BGC (AUSTRALIA) PTY LTD and CITY OF SWAN
[2011] WASAT 158
•4 OCTOBER 2011
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
STREAM: DEVELOPMENT & RESOURCES
ACT: LOCAL GOVERNMENT ACT 1995 (WA)
CITATION: BGC (AUSTRALIA) PTY LTD and CITY OF SWAN [2011] WASAT 158
MEMBER: JUDGE T SHARP (DEPUTY PRESIDENT)
HEARD: 13 JUNE 2011
DELIVERED : 4 OCTOBER 2011
FILE NO/S: DR 232 of 2010
BETWEEN: BGC (AUSTRALIA) PTY LTD
Applicant
AND
CITY OF SWAN
Respondent
Catchwords:
Local government - Rating - Whether rate imposed in accordance with Local Government Act - Specified area rate - Specific work, service or facility - Whether affected rate payers benefit from works - Whether specific works sufficiently identified - Whether Council considered benefit to affected rate payers
Legislation:
City of Swan Town Planning Scheme No 15
Local Government Act 1919 (NSW), s 121, s 121(1)
Local Government Act 1995 (WA), s 6.26(1), s 6.26(2), s 6.32, s 6.33, s 6.37, s 6.37(1), s 6.82
Result:
Application dismissed
Category: B
Representation:
Counsel:
Applicant: Mr MC Hotchkin
Respondent: Mr D McLeod
Solicitors:
Applicant: Hotchkin Hanly
Respondent: McLeod & Co
Case(s) referred to in decision(s):
Burns Philp Trustee Co Ltd v Blacktown Municipal Council [1976] 33 LGRA 231
Citygate Properties Pty Ltd and City of Bunbury [2010] WASAT 182
Little v Gillespie [1977] WAR 78
Parramatta City Council v Pestell (1972) 128 CLR 305
Smith and City of Stirling [2006] WASAT 6
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
BGC (Australia) Pty Ltd challenged a specified area rate imposed by the City of Swan in relation to the area of the City known as the Hazelmere Industrial Area. The company asserted that a question of general interest exists as to whether or not the specified area rate had been imposed in accordance with the requirements of the Local Government Act 1995 (WA) and sought to have the rates quashed commencing from and including the 2010/2011 rating period.
A specified area rate can be imposed where a local government considers that a specific work, service or facility would benefit or provide access to the ratepayers or residents within a portion of its district, or where it considered that those ratepayers had contributed to the need for the specific work, service or facility. The company argued that, in imposing the specified area rate, the City was not entitled to regard an upgrade of the roads within the area to industrial standards as a specific work, service or facility for which the rate was to be used and had not considered the question of benefit, access or contribution in relation to the affected ratepayers. In any event, the company argued that no rational basis existed for the conclusion that works for which the funds were to be applied could produce a benefit to the ratepayers in the relevant sense.
The Tribunal examined the circumstances surrounding the imposition of the specified area rates. It considered the nature of the benefit that is required to support an imposition of a specified area rate and whether the Council of the City had directed its mind to the correct test, and, if so, whether there was a rational basis for the conclusions the City had reached.
The Tribunal concluded that the rate had been imposed in accordance with the requirements of the Local Government Act 1995 (WA) and accordingly the application to quash the rate was dismissed.
Introduction
Section 6.37 of the Local Government Act 1995 (WA) (LG Act) enables the local government, if certain conditions are met, to impose what is referred to as a 'specified area rate' (SAR) on rateable land within a portion of its district for the purposes of meeting the costs of a specific work, service or facility. Commencing from and including the 2010/2011 rating period, the City of Swan (City) has resolved to impose a SAR on ratepayers within an area of the district of the City known as the Hazelmere Industrial Area. The applicant in this proceeding (BGC) owns property within the Hazelmere Industrial Area and is liable for the SAR imposed in relation to its property.
Section 6.82 of the LG Act enables a person to refer a question of general interest as to whether a rate or service charge was imposed in accordance with the LG Act to the State Administrative Tribunal to have it resolved. The section also enables the Tribunal to make an order quashing a rate or service charge which in its opinion has been improperly made or imposed.
BGC challenges the validity of the SAR, and has referred questions to the Tribunal which broadly amount to whether or not the SAR has been imposed in accordance with the LG Act.
The essential complaint by BGC is that the pre-conditions to the exercise of the power to impose an SAR were not satisfied.
