Awad v Greater Bendigo City Council

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST

S CI 2016 00610

MAGDY AWAD	Appellants
- and -
SUZY AWAD
v
GREATER BENDIGO CITY COUNCIL	Respondent

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JUDGE:	Lansdowne AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	26 May 2016
DATE OF JUDGMENT:	15 February 2017
CASE MAY BE CITED AS:	Awad & Anor v Greater Bendigo City Council
MEDIUM NEUTRAL CITATION:	[2017] VSC 36

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APPEAL – appeal on a question of law from an order of the Magistrates’ Court that the appellants pay outstanding fire services property levy and interest – appellants contend that the council had applied the wrong land use classification code to their land and that the magistrate erred by not applying the correct code – held: this issue was not before the magistrate as challenge to a valuation, including the question of the correct code, must be made by the grievance route that is separate to debt recovery – appeal dismissed – Fire Services Property Levy Act 2012 (Vic) – Valuation of Land Act 1960 (Vic) – Local Government Act 1989 (Vic) - s 109 Magistrates’ Court Act 1989 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Appellants	The first appellant in person for himself and the second appellant
For the Respondent	Ms A Kinda	MCC Legal

TABLE OF CONTENTS

Introduction and summary............................................................................................................... 1

Legislative regime.............................................................................................................................. 5

Fire Services Property Levy Act 2012 (Vic).................................................................................... 5
Valuation of Land Act 1960 (Vic)................................................................................................... 9
Local Government Act 1989 (Vic)................................................................................................. 13
Magistrates’ Court Act 1989 (Vic) and the nature of appeal................................................... 14

Proceeding before the Magistrates’ Court................................................................................... 16

Background to the dispute........................................................................................................ 16
Commencement of the proceeding, VCAT proceedings and objections........................... 18
No effective challenge to the AVPCC for 2013-2014.................................................... 22

Hearing and determination of the Complaint........................................................................ 24

Notice of Appeal and admissible evidence on appeal.............................................................. 27

Summary of the parties’ contentions............................................................................................ 29

Discussion.......................................................................................................................................... 30

Application to this case.............................................................................................................. 33
Magistrate’s reasons.......................................................................................................... 33
Question of law and grounds of appeal........................................................................ 33

Conclusion......................................................................................................................................... 35

Orders................................................................................................................................................. 35

HER HONOUR:

Introduction and summary

Mr Awad and his sister, Ms Suzy Awad, appeal an order made against them to recover the fire services property levy for the 2013-2014 rating year imposed on land that they own. The order was made on 22 January 2016 by the Magistrates’ Court constituted by Magistrate Wright (‘the Magistrate’) at Bendigo. The proceeding before the Magistrate was a claim by Greater Bendigo City Council (‘the Council’) for outstanding rates and levies in respect of a property owned by the appellants at 84 Olympic Parade, Kangaroo Flat (‘the Land’). Constructed on the Land is what the appellants describe as an early learning centre. According to the appellants, the centre has only been in continuous operation since February 2016, although the construction of it was completed by December 2013, when it opened briefly. By the time of the hearing before the Magistrate, the only amount outstanding to the Council was the fire services property levy for 2013-2014 in the sum of $530.95. The appellants had paid all other outstanding rates. The Council also sought interest on those levies in the sum of $30.95. The Magistrate ordered the appellants to pay those sums, together with costs fixed in the amount of $4,118.16, with a stay on enforcement of 90 days.

Although the amount in issue in this appeal is small, it arises in the context of a longstanding dispute between the appellants and the Council as to the proper property classification of the Land for the purpose of the imposition of the fire services property levy (‘FSPL’). The appellants stress that they wish to pay the proper amount of the FSPL but say that the FSPL should be applied on the basis that the proper classification under the Australian Valuation Property Classification Code (‘AVPCC’) is Code 720, which relates to an early childhood development centre or kindergarten, or Code 118 relating to residential land with a building adding no value, and not Code 715, which applies to a day care centre for children. The Council valuer applied Code 715 for the year in question, 2013-2014, and for subsequent years.

The difference is significant because Code 720 falls within the land use classification ‘public benefit’ for the purposes of the Fire Services Property Levy Act 2012 (Vic) (‘FSPL Act’) and so results in a smaller levy than the code that relates to a child care centre. The land use classification for the FSPL Act corresponding to the AVPCC code for a child care centre is ‘commercial’.

In addition to the debt recovery proceeding in the Magistrates’ Court that is the subject of this appeal, there have also now been three proceedings in the Victorian Civil and Administrative Tribunal (‘VCAT’) between the parties to this appeal in which this issue has been raised, or sought to be raised, by the appellants.

The appellants also have grievances in relation to the zoning of the Land; the fact that the FSPL (and possibly commercial rates generally) were imposed for periods prior to the commencement of their business on the Land, which they say only took place in February of this year; and in relation to the imposition of interest on the outstanding FSPL. Only the last of these further issues can arise in the context of this appeal, as questions of appropriate zoning and the relationship between actual use and appropriate rating classification were not before the Magistrates’ Court.

The respondent’s initial response to the appeal was to seek summary judgment. When that application came before me, I suggested that the better course may be for the appeal to proceed directly to a full hearing before me on referral. The respondent agreed with that course. The appeal was referred to me for hearing and determination by Justice J Forrest shortly thereafter, and heard on 26 May 2016. I apologise to the parties for the delay in the delivery of this judgment.

The legislative regime that governs the imposition of FSPL is complex. As I will elaborate in these reasons, this regime provides dual tracks for, on the one hand, the hearing of grievances about a valuation, and, on the other, debt collection. An AVPCC may be challenged by objection to the council which has imposed the levy, and then if still aggrieved by seeking review in VCAT. There is a strict time limit on the lodging of an objection and only one objection per valuation may be lodged within a 12 month period. The system is not simple, and no doubt doubly difficult for aggrieved persons such as these appellants whose first language is not English.[1]
[1]I note, however, that both VCAT and the Council have made attempts to explain the system to Mr Awad- for example, the Council’s letter of 21 December 2015 to Mr Awad which is Exhibit 5-K to his affidavit sworn 21 March 2016. It also appears that the appellants have had some legal advice - there is a reference to ‘our solicitor’ on the final page of Ms Awad’s affidavits sworn 20 April 2016 and 23 April 2016. Mr Awad also sought to hand up at the hearing copy letters sent by solicitors Sevdalis Lawyers on his behalf to the Council dated 20 February 2015 and 21 April 2015.

At first blush, there would also appear to be some support in the material before me for the appellants’ contention that the land use classification for the purpose of the FSPL should be early childhood centre, and not child care centre. The occupancy permit issued by the Council (as amended on 15 October 2013) states that the permitted use of the Land is ‘early childhood centre’. The appellants seek that this Court make a decision as to the correct AVPCC. As I explain below, that is not possible. I asked the legal representatives for the Council in the hearing to direct the Council’s attention specifically to the occupancy permit as a basis for the appellants’ contention about the correct code, and to consider whether it is a basis for change to the application of the FSPL for any year within which change is still possible. I do not, however, express any opinion on the question of the correct AVPCC code for the imposition of FSPL.

This Court is limited on appeal to consideration of whether or not the magistrate below made an error of law. It cannot undertake its own factual enquiry, such as determining the correct AVPCC code for the FSPL, even if that issue was properly before the magistrate below. Further, this Court is limited on appeal to examining issues that were properly before the magistrate below. The appellants say that the Magistrate erred because he did not find that the correct AVPCC was 720 or 118, and instead accepted the valuation and FSPL based on an AVPCC of 715. This could only be an error if the Magistrate was required to determine the correct AVPCC. In my view, he was not, and, indeed did not have power to consider that issue at all. For the reasons that I will shortly set out in detail, I accept the respondent’s contention that the determination of the correct AVPCC for land can only be made through the grievance regime, not in a debt recovery proceeding. The Magistrate had no power to consider that question and as a consequence nor does this Court on appeal from his decision.

It follows that the appellants have not shown that the Magistrate made any error of law, and I will dismiss the appeal. The Magistrate did not have the power to determine the correct AVPCC, and he did not seek to do so. He only sought to be satisfied that the AVPCC and so the FSPL had not been changed by challenge through the correct route. He was correctly satisfied that it had not been so changed. The appellants did not follow the correct route to challenge the FSPL for 2013-2014 because they did not lodge an objection with the Council within the permitted time frame, which expired in late May 2014. In short, the appellants could not challenge the FSPL in the Magistrates’ Court and so cannot in this Court on appeal.

