CITYGATE PROPERTIES PTY LTD and CITY OF BUNBURY - [2010] WASAT 182

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: DEVELOPMENT & RESOURCES

ACT: LOCAL GOVERNMENT ACT 1995 (WA)

CITATION: CITYGATE PROPERTIES PTY LTD and CITY OF BUNBURY [2010] WASAT 182

MEMBER: JUSTICE J A CHANEY (PRESIDENT)
MS M CONNOR (MEMBER)

HEARD: 27 MAY 2010
28 MAY 2010

DELIVERED : 10 DECEMBER 2010

FILE NO/S: DR 338 of 2009

BETWEEN: CITYGATE PROPERTIES PTY LTD
PROSSER MANAGEMENT PTY LTD
GEOFFREY D PROSSER
RONALD WALTER FAMILY TRUST
REGIONAL PROPERTY INVESTMENTS PTY LTD
STEVEN RAYMOND PROSSER
PROSSER HOMES PTY LTD
SCANDAS PTY LTD
Applicants
AND
CITY OF BUNBURY
Respondent

FILE NO/S :DR 384 of 2008

BETWEEN :PROSSER MANAGEMENT PTY LTD
Applicant
AND
CITY OF BUNBURY
Respondent

FILE NO/S :DR 350 of 2008

BETWEEN :CITYGATE PROPERTIES PTY LTD
Applicant
AND
CITY OF BUNBURY
Respondent

Catchwords:

Local Government - Rating - Whether rate imposed in accordance with Local Government Act - Specified area rate - Specific work, service or facility - Whether affected ratepayers benefit from works - Whether specific works sufficiently identified - Whether Council considered benefit to affected ratepayers - Whether master plan required where individual works comprise elements of overall improvement of traffic management within the affected area

Legislation:

Local Government Act 1919 (NSW), s 121, s 121(1), s 572(B)
Local Government Act 1960 (WA), s 574(4)
Local Government Act 1993 (QLD), s 971, s 971(4), s 971(4A)
Local Government Act 1995 (WA), s 6.32(1), s 6.37, s 6.37(1), s 6.37(4), s 6.82

Result:

Application dismissed

Category: B

Representation:

DR 338 of 2009

Counsel:

Applicants: Mr J Skinner
Respondent: Mr MJ McCusker QC and Mr P Wittkuhn

Solicitors:

Applicants: Jackson McDonald
Respondent: McLeods

DR 384 of 2008

Counsel:

Applicant: Mr J Skinner
Respondent: Mr MJ McCusker QC and Mr P Wittkuhn

Solicitors:

Applicant: Jackson McDonald
Respondent: McLeods

DR 350 of 2008

Counsel:

Applicant: Mr J Skinner
Respondent: Mr MJ McCusker QC and Mr P Wittkuhn

Solicitors:

Applicant: Jackson McDonald
Respondent: McLeods

Case(s) referred to in decision(s):

Australand Land and Housing No 5 (Hope Island) Pty Ltd v Gold Coast City Council [2008] 1 Qd R 1
Burns Philp Trustee Co Ltd v Blacktown Municipal Council (1976) 33 LGRA 231
Little v Gillespie [1977] WAR 78
Parramatta City Council v Pestell (1972) 128 CLR 305
Severn Shire Council and North West County District Council [1974] 1 NSWLR 190
Smith and the City of Stirling [2006] WASAT 6

REASONS FOR DECISION OF THE TRIBUNAL:

Summary of Tribunal's decision

Citygate Properties Pty Ltd, Prosser Management Pty Ltd and a number of other entities challenged a specified area rate imposed by the City of Bunbury in relation to the area of the City referred to as the Central Traffic Area. Those companies 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, and sought to have the rates quashed in relation to the financial years 2008/2009 and 2009/2010.
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 rate payers had contributed to the need for the specific work, service or facility. The applicant companies argued that, in imposing the specified area rate, the City had not identified specific works, services or facilities for which the rate was to be used, had not considered the questions of benefit, access or contribution in relation to the affected ratepayers, that in any event, no rational basis existed for the conclusion that works for which the funds had been applied could produce a benefit to the ratepayers in the relevant sense.
The Tribunal examined the circumstances surrounding the imposition of the specified rates in each year, 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 it reached.
The Tribunal concluded that the rate had been imposed in accordance with the requirements of the Local Government Act, and accordingly the applications to quash the rate were dismissed.

Introduction

Section 6.37 of the Local Government Act 1995 (WA) (LG Act) enables the Local Government to impose what is known 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 if certain considerations are met. Each year since 2001/2002, the City of Bunbury (City) has resolved to impose an SAR on ratepayers within an area of the central business district of the City, which is referred to as the central traffic area (CTA). The applicants in these proceedings are all owners of properties within the CTA, and are liable for, and have paid, the CTA specified area rates (CTA SAR) imposed in relation to their respective properties.
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 enables the Tribunal to make an order quashing a rate or service charge which in its opinion has been improperly made or imposed.
The applicants challenged the validity of the CTA SAR, and have referred to the Tribunal the question of whether or not the CTA SAR in relation to particular years has been imposed in accordance with LG Act. In DR 350 of 2008, Citygate Properties Pty Ltd challenges the validity of the CTA SAR for the year 2008/2009.
In DR 384 of 2008 Prosser Management Pty Ltd also challenges the validity of the CTA SAR imposed in the year 2008/2009.
In DR 338 of 2009, the various named applicants challenge the validity of the CTA SAR for the year 2009/2010.
The basis upon which the validity of the CTA SAR is challenged is substantially the same in each application, and the three matters were heard together for that reason. The essential complaint by the applicants is that the preconditions to the exercise of the power to impose an SAR were not satisfied. We will return below to the precise manner in which it is said that the preconditions were not satisfied.

The relevant statutory provisions

Central to the issues in this case are the provisions of s 6.37 of the LG Act. That section provides:
(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 this 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 applicants' contentions

The applicants contend that, in each of the financial years 2008/2009, and 2009/2010, the local government failed to identify a 'specific work, service or facility' in respect of which CTA SAR was imposed and rather the CTA SAR was imposed to collect funds for the purpose of a generally described subject matter.
Second, the applicants contend that, having failed to identify any specific work, service or facility in respect of the relevant years, the City could not have been satisfied that the ratepayers and residents within the CTA had benefited from or would benefit from, had access to, or would have access to, or had contributed or would contribute to the need for any such specific work, service or facility.
Alternatively, the applicants contend that even if it is sufficient for the City to have imposed the rates for the relevant year in the manner in which it did, the City did not, in the course of resolving to impose the SAR, resolve or otherwise indicate that it had considered whether the applicants or other ratepayers and residents within the areas had benefited or will benefit from, have access or will have access to, or had contributed or will contribute to the need for the identified work, service or facility. They contend that, in fact, they do not benefit from, have access to or contribute to the need for the various works in respect of which the SAR was imposed, to any greater extent than the ratepayers of the City.
In addition, the applicants complain that the City failed to comply with the requirements of s 6.37(4) of the LG Act to use money raised from the SAR only to meet the costs of the specific work, service or facility for which the rate was imposed, and rather that the fund was used to establish a general pool of money which has been expended on a range of works, services and facilities. In relation to that contention, we agree with the respondent that the allegation falls outside of the scope of the jurisdiction conferred on the Tribunal under s 6.82 of the LG Act, which is concerned solely with questions as to whether the rate was imposed in accordance with the Act. It is not part of the Tribunal's function to monitor the application of the funds raised by the SAR, and we do not propose to deal further with that aspect of the applicants' case.