Background to and the imposition of the SAR
According to the minutes of an ordinary meeting of the Council of the City held on 19 May 2010, (the 19 May Minutes), the Council formed the view that a part of its district known as the Hazelmere Industrial Area requires construction of infrastructure that comprises 5,870 metres of roads, drainage and footpaths at an estimated cost of $13,990,000. To fund this work, the Council proposed that it would establish an SAR for the Hazelmere Industrial Area under s 6.37 of the LG Act.
The Council noted that the collection of the SAR would be insufficient to fund the entire cost of the works and it proposed that the City contribute to the project to the extent of $3.00 for each $1.00 raised through the SAR. The money required for the project would be borrowed and repaid over a period of 25 years. Once the loan was repaid, the SAR would be terminated and any unspent money would be returned to the rate payers in accordance with s 6.37(5) of the LG Act.
The Council noted the importance of consulting with 'business landholders' within the Hazelmere Industrial Area 'throughout the whole process'.
Details of the proposed work are set out in the 19 May Minutes as follows:
Location
Length
Cost
A. Stirling Cres: Great Eastern Highway Bypass Bushmead Road
730m
$1,740,000
B. Stirling Cres: Bushmead Rd Lloyd St
940m
$2,240,000
C. Stirling Cres: Amherst Rd Lloyd St
1,100m
$2,620,000
D. Bushmead Rd: Central Av Stirling Cres
910m
$2,170,000
E. Bushmead Rd Stirling Cres Roe Hwy
650m
$1,550,000
F. Lakes Rd: Lloyd St Short of Roe Hwy
810m
$1,930,000
G. Central Av: Bushmead Rd Stirling Cres
730m
$1,740,000
Totals
5,870m
$13,990,000
Council further noted that Town Planning Scheme 15 (TPS) was introduced in the early 1990s to guide the development of the Hazelmere Industrial Area. Council then noted that in 2000, it had resolved to request the then Minister for Planning not to proceed with TPS 15 and for it to be withdrawn. However, the Minister had not yet withdrawn TPS 15, and would not do so until such time as 'another mechanism to fund the infrastructure in the Area' had been developed. Council concluded that the SAR meets this requirement and as part of the recommendation it would again be requesting the Minister to withdraw TPS 15.
The recommendation was put to Council that it advertise the creation of an SAR for the Hazelmere Industrial Area 'for the purpose of infrastructure construction'. The rate would be 2.645 cents per dollar of unimproved value or gross rental value, as the case may be, effective from 1 July 2010. Money raised through this rate would be held in accordance with the provisions of the LG Act.
The 19 May Minutes also recorded that it was further recommended to Council that the Minister for Planning is again requested that TPS 15 is withdrawn.
These recommendations were put to Council and were carried.
At a further meeting of Council, held on 30 June 2010, the introduction of the 'Hazelmere Industrial Area specified area rate as advertised' was discussed. The minutes of that meeting (the 30 June Minutes) show that Council received and considered a report about the Hazelmere Industrial Area SAR and the concerns that had been raised within the community, including BGC, about it.
The 30 June Minutes record that the proposed SAR would affect 30 land parcels and approximately 20 different people or businesses. The infrastructure concerned was identified as 'roads, drainage and associated work'. The total cost was anticipated to be $14 million, which was stated to be 'indicative', the exact costs to be finalised once detailed design was completed. The Council noted that the SAR would raise approximately 25% of the cost of the works, the balance to be met from 'general ratepayers' funding'.
Attached to the 30 June Minutes is a location plan of the area to be the subject of the SAR.
The recommendations to the Council are shown in the 30 June Minutes as follows:
That the Council resolve to:
1.Introduce a Specified Area Rate for the Industrial Development Zone land in Hazelmere to fund the costs associated with the construction of road infrastructure (including loan servicing), as outlined in the report to Council on 19 May 2010.
2.Notify all property owners of Council's decision accordingly.
The 30 June Minutes indicate that the two resolutions above were 'carried'.
The expert evidence
It is helpful to consider at this point the evidence given at the hearing of this proceeding by Mr Bridges, Mr Perera and Mr Cameron, which assists in understanding the background as to how Council arrived at these resolutions.
