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[2018] QCA 222
In this decision, the Court of Appeal considered certain provisions of the Local Government Act 2009 and the Local Government Regulation 2012 which deal with the levying of rates and charges. It overturned the decision of the primary judge, who had declared that certain water charges were invalid for non-compliance with the legislation.
Sofronoff P and Gotterson and Philippides JJA
18 September 2018
Background
The respondent (“the Friendly Society”) was the registered proprietor of a number of adjacent properties at Mt Isa. [1]. On 21 July 2016, the appellant (“the Council”) passed two resolutions. [5]. The first was “a resolution adopting the Council’s 2016/2017 Revenue Statement” and the second was “a resolution adopting “the following rates and charges ... for the 2016/2017 financial year”. [5].
The rates and charges set out in the second resolution included Water Charges. [6]. These charges comprised an amount of $202.00 per unit where units were assigned to property in accordance with a schedule of land classifications set out in the Revenue Statement. [6]. One unit entitled the ratepayer to 112.5 kilolitres of water, and there was an additional charge for excess water consumed. [6].
The Council issued two rate assessment notices to the Friendly Society for its properties. [8]. Each notice contained a Water Charge calculated on a per unit amount of $101.00 (one half of the yearly amount of $202.00). [8]. The Friendly Society sought judicial review in the Supreme Court of (i) the decisions made by the Council on 21 July 2016 insofar as they related to the adoption of Water Charges and (ii) the decisions made by the Council to apply the land classification-based, per unit methodology adopted on 21 July 2016 for assessing Water Charges in respect of the Friendly Society’s land. [9].
Legislation
The Local Government Act 2009 (“the Act”) provides for rates and charges. [13]. Pursuant to s 94, a regulation may provide for any matter connected with rates and charges. [13]. Section 4(1)(a) provides that “[t]o ensure the system of local government is accountable, effective, efficient and sustainable, Parliament requires anyone who is performing a responsibility under this Act to do so in accordance with the local government principles”. [26]. The local government principles are enacted in s 4(2). [26].
Under the Local Government Regulation 2012 (“the Regulation”), a local government must adopt a budget for each financial year. [14]. The budget must include a revenue statement which must include, inter alia, an outline and explanation of the rates and charges to be levied for the financial year. [14].
Section 101 of the Regulation provides (notes and examples omitted):
“(1) The utility charges for a water service must be charged—
(a) wholly according to the water used; or
(b) partly according to the water used, using a 2-part charge.
(2) The utility charges for the water used must be worked out on the basis of—
(a) if the water used is not measured by a water meter—
(i) the estimated average water usage of the consumers within a group of consumers who have similar water usage; or
(ii) another method that is appropriate to decide a consumer’s likely water usage; or
(b) if the water used is measured by a water meter—
(i) an amount for each unit, or part of a unit, of water that is used; or
(ii) a fixed amount plus an amount for each unit, or part of a unit, of water that is used over a stated quantity.
(3) Utility charges for water are not invalid only because the local government does not comply with this part.”
First instance
It was common ground that the Friendly Society’s properties used a water metre, and that the Council’s method of levying utility charges did not constitute a 2-part charge. [17]. The Friendly Society argued that the Council did not have jurisdiction to make any of the decisions, and that the decisions were not authorised by any enactment. [10]. The essence of the Friendly Society’s argument was that the Water Charges levied by the Council were invalid because they were not “wholly according to the water used” as required by s 101(1)(a) of the Regulation. [21]. The Council argued that the charges were valid because they accorded with s 101(2)(b)(ii) of the Regulation. [21].
The primary judge concluded that s 101(2)(b)(ii) applies only where a local government charges for water using a 2-part charge. [23]. Accordingly, his Honour held that the Water Charges failed to comply with s 101(1)(a) of the Regulation. [24]. He also held that the charges were invalid, beyond the validating scope of s 101(3), because of a failure on the Council’s part to exercise its power under s 94 of the Act to levy rates and charges in a manner consistent with s 4 of the Act. [25].
The primary judge granted relief substantially in the form sought, namely, an order quashing or setting aside each decision under review, and a declaration that the Water Charges levied by the Council in 2016-2017 were not legally due. [10].
Court of Appeal
Gotterson JA (speaking for the Court of Appeal) dealt with the grounds of appeal in two categories.
The grounds in the first category concerned the proper construction of s 101 and the validity of the Water Charges. [30]. His Honour held that “s 101(2) is intended to complement s 101(1) by specifying how utility charges are to be levied according to the water used for both alternatives in s 101(1)”. [41]. In the case of s 101(1)(a), s 101(2) is applicable to the whole of the Water charges, whereas in the case of a 2-part charge under s 101(1)(b), it is applicable to the variable component of it only. [41]. Accordingly, his Honour held that the Water Charges as levied complied with s 101(2)(b)(ii). [49].
The grounds in the second category concerned the finding that the charges were invalid, beyond the validating scope of s 101(3), because of a failure to exercise the power under s 94 consistently with the local government principle in s 4(2)(a) of the Act. [51]. His Honour held that “the generality in which local government principle (a) is expressed taken with its frame of reference, focused as it is upon normative values rather than specific conduct, together suggest that the legislature did not intend that a non-adherence to the principle is to result in invalidity where a charge of a kind permitted by regulations made under the [Act] is levied in accordance with the regulations”. [62].
In the result, the Court of Appeal allowed the appeal. [67].
M J Hafeez-Baig