Given that I will dismiss the appeal, it is unnecessary to consider the summary judgment application.

Before setting out my reasons in more detail I note two more procedural matters. First, only Mr Awad filed the appeal, but he sought at the first directions hearing to prosecute it not only on his own behalf but also on behalf of his sister, Ms Suzy Awad. I directed that if Ms Awad wished to also appeal the order, she was required to confirm her consent to the Notice of Appeal by affidavit. She subsequently filed such an affidavit, and accordingly the appeal stands in the name of both appellants.

Secondly, Mr Awad has purported to file with the Court more documents after the conclusion of the hearing, and has copied the Court into an email he sent to an officer of the Council dated 21 January 2017, which appears to relate to a later decision of Council. Neither step is appropriate. Once a hearing has concluded neither party can file further documents in support of their case unless that party seeks and is granted leave to do so. That has not occurred. Further, the appeal is limited to the decision made by the Magistrate. Other or subsequent decisions by the Council are not relevant, even if they reflect the same ongoing dispute about the proper AVPCC Code. For these reasons, I will not take into account in this appeal either the further documents or the copy email.

It is helpful to first set out the legislative regime, to properly understand the facts and the hearing before the Magistrate.

Legislative regime
Fire Services Property Levy Act 2012 (Vic)

The levy here in question arises under the FSPL Act. The stated purposes of this Act are set out in s 1. They include to :

(a)impose a fire services property levy on all land in Victoria, unless specifically exempted, to fund the Metropolitan Fire and Emergency Services Board and the Country Fire Authority; and
(b)provide for the appointment of each Council as a collection agency in respect of its municipal district; and

(c)       (not relevant); and
(d)      enable a collection agency to collect the fire services property levy; and
(e)       to provide for the Commissioner of State Revenue—
(i)to receive the fire services property levy collected by collection agencies and pay it into the Consolidated Fund; and

(ii) to generally monitor the performance of collection agencies; and
(further purposes not here relevant)

There is no dispute here that the appellants as the registered proprietors of the Land are liable to pay the appropriate FSPL on that land, or that the Land is leviable. Section 17 of the FSPL Act sets out a formula for the calculation of the appropriate levy on leviable land, which has three elements. The first is a fixed charge based on the land use classification of the land calculated in accordance with s 11 of the FSPL Act. Section 11(2) fixes a charge for land depending on whether it is classified as residential land, commercial land, industrial land, primary production land, public benefit land or vacant land. Section 11(1)(b) provides that that amount is then to be adjusted for each levy year commencing on or after 1 July 2014 in accordance with s 11(3), which in turns sets out a formula for taking into account movements in the Consumer Price Index.

The second element of the formula is a levy rate, which is determined by the relevant Minister and is applied to the third element, which is the capital improved value of the subject land. Section 13 provides that the Minister may determine different levy rates based on either the location of the land, or the land use classification of the land. Section 15 provides that the land use classifications which the Minister may use for the purpose of determining different levy rates are residential, commercial, industrial, primary production, public benefit and vacant land. Sections 15(3)-(5) provide as follows:

(3)Land is taken to be used for one of the purposes referred to in subsection (1) or (2) based on the AVPCC allocated to a parcel of land by the valuation authority under the Valuation of Land Act 1960.
(4)A parcel of land is taken to have the land use classification specified in the Schedule based on the AVPCC allocated to that parcel of land under subsection (3).
(5)The land use classification determined under subsection (4) and specified in the Schedule is a non-reviewable decision.

The appellants’ grievance is not the land use classification assigned by s 15(4) and the Schedule to their land (which by reason of s 15 (5) is non reviewable). Their grievance arises from the AVPCC allocated to their land for the purpose of s 15(3) by the relevant valuation authority, which was here the Council. In other words, their grievance arises under the Valuation of Land Act 1960 (Vic). I will discuss that Act shortly.

Section 21 of the FSPL Act appoints local councils as the collection agencies for FSPL levied on land within their districts. Accordingly, the Council here was both the valuation authority and the collection agency for the FSPL. Section 22 of the FSPL Act confers power on collection agencies, i.e. local councils including the Council, to institute proceedings for the recovery of outstanding FSPL by providing that the collection agency, here the Council, may utilise the power it has under s 232 of the Local Government Act 1989 to institute proceedings for the recovery of money due.

Section 25 of the FSPL Act provides that the collection agency must provide written notice to the owners of leviable land of the FSPL due, with specified particulars including the land use classification and the date by which the levy amount must be paid. In cases where the land is rateable for the purposes of council rates, s 25(4) provides that the notice is to be given on the notice of the general council rates and other charges provided under s 158 of the Local Government Act 1989 sent by the collection agency to the owner in its capacity as a council. Section 26 provides that the due date for payment of an instalment or the whole of FSPL as the case may be is that specified by notice published in the Government Gazette as being the date for payment of an instalment or the whole of general council rates.

Section 30 imposes an obligation on the Council to charge interest on unpaid FSPL. That section provides as follows:

30 Collection agency must charge levy interest on unpaid levy amount
(1)A collection agency must require a person to pay levy interest on any levy amount—
(a)which that person is liable to pay; and
(b)which has not been paid by the date specified under section 26 for payment; and
(c)if the leviable land is rateable land, the person is required to pay interest on rates that are payable in respect of that land.

(2) The levy interest—
(a)is to be calculated at the rate fixed under section 2 of the Penalty Interest Rates Act 1983 that applied on the first day of July immediately before the due date for the payment; and

(b) becomes payable—
(i)if the payment was payable in instalments only, on and from the date on which the missed instalment was due; or
(ii)if the payment was payable either in instalments or in a lump sum and the first instalment was paid by the date it was due, on and from the date on which the relevant subsequent missed instalment was due; or
(iii)if the payment was payable either in instalments or in a lump sum, and neither the first instalment nor the lump sum were paid by the dates the first instalment or the lump sum were due, on and from the date on which each missed instalment of levy became due; and

(c)continues to be payable until the payment or recovery of the levy.

(3)If a collection agency obtains a court order requiring the payment of the levy amount payable, levy interest continues to accrue under this section until the payment or recovery of the levy amount.
(4)A collection agency may waive levy interest accrued under subsection (3).

(5) A collection agency may—
(a)if the land is leviable land that is rateable land, exempt any person from paying the whole or part of any levy interest generally or specifically if the collection agency is also exempting the person from paying the whole or part any interest owed in respect of rates on that land;

(b)if the land is non-rateable leviable land which is classified residential for land use classification purposes, exempt any person from paying the whole or part of any levy interest generally or specifically.

(6)A collection agency may recover levy interest due to it on a levy amount in the same way as it may recover the levy amount.

Section 34 of the FSPL Act is also important. The effect of the section is to acknowledge that an aggrieved land owner may wish to challenge a valuation, in particular the AVPCC assigned to the subject land by the valuation authority. Such an objection, or any further step in that process, is not, however, a bar to recovering in the meantime the FSPL claimed to be outstanding. The section provides as follows:

34 Recovery of levy not affected by objection, review or appeal
(1)The right of the collection agency to recover levy is not suspended by an objection, review or appeal of a valuation made or adopted under the Valuation of Land Act 1960.
(2)If an objection, review or appeal results in the alteration of a valuation or a decision to attribute a different AVPCC to leviable land, an adjustment must be made by the collection agency, and a revised assessment notice must be given to the owner of the leviable land or any person the owner has specified under section 25(1)(b), and—
(a)any levy amount or levy interest paid by the person that, as a consequence of a decision following an action taken by a person under subsection (1), amounts to an overpayment—
(i)if the person owes a levy amount or levy interest other than the amount adjusted, the overpayment must be used to pay the outstanding levy amount or levy interest owed by the person;
(ii)if subparagraph (i) does not apply, the overpayment may be refunded to the person by the collection agency;

(b)any additional levy amount that becomes payable as a consequence of any action taken by a person under subsection (1), may be recovered as unpaid levy by the collection agency in accordance with this Part.

