Gallagher v Church of Jesus Christ of Latter-Day Saints

This is an appeal brought by the Church of Jesus Christ of Latter Day Saints (“the Appellant”) against a preliminary determination made by the President of the Lands Tribunal, Mr George Bartlett QC, about the extent to which the various buildings on a site of approximately 15 acres at Temple Way, Chorley, Lancashire (“the site”) are to be excluded from the rating list pursuant to the provisions of paragraph 11 Schedule 5 to the Local Government Finance Act 1988 (“the 1988 Act”).

Schedule 5 to the 1988 Act (“Schedule 5”) sets out a number of categories of hereditament which are “exempt”, i.e. which are to be excluded from the rating list, and therefore are not to be liable for business rates. Paragraph 11 of Schedule 5 (“paragraph 11”) is in the following terms:

In his clear and carefully reasoned decision, Mr Bartlett described the nature of the Appellant’s religion (in summary form) and (in more detail) the site and the nature and use of the buildings on it. I propose to set out the effect of his description as shortly as is necessary for the purposes of determining the issues of this appeal.

Consistently with the findings of Mr Bartlett, the Appellant church has what its counsel described as a “three-fold mission”. First, to perfect the “Saints”, which involves developing individual members towards the perfection of Christ. Secondly, proclaiming the Gospel to those who are willing to listen; this proclamation is not limited to people who are specifically trained as missionaries. Thirdly, redeeming the dead; as counsel says, prayers for the dead are a feature of the Christian tradition, but the particular feature of the Appellant’s mission is that of baptising the dead by the living.

The site consists of a well-tended fifteen acres together with a number of well-maintained buildings, of which the relevant ones are as follows.

The Stake Centre is a single storey building with a gross internal area of 1,227 sq metres, consisting of a chapel and a multi-purpose hall (divided by a movable partitions) capable of holding a total of about 1,300 people, together with some small meeting rooms an office and a baptistery. As Mr Bartlett said, “public religious worship takes place in the chapel” and the “multi-purpose hall is used for sport, Sunday School and numerous local church meetings and social gatherings. The small rooms are used for local administration and for pastoral purposes, meetings, classes and various functions. Baptisms take place in the baptistery and the Stake sanctuary is also used for weddings”.

The Preston Stake (roughly the equivalent of a Diocese in Church of England terms) has thirteen Wards, two of which are served by the Stake Centre, and people meet there each Sunday for directly religious purposes. For the rest of the week, as Mr Bartlett explained, the Stake Centre “is used for numerous church related meetings, youth activities and scripture study classes”, all of which are open to the public, with the exception of administrative meetings.

The Temple has a gross internal area of over 6,300 sq metres. For members of the Appellant, its Temples are Houses of the Lord and the most sacred places on earth. Access to the Temple is generally restricted to “Patrons”, who are members of the Appellant church who have reached a certain standing. To become a Patron, a person has to obtain a “recommend” from his local bishop, his branch President or his Stake President. Such a recommend is only given after what Mr Bartlett called “a searching interview designed to establish that the person accepts the religious beliefs of the Appellant. It serves as a pass to enter any Temple and is valid for a specified period of time. It can be renewed following another interview. The recommend must be shown before each visit to a Temple”.

The ceremonies in the Temple, regarded by members of the Appellant as of deep theological significance, are referred to as “ordinances”. There are various types of ordinance, including “sealing” which involves sanctifying civil marriage, binding a family together, or baptism of a patron on behalf of one or more deceased family member. Once inside the Temple, Patrons change into identical white clothes. As Mr Bartlett said, “particular rooms are reserved for the different Temple Ordinances, and there is a series of rooms leading to the Celestial Chamber, the most sacred place in the Temple, which is in the form of a luxurious sitting room.”

The Missionary Training Centre is a three-storey building of a gross internal area of 1,730 sq metres. The lower ground floor has a restaurant, laundry and classrooms. The ground floor has further classrooms and offices and two bedrooms and the President’s flat (which is subject to council tax). The first floor has 18 dormitory rooms, together with rooms used for associated purposes (such as toilets and a laundry). Young members of the Appellant are taught the importance of serving the Appellant’s mission, and to devote up to two years proselytising full time in whatever locality the President of the Appellant decides. Many of those attending the Missionary Training Centre may come from the north of England, but many also come from overseas. At any one time the Centre accommodates up to 108 missionaries who are trained in a continuous nineteen-day cycle.

