Dayhoff Ltd v Commissioner of Valuation
| Jurisdiction | Ireland |
| Judge | Mr. Justice Barr |
| Judgment Date | 16 December 2020 |
| Neutral Citation | [2020] IEHC 661 |
| Docket Number | [Record No. 2020/952 SS.] |
| Court | High Court |
| Date | 16 December 2020 |
[2020] IEHC 661
Barr
[Record No. 2020/952 SS.]
THE HIGH COURT
Case stated – Valuation– Property – Valuation Tribunal stating a question of law for the determination of the High Court – Whether the Valuation Tribunal had been correct in excluding the valuations of two properties prior to the amalgamation thereof into the property the subject of the valuation, when coming to its determination as to the true valuation thereof
Facts: An appeal arose in relation to a revision of valuation for a public house premises known as 23/24 John Street Upper, Kilkenny. On 16th November, 2018, the Valuation Tribunal preferred the evidence of the appellant, Dayhoff Ltd, insofar as the comparisons adduced before it were concerned and, in particular, it accepted the three comparators put forward on behalf of the appellant and one of the comparators put forward on behalf of the , the Commissioner of Valuation. Those comparators were analysed to give a rate per square metre on the principal ground floor trading area of the pub at an average rate of €167.50, which was deemed appropriate to apply as the rate for the ground floor of the property. It was common case that a rate of one third thereof should be applied to the first floor of the pub. This resulted in a valuation of the licensed premises at €257.00. In reaching its decision, the Tribunal had held that it was not appropriate for it to have regard to the valuations that had been applied to the ground floor of the pub premises and the first floor thereof, when they had been used and valued separately as separate premises, being a pub on the ground floor and a restaurant on the first floor, prior to amalgamation into a single premises, the subject of the revision valuation. The respondent, being unhappy with that approach, requested the Tribunal to state a case by way of appeal for the opinion of the High Court as to whether it had been correct in excluding the valuations of the two properties prior to the amalgamation thereof into the property the subject of the valuation, when coming to its determination as to the true valuation thereof. Pursuant to s. 39 of the Valuation Act 2001, the Chairperson of the Tribunal stated the following question of law for the determination of the Court: “Whether the Valuation Tribunal was correct in law in holding that the property or the two relevant properties (i.e. property no. 79381) (ground floor pub) and property no. 2199717 (first floor restaurant) do not constitute other comparable properties for the purpose of s. 49(1) and having no regard to their valuations in determining the appeal.”
Held by Barr J that the Tribunal was wrong to hold as a matter of law that in valuing a property that was an amalgamation of two properties, it could never have regard to the valuations of the two separate properties prior to the material change of circumstances. Barr J did not think that a correct interpretation of s. 49 of the 2001 Act calls for such a rigid exclusionary rule.
The Court answered the question posed in the case stated as follows: No.
Case stated.
This is an appeal by way of case stated by the Chairperson of the Valuation Tribunal pursuant to s.39 of the Valuation Act 2001. The appeal arises in relation to a revision of valuation for a public house premises known as 23/24 John Street Upper, Kilkenny.
On 16th November, 2018, the Valuation Tribunal preferred the evidence of the appellant insofar as the comparisons adduced before it were concerned and, in particular, it accepted the three comparators put forward on behalf of the appellant and one of the comparators put forward on behalf of the respondent. Those comparators were analysed to give a rate per square metre on the principal ground floor trading area of the pub at an average rate of €167.50, which was deemed appropriate to apply as the rate for the ground floor of the property. It was common case that a rate of one third thereof should be applied to the first floor of the pub. This resulted in a valuation of the licensed premises at €257.00.
In reaching its decision, the Tribunal had held that it was not appropriate for it to have regard to the valuations that had been applied to the ground floor of the pub premises and the first floor thereof, when they had been used and valued separately as separate premises, being a pub on the ground floor and a restaurant on the first floor, prior to amalgamation into a single premises, the subject of the revision valuation.
