Association of Franciscan Order of Friars Minor v. City of Kew VR 732
(Judgment by: Lush J)
Between: Association of Franciscan Order of Friars Minor
And: City of Kew
Land used exclusively for charitable purposes
Advancement of religion
Previous action for declaration between same parties
Estoppel in rating and revenue cases
Each action concerned with use of land at time thereof
No evidence that use the same at time of each action
No estoppel in subsequent action
Local Government Act 1958 (No. 6299) - s 251
Judgment date: 16 May 1967
[His Honour stated the facts, and continued:] The meaning of the words "advancement of religion" has been considered in many cases, two of which I propose to quote. In United Grand Lodge of Ancient Free and Accepted Masons v Holborn Borough Council,  3 All ER 281, at p. 285, Donovan, J, said:
"To advance religion means to promote it, to spread its message ever wider among mankind; to take some positive steps to sustain and increase religious belief; and these things are done in a variety of ways which may be comprehensively described as pastoral and missionary."
In comparing the activities of Masonry with this description his Lordship said, ibid.:
"There is no religious instruction, no programme for the persuasion of unbelievers, no religious supervision to see that its members remain active and constant in the various religions they may profess, no holding of religious services, no pastoral or missionary work of any kind."
These passages were quoted by the Court of Appeal in Berry v St Marylebone Borough Council,  CH 406, at p. 418;  3 All ER 677, at p. 682, and by Herring, CJ, in City of South Melbourne v Young Men's Christian Association of Melbourne,  VR 709, at p. 715. In Keren Kayemeth Le Jisroel Ltd v Inland Revenue Commissioners,  2 KB 465, at p. 477, Lord Hanworth, MR, said:
"The promotion of religion means the promotion of spiritual teaching in a wide sense, and the maintenance of the doctrines on which it rests, and the observances that serve to promote and manifest it."
In my opinion, the conduct of retreats in the manner and with the aims described in the evidence falls within these descriptions of the meaning of the phrase "advancement of religion" and the use of land for the purpose of conducting retreats is, therefore, a use for charitable purposes. Since the gardens and recreation area are, on the evidence, part of the accommodation in the broad sense required for the conduct of retreats, if follows that they are included in what is used for charitable purposes: see Newcastle City Council v Royal Newcastle Hospital,  AC 248;  1 All ER 734; 100 CLR 1;  ALR 817. The only part of the premises which is not used for the purposes of retreats is the coach house, to which I shall refer later.
Mr. Stephen, for the defendant, did not admit in terms that the use by the Order of the premises for the conduct of retreats was a use for the advancement of religion but he abstained from arguing the contrary. He argued, however, that in order to decide whether the use of the property was for charitable purposes it was necessary to consider the purposes of the actual users, and he contended that these were the retreatants. Looking at the matter in this way, he said that each retreatant was concerned with his own inward spiritual betterment, and that the case should, therefore, be governed by the authorities which deny to contemplative orders the character of charities in the legal sense upon the ground that there is no element of public benefit in their activities. The authorities which deal with this problem are based on Cocks v Manners (1871) LR 12 Eq 574. The leading authority is now Gilmour v Coats,  AC 426;  1 All ER 848. Mr. Harris, for the plaintiff, replied that, even if it were correct to assess the question from the standpoint of the retreatants, the fact was that the retreatants passed through the house in a stream and as each received benefits the total result was that spiritual benefits were conferred upon a substantial number of members of the public.
In my opinion, there is no justification for the approach contended for by Mr. Stephen. The Act places the liability for rates upon, in the first instance, the occupier: see s267, s273 and s290. When the Act grants exemptions from rating if land is used for defined purposes, the purposes referred to must be the purposes of the occupier. This is not to say that the matter is determined by some subjective intention (a suggestion mentioned and dismissed in the earlier case between the present parties in a passage in which Lowe, J, cited Shire of Nunawading v Adult Deaf and Dumb Society (1921) 29 CLR 98; 27 ALR 65, and Roman Catholic Bishop of Perth v Perth Road Board (1933) 49 CLR 37;  ALR 149 (see  VLR 199, at p. 201)), but it is determined by a consideration and characterization of what the occupier does or authorizes or permits upon the land. Mr. Stephen's view involves the proposition that exemption of the rateable occupier depends upon the characterization of the activities of other people in relation to the land, and this is, in my judgment, logically unacceptable.
Mr. Stephen contended that he found support for his view in the following cases: City of Essendon v Blackwood (1877) 2 App Cas 574; Mayor of Sale v Bearup (1890) 16 VLR 658, and Kelly v City of Fitzroy (1904) 29 VLR 604; 10 ALR 49. These cases were discussed during the course of argument and I have reread them. In my opinion none of them lends support to Mr. Stephen's argument. Properly understood, they show that the various courts were considering the uses made of the relevant land by or with the consent of the persons assessed to rates. In Roman Catholic Bishop of Perth v Perth Road Board (1933) 49 CLR 37, the judgments of Rich, J, at p. 43, and Dixon, J, at p. 46, are authority for the view which I have expressed.