The costings used for setting the SAR for the Hazelmere Industrial Area were prepared by Mr Mark Bridges. Mr Bridges is the Design Coordinator of Civil Landscape and Architectural Works at the City, in the project management business unit. He has held that position for a number of years. He also spent 10 years at Main Roads Western Australia as a civil engineering draftsperson. He holds a diploma in civil engineering.
Mr Bridges gave a statement of evidence to the Tribunal, in which he said that he is familiar with the Hazelmere Industrial Area and the road network in that area. In particular, he was involved in 2008/2009 in road upgrade work to one of the roads within the Hazelmere Industrial Area, Bushmead Road, when one of the owners of the lots in the Hazelmere Industrial Area had been required as part of its development approval to upgrade the road to 'industrial standard', with associated drainage and lighting, and roundabout improvements. He said he used the costing on that project to reach the estimate which he had made to set the SAR for the Hazelmere Industrial Area. His estimate of the cost for the upgrading of roads in the Hazelmere Industrial Area to industrial standard was $2,380 per linear metre, including GST. He confirms in his statement that although the estimate of the cost of the road upgrade was carried out in 2009, in his opinion those estimates are reasonably reliable as estimates for the purpose of the City's 2010/2011 budget.
As far as the necessity for the upgrade of the roads in the Hazelmere Industrial Area is concerned, Mr Bridges states that all of those roads are presently constructed to what is essentially a rural road standard. He considers that those roads now carry a type and level of vehicular traffic which is in excess of their design capacity. He says that the roads 'for many years' have been carrying highwide load heavy haulage vehicles and that the roads are simply not designed for regular use by vehicles of that kind.
He says that some of the consequences of what he refers to as the 'inadequate design' are:
a)excessive "rutting" of the roads;
b)an increased requirement for shoulder maintenance as the road shoulders are gravel and when large vehicles pass each other it is necessary for each of them to pull off the road onto those shoulders; and
c)because of the rutting of the roads, there is an ongoing problem of standing water, which he regards as "raising a serious road safety issue".
He point out that on certain sections of the roads within the Hazelmere Industrial Area, large heavy vehicles must use a pilot vehicle.
Mr Bridges says:
It is impossible to avoid the conclusion that the existing roads in the Hazelmere Industrial Area are being required to perform a function which is well and truly beyond their current design and construction standard. There is a very pressing need for all of the roads in the network to be upgraded to industrial road standard, and there will be ongoing consequences for road safety, and the cost of road maintenance, while the roads continue in their present condition.
Mr Anil Mohanlal Gerald Perera also gave a statement of evidence to the Tribunal. Mr Perera is an engineer and has been a member of the Australian Institute of Engineers since 1996 and prior to that, a member of the Institution of Civil Engineers, UK since 1981. Mr Perera is the City's Infrastructure Planning Engineer and is responsible for forward planning for major infrastructure projects. He says that roads and bridges are the infrastructure with which he is primarily concerned.
Mr Perera says that he is familiar with the Hazelmere Industrial Area and with the road network in that area. He states that all of the road sections in the Hazelmere Industrial Area are used for industrial purposes, including large vehicles, and, he says, all of the roads need to be upgraded to industrial standard.
Mr Perera states that he has 'extensive experience in the costing of road works'. He confirms that he has reviewed the costs for the road infrastructure proposed for the Hazelmere Industrial Area and in his opinion the costing of $2,380 per linear metre including GST is reasonable.
He is strongly supportive of the upgrading of the roads to industrial standards and he points out that one important difference between the existing roads and the proposed roads will be the provision of road drainage. He says that the existing roads are not provided with piped drainage. Storm water on the existing road drains into open drains on the sides of the roads and in some instance, discharges into private property. The road drainage in the proposed industrial roads will be pipe drains connecting to the City's storm water drainage system.
Mr Perera says that it is 'difficult to avoid the conclusion that all ratepayers within the Hazelmere Industrial Area will benefit from the proposed road upgrading'. He also added at the hearing of this proceeding that 'everybody will benefit'. (T: [78], [13.6.11]).
Mr Colin Lindsay Cameron identifies himself as the City's Executive Manager of Corporate Services and is a certified practising accountant. Mr Cameron provided a statement of evidence to the Tribunal.
Mr Cameron says that he is responsible for the financial services of the City and has primary responsibility in the City for the preparation and implementation of the annual budget. That involves:
a)determination of the works for the coming year in terms of operating and capital expenditure;
b)determining the nonrate revenue expected for the year; and
c)deciding on rate and service charges to make up the difference between anticipated expenditure and nonrate revenue.
