Glendale Nursing Home v Commissioner for Valuation

• Jurisdiction: Ireland
• Judge: Mr. Justice Birmingham
• Judgment Date: 15 June 2012
• Neutral Citation: [2012] IEHC 254
• Court: High Court
• Date: 15 June 2012

[2012] IEHC 254

THE HIGH COURT

[No. 1783 SS/2011]

Glendale Nursing Home v Commissioner of Valuation

IN THE MATTER OF THE VALUATION ACT, 2001 AND IN THE MATTER OF THE VALUATION OF PREMISES

BETWEEN:

GLENDALE NURSING HOME

APPELLANT

AND

THE COMMISSIONER OF VALUATION

RESPONDENT

HEALTH SERVICE EXECUTIVE (HSE) v CMRS OF VALUATION UNREP MACMENAMIN 13.6.2008 2010 4 IR 23 2008/28/6187 2008 IEHC 178

VALUATION ACT 2001 SCHED 4 PARA 14(B)

VALUATION ACT 2001 SCHED 4 PARA 14(A)

HEALTH (NURSING HOMES) (AMDT) ACT 2007

NURSING HOMES SUPPORT SCHEME ACT 2009

OXFORD ENGLISH DICTIONARY 2ED 1989 VOL 4

BULMERS LTD v CMRS OF VALUATION 2009 1 IR 503 2009 1 ILRM 50 2008/5/949 2008 IESC 50

PREMIER PERICLASE LTD v CMSR OF VALUATION UNREP KELLY 24.6.1999 2000/15/5860

NANGLES NURSERIES v CMRS OF VALUATION UNREP MACMENAMIN 14.3.2008 2008/46/9983 2008 IEHC 73

REVENUE CMRS v DOORLEY & MCDERMOTT 1933 IR 750

R v RADIO AUTHORITY, EX PARTE BULL & ANOR 1998 QB 294 1997 3 WLR 1094 1997 2 AER 561

Valuation - Valuation Tribunal - Case stated - Rating - Exemption - Whether nursing home entitled to exemption - Valuation Act 2001

Facts: The appellant was a nursing home in County Carlow. The owners sought to claim an exemption from rates on the grounds they cared for the elderly, with their expenses being defrayed by the State. The Valuation Tribunal had found that the appellant did not qualify for the exemption from rates on the basis that insufficient evidence had been submitted to demonstrate the expenses of the appellant were defrayed by the State wholly or in the main. The appellant now sought to appeal this decision in the High Court.

Held by Birmingham J, that the question to be determined was whether the appellant's expenses were defrayed by the State in the whole or in the main. The Court considered the relationship between the Valuation Tribunal and the High Court, together with the role of the HSE as the relevant State body. The Court stated that the focus should not be solely on the interpretation of defrayed, but also the context in which it was relevant.

Assessing the evidence, the Court found that the HSE was contributing to the cost of care for the elderly which did not equate to defraying the appellant's expenses. This was sufficient to determine the appeal, but the Court proceeded to state there would have been insufficient evidence to determine the extent of how the expenses were being defrayed in the event the Court had found otherwise.

1 JUDGMENT of Mr. Justice Birmingham delivered the 15th day of June 2012

2 1. The Valuation Tribunal has stated a case for the opinion of the High Court arising from its determination of the 4 ^th January 2011.

3 2. The issues on which the opinion of the High Court is sought are whether:

4 (1) The HSE in making payments to nursing homes under the Nursing Homes Support Scheme Act 2009, is, within the ordinary meaning of the word, defraying expenses of the nursing home in its purpose of caring for the elderly;

5 (2) The HSE for all intents and purposes is 'the State' as defined for the purposes of the Valuation Act 2001, as was held by MacMenamin J. in Health Service Executive v. Commissioner for Valuation [2008] IEHC 178 and by natural extension is therefore acting on behalf of the Exchequer when it makes payment;

6 (3) The relevant property falls within the ambit of paragraph 14(b) of the fourth schedule to the Valuation Act 2001;

7 (4) Glendale Nursing Home is a body the expenses incurred by which in carrying on an activity as a nursing home caring for the elderly are defrayed by the Exchequer;

8 (5) In the event that the answers to the above questions are yes, did the Tribunal err in law in holding that expenses incurred by Glendale were not wholly or mainly defrayed out of monies provided by the Exchequer when the uncontested evidence before the Tribunal was that between the 10 ^th January 2010, and the 10 ^th June 2010, the proportion of Glendale's income that came from the HSE ranged from 60.51% to 51.92%?

