KEMPSEY SHIRE COUNCIL v VAN PARK PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SHELLER, POWELL and COLE JJA 1 September 1995, 27 September 1995 [1995] NSWCA 237 MEANING of "rateable person" under Local Government Act 1919 — Construction of s145(2) Local Government Act 1919 — natural reading of statute. Sheller JA I agree with Cole JA. Powell JA The facts which gave rise to these proceedings in the District Court, and which give rise to the appeal from the Judgment delivered by Grogan DCJ on 21 January 1991, are set out in the Statement of Agreed Facts which has been reproduced by Cole JA in his Judgment which I have seen, and read, in draft form. Although, both at first instance, and on appeal, the matter was argued, and although the Judgment of Cole JA, with which I understand Sheller JA agrees, proceeds, upon the basis that the only question in issue was, and is, whether the Respondent was, at any relevant time, "a rateable person" in respect of the rate sued for, it seems to me, with respect to those who are of a different view, that the first question to be determined - albeit that it involves questions similar to those which were debated at first instance,and which have been debated on the hearing of the appeal - is, whether, or not, the land in respect of which the Appellant claimed to have levied a rate, which rate it sought to recover in the proceedings, was "rateable land" for the purposes of the Local Government Act 1919 ("LGA"). To those who would assert that such a question cannot be raised in a proceeding to recover unpaid rates (LGA s599 cf LGA s133(2); Hawkesbury Shire Council v Hills!; distinguishing Bankstown MuniciPal Council v Fripp?, and overruling Mosman Municipal Council v Spain? and Bland Shire Council v Rural Bank of New South Wales)4 I would but point out that, at all relevant times, LGA provided (inter alia) as follows:- (2) The council of a municipality or shire shall in each year make and levy a general rate on the land value of all rateable land in the area. 132. (1) All land in a municipality or shire (whether the property of the Crown or not) shall be rateable except:- (c) land which is vested in the Crown or in a public body or in trustees and is used for a public reserved; and 1. The Commissioner of Taxation v Westraders Pty Ltd (1980) 144 CLR 55 at 59-60 per Barwick CI. 2. BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 280. 3. (1929) 29 SR 492; 46 WN 174 4. (1955) 56 SR 14: (1955) 72 WN 477 2 UNREPORTED JUDGMENTS (g) land owned by the Crown, not being - (i) land held under a lease from the Crown by any person for private purposes 144. Every rate shall, except where this Act otherwise expressly provides, be paid to the council by the owner of the land in respect of which the rate is levied. (2) Where the land is owned by the Crown and is held by any person under a lease therefrom, the rate shall be paid to the council by the holder of the lease: Provided that where a Crown lease is transferred by way of mortgage the council may not recover from the mortgagee unless an until it has failed to recover from the mortgagor. 146. (1) Where the land is owned by the council the rate shall, unless it is paid to the council by a person liable therefor, be paid by transfers from and to the appropriate fund under this Act. (2) Where the land is owned by the council and is held therefrom by any person under a lease granted by the council for a term of not less than one year, the rate shall, if the lease contains an agreement by the lessee to pay municipal or local government rates, whether under chose designations or under any words of description which would include municipal or local government rates, or to pay any equivalent sum expressly fixed by reference thereto, be paid to the council by the holder of the lease." and that, LGA s4 - the interpretation section - at all relevant times provided: "4. In this Ace, unless inconsistent with the context or subject-matter 'Crown' includes any statutory body representing the Crown. 'Crown lands' has the same meaning as in the Crown Lands Consolidation Act 1913. 'Lease' includes an original or derivative lease under-lease or agreement for the same, and extends to any case where there is the relation of landlord and tenant, whether there is or is not any instrument in writing. 'Lease', in relation to Crown Lands, land owed by or vested in the Crown or land within a State forest. includes a license or permit... 