Background to the imposition of the CTA SAR

At a special council meeting on 12 July 2001, a proposal was put and accepted to create a new reserve account for the receipt of funds from a SAR on CTA properties. The proposal was made in the context of the consideration of the overall budget of the council for the 2001/2002 financial year. In relation to the CTA SAR, the council adopted a rate in the dollar for non-residential zone properties in the CTA 'for the provision of motor vehicle parking, road improvements and traffic management measures in the CTA. In the course of the meeting, council also resolved to establish the central traffic area reserve fund 'for the receipt of funds from council's SAR on the CTA for the future provision of car parking, road improvements and traffic management measures to benefit the central traffic area'. An appendix to the minutes contained a plan outlining the area comprised in the CTA.
The minutes also record a question put to the meeting as to the specific works contemplated for funding from the CTA SAR rate. The Chief Executive Officer identified two major traffic management projects and added that 'other projects are planned in the vicinity in the future including a major car park and public transport interchange at Stuart/Bourke Streets as defined in the Bunbury Integrated Land Use and Transport Study.
At its budget meeting on 16 July 2002, the council of the City again imposed a rate for properties in 'the non-residential zone group (2)' and 'central business district zone group (3)' for the provision of motor vehicle parking, road improvements and traffic management within the CTA which was identified by a plan shown on Appendix CB1 to the minutes. Appendix CB1 shows an expanded central traffic area from the area covered by the 2001/2002 CTA SAR.
The CTA was further expanded in the 2002/2003 year, and again in the 2003/2004 year. Since 2003/2004, the boundaries of the CTA have remained unchanged, but an SAR has been imposed in relation to each year.
The budget papers for each year have identified expenditure projects within the CTA proposed from the relevant reserve funds. It is apparent that a fund known as 'central traffic area reserve area 1' was created in 2001 to collect funds from ratepayers within the original CTA boundary. When the boundary was extended in 2002/2003, revenue collected under the CTA SAR has been transferred to a fund known as 'central traffic area reserve area 2' (area 2 reserve fund). The funds have been used to fund a range of projects. The area 2 reserve fund has had a balance carried over from year to year of unexpended funds. That is, at least in part, explicable by the fact that expenditure on indentified projects stretches over more than one budget period so that funds earmarked for a particular project may eventually be expended in subsequent years resulting in a carry over within the reserve fund.
At the commencement of the 2008/2009 year, the opening balance of the area 2 reserve fund stood at $666,876. At the commencement of the 2009/2010 year, the opening balance was $633,799, although the forecast closing balance for that year was $77,395.

Imposition of the CTA SAR for 2008/2009

The meeting of council to adopt the budget for the 2008/2009 financial year was held on 5 August 2008. The recommendation to council was to adopt a CTA SAR for rateable properties in the 'non-residential zone group (2); city centre zone group (3) and special uses zone group (4), for the provision of motor vehicle parking, road improvements and traffic management within the CTA'. (We will refer in these reasons to those rateable properties as 'commercial ratepayers'.) A draft budget had been circulated to councillors prior to the meeting, and the recommendation was adopted at the meeting of 5 August 2008.
The budget provided for the imposition of an SAR on non-residential zone properties in the CTA 'for the purposes of assisting in the provision of motor vehicle parking and traffic management in the CTA' and provided that it would generate $395,661 in income.
The notes to the budget identified the proposed expenditure in relation to the various reserve funds, including the area 2 reserve fund, the purpose of which is described as 'To receipt funds received from Council's specified area rate on the Central Traffic area for the future provision of car parking, road improvements and traffic management measures to benefit the Central Traffic Area'.
The projects identified were as follows:

Blair St (Hayes St) Traffic Control Signals

109,784

Upgrade Parkfield St/ Edward St & Adjacent Intersection	250,000
Spencer / Stuart Street Intersection	84,000
Forrest Ave (C/fwd)	4,189
Hands Oval (C/fwd)	5,472
Way Finding Signage	140,000
Stuart Street Widening (C/fwd)	288,848
882,293

Mr Kenneth Weary is the Executive Manager Corporate Services of the City. He is the person responsible for making recommendations to Council for the adoption of the City's annual budget and the annual imposition of rates including SARs.
As can be noted, a number of those identified projects have the annotation 'C/fwd' which indicates they were carried forward from the previous financial year. Mr Weary explained that, apart from those indicated in the budget note as being carried forward, the Spencer/Stuart Street intersection was a project carried forward from the earlier years, and $50,000 in relation to the Blair Street traffic control signals was new expenditure not previously provided for. Thus, the proposed new expenditure in the budget note amounted to $440,000, slightly more than was to be generated by the CTA SAR for the 2008/2009 year.
As part of the budget formulation process, the city published a document entitled 'Statement of proposed rating objectives and reasons for raising of differential general rates for 2008/09'. The document dealt with specific area rates as well as differential rates. In relation to the CTA SAR, the document identified the purpose as 'assisting in the provision of motor vehicle parking and traffic management in the Central Traffic Area'. Under the heading 'What will I get from my money?' the document reads:
Major expenditure in the Central Traffic Area in the 2008/2009 financial year includes installation of traffic signals at the intersection of Blair and Hayes Streets; upgrade at Parkfield and Edward Street together with adjacent intersection; upgrade of the Spencer Street/Stuart Street intersection and widening of Stuart Street.
Mr Weary told the Tribunal that, prior to adoption of the budget, a number of workshops were held for City councillors and staff. He said that the various projects which are the subject of expenditure proposals were discussed at workshops and council meetings, councillors were briefed on the projects and as to the benefits they would bring, councillors asked questions and obtained clarification, and there was debate about various proposals.
Mr Weary acknowledged that the CTA SAR for both the 2008/2009 and 2009/2010 years was struck by applying a percentage increase from the previous year's SAR which reflected the percentage increase applied to general rates across the municipality. He explained that that was done on the basis that it was not possible to raise the total required funding for traffic related projects in the CTA from the CTA SAR. By way of example, he said that in the 2008/2009 year, the CTA SAR might raise approximately $400,000, but the City may spend around $1.1 million for projects in the area. He said that the balance of the funding came from general rates, or from borrowings or government grants.
Mr Weary was cross-examined as to the relevance to different parts of the CTA of expenditure in other relatively distant parts of the CTA. For example, he was asked about the area of the CTA which is referred to as the 'beach spine' which does not contain the same level of commercial activity as the central business area of the City. He explained that the land in the beach spine area contains a number of tourist uses which are becoming increasingly important, and that the view is taken that those uses benefit from the maintenance and improvement of traffic flow throughout the CTA. He noted that the CTA substantially follows the major road hierarchy of the central business area and the approaches to that area. He explained that the changes to the CTA in 2002/2003 and in 2003/2004 resulted from changes in land use and planning as the City developed.