(3)Interest, at the rate specified in section 30(2)(a), accrues daily on any amount to be refunded to a person under subsection (2)(a) from the day of the decision referred to in that subsection until the day the person is paid the amount to be refunded.
(4)If an adjustment made under this section is in respect of leviable land that is rateable land, the revised assessment of the levy amount must be included in the revised rates notice to be sent to the owner of the land or any person the owner has specified under section 25(1)(b).

Valuation of Land Act 1960 (Vic)

The Valuation of Land Act 1960 (Vic) (‘Valuation of Land Act’) sets out how land is to be valued for the purposes of, amongst other things, council rates and the imposition of the FSPL. It also provides a process for objection to a valuation, which includes an objection based on the AVPCC allocated to the land.

Section 9 of the Valuation of Land Act provides that in most instances the local council is the valuation authority for the land within its district. That was the case here. Section 13DC(1)(b) provides that each separate occupancy on rateable land must be allocated an AVPCC based on the ‘Valuation Best Practice Specifications Guidelines’. These are guidelines prepared by the valuer-general at least each two years and published on the valuer-general’s internet site as required by s 5AA of the Act. Mr Awad exhibits as Exhibit 5C to his affidavit sworn 21 March 2016 the Valuation Best Practice 2014 Specifications Guidelines. The AVPCC code for an early childhood development centre or kindergarten is 720, which appears under the general code 72 for Education and Research. The AVPCC code for a day care centre for children is 715 and appears under the general code 71 for Health.

The Schedule to the FSPL Act headed ‘AVPCC Allocation’ which applies for the purposes of s 15 of the FSPL Act classifies AVPCC code 715 as land use classification ‘Commercial’ and AVPCC code 720 as land use classification ‘Public Benefit’.

Part III of the Valuation of Land Act is headed ‘Objections, reviews and appeals’. Section 16 provides that a person aggrieved by ‘a valuation of any land made or caused to be made by a valuation authority’ may lodge with that authority a written objection to that valuation, on one or more of the grounds specified in s 17. In other words, the objection must be made in the first instance to the council that caused the valuation to be made, here the Council.

The grounds specified in s 17 include:

(g)that the area, dimensions or description of the land including the AVPCC allocated to the land are not correctly stated in the notice of valuation, assessment notice or other document.

Section 18 is critical to this appeal. It provides the time line within which an objection may be lodged as follows:

18       Time for lodging objection
An objection must be lodged—
(a)       within 2 months after the notice of valuation is given; or
(b)       in the case of a person referred to in section 16(5)—
(i)if a notice of assessment of the rate or tax was served on the person by a rating authority, within 2 months after the notice was served; or
(ii)if a notice of assessment of the rate or tax was not served on the person by a rating authority and the person is the occupier of the land, within 4 months after the date of issue specified on the notice; or

(c)in the case of a person referred to in section 16(6A)—within 2 months after receiving the notice of assessment of land tax.

Paragraph (b) of this section provides an exception for ‘a person referred to in section 16(5)’. That sub-section in turn applies to a person who has not been given a ‘notice of valuation’, but is nevertheless liable to pay a rate or tax. ‘Notice of valuation’ is defined in s 2 of the Act to mean ‘a notice given under s 15(1)(a)(i), 15(2)(a) or 15(3)(a)’. The applicable provision here would appear to be s 15(2)(a). Section 15(2) applies to a council that causes a general or supplementary valuation to be made, and paragraph (a) of that sub section requires that council to give notice of that valuation. The appellants were given a notice of valuation for the relevant year (being the first and two supplementary rate notices for that year) and so the time line in paragraph (b) of s 18 does not apply. Nor does the time line provided for by s 18(c) as s 16(6A) applies to an assessment for land tax, not for FSPL. Accordingly, the general rule within paragraph (a) of s 18 applied to the appellants in respect of the 2013-2014 year. There is no provision in this section, or elsewhere, for this time to be extended. It follows that in the case of a supplementary notice of valuation, the rate payer has only two months from the date that supplementary notice of valuation is given to lodge an objection.

There is a further limitation on the lodgement of objections imposed by s 19. That section provides as follows (emphasis in italics added):

19Further limitation on lodging of objections if previous objection lodged
(1)If an objection to the valuation of any rateable land or leviable land is lodged with a rating authority or valuation authority and considered by the valuer of that authority under section 21, a further objection to that valuation cannot be made within 12 months after the lodgement of that objection.
(2)Subsection (1) applies whether the valuation is used by the rating authority to whom the objection was made or another rating authority.

On my reading, the limitation imposed by s 19 applies to a further objection to the same valuation (‘that valuation’), not an objection made within the same twelve month period to a subsequent valuation.

Sections 20 and 21 provide for the determination of an objection. Subsections (2A), (2B) and (7) of s 21 provide that initially the objection must be considered by the valuer who made the valuation in question, who in some cases must provide the objector with a reasonable opportunity to discuss the objection with the valuer. Subsection 21(3) provides that if the valuer considers that no adjustment in the valuation is justified, he or she must give written notice to the objector. If the valuer considers that an adjustment in the valuation is justified, he or she must make a recommendation to that effect to the valuer-general. Subsection 21(4) provides that the valuer-general may disallow the recommended adjustment or confirm it. Subsection (6) of s 21 provides as follows:

(6)Subject to any review or appeal under Division 4, the decision of the valuer-general must be given effect to by the rating authority and every other rating authority using that valuation.

Division 4 of the Act is headed ‘Reviews and appeals’. The first section in that Division, s 22, relevantly provides that an objector who is dissatisfied with the decision of a valuer or the valuer-general on the objection may apply to VCAT for review of the decision. An application for review must by lodged within 30 days after the date notice of the decision is given to the objector.

Section 23 provides that ‘a matter that is the subject of an application under section 22’ and ‘raises questions of unusual difficulty or of general importance’ may be treated as an appeal to the Supreme Court either on referral by the President of VCAT to the Supreme Court or by order of the Supreme Court. Otherwise, an objection may make its way to the Supreme Court on appeal from VCAT pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’). That section is the general appeal provision from VCAT. It limits appeals to questions of law, and requires that leave to appeal be obtained.

Sections 24-27 of the Valuation of Land Act respectively set out the grounds on which an objector may seek review or appeal under s 22 or 23; the powers of VCAT and the Supreme Court on such review or appeal in relation to the subject valuation; and the power of VCAT and the Supreme Court to order costs, or to decline to do so.

Section 29 of the Valuation of Land Act makes similar provision to s 34(1) of the FSPL Act, quoted earlier. Section 29 of the Valuation of Land Act provides as follows:

29 Recovery of rate or tax pending objection, review or appeal
An objection, review or appeal under this Part to the assessment of the value of any land does not prevent the recovery of any rate or tax based on that valuation pending the determination of the objection, review or appeal.

I have referred to these provisions dealing with objections in detail because the respondent contends that the objection route specified in the Valuation of Land Act is the only route by which a landowner may object to the AVPCC assigned to land, and so its land use classification for the purposes of the FSPL Act. In other words, the Council submits that the Magistrate could not in the debt recovery proceedings before him consider whether or not the correct AVPCC had been allocated to the Land. I will discuss that contention further shortly.

For completeness I also touch on the relevant provisions of the Local Government Act 1989 (Vic).

Local Government Act 1989 (Vic)

By the time the Council’s proceeding was heard in the Magistrates’ Court, the only outstanding levies were the FSPL. The appellants had paid the outstanding council rates. Accordingly, it is only necessary in this appeal to consider those sections of the Local Government Act 1989 (‘Local Government Act’) that relate to the imposition or collection of FSPL.

As noted earlier, s 25(4) of the FSPL Act provides that the required notice of the assessed FSPL is to be given on the general rate notice. Section 158 of the Local Government Act sets out the requirements for the rate notice, and s 167 makes similar provision as to when rates and other council charges are payable as is made in s 26 of the FSPL Act i.e. on the date fixed by the Minister and published in the Government Gazette. Section 158(4)(b) provides that the date on which the rates and charges are payable must be specified in the notice.

