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Geldard v Western Downs Regional Council QLC 17
LAND COURT OF QUEENSLAND
Geldard v Western Downs Regional Council  QLC 17
Roger John Geldard
Western Downs Regional Council
Appeal against categorisation decision
20 March 2019
9 October 2018
REAL PROPERTY – RATES AND CHARGES – RATING OF LAND – CATEGORIES OF LAND – where local government has implemented differential general rates – where land owner appeals against decision of local authority on the land owners objection to a rating category for the land – where statutory provisions contemplate categories may be changed from time to time – where respondent uses its own policy to categorise land – where the subject land is used for grazing purposes and burdened by petroleum leases
Local Government Regulation 2012, s 92
APT Petroleum Pipelines Pty Limited v Western Downs Regional Council (2014) 35 QLCR 206;  QLC 18, applied
Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364, cited
BWP Management Ltd v Ipswich City Council; W & V Nominees Pty Ltd as Tte for the Elton Family Trust No.3 v Ipswich City Council  QLC 14, applied
Chamwell Pty Ltd v Strathfield Council  NSWLEC 114, cited
Conyngham & Ors v Minister for Immigration and Ethnic Affairs (1986) 68 ALR 423, applied
Independent Commission against Corruption v Cunneen (2015) 256 CLR 1, cited
Marchesi v Noosa Council  QLC 19, cited
Minister for Immigration and Ethnic Affairs v Conyngham & Ors (1986) 11 FCR 258; 68 ALR 441, cited
Plaintiff 50/2014 v Minister for Immigration and Border Protection (2014) 253 CLR 219, cited
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, cited
Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305, cited
Smith v Wyong Shire Council (No 2) (1980) 41 LGRA 202, applied
South Australian National Football League Inc v City of Charles Sturt (1998) 97 LGERA 293, cited
White & Anor v Moreton Bay Regional Council  QLC 51, cited
RJ Douglas QC (instructed by Thynne + Macartney) for the appellant
DP O'Brien QC, with JP Hastie (instructed by King & Co.) for the respondent
- The appellant, Roger John Geldard, purchased a property called “Lower Heatherley” in the Western Downs Regional Council area on 10 July 2017. It has an area of 839.065 hectares.
- Prior to his purchase of that property it had been owned by Australian Pacific LNG Pty Ltd (APLNG), which company was involved in the production of coal seam gas. The result of the transaction was that there remains, on the property, eight operational gas wells together with a further 14 gas wells which are currently not being used to extract gas. All gas wells are located on 18 gas well pads on the property.
- Prior to the purchase by Mr Geldard, the subject land was categorised for rating purposes as 4/31 Petroleum Other (>400 ha) by the respondent local government.
- Subsequent to receiving a rates notice based upon the land being in category 4/31, the appellant lodged a notice of objection against that categorisation contending that the subject land should be categorised as being in category 3/16 – Rural (which is explained in the list of matters not in dispute set out below).
- That objection was overruled by the Council and so, pursuant to section 92 of the Local Government Regulation 2012, Mr Geldard now appeals to this Court.
- The parties helpfully provided an outline of the areas of agreement between them, as well as the issues in dispute.
- The parties were in agreement that the following matters were not in dispute:
- The Appellant is the registered owner of land located at Fairymedow Road, Miles in the State of Queensland more particularly described as Lot 3 on Crown Plan BWR1 (the Subject Land).
- The Subject Land:
- (a)comprises 839.0650 hectares of freehold land;
- (b)was, prior to 10 July 2017, owned by Australia Pacific LNG Pty Ltd (APLNG), a company involved in the production of coal seam gas;
- (c)is subject to petroleum lease 265 and petroleum lease 267 (the Petroleum Leases) which:
- were granted to APLNG on, respectively, 22 August 2011 and 10 August 2011;
- continue to be held by APLNG; and
- expire, respectively, on 21 August 2041 and 9 August 2041;
- (d)was purchased by the Appellant from APLNG pursuant to a contract of sale dated 24 May 2017 (the Contract of Sale);
- (e)is used solely for rural purposes by Roxborough Pastoral Pty Ltd as trustee for the Roxborough Trust (Roxborough), which is an entity controlled by the Appellant’s family;
- (f)is used by Origin Energy Resources Limited (Origin), as agent for APLNG, for the extraction of gas from eight (8) operational gas wells and has a further fourteen (14) gas wells on the land which are currently not being used to extract gas, situated on eighteen (18) gas well pads, located on the Subject Land;
- (g)contains high point vents and low point drains installed along underground gas pipelines which are associated with the gas wells; and
- (h)contains an underground gas trunk line along its eastern boundary.
Categorization of the Subject Land
- The Subject Land was categorised for rating purposes as 4/31 Petroleum Other >400ha (Category 4/31):
- (a)when owned by APLNG; and
- (b)since the Subject Land was purchased by the Appellant including, relevantly, for the 2017/18 financial year.
- Category 4/31 is a differential rating category adopted by the Respondent in its 2017-2018 Revenue Statement and is described as:
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:
- (a)gas and/or oil extraction; and/or
- (b)processing of gas and/or oil; and/or
- (c)transportation of gas and/or oil by pipeline; or
- (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
- On 2 September 2017, the Respondent gave the Appellant a rates notices for the period 1 July 2017 to 31 December 2017, levying rates on the Subject Land on the basis of it being included in Category 4/31.
- On 27 September 2017, the Appellant submitted a notice of objection against the categorisation to the Respondent, pursuant to section 90 of the Local Government Regulation (the Objection Notice).
- In the Objection Notice, the Appellant stated that the rating category to which the Subject Land should belong was category 3/16 – rural (Category 3/16).