'Lessee' has a meaning corresponding with that of lease, and includes an original or derivative lessee or under-lessee and any person deriving title under or from a lessee or under-lessee..... .... in relation to land, includes every person who jointly or severally, whether the law or in equity: - (a) is entitled to the land for any estate of freehold in possession; and includes every person who by virtue of this Act is deemed to be the owner; Provided that ehe Crown shall be deemed to be the owner of - (a) all lands of the Crown; and (b) all lands vested in a statutory body representing the Crown. 'Owned', 'owning', and similar expressions have a meaning corresponding with that of owning. 'Rateable person', 'person rateable', and similar expressions include the crown in respect of rateable land owned by the Crown and mean - URJ KEMPSEY SHIRE COUNCIL v VAN PARK PTY LTD (Powell JA) 3 (a) an owner in any case where this Act provides that a rate shall be paid to the council by the owner; (b) a holder of a lease in any case where this Act provides that a rate shall be paid to the council by the holder of the lease." What I have recorded above will, I think, be sufficient to demonstrate that a person or corporation is not "a rateable person" for the purposes of LGA unless he is, or is deemed to be, the owner of rateable land within the meaning of LGA s. 132(1), or is the holder of a lease in any case - such as the Appellant claims this to have been - where LGA provided - as, for example, in LGA 145 - that the relevant rate should be paid to the council by the holder of the lease. Before passing on, it should be noted that, notwithstanding the provisions of LGA s133(2), 599, as from 1970 (Sutherland Shire Council v Leyendekkers,5 not following Salmar Holdings Pty Ltd v Hornsby Shire Council;° Burns Philp Trustee Co Ltd v Blacktown Municipal Council;7 Sutton v Blue Mountains City Council)' there developed within the Court a practice which permitted applications to be made to the Court - originally in its Equity Division - for declarations as to the validity, or otherwise, of a rate which a council had purported to levy, and that, notwithstanding that an appeal had been lodged pursuant to the provisions of LGA s133(2), or, notwithstanding that no appeal had been lodged within the time limited by LGA s133(2). The first question to be determined thus is, whether the subject land is "rateable land" within the meaning of LGA s132. It is clear that, if as was submitted by the Appellant, the subject land is properly to be regarded as Crown Land, it does not follow that the subject land was not rateable - it would only have been so if - the onus, in my view, lying on the Respondent (Morris v Woollahra Municipal Council;? see also Vines v Djordjevitch)!9 - it were shown that the land did not fall within any of the exceptions set out in LGA s132(1). It is, in my view, clear that, even if, as was submitted by the Appellant, the subject land was to be regarded as Crown Land, it was rateable for it has not been shown to fall within any of the exceptions - the only exception - LGA 132(1)(g)(i) - to which reference was made in the course of the argument was, and is, inapplicable for, if the relevant lease is to be regarded as a lease from the Crown, it was, and is, a lease for private, and not public, purposes (Council of the Municipality of Randwick v Rutledge!!; Brush Park Bowling Club Ltd v Ryde Municipal Council!2; cf Forster Homes for the Aged Trust v Great Lakes Shire Council!3; Cole vy Moree Municipal Council).!4 This notwithstanding, the first question remains, whether, for the purposes of LGA, the land is to be regarded as Crown land. (1970) 91 WN 250 (1970) 91 WN 234 [1976] 1 NSWLR 531 (1977) 40 LGRA 51 (1966) 13 LGRA 117,122(HC) (1955) 91 CLR 512 11. (1959) 102 CLR 54 12. (1970) 19 LGRA 380 13. [1976] | NSWLR 577 14. [1976] 1 NSWLR 607 SoweI AM 4 UNREPORTED JUDGMENTS If the reservation from sale, and the appointment of the appellant as trustee had taken place prior to the coming into operation of the amendments to the Crown Lands Consolidation Act 1913 effected by the Crown Lands and Other Acts (Reserves) Amendment Act 1974, and if what appears as if it may have been a common, if not the universal, practice followed in relation to such reserves pursuant to the provisions of the Public Trusts Act 1897, had been followed, the answer to this question may well have been rather easier to determine than it is in the present case. The Public Trusts Act 1897 provided (inter alia) as follows: "2 (I) The Governor may, by notice in the Gazette, appoint a corporate body as trustees of land set apart, dedicated, or reserved (temporarily or otherwise) for any public purpose before or after the day on which this Act takes effect, and may grant to or vest the said land in such corporate body as aforesaid and may, in like manner, appoint the council for the time being of a municipality as trustees of such land as aforesaid whether the land be within or without the boundaries of the municipality, and may grant to or vest the said land in such council as aforesaid. 