Land and Environment Court of New South Wales CITATION : Buyinbin Aboriginal Corporation v Richmond Valley Council [2005] NSWLEC 702 APPLICANT Buyinbin Aboriginal Corporation PARTIES : RESPONDENT Richmond Valley Council FILE NUMBER(S) : 31189; 31190; 31191; 31192; 31193; 31194; 31195; 31196; 31197; 31198; 31199; 31200; 31201; 31202; 31203; 31204; 31205; 31206; 31207 of 2005 CORAM: Talbot J Rating :- whether an appeal lies against a charge made for services in respect of non-rateable land. KEY ISSUES: Appeal:- whether an appeal can be made against a charge made in respect of land that is rate exempt. Aboriginal Councils and Associations Act 1976 LEGISLATION CITED: Land and Environment Court Act 1979, s496, s501, s502, s546, s550, s554, s556, s574, s712 Local Government Act 1993, s39(2) National Parks and Wildlife Service and Anor v Stables Perisher Pty Ltd (1990) 20 NSWLR 573; CASES CITED: Thomson Australia Holdings Pty Ltd v The Trade Practices Commission and Ors (1981) 148 CLR 151 DATES OF HEARING: 29/11/2005, 14/12/2005 DATE OF JUDGMENT: 12/14/2005 APPLICANT Mr M L Wright SOLICITORS Hinterland Legal LEGAL REPRESENTATIVES: RESPONDENT Mr A M Pickles SOLICITORS Hannigans Solicitors JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Talbot J 14 December 2005 31189 - 31207 of 2004 Buyinbin Aboriginal Corporation v Richmond Valley Council JUDGMENT 1 Talbot J: The Applicant has appealed pursuant to s 574(1)(b) of the Local Government Act 1993 ("the Act") against the levying of charges by the Council pursuant to sections 496 and 501 of the Act in respect of 19 properties owned by Buyinbin Aboriginal Corporation ("the Corporation"). The Corporation is an incorporated body under the Aboriginal Councils and Associations Act 1976. Seventeen of its properties consist of residential dwellings occupied for residential purposes by Aboriginal tenants who pay rent to the Corporation. One of the properties is used as a community centre and the remaining property is used as an "Art Shed". Each of the properties has available the provision of water and sewerage provided by the Council. In addition the Council provides domestic waste services to each residential property and non-domestic waste to the non-residential properties. 2 The Council has issued notices for the 2004-2005 financial year in respect of domestic waste charges, water consumption charges and sewerage charges for the properties. 3 The sewerage charge for the seventeen residential properties is a fixed charge. The sewerage charge for the two non-residential properties and the water charges are based upon a meter reading. The waste charge is a fixed charge per property and is dependant on the number of services provided to the individual property. 4 In addition to the charges for sewerage, domestic and non-domestic waste for the 2004-2005 financial year the Council has included arrears and interest on the arrears for charges in respect of sewerage, water and waste services outstanding from previous financial years. 5 In February 2004 the Council acknowledged that the Corporation was exempt from the payment of rates for each of the properties pursuant to s556(1)(h) of the Act. The Applicable Legislation 6 The Act contains the following relevant provisions (emphasis added): 554 What land is rateable? All land in an area is rateable unless it is exempt from rating. 496 Making and levying of annual charges for domestic waste management services (1) A council must make and levy an annual charge for the provision of domestic waste management services for each parcel of rateable land for which the service is available. (2) A council may make an annual charge for the provision of a domestic waste management service for a parcel of land that is exempt from rating if: (a) the service is available for that land, and (b) the owner of that land requests or agrees to the provision of the service to that land, and (c) the amount of the annual charge is limited to recovering the cost of providing the service to that land. 501 For what services can a council impose an annual charge? (1) A council may make an annual charge for any of the following services provided, or proposed to be provided, on an annual basis by the council: • water supply services • sewerage services • drainage services • waste management services (other than domestic waste management services) • any services prescribed by the regulations. (2) A council may make a single charge for two or more such services. (3) An annual charge may be levied on each parcel of rateable land for which the service is provided or proposed to be provided. 502 Charges for actual use A council may make a charge for a service referred to in section 496 or 501 according to the actual use of the service. 546 How is a rate or charge levied? (1) A rate or charge is levied on the land specified in a rates and charges notice by the service of the notice. 