Section 22 of the FSPL empowers a council to use its powers under s 232 of the Local Government Act to recover unpaid rates or other money due to the council. Section 232 relevantly provides:

(1)The Secretary, a Council or a person authorised by the Council either generally or in a particular case may institute proceedings in the corporate name of the Council for—
(a)the recovery of any rates, charges, fees or other money due to the Council under any Act, regulation or local law…

The institution of the recovery proceedings by the Council in the Magistrates’ Court in so far as they related to unpaid council rates was also authorised by s 180 of the Local Government Act which relevantly provides:

180 Unpaid rate or charge

(1)If a rate or charge (including any instalment or any part of a rate or charge) remains unpaid after it is due and payable, the Council may recover it in the Magistrates' Court or by suing for debt.

Magistrates’ Court Act 1989 (Vic) and the nature of appeal

This appeal is brought pursuant to s 109 of the Magistrates’ Court Act 1989 (‘Magistrates’ Court Act’). Section 109 relevantly provides:

109 Appeal to Supreme Court from final order made in civil proceeding
(1)A party to a civil proceeding in the Court may appeal to the Supreme Court, on a question of law, from a final order of the Court in that proceeding.

It is helpful to set out three limitations on appeal pursuant to this section.

First, an appeal under s 109 of the Magistrates’ Court Act is an appeal from what occurred at the Magistrates’ Court. It is generally not an opportunity to advance new evidence and arguments, to invite the appeal court to reach its own conclusions on the facts and law. It follows that an appeal under s 109 is generally limited to the oral and written evidence given before the Magistrate, the arguments as put to the Magistrate, and the Magistrate’s conclusions. This Court on appeal can consider the pleadings below (the complaint and defence); the oral and written evidence given before the Magistrate, including any exhibits; any written oral submissions; and the reasons. Further evidence is not generally admissible on appeal.

Mr Awad may not have been aware of this limitation in the preparation of his evidence, because he has exhibited to his affidavits and sought to hand up in Court many documents which he did not put into evidence before the Magistrate. He also delivered other documents to the Court after the conclusion of the hearing and prior to the delivery of these reasons. I cannot take those extra documents into account on this appeal unless leave is given to do so. In most instances I did not and do not give that leave. Unless leave was given, I do not take those documents into account.

There was some further evidence that I sought and did allow on the appeal, because it was necessary to understand what had transpired below and the factual matrix. Further evidence was tendered by the Council as Exhibits 1, 2 and 3, which I requested to better understand what had occurred in the VCAT hearings. Further evidence tendered by Mr Awad, permitted by me and marked Exhibits A and B respectively, are copies of the Council letters of 14 and 18 May 2015, marked up by Mr Awad to show what items he disputes.

The second important limitation is that the right of appeal under s 109 is expressly limited to a question of law. The appellants’ principal contention is that the wrong AVPCC was allocated to the Land. It is debatable whether this is a question of law. It may be a question of fact, turning on the permitted or actual use of the Land. If a pure question of fact, then there is no appeal even if the Magistrate wrongly determined the facts.

The third limitation is that, as held by the Court of Appeal in Wong v Carter,[2] the question of law must be one ‘involved in’ the decision sought to be appealed. The respondent says that the appeal fails for this reason because the question that the appellants’ pose, being the correct AVPCC, did not, and in fact could not, arise before the Magistrate. The respondent says the issue could not be before the Magistrate because the only avenue for objecting to the allocation of an AVPCC is by way of objection to the Council, then application to VCAT for review. The respondent submits that it follows that the Magistrate had no jurisdiction to determine the issue. Counsel for the respondent concedes that there is no express provision in the legislation to the effect that an objection to the underlying valuation cannot be put in defence in an action to recover outstanding FSPL based on the valuation, but submits that this is the intention of the legislation. If this submission is correct, then the Magistrate would have made an error of law if he had sought to determine the correct AVPCC.
[2][2000] VSCA 53, at [43] per Tadgell JA.

Proceeding before the Magistrates’ Court
Background to the dispute

It is helpful to begin with setting out relevant facts. Ordinarily this account would be drawn from, and confined to, the evidence below. In this case, the respondent has given a fuller account of certain facts than was given below, by setting out in the affidavit of Neil Wrigley sworn 18 April 2016 facts relating to the issue of various rate notices, the commencement of proceedings in VCAT, and objections lodged by Mr Awad. Mr Awad has also sought to support his case by reference to a letter from the Council to him dated 21 December 2015, which also sets out a history of events, and which he exhibits to his affidavit of 21 March 2016.[3] The history given by the Council in that letter and in the affidavit of Mr Wrigley is consistent, and Mr Awad does not dispute it. I consider it helpful and appropriate to have regard to the history set out in the affidavit and letter for two reasons. First, the Magistrate made limited factual findings, no doubt because, as I will elaborate later, the only factual questions he was required, and permitted, to determine were essentially not disputed. Secondly, to address the appellants’ arguments on this appeal it is necessary to understand and set out relevant factual background (limited to the issue of rate notices, the lodging of objections and VCAT proceedings) in more detail than did the Magistrate.
[3]Exhibit 5-K.

The appellants seek that I consider many other factual matters, by setting out their account of those matters in their affidavits and exhibiting or handing up documents relating to these other factual matters. As noted earlier, this evidence cannot be considered on the appeal.

The Council first issued a rate notice in respect of the 2013-2014 year on 23 August 2013. At that time the land was rated on the basis that it was vacant and the FSPL was imposed on the residential land use classification. In October 2013, the building on the land was completed and the occupancy permit was issued in amended form on 15 October 2013.[4] The building details given in the occupancy permit are that it is for the construction of a child minding facility with permitted use ‘early childhood centre’.
[4]Exhibit 5B to the affidavit of Magdy Awad sworn 21 March 2016.

Before the Magistrate the Council conceded that the business opened at that time of issue of the occupancy permit for three weeks only, and that according to Mr Awad, it was not then trading, rather attempting to recruit clients.[5] At the time of the hearing before the Magistrate, the business was not trading,[6] and Mr Awad says in this appeal that the centre only commenced operation, and commenced operation as an early childhood centre, in February 2016. One of the questions he seeks to raise in this appeal is whether the fact that the building was not being utilised until February 2016 affects the appropriate FSPL.
[5]Evidence of Neil Wrigley at P-5 ll 29-31 of the transcript of proceedings before the Magistrate, which is Exhibit 5A to the affidavit of Mr Awad sworn 21 March 2016 (henceforth referred to as ‘Transcript’).
[6]P 5 ll 10-13 of the Transcript.

The Council issued a supplementary rates notice on 17 January 2014 in the sum of $8039.80, due and payable by 17 February 2014.[7] The supplementary rates notice increasing the rates was issued because of the issue of the certificate of occupancy for the building, effective as at 15 October 2013.[8] In that supplementary notice the rate category is altered to Commercial Industrial A, and the FSPL imposed on the basis that the land use classification is commercial, reflecting Code 715, childcare centre, under the schedule to the FSPL Act. The FSPL levied by this rates notice was $1,377.80.
[7]Part of Exhibit DB2 to the affidavit of Dean Bosman affirmed 24 March 2016.
[8]P 5 line 25-27 of the Transcript.

A second supplementary rates notice was issued by the Council on 17 March 2014 in the sum of $4611.55, payable by 28 April 2014.[9] This notice gives as the reason for the change a revaluation. It shows a reduction by $595,000 of the capital improved value of the Land with corresponding reduction in the rates and FSPL. The FSPL in this second supplementary rates notice is reduced by $461.
[9]Part of Exhibit DB2 to the affidavit of Dean Bosman affirmed 24 March 2016.

There was apparently then some correspondence between the appellants and the Council, including, at least, a letter dated 4 August 2014 from the Council, which was not in evidence below or in this appeal.

Commencement of the proceeding, VCAT proceedings and objections

By complaint dated 27 August 2014 (‘the Complaint’) the Council sought from the appellants the sum of $4806.70 for rates and charges levied on the Land, said to be due and payable by 17 February 2014 but unpaid, for the period up to and including the rating year ended 30 June 2014. The appellants raised a number of matters in their Notice of Defence, including disputes about the proper characterisation of the Land as residential, not commercial or industrial, the allegation that some money had been paid and reference to a proceeding commenced in VCAT. The Complaint did not come on for hearing until 22 January 2016 because of VCAT proceedings and negotiations between the parties in the meantime, as follows.