3. Where land has, before or after the day on which this Act takes effect, been set apart, dedicated, or reserved for any public purpose, under any Act, the Governor may by notice in the Gazette, and without any deed, grant, or other assurance, vest the land in the trustees for such estate, and with such powers and subject to such limitations and conditions as he may think fit. It having been, as I understand it, a common practice, prior to 1974, for reserved land to be vested in any trustee appointed to the provisions of s3. In such a case, clearly enough, an estate was vested in the relevant council, albeit that whether that estate was an estate in fee simple subject to defeasance, or whether it was an estate in fee simple upon a condition, could well have been the subject of significant debate (Attorney-General v Cochrane)!5. However, with the coming into effect of the amendments to the Crown Lands Consolidation Act 1913, effected by the Crown Lands and Other Acts (Reserves) Amendment Act 1974 - which Act repealed (inter alia) the Public Trusts Act 1897 - the basic scheme which appears to have operated under the provisions of the Public Trusts Act 1897 appears to have been altered. Although the Crown Lands Consolidation Act 1913 as so amended provided - s37AAA, s37BBB - for prescribed lands to be vested in a council for an estate in fee simple in an appropriate case, that power appears to me to be far more limited than was the power vested in the Governor by the provisions of the Public Trusts Act 1897 s4. For present purposes, the new scheme under the Crown Lands Consolidation Act 1913 - since repealed by the Crown Lands Act 1989 s185, Sch 7 - is sufficiently indicated by the following provisions of the Act as so amended: - "37P. (1) The Minister may, by notification published in the Gazette, appoint a corporation, whether (a) a council: to be the sole trustee of a reserve. 37R. The trustees of a reserve appointed under this Division are charged with the care, control and management of the reserve. 15. (1970) 91 WN 861, 871-872 per Mason JA (as he then was) URJ KEMPSEY SHIRE COUNCIL v VAN PARK PTY LTD (Powell JA) 5 37X. (1) Except to the extent that the trustees of a reserve have an estate in fee simple in the reserve apart from this section, the trustees shall, for the purposes only of this Part and of any by-laws, be deemed to have that estate in the reserve. (2) The trustees of a reserve are not capable of alienating, charging, granting leases of, or licenses in respect of, or in any way disposing of the reserve or any pa t of the reserve except in accordance with Division 3. (4) The revocation of the setting apart, dedication or reservation as to the whole or a part of a reserve divests the trustees of any estate in the whole or that part of the reserve, as the case may be. 37(ID). (1) The Governor may make by-laws for or with respect to (a) the care, control and management of any reserve; (i) the regulation, control or prohibition or parking, camping or residing on any reserve, the making of charges for any such parking, camping or residing, and the collecting and receiving of any such charges; (6) By-laws made for or with respect to the matters referred to in para(i) of subs(1) shall have effect notwithstanding anything contained in s37X or any other provision of this or any other Act. 37(KK). (1) Where (a) the trustees of a reserve have passed a resolution that it is desirable to sell, lease or mortgage the reserve or any part thereof upon specified terms or conditions; (c) the trustees have applied in writing to the Minister for his consent to the proposed sale, lease or mortgage and have furnished a full statement of the facts relating thereto; and the Minister may give his consent in writing either as to the whole or as to part of the lands in respect of which the application was made, or may refuse to grant the application. (2) In the case of an application for consent to a sale or lease under this Division, the Minister may give his consent either generally by authorising the sale or lease subject to such conditions, restrictions, reservations and covenants, and in such manner and within such time, as he thinks desirable, or by approving of a particular contract for sale or lease. 