Rates—Exemption—Place of public religious worship

House of Lords; Lord Hoffmann, Lord Hope, Lord Scott, Lord Carswell and Lord Mance; 30 July 2008

The exemption from rates in para 11 of Sch 5 to the Local Government Finance Act 1988 (LGFA 1988) in respect of “place of public religious worship” cannot apply to places used for religious worship from which the public is excluded; such exclusion is not discriminatory on religious grounds.

Jonathan Sumption QC and Richard Glover (instructed by Devonshires) for the church. Timothy Mould QC and Daniel Kolinsky (instructed by the Solicitor for Revenue and Customs) for the valuation officer.

The rate-payer church owned a site on which were a number of buildings. Those included “the Stake Centre“, which included a chapel used for public religious worship and a multipurpose hall, together with some small meeting rooms, an office and a baptistery; and “the Temple”, access to which was generally restricted to “patrons” who were members of the church of particular standing.

The Lands Tribunal made a preliminary determination that the Stake Centre was the only building on the site which was exempt from inclusion in the rating list, pursuant to the provisions of para 11 of Sch 5 to LGFA 1988. The church appealed unsuccessfully to the Court of Appeal and subsequently to the House of Lords.

Lord Hoffmann:
The valuation officer said that the Temple was not a place of “public religious worship” because it was not open to the public. It was not even open to all Mormons. The right of entry was reserved to members who had acquired a “recommend” from the bishop.

The church 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 had been carried over into subsequent rating legislation) the statute required only “congregational worship”, that was, the assembly of a congregation whose association was solely for the purpose of joining in worship and not because they had private links such as being members of the same family, school or college.

The difficulty for the church was that that very point had been decided more than 40 years ago in Church of Jesus Christ of Latter Day Saints v Henning (Valuation Officer) [1964] AC 420, [1963] 2 All ER 733. The House held that the words could not apply to places used for religious worship from which the public was excluded.

The church submitted that the House should depart from Henning or at any rate not apply its reasoning to Sch 5 of LGFA 1988. It was inconceivable to his lordship that Parliament did not intend the phrase to carry the meaning which it had been given in Henning. The legislature had had at least two opportunities to reconsider the matter and had not done so. Henning case was therefore conclusive against the church on that point.

The church next submitted that a different construction was required by s 3 of the Human Rights Act 1998. The exclusion of all but Patrons was 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 Arts 9 and 14 of the European Convention on Human Rights (the Convention) .

His lordship held that LGFA 1988 did not discriminate on grounds of religion. The rule that exemption was accorded to places of worship only if they are open to the public was perfectly general. Anyone might comply. The church submitted that the discrimination was indirect. It was true that anyone might comply, but the reason why the Mormons could not comply was that their religion prevented them from doing so. It was therefore discrimination not to treat them differently.

To manifest one’s religion In order to constitute discrimination on grounds of religion, however, the alleged discrimination had to fall “within the ambit” of a right protected by Art 9, in the instant case, the right to manifest one’s religion. The liability of the Temple to a non-domestic rate would not prevent the Mormons from manifesting their religion. If the legislation imposed rates only upon Mormons, that would be within the ambit of Art 9 even if the Mormons could easily afford to pay them. But the present case was not one in which the Mormons were taxed on account of their religion. It was only that their religion prevented them from providing the public benefit necessary to secure a tax advantage. That was an altogether different matter.

Furthermore, even if the instant case could be regarded as a case of indirect discrimination, it was justified. Parliament had to have a wide discretion in deciding what should be regarded as a sufficient public benefi t to justify exemption from taxation and it was entitled to take the view that public access to religious services was such a benefit.

The church’s alternative argument was that the Temple came within sub-para (b) as “a church hall, chapel hall or similar building used in connection with” a place of public worship. The argument was that the Temple was used in connection with the Stake Centre, which admitted the public and was accepted to be a place of public worship. But the words “used in connection with” carried in context an implication of ancillary use, which was reinforced by the requirement that the building should be similar to a church hall or chapel hall. The  use of the Temple was not ancillary to the use of the Stake Centre but a separate and independent use.

The appeal would be dismissed. Lord Hope, Lord Scott, Lord Carswell and Lord Mance delivered concurring opinions.