Dayhoff Ltd v Commissioner of Valuation

• Jurisdiction: Ireland
• Judge: Mr. Justice Murray
• Judgment Date: 11 February 2022
• Neutral Citation: [2022] IECA 35
• Court: Court of Appeal (Ireland)
• Docket Number: High Court Record No. 2020/952 SS

Between

Dayhoff Limited

Appellant

and

Commissioner of Valuation

Respondent

[2022] IECA 35

Whelan J.

Murray J.

Pilkington J.

High Court Record No. 2020/952 SS

Court of Appeal Record No. 2021/99

THE COURT OF APPEAL

CIVIL

Valuation – Case stated – Valuation Act 2001 s. 49(1) – Appellant appealing from High Court decision – Whether the trial judge correctly answered the question presented to him by way of the case stated

Facts: The Valuation Tribunal revised the valuation of a licensed premises at 23/24 John Street Upper Kilkenny. The Tribunal determined by reference to the valuation evidence adduced by the parties that the valuation of the property was €190.00. The respondent, the Commissioner of Valuation, declared his dissatisfaction in accordance with the requirements of s. 39 of the Valuation Act 2001, and the Tribunal presented the following question in its consequent case stated: whether the Valuation Tribunal was correct in law in holding that the property or the two relevant properties (i.e. property number 79381 (ground floor pub) and property number 2199717 (first floor restaurant)) do not constitute other 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. The issue in the appeal was whether the valuation of a property (C) which is formed by the amalgamation of two other properties (A and B) must – if A and B are found comparable to C – be conducted by reference to the pre-amalgamation values of A and B as they appear in the valuation list. Dayhoff Ltd said that A and B are not ‘other properties’ for the purposes of s. 49 but instead the ‘same property’ as C and that, accordingly regard cannot be had to them in the valuation exercise provided for in the Act. The Commissioner contended that A and B are for rating purposes distinct from C and must, if comparable to C, be taken into account in the exercise of valuing that property.

Held by Murray J that where a new ‘relevant property’ is created following the amalgamation of two pre-existing ‘relevant properties’, those pre-existing ‘relevant properties’ are ‘other properties’ for the purposes of s. 49(1). Murray J held that the valuing body may accordingly take account of those properties in identifying properties that are ‘comparable’ to the property being valued, and if it concludes that they are so comparable must conduct the valuation ‘by reference’ to them. Murray J held that this interpretation (a) enables s. 49(1) and the definition of ‘material change of circumstances’ to function harmoniously and (b) gives effect to the policies of consistency in rating, of ensuring that the Tribunal has available to it all probative evidence relevant to its task, and of maintaining the essential ‘fabric’ of the valuation list.

Murray J held that the trial judge correctly answered the question presented to him by way of the case stated. It was the provisional view of the court that Dayhoff Ltd having failed in its appeal should bear the costs of the appeal and of the proceedings in the High Court.

Appeal dismissed.

NO REDACTION NEEDED

JUDGMENT of Mr. Justice Murray delivered on the 11 ^th day of February 2022

1 . Section 49 of the Valuation Act 2001 (‘the Act’) provides that, in certain specified circumstances, the determination of the value of a property for the purposes of the Act shall be made by reference to the values as they appear in the ‘ valuation list’ of certain ‘ other properties comparable to’ the property being valued. The issue in this appeal is whether the valuation of a property (C) which is formed by the amalgamation of two other properties (A and B) must — if A and B are found comparable to C — be conducted by reference to the pre-amalgamation values of A and B as they appear in the valuation list. The appellant Dayhoff Limited (‘Dayhoff) says that A and B are not ‘ other properties’ for the purposes of the section but instead the ‘ same property’ as C and that, accordingly regard cannot be had to them in the valuation exercise provided for in the Act. The respondent Commissioner contends that A and B are for rating purposes distinct from C and must, if comparable to C, be taken into account in the exercise of valuing that property.

