaster	3985	50	25
AFG Caledonian Doncaster Carr Doncaster	1308.2	55	25
Doncaster Hyundai Centre Middle Bank Doncaster	490.7	45	25
Dixon Motor Holdings Clay Lane West Doncaster	815.5	40	25
Chaceside Doncaster Road Hatfield	559.4	37.50	25
Armthorpe Motor Co 20 Doncaster Road Hatfield	1511.8	N/A	20
A Smalley & Sons Selby Road Garage Thorne	489.9	35	20
Freeway Motor Group Station Road Barnby Dun, Doncaster	815	25	25

38. The respondent produced details of this wide selection of assessments in order to illustrate that the overall range of showroom values in the Doncaster area was between £25 and £55 per m², the precise value depending on location and quality. His starting point for the valuation of the appeal property, however, was £37.50 - the figure agreed for Chaceside, the appellant's other showroom in Hatfield. This agreement showed that the appropriate level of value for a modern showroom in a rural location outside Doncaster was some 32% below that of similar accommodation in the prime showroom position in Doncaster itself. The settlement evidence indicated that size was not a material factor in determining value.
39. His end deduction of 12.5% reflected the fact that the appeal property was not situated on a main road and had been developed in a piecemeal fashion. The result of this calculation was to produce a value of £50,098, which he rounded down to £50,000.
40. It was put to the respondent in cross-examination that there would be no interest in the appeal property if it were vacant and to let. He did not agree. A tenant fresh to the scene would have borne in mind that the previous tenant had done very well there.

Decision

41. Although these appeals relate to both the 1990 and the 1995 rating lists, both experts agreed that the same value should apply to both. They tended to concentrate their attention on the valuation for the 1990 list where there was more evidence available and I shall adopt the same approach.
42. Having carefully considered all the evidence, I have come to the conclusion that there would have been no interest in the appeal property from other motor dealers, if it had been offered to let with vacant possession on 1 April 1988 - the antecedent valuation date for the purposes of the 1990 list. The appellant has continued to trade there successfully solely because of the customer goodwill that it has built up over many years. Whilst a small part of this goodwill might have attached itself to the property, in my opinion the vast majority would not have survived the removal of the appellant. I accept Mr Cross's evidence that, in the ideal world, the appellant would have very much preferred to be located in a main road position elsewhere. Nevertheless, it owned another established car showroom in the same village and it was clearly able to operate profitably at the appeal property, although a more prominent showroom would no doubt have been appreciably more successful. I think the appellant would have been interested in the appeal property if it had been vacant and to let at the relevant date and that Toyota GB would have agreed to renew the appellant's franchise, albeit with reluctance. However, in the hypothetical letting negotiation which I must consider, both parties would have borne in mind that the appellant was the only potential tenant.
43. Although the respondent produced details of the assessments agreed for various motor showrooms in order to provide an overall picture, he relied in effect on one assessment - the appellant's Chaceside garage - as providing the best evidence of a motor showroom in Hatfield. Mr Rogerson relied on four assessments, of which Chaceside was one.
44. I agree with the respondent that Chaceside provides the most helpful evidence, being another car showroom in the same village as the appeal property. Mr Rogerson's other three comparables are all situated in different towns. Their use therefore requires the valuer to make subjective adjustments to reflect locational differences which, subject to two qualifications, do not apply to Chaceside. The Dixon unit at Clay Lane West is in Doncaster itself and Goole and Selby are both three times as far from Doncaster as Hatfield.
45. I must refer at this stage to the different analyses of the Chaceside settlement that were put forward by the two experts. It is clear that no agreement was reached at the time of the agreement between the valuation office and Mr Rogerson's firm as to the break-down of the agreed rateable value of £21,500. It is not easy to choose between the two analyses, because they included petrol sales taken at appreciably different figures and open sales and parking areas where the respective surveyors adopted different units of value. On balance, however, I have decided that the valuation officer's approach is to be preferred. It was as follows:-

	m2	£/m2	RV
Showroom	353.5	37.5	13,256
Kiosk	16.3	20	326
Offices	26.4	35	924
Workshops	132.5	25	3,313
Store	30.7	17	522
Petrol sales	814,263 litres	£2.642 per thousand litres	2,151
Car sales display	140	3	420
Car spaces to front	6	75 per space	450
Rear car parking	325	1	325 21,687 say £21,500