- Category 3/16 is a differential rating category adopted by the Respondent in its 2017-2018 Revenue Statement and is described as:
Land used principally for rural purposes, which is not otherwise categorised, and has an area not less than 100 ha.
- On 4 January 2018, the Respondent’s Acting Chief Executive Office gave notice to the Appellant that the Respondent had decided, pursuant to section 91(2)(b) of the Local Government Regulation, not to allow the objection set out in the Objection Notice (the Decision on Objection).
- On 12 February 2018, the Appellant appealed against a Decision on Objection to this Court.
- The Appellant maintains that the Subject Land should be included in Category 3/16.
- The Respondent maintains that the Subject Land should be included in the adopted category, Category 4/31.
Purchase of the Subject Land by the Appellant
- As noted above, the Appellant purchased the Subject Land pursuant to the Contract of Sale, which was dated 24 May 2017.
- On 2 June 2017, the Respondent provided the Appellant’s solicitors with a response to an amended rates search that stated, inter alia, that the rating category of the Subject Land was Category 4/31.
- On 13 December 2017, the Respondent formally resolved to adopt a “Petroleum Other – Council Policy” which stated:
If a property is currently categorised as 430 Petroleum Other less than 400 hectares or 431 Petroleum Other greater than 400 hectares, the potential buyer or transferee of the property can assume that Council will continue to rate the property as either a 430 or 431 property.
Conduct and Compensation Agreement
- It was a condition of the Contract of Sale that the appellant would enter into a Conduct and Compensation Agreement dated 19 May 2017 (the CC Agreement).
- The CC Agreement provides (among other things):
- (a)the parties to the agreement are the Appellant, Origin and Roxborough – recital.
- (b)APLNG is the ultimate principal under the agreement by its disclosed agent Origin – recital.
- (c)the gas infrastructure is owned and must be maintained by APLNG and not interfered with by the Appellant – clause 30.
- (d)APLNG may enter the land (clause 6) on notice (clause 9) in order to carry out certain activities in respect of the gas infrastructure (schedule 2) (the Relevant Activities).
- (e)The Relevant Activities include:
“All activities and works carried out on the Land by Origin and/or its Associates that are reasonably associated with the testing, development, operation, maintenance, decommissioning and rehabilitation of….22 coal seam gas wells on the Land located within the 17 Wells Pads…” (Schedule 2).
- (f)APLNG indemnified the Appellant from claims or liabilities in respect of the activities (clause 38) and to repair any unauthorised damage (clauses 27-29)
- (g)APLNG would pay compensation to the Appellant in certain sums as determined thereunder, to compensate the Appellant for the Relevant Activities, that being on account of “noise … lighting, dust, odour, vibration, vehicular movements and loss of amenity generally and permanent damage to and diminution in value of” the Subject Land.
Use of the Land by APLNG / Origin
- APLNG, by Origin, has, from time to time during the 2017/18 financial year, undertaken the Relevant Activities on the Subject Land.
- The operational gas wells on the Subject Land have, at all material times during the 2017/18 financial year, been used by Origin, as agent for APLNG, to extract gas.
- The gas extracted from the operational gas wells on the Subject Land has, at all material times during the 2017/18 financial year, been conveyed from the gas wells, through underground gas pipelines on the Subject Land, to the Condabri gas processing plant on the southern boundary of the Subject Land.
- Gas is then transported from the Condabri gas processing plant through an underground gas trunk line on the eastern boundary of the Subject Land.
- The compensation paid by APLNG to the Appellant, under the CC Agreement, in the 2017-2018 year was $42,000.
Use of the Subject Land by the Appellant
- The Appellant:
- (a)is a member of a family conducting extensive family grazing, feedlotting and cropping activities through Roxborough;
- (b)provides the Subject Land for use by Roxborough, together with adjacent and nearby properties, in such activities; and
- (c)does so formally under a written lease agreement dated 11 July 2017, the current annual rental being $62,000 exclusive of GST.
- Roxborough uses the Subject Land solely for the purpose of grazing cattle and growing crops.
- In the 2017/2018 financial year the Subject Land generated grazing and cropping income for Roxborough in the sum of approximately $203,670.
- The Subject Land adjoins freehold land, comprising of 824.7828 hectares and known as “The Wilgas”, more particularly described as Lot 36 on Survey Plan 116140, Lot 27 on Crown Plan BWR416and Lot 35 on Crown Plan BWR450 (The Wilgas).
- The Wilgas was previously owned by APLNG and was categorised for rating purposes as Category 4/31 when owned by APLNG.
- The Wilgas was purchased by The Wilgas Property Pty Ltd as Trustee for The Wilgas Discretionary Trust on 30 November 2016.
- Eleven (11) operational gas wells and six (6) gas wells which are not currently being used to extract gas are situated on fifteen (15) gas well pads, located on The Wilgas which are owned and operated by Origin as agent for APLNG.
- The Wilgas Property Pty Ltd as trustee for The Wilgas Discretionary Trust uses The Wilgas solely for the purpose of grazing cattle and growing crops.
- The Respondent, of its own volition, wrote to The Wilgas Property Pty Ltd as trustee for The Wilgas Discretionary Trust on 20 February 2017 advising that it had completed a rating review which included Lot 27 on Crown Plan BWR416 to determine the differential general rate category and applicable land use classification of the land. The Respondent advised it had amended the rate category of the land from Category 4/31 to Category 3/16 from 1 January 2017.
- The Rates Notice issued by the Respondent dated 02 September 2017 for The Wilgas categorised the whole of the land for rating purposes as Category 3/16.”
