The Commissioner for Valuation v The Valuation Tribunal

• Jurisdiction: Ireland
• Judge: Mr Justice Garrett Simons
• Judgment Date: 25 January 2019
• Neutral Citation: [2019] IEHC 23
• Docket Number: 2017 No. 643 J.R.
• Court: High Court
• Date: 25 January 2019

[2019] IEHC 23

THE HIGH COURT

JUDICIAL REVIEW

Simons J.

2017 No. 643 J.R.

BETWEEN

THE COMMISSIONER FOR VALUATION

APPLICANT

AND

THE VALUATION TRIBUNAL

RESPONDENT

MINISTER FOR COMMUNICATION ENERGY AND NATURAL RESOURCES

E-NASC ÉIREANN TEORANTA

PLANNET 21 COMMUNICATIONS LTD

NOTICE PARTIES

Judicial review – Determination – Legal error – Applicant seeking judicial review – Whether the respondent fell into legal error

Facts: The respondent, the Valuation Tribunal, sought to expedite the hearing of a number of appeals before it by purporting to deal with the appeals on a “preliminary basis without the need to go into evidence”. This was done in circumstances where the appellants had urged upon the Valuation Tribunal that the decisions under appeal constituted both an abuse of process and an unjustified collateral attack on an earlier determination of the Valuation Tribunal. The appellants relied, in particular, upon the doctrine of res judicata and upon the rule in Henderson v Henderson (1843) 3 Hare 100. The applicant, the Commissioner for Valuation, applied to the High Court seeking judicial review of the tribunal’s Determination of 26 June 2017.

Held by Simons J that, by adopting the course that it did, the Valuation Tribunal fell into legal error. Simons J noted that the content of its Determination of 26 June 2017 indicated that the tribunal either (i) failed to address itself to the issues actually before it, or (ii) failed to comply with its statutory duty to set forth reasons for its determinations. Simons J also noted that the tribunal also purported to determine the merits of the appeals without affording fair procedures to the Commissioner for Valuation, and acted in breach of his legitimate expectations as to the procedure to be adopted; in particular, the Commissioner had been entitled to assume that—unless the preliminary issues were decided against him—there would be a second subsequent hearing at which the substantive issues in the appeals would be heard and determined on the basis of evidence.

Simons J held that the 2017 Determination must be set aside in its entirety, and the appeals remitted for reconsideration by a differently constituted division of the Valuation Tribunal if possible.

Application granted.

JUDGMENT of Mr Justice Garrett Simons delivered on 25 January 2019.

INTRODUCTION

1 These proceedings confirm the truth of the adage that the longest way round is often the shortest way home. The Valuation Tribunal sought to expedite the hearing of a number of appeals before it by purporting to deal with the appeals on a ‘preliminary basis without the need to go into evidence’. This was done in circumstances where the appellants had urged upon the Valuation Tribunal that the decisions under appeal constituted both an abuse of process and an unjustified collateral attack on an earlier determination of the Valuation Tribunal. The appellants relied, in particular, upon the doctrine of res judicata and upon the rule in Henderson v. Henderson.

2 By adopting the course that it did, the Valuation Tribunal fell into legal error. The content of its Determination of 26 June 2017 indicates that the tribunal either (i) failed to address itself to the issues actually before it, or (ii) failed to comply with its statutory duty to set forth reasons for its determinations. The tribunal also purported to determine the merits of the appeals without affording fair procedures to the Commissioner for Valuation, and acted in breach of his legitimate expectations as to the procedure to be adopted. In particular, the Commissioner had been entitled to assume that—unless the preliminary issues were decided against him—there would be a second subsequent hearing at which the substantive issues in the appeals would be heard and determined on the basis of evidence.

3 The consequence of all of this is that the 2017 Determination must be set aside in its entirety, and the appeals remitted for reconsideration by a differently constituted division of the Valuation Tribunal if possible.

4 This will have the unfortunate result that the ultimate resolution of the appeals—which were originally submitted as long ago as September 2014—will be further delayed. However, the imperative of ensuring that a quasi-judicial tribunal, such as the Valuation Tribunal, reaches its determinations in accordance with law leaves the court with no other option.

