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|Judgments - Gallagher (Valuation Officer) V Church of Jesus Christ of Latter-Day Saints
HOUSE OF LORDS
 UKHL 56
on appeal from: EWCA Civ 1598
OF THE LORDS OF APPEAL
FOR JUDGMENT IN THE CAUSE
Gallagher (Valuation Officer) (Respondent) v Church of Jesus Christ of Latter-day Saints (Appellants)
Lord Hope of Craighead
Lord Scott of Foscote
Jonathan Sumption QC
(Instructed by Devonshires)
Timothy Mould QC
(Instructed by HM Revenue & Customs Solicitors Office)
Intervener (Secretary of State for Communities and Local Government)
Philip Sales QC
(Instructed by Treasury Solicitors)
24, 25 and 26 JUNE 2008
WEDNESDAY 30 JULY 2008
HOUSE OF LORDS
OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT
IN THE CAUSE
Gallagher (Valuation Officer) (Respondent) v Church of Jesus Christ of Latter-day Saints (Appellants)
 UKHL 56
1. This appeal concerns the assessability for non-domestic rating of a group of buildings belonging to the Church of Jesus Christ of Latter-Day Saints (commonly known as the Mormon Church) in the Borough of Chorley in Lancashire. The largest and most imposing is the Temple, which stands 48m high and has 6306m2 of internal floor space on five floors. It is fully air conditioned and is fitted and finished both externally and internally to the highest standards. In addition, in proximity to the Temple, there are (i) the Stake Centre, a single storey building containing a space of 1227m2 divided by a moveable partition into a chapel and a multi-purpose hall, together with a number of small meeting rooms, an office and a baptistery (ii) the Missionary Training Centre, a three storey building containing class rooms, dormitory rooms, cafeteria and ancillary rooms, as well as the Presidents flat, which is subject to council tax (iii) the Patrons Services Building, a small (523m2) single storey building containing a reception area for visitors, a section which sells Church literature and a section for genealogical research by and on behalf of church members (iv) the Grounds Building, a small (287.8m2) single storey building which houses machinery and equipment used for the maintenance of the grounds and all the buildings on the site. It also contains a workshop area, garage and plant room, including the air conditioning unit for the Temple (v) the Patrons Accommodation, a two storey building housing 35 bedroom and bathroom suites and ancillary rooms for members of the Church who are visiting the Temple and including a caretakers flat which is subject to council tax (vi) the Temple Missionaries Accommodation, a two storey building containing 20 self-contained flats, each of which is subject to council tax. I shall in due course say more about the use of these buildings.
2. Hereditaments which count as domestic and are subject to council tax are of course excluded from liability for non-domestic rates and the Valuation Officer therefore excluded from assessment the flats subject to council tax (including the whole of the Temple Missionaries Accommodation). Nothing more need be said about them. The dispute is over whether all but one of the other buildings are entitled to exemption under the following provisions of paragraph 11 of Schedule 5 of the Local Government Finance Act 1988 (as amended), which appear under the heading Places of religious worship, etc:
(1) A hereditament is exempt to the extent that it consists of any of the following
(a) a place of public religious worship which belongs to the Church of England or the Church in Wales or is for the time being certified as required by law as a place of religious worship;
(b) a church hall, chapel hall or similar building used in connection with a place falling within paragraph (a) above for the purposes of the organisation responsible for the conduct of public religious worship in that place.
(2) A hereditament is exempt to the extent that it is occupied by an organisation responsible for the conduct of public religious worship in a place falling within sub-paragraph (1)(a) above and
(a) is used for carrying out administrative or other activities relating to the organisation of the conduct of public religious worship in such a place; or
(b) is used as an office or for office purposes, or for purposes ancillary to its use as an office or for office purposes.
(3) In this paragraph office purposes include administration, clerical work and handling money; and clerical work includes writing, book-keeping, sorting papers or information, filing, typing, duplicating, calculating (by whatever means), drawing and the editorial preparation of matter for publication.