- The parties agreed to the following “real and substantial issues of fact and law” in Exhibit 12:
“1. The rating category to which the land located at Fairymeadow Road, Miles in the State of Queensland and more particularly described as Lot 3 on Crown Plan BWR1 (the Subject Land) should belong having regard to:
- a)the characteristics, features and use of the Subject Land; and
- b)the rating categories adopted by the Respondent for the 2017/18 financial year as set out in the 2017/18 Revenue Statement.
- In particular, whether the Subject Land should, for the 2017/18 financial year, be included in:
- a)rating category 4/31 – petroleum other – greater than 400 hectare, being the rating category in which the Respondent contends the Subject Land should belong; or
- b)alternatively, rating category 3/16 – rural, being the rating category in which the Appellant contends the Subject Land should belong.
- Whether the categorization of the land owned by The Wilgas Property Pty Ltd as trustee for The Wilgas Discretionary Trust which is described as Lot 36 on SP116140, Lot 27 on Crown Plan BWR416 and Lot 35 on Crown Plan BWR45 footnote exhibits 78 and 5 0 is relevant to the questions identified in paragraphs (1) and (2) above.”
- The nature of the appeal was clarified by the parties filing a statement of facts, matters and contentions and a statement of facts, matters and contentions in reply.
The statutory background
- As indicated above, the relevant statutory background lies in the Local Government Act 2009 and the Local Government Regulation 2012.
- The power of the Council to levy rates and charges exists pursuant to section 94 of the Local Government Act 2009.
- That section provides that the exercise of that power is subject to the provisions of the Local Government Regulation 2012, and in particular, sections 80 and 81, each of which provide as follows:
80 Differential general rates
- (1)A local government may levy general rates that differ for different categories of rateable land in the local government area.
- (2)These rates are called differential general rates.
- (3)For example, a local government may decide the amount of the general rates on a parcel of residential land will be more than the general rates on the same size parcel of rural land.
- (4)However, the differential general rates for a category of rateable land may be the same as the differential general rates for another category of rateable land.
- (5)If a local government makes and levies a differential general rate for rateable land for a financial year, the local government must not make and levy a general rate for the land for the year.
- (6)A differential general rate may be made and levied on a lot under a community titles Act as if it were a parcel of rateable land.
81 Categorisation of land for differential general rates
- (1)Before a local government levies differential general rates, it must decide the different categories (each a rating category) of rateable land in the local government area.
- (2)The local government must, by resolution, make the decision at the local government’s budget meeting.
- (3)The resolution must state—
- (a)the rating categories of rateable land in the local government area; and
- (b)a description of each of the rating categories.
A resolution may state that the rating categories, and a description of each of the rating categories, are as follows—
- (a)residential land—land that is used for residential purposes in particular urban centres, rural localities, park residential estates and coastal villages;
- (b)commercial and industrial land—land that is used solely for commerce or industry in particular urban centres and rural localities, other than land used for manufacturing sugar or another rural production industry;
- (c)grazing and livestock land—land that is used, for commercial purposes, for grazing and livestock;
- (d)sugar cane land—land that is used for producing sugar cane;
- (e)sugar milling land—land that is used for manufacturing sugar;
- (f)rural land—
- (i)land that is not in an urban centre or locality; or
- (ii)land that is not used for grazing and livestock; or
- (iii)land that is not sugar cane land or sugar milling land;
- (g)other land—any other type of land.
- (4)After the rating categories and descriptions have been decided, the local government must identify the rating category to which each parcel of rateable land in the local government area belongs.
- (5)The local government may do so in any way it considers appropriate.
- (6)The fact that some parcels of rateable land are inadvertently not categorised does not stop differential general rates being levied on rateable land that has been categorised.
- In the 2017-18 Revenue Statement for the Western Downs Regional Council the following appears:
“Differential General Rates
Differential general rates are levied to contribute towards meeting the cost of:
- providing local government services other than utility services, such as sewerage, water supply, and refuse collection and disposal, for which specific utility charges are levied, and
- meeting any shortfalls in the funding of utility services.
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.”
- As an element of the dialogue between the parties to this appeal, the Western Downs Regional Council wrote to Mr Geldard on 4 January 2018 explaining the basis upon which they were not inclined to amend the categorisation of his land.
- That correspondence said, inter alia:
“At its meeting of 13 December 2017, Council carefully considered the issues you raised and the options it had relating to your objection to your recently purchased property retaining a category rating of 4/42 (Petroleum Other - Greater than 400 hectares).
Council is very aware that many properties with similar gas infrastructure are rated as 3/16 (Rural). The difference is that these properties have never been owned by coal seam gas companies and they have never been rated as anything other than 3/16 (Rural).
Your property has, for a number of years, been categorised as a 4/42 property (Petroleum Other - Greater than 400 hectares). This categorisation and the annual rates were explicit in the rates search document provided by Council to your solicitor on 2 June 2017.
As a consequence, Council resolved, at its meeting of 13 December 2017, to not allow your rating objection in accordance with section 91(2)(b) of the Local Government Regulation 2012.”
- Both the Wilgas and Lower Heatherley were owned by APLNG before being sold to their current owners.
- Mr Geldard further deposes that both the Wilgas and Lower Heatherly are primarily used for an identical purpose, namely, to background cattle for each of their respective family feedlots.
- In his affidavit, Mr Geldard exhibits a number of photographs which show clearly the nature of the facilities on the subject land. They might be described as robust metal fence-type structures with various pipe-like structures arising from ground level. They are neither numerous nor obviously obtrusive but, as Mr Geldard deposes, they do have an impact upon the landowner’s capacity to work the land with planting and cultivating machines and a spray coupe utilised by a spraying contractor as well as interfering with the efficient layout of two previously existing broadacre paddocks.