46. As for the appropriate adjustments which should be made to the agreed assessment of the Chaceside garage, the principal disagreements between the experts related to the effect of differences of size and location. I deal firstly with size. Mr Rogerson suggested that it is a generally accepted principle that large properties are worth more than small ones. The respondent disagreed. He did not think there was any evidence to suggest that a small car showroom in Hatfield was worth more pro rata than a large one. He referred to the decision of this tribunal in Trevail (VO) v C & A Modes Limited (1967) 13 RRC 204.
47. That case concerned the valuation of a department store and the three member tribunal comprised Sir Michael Rowe QC (President), Mr H P Hobbs FRICS and Mr J S Daniel QC. Their decision included the following observation:

"...it is said that there is no or insufficient evidence that any quantity allowance is given nowadays in the actual market. It is this question of evidence which we regard as the kernel of the problem and as the reconciling key to past decisions of the tribunal. Each case must depend on its own facts and the onus of proof is always on the appellant."

48. I would respectfully agree with that approach. It is agreed by the experts that a quantum allowance is not appropriate for car showrooms in Doncaster itself. Moreover, such an allowance was not mentioned in Mr Rogerson's expert's report dated 14 August 1998. The matter first appeared in the form of a brief comment in his supplemental report dated 12 May 1999 in reply to an assertion in the respondent's expert's report. Although he dealt with the matter at greater length in oral evidence, Mr Rogerson has in my opinion failed to discharge the onus which lies upon him of proving that an allowance to reflect the size of the appeal property is justified.
49. I now turn to the extent of the adjustment that is appropriate to reflect the location of the property. This appeal concerns a car showroom, situated in a cul-se-sac in Hatfield, a village six miles outside Doncaster. I am satisfied on the evidence that, by 1 April 1988 - the antecedent valuation date - motor dealers were generally reluctant to acquire premises which were not situated on main roads. Of the 11 showrooms cited as comparables by the two experts, 9 were on more or less busy roads. The remaining 2 were situated in Doncaster on roads enjoying a low volume of passing traffic and to that extent at least are comparable to the appeal property.
50. The Doncaster Hyundai Centre was built in 1991 and is situated in Middle Bank, a cul-de-sac. This showroom has little passing traffic at present, although there are plans to open up the road at some time in the future to link with the A638 Bawtry road south of Doncaster. A further disadvantage is that the Post Office sorting centre on an adjoining site obscures the showroom when viewed from Doncaster Carr, the main A6182 which connects Doncaster with the M18 motorway. The assessment of this property in the 1990 list was agreed by Mr Rogerson's firm on behalf of the ratepayer. Mr Rogerson did not submit an analysis of the agreed assessment, but the respondent's break-down valued the showroom at £45 per m^2. and the workshop and stores at £25 per m². By contrast, the assessment of the AFG Caledonian showroom, which was built in 1988/89 directly on Doncaster Carr, within one quarter of a mile of the Hyundai Centre, was agreed at a figure which the respondent analysed at £55 per m², again with £25 on the workshop. The respondent said that the difference of 18.18% between the values of the respective showrooms reflected the relative locational disadvantages of the Hyundai Centre.