3. The Valuation Officer accepted that the Stake Centre, with its chapel, associated hall and ancillary rooms, was a place of public religious worship which was entitled to exemption under paragraph 1(a) or (b). But he rejected the claims for exemption in respect of the other buildings.
4. The chief dispute is over whether the Temple is a place of public religious worship within the meaning of paragraph 1(a), although the Church submits in the alternative that it is a a church hall, chapel hall or similar building used in connection with a place falling within paragraph (a) within the meaning of sub-paragraph (b), the place falling within (a) being the Stake Centre.
5. The Valuation Officers case is extremely simple. He says that the Temple is not a place of public religious worship because it is not open to the public. It is not even open to all Mormons. The right of entry is reserved to members who have acquired a recommend from the bishop after demonstrating belief in Mormon doctrine, an appropriate way of life and payment of the required contribution to church funds. Such members are called Patrons and the rituals which take place in the Temple are exclusive to them. These facts are agreed.
6. Mr Sumption QC, in an argument deployed with great skill and learning, submitted that a place of public religious worship did not have to be open to the public. Read in its historical context (the phrase first appeared in the Poor Rate Exemption Act 1833 and has been carried over into subsequent rating legislation) the statute required only what has been called congregational worship", that is to say, the assembly of a congregation whose association is solely for the purpose of joining in worship and not because they have private links such as being members of the same family, school or college: see Goddard J in Cole v Police Constable 443A  1 KB 316, 334. The fact that the services of the Church of England were open to the public did not mean that the legislation was intended to impose the same pattern upon everyone else. A construction which did not require conformity to the practice of the Established Church would be more ecumenical and in accordance with the spirit of the age.
7. Mr Sumption pointed out the difficulties and anomalies which might arise if public access were insisted upon: some religions segregated the sexes and others excluded the public from parts of the building such as the sanctuary of an Eastern Orthodox Church. There was no rational basis for the requirement of access by non-participants in the services and the law accepted that religious institutions could provide the necessary public benefit to qualify as religious charities even if their premises were not open to the public. If they could qualify for the purpose of charity law, why not for rating?
8. These arguments were extremely interesting but the difficulty for the appellants is that this very point was decided more than 40 years ago by this House in Church of Jesus Christ of Latter-Day Saints v Henning (Valuation Officer)  AC 420. The case concerned the Mormon Temple at Godstone and the question was whether it was exempt from rates as a place of public religious worship within the meaning of section 7(2)(a) of the Rating and Valuation (Miscellaneous Provisions) Act 1955, which was the relevant legislation then in force. The House, affirming a unanimous Court of Appeal (Lord Denning MR, Donovan and Pearson LJJ)  1 WLR 1091, held that the words could not apply to places used for religious worship from which the public was excluded. Lord Evershed alone showed some sympathy for the construction now advanced by Mr Sumption, but did not carry his opinion to the point of dissent, saying that he had stated his doubts in case the matter should again be considered by Parliament. No doubt the House did not have the benefit of all the arguments advanced to your Lordships by Mr Sumption, but there is no doubt that the question was squarely raised.
9. Lord Pearce, who gave the leading opinion, said (at pp. 440-441) that Parliament was entitled to take the view that religious services which were open to the public provided a public benefit which justified the exemption. No doubt the concept of public benefit in charity law was different, but it would be unwise to regard charity law as a paradigm of rationality (Lord Simonds, in Gilmour v Coats  AC 426, 449A said that it had been built up not logically but empirically).
