Clarence Village Limited v Clarence Valley Council

[2023] NSWLEC 135

Land and Environment Court

New South Wales

Medium Neutral Citation:

Clarence Village Limited v Clarence Valley Council [2023] NSWLEC 135

Hearing dates:

19 and 20 September 2023

Date of orders:

06 December 2023

Decision date:

06 December 2023

Jurisdiction:

Class 4

Before:

Preston CJ

Decision:

The Court orders:

(1) Time for commencing the proceedings is extended to 16 May 2023.

(2) The proceedings are dismissed.

(3) The applicant is to pay the respondent’s costs of the proceedings.

Catchwords:

JUDICIAL REVIEW – charge for sewerage services – resolution making charge – rate notice levying charge – whether charge made on land parcel or premises on land parcel – amount of charge – how determined – whether determined differing amounts for same charge – whether short separate name needed for amount of charge if not differing amounts – land parcel jointly owned by the Crown – whether Crown exemption from charges as well as rates – extension of time to commence proceedings.

Legislation Cited:

Local Government Act 1993 (NSW) ss 501, 539, 540, 541, 543, 546(1), 554, 555, 560, 561

Housing Act 2001 (NSW) s 6(1), (4)

Valuation of Land Act 1916 (NSW)

Uniform Civil Procedure Rules 2005 (NSW) r 59.10

Category:

Principal judgment

Parties:

Clarence Village Limited (Applicant)
Clarence Valley Council (Respondent)

Representation:

Counsel:
Mr J Lazarus SC with Mr T Poisel (Applicant)
Mr R Lancaster SC with Mr R Coffey (Respondent)

Solicitors:
Fishburn Watson O’Brien (Applicant)
Local Government Legal (Respondent)

File Number(s):

2023/156524

JUDGMENT

Nature of the proceedings and outcome

1. Clarence Village Limited (CVL) is a provider of senior housing and aged care in Grafton. CVL is the registered proprietor of eight properties in Grafton, on which senior housing and aged care premises are constructed. One of those properties is at 196 Turf Street, Grafton, which is jointly owned by CVL with the NSW Land and Housing Corporation (LAHC) as tenants in common.

2. CVL’s properties are within the Clarence Valley local government area. Clarence Valley Council (the Council) makes, pursuant to s 501(1) of the Local Government Act 1993 (NSW) (LG Act), annual charges for services provided, or proposed to be provided, on an annual basis by the Council, including water supply services and sewerage services. The Council then levies an annual charge on each parcel of rateable land for which the service is provided or proposed to be provided.

3. The Council made and levied on CVL’s properties, an annual charge for sewerage services to be provided in each of the 2022/2023 financial year and the 2023/2024 financial year. The Council made the annual charge by two resolutions, the first on 28 June 2022 (Resolution 1) and the second on 27 June 2023 (Resolution 2). The Council levied an annual charge on each on CLV’s eight properties (each being a parcel of rateable land) by way of a rate notice for each of the 2022/2023 financial year and the 2023/2024 financial year.

4. CVL has brought judicial review proceedings challenging the validity of Resolutions 1 and 2 making annual charges for sewerage services and the rate notices levying annual charges on each of CVL’s properties for sewerage services provided or to be provided by the Council. The grounds of challenge fall into three categories:

1. Resolutions 1 and 2, in breach of s 501 of the LG Act, purport to approve an annual charge for sewerage services levied on each of the premises situated on each parcel of land, rather than on each parcel of rateable land (grounds 1 and 3) (the making of the charge grounds);

2. Resolution 1, in breach of s 543(3) of the LG Act, did not give a short separate name for the annual charge for sewerage services (ground 2) (the name of the charge ground); and

3. The 196 Turf Street property, jointly owned with LAHC which is the Crown, is exempt from all rates and CVL is not liable for payment of the annual charge levied on the property (ground 4) (the Crown exemption ground).

5. These four grounds define the issues to be adjudicated. There is, however, one further procedural issue. CVL commenced the proceedings outside the three-month time limit in r 59.10 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) to challenge Resolution 1 and the rate notices for the 2022/2023 financial year. CVL is within time to challenge Resolution 2 and the rate notices for the 2023/2024 financial year. This is the extension of time issue.

