England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2
		23 July 2004

1. MR JUSTICE MOSES: This is an application by the Tower of Refuge Ministry for judicial review of a decision of the Highbury Corner Magistrates, given on 15th September 2003, making a liability order against the Ministry in respect of non-domestic rates.
2. The Tower of Refuge Ministry says that it is a religious organisation with charitable objectives. It is, as its pastor, Pastor Goody Obed, told me today, an organisation with premises at Seven Sisters Road and 132 Axminister Road, used for bible training and a meeting house where, in particular, parents are able to leave their children and those children are educated in religious matters.
3. The Council had granted relief against non-domestic rates for a number of rating periods, but had then refused to grant relief on the grounds that the charity number which was used by the Tower of Refuge Ministry did not exist. Accordingly, the London Borough of Islington wrote by email to the Ministry on 10th October 2002, stating that demands for non-domestic rates would be issued. The rates built up to a total figure of some £52,700 in consequence, which the Ministry did not pay. In those circumstances, the London Borough of Islington sought a liability order from the Magistrates. The complaint was heard, as I have said, on 15th September 2003, and the application for relief from the liability was rejected.
4. The statutory framework for these proceedings is to be found, firstly, in the Local Government Finance Act 1988. By section 43(1):

"A person (the ratepayer) shall as regards a hereditament be subject to non-domestic rate in respect of a chargeable financial year if the following conditions are fulfilled in respect of any day in the year (a) on the day the ratepayer is in occupation of all or part of the hereditament, and (b) the hereditament is shown for the day in a local non-domestic rating list in force for the year."

5. There has been no dispute but that the premises were a hereditament listed in the local non-domestic rating list in force for the years in question.
6. By subsection 6:

"This subsection applies where on the day concerned (a) the ratepayer is a charity ... and the hereditament is wholly or mainly used for charitable purposes ..."

7. Subsection 5 then applies, which provides mandatory relief of four-fifths of the total liability.
8. By Regulation 12(5) of the Non-Domestic Rating (Collection and Enforcement (Local Lists) Regulations 1989, the Magistrates' Court has power to make a liability order pursuant to Regulation 12(5) "if it is satisfied that the sum has become payable by the defendant and has not been paid".
9. There is provision for further relief if the ratepayer is a charity in circumstances where the billing authorities rules so provide. By section 47, where the ratepayer is a charity, and the hereditament is wholly or mainly used for charitable purposes (see section 47(2)) and a decision of the billing authority operates to the effect that section 47 should apply as regards the hereditament concerned (see section 47(3)), then the chargeable amount for the day shall be such as is determined by, or found in accordance with, the rules determined by the billing authority (see section 47(1)(a)).
10. In those circumstances certain hereditaments used for charitable purposes by a charity may receive discretionary relief in respect of a balance of the liability for non-domestic rates. In the instant case Islington has not applied its rules in that respect to the hereditament used by the Ministry, and in those circumstances there can be no possible complaint as to the balance of the one-fifth of the non-domestic rate. No challenge to the refusal to grant that discretionary relief was ever made at the time of the refusal back in 2002.
11. However, the Ministry contend that at the hearing when a liability order was sought the Magistrates should have found that the Ministry was a charity and, in those circumstances, relieved it from liability in the proportion of four-fifths of that total liability I have already identified.
12. The argument has, of course, been hampered by the fact that Pastor Obed has not today been represented, for the reasons I have already given in refusing an adjournment.
13. The grounds of this application were described as follows. It was said that the Magistrates had erred because they did not have "any evidence of the second defendant's [Islington's] decision to cease to recognise the claimant as a charitable institution". Further, it says that before the Magistrates there was a letter of 16th May 2003 from The Charity Commission explaining their delay in reaching a decision on the claimant's charitable status:

"In the circumstances the first Defendants should have adjourned the matter until the Claimant's charitable status was determined one way or another. By not so doing they denied the Claimant a fair hearing in breach of common law and the Claimant's rights under article 6 of the ECHR."

14. Ground 2 alleges that the Magistrates:

"... failed to take into consideration and/or if they did so failed to act upon the above evidence before them. In such circumstances their decision was unreasonable."