550 Charge of rates and charges on land (1) A rate or charge levied under this Act on land (including any interest accrued on the rate or charge as referred to in section 566) and any costs awarded to the council by a court in proceedings to recover the rate or charge are a charge on the land. 556 What land is exempt from all rates, other than water supply special rates and sewerage special rates? (1) The following land is exempt from all rates, other than water supply special rates and sewerage special rates: (h) land that belongs to a public benevolent institution or public charity and is used or occupied by the institution or charity for the purposes of the institution or charity, 712 Special provisions with respect to the recovery of unpaid rates and charges (1) Proceedings for the recovery of a rate or charge may be commenced at any time within 20 years from the date when the rate or charge became due and payable. (3) In any proceedings for the recovery of a rate or charge, a court may decide any matter that is called into question and that is relevant to the determination of the proceedings, even though the matter would otherwise be beyond the court's jurisdiction. (5) No matter in respect of which a right of appeal is given under section 574 may be called into question in any proceedings for the recovery of a rate or charge so as to prevent its recovery if the time within which the right of appeal may be exercised has expired. 574 Appeal on question of whether land is rateable or subject to a charge (1) A person who has an estate in land, or who is the holder of a licence or permit for land under the Crown Lands Act 1989, in respect of which a rates and charges notice is served may appeal to the Land and Environment Court: (a) in the case of a rate—against the levying of the rate on the ground that the land or part of it is not rateable or is not rateable to a particular ordinary rate or a particular special rate, or (b) in the case of a charge—against the levying of the charge on the ground that the land is not subject to any charge (excluding a charge limited under section 503 (2)) or is not subject to the particular charge. 7 Section 496(2) was inserted by Amending Act No 61 of 1997. In that respect the second reading speech of the Minister contained the following: Technical irregularity is also the reason for amendment of the domestic waste management service charging provisions. The Local Government Act includes some very precise provisions for costing and charging for these services. However, due to interlocking definitions of terms, the legal result is that councils are unable to charge for services provided to non-rateable properties. This is a significant omission because the non-rateable exemption applies to Crown land, churches, schools and numerous other categories of land. In fact owners of most non-rateable properties receiving domestic waste management services are separately agreeing to pay councils. An amendment will enable councils to levy a charge for domestic waste management services on non-rateable land, provided the service is requested or agreed to, and the charge is limited to the cost of providing the service. Owners of non-rateable properties who do not wish to incur the cost simply elect not to receive the service. Councils are separately able to charge fees for providing various services, including supplying products or information, allowing admission to a building or enclosure and exercising regulatory function. Rather than the fee attaching to land, the person who receives the service pays the fee. 8 References to "levy" were omitted from s501(1) and (2) by Amending Act No 69 of 1996 and the words underlined in s502 set out above were added. The following extract is taken from the Minister's second reading speech on 11 September1996 (emphasis added): There are two amendments that will clarify the charging provisions of the Act. Firstly, a minor amendment of the general provision that enables a council to levy an annual charge, for such services as water, sewerage and drainage, is being more clearly directed at rateable properties. Secondly, it is clarified that the ability of a council to charge for the actual use of a service is directed at the same services to which annual charges apply. Further, the charge is applicable only where there is a measurable, "actual use" of the service. 9 Pursuant to s502 a council may make a charge for a service referred to in s496 or s501 according to "the actual use of the service" whereas the power under s496 and s501 is confined in terms to the imposition of an annual charge for the services irrespective of actual use. It is the provision of or proposal to provide the service that entitles the council to make the annual charge. Alternatively, pursuant to s502, a charge can be made in respect of each occasion when the service is actually utilised. Although expressed in slightly different terms both s496 and s501 invoke a scheme of a fixed charge rather than a charge for the intermittent or elective service contemplated by s502. 