6. I have determined that an extension of time should be granted to allow CVL to challenge both Resolutions 1 and 2 and the rate notices for both the 2022/2023 and 2023/2024 financial years, but each of the grounds of challenge should be rejected. I will address the grounds of challenge before the extension of time issue.

The making of the charge grounds

7. Section 501 of the LG Act provides for a two-step process for a council to impose an annual charge for services provided by the council. The first step is to make the annual charge and the second step is to levy the annual charge. The first step of making the charge is general; the second step of levying the charge is particular to each parcel of rateable land.

8. This is clear from the terms of s 501:

“501 For what services can a council impose an annual charge?

(1) A council may make an annual charge for any of the following services provided, or proposed to be provided, on an annual basis by the council--

• water supply services

• sewerage services

• drainage services

• waste management services (other than domestic waste management services)

• any services prescribed by the regulations.

(2) A council may make a single charge for two or more such services.

(3) An annual charge may be levied on each parcel of rateable land for which the service is provided or proposed to be provided.”

9. The expression “parcel of land” is defined in the Dictionary to the Act:

“"parcel of land", in relation to rateable land, means a portion or parcel of land separately valued under the Valuation of Land Act 1916.”

10. In this case, it is common ground that the “parcel” of land separately valued under the Valuation of Land Act 1916 (NSW) is each of CVL’s properties, being the whole cadastral lot or lots. For the purpose of s 501(3) of the LG Act, each of the CVL’s properties is therefore a “parcel of rateable land” in respect of which an annual charge may be levied.

11. CVL accepted that the rate notices issued by the Council for both the 2022/2023 and 2023/2024 financial years levied an annual charge for sewerage services on each of CVL’s properties as parcels of rateable land. Pursuant to s 546(1) of the LG Act, a rate or charge is levied on land specified in a rates and charges notice by the service of the notice. In this case, the rate notices issued by the Council specified the land to be each of CVL’s properties, which are each a parcel of rateable land, as defined and for the purpose of s 501(3). These rate notices were served on CVL. In these circumstances, CVL did not challenge directly the rate notices as not complying with s 501(3).

12. Instead, CVL’s challenge was directed to the Council’s making of the charge for sewerage services under s 501(1) of LG Act. CVL argued that because a charge may only be levied on each parcel of rateable land under s 501(3), this necessitated that the charge also be made in relation to each parcel of rateable land under s 501(1). CVL contended that the Council did not do so in passing Resolution 1 or Resolution 2.

13. In Resolution 1, the Council resolved to make annual charges for the services provided or to be provided by the Council described as “sewer availability charges”, “sewer consumption charges”, “waste disposal charges”, “water availability charges”, and “water consumption charges”.

14. The charge challenged by CVL, which was levied in the rate notices served on CVL, fell under the description of “sewer availability charges”. Resolution 1 identified 12 charges within this description, of which the first two are relevant:

“(i) A Special Charge for all land categorised "Residential" and rateable to a sewerage system, the charge being One Thousand Two Hundred and Eighteen Dollars ($1,218.00) per land parcel excepting any parcel in respect of land not built upon and not connected to the Council sewerage system in which case the charge shall be Seven Hundred and Four Dollars ($704.00) to be known as the "Clarence Valley Council Sewerage Charge".

(ii) A Special Charge for all land parcels categorised "Residential" which have additional connections to a premise which can be subject to separate and permanent occupation. The charge to be calculated by multiplying the occupied charge in Item 2(i) ($1,218.00) by the number of additional premises in excess of one (1) which can be occupied separately and on a permanent basis.”

15. In Resolution 2, the Council resolved to make annual charges for services provided or to be provided by the Council with the same descriptions as given in Council’s Resolution 1. The challenged charge fell within the description of “sewer availability charges”. The first two of the 12 charges fell within this description provided:

“(i) A Special Charge for all land categorised "Residential" and rateable to a sewerage system, the charge being One Thousand Two Hundred and Seventy-Six Dollars ($1,276.00) per land parcel excepting any parcel in respect of land not built upon and not connected to the Council sewerage system in which case the charge shall be Seven Hundred and Thirty Seven Dollars ($737.00) to be known as the "Clarence Valley Council Sewerage Charge".