The appellants filed an application to VCAT (‘First VCAT Application’)[10] on 24 August 2014, citing a decision made on 4 August 2014 as being the valuation decision that they wished to review. When that application came before VCAT on a directions hearing on 15 October 2014, the Tribunal recorded in paragraph 1 in the Remarks accompanying the orders made that day that the ‘decision’ said to have been made on 4 August 2014 was not a decision made after the determination of a valuation objection – it was a letter from Council referring to outstanding rates, which was not within the jurisdiction of the Tribunal to consider.[11] The Tribunal amended the application so that it related to the decision of the Council to ‘classify or not classify land as being land of a particular type or class for differential rating purposes’, noting at paragraph 3 of the Remarks that this was possible because the application was ‘within 60 days of the owner receiving his rate notice for the 2014/2015 rating period.’
[10]Exhibit 2, tendered by the Council in this appeal.
[11]The orders and Remarks are Exhibit 3, tendered by the Council in this appeal.

The rate notice issued for 2014-2015 was not before the Magistrate and is not before me as a distinct exhibit, but it seems[12] that it may have issued on 29 August 2014 i.e. within the period of two months before the directions hearing. Confusingly, the letter from the Council dated 21 December 2015 and signed by Mr Wrigley states that the annual rate notice for 2014-2015 issued on 29 October 2014.[13]
[12]This is the date given as issue date for the rate notice the subject of objection subsequently lodged by Mr Awad, and disallowed by the Council- see part of NW 1 to the affidavit of Neil Francis Wrigley affirmed 18 April 2016. It is also noted as the date of service of the 2014-2015 rates on the notice attached to the Second VCAT Application, which is Exhibit 1.
[13]Exhibit 5-K to Mr Awad’s affidavit sworn 21 March 2016.

The Tribunal noted in the Remarks that Mr Awad raised a number of issues at the directions hearing, including the correct property classification code for the ‘fire service levy’; that he was within the statutory timeframe to lodge an objection to the AVPCC for 2014-2015; that the Council had agreed to send him the relevant form to lodge such an objection; and that if he was dissatisfied with the Council’s decision on such objection he had 30 days to lodge an appeal with the Tribunal.[14]
[14]Part paragraph 2, and paragraph 4 of the Remarks, being part of Exhibit 3.

On 30 October 2014, Mr Awad lodged an undated objection with the Council. It is difficult to tell from the objection to what year and to what matters it relates, save that the box referring to an incorrect AVPCC is ticked. The Council refused this objection by letter dated 17 November 2014.[15] Mr and Ms Awad had 30 days thereafter to seek review by VCAT in respect of the FSPL for 2014-2015. There is no evidence that they did so, or sought an extension of time to do so.
[15]The objection and refusal are Exhibit NM 1 to the affidavit of Neal Francis Wrigley sworn 18 April 2016.

The First VCAT Application was determined on 28 April 2015, but by consent and without determination on the merits. The Council agreed to change the classification of the Land for the purposes of the differential rate relating to 2014-2015 to ‘general land’. I observe that the classification ‘general land’ is not a land use classification that applies to the application of the FSPL. It only applies to the differential rate. The VCAT order of 28 April 2015 states:

The decision of the Respondent is varied. The Respondent’s classification for differential rating of the subject land for the 2014/2015 rating year is ‘General Land’.[16]

[16]Exhibit 2 before the Magistrate, and part of Exhibit DB 2 to the affidavit of Dean Bosman affirmed 24 March 2016 in this appeal.

In reasons attached to that order, the Tribunal noted that its determination related only to the classification of the land ‘as being land of a particular type or class for differential rating purposes’ for the 2014-2015 rating year. The Tribunal stated that the determination does not relate to ‘any of the other issues’, which is presumably a reference to the issues raised by Mr Awad at the directions hearing, which included the correct AVPCC for the FSPL.

In other words, the first VCAT order did not apply to the classification of the land for the purposes of the FSPL at all. Nor did the decision apply to the 2013-2014 rating year.

Negotiations continued between the Council and the appellants. The Council sent without prejudice letters to the appellants dated 14 May 2015 and 18 May 2015, which cited the order made by VCAT on 28 April 2015 and reduced, and then further reduced, the amount of the outstanding rates. Both letters were in evidence before the Magistrate and also in this appeal.[17] The letter of 14 May 2015 reflected the agreement reached at the Tribunal in respect of the 2014-2015 rates. The letter of 18 May 2015 further reduced the amount outstanding, as a goodwill gesture,[18] by applying the reduced rates agreed at VCAT for 2014-2015 to the rates for 2013-2014 as well. Neither letter, however, varied the imposition of the FSPL for 2013-2014. To reiterate, no Tribunal decision had been made to require a change to the FSPL for 2013-2014, or for 2014-2015. The letter of 18 May 2015 also recorded a part payment made on 15 May 2015.
[17]Part of Exhibit DB2 to the affidavit of Dean Bosman affirmed 24 March 2016. A marked up version of the letter dated 18 May 2015 is also Exhibit B, marked up by the appellants to show the amounts they dispute.
[18]Opening submissions for the Council before the Magistrate at P-3 ll 38-43 of the transcript of proceedings before the Magistrate, which is Exhibit 5A to the affidavit of Mr Awad sworn 21 March 2016 (henceforth referred to as ‘Transcript’). See also the evidence of Mr Wrigley, at p 7 ll 11-16 of the Transcript.

Mr Awad filed a second application to VCAT dated 2 June 2015 (‘Second VCAT Application’).[19] He utilised the form of application for review of a decision of a council to classify land as being of a particular type for differential rating. It seems that this was incorrect, as in substance it is plain that he sought to challenge the AVPCC code for the purposes of the FSPL. This appears from his attachment to the application of the Council letter to him and his sister of 14 May 2015, marked up by crosses against the FSPL for 2013-2014 and 2014-2015 at the commercial rate. In the details given in the application Mr Awad asserted that the FSPL has been charged as commercial when the land should be classified as ‘public benefit’ which reflects an early childhood centre classification of 720.
[19]Exhibit 1 tendered by the Council in this appeal.

The Second VCAT Application came before the Tribunal on 22 June 2015. It was struck out as misconceived. It is apparent from the reasons attached to the order[20] that the presiding member appreciated the nature of Mr Awad’s grievance, and that it was distinct from the issue of the differential rate determined by the Tribunal in the First VCAT Application. She held, however, that the application was misconceived because there had been no objection lodged with Council, as the Tribunal in the First VCAT Application had explained was required, and so no decision made by Council that could be the subject of appeal to the Tribunal.
[20]The order and reasons were before the Magistrate as Exhibit 4, and in this appeal are part of Exhibit DB 2 to the affidavit of Dean Bosman affirmed 24 March 2016, and Exhibit NW-3 to the affidavit of Neal Francis Wrigley sworn 18 April 2016.

The correctness or otherwise of the order made on the Second VCAT Application is not before me for determination. On the face of it, however, it does seem curious that no reference was made to the objection to the AVPCC for 2014-2015 lodged by Mr Awad, within time, on 30 October 2014 and subsequently disallowed by Council by letter dated 17 November 2014. It may be that this objection and disallowance did not come to the attention of the Tribunal because the Second VCAT Application does not refer to it, and indeed states that the relevant decision was made by the Council on 14 May 2015. That, of course was the date of a letter to Mr Awad, but not the date of the Council’s decision on his objection lodged on 30 October 2014. The Council’s decision was made by the letter dated 17 November 2014, and Mr and Ms Awad had 30 days thereafter to seek review of the Council decision by VCAT. As they did not do so within that time frame, they were in any event out of time to seek review of the Council’s disallowance of their objection by the date of the Second VCAT Application.

No effective challenge to the AVPCC for 2013-2014

As set out earlier, the Valuation of Land Act requires that any objection to the AVPCC for the purposes of the FSPL for 2013-2014 had to be lodged within two months of the notice of valuation being given. Applying that to the second supplementary rates notice for 2013-2014, the latest date on which the appellants could lodge an objection with the Council in respect of the AVPCC for 2013-2014 was 27 May 2014. Had they lodged such an objection, and it was disallowed by Council, they could then have sought review of that decision by VCAT within 30 days.

