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Western Downs Regional Council v Geldard

 

[2020] QLAC 1

LAND APPEAL COURT OF QUEENSLAND

CITATION:

PARTIES:

Western Downs Regional Council v Geldard [2020] QLAC 1

Western Downs Regional Council

(appellant)

v

Roger John Geldard

(respondent)

FILE NOs:

LAC003-19

Land Court No LGR077-18

DIVISION:

Land Appeal Court of Queensland

PROCEEDING:

Appeal from the Land Court of Queensland

ORIGINATING COURT:

Land Court of Queensland

DELIVERED ON:

13 March 2020

DELIVERED AT:

Brisbane

HEARING DATE:

4 February 2020

THE COURT:

Boddice J

WA Isdale, Member of the Land Court

PG Stilgoe OAM, Member of the Land Court

ORDERS:

  1. The appeal is allowed.
  1. The orders of the Land Court are set aside.
  1. The appeal to the Land Court is dismissed.

The Court will hear the parties as to costs.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – ERROR OF LAW – INTERPRETATION – REFERENCE TO CONTEXT – where the dispute at first instance was about which rating category applied to the land – where the Member found the activities of the landowner were determinative of use – where the Member found the subject land is used for grazing purposes and burdened by petroleum leases – where the Member decided the land was to be categorised for rating purposes as category 3/16 Rural – where the appellant appeals that decision on the grounds that the Land Court erred in focusing on the use of the land by the owner rather than the use of the land as a whole – whether the word ‘use’ included all use of the land – whether the Member erred in interpreting ‘use’ to be limited to activities carried out by the landowner – whether gas extraction carried out under a petroleum licence by an energy company can be considered by the local government authority in determining ‘use’ for rating purposes

REAL PROPERTY – RATES AND CHARGES – RATING OF LAND – CATEGORIES OF LAND – OTHER TYPES OF PROPERTY – where the appellant originally determined the correct category was category 4/31 Petroleum Other (>400 HA) – where the respondent contended the correct rating category was category 3/16 Rural – whether the decision of the Land Court should be set aside

APT Petroleum Pipelines Pty Ltd v Western Downs Regional Council [2014] QLC, cited.

Fox v Percy (2003) 214 CLR 118, cited.

Geldard v Western Downs Regional Council [2019] QLC 17, cited.

Ipswich City Council v BWP Management Ltd [2019] QLAC 1, cited.

Moreton Bay Regional Council v White [2018] QLAC 4, applied.

Paton v Mackay Regional Council [2014] QSC 75, applied.

COUNSEL:

Mr RG Bain QC with Mr JP Hastie for the appellant

Mr RJ Douglas QC for the respondent

SOLICITORS:

King & Company Solicitors for the appellant

Thynne & Macartney for the respondent

  1. [1]
    THE COURT: In 2017, the respondent purchased “Lower Heatherley”, a property of about 839 ha, located at Fairymeadow Road, Miles. The appellant is the local government authority, in that area.[1]
  2. [2]
    The land, was previously owned by a company involved in the extraction of gas. Gas wells and associated infrastructure remain on the land[2] and that company continues to use this infrastructure for gas extraction.  The respondent, through a related company, uses the land only for rural purposes that is, grazing and cropping.[3]
  3. [3]
    When the gas company owned the land, the appellant categorised the land for rating purposes, as category 4/31 Petroleum Other (>400 HA). The categorisation did not change after the respondent became the owner.[4]
  4. [4]
    The respondent objected to the categorisation, contending the land should be in category 3/16 Rural, reflecting the use of the land by its owner. 
  5. [5]
    The respondent appealed successfully to the Land Court, which decided that the land was to be categorised for rating purposes as category 3/16 Rural.[5]
  6. [6]
    The appellant appeals that decision. At issue is the proper rating category.
  7. [7]
    The appeal is by way of a rehearing, on the evidence that was before the Land Court, there being no application to introduce new evidence. To succeed, the appellant must establish error, sufficient to warrant the setting aside of the decision or some part of it. 

