Clarke v Halpin

• Jurisdiction: Ireland
• Judge: Ms. Justice Murphy
• Judgment Date: 26 June 2020
• Neutral Citation: [2020] IEHC 317
• Docket Number: 2018 No. 666 SS
• Court: High Court
• Date: 26 June 2020

IN THE MATTER OF SECTION 2 OF THE SUMMARY JURISDICTION ACT 1857 (AS EXTENDED BY SECTION 51 OF THE COURTS SUPPLEMENTAL PROVISIONS ACT 1961)

BETWEEN

JOHN CLARKE

RESPONDENT

-AND-

PATRICK HALPIN

AND

ANN KEANE T/A THE ABERDEEN LODGE

APPELLANTS

[2020] IEHC 317

Murphy J.

2018 No. 666 SS

THE HIGH COURT

Case stated – Rates – Premises – Respondent seeking a decree against the appellants for alleged unpaid rates – Whether the District Court erred in law in determining that the premises were ‘commercial premises’ and were therefore liable to rates

Facts: The claimant/respondent, Mr Clarke, Rate Collector for Dublin City Council, by a summons dated 5th October 2017, instituted District Court proceedings against the defendants/appellants, Mr Halpin and Ms Keane trading as Aberdeen Lodge, in respect of their premises situate at 53/55 Park Avenue Sandymount Dublin 4 seeking a decree against the appellants jointly and severally for alleged unpaid rates for the years 2013-2017 inclusively, in the sum of €75,195.12 together with costs. The appellants claimed that the premises were exempt from rates on the grounds that the premises were ‘domestic premises’ within the meaning of s. 3 of the Valuation Act 2001 and were therefore not liable to rates. The District Court found that the premises were commercial premises and liable to rates. On 16th January, 2018, District Court Judge Brennan granted a decree in favour of the respondent for the sum of €75,195.12 plus costs which he measured at €1,000 plus VAT. This was an appeal by way of case stated pursuant to the provisions of s. 2 of the Summary Jurisdiction Act 1857 as extended by s. 51 of the Courts Supplemental Provisions Act 1961 against that decree. The following questions of law arose for the determination of the High Court: “(1) Did I err in law in determining that the Premises were ‘commercial premises’ and were therefore liable to rates. (2) Did I err in law in failing to hold that the Premises fell within the definition of ‘domestic premises’ in section 3 of the Valuation Act, 2001 and therefore were exempt from rates. (3) Did I err in law in taking judicial notice of the locus of the Premises in a high spending area for visitors and tourists to Dublin and in having regard to same in making my determination. (4) Did I err in law in considering whether the Premises were ‘commercial premises’ and in failing to consider whether the Premises were nevertheless ‘domestic premises’ within the meaning of the Valuation Act, 2001. (5) Whether I erred in law in having regard to, or taking into account the following: (i) The second-named Defendant’s substantial turnover for 2016; (ii) The availability of 16 en suite bedrooms; and / or (iii) The fee paid to the first-named Defendant.”

Held by Murphy J that the District Court was, by reason of the misconceived defence that the property was a domestic premises and so not liable to rates, diverted into consideration of a binary choice of ‘domestic premises’ or ‘commercial premises’. Murphy J held that, quite apart from the fact that such consideration was on the law irrelevant, and probably outside the jurisdiction of the District Court when adjudicating upon a summons for unpaid rates, it also failed to address the real issue in the case, which was whether on the facts found and the law, the rates were payable. Murphy J saw no benefit in answering the questions posed in the case stated, as it followed that because the purported defence was misconceived, questions arising from that defence were also misconceived. Taking the facts as found by the District Court, it seemed to Murphy J that the proper question in this case, was: “Was I right in law in granting a Decree in favour of the Claimant?”

Murphy J substituted for the questions of law posed by the District Court, the question “Was I right in law in granting a decree to the complainant?” and answered the question in the affirmative.

Case stated.

JUDGMENT of Ms. Justice Murphy delivered on the 26th of June, 2020

1 This is an appeal by way of case stated, against a decree granted in favour of the Respondent by District Court Judge, John Brennan, on 16th January, 2018. The case stated is set out in full below.

“ Introduction

1. This is an Appeal by way of a case stated pursuant to the provisions of section 2 of the Summary Jurisdiction Act, 1857 as extended by section 51 of the Courts Supplemental Provisions Act, 1961 of the Orders, made by me sitting in Dublin District Court on the 16th January 2018.

