Kerzner International Mauritius Holdings Ltd v Assessment Review Committee and another (Mauritius)

On an appeal under Mauritius Revenue Authority Act 2004 section 21, a court may intervene only for a wrong legal test, a conclusion which no properly instructed reasonable tribunal could reach, or a material finding that is perverse, irrational or unsupported by evidence. Highest and best use concerns the most advantageous use to which land is reasonably capable of being put in future. Professional valuation texts guide practice but impose no legal requirements. Open market value incorporates highest and best use as an essential consideration, but the two concepts are not equivalent. Selection of comparables and valuation adjustments is ordinarily for the specialist tribunal, subject to the limited legal-error jurisdiction.

Kerzner International Mauritius Holdings Ltd v Assessment Review Committee and another concerned the valuation of land adjoining a hotel in Mauritius for registration duty and land transfer tax. The Registrar General reassessed the declared value under the Land (Duties and Taxes) Act 1984. Following a review under the Mauritius Revenue Authority Act 2004, the Assessment Review Committee valued the property at Rs 855,364,000, treating hotel development as its highest and best use. The Supreme Court of Mauritius dismissed the appeal on 19 June 2019. The Privy Council considered whether the Committee had erred in law, or had reached perverse or irrational conclusions, concerning highest and best use, open market value, comparables and valuation discounts.

Lord Hamblen delivered the judgment of the Board, which dismissed the appeal.

1. Scope of review. An appeal under section 21 of the Mauritius Revenue Authority Act 2004 lies only for an error of law. Applying the approach in Edwards (Inspector of Taxes) v Bairstow [1956] AC 14, the court may intervene where the tribunal adopted the wrong legal test, reached a conclusion which no properly instructed reasonable tribunal could reach, or made a material finding that was perverse, irrational or unsupported by evidence. The court must not substitute its own valuation or factual assessment.
2. Highest and best use. Spencer v Commonwealth [1907] HCA 82 and Vyricherla Narayana Gajapatiraju (Raja) v Revenue Divisional Officer, Vizagapatam [1939] AC 302 establish that the inquiry concerns the most advantageous use to which the land is reasonably capable of being put in future. The International Valuation Standards and other professional texts provide useful guidance, but their stated factors are not mandatory legal requirements. The Committee had evidence concerning zoning, planning policy, location and development potential. Its conclusion was neither unsupported nor perverse.
3. Open market value. Under the Land (Duties and Taxes) Act 1984, the property had to be valued at its open market value at the date of registration. Highest and best use was an essential consideration in applying that test, but it was not treated as equivalent to market value. Neither the Committee nor the Supreme Court therefore adopted an erroneous legal approach.
4. Comparables and adjustments. The sales comparison approach proceeds by analogy and permits adjustments for differences between the comparable and the property, as explained in Marklands Ltd v Virgin Retail Ltd [2004] 2 EGLR 43. The choice of comparables, the adjustments and their amount were matters for the specialist Committee. Relative size was important, but there was no rule preventing comparison merely because the plots differed greatly in area. The selected comparable and the discounts were explained and rational. No error of law, perversity or irrationality was shown.

1. Privy Council: The appeal as of right was dismissed under section 81(1)(b) of the Constitution of Mauritius. [2021] UKPC 18.
2. Supreme Court of Mauritius: On 19 June 2019, dismissed the appeal against the Assessment Review Committee’s decision, holding that no error of law had been established.
3. Assessment Review Committee: Reassessed the property’s open market value at Rs 855,364,000 after hearings concerning the appropriate use, comparables and adjustments.