37MM. (1) After obtaining the consent of the Minister under s37KK, and not otherwise, the trustees of a reserve may sell, lease or mortgage lands within the reserve according to the terms of the consent. (2) Notwithstanding subs(1), where the Minister has given his consent generally under s37KK of the sale or lease of lands within a reserve, the lands shall not be sold or leased in pursuance of the consent unless the price agreed upon or rent reserved has been submitted to him and approved of by him." In the present case, the Agreed Statement of Facts makes it clear that the subject lands were never vested in the Appellant pursuant to the provisions of s37AM, s37BBB of the Crown Lands Consolidation Act 1913, it following that 6 UNREPORTED JUDGMENTS the lease granted to the Respondent by the Appellant was granted, not by virtue of any estate vested in it, but, by virtue of the interaction of the provisions of s37P, s37R, s37X, and by virtue of the consent given by the Minister pursuant to the provisions of s37KK, s37MM of the Crown Land Consolidation Act 1913. This being so, it seems to me that it is inescapable that, at all relevant times, the subject lands remained Crown lands and, not falling within any of the exceptions to LGA s132(1) were to be regarded as "rateable land" for the purposes of LGA. It does not, however, follow that the Respondent was, at any relevant time, "a rateable person" for the purposes of LGA. That would be so only if, at the relevant time, the subject lands were to be held by any person in the circumstances contemplated by LGA s145(2). With respect to the argument, so vigorously advanced by Mr AM Bannon who appeared for the Appellant, that the provisions of LGA s145(2) operate, not merely where a person holds a lease granted by the Crown, but also where a person holds a lease granted by a person or company, the title to grant which lease is derived from the Crown, it seems to me, with respect, that, both in the immediate context in which the word "therefrom" in LGA s145(2) is used, and also in the context provided by LGA s145 and s146, that argument is to be regarded as untenable, it following, that, in the present case, notwithstanding that at all relevant times the subject land was Crown Land, it was not held by the Respondent under a lease from the Crown, and, accordingly, that the Respondent is not "a rateable person" for the purposes of LGA. I note that the view which I have just expressed is one which - although the questions then in issue were not identical with those which have required the decision of the Court on this Appeal - appears to be consonant with the approach taken by Waddell J (as he then was) in Forster Homes for the Aged Trust v Great Lakes Shire Council!® and Cole v Moree Municipal Council!7 when, as the Judge of the Land and Valuation Court, he dealt with appeals pursuant to the provisions of LGA s133(2) in respect of rates which the Respondent councils had sought to levy on Crown lands which had been reserved from sale. This being so, I agree that the present appeal should be dismissed with costs. Cole JA The question for determination on this appeal is: "Whether, under the Local Government Act 1919, as amended, a person being a lessee from a Council of Crown land of which the Council was trustee, was a rateable person." Although the Local Government Act 1919 has now been repealed, the Court was informed that the matter was of general importance. FACTS The following facts were agreed; 1. The land in respect of which the plaintiff claims rates is within the Kempsey Shire. 2. The land is unalienated Crown land known as Reserve 89265. It was reserved from sale for public purposes pursuant to s28 of the Crown Lands Consolidation Act, 1913, by notification dated 9th August, 1974 published in the NSW Government Gazette No. 95 of 9th August, 1974 at 3130 and 31331. 3. There has never been any Crown grant of the land for any interest to the plaintiff, the defendant, the Macleay Shire Council or to anyone else. 16. (supra) 17. (supra) URJ KEMPSEY SHIRE COUNCIL v VAN PARK PTY LTD (Cole JA) 7 4. By an appointment dated 6th September, 1974, the Minister for Lands in pursuance of the provisions of S37P of the Crown Lands Consolidation Act appointed the Council of the Shire of Macleay sole trustee of Reserve 89265. 