Coillte Teoranta v Commissioner of Valuation
Jurisdiction | Ireland |
Judge | Mr. Justice Garrett Simons |
Judgment Date | 02 November 2022 |
Neutral Citation | [2022] IEHC 588 |
Court | High Court |
Docket Number | 2021 No. 421 SS |
[2022] IEHC 588
2021 No. 421 SS
THE HIGH COURT
Case stated – Property – Valuation – Valuation Tribunal stating a case for the opinion of the High Court – Whether the Valuation Tribunal erred in law in excluding the empirical data in respect of energy output
Facts: The rateable property, a wind farm, had not been in existence as of the applicable valuation date. By the time the valuation list came to be published some two years later, the wind farm had been constructed and had been operational for approximately six months. The Valuation Tribunal decided that the property should be valued as a wind farm by reference to its “actual state” on the date of the publication of the new valuation list, on the counterfactual assumption that the wind farm had already been constructed and was available to be leased to a tenant as of the valuation date almost two years earlier. There was a significant dispute between the parties, Coillte Teoranta (the appellant) and the Commissioner of Valuation (the respondent), as to the data to which regard could be had in determining the value of the wind farm. On one side, it was said that only information which would have been available to the hypothetical landlord and tenant at the valuation date could be considered. On the other, it was said that it was permissible to consider empirical data in respect of the actual operation of the wind farm notwithstanding that this data post-dated the valuation date. Both sides requested that the Tribunal state and sign a case for the opinion of the High Court. The case stated came before Simons J for hearing.
Held by Simons J that the Valuation Tribunal erred in law in excluding from consideration the empirical data on energy output from the wind farm, contrary to the provisions of s. 19(5) of the Valuation Act 2001, as applied to an appeal by s. 37. He held that the exclusion of this data is also inconsistent with the logic of the Valuation Tribunal’s finding that the “actual state” of the wind farm fell to be assessed by reference to the date upon which the valuation list was published. He held that physical attributes, such as the energy output of the wind farm and climatic conditions, are as much a part of the “actual state” of the property, as is the existence of structures on the property. Similarly, he held that the ongoing use of the property as a wind farm also comes within the statutory concept. By excluding these matters from consideration, he held that the Valuation Tribunal erred in law in its interpretation and application of the statutory concept of “actual use”. He noted that the exclusion of the empirical data was addressed by the third and fourth questions in the case stated. He found that the wording of those questions did not precisely capture the essence of the dispute between the parties. He proposed amended the third and fourth questions so as to substitute the words “the figures for the energy output from the wind farm available as of the date of issuance of the valuation certificate (7 September 2017)”. He answered the third and fourth questions in the case stated in the affirmative: the Valuation Tribunal did err in law in excluding the empirical data in respect of energy output. He held that it was unnecessary to address the first and second questions in the case stated in circumstances where the figure for energy output should have been based on the empirical data rather than on the content of an energy production assessment report which had been prepared in 2015. The case stated raised a separate issue in respect of the calculation of a (notional) sinking fund to allow the hypothetical tenant to replace physical assets (including wind turbines). The parties were agreed that consideration of this aspect of the case stated should be deferred pending the outcome of an appeal to the Court of Appeal against the decision of the High Court in Commissioner of Valuation v Hibernian Wind Power Ltd [2021] IEHC 49.
Simons J’s provisional view was that an order should be made setting aside the Valuation Tribunal’s determination of 20 February 2020, with a direction that the Tribunal reconsider the valuation of the wind farm.
Case stated.
Owen Hickey SC and Proinsias Ó Maolchalain for the appellant instructed by Arthur Cox LLP
Andrew Fitzpatrick SC and David Dodd for the respondent instructed by the Chief State Solicitor
JUDGMENT of Mr. Justice Garrett Simons delivered on 2 November 2022
This matter comes before the High Court by way of a case stated from the Valuation Tribunal. The impugned determination of the Valuation Tribunal is dated 20 February 2020.