The Patrons’ Services Building is a single-storey building of 523 sq metres gross internal area. One part is used as a general lounge and reception area for visitors to the site. A second part, known as the Distribution Centre, sells books, leaflets, CDs and tapes relating to the Appellant’s activities, and Temple clothing. A third part contains the Family History Centre. As one of the doctrines of the Appellant is that the dead can be redeemed, genealogy is an important aspect of its activities, and the History Centre contains computers, microfilm readers and similar equipment to enable members of the Appellant to undertake their own research in this connection.

The Patrons’ Accommodation is a two-storey building containing 35 en-suite rooms together with associated facilities (such as a kitchen, a dining room, a vestry and a laundry) with a gross internal area of about 1,720 sq metres. It also includes a caretaker’s flat, which is subject to council tax. The rooms are let as very cheap short-stay units for members of the Appellant visiting the Temple; they may stay for up to fourteen nights.

The Temple Missionaries’ Accommodation is a two-storey building of about 1,650 sq metres gross internal floor area. It has twenty self-contained flats, mostly occupied by Temple Missionaries staying for up to eighteen months. It is subject to council tax which is separately assessed for each flat.

Finally, the Grounds Building has a single floor with a gross internal area of about 290 sq meters. As Mr Bartlett said, it “houses machinery and equipment used for the maintenance of the grounds and all the buildings on the site”, and contains “a workshop area, garage and plant room including the air-conditioning plant for the Temple”.

After considering the uses to which each of the buildings was put, the wording of paragraph 11, and such case law as was available to him, Mr Bartlett concluded that the Stake Centre was exempt from rating, but that the other buildings on the site were not. In this connection, he agreed with the conclusions of the respondent Valuation Officer, Mr Gallagher, save that he rejected the view expressed by Mr Gallagher, at one time, that the Missionary Training Centre was exempt. In his written submissions, Mr Clive Newberry QC (who appeared for the Appellant below as he does before us) raised the point that the Appellant had been prejudiced in terms of presentation of its evidence by the fact that this concession on the part of the Valuation Officer had been withdrawn during the hearing. I am satisfied that there is nothing in that point, which, to be fair to Mr Newberry, he did not press in oral argument.

Mr Bartlett said that there was “no doubt that the Stake Centre is exempt” on the basis that it was “part chapel and part chapel hall. As a chapel it is a place of public religious worship, and as a chapel hall it is used for typical church or chapel hall purposes.” In other words, he held that the Stake Centre was used in part as “a place of public religious worship” within paragraph 11(1)(a), and in part as “a… chapel hall…used in connection with a place [of public religious worship] for the purposes of the organisation responsible for the conduct of public religious worship in that place” within paragraph 11(1)(b). That conclusion, which was consistent with the position of both parties, and is not challenged on this appeal, appears to me to have been clearly correct.

I turn now to the Temple. The argument that it falls within paragraph 11(1)(a) was rejected by Mr Bartlett, on the basis that no part of it could be characterised as “a place of public religious worship”, because entry was restricted to Patrons, i.e. to those who obtain a “recommend”. In this connection, Mr Bartlett, quite rightly in my view, considered that he was in any event bound by the decision in Church of Jesus Christ of Latter-Day Saints –v- Henning (VO) [1964] AC 420. In that case, the House of Lords concluded that the London Temple of the Appellant was not exempt for rating pursuant to the provisions of the predecessor of paragraph 11(1), namely section 7(2) of the Rating and Valuation (Miscellaneous Provisions) Act 1955 (“section 7(2)”), which provided:

In the Henning case at 440, Lord Pearce said this:

As Mr Bartlett said, the use of the Temple in this case was, in all material respects, the same as the use of the Temple in the Henning case, at least for the purpose of deciding whether the use of any part of it was as a “place of public religious worship”.

Mr Newberry argued that the difference in wording between paragraph 11(1)(a) and section 7(2)(a) permitted a different answer in the present case from that in the Henning case. That argument was based on the inclusion of the words “to the extent that” in the opening line of paragraph 11(1), words which were not included anywhere in section 7(2). He argued that those words were “widening” in their effect. I do not agree. The introduction of the words “to the extent that” have resulted in what Mr Kolinsky called “a more focused test” than that required by section 7(2)(a).