10. Mr Sumption submitted that the House should depart from Hennings case or at any rate not apply its reasoning to Schedule 5 of the 1988 Act. It is true that since Hennings case  AC 420, the exemption has been extended to buildings used for administrative purposes (paragraph 2(a), added by the 1988 Act) and office purposes (paragraph 2(b), added by the Local Government Finance Act 1992). So the current legislation is not the same as the statute which was construed in Hennings case. But the extensions are dependent upon the central concept of a place of public worship": the administrative buildings must be used for purposes relating to the organisation of worship in such a place and the offices must be used by an organisation responsible for public worship in such a place. Although there is no rigid rule that words used in an Act of Parliament must be given the same construction as the courts have given those words in an earlier Act (see Barras v Aberdeen Steam Trawling and Fishing Co Ltd  AC 402 as explained in R v Chard  1 AC 279) it seems to me inconceivable that Parliament did not intend the phrase to carry the meaning which it had been given in Hennings case. The legislature has had at least two opportunities (in 1988 and 1992) to take up Lord Eversheds invitation to reconsider the matter and has not done so. In my opinion, therefore, Hennings case is conclusive against the appellants on this point.
11. Mr Sumption next submitted that a different construction was required by section 3 of the Human Rights Act 1998. The exclusion of all but Patrons is a manifestion by the Mormons of their religion. Therefore, to deny them exemption on that ground would be to discriminate against them on grounds of religion, contrary to articles 9 and 14 of the Convention. Section 3 of the Act requires the 1988 Act to be read and given effect in a way which is compatible with Convention rights and this requires a construction which exempts the Temple from rating.
12. I put aside the difficulty that the rating list challenged in this appeal was made before the Human Rights Act came into force. In my opinion the 1988 Act does not discriminate on grounds of religion. The rule that exemption is accorded to places of worship only if they are open to the public is perfectly general. Anyone may comply. Mr Sumption submits that the discrimination is indirect. It is true that anyone may comply, but the reason why the Mormons cannot comply is that their religion prevents them from doing so. It was therefore discrimination not to treat them differently. The European Court of Human Rights has decided that article 14 applies to indirect discrimination resulting from a failure to accord different treatment to cases which ought to be treated differently: see Thlimmenos v Greece (2000) 31 EHRR 411; DH v Czech Republic (Application No 57325/00) (13 November 2007) at paragraph 175).
13. In order to constitute discrimination on grounds of religion, however, the alleged discrimination must fall within the ambit of a right protected by article 9, in this case, the right to manifest ones religion. In the present case, the liability of the Temple to a non-domestic rate (reduced by 80% on account of the charitable nature of its use) would not prevent the Mormons from manifesting their religion. But I would not regard that as conclusive. If the legislation imposed rates only upon Mormons, I would regard that as being within the ambit of article 9 even if the Mormons could easily afford to pay them. But the present case is not one in which the Mormons are taxed on account of their religion. It is only that their religion prevents them from providing the public benefit necessary to secure a tax advantage. That seems to me an altogether different matter.
14. For example, I do not think that a Sabbatarian could complain that he was discriminated against because he was unable, on religious grounds, to provide services on the Sabbath and therefore earned less than people of a different religion. A case which in my opinion is very much in point is M v Secretary of State for Work and Pensions UKHL 11;  2 AC 91, in which a woman would have been able to secure a reduction in her liability for the maintenance of her child if she had been living with a male partner. She was unable to qualify because, on account of her sexual orientation, she chose to live with a female partner. The House of Lords decided that the alleged act of discrimination did not fall within the ambit of article 8 (her right to family life and in particular her right to live with a female partner) because loss of the opportunity to gain a financial advantage was too remote from interference with the right in question. The same seems to me true of this case.
15. Furthermore, I think that even if this can be regarded as a case of indirect discrimination, it was justified. Parliament must have a wide discretion in deciding what should be regarded as a sufficient public benefit to justify exemption from taxation and in my opinion it was entitled to take the view that public access to religious services was such a benefit.
16. The Churchs alternative argument is that the Temple comes within sub-paragraph (b) as a church hall, chapel hall or similar building used in connection with a place of public worship. The argument is that the Temple is used in connection with the Stake Centre, which admits the public and is accepted to be a place of public worship. But in my opinion the words used in connection with carry, in this context, an implication of ancillary use, which is reinforced by the requirement that the building should be similar to a church hall or chapel hall. To apply this to the Temple would be having the tail wag the dog. The use of the Temple is not ancillary to the use of the Stake Centre but a separate and independent use. This point was argued in the Court of Appeal in Hennings case (Henning (Valuation Officer) v Church of Jesus Christ of Latter-Day Saints  1 WLR 1091) but summarily dismissed. Lord Denning MR said, at p 1099:
The short answer is that this temple is not a church hall, chapel hall nor a similar building. It is not in the least on the same footing as a church hall or chapel hall. It is a very sacred sanctuary, quite different from a building of that category.