There was no evidence before the Magistrate, and there is none before me, that the appellants lodged an objection with Council in respect of the FSPL for 2013-2014 within that two month time frame i.e. by 27 May 2014. Mr Wrigley, the Manager Rating and Valuation Services of the Council, swears that from his knowledge and on his review of the Council records no such objection was filed within that period.[21] The letter from the Council to Mr Awad of 21 December 2015 similarly asserts that no objection was lodged in respect of 2013-2014 under the provisions of Part III of the Valuation of Land Act. Mr Awad did not dispute before me either the evidence in Mr Wrigley’s affidavit on this point or the statement to the same effect in the Council letter of 21 December 2015. As a consequence, I will assume that no objection was lodged within that time frame.
[21]Affidavit of Neal Francis Wrigley sworn 18 April 2016 at [5].

Mr Awad sought to challenge the AVPCC for the assessment of the FSPL directly by two applications to VCAT which were concluded before the Complaint was heard by the Magistrate, but the Tribunal did not determine that issue in either application. The First VCAT Application was amended to relate only to the differential rate and an agreed position was arrived at in relation to the differential rate for the 2014-2015 year. The Tribunal made no decision in relation to the proper AVPCC code and so land use classification for FSPL, and no decision in relation to the 2013-2014 year at all. The Tribunal struck out the Second VCAT Application entirely. If Mr or Ms Awad was dissatisfied with either of those decisions, then their avenue of appeal lay under s 148 of the VCAT Act, which allows 28 days to make application to this Court for leave to appeal an order of VCAT, although an extension can be sought to that time.

Mr Awad subsequently lodged four further objections with the Council, two in June 2015 and two in September 2015. The Council rejected each objection.[22] The objection dated 19 June 2015 refers to the letter from Council of 18 May 2015 and includes objections to the FSPL for 2013-2014 and 2014-2015, on the basis that they should be calculated on the public benefit basis; to legal fees; and to the calculation of rates given that the centre on the Land was not in operation in 2013-2015. This objection was amended and two objections, one for 2013-2014 and one for 2014-2015 resubmitted on 26 June 2015.
[22]These objections are Exhibit NM 4 to the affidavit of Neal Francis Wrigley sworn 18 April 2016.

The Council rejected both the original objection and the resubmitted objections on the basis that a previous objection had been lodged within the preceding twelve months, being the objection lodged on 30 October 2014.[23] This would appear correct in relation to objection to the 2014-2015 rates and FSPL. In relation to the 2013-2014 rates and FSPL, no objection had been lodged, but the appellants were in any event out of time to object.
[23]The letter of rejection is dated 25 June 2015, and is part of NW 5 to the affidavit of Neal Francis Wrigley sworn 18 April 2016. The letter refers to the previous objection as having been lodged on 3 November 2014, but it appears to be the same objection identified in Mr Wrigley’s affidavit at [7] as having been lodged on 30 October 2014.

The appellants lodged further objections in September 2015, one headed ‘commercial/industrial’ and one headed ‘Fire Services Property Levy, Non-Rateable’.[24] Both assert that the AVPCC is incorrect. It is difficult to tell from the copies in evidence to what year the first relates, although it seems to relate to all three of 2013-2014, 2014-2015 and 2015-2016. The second objection is expressed to relate to the 2015-2016 year, asserting that the FSPL should be assessed as public benefit. The Council replied to the first of these objections, stated to be received on 11 September 2015, saying that it could not be considered as an objection had been received within the preceding 12 months, being the objection of November 2014.[25] There is no reply to the second September 2015 objection in evidence.
[24]Part of NW3 to the affidavit of Neal Francis Wrigley sworn 18 April 2016.
[25]NW 6 to the affidavit of Neal Francis Wrigley sworn 18 April 2016.

Mr Awad commenced a third VCAT proceeding in respect of the 2015-2016 year in September 2015 (‘Third VCAT Application’). The Third VCAT application was not in evidence before me. The Third VCAT Application was determined by order made 31 March 2016, which is after the order made by the Magistrates’ Court which is here appealed. The order on the Third VCAT Application states that ‘The decision of the Respondent is confirmed. The Respondent’s classification for differential rating of the subject land for the 2015/2016 rating year is confirmed as ‘Commercial/Industrial land A.’’[26]
[26]NW 7 to the affidavit of Neal Francis Wrigley sworn 18 April 2016.

It follows that despite Mr Awad’s attempts to challenge the code used for the imposition of FSPL, when the Complaint came before the Magistrate for hearing in January 2016, the FSPL for 2013-2014 remained as determined by the Council in the further supplementary rate notice.

Hearing and determination of the Complaint

The Magistrates’ Court proceeding was heard on 22 January 2016. By that stage, given adjustments made by the Council and payments made by the appellants, the only amount remaining outstanding was $530.95 for FSPL levied at the commercial rate for 150 days (presumably the five months from 1 February 2014 to 30 June 2014). The Council also sought interest of $30.95.

Mr Wrigley, valuer of the Council, gave evidence for the Council and was cross examined by Mr Awad. The Council put into evidence before the Magistrate the two supplementary rate notices for 2013-2014; the rates notice for 2014-2015 that rated the land at the commercial/industrial rate and the subsequent rates notice for 2014-2015 rating the land at the general rate; rates notice for 2015-2016; the order made on the First VCAT Application on 28 April 2015; their letters of 14 and 18 May 2015; the order made on the Second VCAT Application on 22 June 2015; and a calculation of the amount still owing.[27]
[27]Affidavit of Dean Bosman affirmed 24 March 2016 at [9] and Exhibit DB-2.

Mr Awad appeared for himself and his sister, gave evidence and was cross examined. He tendered three documents - which were identified in the transcript as Exhibits 6, 7 and 8. Exhibit 6 is identified in the transcript as a document dated 14 December 2015. No document bearing that date has been put into evidence by the appellants in this appeal, or the respondent, and accordingly I cannot take it into account. I will assume that Exhibit 7, ‘Occupation Permit’ is Exhibit 5B to Mr Awad’s affidavit of 21 March 2016 and that Exhibit 8 ‘Fire Service Levy Document’ is Exhibit 5C to that affidavit.[28] It is an extract from the Valuation Best Practice 2014 Specifications Guidelines, setting out the Australian Valuation Property Classification Codes.
[28]The respondent agrees that this is correct- Supplementary Affidavit of Dean Bosman affirmed 18 April 2016 at [3]-[4].

Mr Awad also proffered the Magistrate a written statement of his position, although the Magistrate said that he did not need it.[29] I will assume that that statement is the letter dated 15 January 2016 addressed to the Registrar, Bendigo Magistrates’ Court, which Mr Awad has also provided in this appeal. In the interests of fairness, having regard to Mr Awad’s limited English (which was evident before me and is also evident on the transcript of the hearing before the Magistrate), I will take that document into account.
[29]Transcript p 15 ll 21-28.

The case for the Council before the Magistrate was that the FSPL for 2013-2014 had been duly levied in the supplementary rate notices for that year; had not been altered by any objection lodged by the appellants or by VCAT; had not been paid; and so was due and payable, together with interest which a collection agency, here the Council, was bound to impose. Mr Awad cross examined Mr Wrigley as to why the child care centre code, 715, had been applied, to which Mr Wrigley responded that the town planning permit for the construction of the building was for a child care centre.[30] Mr Wrigley also gave evidence in cross examination[31] that Mr Awad had lodged an objection to the FSPL for 2014-2015, which was rejected by Council. He noted that Mr Awad did seek review by VCAT but was out of time in doing so. This was the Second VCAT Application. Also in cross examination he noted that the reduction in capital improved value which lead to the reduced second supplementary rates notice was to reflect that the business was not fully trading, although the building was completed.[32]
[30]Transcript p 9 ll 32-43.
[31]Transcript p 10 ll 27-30.
[32]Transcript p 12 ll 26-29.