51. The second showroom which was referred to which is not on a main road location is the Dixon Motor Holdings unit in Clay Lane West. Although this property lies only 300 yards from Wheatley Hall Road, it suffers from a poor volume of passing traffic. The assessment was agreed by Mr Rogerson's firm on behalf of the occupier at RV £30,000 without prejudice to the breakdown of that figure. The respondent's analysis attributed £40 per m² to the showroom and £25 to the workshop, whereas Mr Rogerson's firm valued these elements at £35 and £17.50 respectively. I prefer the respondent's analysis, primarily because Mr Rogerson's value for the display spaces was the same as had been agreed for such spaces in Wheatley Hall Road, whereas in my view they must have been worth substantially less.
52. The respondent's evidence was that a price of £40 per m² was agreed for the showroom to reflect the weakness of the location compared with the rates of £55 and £50 applied to showrooms in Wheatley Hall Road. This suggests that the poor location of the Dixon unit merited an end allowance of between 20% and 27%. In the light of the evidence provided by these two assessments, both agreed between the respondent's office and Mr Rogerson's firm, I conclude that the poor location of the appeal property should be reflected by making a deduction of 20% from the general valuation level agreed for Chaceside, as analysed by the valuation office.
53. It is also necessary to reflect in the valuation my finding that the appellant would not have faced any competition when bidding for the appeal property, since there was no suggestion that the values agreed for Chaceside or any of the other comparables were based on a non-competitive market. I think the parties to the negotiation would have reflected this situation by reducing the overall rent payable for the appeal property by 10%.
54. At first sight, the total of the end allowances I have made might appear to be greater than that suggested by either expert. In particular, it is more than Mr Rogerson's end allowance of 15%, which covers other matters as well as location. The position was not made crystal clear, but I am satisfied that the respondent correctly summarised the position in the course of his closing submissions, when he said that Mr Rogerson had allowed for location implicitly in his selection of £25 for the showroom and explicitly in his end allowance.
55. Both experts also made an end allowance to reflect the awkward layout and Mr Rogerson considered that an additional allowance should be made to reflect the different ages of the various buildings. In the light of my inspection of the appeal property I am not satisfied that a discount for the latter consideration is justified. The respondent quantified the deduction for layout at 2.5% and I agree with him.
56. Using the respondent's analysis of the Chaceside settlement as a starting point, my valuation of the appeal property for the purposes of the 1990 list is £39,500, as calculated in Appendix 2. In general, where the relationship between the value of a particular building and that of the showroom was not agreed by the experts, I have preferred the approach of the respondent. The only exception relates to the open fronted store of 157.57 m², which the respondent valued at £5 per m² and Mr Rogerson at a spot figure of £100. My inspection revealed this to be a primitive structure which in my view is worth little more than the customer parking area, the agreed value of which is £1 per m². I assess the value of the open fronted store at £1.50 per m².
57. Since it is agreed that the assessments in both rating lists should be the same, the value for the purposes of the 1995 list is also £39,500. The appellant's two appeals are allowed and those of the respondent are dismissed. I direct that the assessment of the appeal property in the 1990 and 1995 rating lists be altered to rateable value £39,500.
58. What I have said so far concludes my determination of the substantive issues in this case. It will take effect as a decision when the question of costs is decided and at that point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and Order 61 rule 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions as to the costs of these appeals and a letter accompanying this decision sets out the procedure for submissions in writing.