17. Donovan LJ said, at p 1100, that the Temple was far too important in the life of the Mormon Church to be described as a building similar to a church hall or chapel hall. I agree. It cannot be said to be either within the same category as a church hall or chapel hall or used in connection with the Stake Centre.
18. On the other buildings on the site, I have had the advantage of reading the speech to be delivered by my noble and learned friend Lord Hope of Craighead and agree with what he says. I add only a few short comments of my own.
19. First, the Missionary Training Centre, which is alleged by the Church to be exempt under paragraph 2(a). As its name suggests, it is used for training missionaries. The training lasts 19 days and is intended, as the Lands Tribunal found, to instruct Mormon priests how best to present the message of the Church to the public. It may include some instruction in how to conduct services, although both the Lands Tribunal and the Court of Appeal found that this was not the primary purpose of the training. But the real difficulty for the Church is that there is nothing to connect the training with the Stake Centre, which is the only relevant place of public worship. Paragraph 2(a) requires that the hereditament must be occupied by the organisation responsible for the conduct of public religious worship in a place falling within paragraph 1(a), i.e. the Stake Centre and must be used for carrying out administrative or other activities relating to the organisation of the conduct of public religious worship in such a place. Even if (which I doubt) training priests to conduct services can be described as activities relating to the organisation of the conduct of public religious worship, it cannot possibly be said to relate to the conduct of such worship in the Stake Centre.
20. The Patrons Services Building, as mentioned earlier, welcomes visitors to the site, sells Church literature in printed or electronic form, and has provision for genealogical research. The Church claims that it falls within paragraphs (1)(b) or (2)(a). However, it seems to me to come within neither, for much the same reasons as I have given in connection with the Missionary Training Centre. It is in fact shut on Sundays, the day on which public worship at the Stake Centre takes place. The reception area serves visitors to the site in general but particularly those who come to the Temple. However, the building is not in the least like a church hall or chapel hall (paragraph (1)(b)) and none of the activities which take place there relate to the organisation of the conduct of public religious worship in the Stake Centre (paragraph (2)(a)).
21. The Grounds Building, used for lawn mowers, maintenance equipment and the like, is also not concerned with the organisation of the conduct of public religious worship in the Stake Centre. Nor is the Patrons Accommodation, which provides accommodation for Patrons visiting the Temple.
22. In the result therefore, and in agreement with the judgment of Neuberger LJ in the Court of Appeal, I would dismiss this appeal.
LORD HOPE OF CRAIGHEAD
23. The facts of this case are not in dispute. They have been summarised by my noble and learned friend Lord Hoffmann, whose opinion I have had the advantage of reading in draft. I adopt with gratitude his account of the way in which the Church conducts its mission and of the uses that it makes of all the buildings that it occupies. The question is to what extent, on those facts, the statutory exemption from non-domestic rating that it seeks is available. To obtain the exemption it must show that each of the buildings that are in question has the characteristics described in paragraph 11 of Schedule 5 to the Local Government Finance Act 1988, as amended by section 104 and para 3 in Part 1 of Schedule 10 to the Local Government Finance Act 1992.
24. The President of the Lands Tribunal, Mr George Bartlett QC, held that the Stake Centre at Temple Way was exempt together with the cultivated areas about it and the car parking area that was dedicated to it. There is, as he said, no doubt on this point and the respondent, the Valuation Officer, has accepted it. The Stake Centre is in part a chapel and in part a chapel hall. As a chapel it is a place of public religious worship within the meaning of para 11(1)(a) of Schedule 5. As a chapel hall it is exempt under para 11(1)(b) because it is used in connection with the chapel for the purposes of the organisation responsible for the conduct of public worship there. In the Presidents opinion however the rest of the hereditament was not exempt. In the Court of Appeal Neuberger LJ said that the President was entirely right to conclude that, with the exception of the Stake Centre, all the other buildings on the site are not exempt as none of them falls within the ambit of para 11:  EWCA Civ 1598, para 46.