Mr Cameron's statement indicates that he is familiar with the distinction between general rates, differential general rates and specified area rates. He also shows an understanding of the requirements of s 6.37 of the LG Act and the imposition of the SAR.
Mr Cameron says that the Council of the City has recognised for many years a need to upgrade the roads in the Hazelmere Industrial Area so as to bring the roads up to an appropriate industrial standard, and to improve access and circulation, particularly for heavy vehicles.
He confirmed at the hearing of this proceeding that he was the 'Council officer principally involved in putting together the rating strategy that identified Hazelmere Industrial Area as appropriately subject to a special area rate'. (T: [74], [13.6.11]). He said that he identified the area concerned 'because it was zoned industrial' and that he did not 'have regard to each individual lot to consider what benefits might flow or otherwise to each lot'. (T: 74], [13.6.11]).
He went on in his statement to say that he was present at and played an active role in the meeting of Council of 30 June 2010 when Council resolved to impose the SAR. He says that there was much discussion by Council members at those meetings about the fact that ratepayers within the Hazelmere Industrial Area:
a)will benefit from the road network upgrading work;
b)will have access to the upgraded road network and;
c)have contributed or will contribute to the need for the upgraded road network.
He says those discussions were not recorded in the 30 June Minutes but he expresses the view that local government meetings seldom record the details of those discussions.
The relevant statutory provisions
Central to the issues in this case are the provisions of s 6.37 of the LG Act which provides:
Specified area rates
(1)A local government may impose a specified area rate on rateable land within a portion of its district for the purpose of meeting the cost of the provision by it of a specific work, service or facility if the local government considers that the ratepayers or residents within that area
(a) have benefited or will benefit from;
(b) have access to or will have access to; or
(c) have contributed or will contribute to the need for,
that work, service or facility.
(2)A local government is required to
(a)use the money from a specified area rate for the purpose for which the rate is imposed in the financial year in which the rate is imposed; or
(b)to place it in a reserve account established under section 6.11 for that purpose.
(3)Where money has been placed in a reserve account under subsection (2)(b), the local government is not to
(a)change the purpose of the reserve account; or
(b)use the money in the reserve account for a purpose other than the service for which the specified area rate was imposed,
and section 6.11(2), (3) and (4) do not apply to such a reserve account.
(4)A local government may only use the money raised from a specified area rate
(a)to meet the cost of providing the specific work, service or facility for which the rate was imposed; or
(b)to repay money borrowed for anything referred to in paragraph (a) and interest on that money.
(5)If a local government receives more money than it requires from a specified area rate on any land or if the money received from the rate is no longer required for the work, service or facility the local government
(a)may, and if so requested by the owner of the land is required to, make a refund to that owner which is proportionate to the contributions received by the local government; or
(b)is required to allow a credit of an amount proportionate to the contribution received by the local government in relation to the land on which the rate was imposed against future liabilities for rates or service charges in respect of that land.
As already observed, s 6.82 of the LG Act provides the jurisdiction for the Tribunal to resolve 'a question of general interest as to whether a rate or service charge was imposed in accordance with (the LG Act)', and empowers the Tribunal to make an order quashing a rate or service charge which in its opinion has been improperly made or imposed.
The questions referred to the Tribunal on 10 March 2011
The questions referred to the Tribunal by the applicant under s 6.82 of the LG Act are set out in BGC's Statement of Issues, Facts and Contentions filed with the Tribunal on 10 March 2011 and are stated to be as follows:
1.Do the proposed works (upgrading of roads, drainage, footpaths, street lighting and crossover) (Works) constitute a 'specific work, service or facility' for the purposes of s 6.37(1) of the LG Act?
2.Have the ratepayers on whose properties the SAR has been imposed:
(i) have benefited or will benefit from;
(ii) have access to or will have access to; or
(iii) have contributed to or will contribute to the need for,
the Works, separate, distinct and predominant from such benefit, access or contribution for or by ratepayers generally and third parties from outside the Area?
