I wish to follow on in the general direction in which Deputy Enright is going but with one or two qualifications. The first is that there is a statable case for the tribunal on the ground that what is required is the degree of continuity as between different rating judgments taken in different Circuit Courts and by different judges. The whole process of determining a valuation appeal is one which is, by its very nature, an artificial process because the statutory basis of valuation, even though improved by the 1986 Act, still remains a rather Archaean art to put it mildly. The idea of deciding what the annual letting value of a premises in mid-19th century was and determining people's liability to pay a municipal property tax on that basis is itself rather strange.
The 1986 Act, as I understand it, at least had the benefit for the first time that it allowed the courts to do what they had already been doing unofficially — and to some extent without any legal mandate whatsoever — and that was to do some justice in the matter by having regard to other valuations which applied and not applying the strict letter of the law in relation to what evaluation of a premises should actually be. The tone of the rating list had always to be maintained with regard to the differentials between valuations of different properties. On the basis of that philosophy of maintaining the tone of the list the courts found themselves entitled, as a matter of moral justice, if not legal justice, to depart from the principle of establishing the literal annual value of premises and substituting this extraordinary notion of historic annual value related to a bygone age.
In that context I believe that since courts are being asked at present to entertain appeals in circumstances in which the volume of appeals varies very much from one place to another and the nature of the appeals heard by Circuit Court judges changes fairly dramatically from case to case and where principles which are brought to bear on rating appeals also are ones which are not easily obtained and are not part of the general corpus of the law as lawyers understand it, it has been my experience that it is becoming a very recherché subject for lawyers to practice in. It is one in which the availability of a volume of case law is not there to make it simply understood to the layman or even to the legal practitioner who is suddenly forced to deal with a rating appeal. No doubt, Deputy Enright has extensive practice in the matter but I know of many legal practitioners who do not have such expertise and to whom the whole thing is a frightening process. From that point of view when some of those legal practitioners end up on the bench I wonder if they have an accumulated expertise in valuation law such as would enable them to bring their intellectual faculties to bear on the issue before them in an educated way. I doubt it very much in some cases. They have to learn the law as they go along and that is somewhat unsatisfactory.
From that point of view I welcome the principle of a tribunal where the same standards will be applied, presumably throughout the country, and the personnel will specialise in dealing with the issues before them, but I do have some reservations about the totally open nature of the tribunal as regards eligibility for membership. Is it to be the case that anybody who has any degree of experience will be eligible for appointment? I am not trying to create a preserve for lawyers. Should there not be some statutory criteria on which someone's eligibility should be decided? On looking through the First Schedule to the Bill it struck me that the circumstances in which a person could be appointed are very vague and they are open effectively to the appointment of virtually anyone to serve as a member of the tribunal.
In respect of section 2, I agree there is no demand for a tribunal of this kind. One could not imagine there being demonstrations on the streets calling for the establishment of this tribunal or that the Circuit Court should not exercise a function in this matter. This strikes me as being a minor improvement and a tinkering with a subject which has a huge flaw built into its very heart and that is the nature of the valuation process itself. If we are to finance local government out of property taxes, such as rates on commercial and industrial premises, we should at some stage apply our minds to the fairness or otherwise of that as a tax base and to the issue as to whether as between different forms of premises it is possible within the concept of annual value to decide fairly between the burden that should be borne between a hotel on the one hand and a factory on the other in supporting the activities of local government.
Even though this tribunal is welcome from the point of view that it would establish fairness and continuity in relation to dealing with particular kinds of decisions, it seems we have not faced up adequately to a different question which is whether it is possible within the concept of annual value to direct the tribunal's mind in any way to the issue of what is the fair annual value of a hotel, a processing plant or a fixed crane in a coalyard as between themselves. Theoretically, why should a hotel in Dublin have a valuation of between £7,000 and £12,000 and a coalyard a valuation of £200? What theoretical basis is there for deciding those relative values?
I appreciate that there are all sorts of concepts such as profitability which are taken into account and that there are concepts such as social function which somehow subliminally seem to be taken into account, but I ask the Minister of State is it not time that we set out a rational basis for deciding as between different classes of property what relative annual values they should be given. I can see as between one hotel and another it is possible to say that the Gresham Hotel is more or less valuable than the Royal Dublin Hotel and should bear a heavier proportion of the burden of municipal rates and I can see how in that context you can ask a tribunal to adjust their liability to municipal rates by reference to their annual value, but I cannot see how the same can be done in relation to a comparison between, say, a solicitor's office and an accountant's office or a takeaway premises and an hotel. I do not see how it is possible within the concept of annual value to attack that intellectual task of deciding how much of the burden of municipal tax yield each of those two premises should bear.
That to me is an issue which the legislature has run away from. We ran away from it in relation to agricultural rates and, as a result, they were completely annihilated by the courts. Although by the 1986 Act and by this particular measure things are becoming more fair, there is still a fundamental irrationality at the heart of it. I ask the Minister of State, and I would like to hear his views on it as to whether we should not go towards a more objective basis for deciding liability to rates such as the value of the premises on the open market. People at least would be able to say that their coalyard is worth £30,000 while that hotel is worth £3 million and therefore, because it is worth only 3 per cent of the value of the other building they should shoulder only that portion of the rateable valuation. If open market value is to be the yardstick for determining liability for municipal rates, why should we not at some stage get into the business of enshrining that principle in our laws because it occurs to me that this tribunal will be asked to make slightly fairer a rather irrational process.
The last question I would like to ask in that context — I do not want to stray too far from section 2 of this Bill — is that I ask the Minister of State to bear in mind whether the principle of what is being done here is consistent with a square footage tax on domestic dwellings to support the local authorities' tax base? If the Government are thinking in terms of square footage as a basis of imposing taxes on domestic dwellings in lieu of domestic rates, would it not be fairer to have a more comprehensive and rational basis, that is, based on the value of the property and nothing to do with square footage in one case and annual value in another? I ask the Minister of State in connection with this tribunal and in justifying this section to indicate a few of his deeper thoughts on the process of rateable valuation.
