This recent application involved a challenge to a decision by the respondent to levy utility charges for water services, and the giving of a rates notice demanding payment of those charges. It was argued that the respondent failed to comply with s 101 of the Local Government Regulation 2012, which was a prerequisite to exercise the power to charge rates. The case is interesting for its discussion and application of the relevant principles of statutory interpretation, including the identification of dominant and subordinate provisions.
18 December 2017
This matter concerned two applications for declarations to the effect that the respondent invalidly levied utility charges for water services on the applicant. . The first application sought to challenge the decision to levy utility charges for water services on a particular basis. . The second challenged the giving of rates notices to the applicant demanding payment of the charges. .
The applicant submitted that the manner in which the respondent charged for water under the notices failed to comply with s 101 of the Local Government Regulation 2012 (“LGR”) and that this was a pre-requisite to the exercise of the power to charge rates set out in s 94 of the Local Government Act 2009 (“LGA”). . Section 94 of the LGA provides that a local government may levy utility charges. .
Section 99(1) of the LGR provides that “[a] local government may levy utility charges on any basis the local government considers appropriate”. Utility charges are defined in s 92 of the LGA to include charges for a service, facility or activity for utilities, including “water”. . Section 101(1) of the LGR provides that 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”. . A “2-part charge”, as defined in s 41(4) of the LGR, is a utility charge made up of (i) a fixed charge for using the infrastructure that supplies water to the consumer, and (ii) a variable charge for using the water, based on the amount of water that is actually used by the consumer. .
In July 2016, the respondent adopted rates for the 2016/2017 financial year. . The respondent adopted a “rate per unit, charge or service” for water of $202, and included a charge of $2.60 for “[w]ater consumed above allocated allowance per kL”. . It was an agreed fact that the respondent’s method of levying the utility charges did not constitute a “2 part-charge” as defined in s 41(4) of the LGR. .
The applicant contended that the respondent had failed to comply with s 101(1)(a) of the LGR, which obliges a local government to charge for water “wholly according to the water used”. . The applicant submitted that the power in s 99(1) of the LGR to levy utility charges was “impliedly restricted by the mandatory and specific items of s 101 of the LGR”. .
The respondent relied upon s 101(2)(b) of the LGR which provided that if the water used is measured by a water meter (which was the case here), the utility charges for the water must be worked out on the basis of two options: either (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 unit, of water that is used over a stated quantity. . It submitted that its approach complied with s 101(2)(b)(ii) of the LGR, and because it had worked it out the rates pursuant to s 101(2)(b)(ii), it was able to charge them pursuant to s 101(1). . It also argued that even if it were wrong about its suggested construction of ss 101(1) and 101(2), “non-compliance with s 101(1) [of the] LGR did not render the respondent’s water charges invalid”. . The respondent relied upon s 101(3) which provides: “[u]tility charges for water are not invalid only because the local government does not comply with this part”.
Justice Daubney noted that there was an apparent conflict between the necessity for the respondent to charge for a water service “wholly according to the water used”, as required by s 101(1)(a) of the LGR, and s 101(2)(b)(ii) which provides that such a charge may be worked out on a basis comprising a fixed amount. .
Referring to Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, his Honour noted that where conflict arises from the language of particular provisions, it is necessary to determine which provision is the leading provision and which is the subordinate provision. . His Honour considered that s 101(1) of the LGR was the leading provision, whereas s 101(2) was the subordinate provision. . His Honour was of the view that the respondent’s submissions which subordinated the language of s 101(1)(a) “such that a charge ‘wholly according to the water used’ can be worked out by reference to a ‘fixed amount’” would be “an incoherent result which would render the meaning of the words ‘wholly according to the water used’ a nullity”. .
Accordingly, his Honour held that the respondent had failed to comply with s 101(1)(a) of the LGR when it levied the utility charges for water on the application for the rates period. .
Turning to the respondent’s second submission, namely that even if it did not comply with s 101(1) of the LGR, its charge was nevertheless valid by operation of s 101(3), Daubney J agreed with the respondent’s submission that s 101(3) was an “express intention on the subordinate legislature’s part to limit the invalidity of charges where a local government fails to comply with s 101 [of the] LGR”. .
However, focusing on the words “only because” his Honour was of the view that the possibility had been left open that invalidity might arise in circumstances where a local government failed to comply with ss 101(1) and (2) of the LGR, “coupled with some further default on the local government’s part with the terms of the LGA or LGR”. . The applicant submitted that the respondent had also failed to comply with s 94 LGA “which confers power on the respondent to levy rates and charges in a manner consistent with the local government principles in s 4 [of the] LGA”. . Specifically, the applicant argued that “the respondent did not exercise its power to levy utility charges for water in a way that reflected ‘transparent and effective processes, and decision-making in the public interest’.” .
Daubney J agreed with this submission and found that the respondent did not exercise its power under s 94 of the LGA consistently with s 4 LGA. . His Honour concluded:
“I therefore find that the respondent failed to comply not only with Part 4 of Chapter 7 of the LGR, but that it also failed to exercise its power under s 94 LGA in a manner consistent with s 4 LGA when it adopted the utility charges for water at its special meeting on 21 July 2017.” .
In the result, the respondent’s utility charges for water were invalid. .