10 The Corporation relies upon the use of the discretionary word "may" in s496(2) in contrast to the use of the word "must" in s496(1). Section 496(2) applies to the subject lands as they are acknowledged to be "exempt from rating". The argument raised by Mr Wright on behalf of the Corporation is that the Council has the power to decide whether or not the charge for domestic waste management services is to be made in respect of a parcel of rate exempt land. Unless and until that decision is made the land is not subject to that charge by virtue of its rate exempt status. 11 Mr Wright says the effect of s501(3) is to confine the power to make an annual charge for any of the services referred to in s501(1) to rateable land only. Accordingly such charges cannot be levied on land that is not rateable. Such construction, he says, is consistent with the plain words of s554. That provides for all land to be rateable unless it is exempt. Moreover the amendment to s496 by the introduction of subsection (2) in 1997 relating to land exempt from rating shows an intention to distinguish the power to make an annual charge under s501. This is because there is no specific provision in the latter section for the making of an annual charge for water supply services, sewerage services, drainage services, or waste management services (other than domestic waste management services dealt with by s496) for a parcel of land that is exempt from rating. 12 It is also contended on behalf of the Corporation that, as with s496(2), the use of the word "may" in s501 reveals a clear legislative intention to confer a discretion upon the council to decide whether or not the charges authorised to be made and levied under the latter section are to be made or levied in a particular case. 13 Mr Wright further submits that the discretion conferred on a council under s496(2) and s501 is a discretion that the Court is empowered to exercise on an appeal under s 574(1)(b) pursuant to s39(2) of the Land and Environment Court Act 1979 ("the Court Act"). It is his contention that the discretion should be exercised in favour of the Corporation for the following reasons: · Buyinbin is a public benevolent institution and/or public charity and is using its properties for the purpose of providing much needed housing for the Aboriginal community of Casino. The properties have been acquired with Commonwealth funding specifically for that purpose. · Buyinbin had sought recognition of the rate exempt status of its properties from the Council from 1997 to 2002 without success; · In 2003-2004 it appealed to the Court against the rates and charges levied by the Council in that year. As a consequence of those appeals, the Council belatedly recognised Buyinbin's status yet the basis for seeking recognition of that status in 2003-2004 was the same as it had been in the years from 1997 to 2002. In each of those years, the Council has had the benefit of monies paid by Buyinbin for rates and charges which properly should have been applied to Buyinbin's purposes as a public benevolent institution and/or public charity; · Buyinbin was forced to sell three of its properties to pay a rates and charges debt of $180,033.57 owing to the Council thus reducing its available stock of housing; · This history was well known to the Council at the time it decided to make and levy charges on Buyinbin's properties in the 2004 to 2005 rating year. Arrears 14 In earlier proceedings commenced in 2003 the Corporation appealed against the levying of rates by the Council on its land on the ground it was exempt from rating under s556(1)(h) of the Act. Separate appeals were made in respect of each of the properties that are the subject of the present proceedings. By letter dated 13 February 2004 the Council's solicitors confirmed that the Council accepted that the Corporation was exempt from paying rates for the rating year 2003-2004. On 17 February 2004 orders were made by consent as follows: 1. In each matter the appeal is upheld. 2. The Respondent to pay the Applicant's costs of $2,750 within 28 days of the making of these orders. 15 The rates and charges notices issued by the Council in respect of the 2004-2005 year include amounts claimed to be due to the Council for charges made and levied under ss 496(2) and 501 for the 2003-2004 rating year. It is the Corporation's claim that as appeals were upheld for the 2003-2004 rating year there are no arrears owing that could be included in the 2004-2005 rates and charges notices. The Issues 16 The Corporation does not dispute that s496(2) permits the Council to impose an annual charge for domestic waste management services provided that the statutory criteria are satisfied. The Respondent does not contend that the imposition of a charge for a domestic waste management service under s496 is mandatory. There is no allegation by the Corporation, and there is no evidence, that the charges made do not reflect the cost of providing the services to the respective parcels of land. 17 On behalf of the Council Mr Pickles relies upon the express provision in the Act providing for exemption from rates and special rates and the absence of any corresponding provision in respect of charges. 