In cross-examination, Mr Weary acknowledged that it was always intended that the rate would be an ongoing rate to improve traffic management within the CTA.
It is Mr Weary's responsibility to consider requests from the various departments of the City for expenditure on different projects. He described the CTA as falling principally into three zones, being the city centre zone, key mixed business and shopping centre zones and certain special uses zones. He said that the CTA is shaped around certain important roads such as Strickland Street, Sandridge Road, Blair Street, Forrest Avenue, Spencer Street, Ocean Drive and Koombana Drive. He said that, in putting forward projects for the CTA he had always been of the view that the businesses throughout the CTA 'are in a kind of synergy'. He said that:
For example, I have perceived that attracting customers to businesses in the CBD (or keeping customers coming back to the CBD) will have a flow on effect to businesses in other areas of the CTA. After all, to get into the CBD, customers need to pass via one or more of the main approaches to the CBD. I regard traffic management and vehicle parking as paramount in the central traffic area, which caters for tens of thousands of vehicles daily.
Mr Weary said that there were 790 commercial properties within the CTA, of which 244 are located within the central business district area.
Mr Weary concluded:
The approach I have taken is that if traffic and parking is orderly and functional in the places that customers visit, they are more likely to return. Any traffic congestion, lack of safety, unavailability of parking, inconvenience, confusion or lack of clarity in relation to parking or traffic etc, is likely to turn people off in the area and stifle the chances of visitors making incidental trips to the businesses. In this way, I have seen the whole of the CTA as an integrated whole and critical to the City of Bunbury being able to accommodate the dynamic population growth within the greater Bunbury region utilising and benefiting from the City's ever expanding commercial and regional facilities.
Mr David Smith has been the Mayor of the City since May 2005, and prior to that was a councillor of the City from May 2001, and had previously been a councillor from May 1979 to March 1983. He agreed with the views expressed by Mr Weary. Mr Smith explained that he was well aware of the requirements for the imposition of an SAR and the need to consider whether the expenditure proposed would benefit those in respect of whom the SAR was to be imposed. That awareness arose, he said, from various induction and training programmes provided to the Council and from discussions at budget workshops. Mr Smith explained that councillors are directly involved in the budget process over an extended period of time before the budget proposals are presented for final adoption. He made reference to debates in 2007/2008, and in relation to the 2009/2010 budget in relation to other proposed SARs which are focused upon the requirement to identify benefit in relation to each SAR imposed. Although his recollection was imprecise, he expressed confidence that there was debate in both 2008/2009 and 2009/2010 centering upon the level of benefit to businesses and land owners in the CTA from the projects proposed.
Mr Smith expressed the personal belief that all the projects that had been the subject of expenditure from the CTA SAR have been projects which have benefited the whole of the CTA regardless of exactly where a particular project was undertaken. Mr Smith believed that:
It is essential that all parts of the central traffic area are concentrated upon, because I perceive that any reduction or lack of improvement in the functionality of one area would negatively affect the general inflow of business into all other parts of the central traffic area. Likewise, any improvements to any part of the central traffic area would improve the drawing power of that immediate area and give people reason at the same time to visit businesses in other parts of the central traffic area. … I also believe that works that directly improve the amenity of an area, contribute to the drawing power of Bunbury as a regional centre. If you improve the amenity, streetscape and functionality of a street, or the parking available, all of that is adding to the drawing power of the central traffic area generally, with flow on benefits for all business in the central traffic area, in my opinion, because of the extra traffic it can manage.

The imposition of the CTA SAR for the 2009/2010 year

The special meeting of the council of the City to adopt the budget for the 2009/2010 year was held on 29 July 2009. Mr Weary confirmed that, prior to that meeting, a draft budget was circulated to councillors. That draft budget was subsequently adopted at the meeting on 29 July 2009.
The notes to the budget again set out the proposed expenditure in relation to the area to reserve fund. The projects identified were as follows:

Albert Rd (McKinnon-Strickland) Reconstruction & Widen	150,000
Blair St / Haley St TCS Modifications (State Black Spot)	55,000

Spencer / Stuart St intersection Traffic Control Lights	72,000
Design and implement parking marketing strategies	30,000
Way finding Signage	280,000
Improvement on on-street parking at Stephen & Arthur St	20,000
Design & construct bus parking bays Blair St front of BREC	45,000
Eliot Street (C/fwd)	46,700
Stuart Street Widening (C/fwd)	288,848
987,548

The budget provided that the CTA SAR would raise $431,244 in income for the financial year. Included in the budget was a more detailed explanation of the expenditures proposed from the area to reserve fund. That detail provided at pages 65, 68 and 69 of the budget commenced with the text of s 6.37(1) of the LG Act and the need for car parking in the following terms:
What is the purpose of the rate?
The purpose of this rate is to raise funds for the provision of motor vehicle parking, road improvements and traffic management and other associated works within the boundaries of the Central Traffic Area - specified area rate. The areas that have been included in the Central Traffic Area generally consist of commercial land developed pre 1960 where roads constructed at those times were significantly lower than today's standard of design. The Specified Area Rate is used to enhance these roads, improve traffic management and add car parking to current standards which will promote the area and reduce the migration of business to newer developed areas such as the Bunbury Business Park and Picton Industrial Estate which have very good road access and traffic management. There is a clear nexus between providing additional car parking and traffic management and the benefits to the Central Traffic Area.
The Need for Car Parking
•The surrounding commercial development gains additional benefit from the construction of the additional parking, which is used by customers and staff of the surrounding commercial properties.
•The additional parking is above and beyond the normal parking requirements associated with individual developments planning approval.
•The additional parking reduces the congestion within the area by reduction of parked vehicles on the road and verges. This occurs where the parking requirements of the surrounding businesses exceed the warrant for the planning requirements.
•The reduced congestion on the roads provides a safer environment for traffic within the area.
•The additional and improved parking with less congested roads is highly beneficial in attracting additional customers and improving land values.
•The assessment to construct the additional parking is based on requests received by the City, and from observations of parking utilisation within and around the area.
•Without the funding provided by the Specific Rate - Central Traffic Area, the additional car parking would either not have been constructed or deferred till another source of funding for the project can be found.
•The vast majority of the City's own resources funding is used for maintenance, replacement and operation of its infrastructure.
•The capital expenditure on the construction and enhancement of car parks to provide additional services to the adjoining commercial operations that are required to meet the planning requirements for parking is not a high priority against the City's other municipal activities which fund for example, libraries, landscaping, paths, town planning, buildings, road maintenance, waste management, events and sport facilities.
The Need for Traffic Management
The need for traffic management is based on providing safe and efficient transport routes to the surrounding streets and major transport routes. The provision of traffic management treatments greatly enhances the adjacent commercial areas and central business district by allowing ease of access and to provide gaps in the traffic flow allowing entry and exit from commercial properties upstream of the traffic control signals.
•Council by funding and constructing the traffic control signals provide additional benefit to the properties with enhanced access to their properties.
•The ease of access will enhance customer attraction and utilisation in the central business district and adjoining commercial areas.
•The additional traffic capacity and safer infiltration from the commercial areas has been assisted utilising the Specified Rate - Central Traffic Area funding.
•The provision of traffic control signals reduces the congestion within the area by allowing safer, low risk, easy access into both the central business district and adjoining commercial areas.
•The reduced congestion on the roads provides a safer environment for traffic within the area.
•The additional and improved access with less congested roads is highly beneficial in attracting additional customers and improving land values.
•The increased traffic will give higher visibility and increased marketability to businesses within the Central Traffic Area.
At page 68 and page 69 of the budget, the individual projects were enumerated, with a brief description of the work to be undertaken in relation to each project, and the perceived benefits of it.
The observations made by Mr Weary and Mr Smith concerning the general approach to the imposition of the CTA SAR were directed to both the 2008/2009 and the 2009/2010, financial years.