5. By indenture of Lease ("the Lease') made the 31st day of January 1975 the Council of the Shire of Macleay leased Reserve 39865 to the defendant for a term of 30 years. The consent of the Minister of Lands under s37KK of the Crown Lands Consolidation Act to the Lease was given by a delegate of the Minister. The lease was registered in the General Register of Deeds No. 852 Book 3131 on 29th June, 1975. 6. The Council of the Shire of Macleay made a Development Agreement dated 31st January, 1975 with Van Park Pty Ltd relating to Reserve 89265 and also to other land, being Headland Reserve No. 82364 ("the Development Agreement"). The consent of the Minister of Lands under s37KK to the Development Agreement was given by a delegate of the Minister and endorsed on the Development Agreement. 7. The Council of the Shire of Macleay was amalgamated with the Kempsey Shire Council and the Macleay River County Council on Ist October 1975 to constitute the Kempsey Shire Council. 8. Since the Lease was granted the defendant has occupied Reserve 89265 and has used the land as a caravan park and camp site, and as a shop. The defendant has carried on business thereby hiring out caravan sites and camp sites in the reserve, by selling goods to campers and others from the shop, and by hiring out goods used by campers and surfers. The business has been conducted for the private profit of the company, and the rent payable to the Council varies with the gross receipts of the business. The defendant exercises practical control over the land leased, so that it is all used for the purpose of the caravan and camp site park and associated shop and hire services. The public are not able to use the land leased except by hiring caravan and camp site parks. Caravan sites and camp sites are occupied by members of the public who have hired the sites from the defendant, together with families or other members of camping parties accompanying them. 9. In addition, other members of the public come on to the land leased for the purpose of doing business at the shop, and before and during the year 1979 did in fact (but not as of right) cross the land leased while making their way between the beach and the town or visiting campers. Such person had not at any time had any right to remain on the land or to camp there without the consent of the defendant. 10. The Council of the Shire of Macleay did not levy rates on the Reserve 89265 for the year 1975, and the Kempsey Shire Council did not levy rates on Reserve 89265 for the years 1976, 1977 or 1978. A valuation from the Valuer-general had not been received by the Kempsey Shire Council (or the Macleay Shire Council) prior to 1980. The Kempsey Shire Council was, as at 1976 and thereafter, the relevant rate authority with respect to the land. 11. Kempsey Shire Council has levied rates on the subject land as follows: Calendar year 1979 $2,490.00 1980 $2,680.00 1981 $2,748.50 Interest at 10% pa to 31/12/86 $ 4,659.48 Interest at 17.75 % pa $ 819.90 8 UNREPORTED JUDGMENTS from 1/1/87 to 23/7/87 | $13,397.88 The lease was attached to the statement of agreed facts and was before Grogan DCJ and this Court. On this appeal the Court is not concerned with the quantum of any claim but merely with the determination of the matter of principle. Grogan DCJ held that the respondent was not a rateable person, and dismissed the appellant's claim for rates. THE ISSUE Pursuant to s559(3) of the Act, when a person is sued as here for rates, the defences permitted to be raised were limited. The only defence here raised was that contemplated by s559(1)(c), namely, that the defendant respondent was not at any relevant time a rateable person in respect of the rate levied. "Rateable person" is defined in s4 to: "Include the Crown in respect of rateable land owned by the Crown and mean (a)... (b) a holder of a lease in any case where this Act provides that a rate shall be paid to the Council by the holder the lease." The appellant argued that the Act did so provide in s145(2) which was in the following terms: "Where the land is owned by the Crown and is held by any person under a lease therefrom, the rate shall be paid to the Council by the holder of the lease: Mr Cashion, who argued the matter for the appellant Council with admirable clarity and brevity accepted, correctly, that the word "therefrom" meant "the Crown". As the lease in question showed the lessor as the Council, and not the Crown, the natural reading of s145(2) results in the lease not being a lease "therefrom", meaning from the Crown, and thus the appellant would fail. To escape this natural reading of the section, three propositions