Rating framework

  1. [8]
    The two categories in question are in the following form:

Western Downs Regional Council – 2017-18 Revenue Statement[6]
 

Category

Description

Identification

 

Rural Code 3 – Rural

16 Rural

Land used principally for rural purposes, which is not otherwise categorised, and has an area not less than 100 ha

As determined by the CEO

Rate Code 4 – Other Intensive Businesses and Industries

31 Petroleum Other >400 ha

Land, other than a Petroleum Lease, with an area 400 ha or greater, which is used or intended to be used, in whole or in part, and whether predominantly or not, for:

  1. (a)
    gas and/or oil extraction; and/or
  1. (b)
    processing of gas and/or oil; and/or
  1. (c)
    transportation of gas and/or oil by pipeline; or
  1. (d)
    for any purpose ancillary to or associated with (a) to (c), including water storage, compressor stations or block valves.

This category does not include land in Category 4/38.

As determined by the CEO

  1. [9]
    Other categories said to be of relevance in the appeal are:  

Category

Description

Identification

Rate Code 4 – Other Intensive Businesses and Industries

10 Petroleum Lease – Gas < 1,000 ha

Petroleum Leases issued for the extraction of gas from an area less than 1,000 ha within Council’s local government area, other than Petroleum Leases included in Category 4/34.

As determined by the CEO

34 Underground Coal Gasification - <1,000 ha

Mining Lease, Petroleum Lease or Petroleum Facility Licence for Underground Gasification, issued for an area less than 1,000 ha within Council’s local government area.

As determined by the CEO

38 Underground Coal Gasification - Other - =>400 ha

Land, other than a Petroleum Lease, with an area of 400 ha or more, which is developed, in whole or in part, but not currently used, for:

 

  1. (a)
    underground gasification; and/or
  1. (b)
    processing gas produced by Underground Gasification;
  1. (c)
    transportation, by pipeline, of gas produced by Underground Gasification; or
  1. (d)
    for any purpose ancillary to or associated with (a) to (c), including water storage, compressor stations or block valves.

 

As determined by the CEO

  1. [10]
    Relevantly, the appellant’s 2017-18 Revenue Statement provided:

“…Council has in place a differential general rating framework, which determines rating categories based on different types of land use and different levels of service provision. The rationale for the differing categories is to recognise:

  • The levels of demand upon Council's services generated by characteristics associated with different classes of land, and
  • the levels and quality of local government facilities and services that different categories of land and their occupiers enjoy.

In determining its differential rating system, Council’s objective is to ensure the fair and equitable application of lawful rating and charging principles, without bias, taking account of all relevant considerations. It disregards irrelevant information including the perceived personal wealth of individual ratepayers or ratepayer classes.

In developing the various rating categories, it is recognised that a greater variety of services is provided to ratepayers within urban areas. However services to rural ratepayers may come at an increased cost due to the lack of scale arising from the distances between properties.

Rural residential land is a category of land which is less than 100 hectares and which is located in the vicinity of urban areas. Because of these factors, the use of this land places a higher demand on Council's urban services.

Council categorises residential and rural residential land by reference to locality and land area.

All other lands in the region are categorised by reference to a number of other factors, including:

  • use
  • location
  • availability of services
  • consumption of services
  • area, and
  • valuation.

Definitions

In this Revenue Statement and, in particular, the Categorisation and Description Table that follows, the following definitions apply:

Intended Use

Reference to the intended use (or use intended) for rateable land is a reference to use:

  1. that is as-of-right for the land under the relevant planning scheme
  2. for which a development approval exists
  3. for which an application for development approval has been made but not finally determined, or
  4. when the owner of the land has informed Council of, or has started, publicly, their intention to conduct activities upon the land.”[7]

Decision

  1. [11]
    In determining the rating category , the Member said:

“[87] What is important is that the rating structure is meant to impose reasonable burdens upon landowners according to the activities carried out on land owned by them whether that activity is carried out by the landowner or some other party subject to a lease or licence or some other sort of permit to occupy.

[88] In my view, during the time when the land was owned by APLNG it would inevitably, pursuant to the 2017-18 Revenue Statement, have been categorised as Petroleum Other > 400 ha. APLNG was the owner of the land, in the business of gas extraction and responsible for the erection of various facilities which still remain on site, presumably consequent upon the success of some exploration work to delineate the extent of the gas resource below the ground.

[89] The extent of the drilling of wells across the subject land and other adjoining and nearby properties is graphically shown in an exhibit to the affidavit of Mr Murray Geldard. (citations omitted) 

[90] I am satisfied that once ownership passed to Mr Geldard then the principal activity carried out on the site ceased to be that of gas extraction and became almost exclusively rural save for the presence of the wells and pads which remained on the land together with underground pipe lines and access ways.