25. By far the largest building on the hereditament is the Temple. Its gross internal area is 6306.3 square metres, and it is divided internally into about 180 rooms or use areas. The gross internal area of the Stake Centre, on the other hand, is 1227 square metres. In addition to the chapel and a multi-purpose hall, there are number of small meeting rooms and offices there and a baptistry. Mr Sumption QC submitted that the Temple was exempt under para 11(1)(a) because it was a place of public religious worship within the meaning of that paragraph. If it was not, it was exempt in any event under para 11 (1)(b) because it was a church hall, chapel hall or other similar building used in connection with the Stake Centre for the purposes of the organisation responsible for the conduct of public worship there.
26. I cannot accept Mr Sumptions primary argument that the Temple is a place of public religious worship. There might have been something to be said for his appeal to history and to various anomalies, had it been open to us to take a fresh look at this issue. But I am not persuaded that your Lordships would be justified in departing from the meaning that this House gave to the words a place of public religious worship in Church of Jesus Christ of Latter-Day Saints v Henning (VO)  AC 420. In London Corporation v Cusack-Smith  AC 337, 361 Lord Reid said that where Parliament has continued to use words of which the meaning has been settled by decisions of the court, it is to be presumed that it intends the words to continue to have that meaning. This is a presumption, not a rule. But the history of the legislation since the date of the judgment indicates that Parliament has been content that the words a place of public religious worship should continue to receive the interpretation that the House gave to them in Henning.
27. Both sides of the argument about the meaning of those words were fully deployed in the speeches that were delivered in that case. I would attach particular significance to what was said by Lord Evershed at p 430. He did not share the view of the other members of the committee that the legislative intention was that the word public when applied to religious worship in section 7(2)(a) of the Rating and Valuation (Miscellaneous Provisions) Act 1955 should mean, as Lord Morris of Borth-y-Gest put it at p 435, a place to which all properly disposed person who wish to be present are admitted. He made it clear at the outset of his speech that he was not prepared to dissent. But he wished to state his doubts and the reasons for them in case the matter should at some time come up for further consideration in Parliament. Despite this invitation, and despite changes in religious practice in this country during the past forty years, Parliament adhered to the words used in the 1955 Act when it re-enacted the exemption in section 39 of the General Rate Act 1967. It did so again when it enacted para 11 of Schedule 5 to the 1988 Act. And it did so again when it enacted the 1992 Act which amended that paragraph.
28. It is worth noting that the appellant is not the only Christian body whose religious practices might have prompted a change in the legislation, had this been thought to be appropriate, because they fell outside the scope of the exemption as interpreted in Henning. In Broxtowe Borough Council v Birch  1 WLR 314 the question was whether two buildings used for religious worship by a company of Christians known as the Exclusive Brethren were entitled to the exemption. When one of them was first used for this purpose in 1967 a notice board was placed outside it which stated that the word of God would be preached there at certain times on a Sunday. This was taken to be a declaration that the building was open to the public for religious worship according to the Henning test, so it was shown as exempt in the valuation list. The second building came into use in 1971, and it too was shown as exempt. But by that time the Brethren who occupied the buildings had decided to follow the teaching of James Taylor junior, principally in his teaching about separation from evil. Consequently no notice board was placed outside the second building, and the notice board outside the first building was taken down. In the result there was no sign that the public had permission to enter either of them and attend religious worship there. A proposal by the rating authority to alter the valuation list by entering the buildings as rateable was dismissed by the local valuation court, but it was upheld on appeal. The Court of Appeal was told that there might be 300 other halls where Brethren of same persuasion met that would lose the benefit of the statutory exemption as result of that decision.