In my judgment, Mr Bartlett was right as to the effect of those words. Having said that, dependent on context, the words “to the extent that” “are capable of bearing either a physical or temporal meaning or both” he went on to say this:

In relation to the Temple in this case, it appears to me that the inclusion of the new words “to the extent that” into the statutory provision do not begin to justify any ground for distinguishing, or failing to apply, the reasoning of the House of Lords in the Henning case to the facts of this case. Insofar as it is contended that the use of the Temple, or any part of it, falls within the ambit of paragraph 11(1)(a). The essential point in the Henning case was that, as here, although the Temple was a place of worship, it was not open to the public for that purpose.

I turn to the second basis on which it is said by the Appellant that the Temple, or at any rate part of it, is excluded from rating, namely by reference to paragraph 11(1)(b). Mr Newberry submitted that a hereditament will only fall within this paragraph to the extent that it satisfies three requirements, namely that:

It is a church hall, chapel hall or similar building;

It is used in connection with a place of public worship;

It is so used for the purposes of the organisation responsible for the conduct of public religious worship in that place.

It appears to me that, quite apart from any other reason, the Temple must be excluded from the ambit of paragraph 11(1)(b) in light of the reasoning of the Court of Appeal in the Henning case, where it was argued that the London Temple was excluded from rating on the basis that it fell within section7(2)(b). At [1962] 1 WLR 1091 at 1099, Lord Denning MR said this:

Donovan and Pearson LJJ expressed much the same view at 1100 and 1101. It is of interest to note that this point was not even pursued in the House of Lords. I see no relevant difference between section 7(2) and paragraph 11(1)(b) for present purposes, any more than there is a relevant difference between section 7(1) and paragraph 11(1)(a). Accordingly, at least for the purpose of considering whether the Temple should have been exonerated from rates in this case, it is unnecessary to consider paragraph 11(1)(b) further.

However it should be mentioned that Mr Newberry argued, as he did before Mr Bartlett, that there is a difference between the use of the Temple in the present case and that in the Henning case. The difference he relied on is that the Temple in the present case is part of a complex which includes a place of public religious worship, the Stake Centre, and, accordingly, he said that the use of the Temple should be treated as in some way ancillary to, or at any rate influenced by, the use of the Stake Centre. In my view, Mr Bartlett was right to reject that argument. As he said, it is “the sacred nature of the function” of the Temple which distinguishes it from the primarily non-sacred uses that characterise a church hall or a chapel hall. (I should add that there may be other grounds of distinction as well, but it is unnecessary to consider them for present purposes).

The third, and final, ground upon which it is said on behalf of the Appellant that the Temple should be excluded from rating is pursuant to the provisions of paragraph 11(2)(a). In connection with that contention, Mr Bartlett said this:

I agree with that formulation. Mr Daniel Kolinsky, on behalf of the Valuation Officer, described paragraph 11(2)(a) as applying to administrative and other activities constituting what he called “the necessary infrastructure for the delivery of public worship”. That appears to me to be a pretty good working reformulation of the statutory provision although one must always be chary of seeking to redefine a statutory concept in different words. The ultimate question in a case such as this is whether the use of a hereditament satisfies specific statutory words, and a reformulation of those words consequently risks either being unhelpful or liable to mislead.

When one turns to the activities in the Temple, it seems to me that it can readily be seen that Mr Bartlett was right to conclude that they did not fall within paragraph 11(2)(a). As Mr Bartlett said:

As Mr Kolinsky submitted, the activities carried out in the Temple, far from “relat[ing] to the organisation of the conduct of public religious worship”, are in reality “acts of ritual worship carried out in private”. In his submissions, Mr Newberry placed great reliance on the importance of the particular characteristics of the Appellant’s beliefs, constitution and activities. It must be right that those are borne in mind when considering whether a building should be exempt on any of the grounds set out in paragraph 11, but that cannot begin to warrant a departure from the requirements of those provisions.

As Mummery LJ observed during argument, the types of factors which must weigh with a court of law when considering whether or not a building owned and used by a particular religious group qualifies for exemption from rating, and indeed the conclusion of the court as to whether or not such a building is so exempt, will often seem surprising, even inappropriate, to members of that religion. The exercise which had to be carried out by Mr Bartlett in this case, while involving consideration of the Appellant’s belief and activities, required a very different focus from that which would seem appropriate to its members. His (and indeed our) perspective must be external, objective and analytical, not internal, subjective or holistic. The exercise we are carrying out is concerned with a topic which cannot be characterised as remotely religious, namely rating legislation.