3.Has the SAR been determined on a proper and justifiable basis:
(i) taking into account relevant factors, including:
(A)deeds entered into between ratepayers and the City on the ratepayers' commitment to Town Planning Scheme 15 and its costs;
(B)differential rates imposed on ratepayers on account of their properties being classified as transport depots and heavy haulage vehicle centres: and
ii)not taking into account irrelevant factors such as the City's commitment to make payment of the sum of $2 million by 31 December 2011 to a developer in the Area (who has agreed to undertake certain road works as "prefunded infrastructure"
The questions referred to the Tribunal on 13 June 2011
In its oral submissions made to the Tribunal at the hearing of this proceeding on 13 June 2011, BGC says that it does not contest either the right or the merit of any decision that the City may wish to make about the desirability of improving infrastructure within its municipality. That, it says, is not the subject of its concern. Its concern is 'the circumstances which the cost of that decision should be borne'. (T: [2], [13.6.11]).
BGC's written submissions to the Tribunal handed up at the hearing, reiterate that point. BGC accepts that the City may consider that the proposed upgrading of the road network area within the Hazelmere Industrial Area is warranted, and/or that the City could reasonably and properly form the view that any part of its municipality should be improved. What BGC says it takes issue with, is the respondent's choice of:
a)the statutory means by which its objective of funding the road upgrading works is given effect to;
b)the particular ratepayers called upon to bear those costs (in whole or in part).
BGC then restates its questions which it wishes to refer to the Tribunal as follows:
a)Whether the costs of infrastructure works of the nature and extent proposed by the Respondent (namely upgrading of the road network and ancillary works) can be recovered by the Respondent through the imposition of a SAR, pursuant to s 6.37(1) of the LG Act, on industrial use ratepayers within the [Hazelmere Industrial] Area or whether such costs are to be recovered, if at all, through the imposition of differential general rates pursuant to s 6.33(1) of the LG Act?
b)If the costs of the road upgrading works can be recovered through a SAR, whether the Respondent has complied with s 6.37(1) of the LG Act in arriving at a reasonable opinion that the industrial use ratepayers within the [Hazelmere Industrial] Area:
(i) have benefited or will benefit from;
(ii) have access to or will have access to; or
(iii) have contributed to or will contribute to the need for,
those works?
It is unclear to the Tribunal whether these questions are in addition to or are instead of the questions which it set out in its Statement of Issues, Facts and Contentions. The Tribunal in any event has proceeded on the basis that, because its jurisdiction is conferred under s 6.82 of the LG Act which is concerned solely with the question as to whether the SAR was imposed in accordance with the LG Act, it is not part of the Tribunal's function to consider the other matters raised by BGC in its questions set out above.
The Tribunal's response
In order for the City to properly impose the SAR, the City must first identify:
(a)that portion of its district to which the SAR will apply; and
(b)the 'specific work, service or facility' intended to be undertaken within that portion or area.
Identification of area
The Hazelmere Industrial Area is located wholly within the district of the City and is the area identified in a location plan attached to the 30 June Minutes. All of the land within the Hazelmere Industrial Area is zoned for the purpose of industry and a large part, but not all, of that land is used for industrial purposes.
The legislation does not contain any particular requirement as to how the portion of land is to be identified, and the Tribunal's conclusion is that the portion of land has been identified by the local government for the purpose of s 6.37(1) of the LG Act.
Identification of work
Section 6.37 refers to the provision by the local government of 'a specific work, service or facility'. BGC submits that synonyms for the word 'specific' in the phrase include 'particular' or 'precise' and that 'specific' is used in contradistinction to the word 'general'.
BGC goes on to suggest that Parliament had in mind, not general works of infrastructure such as the construction or upgrading of roads, but rather something which is directed specifically at and for the benefit of an identifiable ratepayer or group of ratepayers.
BGC then took the Tribunal to the second reading speech of the Minister who introduced the bill into the Parliament. However, the Tribunal is unclear as to why it should consider, and no argument has been put as to why it should consider, that material. In the Tribunal's view, there is no reason to give the word 'specific' anything other than its ordinary meaning, which the Shorter Oxford English Dictionary defines, relevantly, to mean 'clearly or explicitly defined'.
The City submits that the work in question is set out in the 19 May Minutes and is included in an information sheet sent to ratepayers entitled 'Proposal to Introduce Specified Area Rate in Hazelmere'. The description of the specified works is somewhat limited in that it describes the work as 'the upgrade of roads, drainage and footpaths, with street lighting and crossovers', followed by a table setting out the portions of the various roads to be affected. It also includes a measurement of each of the portions of the roads in question and an 'indicative' costing of the work in respect of each portion.