(ii) A Special Charge to be known as the "Clarence Valley Council Sewerage Charge" for all land parcels categorised "Residential" which have additional connections to a premise which can be subject to separate and permanent occupation. The charge to be calculated by multiplying the occupied charge in Item 2(i) ($1,276.00) by the number of separate occupations per property which can be occupied separately on a permanent basis.”

16. CVL seized upon the wording in item 2(ii) of each of Resolutions 1 and 2 that makes calculation of the amount of the charge for each land parcel dependent of the number of premises on the land parcel, which can be subject to separate and permanent occupation. CVL argued that wording impermissibly makes the charge on each premise on a parcel of land, rather than on the parcel of land itself.

17. The Council contested CVL’s construction of both s 501 of the LG Act and Resolutions 1 and 2. The Council submitted CVL’s argument conflated the two steps in s 501(1) of making a charge for services provided and in s 501(3) of levying a charge for a service provided. Whilst the second step does require the charge to be levied on each parcel of rateable land for which a service is provided, the first step does not require the charge to be made in relation to each parcel of rateable land.

18. The Council submitted that the wording of item 2 (ii) in Resolutions 1 and 2 was not directed to levying a sewer availability charge on premises on a land parcel but rather to determining the amount of the charge that can be levied on the land parcel. The power in s 501(1) of the LG Act to “make” a charge for services provided needs to be read with the provisions of Part 4 of LG Act regulating the making of rates and charges. Amongst the provisions regulating the making of a charge are ss 539-543.

19. Section 539 provides a non-exhaustive list of matters that the Council may take into account when determining the amount of a charge for a service provided by the Council. Section 539(1) provides:

“539 What criteria are relevant in determining the amount of a charge?

(1) In determining the amount of a charge for a service, the council may have regard to (but is not limited to) the following--

• the purpose for which the service is provided

• the nature, extent and frequency of the service

• the cost of providing the service

• the categorisation for rating purposes of the land to which the service is provided

• the nature and use of premises to which the service is provided

• the area of land to which the service is provided

• in the case of water supply services--the quantity of water supplied.”

20. Of particular relevance to the provision of sewerage services are the nature, extent and frequency of the service and the nature and use of premises to which the service is provided. In the present case, CVL provides senior housing and aged care services in multiple premises on each of its properties. Evidently, the sewerage services provided by the Council for a parcel of land on which there are multiple premisses will be greater than for a parcel of land on which there is only one premise. This would justify determining a greater amount of a charge for providing greater sewerage services.

21. Section 540 provides that the amount of a charge may be expressed as a single amount or as a rate per unit or as any combination of them. The Council submitted that the amount of the charge in item 2(i) and (ii) of Resolutions 1 and 2 are expressed as a combination of a single amount and a rate per unit. The single amount is $1,218 (for Resolution 1) and $1,276 (for Resolution 2) per land parcel with a connection to a premise and the rate per unit is $1,218 (for Resolution 1) and $1,276 (for Resolution 2) multiplied by the number of premises on the land parcel in excess of one premise. CVL contested that determining the amount by the number of premises on the land parcel employs a “rate per unit” for the purposes of s 540. CVL submitted that that expression refers to units of service provided. In the case of sewerage services, it would refer to the volume of sewage disposed of to the Council’s sewerage system. However, nothing turns on this as CVL did not challenge the amount of the charge for sewerage services on the basis of non-compliance with s 540 of the LG Act.

22. Section 541 provides that a Council may determine differing amounts for the same charge. The Council noted that some of the 12 sewer availability charges in item 2 of Resolutions 1 and 2 have differing amounts for the same charge. These differing amounts are given short separate names. These names are “Clarence Valley Council Sewerage Charge, “Residential Sewer Connection Charge”, “Residential Onsite Wastewater Management Charge” and “Non Residential Backflow Prevention Device Charge”.

23. The Council submitted that the charge for sewerage services referred to in paragraphs (i) and (ii) of item 2 is the same charge. Although the paragraphs provide different ways to calculate the amount of the charge, the paragraphs do not determine differing amounts for the charge, pursuant to s 541.

24. Section 542 provides that a council may, in a resolution making the charge, specify a minimum amount of the charge or, if the council has determined differing amounts for the same charge, minimum amounts for each such differing amount. The Council noted that minimum amounts for the same charge have been specified for a land parcel depending on whether the land parcel is or is not built upon.