I turn now to the appeal against Mr Bartlett’s conclusion that the Missionary Training Centre was not exempt. In that connection, Mr Newberry contends, as he did below, that the Centre should have been exempt either pursuant to the provisions of paragraph 11(1)(b) or to those of paragraph 11(2)(a).

So far as paragraph 11(1)(b) is concerned, I consider that it cannot fairly be said that the use of a building primarily for training missionaries can be said to satisfy two of the three limbs of paragraph 11(1)(b). First, it does not seem to me that the use of such a building can fairly be said to fall within the ambit of the expression “a church hall, chapel hall or similar building” Mr Bartlett said this about that expression:

I have already mentioned the risk of seeking to define, or redefine, an expression used in a statutory provision, and the opening words of this quotation indicates that Mr Bartlett appreciated the risk as well. Having said that, it seems to me that his formulation is pretty satisfactory, save that it may be a little too restrictive so far as the words which follow “wider community purposes” are concerned. The uses for which a church or chapel hall will, in many cases, be let out from time to time are pretty wide, and (probably) provided such uses do not positively conflict with those of the church or chapel, it seems to me that they would not prevent the use being consistent with that of a church or chapel hall. At any rate, however one defines a church hall or chapel hall, it seems to me that it cannot possibly include full time use of the sort of use to which the Training Centre is put.

Quite apart from this, I consider that the use of the Missionary Training Centre cannot fairly be said to be a use “in connection with a place falling within paragraph 11(1)(a) above”, whether that “place” is limited to the Stake Centre (being the only place used for public worship on site) or any other place of public worship used as such by the Appellant. The individuals who were trained at the Centre would go out into the world to perform their missionary activities anywhere. It is true that some of the individuals trained at the Training Centre teach and give sermons at the Stake Centre once they have been trained, but that does not cause me to alter my view. Those individuals received their training for the purpose of acting as missionaries anywhere. The fact that some of them may end up being based on the site, even performing services in the Stake Centre, does not sensibly result in the conclusion that the use of the Training Centre satisfies the second limb of paragraph 11(1)(b).

I am prepared to accept that the third limb of paragraph 11(1)(b) would be satisfied by the Missionary Training Centre, given that the Appellant can fairly say that it is the organisation responsible for the conduct of public religious worship in the Stake Centre and that the Training Centre is used for its “purposes”.

The contention that the Centre should be exempt by virtue of paragraph 11(2)(a) has more force - not surprisingly, given that the Valuation Officer was inclined to accept the correctness of that contention at the hearing before the Lands Tribunal. As I have said in relation to paragraph 11(1)(b), it appears to me that it can be fairly said that the Missionary Training Centre is occupied by an organisation responsible for the conduct of public religious worship in place falling within sub-paragraph (1)(a) above, and that, accordingly, the opening words of paragraph 11(2) are satisfied.

However, I cannot accept that the Training Centre can fairly be described as “used for carrying out administration or other activities relating to the organisation of the conduct of public religious worship in such a place”. I am prepared to proceed on the assumption, albeit without deciding, that the words “such a place” can, pursuant to the provisions of section 7 of the Interpretation Act 1978, be read as meaning “such places”. I am also prepared to assume, without deciding, that training of missionaries could be treated as falling within the expression “other activities” in paragraph 11(2)(a). However, I simply cannot accept that the training of missionaries can possibly fall within the expression “activities relating to the organisation of the conduct of public religious worship”. As Mr Bartlett said, although “as part of their training the missionaries are instructed in the conduct of chapel services, this is not the primary purpose of their training; and in any event that part of the training is an activity that appears to relate not to the organisation of the conduct of services but of the conduct itself”.