9 3. By way of background it should be explained that Glendale is a nursing home located at Tullowphelim, Tullow Rural, Carlow. The proprietors of the nursing home contend that it should be exempt from rateability. During the course of an oral hearing, held before the Valuation Tribunal on the 21 ^st September 2010, and the 10 ^th November 2010, at which it may be noted the appellant was not legally represented, it was agreed that the appellant's claim to be entitled to an exemption from rateability fell to be determined by reference to para 14(b) of Schedule 4 of the Valuation Act 2001. That schedule so far as material provides: "Relevant Property Not Rateable"

10 2 "14. Any land, building or part of a building occupied for the purpose of caring for elderly, handicapped or disabled persons by a body, being either -

11 (a) a body which is not established and the affairs of which are not conducted for the purpose of making a private profit from an activity as aforesaid, or

12 (b) a body the expenses incurred by which in carrying on an activity as aforesaid are defrayed wholly or mainly out of moneys provided by the Exchequer."

13 4. It is agreed that the promoters of the nursing home have sought to make a profit so that the home is not one to which para 14(a) applies. In effect the real question at issue, which will decide whether the nursing home is rateable or is exempt from rates, is whether it is the case that its expenses are defrayed wholly or mainly out of monies provided by the Exchequer. In that regard it is no longer in dispute between the parties that payments by the Health Service Executive are the equivalent to payments by the State. Accordingly the question posed at (b) in the cases stated was not argued and it does not appear either appropriate or necessary to answer this question.

The Valuation Tribunal

14 5. At the hearing before the Valuation Tribunal it was submitted on behalf of the nursing home that in excess of fifty percent of its income was derived from the Nursing Home Subvention Scheme and the Nursing Home Support Scheme paid by the HSE in compliance with the Health (Nursing Homes) (Amendment) Act 2007, and the Nursing Homes Support Scheme Act, 2009. On that basis, it was argued that the appellant met the criteria under para 14(b) of Schedule 4 to the 2001 Act and accordingly was entitled to an exemption from rateability.

15 6. On behalf of the Commissioner it was submitted that in order to avail of the exemption from rates, in accordance with the provisions of para 14(b), it was necessary for the appellant to establish that expenses incurred were wholly or mainly defrayed by the Exchequer. It was further submitted that State support or subvention is a payment applied for by a person in order to assist that person procure services of their choice from the market place and that the HSE does not involve itself in defraying expenses incurred by Glendale Nursing Home or indeed by any other private nursing home and that the HSE does not have the statutory objective or purpose of defraying the expenses of Glendale Nursing Home.

16 7. Before the Valuation Tribunal it was agreed by the parties that the Tribunal should determine the issues arising from the submissions that had been made to it in advance as a preliminary legal issue. In doing so, the Tribunal first referred to the definition of the word 'defray' that appears in the Oxford English Dictionary, 2 ^nd Edition, Volume IV which is as follows:-

"1. To pay out, expend, spend, disburse (money). 2. To discharge the (expense or cost of anything) by payment; to pay, meet, settle. 3. To meet the expenses of; to bear the charge of; pay for. 4. To pay the charges or expenses of (a person); to reimburse, to entertain free of charge."

17 The Tribunal then continued:-

"The HSE, in making payments to nursing homes under the Nursing Homes Support Scheme Act 2009, is, within the ordinary meaning of the word, defraying expenses of the nursing home in its purpose of caring for the elderly. The HSE for all intents and purposes is 'the State' as defined for the purposes of the Valuation Act 2001, as was held by MacMenamin J. in Health Service Executive v. Commissioner for Valuation [2008] IEHC 178 and by natural extension is therefore acting on behalf of the Exchequer when it makes a payment.

The Tribunal finds that the relevant property falls within the ambit of Paragraph 14(b) above, and further, that Glendale Nursing Home is a body the expenses incurred by which in carrying on an activity as a nursing home in caring for the elderly are defrayed by the Exchequer.

However, the Tribunal was not provided with sufficient evidence to establish that the aforementioned expenses are defrayed wholly or mainly out of monies provided by the Exchequer.

Accordingly, the Tribunal finds that in the absence of evidence, the subject property does not qualify for relief under Schedule 4, Paragraph 14(b)."

The role of the High Court

18 8. The role of the High Court when dealing with cases of this nature was recently the subject of comment by MacMenamin J. in Health Service Executive v. Commissioner for Valuation [2010] 4 I.R. 23, where he commented as follows:-

19 2 "[5] By virtue of s.39 (5) of the Act of 2001, the High Court shall determine any question or questions of law arising on the case and shall reverse, affirm or amend the determination in respect of which the case has been stated, or shall remit the matter to the Valuation Tribunal with the opinion of the Court, or make such other order as the Court shall think fit.

20 3 [6] Thus, the remit of this Court is not now confined to a narrow consideration of affirmation or denial of the Valuation Tribunal's conclusion."

The relationship between the Valuation Tribunal...