- The list of matters not in dispute concedes “The Respondent, of its own volition, wrote to The Wilgas Property Pty Ltd as trustee for The Wilgas Discretionary Trust on 20 February 2017 advising that it had completed a rating review which included Lot 27 on Crown Plan BWR416 to determine the differential general rate category and applicable land use classification of the land. The Respondent advised it had amended the rate category of the land from Category 4/31 to Category 3/16 from 1 January 2017.”
- That correspondence actually said:
“The current primary land use of your property as determined by Council is inconsistent with the 2016/17 differential general rate category. As a result of the review, your property which was previously categorised as 4/31 - Petroleum Other - => 400 ha has now been amended to 3/16 - Rural. This change will apply from 1 January 2017.”
- On any sensible reading of the correspondence from the Regional Council on 4 January 2018 (as detailed in ), three inferences are clearly discernible.
- The first of those is that, contrary to the provisions of Chapter 4, Division 4 – Objecting to rates category, once a piece of rateable land has been categorised then, in some way, that categorisation is “cast in stone”. Clearly, having regard to the provisions of Division 4, the statute contemplates that categorisations of land can be changed.
- The second inference is that properties previously owned by coal seam gas companies are to remain categorised as 4/31 (Petroleum Other).
- That inference is also clearly incorrect as is evidenced by the Council’s treatment of the Wilgas property.
- There appears to be no clear explanation for the treatment of the Wilgas property particularly as it appears to have been done at the instigation of the respondent.
- The third inference appears to be that it is a matter of previous ownership rather than predominant use which seems to be influential in determining the rating category attached to properties on which gas infrastructure exists but which have never been owned by coal seam gas companies.
- That inference would seem to fly in the face of the assertion contained within the Revenue Statement for 2017-18 which refers to the objective “to ensure the fair and equitable application of lawful rating and charging principles, without bias, taking account of all relevant considerations”.
- The treatment of the Wilgas property is not to be seen, in my opinion, as determinative of the outcome of this appeal. It does however demonstrate that a categorisation is not “cast in stone”. It also demonstrates that at some point in time the Council has been prepared to accept that a property can be predominantly utilised for rural activities even with coal seam gas wells and well pads and associated infrastructure present on the land.
- The parties in their agreed issues of fact and law raise the question of the relevance of the Wilgas land. While I have come to the view that the treatment of that land is not to be determinative of the outcome of this appeal, it is, I think, relevant to the considerations which I have to give the Geldard land.
- Given that the affidavit material as well as the articulation of matters not in dispute satisfies me that the Wilgas land and the Geldard land share common features including the presence of gas facilities and the predominant use of the properties for grazing activities, it seems to me that the categorisation of the Wilgas land and the categorisation of the Geldard land do not sit comfortably side-by-side. That is particularly so within a differential rating structure which contemplates that categories can, from time to time, be changed.
- It may be, of course, that my consideration of the Revenue Statement provisions leads me to the view that the Wilgas land is inappropriately categorised and should share the same categorisation as the Geldard land. That would then create an issue for the respondent and the landowner. It is not a matter for me.
- Counsel for the respondent expresses that sentiment in the following way:
“Fifth, the Appellant seeks to make much of the fact that the Council has applied the Contended Category to land which adjoins the subject land (Adjoining land). It is accepted that, as with the Subject Land, the Adjoining Land is similarly used for both the extraction of gas and grazing.
These matters are, however, irrelevant to the Court’s function in this appeal. The issue of whether or not the Adjoining Land was properly categorized is not an issue in this appeal. The only issue is how, on the basis of the agreed position about the use of the Subject Land and the appropriate construction of the categories, the Subject Land should be categorized.”
- This seems an appropriate point at which to observe that the money received by Mr Geldard and presumably by others from the gas producers is as compensation for the impact of the gas wells and their associated infrastructure on the landowner’s property. It is clearly not income derived from some gas extraction activity by the landowner but is an allowance made for the loss of access to otherwise productive land; the detrimental impact from facilities such as fences and gates and the like on the productive capacity of the rural enterprise; as well as for the comings and goings onto the properties of persons not connected with the rural pursuits otherwise being carried out on the properties.
- The amount received by the appellant is determined pursuant to a Conduct and Compensation Agreement entered into as a condition of the purchase of the land.
- Counsel for the appellant describes the gas activities on the subject land in the following terms:
“the gas activities undertaken by Origin (as agent of APLNG-see below) on the Subject Land are not undertaken by the Appellant, or by Roxborough, or with their permission, but rather by Origin under statutory fiat…”
- The compensatory nature of the $42,000 paid annually by Origin to the appellant is made clear by the observations of Mr Murray Geldard in his affidavit where he says:
“27. In paddocks we use for cultivation, the gas well pads have a significant impact. Our planting and cultivating machines are all 12 metres wide. The spraying contractor we employ has a spray coupe which is 36 metres wide. All of these machines operate with GPS autos steering within 2 cm of accuracy. Auto steer works very well in straight lines using a very small overlap for each pass. We use 10 cm as our standard overlap. Highpoint fence and access roads going anywhere and everywhere have cut what was once a very efficient layout of 2 big rectangular paddocks into 9 paddocks of totally different widths and shapes.…
32. These roads have been constructed on areas which have traditionally been used for grazing and cultivation, eliminating any farming or grazing productivity from the areas they are constructed on.”
- It is unnecessary to descend into reciting the details of the Compensation Agreement save to observe that within that Conduct and Compensation Agreement paragraph 11 provides that:
“The parties acknowledges [sic] that the:
- (a)Compensation compensates for all impacts of the Activities; and
- (b)The Additional Infrastructure Activities Compensation compensates for all impacts of the Additional Infrastructure Activities, including all impacts of noise… light, dust, odour, vibration, vehicular movements and the loss of amenity generally and permanent damage to and diminution in the value of the land.”