The expert evidence

The applicants engaged Mr Brian Haratsis, an economist and strategic planner to examine the history of the imposition of the CTA SAR and to consider the planning circumstances surrounding its imposition since 2001/2002. The City engaged Mr Anthony Shrapnel, a town planner with extensive experience in both strategic and detailed planning of urban centres.
Mr Haratsis examined the documentation surrounding the imposition of the CTA SAR and reached certain conclusions. His ultimate conclusion went to the question of whether or not the rates had been imposed in accordance with the requirements of s 6.37 of the LG Act, a matter clearly beyond his expertise. While Mr Haratsis' analysis of the background of the CTA SAR and commentary on the individual projects was helpful, we give no weight to his opinion on the ultimate legal question which the Tribunal is called upon to determine.
Mr Shrapnel's evidence was essentially directed to the proposition that the viability and success of a regional centre like Bunbury is dependent upon maintaining ease of access, efficiency of movement, adequate car parking areas and attractiveness. He noted that the shops/retail floor space in Bunbury is demonstrably catering for a far wider population than just the population of Bunbury itself. He noted the vast majority of the shop/retail floor space in the Bunbury local government area is located within the Bunbury Strategic Regional Centre. Mr Shrapnel noted that, in terms of the provision of commercial services to people outside the City of Bunbury, Bunbury competed with other regional centres. He concluded therefore that the maintenance and improvement of traffic infrastructure within the City was likely to lead to more people accessing the City for commercial purposes, and thus provided a benefit to commercial premises within the Bunbury Regional Centre.
It was observed by Mr Haratsis that the CTA went beyond the area designated in 2007 by the Western Australia Planning Commission (Planning Commission) for planning purposes as the 'Bunbury Regional Centre'. Mr Shrapnel's opinion was that, whilst he had referred to the 'Bunbury Regional Centre', for the purpose of quoting data relating to retail and commercial floor space, the benefits which he considered existed were applicable to the whole of the commercial premises in the CTA and not confined to those which the Planning Commission had identified as the Bunbury Regional Centre.
Mr Haratsis disagreed with Mr Shrapnel, rather taking the view that s 6.37 of the LG Act required that the economic analysis of each particular proposed project to determine which ratepayers would derive some greater benefit, or have greater access to, or make greater contribution to the need for, than any other ratepayer. Accordingly, Mr Haratsis undertook an analysis of each of the projects identified in the 2008/2009 and 2009/2010 budget documents for expenditure from the area to reserve fund, and reached the conclusion, in general terms, that it could not be said that those who were liable to pay the CTA SAR in those relevant years could be said to come within paras (a), (b) or (c) of s 6.32(1) of the LG Act.
The applicants and the respondent each also adduced evidence from a traffic engineer. The applicants relied upon the evidence of Mr Anthony Shaw, and the City relied upon the evidence of Mr Jason Gick, the City engineer with previous experience as a road corridor planning manager with Main Roads Western Australia. In their conferral prior to hearing, Mr Shaw and Mr Gick agreed on many aspects of each other's statements of evidence. Their essential point of departure was that Mr Gick expressed the opinion that all ratepayers within the CTA do or will benefit directly from the various works proposed to be funded from the CTA SAR, while Mr Shaw considered that benefit could only be ascertained by detailed analysis of each project and its effects on particular ratepayers. Mr Shaw considered that improvements within the CTA should be based on an overall traffic and parking management plan which identifies and quantifies network operational and parking deficiencies.

Identification of a specific work, service or facility

The first complaint of the applicants was that, in the relevant financial years, the City failed to identify a specific work, service or facility in respect of which the CTA SAR was imposed, and thus the requisite purpose of an SAR was absent. Rather, the applicants contended, the City merely identified a generally described subject matter, namely, the provision of car parking, road improvements and traffic management. The applicants' position in relation to that submission was somewhat modified in closing submissions as a result of the evidence of Mr Weary concerning the fact that the CTA SAR raised in relevant years was designed to cover the new items listed in the notes to the budget rather than those items carried forward from previous years' budgets. The applicants conceded that if Mr Weary's oral evidence in that respect is accepted, and as a result the works the subject of the SAR were those new works identified in the lists, then the works the subject of the SAR have been identified with sufficient particularity.
The applicants raised concerns as to whether Mr Weary's oral evidence should be accepted on that point. They note that that evidence is not contained in Mr Weary's written statement of evidence filed in advance of the hearing. Although it is true that Mr Weary made no reference in his written statement to the significance of the annotation 'c/fwd', his witness statement did draw attention to the lists of specific works where that annotation appears. His written witness statement largely addressed matters of process and we would certainly not conclude that his evidence in relation to the carrying forward of previous projects was a matter of recent invention. We do not consider that the failure to descend in his written statement to the level of detail which emerged in crossexamination is a reason to disbelieve Mr Weary's evidence on the point.
The second concern expressed by the applicants was that Mr Weary's evidence 'is not disclosed by any documents before the Tribunal relating to the SAR CTA in previous years'. The documents relating to the budget process in previous years were not produced at the hearing. That is unsurprising given that the striking of the SAR in those years was not the subject of a review by the Tribunal. In some, but admittedly not all, cases, the annotation 'c/fwd' appears against the relevant project. The obvious implication is that the expenditure on those projects is carried forward from previous years. The absence of documents which enable the Tribunal to track back through previous years to identify the origins of each project is not a basis to reject Mr Weary's evidence.
The third concern was that it does not appear from the statement of evidence of the City's other witnesses, Mr Shrapnel, Mr Gick or Mr Smith, that they were aware that the carried forward items were not the subject of the SAR CTA in the relevant years. In the case of Mr Shrapnel and Mr Gick, that submission is based upon the fact that, in their witness statements, they dealt with all of the projects identified in the budget notes dealing with expenditure from the area 2 reserve account. In his witness statement, Mr Shrapnel identified the purpose of his statement as being to respond to paragraph 22 and 23 of the applicants' consolidated statement of issues, facts and contentions. Paragraph 22 asserts that the applicants and other ratepayers and residents do not benefit from, have access to or contribute to the need for 'the provision for motor vehicle parking, road improvements and traffic management in the central traffic area to an extent that is additional to or greater than any other ratepayer in the City of Bunbury'.
Paragraph 23 of the applicants' statement of issues, facts and contentions asserts that 'having regard to the actual works, services or facilities indicated by the respondent as works on which money raised by the 2008/2009 specified area rate has been or is anticipated to be expended', a number of the works are at some distance from the particular ratepayers' properties, the applicants do not benefit from the works or have not contributed to the need for the particular works, and have no greater access to the works than any other ratepayers of the City.
Mr Gick's witness statement identifies 12 road, traffic and car parking projects 'identified in the 2008/09 - 2009/10 period'. He then analyses each of those projects. The 12 projects include those shown as carried forward in the budget notes.
It is true that the analysis by Mr Gick and Mr Shrapnel extend to projects which, on Mr Weary's evidence, were the subject of CTA SARs for earlier years than those with which we are concerned in these proceedings. On the other hand, the issues to which those witnesses were directing their minds were the relationship between the projects and the benefit of those projects to commercial ratepayers within the CTA. It is understandable that they might illustrate their opinion that commercial businesses derive a benefit from improved parking facilities and traffic management within the CTA by reference to all of the projects referred to in the budget papers as being funded from the area 2 reserve account. It was not the lot of either Mr Shrapnel or Mr Gick to analyse the substance and effect of the resolution of the Council to adopt the particular CTA SAR. We do not consider that the fact that Mr Gick and Mr Shrapnel had regard to projects which had been identified for funding through the CTA SAR in previous years to be a basis to undermine the credibility of Mr Weary's explanation of the budget process.