25. The Council submitted that construing item 2(i) and (ii) of Resolutions 1 and 2 in this statutory context, Resolutions 1 and 2 do not impermissibly levy the charges for sewerage services provided by the Council on the premises built upon the parcels of rateable land owned by CVL. Instead, the resolutions determine the amounts of the charge for sewerage services that may be levied on each parcel of rateable land.

26. CVL has not established the making of the charges grounds, for the reasons advanced by the Council.

27. Item 2(i) and (ii) of Resolutions 1 and 2 make one charge for sewerage services for all land categorised as “Residential” and rateable to a sewerage system. That charge is expressly stated to be on “land parcels”. Paragraph (i) states the charge is for “all land” and determines the amount of the charge “per land parcel”. Paragraph (ii) states the charge is for “all land parcels”.

28. The reference to “premises” in paragraph (ii) is for the different purpose of determining the amount of the charge where a built-upon land parcel has more than one premise. That amount is to be calculated by multiplying the minimum amount for a built-upon land parcel in item 2(i) of $1,218 or $1,276 (the amount differs in the two resolutions) by the number of additional premises on the land parcel in excess of one, which can be occupied separately and on a permanent basis. Whether that determination of the amount of the charge is made under ss 540, 541 or 542, or a combination of them, is not relevant to the challenge made by CVL.

29. What is relevant is that the Council determined only the amount of the charge by reference to any premises that might be built upon the land parcel, not the charge itself. The Council made the charge for sewerage services for all land parcels categorised as “Residential” and rateable to a sewerage system and not for any premises which might be built upon the land parcels.

30. I reject grounds 1 and 3.

The name of the charge ground

31. Section 543 of the LG Act requires a council to give a name for each form of rate and charge. Section 543(3) provides:

“(3) A council must, when making a charge, give a short separate name for each amount of the charge.”

32. CVL contended that the Council failed to give a name when it made the charge in item 2(ii) of Resolution 1. CVL contended that as paragraphs (i) and (ii) of item 2 determined different amounts for the charge, the Council was required by s 543(3) to give a short separate name for each amount of the charge. The Council did give a name “Clarence Valley Council Sewerage Charge” for the amount of the charge determined in paragraph (i). But it failed to give a short separate name for the amount of the charge determined in paragraph (ii).

33. CVL submitted that this omission was sought to be rectified in Resolution 2. The Council gave a short name to the amount of the charge determined in both paragraphs (i) and (ii), “Clarence Valley Council Sewerage Charge”. CVL observed that the Council gave the same short name for each amount of the charge in paragraphs (i) and (ii), rather than giving a separate name for each amount of the charge. But CVL did not raise this as a ground of invalidity of Resolution 2. CVL only challenged Resolution 1 in this respect.

34. The Council submitted that both paragraphs (i) and (ii) of item 2 of Resolution 1 need to be read together. The Council accepted that those paragraphs make one charge and provide for different ways to calculate the amount of the charge. But the paragraphs do not determine differing amounts for the same charge, pursuant to s 541 of the LG Act. In these circumstances, the Council was not required to give a short separate name for the charge in paragraphs (i) and (ii).

35. The Council noted the express inter-relationship between the two paragraphs. Both paragraphs refer to the same charge for “all land” or “all land parcels” categorised “Residential” and rateable to a sewerage system. There is only one amount of the charge, not differing amounts. The paragraphs provide how that one amount is to be calculated.

36. For a land parcel which has not been built upon, the amount is $704 (Resolution 1) or $737 (Resolution 2) (see paragraph (i)). For a parcel of land that has been built upon, the amount of the charge is to be calculated by the number of premises built upon the parcel. If only one premise has been built upon the parcel, the amount is $1,218 (Resolution 1) or $1,276 (Resolution 2) (see paragraph (i)). If more than one premise has been built upon the parcel, the amount is to be calculated by the sum of the amount of the occupied charge in paragraph (i) ($1,218 or $1,276) plus the product of multiplying that occupied charge by the number of additional premises in excess of one (paragraph (ii)).

37. The Council submitted that these ways of calculating the amount of the charge are mutually exclusive. There can never be more than one amount of the charge in any given factual situation.