Dated 17 January 2000

(Signed) N. J. Rose

Addendum on costs

59. The appellant asks for its costs. It refers to the Civil Procedure Rules Part 44 which, it says, provides the Tribunal with discretion in relation to costs and guidelines for exercising that discretion. Both parties appealed against the decision of the VT at rateable value £46,000. The appellant succeeded, obtaining a reduction of £6,500. The respondent's appeal, on the basis that the VT decision was too low, failed. Thus, the appellant has been wholly successful.
60. The appellant refers to two Calderbank offers. One was made by the respondent, three weeks before the date of the hearing at £40,000, provided each party paid its own costs. By a further Calderbank offer sent nine days later, the appellant offered to accept the suggested rateable value of £40,000 together with its reasonable costs. Neither offer was accepted. The appellant submits that the respondent's Calderbank offer failed to beat the decision of this Tribunal and therefore has no effect on the question of costs. If that is wrong, the appellant draws the Tribunal's attention to its own Calderbank offer, agreeing to settle at a rateable value higher than that decided by the Tribunal.
61. Finally, the appellant says that the difference between the £50,000 proposed by the respondent at the hearing and the £40,000 in his Calderbank offer was so great that it placed him in breach of his statutory duty to maintain a correct rating list. As such, it should not affect the appellant's entitlement to costs. Further, the respondent's offer was made at such an advanced stage of the proceedings that the appellant had by then already incurred the vast majority of its costs.
62. The respondent disagrees with these submissions. He says that the appeal property is unusual, and in many ways unique, as illustrated by the large end allowances awarded for location, layout and lack of competition. The Tribunal accepted the respondent's approach on the principal issues, namely the values to be ascribed to the main showroom, the repair garage and the sprayshop. It also accepted his approach on four of the six subsidiary issues - i.e. the effect of layout, size and mixed age and the value of nearly all the ancillary areas. In addition, the Tribunal found in the respondent's favour in accepting that Chaceside provided the best evidence; agreeing that the appellant's comparables at Goole and Selby were in a different geographical location and rental market and preferring the respondent's devaluation of the Chaceside settlement.
63. Because the unique nature of the appeal property created a wide valuation margin, the respondent made a Calderbank offer on 20 October 1999 at £40,000. This was only £500 above the Tribunal's determination. The appellant's Calderbank offer was made less than 2 weeks before the hearing, too late to give the respondent time to give it proper consideration. The respondent therefore asks for his own costs. Alternatively, since the decision was slightly below the mid-point between the values sought by the parties, he suggests that each party should bear its own costs.
64. Although the appellant refers to the Civil Procedure Rules, technically these do not apply to proceedings in this Tribunal, but only to those in the County Courts, the High Court and the Civil Division of the Court of Appeal. The relevant provision in this case is rule 52(1) of the Lands Tribunal Rules 1996, which reads as follows:

"Subject to the provisions of section 4 of the 1961 Act and of rule 28(11), the costs of and incidental to any proceedings shall be in the discretion of the Tribunal."

65. The reference to s4 of the Land Compensation Act 1961 relates to the basis upon which costs should be awarded in proceedings determining the amount of compensation payable on compulsory acquisition, where either there has been an unconditional offer to pay or accept a sum in compensation, or the claimant has failed to deliver a sufficiently detailed notice in writing of the amount claimed by him, in time for the acquiring authority to make a proper offer. Rule 28(11) of the Lands Tribunal Rules 1996 relates to the award of costs in proceedings to which the simplified procedure applies.
66. The effect of rule 52 (1), therefore, is that the costs of this appeal are entirely in the discretion of this Tribunal. Nevertheless, in exercising that discretion, I consider that it would be helpful for me to bear in mind the guidelines contained in Part 44 of the Civil Procedure Rules. These state that the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, but the court may make a different order. In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including the conduct of all the parties; whether a party has succeeded on part of his case, even if he has not been wholly successful and any payment into court or admissible offer to settle made by a party which is drawn to the court's attention.
67. Applying these guidelines to the present appeal, the starting point is that the appellant has been successful and the respondent unsuccessful. The appellant sought a substantial reduction below the assessment determined by the VT and obtained one; the respondent sought a material increase in that assessment and failed.
68. The general rule, therefore, is that the respondent should pay the appellant's costs. In deciding whether to make such an order, matters to be considered include the Calderbank offers submitted by the parties. So far as the respondent's offer is concerned, this was at a figure above - albeit only slightly above - the level of my determination and it included no reference to costs. It therefore has no effect on the general rule. As far as the appellant's Calderbank offer is concerned, although submitted at a very late stage, it indicated a willingness to settle at a higher rateable value than was eventually decided by this Tribunal. Again, therefore, it does not, justify a departure from the general rule.
69. I now consider the respondent's suggestion that it has succeeded on considerable parts of its case, although it has not been successful in its appeal. It is certainly the case that there were many differences between the parties and I decided in favour of the respondent on most of them. Unfortunately for the respondent, the two main issues where I found in favour of the appellant, namely the effect on value of location and the absence of competition, were extremely significant in terms of value. Nevertheless, in my opinion the length of time taken at the hearing, and also in preparing the appellant's expert's reports prior to the hearing, would have been significantly reduced if it had limited its case to the narrow issues on which I found in its favour.
70. Taking an overall view of the matter, I consider the appropriate Order to be that the appellant shall recover 70% of its costs of the appeal against the respondent. Such costs to be agreed and if not so agreed to be the subject of a detailed assessment on the standard basis by the Registrar of the Lands Tribunal in accordance with rules 44.4 and 44.7 of the Civil Procedure Rules.
71. The procedure laid down in rule 52 of the Lands Tribunal Rules 1996 will apply to such detailed assessment.

