St. Vincent's Healthcare Group Ltd v Commissioner of Valuation

• Jurisdiction: Ireland
• Judge: Mr Justice Cooke
• Judgment Date: 26 February 2009
• Neutral Citation: [2009] IEHC 113
• Docket Number: [No. 404 SS/2007]
• Court: High Court
• Date: 26 February 2009

[2009] IEHC 113

THE HIGH COURT

[No. 404 SS/2007]

St. Vincent's Healthcare Group Ltd v Commissioner of Valuation

IN THE MATTER OF THE VALUATION ACT 2001

BETWEEN/

ST. VINCENT'S HEALTHCARE GROUP LTD

APPELLANT

AND

COMMISSIONER OF VALUATION

RESPONDENT

VALUATION ACT 2001 S39

VALUATION ACT 2001 SCHED 4

VALUATION ACT 2001 S15(2)

VALUATION ACT 2001 S5

CLONMEL MENTAL HOSPITAL v CMSR OF VALUATION 1958 IR 381

POOR RELIEF (IRL) ACT 1838 S63 (UK)

MARA (INSPECTOR OF TAXES) v HUMMINGBIRD LTD 1982 2 ILRM 421

RATING

Valuation

Valuation Tribunal - Case stated - Rateable valuation of car park at hospital - Car park also made available to non-users of hospital on commercial basis - Test to be applied - Whether car park at hospital a "relevant property not rateable" so as to be exempt from rates - Whether car park inextricably linked to aim of caring for sick persons - Whether Valuation Tribunal erred in law in applying test - Clonmel Mental Hospital v Commissioner of Valuation [1958] IR 381 applied; Mara v Hummingbird Ltd [1982] 2 ILRM 421 considered - Valuation Act 2001 (No 13), s 39 and sch 4 - Poor Relief (Ireland) Act 1838 (1 & 2 Vict, c 56), s 63 - Tribunal determined to have erred in law in determining that property not relevant property (2007/404SS - Cooke J - 26/2/2009) [2009] IEHC 113

St Vincent's Healthcare Group Ltd v Commissioner of Valuation

Mr Justice Cooke

1 On 19^th December, 2006, the Valuation Tribunal ("the Tribunal") issued its determination on an appeal by St. Vincent's Hospital Healthcare Group Ltd. ("the appellant") against the fixing by the Commissioner of Valuation of €1,400 as the rateable valuation of a "relevant property" comprising a car park at lot 103 - 127A (part of) Merrion Road, D, Pembroke East, in the County Borough of Dublin. The property in question is a purpose built, stand alone, multi-storey car park which is built, owned by and operated for the appellant within the grounds of its hospital at Merrion Road, Dublin 4.

2 The appellant, having expressed dissatisfaction with that determination, required the Tribunal to state this case pursuant to s. 39 of the Valuation Act2001 ("The Act"). The sole issue that is raised for the opinion of this Court is whether the Tribunal's determination that the property in question is not a "relevant property not rateable" in accordance with Schedule 4 of the Act, is correct. In effect, the issue thus raised turns upon the question as to whether this car park in the grounds of the appellant's hospital is entitled to be treated as exempt from rates under one or other of headings Nos. 8 and 16 of the list of properties designated as "relevant properties not rateable" in that Schedule.

3 The Act has the effect of repealing and re-enacting in consolidated but substantially revised and modernised form almost the entirety of the law relating to the valuation of property for rating purposes in this jurisdiction since 1838. The terminology familiar to practitioners in this field of rateable "hereditaments" and "tenements" has been replaced by the term "rateable property" and Schedule 4 of the Act lists 19 types or categories of relevant property which are designated as "not rateable" by s. 15(2) of the Act.

4 The properties specified at headings 8 and 16 of Schedule 4 are defined as follows:-

"8.-Any land, building or part of a building used by a body for the purposes of caring for sick persons, for the treatment of illnesses or as a maternity hospital, being either-"

5 a (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,

6 b (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 and the care or treatment provided by which is made available to the general public (whether with or without a charge being made therefor).

7 16. - Any land, building or part of a building which is occupied by a body, being either -

8 a (a) a charitable organisation that uses the land, building or part exclusively for charitable purposes and otherwise than for private profit, or

9 b (b) a body which is not established and the affairs of which are not conducted for the purpose of making a private profit and -

10 (i) the principal activity of which is the conservation of the natural and built endowments in the State, and

11 (ii) the land, building or part is used exclusively by it for the purpose of that activity and otherwise than for private profit."

