Rosses Point Hotel v Commissioner of Valuation

• Jurisdiction: Ireland
• Judge: Mr. Justice Barron
• Judgment Date: 28 January 1987
• Neutral Citation: 1987 WJSC-HC 1100
• Docket Number: No. 603 SS/1986,[1986 No. 603 SS]
• Court: High Court
• Date: 28 January 1987

1987 WJSC-HC 1100

THE HIGH COURT

No. 603 SS/1986

ROSSES POINT HOTEL CO LTD v. COMMISSIONER OF VALUATION

ROSSES POINT HOTEL COMPANY LIMITED

.v.

THE COMMISSIONER OF VALUATION

Citations:

VALUATION (IRL) ACT 1852 S11

ROADSTONE LTD V COMMISSIONER OF VALUATION 1961 IR 239

R V NORTH AYLESFORD UNION 37 JP 148

COMMISSIONER OF VALUATION V DUNDALK UDC 1932 IR 272

Synopsis:

RATES

Valuation

Revision - Reduction - Business premises - Hotel - Economic recession - Substantial reduction in income from business - Rateable valuation of #650 fixed in 1970 - Hotel business run at a loss between 1974 and 1976 - Bed occupancy being 53% in 1970 and 30% in 1976 - Application to Circuit Court for reduction of valuation - Application refused on basis that judge could take into account a reduction of the profit-earning capacity of the hereditament only where the business conducted therein, or an identifiable part thereof, had ceased or had nearly ceased - Case stated to High Court - Whether basis of refusal was in accordance with the law - Held that the profit-earning ability of the business was an essential element in determining the net annual value of the hereditament, and that the question posed must be answered in the negative - Valuation (Ir.) Act, 1852, s.11 - (1986/603 SS - Barron J. - 28/1/87) - [1987] IR 143 [1987] ILRM 512

|Rosses Point Hotel v. Commissioner of Valuation|

1 Judgment of Mr. Justice Barron delivered the 28th day of January 1987.

2 The Appellants in this case are the owners of a hotel known as the "Yeats Country Ryan". The premises were acquired by them in the year 1968. At that date the rateable valuation on the buildings was £275. A three storey extension was built in that year which increased the number of bedrooms in the hotel to 100. As a result, in 1970 the rateable valuation of the buildings was increased to £850, but was reduced on appeal to £650. The premises are situate in Rosses Point which is five miles from the town of Sligo. Its guests in general reserve accomodation in advance.

3 Since 1970 numerous hotels within the State have ceased to be viable owing to the troubled situation in Northern Ireland and a worldwide economic recession. In the year 1975/76, 115 Hotels closed from lack of business and few, if any, were gainfully disposed of. The Appellants hotel ran at a loss during the period 1974 to 1976. It reduced the number of its bedrooms in 1973 to "79, the remainder being provided as staff bedrooms. The bed occupancy, as opposed to room occupancy, which had been 53% in 1970 was reduced to 39% in 1976 and that in respect of the lesser number then provided for guests.

4 In 1974 the grading of the hotel with Bord Failte was altered from A to Motor Hotel. In the same year the Appellants would have closed off part of their hotel to reduce overheads, but could not do so because of difficulties with servicing, maintenance and insurance. In 1976 there was a substantial expenditure on repairs and replacements. The Appellants were unable to meet these costs out of their own resources which were met by its parent company. The premises are incapable of being used for any purpose other than a hotel and for that reason are unlettable, for that or any other purpose. There is no hypothetical tenant other than the Appellants. A sole trader unsupported by a parent company would have found it impossible to operate the hotel profitably because of enormous and increasing overheads and increasingly low and reducing bed occupancy. For a hotel to be viable in Rosses Point it should not have more than 25/30 guest bedrooms.

5 It was submitted to the Learned Circuit Court Judge on the basis of these facts that the valuation of the premises should be reduced. The Learned Judge took the view that before he could take into account a reduction in profit earning ability it would be necessary for the Appellants to establish that the business or a specific or identifiable part of a business had ceased to be carried on or had almost completely ceased to exist. Not being so satisfied he took the view that he was not entitled in law to reduce the rateable value of the premises. He now poses the following question for the opinion of this Court.

"Was I correct in law in holding that the rateable valuation on the said premises...