Supreme Court allows judicial review appeal, dismissing claim for rates remission based on planning works.

THE SUPREME COURT

Keane C.J.

McGuinness J.

Hardiman J.

128/99

BETWEEN:

SLATTERY’S LIMITED

Applicant/Respondent

and

THE COMMISSIONER OF VALUATION AND HIS HONOUR JUDGE LIAM DEVALLY

Respondents/Appellants

and

THE RIGHT HONORABLE THE LORD MAYOR ALDERMAN AND BURGESSES OF DUBLIN

Notice Parties

JUDGMENT delivered the 13th day of July 2001 by Keane C.J.

This case arises out of a remission of rates scheme which came into force in the Temple Bar area of Dublin some years ago. The

applicants are the owners and occupiers of a licensed premises known as The Oliver St. John Gogarty, a four storey over-basement

corner building at 57/58 Fleet Street in that area. Between January and December 1992, having obtained the necessary planning

permissions, they carried out extensive works on the premises which included the demolition of all the internal walls, the removal of

the roof and all the floors, including suspended floors, to basement level. Substantial works were then carried out which resulted in

the premises being reopened in a significantly renovated state. The issue which arose was as to whether the applicants in respect of

the relevant period were entitled to an entire or a partial remission of the rates under the statutory scheme.

It is, accordingly, helpful at the outset to set out the details of the statutory scheme. Section 7 of the 1986 Act provides that:

“(1) The Minister [for the Environment], with the consent of the Minister for Finance, may make a scheme providing for the

remission in whole or part of rates leviable in respect of premises -

(a) which are situate in the Custom House Docks Area and are certified by the [Custom House Docks Development]

Authority to have been erected, enlarged or improved after the approval of a planning scheme under section 12, or

(b) which are situate in any other designated area and which the relevant local authority are satisfied were erected,

enlarged or improved after the designation of such area.

(2) A scheme under this section shall specify -

(a) the classes or descriptions of premises to which the scheme applies,

(b) the local financial years in relation to which the remission of rates is to have effect,

(c) the terms or conditions (if any) subject to which the remission of rates is to have effect in any local financial year,

and

(d) the period during which the scheme is to operate.

....

(4) Where a scheme is made under this section a local authority shall, in relation to a rate leviable by them, give effect to any

remission provided for in the scheme.

(5) A remission provided for in a scheme under this section shall not be granted more than once in respect of the same

erection, enlargement or improvement of premises.”

Under the powers vested in him by this section, the Minister for the Environment made a scheme in respect of the designated area,

i.e. the Temple Bar area, in which the premises in question are situated. The scheme is contained in the Urban Renewal Act 1986

(Remission of Rates) Scheme, 1991 (S.I. No. 157 of 1991) (hereafter “the Scheme”), Article 5 of which provides that

“Rates leviable in respect of premises to which this scheme applies shall be remitted as follows :

(a) Where it is determined by the Commissioner of Valuation that the entire valuation of the hereditament which consist

of or includes the premises is attributable to the erection, enlargement or improvement of the premises, the remission

shall have effect in relation to the rates leviable on that valuation;

(b) where the valuation of the hereditament which consists of or includes the premises is increased and it is determined

by the Commissioner of Valuation that the increase or part of the increase is attributable to the erection, enlargement

or improvement of the premises, the remission shall have effect in relation to the rates leviable on that increase, or

that part of the increase;

(c) every remission shall have effect in respect of the ten local financial years next following that in which the valuation

or increased valuation comes into force.”

In the present case, the notice party (hereafter “the Corporation”) were notified when the demolition works had been concluded that

the premises was ready for inspection to enable the first named respondent (hereafter “the Commissioner”) to make a determination

under the provisions of the scheme. It does not appear that, at that point, the premises were inspected on behalf of the

Commissioner: the rate collector for the Corporation, however, Mr. Patrick Lawlor, did inspect the premises and on the 19th May 1992

reported that:

“(The) premises [were] incapable of beneficial occupation at the making of the rate - roof removed, interior floors removed.

Please find copy of engineer’s report attached.”

