Tearfund Ireland Ltd v Commissioner of Valuation

• Jurisdiction: Ireland
• Judge: Mr. Justice Barr
• Judgment Date: 28 July 2021
• Neutral Citation: [2021] IEHC 534
• Court: High Court
• Docket Number: [Record No. 2020/186 SS]

Between

Tearfund Ireland Limited

Appellant

and

Commissioner of Valuation

Respondent

[2021] IEHC 534

[Record No. 2020/186 SS]

THE HIGH COURT

Question of law – Charitable purposes – Valuation Act 2001 schedule IV para. 16 – Respondent requesting the Valuation Tribunal to state a question for the determination of the High Court – 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 IV of the Valuation Act 2001 includes the “advancement of religion” and that the advancement of religion is a charitable purpose for the purposes of the 2001 Act

Facts: The appellant, Tearfund Ireland Ltd (Tearfund), was a registered charity. It held a lease of offices on the second floor of 22/24 Foley Street, Dublin. By a determination issued on 5th April, 2019, the Valuation Tribunal ruled that the premises occupied by Tearfund was exempted from rates pursuant to the Valuation Act 2001 (as amended) and in particular, pursuant to para. 16(a) of schedule IV. The respondent, the Commissioner of Valuation (the Commissioner), requested the Tribunal to state a question for the determination of the High Court. The question which was posed to the court was the following: “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 IV of the 2001 Act includes the “advancement of religion” and that the advancement of religion is a charitable purpose for the purposes of the 2001 Act?” The Commissioner argued that the phrase “charitable purposes” continued to bear the meaning which it had at common law for rating purposes for over 100 years, as not including the advancement of religion.

Held by Barr J that applying the ordinary and natural meaning of the words “charitable purposes”, as understood in rating law for over a century prior to their enactment in the 2001 Act, that phrase does not include the advancement of religion. The court was satisfied that this interpretation of para. 16(a) is consistent with the overall scheme of the schedule and in particular, it fits with the exemption provided for in para. 7. Barr J held that, even if the court was wrong in the construction of “charitable purposes” in para. 16(a) and if it were held that that phrase was ambiguous, then applying the approach endorsed by the Supreme Court in Nangles Nurseries v Commissioner of Valuation [2008] IEHC 73, the wording must be construed against the ratepayer, as it concerns an exemption; in which case the court would also reach the conclusion that the words used do not include the advancement of religion. The court was satisfied that this interpretation of the Act is consistent with the provisions of the Constitution, which guarantee the freedom to practice religion in Art. 44, but as stated by McMenamin J in McNally v Ireland [2009] IEHC 573, that right has to be seen through the prism of the right to equality before the law of all citizens guaranteed by Art. 40.1.

Barr J proposed answering the question of law posed to it by the Valuation Tribunal in the following way: the Valuation Tribunal was not correct in law in holding that the meaning intended by the Oireachtas to be assigned to charitable purposes in para. 16 of schedule IV of the 2001 Act included the “advancement of religion” and that the Tribunal was incorrect to find that the advancement religion is a charitable purpose for the purposes of the 2001 Act.

Question answered in the negative.

JUDGMENT of Mr. Justice Barr delivered electronically on the 28th day of July, 2021

Introduction

1 The appellant (hereinafter referred to as “ Tearfund”) is a registered charity. It holds a lease of offices on the second floor of 22/24 Foley Street, Dublin. By a determination issued on 5th April, 2019, the Valuation Tribunal ruled that the premises occupied by Tearfund was exempted from rates pursuant to the Valuation Act 2001 (as amended) and in particular, pursuant to para. 16(a) of schedule IV.

2 The respondent (hereinafter referred to as “ the Commissioner”) requested the Tribunal to state a question for the determination of this Court. The question which has been posed to the court is the following:-

“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 IV of the 2001 Act includes the “advancement of religion” and that the advancement of religion is a charitable purpose for the purposes of the 2001 Act?”