In his evidence Mr Awad did not dispute liability to pay FSPL at the proper rate, indeed in cross examination he agreed that he and his sister were so liable.[33] His evidence in chief was to the effect that the Land should have been regarded as vacant because the business was not operating, and so code 118 should have been applied.[34] It could not be used as a child care centre because according to the Education Department there was something missing, and accordingly was an empty building.[35] Mr Awad equivocated as to whether or not the building was originally intended to be a child care centre. In his evidence in chief in answer to the Magistrate he said that the building was not designed as a child care centre, rather was designed ‘as a prep school and a kinder, and should be a 720’.[36] Initially in cross examination he agreed that he had sought to build a child care centre, but when it was constructed it was not approved to be a child care centre.[37] Later in cross examination he denied that his original application for planning permission was to build a child care centre.[38] Similarly, he initially agreed in cross examination that the sign on the building described it as ‘child care centre’, and later disagreed, saying that the sign described it as a kinder and early childhood.[39] The actual sign was not in evidence. Mr Awad sought in this appeal to put into evidence documents relating to the name and purpose of the centre[40], but as I explain in further detail shortly as these were not in evidence below this Court cannot consider them.
[33]Transcript p 17 ll 14-18.
[34]Transcript p 16 ll 21-22.
[35]Transcript p 16 l 39- p 17 l 8.
[36]Transcript p 13 ll 32-33.
[37]Transcript p 17 ll 20-34.
[38]Transcript p 18 ll 6-7.
[39]Transcript p 22 ll 1-2, cf p 22 ll 10-16.
[40]Exhibits 5-G and 5-H of Mr Awad’s affidavit sworn 21 March 2016 appear to be directed to this end.

The Magistrate gave brief oral reasons.[41] He noted that Mr Awad had sought to challenge the ‘classification of the building’ on a couple of occasions at VCAT, but that he had not been successful. He summarised Mr Awad’s contention as being that ‘because the property is not operating as a child care centre it should not be treated as a child care centre’ but held that the Council had proved that it was ‘accurately valued and classified’. The Magistrate ordered the appellants jointly and severally to pay the FSPL and interest as sought, together with the Council’s costs of $4118.16 as sought, with a stay of 90 days. He recommended that Mr Awad obtain legal advice if he wished to appeal.
[41]Transcript p 25 l 42 to p 26.

Notice of Appeal and admissible evidence on appeal

The question of law that the appellants identify in the Notice of Appeal asserts that the Magistrate interpreted the debt according to the wrong code, being 715 (day care centre) instead of 720 (early childhood development centre) or 118 (residential land with a building upon it that adds no value).

There are four paragraphs set out under the heading ‘Grounds of Appeal’. The first paragraph asserts that the Magistrate ‘disregarded the proper zoning of the area’. The second and third paragraphs repeat the assertion under the heading ‘Question(s) of Law’ that the proper code was 720 or 118. The fourth paragraph asserts that the Magistrate ‘failed to consider the reasons provided by VCAT’ in the order of 22 June 2015.

These grounds are elaborated in the appellants’ affidavits. In his affidavit of 21 March 2016, Mr Awad deposes in relation to his contention that the Magistrate failed to consider VCAT’s reasons for its order of 22 June 2015 that he was only informed by Council of its decision to reject his AVPCC classification objection on 21 December 2015.[42] He also asserts in that affidavit that there was only one application to VCAT, and it related to 2014-2015.[43]
[42]At page 1, fourth dot point under 1.1.
[43]Page 1, second dot point under 1.1.

In relation to the correct AVPCC being 720, Mr Awad in his affidavit of 21 March 2016 refers to the occupancy permit, which was in evidence before the Magistrate, and to other evidence, which was not, and so cannot be taken into account in this appeal.[44]
[44]Pages 1-2, under 1.2 and 1.3. The evidence there set out of service approval from the Department of Education and Training for a certain business name and that it was open for an open day period 2-20 December 2013 as an early childhood centre was not before the Magistrate.

Mr Awad in his affidavit of 21 March 2016 makes other assertions that do not arise under the Notice of Appeal. These are that the barrister for the Council attempted to mislead the Magistrates’ Court[45] and a question as to what is the proper rating zone for the Land.[46] As these are beyond the scope of the Notice of Appeal I do not consider them further. Mr Awad also asserts in his affidavit of 21 March 2016 that interest should not have been charged because the Council did not inform his of its decision to reject the AVPCC objection until 21 December 2015. This issue was not raised before the Magistrate and so in strict terms cannot be argued on appeal. As the Council has addressed this issue, however, in the affidavit of Mr Wrigley, I will consider it.
[45]At pages 2 and 3, under 2.1 and 2.2.
[46]At page 3, point 1 under 3. Questions to the Court.

As noted earlier, Mr Awad has sought to put into evidence on this appeal documents that were not before the Magistrate. Attached to his affidavit of 21 March 2016 are attachments A to L inclusive. Of those attachments, only B to E were before the Magistrate. They are admissible and I will consider them. Attachment A is the transcript of the hearing before the Magistrate and so is also admissible in the appeal. Attachments F- H, J and L were not before the Magistrate and so properly before me on this appeal. I do not take them into account. Nor do I take into account other documents that Mr Awad handed up at the appeal hearing or later. Attachment I to his affidavit of 21 March 2016 is a further copy of the Council’s letter to him and his sister of 18 May 2015 which is admissible as it was before the Magistrate. Attachment K is the letter of 21 December 2015 from the Council to which Mr Awad refers in the affidavit. It was not before the Magistrate, but as the Council has sought to address the argument Mr Awad advances based on it, I will allow it to be received into evidence.

The other appellant, Ms Suzy Awad, has filed three affidavits, sworn and filed 13 April 2016, 20 April 2016 (filed 24 April 2016) and 23 April 2016 (filed 12 May 2016) respectively. The affidavits confirm that she wishes to appeal and wishes her brother Mr Awad to represent her. They also depose to various matters and raise issues that were not before the Magistrate. As set out earlier, evidence is generally not permitted on appeal unless it was given before the Court below. For that reasons, I disregard those aspects of Ms Awad’s affidavits.

Summary of the parties’ contentions

The appellants claim in this appeal that the amount should have been calculated on the public benefit rate at $129.50.[47] The appellants similarly assert that the FSPL for 2014-2015 should have been calculated on the public benefit rate at $315, instead of at the commercial rate of $1085.[48] As the proceeding before the Magistrate concerned only the 2013-2014 year, however, no dispute in relation to the FSPL for any subsequent year was before him and accordingly it cannot be considered on this appeal.
[47]Exhibit B.
[48]Ibid.

Put in simple terms, the respondent submits that question of what AVPCC should apply for the 2013-2014 FSPL was not a question that was before the Magistrate, and so (even if a question of law, which is not conceded and is indeed doubtful) it cannot be a basis for appeal under s 109 of the Magistrates’ Court Act. The respondent contends that if there is challenge to the AVPCC on the basis of which the FSPL has been levied by a council, then that challenge must be made first by objection to the council, then, if rejected by the council, by seeking review by VCAT. It follows that the Magistrate was not required, and indeed could not, consider whether or not the correct AVPCC had been applied. In short, the Council submits that the grievance and debt recovery processes are distinct, and the Magistrate could not in the debt recovery process consider the appellants’ grievance about the AVPCC.

Discussion

If the respondent Council is correct in its submission, then it is not a defence to a debt recovery proceeding that the underlying valuation is said to be incorrect - the ratepayer can only make that challenge through the grievance procedure of objection, review by VCAT if still dissatisfied, and, ultimately by seeking leave to appeal to the Supreme Court under s 148 of the VCAT Act from an adverse determination by VCAT. The fact that the grievance procedure and appeal from a debt recovery order by a Magistrate may both end up in the Supreme Court is irrelevant, as they do so by different routes and under different legislation.

The first point to make is that nowhere in the legislative scheme established by the FSPL Act, Valuation of Land Act or Local Government Act is it expressly stated that no challenge can be made to the correctness of the underlying valuation in a debt recovery proceeding for rates or FSPL said to be outstanding by virtue of that valuation. Nor is the rate notice given the conclusive evidentiary status that is given in income tax law, for example, to a notice of assessment of income tax.

In the area of income tax and other federal taxes, it is well established that there are two distinct routes- a procedure by which a taxpayer may challenge the correctness of the assessment of tax, and a process for collection of outstanding tax. The relevant legislation has been challenged in the High Court on a number of occasions, and has withstood that challenge.[49] Under that legislation, it is no defence to a debt recovery proceeding that the calculation of the tax sought may be incorrect. The taxpayer can only challenge the correctness of the amount by utilising the grievance route, which requires first an objection to the Australian Taxation Office and then review by the Administrative Appeals Tribunal if dissatisfied with the outcome of the objection.[50]
[49]For example, see Commissioner of Taxation v Futuris Corporation (2008) 237 CLR 146, [2008] HCA 32 and Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473, [2008] HCA 41.
[50]I discussed this regime in Deputy Commissioner of Taxation v De Simone [2012] VSC 644. It has been the subject of many other published decisions.