As to Mr Smith, his evidence went generally to the question of benefit of parking and traffic management to ratepayers within the City, and Council's attention to the statutory requirements for an SAR. He did not deal in any detail with any specific projects. The fact that his written statement did not address the particular projects which were newly identified in the respective budget years provides no basis for any adverse inference in relation to Mr Weary's evidence.
Finally, the applicants submit that Mr Weary's suggestion that the items carried forward in the budget documents were not works the subject of funding through the 2008/2009 CTA SAR, or the 2009/2010 CTA SAR does not appear, on the documents before the Tribunal, to have been known to the councillors as part of the budget process in the respective years. As earlier indicated, most of the carried forward items had a notation attached to them to that effect. Both Mr Smith and Mr Weary gave evidence of the fact that workshops were held with councillors prior to the adoption of the budget, and the fact that the various proposed items of expenditure were discussed and debated at those meetings. It is not possible to identify discussions about particular items or to make findings as to the extent of explanations undertaken in relation to each particular item. But that difficulty does not lead to an inference that councillors had no more knowledge than appears on the face of the budget documents. The budget papers reveal that there was an accumulated balance at the commencement of each financial year anticipated in the area 2 reserve account. That fact, and the annotation that certain items were carried forward, suggests that there were unexpended funds in relation to projects previously the subject of specification for the purposes of earlier SARs. Mr Weary's oral evidence is consistent with that suggestion, and in the context of the budget workshops, and the evidence as to the discussions at those workshops, we consider it more likely than not that councillors understood that only some of the projects listed in the notes to the budget were new projects in respect of which the new funding was to be applied.
Accordingly, we consider that Mr Weary's evidence that the 2008/2009 CTA SAR and the 2009/2010 CTA SAR were raised for the specific purpose of funding the new projects listed in the budget papers should be accepted.
The concession by the applicants that, if Mr Weary's evidence is accepted, a relationship is disclosed between the amount raised by the CTA SAR in each year and the amount to be funded from the reserve for the new works identified in the lists, and that those works are identified with sufficient particularity to satisfy the requirement of s 6.37(1) of the LG Act, is appropriately made. We find that the respondent has not failed to identify 'a specific work, service or facility' for the purposes of raising the CTA SAR for the 2008/2009 or the 2009/2010 years.
It is apparent that the City has approached the determination of the rate to be levied to raise the CTA SAR not by first identifying the projects to be funded, assessing their cost, and then calculating the rate necessary to raise that cost. Rather, the City has determined a percentage increase from the previous years CTA SAR, being the same percentage increase which it has applied to all rates, identifying the amount to be raised as a result, and then identifying projects which would be funded, or at least partly funded, from the amount raised. That approach was identified by Mr Haratsis in his analysis of the documents relating to the CTA SAR in the relevant years and is readily apparent from the documents before the Tribunal. Mr Weary accepted that the City approached the raising of the CTA SAR in that manner.
We do not consider that the methodology applied by the City is inconsistent with the requirements of s 6.37 of the LG Act. There is nothing in s 6.37 which requires that an SAR necessarily meet the whole cost of any specific work, service or facility in respect of which it is raised. It would be open to a local government to raise a portion of the cost of a specific work, service or facility having regard to limiting the financial burden on the ratepayers concerned, with a view to funding for the balance of the cost of a specific work being obtained from another source such as general rates or government grants. In the same way, where a local government identifies a number of works which meet the criteria of benefit or access or contribution to need, is open to fund, either fully or partially, some of those works. In determining which works might be funded from the SAR, we can see no reason why it is not open to a local government to first determine a reasonable imposition on the ratepayers concerned and then apply the available funds to works which have been identified as satisfying the requirements of s 6.37 of the LG Act. The works must, of course, be specifically identified and must be considered by the local government to involve a benefit to, to provide access to or arise as a result of a need contributed by, the ratepayers upon whom the SAR is to be imposed.
In our view, the City's methodology does not, of itself, suggest that the City has failed to impose the SAR in accordance with the requirements of the LG Act.

Did affected ratepayers benefit from, have access to, or contribute to the need for the specified works?

The second complaint of the applicants is that the requirement that the ratepayers or residents within the CTA have benefited or will benefit from, have access to or will have access to, or have contributed or will contribute to the need for the specified works is not satisfied, and that the City could not reasonably have formed an opinion that those requirements were satisfied.
In order to consider that argument, it is necessary to briefly describe the specified works.
Mr Gick's description of the characteristics of the CTA was not in dispute. He described the area as exhibiting commercial, light industrial, mixed business, tourist and CBD land uses, including shopping centres, the Homemaker Centre showrooms, car yards, light industries, short stay accommodation, restaurants, cafes, professional services and other traffic generating enterprises. The CTA contains a number of distributor roads including Sandridge Road, Blair Street, Picton Road, Ocean Drive and Koombana Drive. The area includes 13 local distributor roads, and seven important local roads that perform both a local distributor and local access function.
There are off-road parking facilities spread throughout the CTA in Stuart Street, Blair Street, Casuarina Drive, Ocean Drive, Prinsep Street, Parkfield Street and Cobblestone Drive. Mr Gick described the CTA road network as set out in a traditional square grid system which has developed over time since Bunbury was first settled. Due to the physical constraints of the area, land settlement patterns and the influence of the old railway alignment, the network of roads has developed as a series of local area networks linked by district and local distributor roads. Average daily traffic counts for district distributor roads within the CTA demonstrate that traffic in the CTA has been steadily increasing over time.

New projects in the 2008/2009 Budget

The new projects identified in the 2008/2009 budget to be funded from the area 2 reserve account were an additional $50,000 towards an existing project involving the Blair Street (Hayes Street) traffic control signals, the upgrade to the Parkfield and Edward Streets intersection, and way finding signage.

Blair Street (Hayes Street) traffic control signals

This project involves the modification of the Blair Street/Hayes Street intersection and installation of traffic control signals. Mr Gick and Mr Shaw agreed that the project creates a safer road environment on Blair Street, although Mr Shaw did not consider that the safer environment extended over the entire length of Blair Street. They agreed that the project improves legibility and access to a number of properties on Blair Street. Mr Gick observed that most traffic into and out of the CBD along Blair Street would pass the Homemaker Centre, the significance of that observation is that the Homemaker Centre comprises the property of some of the applicants.

Realignment of Edward Street to Parkfield Street

According to Mr Gick, this project has improved road network legibility and improved intersection priority. He considered that the project had improved the amenity of Edward Street and forms an improved entrance to the CBD of Bunbury. The ability for motorists to choose the Edward Street/Parkfield Street entry as an alternative entry to the CBD has the effect of reducing the traffic load on Spencer Street. Mr Shaw agreed in part with Mr Gick's opinion as to the improvement to network legibility, and agreed that the project had improved intersection priorities and that the improvements presented an alternative entry to the CBD. Mr Shaw identified improvements to safety of the intersection by restricting vehicle speeds, but considered that that improvement extended only to traffic using the intersection, and that there would be no benefit to traffic accessing or egressing the CTA by other routes. Mr Shaw and Mr Gick agreed that the works do not include modifications that are considered likely to improve access to existing parking or increased parking, but Mr Gick was of the opinion that, because the project is only the first stage of a larger project, subsequent stages will deliver additional parking.

Way finding signage

The City called evidence from Mr John Kowal, the Manager, Community Law and Safety for the City. Mr Kowal was responsible for putting forward a request to include in the budget funding for way finding signage in the 2008/2009 budget. He did so in order to implement a number of resolutions of the Council of the City to maintain informative and ongoing communication with all stakeholders in the community, and to implement directional signs to ensure that the City's car parks can be easily located by residents and visitors. Mr Kowal explained that the steps taken by City to utilise funding from the area 2 reserve account in relation to way finding signage involved commissioning and obtaining a report entitled 'Bunbury CBD Walkability and Way Finding Strategy' and on the erection of way finding signs intended to direct patrons to various car parks.

New projects in the 2009/2010 Budget

In the 2009/2010 budget, the new projects identified to be funded from the number 2 reserve account were the reconstruction and widening of Albert Road, the design and implementation of parking marketing strategies, improvement to on street parking at Steven and Arthur Streets, and the design and construction of bus parking bays in Blair Street, along with additional allocation of a further $140,000 to way finding signage.

Albert Road widening

Mr Gick considered that this project would accommodate increased traffic volumes and larger vehicles with a resultant improvement of road safety and access to properties on Albert Road and improvement on road drainage. Albert Road is the local distributor road which performs a distribution function between Strickland Street, Blair Street and Sandridge Street and the surrounding mixed business and light industrial land uses. Mr Shaw expressed the view that access to adjacent properties would not be improved by the road widening, and that the widening itself did not significantly increase lane width and so was unlikely to lead to a measurable improvement in the level of service of the road.

Design and implement parking marketing strategies

Mr Kowal explained that the $30,000 allocation to this item from the area 2 reserve account was also recommended by him to implement the resolutions of the Council designed to improve location of and access to parking facilities. The funds have been utilised for the preparation of a parking marketing strategy and various forms of advertising as to the City's parking facilities.

Improvement of on street parking at Stephen and Arthur Streets

Mr Gick explained that this project involves the provision of dedicated taxi bay parking on Stephen Street and Arthur Street with a view to creating a safe place for taxis to queue without interference to through traffic on either street. The project provides space for taxis for the disabled to collect and deposit wheelchair bound passengers seeking access to the CBD and Centrepoint Shopping Centre. Arthur Street is the northern extension of Spencer Street which is one of the major entries into the CBD from the south. Mr Shaw agreed with Mr Gick's observations about this project.