- All of those impacts there referred to relate to the consequences of the gas extraction process.
- The appellant makes the point that the entry into the Conduct and Compensation Agreement was not the outcome of a deliberate strategy on the part of the appellant but rather, was the consequence of the statutory requirement that a purchaser such as the appellant is required to enter into a conduct and compensation agreement with any company extracting gas.
- The Conduct and Compensation Agreement has three parties, namely, Roger John Geldard, Roxburgh Pastoral Pty Ltd and Origin Energy Resources Limited as agent for and on behalf of APLNG.
- The recital to that Agreement, by way of background, identifies APLNG as the holder of the petroleum authority described in item 2 of the Reference Schedule (Petroleum Authority).
- Item 2 of the Reference Schedule describes the Petroleum Authority as “Petroleum Lease 265 and Petroleum Lease 267 including any petroleum authority granted in substitution or replacement of the Petroleum Authority and any renewal(s) of the Petroleum Authority”.
- In the Compensation and Conduct Agreement, Schedule 4 – Interpretation and Definitions describes the Petroleum Legislation pursuant to which the Conduct and Compensation Agreement was entered into as meaning “the Mineral and Energy Resources (Common Provisions) Act 2014 (Qld) and the Petroleum and Gas (Production And Safety) Act 2004”.
- The issue of determining the appropriate categorisation of land susceptible to a differential rating system is not uncommon in this Court.
- Curiously, the correspondence to Roger Geldard from the respondent on 4 January 2018 makes no mention of a policy which on the same date as the resolution not to allow Mr Geldard’s rating objection was adopted by the respondent and entitled “Petroleum Other - Council Policy”.
- The official policy document identifies the purpose of the Policy as being:
“to provide clarity around the rating category to be used subsequent to the sale or transfer of a property currently categorised as either
- 430 Petroleum Other less than 400 ha or
- 431 Petroleum Other Greater than 400 ha.”
- The policy goes on in the following terms:
Council categorises and rates all rateable properties in the Western Downs region. A transfer or sale of a property will not, of itself, result in a change in category.
However there is the potential for uncertainty around the categorisation of properties currently categorised as either 430 or 431 and subsequently sold or transferred. This Policy seeks to clarify this uncertainty.
In clarifying this uncertainty, this Policy provides the potential owners of these properties a greater understanding of issues they need to consider in negotiating the purchase or transfer of the property. This may be through the sales contract and/or through compensation agreements.”
- In its written submissions the appellant characterises the task of the Court, having regard to some recent decisions, as having three main elements, namely:
“1. confined to deciding the correct rating category for the property”
“2. to assess whether, having regard to the definitions in and the provisions of, the various Revenue Statements, the category into which any particular lot is placed is the appropriate one”
“3. such that ‘The history of the site and categorisations that may have applied in previous rating periods… unless good reason can be shown why regard should be had to them, largely irrelevant.’”
- Similar observations are to be found in the submissions for the respondent.
- Counsel for the appellant directed the Court’s attention to a recent decision of his Honour Member Smith in BWP Management Ltd v Ipswich City Council; W & V Nominees Pty Ltd as Tte for the Elton Family Trust No.3 v Ipswich City Council (BWP) where his Honour identified the salient principles to be applied in a case such as this. Counsel for the respondent did not seek to dispute the applicant’s characterisation of the relevant provisions.
- In the BWP decision, Member Smith embarked upon a detailed review of a large number of cases dealing with statutory interpretation particularly in the context of categorisations for the purpose of a rating and ascertaining the appropriate category into which land should be placed.
- I do not propose to recite in detail all of those matters alluded to by Member Smith. It is convenient however to recite the relevant provisions as characterised by Counsel for the appellant. They were:
- “(a)The Revenue Statement falls to be construed as a statutory instrument.
- (b)Thus construction thereof ensues, primarily, upon textual and contextual considerations. What this entails is that the instrument ought be construed as a whole such that the provisions give effect to harmonious goals, with a court giving ‘close attention to the words of the [instrument] and the statutory scheme in general’.
- (c)To that end, by reference to s 14A of the Acts Interpretation Act 1954, the court ought prefer a construction which best achieves the purpose of the instrument.
- (d)The test of apt rating category by reference to land ‘use’ requires such use to be ascertained only at that level of generality which is necessary and sufficient to cover the individual activities, transactions or process carried out at the relevant date.
- (e)Such categorisation must be undertaken in a ‘common sense and practical way’.
- (f)Regard ought be had to the purpose of categorisation, namely to equitably direct the appropriate liability of the ratepayer for rating purposes.
- (g)Where a court is left in doubt as to the categorisation, by dint of ambiguity or uncertainty in the Revenue Statement apropos of such categorisation, the outcome ought be resolved in the ratepayer’s (ie taxpayer’s) favour”. (citations omitted)
- Member Smith referred to a decision of Member Isdale of this Court in APT Petroleum Pipelines Pty Limited v Western Downs Regional Council (APT Pipelines) where his Honour was specifically considering how the principles of statutory interpretation were to be applied to statutory instruments such as a local authority budget.
- In the APT Pipelines decision Member Isdale referred to three decisions which I regard as directly apposite to the task with which I am confronted.