The Valuation Act 2001 provides that the rateable value of property is to be determined by reference to the “ valuation date” specified in the valuation order for the particular rating area. The valuation is to be made by reference to the “ actual state” of the property.
On the facts of the case stated, the rateable property, a wind farm, had not been in existence as of the applicable valuation date. By the time the valuation list came to be published some two years later, however, the wind farm had been constructed and had been operational for approximately six months.
Notwithstanding that the wind farm had not been in existence as of the valuation date, the Valuation Tribunal nonetheless decided that the property should be valued as a wind farm. The Valuation Tribunal purported to value the wind farm by reference to its “ actual state” on the date of the publication of the new valuation list, on the counterfactual assumption that the wind farm had already been constructed and was available to be leased to a tenant as of the valuation date almost two years earlier.
This approach, not surprisingly, gave rise to a number of practical difficulties. In particular, there was a significant dispute between the parties as to the data to which regard could be had in determining the value of the wind farm. On one side, it was said that only information which would have been available to the hypothetical landlord and tenant at the valuation date could be considered. On the other, it was said that it was permissible to consider empirical data in respect of the actual operation of the wind farm notwithstanding that this data, obviously, post-dated the valuation date.
In the event, neither side was satisfied with the approach adopted by the Valuation Tribunal and both sides requested that the Tribunal state and sign a case for the opinion of the High Court.
The case stated ultimately came before me for hearing. It may be useful to flag from the outset of this judgment that I raised a query as to whether, on its proper interpretation, the Valuation Act 2001 required that the “ actual state” of the property be assessed by reference to the valuation date and not the later date of the publication of the valuation list. On this interpretation, the lands on which the wind farm was subsequently constructed would not be valued as a wind farm and, indeed, might not have constituted a rateable property at all as of the valuation date. The parties were afforded an opportunity to make written and oral submissions on this issue. In the event, neither party agreed with the mooted interpretation. I will return to consider the implications of this at paragraphs 86 to 93 below.
Before turning to the relevant provisions of the Valuation Act 2001, it is necessary first to make the following general observations. The Valuation Act 2001 is a taxation statute. This has certain implications for the approach to be taken to statutory interpretation. The provisions of Section 5 of the Interpretation Act 2005, which allow for a purposive approach to legislation which is obscure or ambiguous, do not apply to a taxation statute.
The proper approach to the interpretation of a taxation statute has been summarised as follows by the Supreme Court in Bookfinders Ltd v. Revenue Commissioners [2020] IESC 60 (at paragraph 52):
“It is not, and never has been, correct to approach a statute as if the words were written on glass, without any context or background, and on the basis that, if on a superficial reading more than one meaning could be wrenched from those words, it must be determined to be ambiguous, and the more beneficial interpretation afforded to the taxpayer, however unlikely and implausible. The rule of strict construction is best described as a rule against doubtful penalisation. If, after the application of the general principles of statutory interpretation, it is not possible to say clearly that the Act applies to a particular situation, and if a narrower interpretation is possible, then effect must be given to that interpretation. As was observed in [ Inspector of Taxes v. Kiernan [1982] I.L.R.M. 13], the words should then be construed ‘strictly so as to prevent a fresh imposition of liability from being created unfairly by the use of oblique or slack language’.”
These principles are relevant having regard to a number of arguments advanced on behalf of the Commissioner of Valuation. On one view at least, the Commissioner's case is predicated on reading into the legislation concepts which are not expressly provided for under the Valuation Act 2001. In particular, the notion that there are two different dates by reference to which the valuation exercise is to be carried out is not one expressly provided for under the legislation. To elaborate: the Act does not expressly provide that the “ actual state” of a property is to be assessed by reference to the publication date, rather than the valuation date specified for the purposes of Section 20 of the Act. The Commissioner's approach might be said to necessitate giving an...
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