The Court of Appeal has dismissed appeals by Hibernian Wind Power Limited and the Commissioner of Valuation over the rating of a Limerick wind farm, leaving in place the High Court’s answers on how its net annual value should be assessed.
The dispute concerned Grouse Lodge Wind Farm, near Rathkeale, which has six turbines and a total installed capacity of 15 megawatts. The Commissioner had set its net annual value at €1.128 million as of 1 March 2012. The Valuation Tribunal later assessed it at €1.02 million.
The Commissioner challenged two aspects of the Tribunal’s decision by case stated. The High Court held that a sinking fund for replacing the turbines should be calculated over their agreed 20-year design life, rather than over the 15-year period of the Renewable Energy Feed-In Tariff scheme. It also upheld the Tribunal’s rejection of the Commissioner’s alternative valuation, which used average figures from wind farms in County Limerick to derive a standard value per megawatt.
Hibernian appealed the sinking fund ruling. The Court of Appeal agreed with the High Court that the Tribunal had erred in law. Under section 48(3) of the Valuation Act 2001, the replacement cost had to be averaged over the turbines’ full 20-year design life. Spreading that cost over 15 years would allow a deduction greater than the probable average annual cost for those years, with no allowance in the final five years before replacement was due.
The court dismissed the Commissioner’s cross-appeal on the accounts issue. It said the Commissioner’s standard value per megawatt was based on mathematical averaging and did not account for differences between wind farms, including location, output and operating costs. The method did not independently assess Grouse Lodge and could produce arbitrary overvaluation or undervaluation. The court also noted that the method relied on confidential information unavailable to Hibernian, limiting its ability to challenge the valuation.
The court said the actual occupier’s accounts are the starting point for a receipts and expenditure valuation where reliable accounts are available, though adjustments may be needed. The Commissioner had not challenged the reliability of Hibernian’s accounts or projections.
The court affirmed the High Court’s judgment and order, dismissing both the appeal and cross-appeal. It provisionally indicated that there should be no order for costs in the Court of Appeal, while allowing either party 14 days to seek a further hearing on costs. The case was decided by Collins J, with Whelan and Haughton JJ agreeing.