12 5. The primary facts relating to the history, status and the use of the car park are not disputed by the parties and, so far as relevant for the purpose of this judgment can be extracted from Section 1 of the case stated and summarised as follows:-

13 a A) The car park was built by the appellant in the grounds of its hospital at a cost to it of €17 million funded by bank borrowing and from its own resources. The building is vested in a wholly owned subsidiary of the appellant but occupied by the latter under a full repairing and insuring lease for a term of nine years and eleven months from 1^st October, 2002, at an initial yearly rent of €375,000:

14 b B) The daily operation of the car park is managed for the appellant under a service contract by Q Park Ireland Ltd.;

15 c C) The car park is a three storey structure with 450 car spaces which are available to all potential users on a first come, first served basis, no spaces being reserved for any particular user or category of user;

16 d D) The car park is available for use by hospital staff, by patients, by visitors and others having business with the hospital and also by the general public whether visiting the hospital or not;

17 e E) Staff users are charged a rate lower than that paid by others and on average staff account for about 50% of use. There are other car parks in the hospital specifically reserved for the use of staff;

18 f F) There are about 2,500 staff in the hospital, most working on a shift basis;

19 g G) All receipts from use of the car park go into the general accounts of the hospital and any surplus over costs and expenses accrues to the benefit of the appellant.

20 6. It is not disputed that the appellant is a "charitable organisation" within the definition of that term in s. 5 of the Act such that, where appropriate, its purposes would be "charitable purposes" within the terms of heading 16 of Schedule 4.

21 7. The essential basis of the Tribunal's determination that the car park is not exempt under the two headings of Schedule 4. as set out in para. 5 to 8 of the case stated and can be summarised as follows:

22 (a) On the face of it, the car park is not used for "the purposes of caring for sick persons, for the treatment of illnesses or as a maternity hospital":

23 (b) If it could be shown, however, that the use of the car park was "inextricably linked to the carrying out" of the aim of caring for sick persons, it would be exempt under heading 8;

24 (c) Unlike the case of the Tribunal's decision VA04/1/001, City of Dublin VEC "the provision of car parking is not a necessary operative element in the functioning" of the hospital. While car parking may be desirable it is "not essential to the provision of medical services in the hospital";

25 (d) The car park is occupied solely for the purpose of providing car parking to a wide variety of users on a temporary basis subject to the payment of an appropriate charge. This "has all the elements of a commercial activity and is so remote from the provision of medical services as to be not capable of being considered related to the main objects of the appellant."

26 (e) So far as heading 16 of schedule 4 is concerned, the Tribunal considered that the car park would be exempt if its use is "wholly ancillary to or directly facilitates the carrying out of the appellant's charitable objects" and the test in that regard is similar to its being "inextricably linked" to the carrying out of the appellants aims for the purposes of heading 8;

27 (f) The provision of car parking for staff, patients, visitors and others is neither wholly ancillary to nor directly facilitates the applicants charitable objects;

28 (g) The fact that surplus monies from the operation of the car park go to the benefit of the appellant is not sufficient to qualify for exemption under heading 16.

29 8. The appellant submits that there is here no dispute as to primary facts or as to the inferences to be drawn from primary facts by the Tribunal. The issue in dispute is a mixed question of law and fact namely, whether the appellant's occupation of the car park comes within heading 8 and/or heading 16. This is a matter of statutory interpretation.

30 9. The fundamental conclusion of the Tribunal is unsustainable namely, that a car park is not a necessary operative element in the functioning of a hospital. The Tribunal applied the wrong test in holding that it was not "directly related to" or "inextricably linked" or "essential" to the provision of medical services. The correct test is not whether its use is essential to the provision of medical services but whether the occupation of the car park is for the purpose of the hospital. The issue is not the fact that cars are parked in the car park but why they are parked there.

31 10. A residence for nurses or a visitors' restaurant are not essential to the provision of medical services in a hospital, yet they would undoubtedly be entitled to exemption.

32 11. It is to be noted that heading 8 is not confined to buildings or parts of buildings but extends to "land used for the purposes of caring for sick persons".

33 12. The Tribunal erred in attaching undue significance to the fact that the car park is run at a...