The Court of Appeal has ruled that earlier valuations of two premises may be considered when valuing a new property formed by their amalgamation, if the premises are found comparable under the Valuation Act 2001.
Dayhoff Limited appealed a High Court answer to a case stated by the Valuation Tribunal. The legal question was whether two units, previously valued separately and later combined, counted as “other properties” for the purposes of section 49(1), which requires a revised valuation to refer to listed values of comparable properties in the same rating area.
The premises at 23/24 John Street Upper, Kilkenny, consisted of a ground-floor bar and lounge and a first-floor dwelling until they were separated in 2009. They then operated as distinct properties, with separate owners, entrances, telephone numbers and booking systems, and no physical connection. Their valuations were €198 and €122.
Dayhoff acquired both units in 2011 and amalgamated them into a single licensed premises, adding a mezzanine and a stairway between the floors. The Commissioner of Valuation later set the combined property’s rateable valuation at €257. Dayhoff argued before the Tribunal that the valuation was excessive and inequitable and should be €130. The Tribunal rejected the Commissioner’s reliance on the earlier valuations as comparators, but determined a valuation of €190. The Commissioner appealed by way of case stated.
The High Court answered the Tribunal’s question in the negative, allowing the Commissioner’s appeal. Dayhoff then appealed to the Court of Appeal, which upheld the High Court’s answer. Mr Justice Murray, with whom Ms Justice Whelan and Mr Justice Pilkington agreed, held that the earlier units were separate relevant properties from the single property created by their amalgamation and therefore could be “other properties” under section 49(1).
The ruling allows the valuing body to consider the earlier units when identifying comparators. If it finds them comparable, it must conduct the valuation by reference to them. The court did not decide that they were in fact comparable or set a new valuation. The Tribunal’s valuation of €190 was not replaced by a valuation in the Court of Appeal judgment.
The court also declined to express a general view on the permissibility of the “bolt on” method of valuation, saying that issue was unnecessary to decide. It provisionally considered that Dayhoff should pay the costs of the appeal and High Court proceedings. Dayhoff was given a week to notify the Court of Appeal office if it wished to contest that provisional view, in which case a hearing would be convened.