Tearfund Ireland Ltd v Commissioner of Valuation

• Jurisdiction: Ireland
• Judge: Mr. Justice Tony O'Connor
• Judgment Date: 27 November 2020
• Neutral Citation: [2020] IEHC 621
• Docket Number: [No. 2020 186 SS]
• Court: High Court
• Date: 27 November 2020

BETWEEN

TEARFUND IRELAND LTD

APPELLANT

AND

COMMISSIONER OF VALUATION

RESPONDENT

[2020] IEHC 621

Tony O'Connor

[No. 2020 186 SS]

THE HIGH COURT

JUDGMENT of Mr. Justice Tony O'Connor delivered on the 27th day of November 2020

Introduction

1 The appellant (“Tearfund”) seeks “a declaration pursuant to the inherent jurisdiction of” the court that it “will have no liability for the costs” of the respondent (“the commissioner”) if its position at the hearing of this case stated “does not prevail”. A “protective costs order” is a term used to describe this rarely sought declaration.

Procedural background

2 The commissioner, following delivery of a judgment by the Valuation Tribunal, sought a case stated in accordance with s. 39(2) of the Valuation Act 2001 (“the 2001 Act”). In January 2020 the registrar of the Valuation Tribunal signed the case stated.

Issue in case stated

3 The court will be asked “whether the Valuation Tribunal was correct in law in holding that the meaning intended by the Oireachtas to be assigned to charitable purposes in para. 16 of Schedule 4 of the 2001 Act includes the ‘advancement of religion’ and whether the advancement of religion is a charitable purpose for the purposes of the 2001 Act?”

Annual rates bill

4 Tearfund originally sought exemption from rateability for its office in Dublin. There is now no dispute that the offices were used for its purposes and “otherwise than for private profit”. The appeal against the revision officer's decision not to exempt the office was disallowed on the ground that the promotion of religion was not deemed to be a charitable purpose under the 2001 Act. The annual rates bill for the relevant offices is currently in the region of €4,000 in the absence of an exemption.

Judgment of Valuation Tribunal

5 The judgment of the Valuation Tribunal referred to a consensus that Tearfund is a “charitable organisation” within the meaning of s. 3 of the 2001 Act. The issue in dispute relates to whether “the advancement of religion is a charitable purpose”. The Valuation Tribunal “in the interests of comity and to avoid inconsistencies in decision making” considered “that it should follow” its decision in Veritas Company DAC v. Commissioner of Valuation.

Veritas and no costs to be sought

6 In Veritas, the Valuation Tribunal found the subject premises in Sligo town to be used for mixed purposes some of which were for profit. More significantly for Tearfund it “…is of the view that the meaning intended by the Oireachtas to be assigned to ‘charitable purposes’ in para. 16 of Schedule 4 of the 2001 Act is the Pemsel [Commissioner for Special Purposes of Income Tax v Pemsel [1891] AC 531] meaning and accordingly the advancement of religion is a charitable purpose for the purposes of the 2001 Act”.

7 The parties have agreed that these proceedings should be linked with the case also stated at the request of the commissioner in Veritas. The same solicitors and counsel appear in both cases. Indeed, Veritas and the commissioner have agreed that neither side would seek their costs from the other if their positions at the hearing do not prevail in the High Court or in any appeal therefrom. The same facility of mutuality was offered to Tearfund in reply to its request for a protective arrangement for costs.

Reply to offer of mutuality

8 By reply dated 27 July 2020, three days in advance of the issue of the notice of motion before the court now, the solicitors for Tearfund mentioned that: -

“(a) The underlying rationale of the commissioner's position that ‘religious bodies should pay rates like everybody else’ … seems to be based on the repealed statutes or some wider philosophical view. However, if the Valuation Tribunal has correctly interpreted the Valuation Act 2001, then the views of the commissioner as to the desirability or otherwise of exemption from rates are irrelevant”;

(b) “… the circumstances of the Veritas case are to say the least unusual in that the commissioner won the Veritas case (on the question of ‘exclusive use’) but has nevertheless appealed it …”.