[91] Counsel for the appellant characterises the current situation in the following terms:

“The gas activities undertaken by Origin (as agent of APLNG…) on the subject land are not undertaken by the Appellant, or by Roxburgh, all with their permission, but rather by Origin under statutory fiat.” (citations omitted)

[92] The receipt by Mr Geldard of money paid pursuant to the Conduct and Compensation Agreement is not revenue earned from gas extraction but is, as I observed above, compensation for the interference with his rights as freehold owner by the gas company and its remnant activity on land which Mr Geldard now owns as freehold land.”

The appellant’s submissions

  1. [12]
    The ten grounds of appeal need not be set out in detail. In essence, the appellant contends that the Land Court was in error in focusing on what the owner, the rate-payer, was using the land for, rather than what the land was being used for, something not restricted to uses conducted only by or on behalf of the owner.
  2. [13]
    The appellant accepts that rating category 3/16 Rural was contended for by the respondent as it reflected his use of the land for grazing and agriculture.[8] However, the land had to be categorised by reference to its use by all persons, not just its use by the owner. 
  3. [14]
    The appellant submits that, in considering that issue, it was not necessary for the land to be principally or predominantly used for gas extraction. The Petroleum Other category could be satisfied if the land was used “in whole or in part” and whether “predominantly or not,” for those purposes.[9]
  4. [15]
    The appellant submits that as the land  was freehold and over 400ha, it fell for rating purposes under “Land other than a Petroleum Lease,” within the meaning of category 4/31 Petroleum Other (>400 HA).[10] Once the land is found to be within that category, it could not be within category 3/16 Rural, as that category only applies to land not otherwise categorised.
  5. [16]
    The appellant also submits that the Land Court erred in its consideration of the applicability of the concept of a petroleum lease in the facts of this case; in misconstruing the meaning of the Rural category; and in incorrectly having regard to evidence about how the appellant had categorised adjoining land, something the Court found “not to be determinative” but “relevant” to the appeal before it.[11]

The respondent’s submissions

  1. [17]
    The respondent submits that the appellant’s interpretation results in capricious and unintended rating outcomes. Under that interpretation, an easement for a gas pipeline on the edge of a large grazing property would result in the whole property attracting a rating of category 4/31 Petroleum Other (>400 HA).[12] 
  2. [18]
    The respondent contends that the correct construction of the Revenue Statement required the respondent’s land and the petroleum leases to be rated separately. The land, being used solely for grazing and some cropping, was properly categorised as category 3/16 Rural. 
  3. [19]
    The respondent submits that the rating categories should not be construed to apply to uses other than those permitted by the landowner[13] and thus enjoyed by, and not simply, as here, imposed on him.[14] The definition of “intended use” in the Revenue Statement supports such a construction. Significantly, the Revenue Statement does not contain a definition of “use” or “used.”
  4. [20]
    The respondent submits that, because gas extraction by a gas company is undertaken under statutory authority and not under an agreement with the landowner, it is not undertaken by or on behalf of the landowner. The respondent, as owner of the land, had no control over the gas infrastructure or gas extraction and, although he might have received compensation mandated by statute, he did not receive royalties for the gas extraction.
  5. [21]
    The Revenue Statement, as shown in category 4/10 Petroleum Lease – Gas <1000 HA and category 4/34 Underground Coal Gasification - <1000 HA, provides for situations where the gas company as leaseholder is the ratepayer. Where, as here, the owner of the land is not in any real sense a participant in the activity referred to in category 4/31 Petroleum Other (>400 HA), that category cannot apply. Any ambiguity in category 4/31 Petroleum Other (>400 HA) ought to be resolved in the respondent’s favour.
  6. [22]
    The Revenue Statement recognised the level and quality of facilities and services that different categories of land and their occupiers enjoy and the objectives of fairness and equity.[15] The respondent does not enjoy greater levels and quality of facilities and services from the appellant as a result of its categorisation.
  7. [23]
    The respondent submits that the appellant’s inconsistent rating of adjoining land illustrated the respondent’s construction of the Revenue Statement but rating of that adjoining land did not feature directly in the reasoning of the Land Court Member.