The legislation that applies to the collection of FSPL that I have set out earlier is similar in some respects to aspects of the legislation applying to the collection of federal income tax. For example, s 29 of the Valuation of Land Act, which I set out earlier, provides that outstanding rates or taxes can be collected despite the fact that an objection, review or appeal is pending in respect of the underlying valuation. This provision is to the same effect as similar provisions applying to the collection of federal income tax.[51]
[51]For example, s 14ZZM and 14ZZR in Part IVC of the Taxation Administration Act 1953 (Cth).

The federal system has additional provisions, however, that provide that the notice of assessment of outstanding tax is conclusive evidence of the due making of the assessment, and that the amount and all particulars are correct.[52] The effect of these provisions is that no evidence can challenge the correctness of the assessment. I was not directed to, and have not myself found, any similar provision in the Valuation of Land Act.
[52]For example, s 177(1) of the Income Tax Assessment Act 1936 (Cth).

The absence of such a provision means that evidence could conceivably be given by a defendant to a debt recovery claim to challenge the correctness of the rate notice on which the plaintiff council relies. But in my view that evidence could not go to the correctness of the underlying valuation. It is not here necessary to decide, but perhaps a ratepayer is able to defend a debt recovery action on the basis that, for example, the collection agency plaintiff has not given effect to a change to the underlying valuation that was required by a successful objection or review by VCAT. But where there has been no such failure, then I consider the Council is correct in its submission that the correctness of the underlying valuation can only be challenged through the separate grievance procedure. I consider that the intention of the FSPL Act and the Valuation of Land Act is that such a challenge can only be made through the grievance procedure of objection to the valuer, review by VCAT and subsequent application for leave to appeal. I reach this conclusion for the following reasons.

First, the legislation sets up a specific grievance procedure for challenges to a valuation, including a challenge to the AVPCC. That grievance procedure is particularly well suited to a specialist area such as valuation. It first gives the valuation authority an opportunity to review the issue itself, before external review. If the ratepayer remains dissatisfied, then the avenue of review is to a tribunal, not a court, and so allows for the utilisation of subject matter specialists in the determination of the review. The same degree of specialist knowledge in the decision maker would not be possible if the valuation could be challenged in a debt recovery proceeding in a court.

Secondly, this specific grievance procedure is limited by a strict time limit on the making of the objection, and the limitation to one objection only to the same valuation within 12 months. If the valuation could also be challenged in a debt recovery proceeding in a court, then these limitations would be undermined.

Thirdly, a legislative intention that there be two distinct processes, concerned with different subject matter, is shown by the provision in each of the FSPL and Valuation of Land Acts that an amount outstanding under a rate notice may be collected notwithstanding that there is a pending objection, review or appeal against the valuation underlying the rate notice. This is set out in s 34(1) of the FSPL Act and s 29 of the Valuation of Land Act.

Fourthly, although debt recovery may proceed despite a pending objection, review or appeal, both the FSPL Act and the Valuation of Land Act require the decision of the reviewer to be given effect to by any necessary adjustment to the rate or FSPL in question. Provision to this effect appears in s 34(2) of the FSPL Act and in s 21(6) of the Valuation of Land Act. The consequence is that the amount ultimately paid by the ratepayer will be the amount established in the specialist grievance process.

Application to this case
Magistrate’s reasons

Given that Mr Awad’s defence was based on the AVPCC being incorrect, it was appropriate for the Magistrate to be satisfied that there had been no change to the AVPCC and so valuation as a result of the objection process that required a change to the amount outstanding. But on the basis of my analysis above this was the only issue in relation to the AVPCC which the Magistrate could consider. He could not himself conduct an enquiry into what was the correct AVPCC, as that is the sole preserve of the objection process.

The Council called evidence (from Mr Wrigley) as to the sequence of the rate notices, the absence of relevant objection and the absence of any change to the valuation at VCAT. Mr Awad did not challenge this evidence. He sought to directly challenge in the debt recovery proceeding the correctness of the AVPCC, and seeks again to do so in this appeal. The Magistrate’s reasons are not lengthy, but they show in my view that he appreciated that he had to be satisfied that the amount sought had not been changed by objection or by VCAT, and he was so satisfied. The Magistrate was not required and indeed not permitted to go further, and himself investigate what was the appropriate AVPCC.

Question of law and grounds of appeal

The appellants have not shown any error arising from their stated question of law, being that the wrong AVPCC was applied. As stated above, this was not a question that the Magistrate could consider. It follows that the grounds that seek to amplify this question, which are set out in the second and third paragraphs under the heading Grounds of Appeal, also fail.

The first paragraph under that heading, relating to zoning, did not arise before the Magistrate and so cannot arise on this appeal. I explained this to Mr Awad at the hearing itself.

The final paragraph under the heading Grounds of Appeal asserts that the Magistrate failed to consider the reasons given by VCAT at the time of the determination of the Second VCAT Application by order of 22 June 2015. Mr Awad’s affidavit of 21 March 2016 suggests that he seeks to assert that these reasons are relevant because they show there was no objection, in support of his contention that he was only advised of a rejection of an AVPCC objection by letter dated 21 December 2015. Further, Mr Awad states in that affidavit that there was only one application to VCAT, apparently by way of challenge to the Magistrate’s reference in his reasons to two applications to VCAT.

In my view these assertions by Mr Awad are misconceived. First, it is plain from the factual history I set out earlier that Mr Awad had made two applications to VCAT, not just one. The Magistrate in his reasons referred to the fact that there had been two VCAT applications, and that Mr Awad had not been successful. This was correct, and, as noted above, all that the Magistrate was required or permitted to be satisfied of in relation to the AVPCC.

Next, although it is correct to say that the Magistrate did not refer specifically to the reasons given by VCAT for strike out of the Second VCAT Application, I do not consider that it was necessary for him to do so. It was strictly not relevant as the Second VCAT Application concerned a different rating year to that with which the Magistrate was concerned. It follows that the reference by VCAT in those reasons to there being no relevant objection to the valuation for 2014-2015 (assuming it to be correct) was irrelevant to the debt recovery proceeding which concerned 2013-2014.

For these reasons, this ground is also not made out.

Mr Awad also seeks in his affidavit of 21 March 2016 to challenge the imposition of interest. The Council was required to seek interest by s 30 of the FSPL Act. Mr Awad does not challenge the arithmetical calculation of the interest sought and awarded. He claims that there is no ground for charging interest because he was only notified of rejection of his AVPCC objection by the Council letter to him dated 21 December 2015. I do not consider this correct. That letter was a history of what had occurred in respect of three rating years - it was not notification of rejection of an objection to the FSPL for the 2013-2014 year. It simply could not be because, as stated previously, the appellants did not make any objection to the FSPL for that year within the necessary time frame. They did object to the FSPL for the following year, 2014-2015, but that objection was rejected by letter dated 17 November 2014. The challenge to the interest fails.

Conclusion

For these reasons I will dismiss the appeal.

The Council made an oral application at the conclusion of the hearing for its costs of the appeal on the standard basis, if it was successful. I indicated at the close of hearing that I would excuse the parties from appearance on the delivery of judgment and would also determine the issue of costs in these reasons, so as to save the parties the cost of a further appearance. I said that I would provide an opportunity to a party aggrieved by a costs order so made to relist the proceeding to argue the issue if that party chose.

The Council has been successful in its opposition to the appeal, and the appellants entirely unsuccessful. The usual costs order is that costs follow the event i.e. the unsuccessful party is ordered to pay the costs of the successful party. This is the order that I will make. There is nothing currently before me to justify departure from the usual costs order.

Orders

I will dismiss the appeal and order the appellants to pay the respondent’s costs of the appeal on the standard basis, as taxed or agreed. I will allow the appellants to relist the issue of costs if they make that request within 14 days of publication of these reasons. They should understand that if they do so, and are unsuccessful in changing the costs order, it is likely that they will also be ordered to pay the Council’s costs of that appearance, as well as the costs of the appeal to date.

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[2017] VSC 36

15 February 2017