Land and Environment Court of New South Wales CITATION : Oliver v Kempsey Shire Council [1988] NSWLEC 152 APPLICANT Oliver PARTIES : RESPONDENT Kempsey Shire Council FILE NUMBER(S) : 30033; 30034; 30035 of 1988 CORAM: Bignold J KEY ISSUES: :- LEGISLATION CITED: Local Government Act 1919 Waddell J. in Fennell v. Wyong Shire Council (1975) ; Hope v. Bathurst City Council (1980) ; Hinton v. Hornsby Shire Council (1970); Bistern Pty. Ltd. v. Penrith City Council (1977) ; Ryde Municipal Council v. Macquarie University (1978) ; Southern Riverina County Council v. Lewington (1963) ; CASES CITED: Simpson v. Wingecarribee Shire Council (1963) ; Power v. Southern Riverina County Council (1965); Ulan Coal Mines Limited v. Mudgee Shire Council (1988); Hope v. Bathurst City Council (1980) ; Ferguson v. Federal Commissioner of Taxation (1979); Fairway Estates Pty. Ltd. v. Federal Commissioner of Taxation (1972) ; Dolus Pty Ltd. v. Wyong Shire Council (1975) DATES OF HEARING: DATE OF JUDGMENT: 12/06/1988 LEGAL REPRESENTATIVES: JUDGMENT: Bignold J.: There are 3 appeals (by consent heard together) under s.118(7) and s.133(2) of the Local Government Act 1919 in respect of the levy of rates for the 1988 rate year on three separate parcels of land owned by the Applicant situate in Kempsey. The three parcels of land are known as Portions 22, 27 and 83 Parish of Berangi, contain areas of some 8 hectares, 6.75 hectares and 4 hectares respectively and are located between Yabsley Lane and Bruce's Lane north of Crescent Head Road and situate a few kilometres removed from Kempsey township. The appeals raise 2 separate issues - (i) whether each of the ratable parcels is 'rural land' within the meaning of s.118(1) of the Local Government Act 1919; and (ii) whether each of the parcels is liable to the water supply local rate within the meaning of s.379(1) of the Local Government Act 1919. It will be convenient to deal with these two issues separately. (i) IS EACH PARCEL OF RATABLE LAND "RURAL LAND" WITHIN THE MEANING OF S.118(1) OF THE LOCAL GOVERNMENT ACT 1919? Section 118(7) of the Local Government Act 1919 provides that the onus of proof that land is rural land shall be upon the ratepayer. Accordingly in order to succeed in each of the three appeals the Applicant must establish, to adopt the words of Waddell J. in Fennell v. Wyong Shire Council (1975) 31 LGRA 164 at p.167 (cf. Hope v. Bathurst City Council (1980) 144 CLR at p.3) the following facts as at the relevant date for the 1988 rating year (ie 1st January, 1988 - see s.139(1)) - (a) who is the occupier; (b) that the land is wholly or mainly used by that occupier; (c) for one or more of the businesses or industries; (d) of grazing, etc. I shall say at once that the Applicant has in each appeal, failed to discharge the onus of proof and accordingly each of the appeals must be dismissed. I shall briefly state my reasons for these ultimate findings. The evidence establishes the following primary facts (which were not in dispute) - (i) The Applicant is the owner of each of the 3 Portions having acquired them in 1975, Portions 27 and 83 being contiguous and Portion 22 being separated from Portion 27 by Portion 26 (formerly also owned by the Applicant). The Portions are enclosed by a perimeter fence which also includes the perimeters of Portions 26 and 111 (each formerly owned by the Applicant); (ii) Each of the 3 Portions is developed by a substantial building - Portion 22 accommodates the Applicant's private residence, Portion 27 accommodates a modern building containing 3 flats and Portion 83 likewise accommodates a modern building carrying 3 flats; (iii) A holding company of the Applicant receives the rents derived from each of the aforesaid flat buildings; (iv) For at least the past 2 years the Applicant has allowed a friend, Mr. Smith, to agist his cattle on each of the aforesaid Portions. At the present time Mr. Smith has 14 head of cattle and 12 calves on the Applicant's aforesaid lands; (v) In addition to grazing and tending his own cattle on the Applicant's lands Mr. Smith also grazes and tends thereon 4 heifers acquired by the Applicant in the second half of 1987; (vi) As at 1st January, 1988 there were altogether 17 head of cattle grazing on the Applicant's lands together with 6 horses which belonged to a friend of the Applicant and the Applicant allowed to agist on his lands; (vii) Mr. Smith's use of the Applicant's lands extends to all 3 Portions except for the respective domestic curtilages (separately fenced off) of the 3 residential buildings; (viii) Mr. Smith's aforesaid use of the Applicant's lands is the result of an informal agreement between the Applicant and Mr. Smith. The consideration for the use is Mr. Smith's tending the Applicant's cattle and preparing and maintaining the boundary fences and providing hand fodder if and when required in winter time. Additionally Mr. Smith had supplied a bull to service the heifers which had in recent times produced calves. (ix) Portion 22 which had been sown to pasture and last been fertilised in June 1985, contained a 'home dam' which was used for the cattle. Portion 83 also contained a dam and stock yards; (x) The Applicant had since 1st January, 1988 acquired 2 more heifers. His intention was to sell off the progeny at the appropriate time in the course of conducting a business as primary produce. The Applicant had not made any profit in 1987 or 1988 from the use of his lands for cattle grazing. Based upon the foregoing primary facts I make the following findings - (i) The Applicant is, but Mr. Smith is not, the occupier of each of the three Portions: see Hinton v. Hornsby Shire Council (1970) 20 LGRA 246; Bistern Pty. Ltd. v. Penrith City Council (1977) 35 LGRA 281; Ryde Municipal Council v. Macquarie University (1978) 139 CLR 633 and Ulan Coal Mines Limited v. Mudgee Shire Council (Land and Environment Court - unreported 11th January, 1988); (ii) By agisting his cattle on each