No rates were levied by the Corporation against the premises in respect of the year 1992. On the 21st May 1993 the applicants were

advised by the Corporation that, if they wished to make an application for a remission of the rates pursuant to the statutory scheme,

they should make an application to that effect to the Commissioner. Such an application was forwarded by the applicants to the

Corporation and, in turn, transmitted by the latter to the Commissioner. On the 20th June 1994, the Corporation were informed by the

Valuation Office of the Commissioner that the existing rateable valuation of £630 would be subject to a remission of £295. On the

13th March 1995, the solicitors for the applicants wrote to the Corporation claiming that the entire valuation of the premises was

attributable to the improvements effected by their clients and that, in the result, pursuant to Article 5(a), they were entitled to a

remission of the entire of the rates for the relevant period. That communication was transmitted by the Corporation to the

Commissioner but on the 25th July 1995 the valuation office wrote again to the Corporation confirming that the remission applicable

was £295. The applicant’s solicitors were so informed on the 25th August 1995.

The applicant’s solicitors then wrote on the 15th August 1996 directly to the Commissioner of Valuation calling on him to make a

determination in the case pursuant to the provisions of the scheme and again saying that the matter should be determined pursuant

to Article 5(a). They also said that their clients had been advised by their rating consultants of several comparable premises in the

Temple Bar area the rateable valuations of which were “struck out” by the Valuation Office in the course of redevelopment works. It

was said that such premises were not in anything like the comparable condition of the premises in question at the time the valuation

were struck out. On the 16th October 1996, the Valuation Office responded stating that the approach of the Commissioner was as

follows:

“(1) Where the Commissioner is satisfied of the following:

(a) that a new building has been erected.

(b) that the rateable value of the pre-existing premises (including any developed land) would have been nil, had the

premises been revised immediately prior to the commencement of enlargement or improvement ... full remission

applies.

(2) In circumstances where erection, enlargement or improvement of the premises leads to an increase in RV ... the

remission applies in respect of rates levied on the increased rateable value.”

That passage summarised what was contained in a circular which was issued by the Commissioner’s office dealing with applications

being made to him under the scheme.

From documents furnished by the Valuation Office, it appears that the valuer concerned was initially of the view that the premises

should be regarded as a new building as a result of the works carried out by the applicants. His notes summarised the position as

follows:-

“Property gutted - roof removed - prior to major redevelopment - now totally refurbished in a designated area - for the

purposes of rates relief can be regarded as a new building ...”

However, in a report of the 19th June 1994, he said:-

“At revision I had recommended full remission on the basis of information that the building had been gutted and the roof

removed. At my inspection the property was fully refurbished and the information regarding the previous condition of the

building was forwarded to me by the rate collector, who was keen to have the O.V. of £335 deleted.

“In view of the recent meeting with the managing valuers on the subject, and taking into account further information

obtained, I now consider that the relief should be on the difference of the O.V. £335 and the new R.V. of £630 - £295 R.V.”

The valuer went on to refer to the fact that there had not been a full demolition of the premises, since the external walls and a small

part of the roof were retained. He also said that the relevant planning permission has referred to “alterations” to the elevation of the

existing premises. However, he added

“In view of the amount of work carried out the applicant could make a good case for total remission if issue pursued through

the court.”

It was also stated on behalf of the applicants, and not disputed on behalf of the Commissioner or the Corporation, that the sum of

£562,240 had been spent by the applicants on the relevant works.

In the meantime, however, the Corporation had issued proceedings in the District Court claiming the sum of £22,473, the sum stated

in a revised rate demand which had been issued by the Corporation on the 13th July 1994. The District Court having given judgment

for the sum claimed, the applicants appealed from the District Court decree to the Circuit Court, but by an order dated the 17th

January 1997 of the second named respondent the order of the District Court was affirmed. It is not in dispute that the Commissioner,

as was usual, was not a party to those proceedings and that the case was dealt with in the Circuit Court on the basis that the court

had no jurisdiction to interfere with the determination by the Commissioner.