3 In a nutshell, the issue which the court has to decide in these proceedings, is whether the Tribunal was correct in holding that the phrase “ charitable purposes” in paragraph 16 (a) of schedule IV of the 2001 Act, included the advancement of religion as provided for in Commissioners for Special Purposes of Income Tax v. Pemsel [1891] AC 531; or, as argued by the Commissioner, that phrase continued to bear the meaning which it had at common law for rating purposes for over 100 years, as not including the advancement of religion.

Background

4 The essential facts were not in dispute between the parties. They were succinctly summarised by the Tribunal at para. 11 of its determination in the following way:-

• “i The Property is a second-floor office in a five story third generation office building known as Ulysses House situated at 22–24 Foley Street. The floor are of the office measures 169.34 square metres.

• ii The Appellant is in occupation of the Property under a Lease dated the 12th October 2012.

• iii The Appellant was incorporated in 2000 as a company limited by guarantee not having a share capital. It has been operating as an international charity since 2008 with its headquarters based in Dublin.

• iv The Appellant's history and origins come from a movement of Evangelical Christians in the UK and Ireland having a conviction of faith to respond to the millions of suffering across the world due to extreme poverty, injustice, natural disasters and suffering in the late 1960's. The Biafra famine led many Christians to commit funds to the Evangelical Alliance to help alleviate poverty and suffering. Originally named ‘The Evangelical Alliance Relief Fund’, it was later abbreviated to the acronym TEAR Fund, before finally changing to Tearfund.

• v The Appellant is a separate independent faith-based organisation with links to the Tearfund in the UK.

• vi Article 3 (A) of the Appellant's Memorandum of Association states that the objects for which the Appellant is established are:

  • (a) To relieve poverty, suffering and distress and prevent disease and ill health among the peoples of the World; and

  • (b) to promote Christian education and evangelism among the peoples of the World.

  And as to both objectives set out in paragraphs (a) and (b) in this sub-clause by working in partnership with or through fellow Christians who share the conviction that true meaning in life and fulfilment for life can only be found through a faith and trust in Jesus Christ, such objectives to be pursued in accordance with the following principles:-

  • (i) The Bible is the authoritative Word of God and is the guiding rule of all Christian belief and behaviour;

  • (ii) The supervision of any project supported by the Company must be in the hands of a Christian or Christians who accept sub-paragraph (i) above and who want to introduce the people whom they serve to that fullness of life which comes through faith in Jesus Christ alone; and

  The Basis of Faith set out in clause 12 of this Memorandum of Association which the Basis of Faith of the Evangelical Alliance.

• vii The Appellant is a charitable organisation within the meaning of Section 3 of the Act.

• viii The Property is in use as an administrative office where meetings of the Appellant's Board and subcommittees are held and where staff plan, manage and administer the Appellant's activities and projects pursuant to the objects in its constitution.”

Relevant Statutory Provisions

5 It is appropriate to describe the relevant provisions of the Valuation Act 2001 (as amended) hereinafter referred to as (‘the Act’), which are germane to this case. Those of special significance will be quoted in full or in part, as appropriate.

6 It is necessary to set out the long title to the Act, as Tearfund has placed considerable emphasis on the fact that in the long title it was made clear that the Act was revising aspects of the law on the valuation of properties and, in particular, was making new provisions in relation to properties that would be exempt from the payment of rates. The long title states:-

“An act to revise the law relating to the valuation of properties for the purposes of the making of rates in relation to them; to make new provision in relation to the categories of properties in respect of which rates may not be made and to provide for related matters.”

7 Section 3 of the Act contains a definition of “charitable organisation”, which is a new concept introduced in the Act. It provides that “charitable organisation” means a company, or other body corporate, or an un-incorporated body of persons which complies with a specified list of conditions. This list effectively relates to provisions that must be in place for the proper governance of the organisation. In addition, it provides that in the case of a company it has to comply with the stipulations set out in subparagraphs (iii) and (vii) of para. (a). This effectively provides that the memorandum of association or articles of association, as appropriate, of the company must state, as its main object or objects, a charitable purpose and specify the purpose of any secondary objects for which provision is made to be the attainment of the main object or objects.

8 Section 3 also provides that “relevant...