In his submissions, Mr Newberry invited us to consider what was said by Lord Hesketh, the Minister responsible for the introduction of the 1988 Act, at the House of Lords Report stage (Hansard Lords, volume 499 column number 54-55) on 4 July 1988. I do not consider that it is appropriate to have regard to Hansard in this case. Although paragraph 11(2)(a) is not conspicuously well drafted, it appears to me to be very far away from being ambiguous, obscure or leading to obscurity. Mr Newberry suggested that his case on ambiguity was made out by the fact that the Valuation Officer had inititally been of the view that the Training Centre fell within the ambit of paragraph 11(2)(a), and had now changed his mind. That is a proposition which merely has to be stated in order to be rejected. Ambiguity is to be established to the satisfaction of the court by argument, not by reference to the views of the parties. In any event, it is right to record that I am far from satisfied that the ministerial statement as to the intended effect of the paragraph can be said to be “clear” in the sense of extending to the Missionary Training Centre, but it is unnecessary to reach a conclusion on the point.

The Patrons Services Building is, as I have mentioned, divided into three parts, each of which has a somewhat different use. It is therefore appropriate to consider each part separately, but it is worth first mentioning that the Building is closed on Sundays, so it cannot act as a reception area, or indeed for any other use, in connection with those attending the Stake Centre for Sunday worship.

The Foyer and Day Lounge provides a service for the whole site, although, as Mr Bartlett said “it has a particular role in relation to those arriving at the site to enter the Temple”. Given that the Temple is not exempt, and in particular that it does not fall within paragraph 11(1)(a), this is not a promising start for the Appellant’s case. However, given that the Foyer and Day Lounge serves the rest of the site, it is necessary to consider whether it falls within paragraph 11(1)(b) or (11)(2)(b) a little more fully. In my view, essentially for reasons already discussed, its use does not fall within either category. It does not seem to me that it can fairly be said to be “a church hall, chapel hall or similar building” in light of the multifarious type of use that expression envisages. Nor does it seem to me that it could be said that the activities involved in the Foyer and Day Lounge relate to “the organisation of” the conduct of public religious worship at the Stake Centre.

As to the shop, Mr Bartlett said that its use was “not linked … to any particular part of the site, except that the sale of Temple clothing is clearly related to the use of that building.” In any event, it seems to me impossible to describe the use of that area as falling within the opening words of paragraph 11(1)(b) or that its use “relat[es] the organisation of the conduct of public religious worship”.

Mr Bartlett thought that the Family History Centre might possibly be said to be used for office purposes, within paragraph 11(2)(b), although no argument was advanced to that effect before him – or indeed before us. I think that Mr Bartlett was right to conclude on this point that the research being done in the centre was “work… carried out for their own purposes by individual church members and members of the public”, which was “not properly to be regarded as clerical work within the meaning of” paragraph 11(2)(b)”. As to the arguments which were advanced before us, it seems to me that, for reasons already discussed, Mr Bartlett was right to reject the argument that the use of the Family History Centre fell within paragraph 11(1)(b) or (2)(a).

Mr Bartlett was also right to reject the contention that either the Grounds Building or the Patrons Accommodation were exempt was on the basis that “buildings devoted to public religious worship and ancillary to that purpose should be in a setting which befits that purpose” and that “in organising the conduct of public religious worship the [Appellant] has an all embracing view that the [site] as a whole should be fit for that purpose to take place”. This reasoning proceeded on the assumption that the whole of the rest of the site is exempt from rating, which, for the reasons I have discussed, is wrong. In any event, these submissions are expressed in very wide terms, whereas the provisions of paragraph 11(1)and (2) require close contextual analysis, as I have indicated, and, once so analysed, it is clear that the basis upon which exemption is claimed for the Grounds Building simply cannot be right.

As to the Patrons Accommodation, Mr Bartlett said that it was “simply short term living accommodation that is primarily used by members of the Church visiting the Temple” and, as such, would clearly not fall within the ambit of any of the exceptions in paragraph 11. In his submissions, Mr Newberry said that those receiving “Temple education and training need sleeping accommodation” and that the purpose of visiting the Temple “is to enable Temple members to pass on their endowed knowledge and reflections on the fundamental… mission to the congregation and the Stake Centre”. Even accepting that is right, it seems to me that, once again, it proceeds on the basis that paragraph 11 is far more broad in its ambit than, on analysis, it can fairly be said to be.

In the result, therefore, it seems to me that Mr Bartlett was entirely right to conclude that, with the exception of the Stake Centre, which is exempt because it falls with the ambit of paragraph 11(1), all the other buildings on the site are not exempt as none of them falls within the ambit of paragraph 11. I would, therefore, dismiss this appeal.

I agree.

I also agree.