On the 15th July 1997, the applicants were given leave to apply to the High Court by way of judicial review for an order of certiorari

quashing the Commissioner’s determination of the remission of rates applicable to the premises. They were also given an order

extending the time for the making of such an application pursuant to Order 84, rule 21(1) of the Rules of the Superior Courts. A

statement of opposition having been filed on behalf of the Commissioner, the matter came on for hearing before Geoghegan J. who, in

an extempore judgment delivered on the 26th February 1999, said that he was satisfied that this was a proper case in which to

extend the time for an application by way of judicial review. As to the substantive issue, he said

“... I hold that any conclusion that the applicants’ premises is not a new building is not a rational one. Had inspection of the

applicants’ premises been carried out prior to the commencement of the works, the valuation of the premises would have

been nil. The retention of a shell of a premises does not mean that the premises had a value. It could not be held that the

erection, enlargement or improvement works to the applicants’ premises had simply enhanced the appearance of the

premises. The works have created a new building. The Commissioner took into account facts which were irrelevant. The

question for this court and the Commissioner is whether the physical state of the applicants’ premises had a value or not. I

conclude that it was not open to the Commissioner to hold that the applicant was entitled to a partial remission of rates only

following the completion of the works which had been carried out to the premises.”

As to the extension of time issue, the learned High Court judge said:

“An extension of time is justified where there are objective reasons to explain the delay, as where it is thought with reason

that the desired results can be achieved by pursuing other routes. The applicant in defending the proceedings which were

brought before the District Court, and in appealing to the Circuit Court against the District Court decision, reasonably thought

that it could secure its objective of obtaining a full remission of rates.”

From that judgment, the Commissioner has now appealed to this court. The written and oral submissions on behalf of the

Commissioner to the effect that the judgment and order of the High Court were wrong in point of law were adopted and supplemented

by the Corporation.

The first issue that arose was as to whether the High Court judge erred in law in deciding that the applicants were not precluded by

the delay which had occurred from obtaining relief by way of certiorari. It was not in dispute that, as was held by this court in

O’Floinn .v. Midwestern Health Board (1991) 2 IR 23 in a case such as this, where leave is granted at the ex-parte stage, the trial

judge at the substantive hearing must adjudicate, if asked so to do, on whether the delay was reasonable and such as might be

excused or not.

Order 84, Rule 21(1) of the Rules of the Superior Courts provides that

“An application for leave to apply for judicial review shall be made promptly and in any event within three months from the

date when grounds for the application first arose, or six months where the relief sought is certiorari, unless the court

considers that there is good reason for extending the period within which the application shall be made.”

In O’Donnell .v. Dun Laoghaire Corporation (1991) ILRM 301 at p. 315, Costello J., as he then was, said of this rule:-

“The phrase ‘good reasons’ is one of wide import which it would be futile to attempt to define precisely. However, in

considering whether or not there are good reasons for extending the time I think it is clear that the test must be an objective

one and the court should not extend the time merely because an aggrieved plaintiff believed that he or she was justified in

delaying the institution of proceedings. What the plaintiff has to show (and I think the onus under O. 84, r. 21 is on the

plaintiff) is that there are reasons which both explain the delay and afford a justifiable excuse for the delay. There may be

cases, for example, where a third party has acquired rights under an administrative decision which is later challenged in a

delayed action. Although the aggrieved plaintiff may be able to establish a reasonable explanation for the delay the court might

well conclude that this explanation did not afford a good reason for extending the time because to do so would interfere

unfairly with the acquired rights (State (Cussen) .v. Brennan (1981) IR 181).

“Or again, the delay may unfairly prejudice the rights and interests of the public authority which had made the ultra vires

decision in which event there would not be a good reason for extending the time, or a plaintiff may acquiesce in a situation

arising from the ultra vires decision he later challenges or the delay may have mounted to a waiver of his right to challenge

and so the court could not conclude that there were good reasons for excusing the delay in instituting the proceedings.”

I am satisfied that that passage is a correct statement of the law. Its application in any case must, of course, necessarily depend

upon the factual circumstances of the particular case.

In the present case, the Commissioner relies on three separate periods of delay which they say the facts disclose. The first was from

the 11th July 1994, when the applicants were informed of the Commissioner’s decision until the issue of District Court proceedings by

the Corporation in March 1996. The second was from the 15th August 1995, when the applicants wrote directly to the Commissioner

calling on him to determine the applicants’ entitlements under s. 5(a) as distinct from s. 5(b), until the 17th January 1997 when the

District Court order was affirmed by the Circuit Court. The third was the period from the 17th January 1997 to the 15th July 1997

when the company applied ex-parte for leave to apply by way of judicial review.

If the only period of delay with which the High Court and this court was concerned was the third period, it might well be that the

period was not of such duration as seriously to prejudice either the Commissioner or the Corporation and that it was not unreasonable

that the applicants should be afforded time within which to obtain legal advice before taking the expensive course of instituting High

Court proceedings. Different considerations clearly apply to the first and second periods which cumulatively amounted to a delay of

three years.

