|
Appeal No. VA90/3/003 AN BINSE LUACHÁLA Limerick Youth Services Board APPELLANT RE: Offices, hair salon, restaurant and workrooms at
B E F O R E JUDGMENT OF THE VALUATION TRIBUNAL By notice of appeal dated 12 September, 1990, the appellants appealed
against the determination of the Commissioner of Valuation in fixing a
rateable valuation of £180.00 on the above described hereditament.
2. The Limerick Youth Service Board is a registered charity and was founded specifically for the training of youths from disadvantaged areas and families in Limerick city. 3. The Limerick Youth Service Board are entitled to distinguished status under Section 2 of the Valuation (Ireland) Amendment Act 1854 and have already been granted this status in respect of 5 Lower Glentworth Street. THE PREMISES Reception First Floor 2 Counselling Rooms VALUATION HISTORY WRITTEN SUBMISSIONS Mr O'Donnell said that all the property of the Charity, including the hereditament under appeal, is vested in the Corporation. Under the terms of its constitution which is read into the Scheme of Incorporation, the Corporation is obliged to devote all income and property solely to the purposes of the charity. He said that no portion of its income or assets may be paid directly or indirectly by way of dividend, bonus or otherwise to any member of the Corporation. Mr O'Donnell said that in the event of a dissolution the Corporation is obliged, after discharging all debts and liabilities, to devote any surplus remaining to such other charitable institution or institutions as have objectives similar to those of the Limerick Youth Service. He said that the activities of the Limerick Youth Service fall mainly into four categories: (1) Training projects with integrated elements of training in literacy and social skills for unemployed young people drawn from deprived backgrounds. (2) General mainline youth services such as the organising of recreational and leisure activities for young people in Limerick City and County, and such as the training of voluntary youth club leaders. (3) Outreach programmes which aim to make contact with young people at risk, in their own communities. (4) The provision of Ancillary services such as the Youth Information Bureau or weekend activity programmes for second level students. Mr O'Donnell said the premises are not used or operated as a commercial venture and such service to the public as is provided is provided only as a training medium - communication skills and practice in dealing with the public are considered by the Youth Service to be among the basic skills. He comments that the hereditament is wrongly described in the Valuation Lists and that it should more appropriately be described as "Training Centre". Mr O'Donnell said the programmes are aimed at young people aged fifteen and upwards from deprived or disadvantaged backgrounds. He said that the programmes are non discriminatory as to sex, colour, creed or class. Mr O'Donnell said that the Limerick Youth Service is essentially a voluntary organisation dependant on the enlightened interest of the public at large. He said that approximately 75% of the cost of the training centre was raised by collections, donations, sponsored events and other such fund-raising activities. The training and Youth Advisory Services provided in the Centre are, he said provided free or at a nominal charge. Mr O'Donnell said that exemption had been granted to the following premises
used for comparable purposes;- (ii) The Itinerant Educational Centre run by the Limerick Committee for Travelling People (exempted on charitable grounds). (iii) A Training Centre at Castlebar run by the Western Care Association (R.V. £18.00 exempt). (iv) Various Boy Scout Halls at Dundalk, Castleblaney, Rathfarnham, and other venues (all marked exempt). (v) The Free Legal Advice Centre at Coolock, Dublin. (vi) St. Malachy's Youth Centre at Tonglegee, Coolock, Dublin. (vii) Hostels of the Los Angeles Society at Seville Place and Conyingham Road, Dublin (refuges for boys in need of protection). (viii) O'Connell's Schools Boys Club, Seville Place, Dublin (exempted on charitable grounds). (ix) Various Rehab Training Centres including Rehab Retail Shops (all exempt). (x) Various St. John of God's Training Centres and also various S.T.E.P. enterprises. (xi) Brothers of Charity, Newcastle West. "Office, Workshop and Store".R.V. £117.00 Exempt by Commissioner. 1988 (xii) Brothers of Charity, Baunmore, Limerick."Community Workshop" - Exempt. (xiii) St. Francis Community Training Centre & Workshop, Father Matthew Street, Cork. Exempt (incl. Bakery Outlet). (xiv) Charleville and District Association for the Handicapped inc. St. Joseph's Community Workshop. -Exempt. (xv) The National Association of Widows in Ireland Ltd. (Appeal No. 88/130). Exempt under Section 63 of the Poor Relief (Ireland) Act, 1838. Mr O'Donnell submitted that this hereditament is entitled to exemption under the provisions of Section 63 of the 1838 Act and Section 2 of the 1854 Act by reason of the charitable nature of its user. A summary of evidence was received on the 19th March, 1991 from Sr. Joan Bowles, Director, Limerick Youth Service. In this Sr Bowles said that the Youth Service is a voluntary organisation established in 1973. She said that the programmes of the Youth Service fall mainly into the following