The High Court ruled that toll revenue shares paid by two road operators to public authorities under negotiated agreements are not taxes or charges payable under an enactment for rating purposes. The decision concerned valuation appeals involving Celtic Roads Group (Dundalk) Limited and West-Link Toll Bridge Limited.
Mr Justice Charleton delivered the judgment on 11 July 2008 in two cases stated by the Valuation Tribunal under section 39 of the Valuation Act 2001. The Tribunal had treated the division of toll proceeds as a statutory tax or charge when determining the properties’ net annual values. The High Court advised that this approach was wrong in law.
The operators argued that only the portions of toll revenue they were entitled to keep should count in the valuations, because the remaining shares were payable under the Roads Act 1993. The judgment described the toll-sharing arrangements as terms of agreements negotiated between the operators and the National Roads Authority. It held that statutory authority for entering such agreements did not make the agreed revenue split a tax or charge imposed by statute.
The ruling did not mean statutory limits on tolls could be ignored. The judge said the Valuation Commissioner could consider restrictions on an undertaking’s profit-earning capacity when assessing value. But toll income was not to be treated as if it had never been a return to the operators.
The companies also challenged the rates reduction factors used to bring valuations back to the 1988 level. They proposed a factor of 0.2664%, based on work involving utility valuations. The Tribunal had used 0.5% for Celtic Roads and 0.63% for West-Link, reflecting the factors used in the relevant areas. The High Court found no basis to interfere with the Tribunal’s decisions on those factors.
A further issue concerned Celtic Roads’ maintenance obligations. Its contract covered 54.7 kilometres of motorway, although 21.74 kilometres of the relevant stretch generated tolls. The Tribunal had considered that toll levels reflected the operator’s responsibility to maintain the longer section. The High Court found no persuasive basis to disturb the Tribunal’s treatment of the property and maintenance allowance.
The judgment addressed the Tribunal’s decisions through the statutory case-stated procedure. It advised the Tribunal on the legal error concerning toll revenue shares and upheld its approach on the reduction factors and maintenance issue. The source does not set out a separate final order or any resulting revised valuation figures.