The explanation for the delay which, as the applicants contend, constituted “good reasons” for extending the time was the institution

of the District Court proceedings and their ultimate resolution by the Circuit Court in January 1997. The applicants submitted that it

was entirely reasonable for them to believe that the result which they wished to be accomplished could be achieved by making their

case in those proceedings.

In reply, the Commissioner, supported by the Corporation, submits that, as a matter of law, the result which the applicants sought to

achieve could never have been obtained in the proceedings in the District Court and the Circuit Court. They say that the

determination of the Commissioner could never have been set aside in proceedings to which he was not a party and that the District

Court and the Circuit Court were right in so holding.

I am satisfied that the submissions on behalf of the Commissioner and the Corporation are correct. The District Court and Circuit Court

patently had no jurisdiction to set aside a determination by the Commissioner on grounds of want of or excess of jurisdiction. Even if

they enjoyed such a jurisdiction, which they plainly do not, it could not conceivably be exercised in proceedings to which the public

authority, whose decision was being challenged, was not a party. The decisions relied on in support of the applicants’ proposition -

Listowel Urban District Council .v. McDonagh (1968) IR 312 and Wandsworth London Borough Council .v. Winder (1985) AC 461 - do

not in any way support the contention of the applicants: in both of those cases, the public authority concerned was a party to the

proceedings.

Apart from those considerations, I would in any event consider that this was a case in which the passage cited from the judgment of

Costello J. applies. The Corporation, as the rate collecting authority, are obliged in the performance of their statutory duties to collect

the rates by whatever legal means are available to them. If the validity of the determination by the Commissioner - a determination to

which they, as the rating authority, must give full legal effect unless or until it is quashed on certiorari - could be set aside a number

of years after the rates had been collected, with whatever legal consequences might flow to the Corporation because of the

collection by them of those rates, their rights as third parties could be seriously affected.

I am satisfied that the decision of the learned High Court judge that this was a proper case in which to extend the time was

erroneous in point of law and I would allow the appeal on that ground. However, I propose shortly to state my views on the other

principal issue which has arisen in deference to the arguments which were addressed to the court.

I am satisfied that, even if it could be said that the decision of the Commissioner on the facts of this particular case was that it was

a case to which Article 5(b) applied was erroneous - and I am very far from saying that it was - it was nonetheless an error made

within his jurisdiction and, accordingly, was not amenable to being set aside by way of certiorari. I respectfully cannot agree with the

view of the learned High Court judge that it was a decision which, under the principles laid down by this court in The State (Keegan)

.v. Stardust Compensation Tribunal (1986) IR 642 and other cases, was so irrational in nature as to entitle the High Court to set it

aside. On the contrary, the material before the Commissioner was such as to enable him, discharging the function imposed on him by

a statute, to determine that the entire valuation of the hereditament was not attributable to the erection, enlargement or

improvement of the premises within the meaning of Article 5(a). Indeed, given that he was dealing with a site which, even before the

work of reconstruction began, plainly had a development potential, it might, on one view, be said to have been difficult for him to

arrive at a conclusion that, if valued at the relevant time, it should have attracted a nil valuation: see Harper Stores Ltd. .v.

Commissioner of Valuation (1968) IR 167. As Henchy J. said in that case:

“The ten weeks in question [during which the premises were being reconstructed], amounted, not to a sundering of the

appellants’ rateable occupation, but to a mere variation of the mode of their continuous use of the premises for the purposes

of their business as retailers of ladies’ drapery. During those weeks they were using the premises through the agency of the

contractors, not (admittedly) for trading, but for the purpose of making structural and other changes which would enhance

their trading prospects. This use of the premises was to their benefit as lessees and amounted to rateable occupation.”

It is, however, unnecessary to express even the most tentative view as to whether the Commissioner was correct in the

determination that he arrived at, i.e. that the remission to which the applicants were undoubtedly entitled fell to be determined under

Article 5(b) rather than Article 5(a). It is sufficient to say that the submission that it was not within his jurisdiction to make such a

determination is without foundation.

I would allow the appeal and substitute for the order of the High Court an order dismissing the applicants’ claim for judicial review.