Dated

(Signed) N. J. Rose


 


Appendix 1

CARR GARAGE, OLD THORNE ROAD, HATFIELD, DONCASTER, S.YORKS DN7 6ER

COMPARISON OF VALUATIONS PRESENTED BY EXPERT WITNESSES

			M.T.SPENCER ASVA (Valuation Officer)	A. ROGERSON BSc ARICS ASVA (Appellant's expert)	A. ROGERSON BSc ARICS ASVA (Appellant's expert)	A. ROGERSON BSc ARICS ASVA (Appellant's expert)
Ref	Description	m.2	£/m2	R V	£/m2.	R V
1	Showroom (incl.partitioned offices)	548.65	37.50	20,574	25.00	13,716
2	Kitchen	8.60	25.00	215	20.00	172
3	Showroom Offices	31.45	37.50	1,179	25.00	786
3	Parts Counter	18.00	25.00	450	20.00	360
3	Parts Workshop/ Office	49.80	25.00	1,245	20.00	996
3	1st Floor Offices	99.75	20.00	1,995	15.00	1,496
4	Repair Garage	413.70	22.50	9,308	12.50	5,172
5	Parts Store	76.76	20.00	1,535	10.00	768
1st FL Over 5	Parts Store	71.10	7.50	533	5.00	356
1st FL Over 6	Parts Store	72.55	7.50	544	5.00	363
1st FL Over 6	Canteen	41.14	7.50	309	5.00	206
6	Spray Shop	359.10	22.50	8,080	12.50	4,489
6	Spray Shop Lower Height	102.20	20.00	2,044	12.50	1,278
7	Valeting Bay	154.44	22.50	3,475	10.00	1,544
8	Workshop	27.90	15.00	419	7.50	209
OUTSIDE	Car Sales	1183.30	2.00	2,367	2.00	2,367
	Customer Parking	486.20	1.00	486	1.00	486
	Rear Parking	1733.00	0.50	867	0.50	867
	Field Storage	1683.00	0.50	842	0.50	842
	Open fronted store	157.57	5.00	788	say	100
				57,255		36,573
		Less 12.5% for location and layout	50,098	Less 15% for 31,082 isolated location, layout and mixed age	Less 15% for 31,082 isolated location, layout and mixed age	Less 15% for 31,082 isolated location, layout and mixed age
			say £50,000		say £31,000	say £31,000


 


Appendix 2

CARR GARAGE, OLD THORNE ROAD, HATFIELD, DONCASTER, S.YORKS, DN7 6ER

LANDS TRIBUNAL DETERMINATION OF VALUE

Ref	Description	m2.	£/m2.	R.V.
1	Showroom (incl. partitioned offices)	548.65	37.50	20,574
2	Kitchen	8.60	25.00	215
3	Showroom Offices	31.45	37.50	1,179
3	Parts Counter	18.00	25.00	450
3	Parts Workshop Office	49.80	25.00	1,245
3	First Floor Offices	99.75	20.00	1,995
4	Repair Garage	413.70	22.50	9,308
5	Parts Store	76.76	20.00	1,535
1st Fl Over 5	Parts Store	71.10	7.50	533
1st Fl Over 6	Parts Store	72.55	7.50	544
1st Fl Over 6	Canteen	41.14	7.50	309
6	Spray Shop	359.10	22.50	8,080
6	Spray Shop, Lower height	102.20	20.00	2,044
7	Valeting Bay	154.44	22.50	3,475
8	Workshop	27.90	15.0	419
Outside	i) Car Sales	1,183.30	2.00	2,367
	ii) Customer Parking	486.20	1.00	486
	iii) Rear Parking	1,733.00	0.50	867
	iv) Field Storage	1,683.00	0.50	842
	v) Open fronted store	157.57	1.50	236
				56,703
		Less for location and layout - 22.5%	12,758	12,758
				43,945
		Less for absence of competition - 10%	4,395	4,395
				£39,550
				say £39,500