Design and construction of bus parking bays in Blair Street

Mr Gick explained that Blair Street is a district distributor road which provides access to the CBD of Bunbury. The street passes the Centrepoint Shopping Centre, the Bunbury Visitor Centre and the Bunbury Regional Entertainment Centre. This project involved the provision of dedicated bus bays and caravan parking to service the Bunbury Regional Entertainment Centre and the Bunbury Visitor Centre. Both Mr Gick and Mr Shaw agreed that the project would improve safety at the Bunbury bus station by removing caravans from a hardstand area. It would also provide a safe area for occasional buses to collect and deposit passengers for special events such as cruise ship visits and high school eisteddfods.

Benefits to ratepayers and residents of the CTA

The applicants' position is that whilst the individual projects identified above might have some benefit for some ratepayers or business proprietors within close proximity to the particular project, it cannot be said that benefit is enjoyed by all of those upon whom the CTA SAR is imposed.
The respondent contends that it is not necessary, in order to invoke s 6.37 of the LG Act that each and every ratepayer upon whom the SAR is imposed must be identified, and in the particular benefit to that ratepayer assessed. The City's approach, reflected in the evidence of Mr Weary and Mr Smith, and supported by the opinion of Mr Shrapnel, was that improvements generally to the traffic management and parking facilities within the CTA benefits the commercial operators within the CTA because it provides an incentive for people to access the CTA, and thus the businesses within the CTA, rather than choose alternative locations. The benefit was more fully explained in particulars to para 22 of the respondent's responsive statement of issues, facts and contentions in the following way:
(1)Businesses within the Bunbury Central Traffic Area draw their custom from a substantial region, which includes some substantial urban and rural areas well outside the municipality of the City of Bunbury.
(2)Bunbury is a regional city and major commercial centre for the southwest of Western Australia.
(3)Nevertheless consumers have the option of redirecting or increasing their custom, to varying degrees according to the goods or services in question, to other centres such as Mandurah, Busselton, Perth or more local providers.
(4)Consumers also have the option of redirecting or increasing their custom, from other centres to Bunbury.
(5)Consumers, within the limits of their purchasing power, have the freedom to undertake discretionary spending on goods or services from Bunbury which they might otherwise choose not to obtain at all, if the conditions are conducive to consumers doing so.
(6)Given the choice, consumers tend to prefer the higher level of service generally offered by larger centres, provided it is sufficiently convenient to access them.
(7)Any improvement to traffic or parking management within any part of the Central Traffic Area, directly and physically improves the functionality and amenity of some part of the Central Traffic Area. It is generally impossible to identify precisely the extent of an area directly and physically benefited, and the extent of the direct physical benefit tends to be more obvious in proximity to the improvement.
(8)Where the functionality and amenity of a particular improvement draws consumers to businesses directly benefited by the improvement, the drawing of those consumers also conduces to conditions under which those consumers are more likely to visit businesses in other parts of the Central Traffic Area not necessarily directly benefited in a direct physical sense by the improvement.
(9)Also, where consumers are already attracted by a business or type of business within the Central Traffic Area, improved functionality and amenity of another part of the Central Traffic Area will end to encourage consumers to also visit that other part of the Central Traffic Area. This tends to promote the consolidation of consumers' spending habits within the Central Traffic Area as a whole.
(10)An improvement to the functionality and amenity of any part of the Central Traffic Area accordingly helps to maintain and promote the attraction, reputation and drawing power of businesses located within the Central Traffic Area as a whole.
That description of the benefit accruing to ratepayers of commercial properties within the CTA illustrates what is the fundamental point of departure between the parties in these proceedings. Put simplistically, the City's approach is that improvements to traffic management and parking within the CTA, wherever those improvements may occur, contributed to the overall attractiveness of the CTA to potential customers. Individual improvements incrementally improve overall traffic management or parking, and contribute to the overall commercial success of the CTA as a commercial centre. The benefit derived by ratepayers of commercial properties within the CTA is said to be the indirect benefit of being part of a successful commercial centre.
The applicants' position is that there is insufficient analysis to draw the conclusions as to benefit drawn by the City, but in any event, in the absence of some proper analysis of the collective benefits of the individual projects proposed, or alternatively an analysis of the extent of benefit to individual ratepayers flowing from individual specific works, the requirements of s 6.37 of the LG Act are not satisfied, and the CTA SAR has not been raised in accordance with the requirements of the LG Act.
Resolution of that fundamental difference in approach requires consideration of the nature of the benefit contemplated by s 6.37. To assess whether the CTA SAR has been imposed in accordance with the requirements of the Act, it is then necessary to consider whether the City actually considered the benefit to be derived from the specified works by the ratepayers affected, and if so, whether it was rationally open to the City to form the required opinion as to benefit.

The nature of the benefit required

We agree with the conclusion, reached by the Tribunal in Smith and the City of Stirling [2006] WASAT 6, 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''. That conclusion drew upon the decision of Jackson CJ in Little v Gillespie [1977] WAR 78 at 81 which dealt with s 547(4) of the Local Government Act 1960 (WA) but which, in our view, is equally applicable to s 6.37 of the LG Act.

Did the Council actually consider that ratepayers would derive a benefit?

The applicants contend that the papers produced by the City in relation to its budget approval process did not support a conclusion that the Councillors, in resolving to adopt the SAR, directed their minds to the benefit to be derived by the ratepayers affected. 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'.

We find that the Council did consider that the improvement of traffic management or parking by way of the specific projects identified as new projects in the budget papers would benefit the ratepayers of the commercial properties in the CTA in the sense described by Mr Weary and Mr Smith. There is no reason to reject the evidence of Mr Smith as the Mayor, and Mr Weary as the person responsible for the preparation of the budget, that they were aware of the requirement to identify benefit for the purposes of adoption of an SAR, and that they held the views as to benefit which are set out above. We accept as well that the budget adoption process involved workshops at which debate occurred in both relevant financial years concerning the benefit to be derived from the individual projects proposed. In relation to the 2009/2010 year, the detailed explanation of the requirements of s 6.37 of the LG Act and the description of the benefits thought to accrue to the ratepayers, supports the conclusion that councillors directed their attention to the question of benefit.
It is clear, however, no empirical analysis of precise benefits of individual projects that would be enjoyed by commercial ratepayers generally, or even particular ratepayers within the vicinity of the individual projects, was undertaken by the City. Nor was there, as Mr Haratsis analysis reveals, anything that might be described as a formal coordinated master plan for improvement of traffic management and parking within the CTA of which the individual works form a part. Rather, although we accept that the individual merits of specific projects were debated by councillors, the benefits to the commercial ratepayers within the CTA which the City considered to exist arose from a general view that improved traffic management and parking facilities results in more attractive commercial centre which improves the general level of business transacted within the CTA.

Was it rationally open to Council to reach its opinion as to benefit?