2. By a summons dated 5th October 2017 Mr John Clarke, Rate Collector for Dublin City Council (hereafter ‘the Claimant’) instituted District Court proceedings (bearing Record No. 96757/2017) against Patrick Halpin and Ann Keane trading as Aberdeen Lodge (hereafter ‘the Defendants’) in respect of their premises situate at 53/55 Park Avenue Sandymount Dublin 4 (hereafter ‘the Premises’) seeking a decree against the Defendants jointly and severally for alleged unpaid rates for the years 2013-2017 inclusively, in the sum of €75,195.12 together with costs.

3. The Defendants claimed that the Premises were exempt from rates on the grounds that the Premises were ‘domestic premises’ within the meaning of section 3 of the Valuation Act, 2001 and were therefore not liable to rates.

Findings of Fact by the District Court

4. I found the following facts:

(i) The Defendants reside in the Premises as their family home with their two children.

(ii) The Premises has 16 en suite bathrooms and is listed on some websites as a boutique guesthouse. The Defendants have no control over such listings.

(iii) The Premises had been registered as a guesthouse under the Tourist Traffic Acts 1939 to 2011 until 2012 and operated by a limited liability company, Elektron Holdings Limited, (hereafter ‘the Company’) until that time. Rates were paid for 2012 by the Company. Following the appointment of a receiver to the Company in July 2012 the guesthouse was shut down and the registration was allowed to lapse.

(iv) Thereafter the second-named Defendant commenced the use of the Premises as a B&B, but did not re-register the Premises.

(v) The second-named Defendant's profit and loss account for 2016 shows a substantial turnover of €537,000.

(vi) The first-named Defendant was paid a not inconsiderable consultancy fee for 2016 in the sum of €32,800 for services provided to the second-named Defendant.

(vii) An application for a revision of the rateable valuation of the Premises under section 28 of the Valuation Act, 2001 was not submitted by the Defendants to the Valuation Office until 21st November 2017.

(viii) The Premises is located in a high spending area for visitors and tourists in Dublin.

Findings based on the facts as found

5. I made the following findings based on the facts as found:

(i) While the Act may be silent as to the level of commercial activity that was required, I was satisfied that the substantial turnover for 2016 and the availability of the 16 en suite bedrooms in the Premises meant that it would defy common sense to hold that the Premises were not commercial premises.

(ii) I took judicial notice of the locus of the premises, and its location in a high-spending area for visitors and tourists to Dublin.

Determination of the District Court

6. In light of the foregoing, I found that the Premises were commercial premises and liable to rates. I granted a Decree in favour of the Claimant for the sum of €75,195.12 plus costs which I measured at €1,000 plus VAT.

Applicable Law

7. Section 3 of the Valuation Act, 2001 defines “domestic premises” as “any property which consists wholly or partly of premises used as a dwelling and which is neither a mixed premises nor an apart-hotel.”

8. Section 3(4)(a) of the Act provides that “For the purposes of this Act a property shall not be regarded as being other than a domestic premises by reason only of the fact that…the property is used to provide lodgings”.

9. Section 3(1) of the Act provides that ‘Lodgings’ shall not be construed as including accommodation provided in premises registered under the Tourist Traffic Acts, 1939 to 1998, or in an apart-hotel.

10. Section 15(2) of the Act provides that relevant property referred to in Schedule 4 shall not be rateable.

11. Schedule 4 of the Act lists categories of property which are not rateable. Paragraph 6 of the Schedule applies to ‘Any domestic premises (but subject to section 59(4) (which provides that apartments are rateable in certain limited circumstances)).’

The Questions of Law Arising

12. Arising out of the foregoing the following Questions of Law arise for the determination of the High Court:

(1) Did I err in law in determining that the Premises were ‘commercial premises’ and were therefore liable to rates.

(2) Did I err in law in failing to hold that the Premises fell within the definition of ‘domestic premises’ in section 3 of the Valuation Act, 2001 and therefore were exempt from rates.

(3) Did I err in law in taking judicial notice of the locus of the Premises in a high spending area for visitors and tourists to Dublin and in having regard to same in making my determination.

(4) Did I err in law in considering whether the Premises were ‘commercial premises’ and in failing to consider whether the Premises were nevertheless ‘domestic premises’ within the meaning of the Valuation Act, 2001.

(5) Whether I erred in law in having regard to, or taking into account the following:

(i) The second-named Defendant's substantial turnover for 2016; (ii) The availability of 16 en suite bedrooms; and/ or

(iii) The fee paid to the first-named Defendant.”

2 The matter came before this court on 22nd January, 2019, and was adjourned in order to allow both parties to prepare submissions. The matter next came before the court on 19th and 20th February, 2019, and the court reserved its judgment. At the...