UNDERLYING DISPUTE

5 The underlying dispute between the parties concerns the rateability of certain infrastructure used for the purposes of the provision of broadband capacity. More specifically, the dispute centres on the question of whether metropolitan area fibre optic networks for broadband communication (referred to as ‘metropolitan area networks’ or ‘MANs’) are subject to the requirement to pay rates. The MANs infrastructure consists of a ring network which in turn consists of ducts (through which sub-ducts pass) and fibre optic cables (which pass through sub-ducts). The infrastructure was constructed by the State in circumstances where there was a concern that the private sector was not providing such infrastructure quickly enough. The infrastructure is managed on behalf of the State by a concessionaire (or ‘management service entity’) pursuant to a concession agreement. (The concessionaire, ENET, is the second-named notice party to these proceedings). ENET, in turn, has entered into agreements to allow service providers, including the third-named notice party, PlanNet 21 Communications Ltd. (‘PlanNet 21’), to use the infrastructure.

6 The question of whether the MANs infrastructure was subject to a requirement to pay rates had initially come before the Valuation Tribunal as long ago as 2007. It appears from the terms of the 2007 Determination that the parties thereto regarded it as a ‘test case’. The parties to this 2007 Determination were the Minister for Communications Marine and Natural Resources (‘the Minister’), as owner of the MANs infrastructure, and the Commissioner for Valuation (‘the Commissioner’).

2007 DETERMINATION

7 The Valuation Tribunal determined on 25 October 2007 that the MANs infrastructure was exempt from the payment of rates by virtue of section 15(3) of the Valuation Act 2001. Prior to its amendment under the Local Government Reform Act 2014, this section provided that relevant property directly occupied by the State (including any land or building occupied by inter alia any Department) shall not be rateable.

8 The Valuation Tribunal had concluded that the Minister was in exclusive or paramount occupation of the infrastructure. This was so notwithstanding the existence of the concession agreement with ENET. The Valuation Tribunal noted that the MANs have been designed, funded and constructed by the State; that the State owned the property in question; and that the State retained a very high degree of control over the management, maintenance and operation of the MANs.

‘[…] It is our view that the property in question is occupied by the State for the purposes of Section 15(3) of the Act and any such limited right of or actual occupation by E-Net is subordinate to the paramount occupation for rateable purposes by the State.’

9 It is not entirely clear whether the Valuation Tribunal had considered and determined the separate question of whether a service provider might be regarded as being in occupation of individual fibre optic cables for the purposes of rating.

10 As noted earlier, the parties to the 2007 proceedings were the Minister and the Commissioner. The concessionaire, E-Net, was not formally a party to the proceedings, still less were the service providers. Indeed, there appears to have been some confusion on the part of the Commissioner at the hearing in September and November 2016 as to whether there had, in fact, been any service providers in situ at the time of the 2007 Determination. However, on the penultimate day of the hearing before the Valuation Tribunal (7 November 2016), senior counsel acting on behalf of the Commissioner conceded that there were, in fact, service providers in situ in 2007.

11 It is now accepted by all parties that, as a matter of fact, certain service providers were using at least some of the fibre optic cables as of 2007. Accordingly, the legal implications of this use could have been raised in 2007. As explained presently, one of the issues which the Valuation Tribunal was required to consider in 2017 was whether the fact that the Commissioner did not pursue an argument in 2007 to the effect that the service providers were in rateable occupation of individual fibre optic cables precludes him from ever relying on an argument to that effect.

THE 2014 APPEALS

12 Section 19 of the Valuation Act 2001 provides for the making of a valuation order. The Commissioner is then required to appoint an officer to organise and secure the carrying out of a valuation of every relevant property situated in the rating authority area specified in the order, other than (a) any relevant property the subject of an order under section 53, or (b) any relevant property specified in Schedule 4. A valuation order was made for Waterford City Council on 12 December 2011.

13 Notwithstanding the existence of the 2007 Determination, the Commissioner, as part of the revaluation exercise pursuant to section 19 of the Valuation Act 2001, purported to issue proposed valuation certificates in respect of infrastructure within the metropolitan area network in Waterford in or about September 2013. In one instance, the Commissioner had purported to issue separate certificates in respect of the same overall property as follows (No. 2182875 and No. 500421). It seems that PlanNet 21 was treated as being in rateable occupation of fibre optic cables, while the other elements of the MANs infrastructure were treated as being ‘vacant’ notwithstanding that same remained in the ownership of...