The task for the Tribunal is to determine the question as to whether the SAR was imposed in accordance with the LG Act. Having concluded that the CTA SAR was imposed in respect to specific works which were identified in the budget papers, and that the local government considered that the commercial ratepayers within the CTA would benefit from the specific works in the sense described above, it would appear that the requirements of s 6.37(1) have been met, and that the CTA SAR was imposed in accordance with the LG Act. However, in Parramatta City Council v Pestell (1972) 128 CLR 305, in the context of the 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.
The applicants argue that no rational basis exists to conclude that all of the affected ratepayers in the CTA would benefit from the individual specific works for which the rate was imposed.
Section 121 of the Local Government Act 1919 (NSW) permits the raising of a local rate where a work or service would, in the opinion of Council, 'be of specific benefit to a portion of its area to be defined as prescribed'. Unlike s 6.37 of the LG Act, therefore, the benefit to be considered was a benefit to an area of land, rather than a benefit to the ratepayers or residents within a particular area. In relation to the approach to assessment of the opinion of the Council, Barwick CJ said at 313:
The concept of special benefit in connexion [sic] with local government works and services is somewhat nebulous. The nature of a special benefit, as well as the choice of a portion to be subject to a local rate, are both matters apt to be committed to the opinion of the local government authority. In this connexion [sic] it must be borne in mind that the council is a representative body of limited tenure of office. The question whether or not the given works or services are of special benefit to a portion of the local government area is very much a matter of opinion probably involving many imponderables and a great deal of local knowledge. The purpose of the legislature in committing the selection of the portion in respect of which a local rate is to be levied to the opinion of the local council reflects such considerations.
At 327, Gibbs J said:
A work is of special benefit to a portion of a local authority area 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 … It may of course prove disputable whether a work benefits a particular parcel of land and, if so, whether it benefits that parcel more than another. For obvious reasons therefore, the legislature has left it to the council to form its opinion as to whether a particular work is of special benefit to a portion of the area. A court has no power to override the council's opinion on such a matter simply because it considers it to be wrong. However, a court may interfere to ensure that the council acts within the powers confided to it by law.
Those comments must, of course, be read in the context that the case involved an application for a declaration in the Court's equitable jurisdiction, rather than a review of the type contemplated by s 6.82 of the LG ACT. Nevertheless, in my view, the observations are applicable to a review under s 6.82. An opinion by a local government as to benefit which lacked any rational basis, or was unreasonable, would not, in our view, be sufficient to comply with the requirements of s 6.37. On the other hand, the observations by Barwick CJ recognising that the opinion may involve many imponderables and a great deal of local knowledge, are applicable to an assessment of the reasonableness and the identification of the rational basis of an opinion for the purposes of a review under s 6.82.
We have summarised above the evidence of Mr Shrapnel, an experienced strategic planner. His opinion, which we accept is an opinion genuinely held, was that commercial businesses within the CTA derive a benefit generally from the maintenance and improvement of traffic infrastructure and parking. His reasons for that conclusion were set out in his report. In our view, that report illustrates a rational basis upon which the view held by the City as explained by Mr Smith and Mr Weary, might be justified.
Mr Haratsis held quite a different view. The difference was based on Mr Haratsis' opinion that estimates of the specific economic benefits to specific individual ratepayers in relation to each project must be undertaken in order to demonstrate a benefit for the purposes of s 6.37 of the LG Act. He summarised his reasons for that view in the joint report of the experts in the following terms:
i)In Mr Haratsis' opinion, it is critical that transparency and equity are achieved in setting any rate or levy. The CTA Specified Area Rate does not achieve these outcomes and thus appears to operate more as general rate raising revenue.
ii)It is necessary to specify at least the additional benefit, access or need of the CTA Specified Area Rate as a whole. Where a very broad benefit area is established and is extended to cover three different geographical boundaries, it is essential to specify the benefit, access or need at each step.
iii)Where a series of sometimes very small projects at very long distances are funded by beneficiary properties, then it is essential to demonstrate specific benefit. The geographical extent of specified areas is an important consideration. For example, if a specified area was adjacent to proposed works then specific benefits could more easily be established. Mr Haratsis argues that in the event that benefits are not specified for individual ratepayers or cannot be readily identified, then it is essential that the need, benefit or access be accurately and specifically identified for the Central Traffic Area.
iv)In Mr Haratsis' view, it is reasonable to expect that where projects are not proximate, then benefits should be provided for individual properties.
Those opinions appear to be based upon Mr Haratsis' view as to the proper construction of s 6.37 of the LG Act or perhaps his personal views as to how SARs should be imposed. They are not views which we share. It is not, in our view, necessary for a local government, in imposing an SAR, necessarily to undertake a detailed economic or strategic analysis to support or justify its opinion as to benefit. Rather, 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 with the rational basis is not sufficient to determine that the rate is invalid.
Particular features of the CTA SAR were relied upon by the applicants as demonstrating that the approach by Council to benefit was unreasonable. The first was the size of CTA and the relative remoteness from particular developments of some premises. The second was the choice of ratepayers within the CTA that were said to benefit.

Remoteness of properties from specific works

The applicants observed that the CTA does not correspond with the area of the Strategic Regional Centre being the area identified by the Western Australian Planning Commission for the purposes of regional planning. Nor does it correspond with the boundaries of the 'vision focus areas' identified in the respondent's City Vision Strategy and City Vision Action Plan. As observed above, the CTA includes the area referred to as the 'Beach Spine' which contains a different level of commercial activity from the central business area within the CTA. The applicants argue that for example, improvements to the Blair Street/Hayes Street traffic control signals, which are located well away from the Beach Spine area, cannot rationally said to benefit ratepayers in the Beach Spine area, or other areas remote from that intersection. They argue that, in order to conclude that traffic management generally provides a benefit to the whole of the CTA, it is necessary that there be some form of master plan of which the particular works form part. They rely for that contention on observations made in Severn Shire Council and North West County District Council [1974] 1 NSWLR 190 (Severn) and Australand Land and Housing No 5 (Hope Island) Pty Ltd v Gold Coast City Council [2008] 1 Qd R 1 (Australand).
Severn concerned the assessment of a rate in 23 separate resolutions by the County District Council in respect of 23 loans taken out by it between 1947 and 1972. The loans had been raised for the purpose of a programme of rural electrification undertaken by the Country District Council. The scheme involved the construction of electricity lines through various parts of the County District, and various works associated with the provision of electrical power. Section 572(B) of the Local Government Act 1919 (NSW) permitted the District Council to assess a rate in respect of a loan 'raised for any work or service which in the opinion of the County Council would be of special benefit to a portion only of the County district', and for the rate to 'be assessed only on the Councils of the area within which such portion is situated'. The defendant assessed certain rates for nine of the ten shire councils within its district. Mahoney J concluded that the loans had been raised as part of a master plan for the supply of electricity to rural areas of the County District, and that that plan involved the construction of the electricity lines and ancillary works in question.
Mahoney J said at 206:
In my opinion the words 'work or service' in s 572B may include the result of a series of operations, even though they extend over a number of years, and, notwithstanding that, as the particular parts are completed, those parts confer an immediate benefit upon the individuals for whose benefit the operations were undertaken.
However, the fact that there may have existed from the outset a 'master plan' of the particular operations to be carried out does not of itself result in those operations being one work or service within the section. Several separate 'works or services' may obviously be included in the one plan.
For the operations of the kind here in question to be properly categorized as one work or service for the purposes of s 572B it is necessary for there to be an appropriate degree of inter-relation between and integration of the operations and the results of the operations. That which is the result of the operations must in its actual or intended function or operation be as between its parts inter-dependent to a substantial degree.
In relation to any planned series of operations, the determination of whether the degree of inter-relation or inter-dependence is sufficient to constitute the plan as the plan of a single work or service or one of several separate works or services may depend ultimately upon the impression which the evidence as a whole makes upon the court. In such cases it may be generally sufficient for the court to form a conclusion upon the question and to state it: to say, to paraphrase Lord Haldane, that there are sufficient grains of corn together to make a heap; see Bradford Corporation v. Meyers (6): see also Wood v. Wood (7), per Lord Merriman P.. However, it would I think do less than justice to Mr. O'Keefe's persistent argument in the present case merely to observe that differences of degree are inherent in any system of civilized law: see Nash v. United States (8), per Holmes J., and simply to follow that course.
Australand concerned a rate imposed pursuant to s 971(1)(b)(i) of the Local Government Act 1993 (Qld). That section enabled the imposition of a special rate on land which specially benefited from a service, facility or activity to be funded by the rate. Subsections (4) and (4A) and (6) of s 971 provided:
(4)The local government's resolution making the special rate or charge must identify -
(a) the rateable land to which the charge applies; and
(b)the overall plan for the supply of the service, facility or activity.
(4A)The overall plan must -
(a)be adopted by the local government by resolution either before, or at the same time, as, the local government first makes the special rate or charge; and
(b)identify the rateable land to which the rate or charge applies; and
(c)describe the service, facility or activity; and
(d)state the estimated cost of implementing the overall plan; and
(e)state the estimated time for implementing the overall plan.
…
(6)Subsection (1) is taken to have been complied with if the special rate or charge is made and levied on -
(a)all rateable land that, at the time of making and levying the rate or charge, could reasonably be identified as land on which the rate or charge may be made and levied; or
(b)all rateable land on which the rate or charge may be made and levied, other than land accidentally omitted.
The Gold Coast Council imposed a rate to recoup the cost of the construction of a canal, two road bridges and one pedestrian and bicycle bridge and the acquisition of land to replace lost parkland. The plaintiff argued that s 971 had no application to a case of disparate benefits received by different lots as a result of a different works. The defendent sought to argue that the disparate works were part of a single facility. The different benefits enjoyed by different land was explained by Jerrard JA at 24 - 25 in Australand when, after referring to the passage from Severn set out above, he said:
Mr Hinson SC urged the same opinion here, but the difficulty is that in that matter the same special benefit - the provision of electricity to rural residents of the plaintiff shire councils - could be shown, albeit it was received at different times by different works in different places over the years. The various different works produced the same result, the special benefit, throughout. Here, the different works provide other, different, benefits from the special benefit relied on by the Council. The reasons for judgment record that the traffic engineers engaged by the parties agreed that the three proposed bridges restored in varying degrees access previously provided by roads, and a significant proportion of the traffic on the Sickle Avenue bridges was generated by developments not included within the charged land. The two road bridges would be used by both traffic generated by the use of the land subject to the special charge, and also by other land. The Crescent Avenue bridge would reinstate pedestrian and bicycle access to the areas immediately adjacent to that bridge. While that proposed pedestrian and bicycle bridge would benefit the residents of Boykambil, as the learned judge held, it was very difficult to see that any benefit was conferred by that particular bridge upon any of the charged land. The same was true of the new parkland. Some properties abutting it were not subject to the charge, while land "remote from it and separated from it by the canal" was subject to the charge. Regarding the road bridges, likewise the land owned by Australand was located to the west of the canal (the long neck of the duck), and vehicular access to it did not depend upon either of the two bridges. The learned judge accordingly thought it difficult to see how that land could derive any special benefit from the construction of those bridges, which while they would benefit the land owned by Fish Developments (on the Island and abutting the canal), would benefit more land than that respondent's.
It does not follow that because individual works carried out in creating part of a facility produce no special benefit to charged land, that the charged land does not specially benefit from that facility. But it does make it critical to establish that the works make a single facility, and that the facility results in an identified special benefit to all the charged land, and no other land.
The Court concluded that the Council had not in fact identified the special benefit relied upon in the appeal and that the Council resolution 'failed to accord with the command of s 971(6) that the special rate be levied on all rateable land that could reasonably be identified as land on which the rate might be levied'.
Care must be taken to read the observations in all of the cases cited from other jurisdictions in the context of the particular legislation with which they are dealing. Section 971 of the Queensland legislation imposes quite specific and different requirements from s 6.37 of the LG Act. The decision in Australand was concerned with a statutory provision which mandated an overall scheme or plan for the whole of the affected area of which a specific work forms part, before the benefit of a specific work of the general nature identified by the City was capable of being considered a benefit for all affected ratepayers within the designated area.
Section 6.37 of the LG Act does not contain a requirement of the nature prescribed by s 971(4) and (4A) of the Local Government Act 1993 (Qld). We accept, however, that where the benefit ascribed to specific works is a benefit flowing not directly from the individual works, but rather from the cumulative effects of a number of different specific works, there must be 'an appropriate degree of inter-relation between and integration of the operations and the results of the operations'. It does not follow, however, that it is necessary to identify some formal study or plan document in order for the requirements of s 6.37 to be satisfied. If a rational basis for the accrued benefit of the cumulative works can be identified, that is, in our view, sufficient to render a resolution to impose an SAR on the basis of that benefit valid.