On this branch of the case, it remains to consider whether the use of the premises for the advancement of religion by the holding of retreats is an exclusive use. Some of the other uses to which I referred, such as the celebration of Masses which are open to the public, are themselves uses for the advancement of religion. Leaving the coach house for separate consideration the remaining uses made of the premises are, in my opinion, of a minor nature, and it is unnecessary to attempt to classify them as involving the advancement of religion or other charitable or non-charitable activities. The court is relieved of that task by s251(2), because the result of my judgment to this stage is that all the premises except the coach house are used for the advancement of religion, and if they are also used for purposes connected with or in support of the objects of the Order then the latter use does not derogate from the proposition that the premises are exclusively used for the advancement of religion. In my opinion, the various remaining purposes for which the property is used can be classified as being connected with or in support of the objects of the Order or may be dismissed as so minor as to be disregarded.
Turning to the coach house, it provides accommodation for the activities of a priest working for the Mission Aid Society to assist its New Guinea mission. One of the office rooms is used by a priest concerned with raising money for the support of Franciscan Training Colleges. The building is also used by laymen concerned with a particular devotion and for gatherings of the Third Order for lectures and discussions. The precise nature of the special devotion was not examined in detail in the evidence, but the other activities are, in my opinion, within the description of activities for the advancement of religion. It follows that the coach house is used for the advancement of religion, and is so used exclusively either in the literal sense or in the extended sense provided by s251(2).
Before leaving this branch of the case, I should refer to the decision of Harman, J, in Re Warre's Will Trusts,  1 WLR 725;  2 All ER 99. The relevant gift in the will under consideration in that case was a gift to apply property for the provision and upkeep of a retreat house, the testator having in view not the endowment of an existing house but the creation of a new one. Harman, J, described a retreat as "a retirement from the activities of the world for a space of time for religious contemplation and the cleansing of the soul. No doubt that is a highly beneficial activity for the person who undertakes it, but it is not an activity which for the reasons so often set out in English law is a charitable activity". He referred to Cocks v Manners, supra, and Gilmour v Coats, supra. Mr. Stephen argued that this decision was authority for assessing the charitable quality of a retreat by examining the retreat from the point of view of the retreatant. He was disposed to concede that this case must be regarded as wrongly decided if the proper approach was to regard the matter from the point of view of the donor or of the Order which is providing the opportunity for participation in retreats. The case is, of course, of considerable persuasive authority, but I cannot regard its approach as correct. In my opinion, the gift for the provision of a retreat house should have been regarded as a gift which made it possible for members of the public to come to the retreat house for the purposes which I have endeavoured to describe, and so regarded the gift was, in my opinion, charitable.
I should also point out that at the time of the earlier case between the present parties, reported in  VLR 199, it was not upon the authorities, as they they stood, arguable at first instance that the property was exempt from rating on the ground that it was used exclusively for charitable purposes, and the judgment at p. 201 shows that although the statement of claim raised this ground for exemption, the ground was not persisted in. The decision of the High Court in 1952 in Salvation Army (Victoria) Property Trust v Shire of Fern Tree Gully (1951) 85 CLR 159;  ALR 85, altered this situation. The leading earlier authority was Trustees of Queen's College v City of Melbourne,  VLR 247; 11 ALR 103.
I am, therefore, of the opinion that the plaintiff is entitled to exemption of the whole property from rating upon the ground that it is used exclusively for charitable purposes within the meaning of the Local Government Act 1958.
Since I decide the substantive issue in the case upon this ground, anything I might say in relation to the other grounds upon which exemption is claimed would be superfluous. This is an area of law of considerable public importance: it appears to me to be undesirable to publish in relation to it opinions which can only have the status of obiter dicta.
It may be, however, that my decision will be the subject of an appeal and in that event it may assist the appellate court if I express views on certain matters of fact which are or may be relevant to the other claims.
[His Honour examined the evidence, set out his findings of fact and continued:--]
The defendant contends that the decision of Lowe, J, in 1944 estops the plaintiff from succeeding in the present action. It is argued that the grounds for exemption claimed in the present action are substantially those which were considered and rejected by Lowe, J, in the earlier action.
It is convenient to begin a consideration of this problem by referring to Caffoor v Commissioner of Income Tax,  AC 584;  2 All ER 436. In that case a board of review constituted under the Ceylon Income Tax Ordinance had held that the income of a particular trust was exempt from tax on the ground that the trust was of a public character established solely for charitable purposes. In the case before the Privy Council assessments of subsequent years were under consideration and the taxpayer contended that the Commissioner of Income Tax was estopped by the decision of the board of review in relation to earlier years from assessing to tax the income formerly held exempt. Lord Radcliffe, speaking for the Judicial Committee, said that in a tax case the only issue was the amount of the assessable income for the relevant year. At (AC) p. 598; (All ER) p. 441, he said:
"Although, of course, the process of arriving at the necessary decision is likely to involve the consideration of questions of law, turning upon the construction of the Ordinance or of other statutes or upon the general law, and the tribunal will have to form its view on those questions, all these questions have to be treated as collateral or incidental to what is the only issue that is truly submitted to determination."