2 . The issue is framed in a case stated by the Valuation Tribunal (‘the Tribunal’) pursuant to s. 39 of the Act, which in turn arose from the revision of the valuation of a licensed premises at 23/24 John Street Upper Kilkenny (‘ the subject property’). Until 2009, that property consisted of a ground floor bar and lounge and a first-floor domestic dwelling. The ground floor valuation was revised in 1995, 2000 and 2003. In May 2009, the subject property was subdivided into a restaurant on the first floor, and a bar and lounge on the ground floor, and its valuation was thereupon revised to take account of the first-floor restaurant area.

3 . From that point until 2011 these premises were separate in all respects, being owned by different and unrelated entities, each property having its own entrance, telephone number and booking system. There was no physical connection between them. Each of the units was thus used, and appeared on the valuation list as, distinct properties. The valuation of the ground floor was recorded under reference 79381 and that of the first floor under reference 2199717. Having been first valued separately in May 2009, the premises were valued again in September 2009. Following the latter valuation, the two properties appeared on the valuation list with rateable valuations of, respectively, €198.00 and €122.00.

4 . In 2011, the two properties came under the ownership of Dayhoff and were eventually amalgamated to form one unit. Works were undertaken to insert a mezzanine floor into a portion of the ground floor of the property, and a stairway was installed connecting the ground floor to the first floor. The entire property has since then been used as a single, licensed premises.

5 . The statutory context in which the amalgamation of the ground and first floor units gave rise to the valuation from which the Tribunal's case stated arises, is this:

• (i) Section 21 of the Act provides that the ‘ valuation list’ comprises every ‘ relevant property’ that has been the subject of a valuation order and the value of that property as determined by that valuation. ‘ Value’ for these purposes means the value by reference to which a rate made in respect of that property has effect (s. 3(1)).

• (ii) The ‘ value’ of a relevant property is determined by estimating the net annual value of the property which, in turn, means the rent for which, one year with another, the property might in its actual state, be reasonably expected to let from year to year subject to certain statutory assumptions (s. 48).

• (iii) Section 63 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.

• (iv) ‘ Relevant property’ as that term appears throughout the Act is defined by reference to Schedule 3 thereof (s. 3(1)), which in turn lists various species of property.

• (v) Section 15 of the Act decrees that – subject to certain prescribed exclusions — ‘ relevant property’ shall be rateable.

• (vi) Relevant property may be ascribed a rateable valuation on the valuation list in one of two ways. The rating authority may conduct a revaluation of the list in respect of its area, which involves a re-assessment of the rateable valuation of all rateable properties in that area, or it may undertake a revision of the list in respect of an individual entry on the list. The valuation of a premises may thus be assessed prior to a revaluation or between revaluations.

• (vii) Under s. 28 of the Act, a revision may be undertaken only if there has been a ‘ material change of circumstances’ (‘MCC’) since the property was last valued.

• (viii) Where a revision officer determines that there is such an MCC, he or she proceeds to value the property in accordance with s. 49(1). That decision may be appealed to the Commissioner under s. 30 of the Act, being subject to an onward appeal to the Tribunal under s. 34.

6 . In November 2011 Dayhoff sought a revision of the valuation of the property seeking amalgamation of the ground floor and first floor of the premises. That request was at first refused but following an appeal against that decision first to the Commissioner of Valuation and then to the Tribunal, the Commissioner conceded (in August 2012) that a material change in circumstances within the meaning of s. 28 had occurred and that Dayhoff was entitled to a revision. From there, the sequence was as follows:

• (i) On 9 May 2014 the Commissioner issued a proposed certificate of valuation for the entire property of €278.00.

• (ii) On 7 October 2014 (and following representations on behalf of Dayhoff) the Commissioner issued a certificate with a rateable valuation of €257.00. That was calculated by reference to a rate per square metre on the ground floor of the property. By agreement, the value of the first floor was determined to be one third of this.

• (iii) On 23 May 2016, the Commissioner determined an appeal brought against that valuation, declining to change the certificate issued on 7 October 2014.

7 . Dayhoff's appeal to the Tribunal against that valuation (which it should be said was assigned to a property also designated as number 79381 on the relevant list) was based upon the contention that the rateable valuation as assessed was excessive and inequitable and that the Commissioner had failed to revise the property in line with the ‘ tone of the list’. It contended that...