- Member Isdale describes the correct approach to categorisation matters as follows:
“ In cases of a dispute over the applicable rating category, the correct approach was said by Debelle J in South Australian National Football League Inc v City of Charles Sturt to be:
‘The task of determining the nature of a land use will obviously require an examination of the manner in which the land is being used and, if it has been improved, an examination of the nature of the buildings or improvements or other development on the land and the use which is made of them. If there is more than one use, it is necessary to determine the predominant use of the land: (s 176(3)). Given that the enquiry is to determine the nature of the land use, the principles of planning law as to the process involved when determining the nature of a proposed development provide some assistance. The enquiry should not involve a meticulous examination of the details of the likely activities being conducted on the land or any precise cataloguing of them but, instead, should be an enquiry as to what, according to its ordinary terminology, is the appropriate designation of the use of the land and any buildings thereon: see Stephen J in Pioneer Concrete (Qld) Pty Ltd v Brisbane City Council (1980) 145 CLR 485 at 507-508; 44 LGRA 346 at 362-363. Generally speaking, that will often be a useful approach. Of course, each case must be considered according to its own facts and circumstances.
It is essential to remember that the purpose of the enquiry is limited to a determination of the nature of the land use. However, some assistance may be gained from examining the activities in which the owner or occupier of the land is engaged since they might provide an understanding of the nature of the use of the land. However, care must be taken to ensure that the nature of the activities of the owner or occupier do not distract one from the real question, which, as I have said, is to determine the nature of the use of the land. The fact that land is being used by a commercial enterprise does not necessarily mean that the land is being used for commercial purposes. A commercial enterprise might use a particular parcel of land for a purpose quite divorced from its usual commercial activities, for example, it might use a particular parcel for charitable purposes only. In other words, a commercial organisation and a non-commercial organisation might use land in the same way. Thus, the essential task is to determine the nature of the land use. In the final analysis, it might often be a question of fact and degree whether the use is for a commercial purpose or some other purpose: Lizzio v Ryde Municipal Council (1983) 155 CLR 211 at 217; 51 LGRA 114 at 117; Penrith City Council v Waste Management Authority (1990) 71 LGRA 376 at 384.’
 In Royal Agricultural Society of New South Wales v Sydney City Council, Mc Hugh JA, with whom Hope and Samuels JJA agreed, said:
‘Accordingly, a test has been devised which requires the purpose of the use of land to be described only at that level of generality which is necessary and sufficient to cover the individual activities, transactions or processes carried on at the relevant date. Thus the test is not so narrow that it requires characterisation of purpose in terms of the detailed activities, transactions or processes which have taken place. But it is not so general that the characterisation can embrace activities, transactions or processes which differ in kind from the use which the activities etc as a class have made of the land.’
 Preston J said in Chamwell Pty Ltd v Strathfield Council that:
‘The characterisation of the purpose of development must also be done in a common sense and practical way.
 The Planning and Environment Court said in Yu & Leung v Brisbane City Council & Anor:
‘ In determining the description which is applicable, the Court must undertake its task of characterisation in a practical and common sense way to determine the appropriate genus which best describes the activities in question. Where there are two or more defined purposes which are apt to cover a particular proposal, a “best fit” approach is appropriate. What must be characterised is the proposal the subject of the application, rather than some further or other application which might be made at another time’” (citations omitted)
- Counsel for the respondent points out however that Member Isdale in the APT Petroleum Pipelines case was considering a different rating resolution passed by the same local government as in this case but which employed a “primary” use test. That may be so but the utility of the quotes from decided cases is, I think, unaffected by that.
- It is appropriate at this point to consider carefully the precise terms used in describing the various differential categories and descriptions.
- It is said by Counsel for the respondent:
“It ought to be readily accepted that the Subject Land satisfies the description for inclusion in the Adopted Category [i.e. category 4/31]. That is because:
- (a)it is freehold land and is, therefore, land other than a petroleum lease;
- (b)it has an area of over 839 hectares and does, therefore, have an area greater than 400 hectares; and
- (c)it is used, at least in part, for the extraction and transportation of gas.
- The contention that the land is other than a petroleum lease, in my view, fails when regard is had to the underlying reason for the entry into a conduct and compensation agreement by the appellant.
- Further, the Local Area Mining Permit Report in respect of Lot 3 on Crown Plan BWR1 identifies the land as possessing 2 petroleum and gas production permits.
- In the explanatory section of that Permit Report, “Types of Production Permits” are described to include “production permits for petroleum (including coal seam gas).”
- That descriptor is entirely congruent with the recitals in the Conduct and Compensation Agreement which have been quoted above.
- Having regard to the matters set out, it seems impossible to say the land is not the subject of a petroleum lease or is “other than a petroleum lease”.
- At the time when the land was owned by APLNG there is no suggestion that it was used for anything other than exploration for, and capture of, natural gas.
- Having regard to the provisions of the Mineral Resources Act 1989 and the Petroleum and Gas (Production and Safety) Act 2004 it is clear that, quite frequently, the granting of a lease pursuant to either of those Acts creates a tenure which can overlay, but not extinguish, freehold title. Hence the need for conduct and compensation agreements in circumstances where the existence of a petroleum lease impacts upon the usual activities of a freehold title holder. Being a petroleum lease and being freehold land are not necessarily mutually exclusive.
- It is appropriate to contemplate the relevance of the Petroleum Other - Council Policy effective in the respondent’s local government area as and from 13 December 2017.
- As I observe above, the Policy was not mentioned in the correspondence to Roger Geldard of 4 January 2018.
- The Policy document, in addition to those parts of it already quoted in paragraphs 49 and 50 above, characterises its effect as follows:
“If a property is currently characterised as 430 Petroleum Other less than 400 hectares or 431 Petroleum Other greater than 400 hectares, the potential buyer or transferee of the property can assume that Council will continue to rate the property as either a 430 or 431 property.”