32. In these circumstances, the Council submitted that the giving of the short name, “Clarence Valley Council Sewerage Charge”, for the same charge in both paragraphs (i) and (ii) complied with s 543(3).

33. CVL has not established the name of the charge ground, for the reasons advanced by the Council. Section 543(3) only requires separate names if a council has determined differing amounts for the same charge, under s 541 of the LG Act. This is evident from the reference in s 543(3) to “each” amount of the charge. The word “each” is used to refer to everyone of two or more things. In the context of the amount of a charge, “each” amount refers to everyone of two or more amounts of a charge. For there to be two or more amounts of a charge, a council must have determined differing amounts for the same charge under s 541 of the LG Act.

34. In the present case, the Council did not determine, pursuant to s 541 of the LG Act, differing amounts (two amounts or more) for the same charge. The Council determined one amount for the charge. The fact that there are different ways of calculating that one amount, depending on whether and to what extent the land parcel is built upon, does not cause there to be differing amounts for the same charge.

35. I reject ground 2.

The Crown exemption ground

42. The Crown exemption ground relates only to the 196 Turf Street property. CVL jointly owns this property with LAHC as tenants in common.

43. CVL contended that LAHC is relevantly the Crown. LAHC is constituted as a body corporate under s 6(1) of the Housing Act 2001 (NSW) and is, for the purposes of any Act, a statutory body representing the Crown under s 6(4) of the Act. CVL submitted that the reference to the Crown in the LG Act includes LAHC and therefore 196 Turf Street is owned by the Crown.

44. Part 6 of the LG Act identifies what land is rateable. Section 554 provides that: “All land in an area is rateable unless it is exempt from rating.” Section 555 specifies the land that is exempt from rating. Section 555(1)(a) provides:

“(1) The following land is exempt from all rates--

(a) land owned by the Crown, not being land held under a lease for private purposes,”

45. CVL contended that 196 Turf Street is not “held under a lease for private purposes,” so the exception in paragraph (a) is not engaged. Paragraph (a) therefore applies as 196 Turf Street is land owned by the Crown.

46. CVL submitted that this means that 196 Turf Street is exempt from all rates. The rates notice for 196 Turf Street for the 2022/2023 and 2023/2024 financial years should therefore be set aside.

47. In the alternative, CVL contended that that part of 196 Turf Street which is owned by LAHC is exempt from rates. This means that CVL is not liable to pay any charge in respect of that part of 196 Turf Street that is owned by LAHC. Under s 561(b) of the LG Act, the Crown is liable to pay a charge in respect of land owned by the Crown, not being land held under a lease for private purposes. The converse is that CVL is not liable to pay a charge in respect of that part of 196 Turf Street that is owned by the Crown. Hence, CVL submitted it is liable only to pay a charge in respect of that part of 196 Turf Street it owns and not that part the Crown owns.

48. The Council submitted that CVL has misunderstood the operation of Part 6 and s 555(1)(a) of the LG Act. They only apply to rates, not charges. Section 555(1)(a) exempts Crown land from all rates, but not charges. Hence, s 551(1)(a) does not exempt 196 Turf Street from the charge for sewerage services levied by the Council on that parcel of land, irrespective of whether that parcel could be described as land owned by the Crown and as not being land held under a lease for private purposes.

49. The provisions of Part 7 of the LG Act dealing with who is liable to pay rates and charges confirms this. Section 560 identifies who is liable to pay rates, while s 561 identifies who is liable to pay charges. As land owned by the Crown is exempt from all rates unless the land is held under a lease for private purposes, the Crown is not identified in s 560 as a person who is liable to pay rates (except in the limited circumstances specified in s 560(4)) but a lessee of Crown land is identified as a person liable to pay rates (s 560(2) and (3)). As the Crown is not exempt from paying charges, the Crown is identified in s 561 as a person who is liable to pay charges. Section 561(b) provides that the person liable to pay a charge is “the Crown in respect of land owned by the Crown, not being land held under a lease for private purposes.”

50. The Council submitted that in these circumstances, no part of 196 Turf Street is exempt from the charge levied by the Council on that land parcel. It matters not that the land parcel is jointly owned by CVL and LAHC even if the latter is the Crown.