categories;- (a) Trained projects with integrated literacy and social skills elements for unemployed young people drawn from deprived backgrounds. (b) General mainline youth services organising recreational and leisure activities for young people in Limerick City and County and training for voluntary youth club leaders. (c) Outreach programmes which aim to make contact with young people at risk, in their own communities. (d) Other services. Sr Bowles said that up to July, 1987 when the new premises at 56 Henry Street on the site of the former Glentworth Garage was completed, all Limerick Youth Service activities were based at 5 Lr. Glentworth Street and that during the period up to July, 1987 the Limerick Youth Service had been exempted from payment of rates. She said that programmes have remained unchanged except for the addition of a Youth Information Bureau which was established on taking up residence in the new premises at 56 Henry Street. Activities at 5 Lr. Glentworth Street now consist mainly of the following;- administration offices, mainline youthwork offices, recreational hall, machine knitting project, trainee canteen, stores, social skills/literacy facilities and laundry. Sr Bowles said that the premises at 56 Henry Street house the following Training Modules (formerly based at 5 Lr. Glentworth Street);- shoe repair, hairdressing, home baking, kitchen, restaurant, fast foods and soft furnishing. She said that also housed are social work offices/counselling rooms, reception, quiet room and a youth information bureau. Sr Bowles said that there has been no change in emphasis following construction of the Youth Resource Centre at 56 Henry Street. She said that programmes are still centered on the provision of training projects with integrated literacy and social skills elements for young people drawn from disadvantaged backgrounds. She said that Limerick Youth Service is a voluntary non-profit making training and educational agency dependent on statutory funding, voluntary contributions and fundraising ventures. Sr Bowles said that the Limerick Youth Service has, to date, been exempted from payment of rates in recognition of its standing in the field of provision of educational and training services for young people from the disadvantaged sectors of society. A written submission was received on the 19th March, 1991 from Mr William M. Walsh, B.Agr.Sc. F.R.I.C.S. a Chartered Valuation Surveyor and District Valuer in the Valuation Office. In this precis Mr Walsh outlined the valuation history of the premises and said that the hereditament occupied is a prominent corner site at the junction of Henry Street and Lr. Glentworth Street, Limerick. He said that the immediate area whilst close to O'Connell Street and the commercial heart of the city is generally run down. He said that the predominant land uses are storage/warehousing and that there are some secondary retail uses mixed with services and residential. Mr Walsh said that the site was purchased for £99,000 in a derelict condition in 1986. He said that the fee simple was subsequently acquired at a cost of £4,500.00 and that the old building was totally refurbished and rebuilt to provide a modern, well designed functional complex with self contained, workrooms, restaurant, bakery, hairdressing saloon, heel bar etc. He said that goods and services are sold to the public in addition to providing training for the youth in charge of the Limerick Youth Service Board. He said that the undertaking was funded by a Department of Justice grant, Youth Employment Agency grant, and voluntary fund raising. As regards the funding of the Limerick Youth Service Board he said that 70% of total income is funded by substantial grants from F.A.S. the Health Board, Limerick Corporation and County Council. He said that the balance is substantially made up of fundraising and contributions. Mr Walsh said that the Limerick Youth Service Board is a charity incorporated in 1985 by the Commissioners of Charitable Donations and Bequests. He said that the main purpose of the Limerick Youth Service Board is that it was established for charitable purposes for the young people of Limerick and Clare and any funds received for this purpose will be applied to this charitable purpose only. He said that the subject property operates as workshop/training workshop for 15/16 year olds. He said that these trainees are all from disadvantaged backgrounds, socially economically and emotionally. Virtually all, he said, have dropped out of school and lack any vocational training. Mr Walsh said that training is provided in as near as possible to a normal commercial situation. He said that courses are provided in hairdressing, shoe repair, confectionary, catering sewing etc. The services are provided by the trainees under the guidance of the instructors. Mr Walsh said that it is argued that the interaction with the public is a necessary element in the training of the disadvantaged youths, an essential element in the operation of the complex is the selling of the goods, and services to members of the public. Mr Walsh said that it is the Commissioner's view that having regard to
the fact that goods and services are sold on this premises to the public
and that the use of the premises is not "exclusively for charitable
purposes" or "exclusively for the education of the poor".