The respondent, being unhappy with that approach, requested the Tribunal to state a case by way of appeal for the opinion of this Court as to whether it had been correct in excluding the valuations of the two properties prior to the amalgamation thereof into the property the subject of the valuation, when coming to its determination as to the true valuation thereof.
At its most basic level, the case stated boils down to a consideration of whether the two previous properties can be regarded as being “ other properties comparable to that property”; as required for comparison purposes pursuant to s.49(1) of the 2001 Act.
The description of the parties under the terms “appellant” and “respondent” can be confusing, because they have effectively changed roles between the hearing before the Tribunal and the hearing before this Court. Dayhoff Limited, who had been the appellant before the Tribunal, became the respondent to this appeal; while the Commissioner of Valuation was the respondent before the Tribunal, but was the appellant before this Court. In an effort to avoid confusion, the court will refer to the parties simply as “ the Commissioner” and “ Dayhoff”.
The public house premises which was the subject of the valuation, had previously been used as two separate properties. The ground floor of the property was used as a pub. It had a previous valuation under reference number 79381. The first floor of the property had been used as a restaurant. It had a valuation under reference number 2199717.
The two properties had been entirely separate in all respects. They were owned by separate entities; they had separate entrances; they had separate telephone numbers and booking systems, and they were not physically interconnected by means of a stairs or lift.
The revision of valuation came about when the two properties were amalgamated and came under the ownership of a single entity. Works were carried out to the premises whereby a mezzanine floor was inserted into a portion of the ground floor and a stairwell was created to connect the ground floor to the first floor and the entire area was to be used as a single licensed premises.
Section 28 of the 2001 Act provides that a revision of valuation can occur if a revision manager is of the opinion that a material change of circumstances has occurred. The relevant definition of material change of circumstances (hereinafter “ MCC”) is contained in s.3 of the Act which, inter alia, provides:-
“[…] ‘material change of circumstances’ means a change of circumstances which consists of –
[…] (f) property previously valued as 2 or more relevant properties becoming liable to be valued as a single relevant property”.
The relevant provisions in relation to a revision of valuation are set out in s.49(1) of the 2001 Act:-
“If the value of a relevant property (in subsection (2) referred to as the ‘first-mentioned property’) falls to be determined for the purpose of section 28(4), (or of an appeal from a decision under that section) that determination 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.”
Where a property is being valued under a revision, the valuation is governed by s.49(1) 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. This is often referred to as the “ tone of the list” meaning that a property is valued by reference to the prevailing values of comparable properties appearing on the list in the same rating authority area. The logic underpinning this approach being that the values appearing on the list are correct assessments of the rent those properties would command under the statutory conditions.
It is also of relevance to note that s.63 of the Act provides that the statement of the value of a property as appearing on a valuation list shall be deemed to be a correct statement of that value until it has been altered in accordance with the provisions of the Act.
As previously noted, in this case, the Tribunal reached its decision on the appropriate valuation for the premises by reference to three comparators that had been put forward by the valuer on behalf of Dayhoff and by reference to one comparator that had been put forward on behalf of the Commissioner. By reference to the rates per square metre that had been applied to the comparator premises, the Tribunal reached a decision as to the appropriate rate to be applied to the ground floor of the new public house premises. By agreement of the parties the Tribunal adopted the approach that the rate for the first floor area would be measured at one third of the rate applicable to the ground floor area per square metre.
In reaching its determination, the Tribunal ruled that it was not appropriate for it to have regard to the valuations applying to the two properties prior to the amalgamation thereof, being the ground floor pub and the first floor restaurant, when reaching...
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Dayhoff Ltd v Commissioner of Valuation
...property for the purposes of s. 49(1) of the Act and having no regard to their valuations in determining the appeal. The trial judge ([2020] IEHC 661) answered the question in the negative and allowed the Commissioner’s appeal. The appellant, Dayhoff Ltd, appealed to the Court of Appeal. Th......