The budget papers in the 2009/2010 budget year contained a detailed explanation of the perceived benefit arising from the satisfaction of the need for car parking and traffic management within the CTA. While documentation of that explanation of the CTA SAR was not as comprehensive in 2008/2009, the evidence suggests that what is reflected in the 2009/2010 budget papers reflects the approach which had been taken to the imposition of the CTA SAR since it was first imposed in 2001. What the 2009/2010 budget papers make clear is that, in the absence of the CTA SAR, the works to be done using the funds available through the area 2 reserve fund would, in all probability, not be able to be done because of a lack of finance. The City's approach is to recognise the need for enhancements to traffic management and parking within the CTA, and to develop a programme of works capable of being funded from year to year. The individual works are thus not seen in isolation, but as part of an ongoing programme, albeit a programme determined from year to year rather than as a result of an overall traffic master plan. Thus, while, seen in isolation, it may be impossible to assess a benefit to ratepayers remote from that particular work, the benefit accrues because the specific work is part of the ongoing programme. There is, in our view, in that sense sufficient interrelation between an integration of the specific projects to satisfy the requirement identified in Severn. In reaching that conclusion, we are mindful of the respect which must be given to the 'great deal of local knowledge' enjoyed by the counsellors, and recognition of the 'many imponderables' which might affect their opinion.

Were the affected ratepayers the ones to benefit?

A further criticism by the applicants of the City's opinion is that the persons benefited (if the City's view of the benefit of improved traffic management and parking is accepted) accrues to any business operating within the CTA, some at least of whom are not ratepayers or residents. Section 6.37 of the LG Act requires that the local government consider that the ratepayers or residents will benefit from the specific work. The applicants argue that the ratepayers liable for the CTA SAR may not themselves operate businesses, for example because they lease their premises to others who do so.
That contention implies that the benefit required must be a direct financial benefit. The applicants' argument is consistent with the suggestion that s 6.37 requires detailed economic analysis of benefit in order to justify the imposition of an SAR. The type of benefit which might justify the imposition of an SAR is not necessarily financial, and not necessarily direct. An SAR might be imposed on the basis of aesthetic or amenity improvements. The view taken by the City is, in effect, that the financial success of the CTA is enhanced by improved by traffic management and parking facilities. Financial success within an area which enhances the business of tenants is, in our view, capable of being construed as a benefit to the landlords of those tenants since it potentially enhances rents within the area and the capacity of tenants to meet commitments to their landlords. The extent to which that occurs will, inevitably, differ from business to business, and may be much greater for some tenants and landlords than for others. In our view, s 6.37 does not require the City to make an assessment of the extent of benefit to each of the ratepayers affected by the rate. It is open, in our view, for a local government to impose an SAR notwithstanding that the extent of the benefit to each ratepayer affected may differ, and on the basis of an opinion as to benefit to indentified ratepayers resulting from the general effect of the specific work, provided there is a rational basis for that opinion.

Conclusion in relation to benefit

In our view, the respondent did consider that the specific works to be funded would contribute to the improvement of traffic management and parking facilities within the CTA, and that the ratepayers of commercial properties within the CTA would thereby benefit from the enhanced attractiveness to potential customers of the CTA. While there might be much room for argument as to the correctness of that view, we do not consider that the opinion lacks a rational basis. It follows that, in our view, the CTA SAR was imposed in accordance with the requirements of the LG Act in the relevant years.
It is apparent from the materials provided to the Tribunal, and from the evidence at the hearing, that the basis of the CTA SAR was a perceived benefit to the ratepayers concerned, rather than an opinion that those ratepayers would have access to the specific works, or that they contributed to the need for those works, more than other ratepayers. It is therefore not necessary to consider those aspects of s 6.37 of the LG Act.
It follows that the CTA SAR has been imposed in accordance with the requirements of the LG Act, and the applications should be dismissed.

DR 338 of 2009

Order

1.The application is dismissed

DR 384 of 2008

Order

1.The application is dismissed

DR 350 of 2008

Order

1.The application is dismissed

I certify that this and the preceding [108] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUSTICE J A CHANEY, PRESIDENT

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Citations

CITYGATE PROPERTIES PTY LTD and CITY OF BUNBURY [2010] WASAT 182

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BGC (AUSTRALIA) PTY LTD and CITY OF SWAN [2011] WASAT 158

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