Consideration

  1. [24]
    It is not in dispute that the appellant may properly levy differentiated general rates and may decide the rating categories and their descriptions.
  2. [25]
    There is also no dispute that the appellant had decided, by resolution, the rating categories of rateable lands giving a description of each category as required under section 81 of the Local Government Regulations 2012 (Qld).
  3. [26]
    The function of the Land Court, in exercising its powers on the respondent’s appeal against the appellant’s categorisation of the relevant land, was to decide the correct rating category for the property.[16] 
  4. [27]
    In doing so, the Land Court was to give a practical, sensible, broad and fair reading to the appellant’s revenue statement and ratings categories in the context of the application of orthodox principles of statutory interpretation.[17]
  5. [28]
    A determination of the rating category required consideration of the words adopted by the appellant.  As Dalton J observed in Moreton Bay Regional Council v White:

“… the rating categories were not formulated on the spur of the moment, bearing a relationship to debate in Council.  They were a considered technical document introduced as a resolution to a special general meeting of the Council.  For that reason, I think the Court is right to look at the words the Council chose to use.”[18]

  1. [29]
    Rates are a tax on land, not on the owner.  Rating categories are framed around usage of the land.  As the appellant’s revenue statement observed, rating categories are determined “based on different types of land use and different levels of service production”.  The relevant “use” is derived from some characteristic of the land.[19]
  2. [30]
    The Member found that categorisation of the subject land required him “to contemplate, given the rates are to be paid by the landowner, which is the “principal” activity carried on by that registered owner”.[20] 
  3. [31]
    Further, the Member found that once ownership passed to the respondent, the “principal activity” carried out on the land ceased to be that of gas extraction and became almost exclusively rural save for the presence of gas infrastructure which remained on the land.[21] 
  4. [32]
    Such an approach was an error and inconsistent with a proper determination of the appropriate rating category for that land.  It is use of the land, not solely the principal activity of the owner of the land, that determines categorisation.
  5. [33]
    An important feature of rating category 4/31 Petroleum Other (>400 HA) is that it did not require the land to be used exclusively, wholly or predominantly for gas extraction and associated activities. Such wording was a deliberate departure from the wording of previous rate resolutions adopted by the appellant, which had employed the “primary” use test.[22]
  6. [34]
    The wording of the rating categories adopted by the appellant evidences an intention to give consideration to all uses of the land, not merely its predominant use. Such an approach rendered the authorities relied upon by the Member below distinguishable.[23]  The Member’s failure to determine the appeal having regard to such a changed approach was an error.
  7. [35]
    The appellant determined that petroleum leases were a separate and distinct form of tenure, captured by other rating categories. This distinct and deliberate decision is consistent with an intention by the appellant that the owners of freehold land used for a variety of uses, including in part the extraction of gas and associated activities, be liable for the payment of rates on a particular basis, having regard to that use of the land. 
  8. [36]
    Such a requirement is neither unfair nor unreasonable. It involves an appropriate exercise of a local government’s power to levy differential general rates on land within its local government area having regard to its use. 
  9. [37]
    The construction adopted by the Member to the rating categories failed to give proper effect to the words “Land, other than a Petroleum Lease” when considering the appropriate categorisation of the respondent’s land. The land in question was freehold land.  The fact that the land was within the area of petroleum leases granted pursuant to the Petroleum and Gas (Production) Safety Act 2004 (Qld) did not alter that. 
  10. [38]
    The Member’s erroneous construction of the rating categories led to a further error.  Contrary to the Member’s observations, the Rural Rating category of “Land used principally for rural purposes, which is not otherwise categorised” is not consistent with commencing with a “blank sheet of paper”.[24] The appropriate categorisation of the subject land required consideration of the various rating categories.  The land could not fall within category 3/16 Rural if it is otherwise categorised. 
  11. [39]
    Such a construction did not involve any preconception that the existing categorisation is an appropriate one. It involved giving proper effect to the intended meaning of the words used by the appellant in its rating categorisations, in the context of the structure and context of the Revenue Statement as a whole.
  12. [40]
    The errors identified above are sufficient to determine that the appeal must be allowed.  It is accordingly unnecessary to determine the remaining ground of appeal, namely, that the Member erred in having regard to evidence about how neighbouring land had been categorised by the respondent. 
  13. [41]
    Had it been necessary to do so, a consideration of the Member’s reasons supported a conclusion that, even if the Council’s categorisation of neighbouring land in the rural category was irrelevant, the Member’s reference to it did not affect the decision. The Member expressly acknowledged that the categorisation of that land was not determinative of the outcome of the appeal.
  14. [42]
    Error having been established, this Court is to give the judgment which ought to have been given at first instance.[25]
  15. [43]
    Having regard to the ratings categories adopted by the appellant, and the contents of the appellant’s Revenue Statement, the proper categorisation of the respondent’s land requires that due consideration be given to the fact that the appellant, in the proper exercise of its power to levy differential rates on different categories of land, determined that freehold land, other than a petroleum lease, which was used or intended to be used for gas extraction and associated activities was subject to a particular rating category.
  16. [44]
    In devising that structure, the appellant specifically pursued a categorisation which was not based on the primary or predominant use of land. Freehold land holdings above a certain size, which had a use or intended use of gas extraction or associated activities, although not its whole or predominant use, are subject to that specific categorisation.
  17. [45]
    The respondent’s land falls within category 4/31 Petroleum Other (>400 HA).  It is land, other than a petroleum lease; it is above the requisite size; and it was used in part for gas extraction and associated activities.
  18. [46]
    Such land, being the subject of another categorisation, does not fall within category 3/16 Rural even though another use of the property is grazing and associated activities.
  19. [47]
    This conclusion is not altered by the fact that the Revenue Statement does not define use but does define “intended to be used”. A definition of intended to be used is understandable, in the context of ratings categories. It limits proposed intended uses to objectively established future uses by defined factors.
  20. [48]
    There is no need to limit the present use of land. That is easily discernible. “Use” is a well understood word. It is to be given its ordinary meaning. 
  21. [49]
    The fact that “intended to be used” is defined in a particular way does not limit or restrict the ordinary meaning of the word “use”. To do otherwise would not involve the broad, sensible and practical reading of the ratings categories as a whole.