In the Tribunal's view, for the purpose of s 6.37(1), the degree of detail of the specific work needs only to be sufficient to enable the affected ratepayers to consider whether or not they have benefited or will benefit from that work. In any event, BGC does not seem to be contending that it is unaware of what work is being proposed.
The Tribunal therefore concludes that the work in question has been specified to the necessary degree.
Did the City consider that ratepayers would benefit?
Eight of the City's fifteen Councillors provided witness statements detailing their involvement in the decision to impose an SAR on the ratepayers within the Hazelmere Industrial Area. The statements varied in their description of the witnesses' recollection of the early stages of planning of the upgrade, however they were consistent in their account of the Council's deliberations about the proposed SAR.
Each of the witness statements of Kevin Bryce Bailey, Melvyn Paul Langerton, David Russell Fardig, Jon William Holmes, Giuseppe Antonio Marino, Darryl Raymond Trease, Michael Albert Wainwright and Charlie Zannino, the Mayor of the City, confirm that:
(a)each Councillor concerned was familiar with the Hazelmere Industrial Area;
(b)Councillors attended a workshop in February 2010 in which they were briefed by officers of the City on the need for the upgrade, the technical details of the plan and the costings for roads, drainage and lighting;
(c)the Council resolved that there was a need for the upgrade;
(e)each Councillor concerned attended the June 2010 meeting during which the Council considered whether the SAR should be imposed on the basis that:
a. the ratepayers within the Hazelmere Industrial Area would benefit from the upgrading of the road network;
b. the upgrade would improve access of industrial lots to the road network; and
c. that the industrial use of the land gave rise to the need for the upgrade.
Each statement indicated that the issues of benefit, access and need were discussed at length, and that at the conclusion of the discussion, each Councillor concerned was satisfied that the ratepayers within the Hazelmere Industrial Area would benefit from the upgrading of the road network and therefore the SAR should be imposed.
BGC did not seek to challenge any of the witness statements in crossexamination and there is no reason to reject the evidence of the Councillors. The Tribunal accepts that the process involved discussion by the Council as to the benefit to be derived from the proposed upgrades.
However, in Burns Philp Trustee Co Ltd v Blacktown Municipal Council [1976] 33 LGRA 231 at 240 241, Wootten J said, in relation to s 121(1) of the Local Government Act 1919 (NSW), that it was essential that, in imposing a local rate, the Council direct its attention to the nature and scope of the work or service in order that it can form an opinion as to what portion of its area would be specifically benefited by that work. He said 'it is necessary that the council should in fact form that opinion and not merely adopt a verbal formula saying that it has done so when in fact it has not or has done something else'.
The Tribunal has considered the evidence before it and finds that the Council did consider the nature and scope of the proposed work and concluded that all ratepayers within the Hazelmere Industrial Area would benefit from the upgrade to the road network.
Was it rationally open to Council to reach its opinion as to benefit?
Having considered that the SAR was imposed in respect to specific works which were identified to the affected ratepayers and that the local government considered that the ratepayers within the Hazelmere Industrial Area would benefit from those specific works, it would appear that the requirements of s 6.37(1) of the LG Act have been met, and that the SAR has been imposed in accordance with the LG Act.
However, in Parramatta City Council v Pestell (1972) 128 CLR 305 (Parramatta), in the context of its consideration of s 121 of the Local Government Act 1919 (NSW), the High Court noted that notwithstanding that the Council may have in fact held an opinion as to the special benefit to be derived by the area of land affected by a local rate, the rate would not be validly imposed where no rational basis could exist for holding the opinion - Barwick CJ at 314 - or where the Council could not in reason hold the opinion that the identified land would be specially benefited by the execution of the works - Menzies J at 322.
Although Parramatta concerns s 121 of the Local Government Act 1919 (NSW), which refers to 'special benefit' rather than 'benefit' and requires a benefit to the land rather than to the relevant ratepayers, the comments in Parramatta in the Tribunal's view are equally applicable to s 6.37 of the LG Act.
The Tribunal reached the conclusion in Smith and City of Stirling [2006] WASAT 6 (Smith), that a relevant 'benefit' will include a benefit (whether direct or indirect) which is rationally found to be additional to or greater than that which other ratepayers or residents receive arising out of the identified 'specific work, service or facility'. The Tribunal also notes the reference in that decision to the comment of Jackson CJ in Little v Gillespie [1977] WAR 78 at 81 of taking a 'commonsense' approach to the issue.