of the three Portions Mr. Smith is, but the Applicant as occupier, is not relevantly 'using' those lands for grazing purposes; (iii) The Applicant's use of each of the three Portions for the purpose of grazing the 4 heifers owned by him is not the carrying on of the business of grazing because that activity as at the relevant date (1st January, 1988) was not being "undertaken as a commercial enterprise in the nature of a going concern, that is activities engaged in for the purpose of profit on a continuous and repetitive basis" see Hope v. Bathurst City Council (1980) 144 CLR 1 at pp.8 and 9 (per Mason J.) In so concluding I have not overlooked the fact that "every business has to begin and even isolated activities may in the circumstances be held to be the commencement of the carrying on business": per the Federal Court in Ferguson v. Federal Commissioner of Taxation (1979) 26 ALR 307 at p.311 cf. Fairway Estates Pty. Ltd. v. Federal Commissioner of Taxation (1972) 46 ALJR 397; Dolus Pty Ltd. v. Wyong Shire Council (1975) 31 LGRA 58; (iv) None of the three Portions was, at the relevant date, relevantly "wholly or mainly used ......... for the business ......... of grazing". I find that the main use of Portion 22 was as the Applicant's private residence. I find that the main use of each of Portions 27 and 83 was as residential flat buildings from each of which rents were derived: see Hope v. Bathurst City Council (1986) 7 NSWLR 669. It follows that the Applicant has failed to establish that any of the three Portions is 'rural land' within the meaning of s.118(1) of the Local Government Act 1919. Accordingly each appeal under s.118(7) must be dismissed. (ii) IS EACH PARCEL LIABLE TO WATER RATES UNDER S.379 OF THE LOCAL GOVERNMENT ACT 1919? Section 379(1) of the Local Government Act 1919 provides as follows:- "379 (1) Water supply local rates may be levied upon - (a) land whether owned by the Crown or not which is supplied with water from any water-pipe of the council, notwithstanding that such land is in any other Act or in any section of this Act other than this section exempted from rates; (b) all ratable land which is situated within 225 metres of a water pipe of the council whether such land has a frontage or not to the public road (if any) in which such water pipe is laid, and although the land is not actually supplied with water from any water pipe of the council: Provided that such rates may not be levied upon land unless water could be supplied to some part thereof from a standpipe at least 1 metre in height from the ground level, if such pipe were laid and connected to the council's mains." The evidence which was not in dispute establishes that as at the relevant date (1st January, 1988) the Respondent's water supply service was located in Bruce's Lane and terminated at a point some 400m south of Portion 83, the nearest location of the Applicant's three Portions. In 1983 the Respondent had allowed the Applicant to connect each of his three Portions to the water service. This connection was achieved by the installation of a private pipeline located in Bruce's Lane and extending to each of the 3 residential buildings located on the Applicant's three Portions. Water is supplied to each residential building located on each Portion owned by the Applicant. I find that water from the Respondent's water pipe is supplied to the Applicant's private residence located on Portion 22 and to the Applicant's residential flat buildings located on Portions 83 and 27. The only argument advanced by the Applicant in support of its appeal challenging the liability of each of his three Portions to the water supply local rate was that his lands were situate more than the prescribed statutory distance of 225 metres from the Respondent's water pipe. In my opinion this argument is clearly untenable. Each of the Portions owned by the Applicant is "supplied with water from the water-pipe of the Council" within the meaning of s.379(1)(a) of the Act. Accordingly each Portion is land upon which the water supply local rate may be levied. This basis for liability being clearly established the Applicant's argument based upon s.379(1)(b) is to no avail and is essentially irrelevant. The fact that that water supply in this case depends upon a privately owned pipeline connected to the Council water-pipe so as to extend the service to the Applicant's lands, in my opinion, does not place the present case beyond the reach of s.379(1)(a). This conclusion is consistent with Southern Riverina County Council v. Lewington (1963) 8 LGRA 417 where although the point I now determine was not actually decided, its validity appears to have been, at least, implicitly acknowledged by Nagle J. In the present appeals the Applicant has not sought to argue that part only of each of the parcels of land is liable to the water supply local rate eg only the parts accommodating the residential buildings to which the water is supplied via the pipeline I have mentioned. (This may be because the ratable lands in this case are but small parcels. It may also reflect the fact that the lands were levied only with minimum rates). Thus these appeals do not raise questions concerning ratability of part only of ratable lands such as were decided in Simpson v. Wingecarribee Shire Council (1963) 9 LGRA 341 and Power v. Southern Riverina County Council (1965) 11 LGRA 303 (both cases involving extensive areas of land levied with the water supply rate). Accordingly each of the appeals under s.133(2) must also be dismissed. I make the following orders - 1. Each appeal under s.118(7) of the Local Government Act 1919 be dismissed. 2. Each appeal under s.133(2) of the Local Government Act 1919 be dismissed. 3. The Applicant to pay the Respondent's costs of the appeals (limited to the question of liability to the water supply local rate) in the sum of $500. 4. Exhibits to be returned. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.