Referring to a number of cases dealing with taxation matters, he said, at (AC) p. 599; (All ER) p. 442:
"It may be that the principles applied in these cases form of somewhat anomalous branch of the general law of estoppel per rem judicatam and are not easily derived from or transferred to other branches of litigation in which such estoppels have to be considered; but in their Lordships' opinion they are well established in their own field, and it is not by any means to be assumed that the result is one that should be regretted in the public interest."
His Lordship then proceeded to consider the decision of the Board in Hoysted v Federal Commissioner of Taxation,  AC 155; 37 CLR 290;  ALR 33, and expressed the view that that case could not now be treated "as constituting a legal authority on the question of estoppels in respect of successive years of tax assessment".
Mr. Stephen contended that the decision in Caffoor's Case, supra, did not apply in the present case. The statement of claim in the earlier case asserted that the plaintiff had been assessed to rates by a notice of January 1943 and had paid the rates, but that the defendant claimed to be entitled to assess the land to rates in respect of subsequent years and would treat the land as rateable unless declarations were made. At first impression the statement of claim, therefore, seems to be seeking declarations that the land will not be rateable in future. These declarations were refused, and it is contended that the issue now before the Court was decided in the earlier case. Mr. Stephen did not found his argument on the basis that the 1944 decision was a decision on rateability for subsequent years, but rather on the proposition that Caffoor's Case, supra, applied only where the matter in issue was the amount of an assessment and that this was not the situation in the 1944 case in which the plaintiff had invited and sought a decision on a wider issue.
Whatever may be the first impression created by reading the statement of claim, the court before which the first action came was faced with deciding whether the land was exempted from rating by reason of the use or uses to which it was put. If declarations had been made, they must necessarily have been limited to declarations that either at the date of rating or the date of issue of the writ or the date of judgment or at two or all of these dates the lands were used in a manner entitling them of exemption. It was impossible for any declaration to be made establishing the right to exemption of the lands in the future, because the use or uses might be changed at any time. The issue before the Court, therefore, was whether the use made of the land at one or more of the dates to which I have referred was a use entitling to exemption.
So analysed, I think that the decision in the earlier case comes within the principle of Caffoor's Case, supra. The only issue was whether there was exemption at one of the dates to which I have referred. The question before me in the present case does not concern those dates and is, therefore, not the same question. Further, although the form of the earlier action and that of the present action is a claim for declarations and not an appeal against assessment or a claim for recovery, I can see no difference in principle between the proceedings involved in Caffoor's Case, supra, and the other cases discussed in it and the proceedings in the earlier case and the present case.
Placing Caffoor's Case aside, and regarding the problem as one of issue-estoppel to be governed by the authorities dealing directly with that problem the result is the same. The concept of issue-estoppel is defined by contrast with res judicata in the judgment of Dixon, J, in Blair v Curran (1939) 62 CLR 464, at pp. 531-2. His Honour there said:
"In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients of the cause of action."
In the 1944 case the "ultimate fact" was the nature of the use made of the lands at the relevant time or times. The classification of this use was such a question of fact, and is a different question of fact from the classification of the use at a different and later time. If I am right in regarding the classification of the use, for present purposes as an issue of fact, I can see no issues of law which were determined in the earlier case and which the parties, therefore, cannot now raise again.
There is a further related ground for rejecting the plea of estoppel. Once it is appreciated that the declarations sought in the earlier action must have related to some relevant point of time not later than the date of judgment it becomes apparent that the suggested estoppel can only operate if other evidence is given that the use now made of the property is the same or substantially the same as the use then made of it. In O'Donel v Commissioner for Road Transport (1938) 59 CLR 744, at p. 758;  ALR 305, at p. 308, Latham, CJ, said:
"Now it cannot possibly be said that the Supreme Court, by a judgment relating only to a period which ended on 15 February, thereby made any direct or actual decision or determination as to any matter or state of affairs whatever which existed at a later date. That judgment did create an estoppel as to one proposition--but that estoppel cannot operate to establish by estoppel another proposition which follows from the former proposition only when that proposition is combined with others the establishment of which depends upon evidence or assumption."
Evatt, J, at (CLR) p. 763; (ALR) p. 310, said:
"The argument involves and is based upon the fallacy that, where an issue between A and B relates to a state of things which is capable of subsequent alteration, the conclusive determination in A's favour of that state of things as at one day plus conclusive proof that up to a later day there has been no alteration of such state of things establishes in A's favour as against B an estoppel as to the state of things existing at the later day."
See also Weston v Ray,  VR 373, at p. 380;  ALR 431, at p. 433.
If the views I have expressed on estoppel in relation to cases in which declarations relating to revenue liability are sought are correct, it is clear that any declaration in such a case can have only a very limited effect, and can be challenged or ignored in respect of any later tax or rating period. In my opinion, this is a matter which is relevant to a consideration whether any particular case in this class is appropriate for the making of declarations. In the earlier case between the present parties the appropriateness of the proceedings does not appear to have been challenged. So also in the present case. I propose to make declarations in the present case partly because of the situation existing as a result of the earlier decision and partly because it is evidently the wish of the parties that their respective rights be determined in this way. It should not, however, be assumed that a court will always grant declarations in cases of this description.