As the Tribunal observed in Smith at [46], the discussion in these cases indicates that a relevant 'benefit' will include a benefit (whether direct or indirect) which is rationally found to be additional to or greater than that which other ratepayers or residents receive arising out of the identified 'specific work, service or facility'. Such benefit may be considered in an abstract sense. Thus, such matters as the views of the present owner of the affected land or the present use of the land are not determinative of whether something could be said to be for the objectively determined benefit of ratepayers or residents.
A work is of special benefit to a portion of a local government district if 'the lands comprising that portion derive from the work a benefit which is not shared by other lands or a benefit which is additional to, or greater than, that which is derived by other lands'; see Parramatta at 327. It does not need to be a benefit that no other ratepayers in the local government district would enjoy, as long as it is a benefit which is not necessarily enjoyed by all the land in the local government district. It is a benefit particular to the land selected, though not exclusively so; see Parramatta at 313.
The benefits which the City considered would accrue to ratepayers within the Hazelmere Industrial Area were, first, improvements to road safety within the Hazelmere Industrial Area, including obviating the likelihood of water standing on the road, second, a decrease in or an elimination of dust, third, improved access to the lots within the Hazelmere Industrial Area and, fourth, an increase in land values once the work was completed.
BGC contends that none of these are benefits which would justify the imposition of an SAR.
BGC says that the safety and access benefits are benefits which would be enjoyed by all ratepayers within the district, not just the ratepayers within the Hazelmere Industrial Area. However, the Tribunal considers that even if BGC is correct, this point was dealt with by Barwick CJ in Parramatta at 314 as follows:
… if a council in fact holds the opinion that the portion of its area in respect of which it decides to impose a local rate will derive special benefit from the execution of the works or services to which the proceeds of the local rate are to be devoted, the rate resulting from its resolution in that behalf will be valid, thought it might reasonably be thought that other land in the council's area would derive equal benefit from the execution of those works or services.
The benefit of the elimination of dust, BGC says, even if it were accepted as a benefit to some of the affected ratepayers, could not benefit the ratepayers who owned vacant lots within the area. However, as Stephen J said in Parramatta at 334 - 335:
… special benefit is not to be disregarded simply because some lower economic use to which, for the time being, the land is being put precludes advantage being taken of that special benefit.
Finally, BGC questions whether the City is qualified to make an assessment of how land values would change following completion of the work and submits that this 'benefit' should be disregarded. However, the Tribunal considers that the City is entitled to form this view at a general level, albeit without necessarily being able to put a particular figure to the amount by which those values will increase.
The Tribunal therefore concludes that it was rationally open to the City to hold an opinion that the ratepayers within the Hazelmere Industrial Area would benefit from the proposed works.
Extent of the Tribunal's review
The Tribunal considers that its task is to determine the question as to whether the SAR was imposed in accordance with the LG Act. The Tribunal has concluded that the SAR was imposed in respect to specific works which were identified and that the local government considered that the ratepayers within the Hazelmere Industrial Area would benefit from the specific works. The Tribunal has also concluded that a rational basis exists for the local government to come to that conclusion.
However, BGC contends that, because this matter is within the Tribunal's review jurisdiction and that it is a hearing de novo, the Tribunal should go further and make a finding as to whether or not the Tribunal agreed with the local government's decision.
The Tribunal continues to hold the view set out by Chaney J in Citygate Properties Pty Ltd and City of Bunbury [2010] WASAT 182 at [93], for the reasons set out in that decision, that what is required is that the local government address its mind to the question of benefit, and that it reach an opinion which is not unreasonable and has some rational basis. Disagreement by the Tribunal with the rational basis is not sufficient to determine that the rate is invalid.
Having concluded that the local government formed its opinion on the basis of benefit, it is unnecessary for the Tribunal to consider the other aspects of s 6.37 of the LG Act, namely whether the relevant ratepayers have access to or will have access to or have contributed to or will contribute to the need for the specific work.
Conclusion
The Tribunal finds that the SAR has been imposed in accordance with the requirements of the LG Act and BGC's application should be dismissed.
Order
1.The application is dismissed.
2.The rate imposed by the respondent and under review is affirmed.
I certify that this and the preceding [79] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUDGE T SHARP, DEPUTY PRESIDENT
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