18 The question arises whether the legislature has indicated an intention to make a distinction between a charge for the provision of domestic waste management services and the provision of the services referred to in s501. Until s496(2) was introduced there was no power to make a charge for domestic waste management services to land that is exempt from rating. When that change was made no corresponding amendment was made to s501. 19 It is the Corporation's position that at all relevant times s501(3) made it clear that the power to levy an annual charge for the services nominated in that section was limited to a levy on each parcel of rateable land. Accordingly it is said that the introduction of s496(2) in 1997 was intended to overcome the lack of power to make a charge for domestic waste management services on rate exempt land but no such intention was expressed in s501 which expressly excludes charges for domestic waste management services. 20 It is the Council's argument that as s501(1) makes no distinction between rateable and non-rateable land and because subs (3) is not expressed in exclusive language (for example by use of the word "only") it is a matter for the discretion of council in each case (irrespective of whether the land is rateable) to make the annual charges referred to in the section. 21 During oral submissions there was discussion regarding whether there is a difference between the power of the council to "make" an annual charge in contrast to the power to "make and levy " or "levy" the charge. 22 The dictionary meaning of "levy" relevantly relates to the imposition and collection of a tax by assessment and the seizure or attachment of property in respect thereof (The Macquarie Dictionary and The Australian Oxford Dictionary). In the context of Chapter 15 of the Act "levy" is used consistently in respect of the assessment and collection of rates and annual charges for rateable land. 23 Section 546 provides that "a rate or charge is levied on the land" by service of a notice. Section 496(1) dealing with the obligation to impose an annual charge for the provision of domestic waste management services for rateable land uses the expression "make and levy". Whereas subs (2) deals only with the discretionary power to "make" an annual charge in respect to the provision of service to land that is exempt from rating. The general power contained in s501(1) is a power to "make" an annual charge. However under s501(3) the annual charge "may be levied" on rateable land. The power to levy was expressly removed in respect of a charge under s501(1) and (2) in 1996. 24 Wherever provision is made for the "levy" of a charge under the Act it relates only to rateable land. A rate or charge levied under the Act on land becomes a charge on the land pursuant to s550(1). There is no provision for the levy of a charge where it is made in respect of non-rateable or exempt land. Nor is there any provision for a charge made in respect of non-rateable or exempt land to become a charge on the land. 25 The scheme of the Act provides for the levy of a rate on rateable land. The rate when levied becomes a charge on the land. Likewise when a charge is made and levied in respect of rateable land it becomes a charge on the land. 26 All land is rateable unless it is exempt from rating. There being no power for the levy of a charge on non-rateable or exempt land there cannot be the creation of a charge on non-rateable or exempt land pursuant to s550(1). This consequence is consistent with the notion of a tax imposed according to a system based upon a universal or standard rate irrespective of benefit or user. A charge for actual services rendered is in a different category. 27 The abovementioned analysis is important in order to understand the effect of s574. The Rate Notices Issued by Council 28 The charges pursuant to s496 have been notified by a document entitled "Rate Notice" and bearing the following endorsement: 1993 Act and Regulations. Notice hereby given that the undermentioned land has been rated by Richmond Valley Council as shown hereunder. 29 The Corporation's land is exempt from rates and therefore prima facie it may be entitled to succeed on appeal in respect of those assessments on a strictly technical basis. However, it is clear that the charges under s496 are not rates. Domestic waste services are the only items nominated in the Notices. No rate is levied. For the reasons explained in connection with the Water/Sewerage Accounts hereunder there is no ground for appeal against the making of charges for domestic waste management services. There would be no utility in upholding the appeals. The charges are still recoverable against the Corporation on the same basis as the charges raised under ss 501 and 502. The Water/Sewerage Accounts 30 The Water/Sewerage Accounts bear one of the following endorsements. Either: This account is raised under section 502 of the Local Government Act 1993 being a charge for water supplied as set out below. Or: This account is raised under sections 501 and 502 of the Local Government Act 1993 being a charge for water and/or sewerage where applicable as set out below. 