Jurisdiction to make a protective costs order

9 Laffoy J. in Village Residents Association Ltd. v. An Bord Pleanála (No. 2) [2000] 4 IR 321 acknowledged that a pre-emptive costs order could be made although she refused to make the order. Kelly J. in Friends of the Curragh Environment Ltd. v. An Bord Pleanála [2009] 4 IR 451, who refused a similar application, also said at para. 5, p. 453, that the said application before Laffoy J. was the only earlier instance of such an order being sought. Kelly J. referred to the Law Reform Commission Report on Judicial Review Procedure (LRC 71 – 2004) where the topic was considered. Simons J. in Heather Hill Management CLG v. An Bord Pleanala [2019] IEHC 186 at para. 22 acknowledged the potential for making such an order under the then – O. 99(5) of the Rules of the Superior Courts before considering whether to apply the special costs rules governing environmental litigation under s. 50(B) of the Planning and Development Act 2000 (as amended in 2018) or under Part 2 of the Environmental ( Miscellaneous Provisions) Act 2011.

Statutory footing

10 Since the delivery of those judgments s. 168 of the Legal Services Regulation Act 2015 (“the 2015 Act”) came into operation on 7 October 2019. It incorporated into primary legislation much of the effect relevant to this application of what was contained in O. 99(5) of the Rules of the Superior Courts prior to its replacement by the Rules of the Superior Courts (Costs) 2019 S.I. 584/2019 on 3 December 2019. Section 168 of the 2015 Act provides: -

“(1) Subject to the provisions of this Part, a court may, on application by a party to civil proceedings, at any stage in, and from time to time during, those proceedings—

(a) order that a party to the proceedings pay the costs of or incidental to the proceedings of one or more other parties to the proceedings, or

(b) … .

(2) Without prejudice to subsection (1), the order may include an order that a party shall pay -

(a) a portion of another party's costs,

(b) costs from or until a specified date, including a date before the proceedings were commenced,

(c) costs relating to one or more particular steps in the proceedings,

(d) where a party is partially successful in the proceedings, costs relating to the successful element or elements of the proceedings, and

(e) interest on costs from or until a specified date, including a date before the judgment.

(3) …”

11 Section 169 of the 2015 Act further provides: “A party who is entirely successful in civil proceedings is entitled to an award of costs against a party who is not successful in those proceedings, unless the court orders otherwise, having regard to the particular nature and circumstances of the case, and the conduct of the proceedings by the parties ….”

12 It is noteworthy that although the 2015 Act enables the court at any stage to award costs, it is silent about a jurisdiction to make a protective costs declaration. The old O.99(5) of the Rules of the Superior Courts provided that: - “Costs may be dealt with by the courts”, whereas s. 168 refers to “an order that a party to the proceedings pay the costs …”.

Inherent Jurisdiction

13 The Supreme Court addressed when a court may use its inherent jurisdiction and stated that “… inherent jurisdiction must not be used as a first port of call, when, by legislation the Oireachtas has spoken on the matter…” ( HSE v. A.M. [2019] IESC 3 (Unreported, Supreme Court, 29 January 2019), MacMenamin J., at para. 89).

14 The judgment of Irvine J. in Dorgan v. Spillane [2016] IECA 84 (Unreported, Court of Appeal, 14 March 2016) clarified that the inherent jurisdiction of the court in the context of taxing a solicitor client bill runs parallel to the statutory jurisdiction and that the statutory jurisdiction should not be usurped lightly.

15 Clarke J., in Mavior v. Zerko Ltd. [2013] 3 I.R. 268, at paras. 17 and 18, reiterated the caution of Murray J. in G. McG. v. D.W. (No. 2) (Joinder of Attorney General) [2000] 4 I.R. 1, at pp. 26 and 27, against “the creation of parallel jurisdictions for resolving much the same area of controversy, founded on, on the one hand, existing law and, on the other hand, an asserted inherent jurisdiction. … Sometimes, however, a relevant jurisdiction may not be the subject of any, or at least any complete, delineation by statute. …”.

16 The above case law is cited lest it be understood that the court is ever ready to invoke its inherent jurisdiction. The difference between inherent jurisdiction and inherent power may also be relevant whenever the courts are asked to consider this rare type of application in the future. Counsel were focussed on applying recognized criteria and were not asked to address whether the court may now have a more limited inherent jurisdiction to...