15. The acknowledgment of service of the Magistrates points out that the court had made a liability order in the absence of the claimant. The claimant did not appear until 4.20, and then merely produced a letter showing that the Charity Commissioners were considering an application for registration but had lost a previous application.
16. The history of the matter explains what went on in front of the Magistrates. In March 1999 the Ministry were granted planning permission for change of use from commercial premises to a bible training and meeting house with ancillary nursery, bookshop and library. Between June 1999 and March 2002 the Ministry received the mandatory rate relief pursuant to statute. The London Borough of Islington then conducted a review and discovered the use of a false charity number, to which I have already referred, in October 2002. Accordingly, it revised the Ministry's rate liability.
17. There can be no argument as to Islington's entitlement to withdraw the mandatory relief in the light of the use of a false number. There was a challenge as to that decision but since the decision was made back in October 2002 it was not only hopelessly out of time but absolutely no basis has been advanced, in any event, for challenging that withdrawal of mandatory relief by Islington. Faced as it was with the use of a false charity number it had, in my view, no alternative.
18. The Deputy High Court Judge who gave permission did not, in giving permission, deal with delay. It is therefore not open to this court to refuse relief against Islington on that basis but, for the reasons I have given, there is absolutely no basis for challenging Islington's withdrawal, in October 2002, of the mandatory relief.
19. The next question arises therefore as to whether there was any arguable defect in law in relation to the Magistrates' refusal to grant an adjournment and not reach the conclusion that the Ministry did have a charitable status. On the evidence before me, there is no basis for saying that any evidence was adduced before the justices as to the charitable status of the Tower of Refuge Ministry. All that was pointed out was that charitable recognition by Islington of the charitable status of the Ministry was withdrawn, and a letter stating that the Charity Commissioners were considering an application for registration. That fell hopelessly short of any evidence on the basis of which the Magistrates could be satisfied as to the charitable status of the Tower of Refuge Ministry. It was for the Ministry to establish that it was a charity, and thus fell within the statutory conditions for mandatory relief. It palpably failed to do so on the day of the hearing, 15th September 2003.
20. The Deputy High Court Judge, in giving permission, does not appear to have observed that the application against the Magistrates ought to have been by way of case stated, nor that the application was in any event out of time. I do not therefore reject the application today on those two bases, although had I been hearing the application for permission I would have done so. But I do reject it on the basis that it is clear that no evidence, let alone any sufficient evidence, was adduced before the justices on the basis of which they could have reached a conclusion that the Ministry was a charity. In those circumstances, this application fails.
21. I should add by way of a footnote, and it is only a footnote, that the charitable status of the Ministry has now been recognised and it will possibly -- but it is not for this court -- now enjoy the relief from non-domestic rates that that status brings. But that has no bearing upon the situation as it appeared before the Magistrates at the time of the application for a liability order in September 2003. For those reasons, this application is dismissed.
22. MR MCCAFFERTY: My Lord, we do seek our costs in this matter.
23. MR JUSTICE MOSES: Are you asking for a summary assessment?
24. MR MCCAFFERTY: My Lord, yes.
25. MR JUSTICE MOSES: Do you have the ...? Does Pastor Obed have it?
26. MR MCCAFFERTY: My Lord, yes, that was served on him.
27. MR JUSTICE MOSES: What do you want to say about costs, Mr Obed? What is sought is, first of all, that you should pay the costs of this hearing and, secondly, do you want to say anything about the total claim, £3,895?
28. MR OBED: I was not actually in the office yesterday, but when I came to the office I tried to find out what it was for.
29. MR JUSTICE MOSES: No, this is for the costs of today and the preparation for today.
30. MR OBED: This is for today's costs?
31. MR JUSTICE MOSES: Yes, and the preparation for today as well. What is said is that they are the attendances and the hours spent and so on. Do you want to say anything about that?
32. MR OBED: I have not found the basis of the payment by the Ministry. Can I receive an explanation, please?
33. MR JUSTICE MOSES: You have fought this case, you have lost it, and then I have ordered -- or I shall, subject to any submissions you make, order -- that you pay the costs of the litigation, the hearing. Do you want to say any reason as to why I should not?
34. MR OBED: I have to take it before the Ministry and we have to find out what to do. We are just a handful of people. Can we be allowed to make instalment payments on this?
35. MR JUSTICE MOSES: I expect you can come to some agreement with the other side, but that will not be for the court. Thank you very much.
36. Yes, I shall make an order for costs, and it seems to me wholly appropriate that there should be a summary assessment. I shall make an order in the sum of £3,895. Thank you both very much.