were advanced. The first was that the wording of s145(2), and in particular the use of the words "owned" and "held", suggest that the subsection is primarily concerned with matters of title and derivation of title rather than with the party named as lessor. It was argued that had the legislature been concerned primarily with the identity of the parties to the lease, it could have expressed the test contained in the subsection by reference to the words "lessor" and "lessee". Both those words are used elsewhere in the Act and are defined in s4 of the Act. However, the focus of the subsection is the leasehold estate held by the respondent and its derivation. That leasehold holding is derived from the Crown. There are a number of answers to this submission. First, whilst it is true that different expressions may have been used, the legislature chose the expressions it did use. The expression "under a lease therefrom" is clear and unambiguous. There is no warrant for giving the words a meaning other than their clear meaning. Second, s145(2) is related to s132(1)(g). By the latter section all land in a municipality, whether the property of the Crown or not, is rateable except: "Land owned by the Crown, not being - (i) land held under a lease from the Crown by any person for private purposes." URJ KEMPSEY SHIRE COUNCIL v VAN PARK PTY LTD (Cole JA) 9 Being a taxing statute, clear words are required to impose a taxation liability.18 This principle mitigates against torturing the language of s145(2) to impose an impost. Third, the definition of "rateable person" and the provisions of s132 make clear that it is only a limited category of land which is rateable, namely, that described in s145(2). Had the legislature intended to render rateable, land owned by the Crown but which was leased by a trustee holding the land on behalf of the Crown, or by a lessee or sub- lessee who held its interest otherwise than directly from the Crown, it could readily, and clearly have so provided. The second submission was that if the position be otherwise than that asserted by the Council, there would be an anomaly. Such an anomaly would arise because a person who entered into a lease with the Crown in respect of Crown land for use by the lessee as a caravan park would be a rateable person, whereas if a trustee under the Crown Lands Consolidation Act 1913 has been interposed as contemplated by s37R and the land was leased by the trustee pursuant to s37MM Crown Lands Consolidation Act 1913, the lessee would not be a rateable person. It was argued that that could not have been the intention of the legislature. Accordingly s145(2) should be construed as thought the words "under a lease therefrom" read "under a lease from the Crown or trustee of Crown land". There is no warrant for such an insertion in s145(2) simply to remove the asserted anomaly.!9 That is so, additionally, for the reasons given in relation to the first submission. The third submission depended on use of the first definition of "lease" in s4 of the Act. "Lease" is there defined as follows: "Lease" includes an original or derivative lease underlease or agreement for the same, and extends to any case where there is the relationship of landlord and tenant, whether there is or is not any instrument in writing." This was said to highlight the derivative concept of a lease from the Crown and show the intention of the legislature in relation to leases referred to in s145(2). This construction involves reading the expression "under a lease therefrom" as though it was the expression "under a lease derived therefrom". There is no warrant for inserting the word derived. Further, the argument, were it correct, would make not only lessees but sub-lessees both rateable in respect of the same piece of land. That could hardly have been intended. There is no reason to give the words in s145(2) other than their natural meaning. In consequence Crown land the subject of a lease from trustees does not fall within the land described in s145(2). It is thus not rateable in consequence of s132(1)(g), as it does not fall within the exception provided by s133(1)(g)(i). Grogan DCJ was correct. The appeal should be dismissed with costs. Appeal dismissed with costs. COUNSEL: Appellant: M Cashion Respondent: TS Hale SOLICITORS: 18. The Commissioner of Taxation v Westraders Pty Ltd (1980) 144 CLR 55 at 59-60 per Barwick CI. 19. BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 280. 10 UNREPORTED JUDGMENTS Appellant: Howard, Sheridan, Cooney, Harvey Respondent: Allen Allen and Hemsley