Orders

  1. [50]
    The Court orders:
    1. The appeal is allowed.
    2. The orders of the Land Court are set aside.
    3. The appeal to the Land Court is dismissed.

The Court will hear the parties as to costs.

 

BODDICE J

 

WA ISDALE

MEMBER OF THE LAND COURT

 

PG STILGOE OAM

MEMBER OF THE LAND COURT

Footnotes

[1] Geldard v Western Downs Regional Council [2019] QLC 17, [1].

[2]   Ibid, [2].

[3]   Ibid [7].

[4]   Ibid.

[5]   Ibid [101].

[6]   Appeal record book, 129 - 130.

[7]   Appeal record book, 260 - 261.

[8]   Appellant’s outline of argument, [2].

[9]   Appeal record book, 129; Rate Code 4 of the appellant’s 2017-18 Revenue Statement.

[10]   Ibid.

[11] Geldard v Western Downs Regional Council [2019] QLC 17, [32].

[12]   Respondent’s outline of submissions, [40]; Appeal record book, 452 - 454 [52].

[13]   Appeal record book, 447 - 454, [24] – [57].

[14]   Respondent’s outline of submissions, [27].

[15]   Appeal record book, 260.

[16] Moreton Bay Regional Council v White [2018] QLAC 4, [2]; Ipswich City Council v BWP Management Ltd[2019] QLAC 1, [4].

[17] Ipswich City Council v BWP Management Ltd [2019] QLAC 1, [10].

[18]   [2018] QLAC 4, [11].

[19] Paton v Mackay Regional Council [2014] QSC 75, [43].

[20] Geldard v Western Downs Regional Council [2019] QLC 17, [94].

[21]   Ibid, [90].

[22]   Ibid, [81].

[23] APT Petroleum Pipelines Pty Ltd v Western Downs Regional Council [2014] QLC 18.

[24] Geldard v Western Downs Regional Council [2019] QLC 17, [78].

[25] Fox v Percy (2003) 214 CLR 118 at [43].

Close

Editorial Notes

  • Published Case Name:

    Western Downs Regional Council v Geldard

  • Shortened Case Name:

    Western Downs Regional Council v Geldard

  • MNC:

    [2020] QLAC 1

  • Court:

    QLAC

  • Judge(s):

    Boddice J, WA Isdale, PG Stilgoe OAM

  • Date:

    13 Mar 2020

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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