- That is a somewhat surprising characterisation of the effect of the Policy because it seems to suggest that notwithstanding the entitlement of a ratepayer to seek to have the categorisation of his or her property changed, Council would approach such a request with a closed mind and an inclination to refuse any categorisation change without considering all the relevant facts and circumstances. It is as well, therefore, that the Act protects the entitlement of ratepayers to challenge the categorisation of the land subject to a differential rate.
- In Smith v Wyong Shire Council (No 2) Holland J had to consider a policy in respect of building applications and in particular with respect to relocating dwellings.
- In the course of his judgment Holland J observed as follows:
“The question is whether the adoption of a policy in advance of consideration of individual applications for an exercise of the function is compatible with its due and proper exercise. If it is compatible an objection to the existence of a policy can rarely be properly taken. Indeed, the adoption of a policy for dealing with a recurring class of case can be most beneficial, not only as an aid to the public authority in promoting an efficient, orderly and consistent exercise of its responsibilities but also to the public and individuals affected by is as being, for example, advance notice of the standards expected or the conditions likely to be imposed by the authority.
What is objectionable, unless the authority is given express power to formulate and apply a policy, is a predetermination not to entertain any application of a particular character or to refuse it without even considering the applicant’s case or to apply the policy inflexibly to every case when, under the statute, the authority has a duty to receive, consider and decide all applications submitted to it for its approval. This is objectionable because it results in the duty not being performed at all… The general rule is that anyone who has to exercise a statutory discretion must not “shut his ears to an application…”
- In a similar vein, Wilcox J of the Federal Court of Australia speaking of the role of a policy to guide decision-making observed as follows:
“The Minister has chosen to adopt a policy to guide his consideration of sponsorship applications. It has long been recognised that a statutory decision-maker may lawfully adopt a policy to guide him or her in the making of particular decisions provided only that he or she does not apply that policy inflexibly or deny to a particular applicant the opportunity to argue that the policy should not be applied in the instant case… But, although a policy is never to be applied in a rigid manner, it must be applied fairly. Without fair application it loses its claim to validity.” (citations omitted)
- On appeal, where the Full Court of the Federal Court overturned the decision of Wilcox J, this point was not overruled or said to be wrong.
- I should, for completeness, acknowledge that Counsel for the respondent did not, in his closing submissions, seek to rely upon the existence of the Policy to justify refusing to change the categorisation of the subject land. It would have been inappropriate to have done so because that would have evidenced a closed minded approach to the issue of categorisation.
- In my view, the appropriate and fair approach to any issue of categorisation is not to start with the existing category of a parcel of land but rather, to adopt the task at hand as a “blank sheet of paper”, and to then consider the provisions of the applicable revenue statement and the various differential categories thereto and to then consider the characteristics of the land in question.
- In the present case, the approach of the respondent seems, as evidenced by its correspondence and its decision, to have been to take the existing categorisation as a starting point and then seemingly to apply a closed mind to the desirability of changing the categorisation.
- In his written submissions, Counsel for the respondent submits as follows:
“An important feature of the description of the Adopted Category [which term is used by the respondent to refer to category 4/31] is that it does not require the land to be used exclusively, wholly or predominately for one of the uses (i.e. gas extraction) to which it relates. A parcel of land will satisfy the criteria for inclusion in the Adopted Category irrespective of the degree or extent to which the land is being used for one of those purposes provided that it is used for a such purpose in part. This wording is a deliberate departure from the wording of previous rating resolutions adopted by the Council in relation to such uses which employed the ‘primary’ use test: see APT Petroleum Pipelines Pty Ltd v Western Downs Regional Council.” (citations omitted)
- I have difficulty accepting the force of that submission when the description of category 3/16 uses the adverb “principally” as the criterion or identifier. I do not see much difference between describing something as being “principally” used or being the “primary” use.
- I should also observe that the apparent logic in the submission by Counsel for the respondent applies equally in the case of land being used for a rural purpose and in part (as in the present case) for petroleum lease purposes.
- As to the term “not otherwise categorised” in this category, consistent with my view that one begins with a “blank page”, it is hard to see that a starting point in considering an application to change the categorisation should be to begin with a preconception that the existing categorisation is the appropriate one.
- It is trite to observe that the obligation to pay rates is imposed upon the landowner not upon an occupier from time to time unless of course the land has an owner/occupier.
- Further, in his submissions, Counsel for the respondent submits:
“It is evident from the description of the Adopted Category, the Contended Category and the Council’s adopted rating categories as a whole, that the Council’s intention was that the Contended Category is, in effect, a catchall category which only applies where no other category applies. Equally, the description of the Adopted Category makes it clear that it was intended to capture any land used for one of the purposes to which it relates, irrespective of whether there was any other use occurring on the land.”
- That section of the Revenue Statement which deals with “Differential Categories and Descriptions” is not, in my view, meant to be read as some kind of a hierarchy. No one category is, on my reading of the document, pre-eminent or dominant.
- 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.
- 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.
- 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.
- 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.
- 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.”
- 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.
- Counsel for the respondent says, in the context of the potential dual use of the subject land:
“Even though it may be accepted that the Subject Land is being used for rural purposes by Roxburgh it cannot satisfy the description of the Contended Category because the Subject Land also satisfies the criteria for inclusion in the Adopted Category. The Adopted Category and the Contended Category are, in terms, mutually exclusive. It is not possible for the subject land to satisfy the description of both categories.”
- Even if I accept that proposition I am still left confronted by the reality that the differential rate is visited upon the landowner rather than any occupier and I am persuaded that the mental exercise required to categorise the appropriate category for the subject land requires me to contemplate, given the rates are to be paid by the landowner, what is the “principal” activity carried on by that registered owner.