51. The Council submitted in the alternative that if the Court were to conclude that s 555(1) does apply to an annual charge for sewerage services levied upon land owned by the Crown, then the exemption could only operate in respect of such land as is owned by the Crown. In that circumstance, by operation of s 561 of the LG Act, CVL would be liable to pay the charge on that part of 196 Turf Street that is owned by CVL.

52. CVL has not established the Crown exemption ground, for the reasons advanced by the Council. Section 558(1) does not operate to exempt land owned by Crown from all charges, only from all rates. Item 2(i) and (ii) of Resolutions 1 and 2 imposed a sewer availability charge, not a rate, on all land parcels categorised “Residential” and rateable to a sewerage system. Section 555(1)(a) does not operate to exempt any such land that is owned by the Crown from that charge. I reject ground 4.

Extension of time issue

53. CVL filed a summons commencing the proceedings on 16 May 2023. Resolution 1 making the annual charge for the 2022/2023 financial year was passed on 28 June 2022. On 21 July 2022, the Council served rate notices, levying the charge on CVL’s eight properties. On 7 September 2022, the Council served supplementary rate notices, correcting some details, on four of CVL’s properties.

54. There is no statutory limitation period in the LG Act to commence judicial review proceedings challenging decisions under that Act. Rule 59.10(1) of UCPR therefore applies. Rule 59.10(1) provides that proceedings for judicial review of a decision must be commenced within 3 months of the date of the decision.

55. CVL’s proceedings for judicial review of Resolution 1 and the rate notices, both original and supplementary, for the 2022/2023 financial year were commenced outside this 3-month period.

56. Under r 59.10(2) of UCPR, the Court may extend the time for commencing the proceedings. CVL has sought for the Court to extend the time. Under r 59.10(3), the Court, in considering whether to extend the time, is to take into account such factors as are relevant in the circumstances of the case, including:

“(a) any particular interest of the plaintiff in challenging the decision,

(b) possible prejudice to other persons caused by the passage of time, if the relief were to be granted, including but not limited to prejudice to parties to the proceedings,

(c) the time at which the plaintiff became or, by exercising reasonable diligence, should have become aware of the decision,

(d) any relevant public interest.”

57. CVL noted that CVL has a direct financial interest in challenging the decisions, as it is the person liable to pay the charges. There is no possible prejudice to any other persons caused by the delay in commencing the proceedings. CVL explained that although the Chief Executive Officer of CVL, Mr McKimm, became aware of the rate notices within a week or so of the notices being served on 21 July 2022, he sought to query the notices with the Council, as he thought it had made an error in levying the rates, rather than to bring proceedings to judicially review the notices and the resolution making the charge that was levied by the notices. Mr McKimm gave evidence explaining the action he took and his reasons for delaying commencing judicial review proceedings.

58. CVL submitted a relevant public interest is that CVL is a public charity and the increased charges will impact on its delivery of charitable services in the local government area.

59. The length of the delay varies depending on the decision being challenged, the longest delay being from the date of Resolution 1 on 28 June 2022, the next being from the date of service of the rate notices on 21 July 2022 and the shortest being from the date of service of the supplementary rate notices on 17 September 2022. CVL submitted the explanation given by Mr Mckimm for trying to negotiate the dispute with the Council, rather than bringing judicial review proceedings, was reasonable in the circumstances.

60. The Council submitted that the delay was significant and the explanation for the delay is not persuasive. The Council submitted that the Council could suffer prejudice in that if the resolutions and rate notices were to be set aside the Council would lose not only the amounts of rates charges levied but also the annual cycle of rates and charges would be interrupted.

61. I consider in all the circumstances time to bring the proceedings should be extended. CVL has provided an explanation for the delay. As a charitable provider of senior living and aged care services, it sought to negotiate rather than litigate the dispute about the charges. That was reasonable. Extending the time does not cause any material prejudice to the Council or to any other person.

Conclusion and orders

62. Although time to commence the proceedings should be extended, the proceedings should be dismissed. CVL has not established any of the grounds of review. Costs in judicial review proceedings usually follow the event. No basis has been advanced for a different cost order.

63. The Court orders:

1. Time for commencing the proceedings is extended to 16 May 2023.

2. The proceedings are dismissed.

3. The applicant is to pay the respondent’s costs of the proceedings.

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Decision last updated: 06 December 2023