The Court of Appeal has ruled[1] that the Circuit Court had no jurisdiction to grant orders for possession of 6 residential investment properties as they were “not rateable” under s. 15 of the Valuation Act 2001 and not subject to the exceptions contained in that Act or the Land and Conveyancing Law Reform Act, 2009 and 2013.

The judgment establishes the law following the recent conflicting decisions of the High Court on the issue[2]. Whilst the Court of Appeal acknowledged that the judgment would lead to “unfortunate” and “unintended” consequences, the Court ruled that it had no alternative but to hold that the jurisdiction of the Circuit Court was limited by s. 22(1) of the Courts (Supplemental Provisions) Act 1961. 

The Court held that the jurisdiction of the Circuit Court in relation to property derived from the 1961 Act and is confined to property with a rateable valuation below €253.94. Therefore it followed that in order for the Circuit Court to have jurisdiction, the property must be “rateable” and thereafter have a rateable value below €253.94. 

Instances where a property may not have a rateable valuation have evolved due to legislative developments in the area.Subject to minor exceptions, domestic dwellings built after May 2002, are not rateable. Exceptions are, mixed use premises,  apart-hotels or apartments (but only in a very limited way). A further development was brought about by Part 10 of the 2009 Act which provides that the Circuit Court has jurisdiction in mortgage suits with no requirement for a rateable valuation. This section however only confers jurisdiction in respect of mortgages entered into on or after 1 December 2009.

The Land and Conveyancing Law Reform Act 2013 extended the jurisdiction of the Circuit Court to mortgages in respect of principle private residences created before 1 December 2009. This assisted in remedying the issues raised by the 2009 Act but left a gap given the section has no application where a property is not a principle private residence.

The above developments left the Court in a position where it had no option but to hold that in cases where a property is “not rateable” and where the exceptions in the 2009 Act or the 2013 Act do not apply, the Circuit Court does not have jurisdiction. The Court was extremely mindful of the difficulties this will cause in circumstances where proceedings will have to be commenced in the High Court rather than the Circuit Court and the increased costs involved. Interestingly, the Court also commented that the jurisdiction of the Circuit Court more generally in relation to disputes over property as opposed to possession proceedings was now also “open to question”.

Conclusions

This ruling will have an impact on proceedings in being in the Circuit Court to which none of the jurisdiction expections apply. Therefore, it is highly advisabale that all proceedings initiated in the Circuit Court be reviewed to confirm that the court has jurisdiction.

There is also the potential that historic proceedings which have already concluded may now be subject to appeals on foot of this ruling. Although the time limit for such appeals could have long since expired there does remain the possibility of such appeals commencing with leave of the High Court.

Any fresh proceedings being considered which would be affected by this ruling, should now be commenced in the High Court. This will, as already noted by the Court of Appeal, have both a costs and convenience impact which for the time being is unavoidable.

Finally, it is interesting to note that in its decision, the Court of Appeal made specific reference to Section 45 of the Civil Liability and Court Act 2004 which provides for a change in how Circuit Court jurisdiction is established. Section 45 envisages a move away from the traditional rateable valuation and instead bases jurisdiction on market value, namely €3,000,000.00. However, that section has never been commenced. This would appear to be a ready fix to the issue at hand and indeed something envisaged by the Oireachtas. The fact of this decision may now compel the commencement of Section 45.

A copy of the Permanent TSB plc v. David Langan [2016] IECA 229 judgment can be found on the Courts Services website, please click HERE.