He said that the policy of the Commissioner has been to value as rateable
retail shops run by charities for fund raising purposes. He said that
normally the administrative offices of such charities are distinguished.
He said that it is to be noted that the following were valued as rateable
by the Commissioner;- (ii) Unicef at 4 St Andrews Street, Dublin (Administrative offices exempt, shop rateable). (iii) Ballymun Training Centre, Dublin (Training workshop rateable). ORAL HEARING At the oral hearing which took place in Ennis on the 26th March, 1991, Mr John Punch, Solicitor, of Connolly, Sellors, Geraghty, Fitt, Solicitors represented the appellant. Mr Brendan Nix, Barrister, instructed by the Chief State Solicitor represented the respondent. Also present was Mr Frank O'Donnell, Valuer and Sr Joan Bowles, Director Limerick Youth Services on behalf of the appellants and Mr William Walsh, Valuer on behalf of the respondent. Sr Bowles gave evidence as set out in her precis of evidence and summarised above. In addition she said that the activities broke down into two areas as follows;- social education, and group work skills. She said that the age of participants range from fifteen to twenty two and that it was very different from working in an ordinary work place. She said that the activities in the centre were not run on a commercial basis and there was no record of the amounts of turnover associated with each of the activities. However, when questioned further she said that the turnover in the restaurant would be in the region of £100 to £150 per day. She said that a limited number of people would come in and that the menu itself was limited for operational reasons. She said the purpose of the restaurant was to make the training meaningful for the youths involved and to bridge the gap between working in the type of environment offered by the Limerick Youth Services Board and a commercial restaurant such as in a hotel. She said that because of the kind of young people that are being trained there is a lot of wastage, breakages and as a result maintenance costs are very high. Sr Bowles said that it is a mistake to label the activities which are undertaken in the centre as enterprises. She said that what is involved is purely a medium for training of disadvantaged youths. She said an essential part of this is the inter-relationship with the public and the ability to handle cash. Any excess money derived from the centre goes back into an outreach programme for the youngsters. There is a recreational programme whereby part of each youngsters time is involved in coming to terms with the recreational facilities available. She also said that there is liaison with local businesses and local hotels whereby some of the young people are given opportunities to work there. She said that this is a very difficult operation because these young people have failed the educational system and have extreme difficulty in coping with the commercial world. It was to bridge this gap that the centre was set-up initially. Sr Bowles said that the young people being trained at the centre would, more than likely, have been in trouble with the law both prior to, and indeed often during, their training. She said that this was one of the reasons that the centre received the £150,000 grant from the Department of Justice. Sr Bowles in reply to questions said that initially there was a 70% placement rate of participants with businesses following training in the centre, however, in recent times this is reduced to about 20% due to increased competition from well educated young people in the area. Sr Bowles said that the trainers employed by the Limerick Youth Services Board are on the FAS supervisor's scale but that the board itself subsidises two members of the staff including the social worker. She said that the Youth Services Board provides the back-up services in terms of administration and her own services are provided free of charge. Under cross examination by Mr Nix, Sr Bowles said that the chocolate, sweets project is in its infancy and it is an effort to see if some job creation project might work in relation to the work carried out by the Youth Services Board. She said that six young people are employed there and that the sweets are manufactured in the Board's other building and that the sales outlet is in the subject premises. In reply to Mr Nix, Sr Bowles said that in the week before Christmas the people other than trainees selling these sweets in the subject property were volunteers of the Limerick Youth Services Board. She agreed with Mr Nix that there is a turnover of at least £100,000 per year even allowing for a pilferage of £2,000 to £3,000. She said that the expenditure on materials is in the region of £80,000 per annum. In response to Mr Nix, Sr Bowles said that the hairdressing is only open to the public for three out of the five days per week and that the amounts paid to the trainees are £20.00 for the fifteen year olds, £29.50 for seventeen year olds and £37.50 for the eighteen year olds. She said that the equipment in the heel bar is less sophisticated than would be found in a