31 An appeal lies in this Court against the levying of a charge. Section 712 contemplates that where a rate or charge is levied the opportunity for challenge against the levying of the charge on the ground that the land is not subject to any charge is confined to an appeal under s574. Otherwise a court in any proceedings for recovery of a rate or charge may decide any matter that is called into question. Mr Wright is correct when he says there is no power to levy a charge on non-rateable land under s501. The same applies to s496. Where the land is exempt from all rates there can be no question of a levy because there is no provision for a levy of charges on non-rateable land and hence no right of appeal under s574(1)(b). 32 Accordingly irrespective of the effect of s39(2) of the Court Act the Court is not in a position to re-exercise the Council's discretion to make the charges under s496(2) or s501(1). It is the absence of the levy that deprives his client of the right to appeal. That however does not preclude the making of such a charge. Moreover the specified ground for appeal in s574(1)(b) does not encompass a re-exercise of the Council's discretion on matters of merit. That is the basis for the Corporation's claim. 33 If on the other hand the issue of the respective notices by the Council purports to be or is in fact a levy, an appeal arguably could lie on the limited basis that the land is not subject to any charge. For the Appellant to succeed it would be necessary to take an extremely liberal view of the power to exercise discretion under s39(2) of the Court Act. 34 With possible exception of the Rate Notices referred to above the notices issued in respect of subject charges (including arrears) do not purport to levy the charges made. Clearly a charge has been made in the present case. However without a levy of the charge no right of appeal exists. The recourse of the Corporation, if any, is to defend proceedings for recovery of the charges under s712. 35 The Parliament has seen fit to afford an opportunity for appeal where the levy of the charge is in the nature of a tax and results in a charge on the land. In such a case there is an obvious ongoing effect from the adverse impact of creation of an encumbrance on the title to the land, irrespective of whether direct recovery action is taken. Conversely where the title to the land is not encumbered with a charge the relationship between the council and the land owner is that which prevails in a normal position between a debtor and a creditor enhanced, as it is, to the extent provided by s712. The owner of non-rateable land has the opportunity to reject a service offered for domestic waste management services. That is a further reason to support a construction against the right of appeal against the making of a charge in respect of domestic waste management services. 36 The approach that I have adopted is directly consistent with the explanation given by the respective Ministers in the second reading speeches made in 1996 and 1997, the relevant parts of which I have quoted above. 37 The appeals in respect of the Water/Sewerage Accounts will be dismissed. 38 The same arguments and conclusions deal with the arrears claimed for previous years. 39 Not only is it unfortunate that the appellant has no right of appeal but it is also regrettable that neither side, the Council nor the Corporation, addressed the crucial issue until it was raised during discussion at the hearing. It is prima facie appropriate, in the circumstances, that there be no order as to costs so that each party becomes responsible for its own costs. The issues raised in the appeal have not, so far as my researches show, been litigated previously and needed to be resolved. Even though ultimately the conclusion was foreseeable, there was no formal challenge to the jurisdiction of the Court until I raised the matter during submissions. The Court cannot attract jurisdiction to itself, even with the consent of the parties (Thomson Australia Holdings Pty Ltd v The Trade Practices Commission and Ors (1981) 148 CLR 151 at 163; National Parks and Wildlife Service and Anor v Stables Perisher Pty Ltd (1990) 20 NSWLR 573). Orders 40 The Court orders that: 1. The Appeal in each of matters numbered 31189-31207 of 2004 is dismissed. 2. The exhibits may be returned. 3. If neither party makes an application for an order for costs by lodging a Notice of Motion within 7 days there will be no orders as to costs. 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