- Accordingly, I am persuaded that, having considered all of the relevant facts and circumstances and the submissions made by Counsel for both parties, and in particular, recognising that rates imposed by a local government obliges that the registered proprietor of the freehold estate should pay those rates, the appropriate categorisation for the subject land is Rural (category 3/16).
- My conclusion in this respect specifically rejects the proposition advanced by Counsel for the respondent that acknowledging that:
“The Rate Applicable for the Adopted Category (and other such categories which use adopt [sic] the phrase “in whole or in part”) is significantly higher than the Contended Category, the structure of the categories is, it is submitted, designed to ensure that land being used for high intensive uses such as gas extraction will always fall into the category with the higher rate. As much is apparent from the fact that the phrasing “not otherwise categorised” does not appear in any of the “Rate Code 4-Other Intensive Business and Industries”, the highest rated code. It is only if land does not fall within the Categories in that Rate Code that it trickles down to the less intense, and lower rated, categories in the other Rate Codes. The construction which the Council advances here is, therefore, consistent with this objectively ascertainable purpose for the way in which the categories have been framed.”
- As quoted above, the intention of applying differential general rates recover funds to contribute towards the cost of providing local government services “other than utility services, such as sewerage, water supply, and refuse collection and disposal, for which specific utility charges are levied, and meeting any shortfalls in the funding of utility services”.
- There is nothing in the evidence before me which suggests that the use of land for gas extraction in the form in which it is currently conducted on the appellant’s land is a “high intensive use”. Indeed, once the wells and pads are in place their impact seems to be somewhat benign. Certainly there was no evidence that rural properties burdened with the presence of gas extraction wells and pads constitute a more intensive use than other rural properties not similarly burdened.
- I find it difficult to contemplate that the presence of some gas wells and underground gas pipelines, which on the evidence before me do not appear to require daily attendance by the employees of APLNG, can be regarded as constituting an “intensive use” of the subject land.
- In coming to my view I have remained mindful of the submission of the respondent in which it said “the question for this Court is not whether the ratings resolution or the way in which it categorises different land uses is ‘fair’ or ‘equitable’. That is beyond the scope of this court’s function. Rather, the inquiry is, applying the words employed by the council in its ratings resolution is to determine which category the Subject Land falls into.”
- Therefore the order of the Court is that:
- The appeal is allowed.
- The appropriate rating category for the land described as Lot 3 on Crown Plan BWR1 located at Fairymeadow Road, Miles in the State of Queensland is Rural (category 3/16).
MEMBER OF THE LAND COURT
 Ex 13.
 Ex’s 3 and 4.
 Ex’s 5 and 7.
 Ex 11.
 Ex 8.
 Ex 9.
 Ex 10.
 Page 31.
 Ex 8, page 67 (attachment MRG-32).
 Ex 8, paragraphs 1–4.
 Ex 8, paragraph 39.
 Ex 8, paragraph 44.
 Ex 8, paragraphs 26–30 and exhibits MRG-5–MRG-17.
 Ex 13, paragraph 31.
 Ex 8, exhibit MRG-33.
Local Government Regulation 2012.
 Ex 15, paragraphs 36–37 (emphasis in original).
 Ex 14, paragraph 24.
 Ex 8.
 Ex 8, exhibit MRG-03 paragraph 11.
 See Mineral and Energy Resources (Common Provisions) Act 2014 Chapter 3 Division 7 Subdivision 2 and Petroleum and Gas (Production and Safety) Act 2004.
White & Anor v Moreton Bay Regional Council  QLC 51 at  per President Kingham (citation in original).
Marchesi v Noosa Council  QLC 19 at  per Member Cochrane (citation in original).
Marchesi v Noosa Council  QLC 19 at  per Member Cochrane (citation in original).
 Ex 15, paragraphs 17–30.
  QLC 14.
 See Member Smith’s observations regarding Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381–82 and the submissions of Counsel for the appellant relating to Plaintiff 50/2014 v Minister for Immigration and Border Protection (2014) 253 CLR 219, ; Independent Commission against Corruption v Cunneen (2015) 256 CLR 1, ; Berowra Holdings Pty Ltd v Gordon (2006) 225 CLR 364, .
 Paragraph 15.
 (2014) 35 QLCR 206;  QLC 18.
 See South Australian National Football League Inc v City of Charles Sturt (1998) 97 LGERA 293; Royal Agricultural Society of New South Wales v Sydney City Council (1987) 61 LGRA 305; Chamwell Pty Ltd v Strathfield Council  NSWLEC 114.
 Ex 15, paragraph 22.
 Ex 10, paragraph 3, exhibit JPB-1 page 8 and 10.
 Ibid exhibit JPB-1 page 8.
Smith v Wyong Shire Council (No 2) (1980) 41 LGRA 202.
 Ibid 213.
Conyngham & Ors v Minister for Immigration and Ethnic Affairs (1986) 68 ALR 423, 437.
Minister for Immigration and Ethnic Affairs v Conyngham & Ors (1986) 11 FCR 258; 68 ALR 441 (Sheppard, Beaumont and Burchett JJ).
 Ex 15, paragraph 23.
 See Local Government Act 2009, s 94(1A) and s 95; Local Government Regulation 2012, s 88(4)(e).
 Ex 15, paragraph 26.
 Ex 8, exhibit MRG-18.
 Ex 14, paragraph 24.
 Ex 15, paragraph 25.
 Unless of course there is some arrangement by which an occupier or tenant becomes liable to pay the rates during the period of occupancy or tenancy.
 Ex 15, paragraph 28.
 Revenue Statement 2017-18.
- Published Case Name:
Geldard v Western Downs Regional Council
- Shortened Case Name:
Geldard v Western Downs Regional Council
 QLC 17
20 Mar 2019