commercial heel bar outlet. She said that there is a workroom for soft- furnishings such as curtains and she agreed with Mr Nix that they are available to receive orders and fulfil them. She said that people come to them because they know of the educational function of the Youth Services Board. She said that the prices are a little lower than usual because they cannot guarantee the continuity of service or the quality of the product. She said that FAS would admit that, even after one year's training in the Limerick Youth Services Centre, despite courses on self esteem and assertiveness etc., the youths would not be ready to go into a main-stream FAS course which, she said, is an indication of how deprived these children are. Sr Bowles said that the youths concerned have no motivation whatsoever to go into the real world of work. She said that they only receive funding for two years in respect of any trainee and that they have not placed any youngster within one year of coming into the centre. Mr Frank O'Donnell gave evidence as outlined in his precis of evidence and said that, in his opinion, the provision under the terms of the scheme of incorporation, whereby the Corporation is obliged to devote all income and property solely to the purposes of the Charity, fulfils Section 63 of the 1838 Act. He said that in the case of dissolution of the organisation the money has to be put back into similar activities. He said that the primary purpose of the building is the training and education of the trainees. Mr O'Donnell went through the comparisons which he supplied in his precis and said that in relation to comparison 14 - Charleville & District Association for the Handicapped incorporating St Joseph's Community Workshop that the exact situation applies there in relation to garden furniture and printing and that that premises is exempt. Also, in relation to St Francis Community Training Centre & Workshop, Fr Matthew Street, Cork there is a bakery outlet there which is exempt. He said that all of the Rehab premises including the workshops and a sales room at Harolds Cross are exempt from rating. He also referred to the appellant's premises at Lower Glentworth Street which is exempt. He said that the St John of God's hospital is exempted because of a clause in the constitution prohibiting the private use of profit. Mr Brendan Nix said that the site is in an improving part of the city. He said that the hereditament is clearly intended for business and that the overall thrust is one of commerciality. He said that the services offered by the centre are advertised, that they are competing in the market place with other local businesses and that, if the activities were simply educational, there would be no need for this commercial aspect. Mr Nix said that the training carried out in the subject premises does not differ from any other scheme of apprenticeship and that it has all the trimmings of a commercial enterprise. He submitted that the subject property was not exclusively used for education. Mr William Walsh said that in dealing with associations involved in charity or educational purposes, the approach adopted by the Commissioner is broadly to exempt the administrative offices but where anything is of the nature of a retail outlet he regards them as being closer to commercial retail enterprises and he would normally rate the "shop" aspect of the operation. THE LAW The grounds for exemption from rates are stated by the judgment of the
Tribunal in the St Patrick's Agricultural College, Co. Monaghan case,
appeal no 88/100 to have been held by the Supreme Court in the cases of
McGahon and Ryan V Commissioner of Valuation (1934) I.R. 76 and Barrington's
Hospital V Commissioner of Valuation (1957) I.R. 299 are to be found in
the proviso to S. 63 of the Poor Relief (Ireland) Act 1838 - In submissions by both parties the analysis of the issues in this case
was stated to be helped by the principles enunciated in the case Oxfam
V City of Birmingham District Council 1975 2 All England Reports 289.
In the Oxfam case, gift shops which were staffed by voluntary helpers
were used for the sale of articles donated to Oxfam and consisted mainly
of clothing. The profit from the sales in the Oxfam shops were applied
to the objects of Oxfam which is a well known charitable organisation
dedicated to the relief of poverty in under- developed countries. In that
case Lord Crosse of Chelsea stated In reaching this conclusion the Tribunal has had regard to the essence of the charitable objectives of the appellant being to provide a working environment as close to the real environment as possible for the young people involved. This type of situation was analysed by McVeigh L J in the case Belfast
Association for Employment of Industrious Blind V. Commissioner of Valuation
1968 Northern Ireland Law Reports page 21 when dealing with the provision
of a shop for blind persons in respect whereof the Belfast Association
for Employment of Industrious Blind claimed exemption for rating - Accordingly the Tribunal holds that the appellants are entitled to the exemption sought in respect of the premises under appeal.
|