Coomealla Aboriginal Housing Co Limited v WENTWORTH Shire Council [1998] Nswlec 125 (15 June 1998)
[1998] NSWLEC 125
•06/15/1998
Land and Environment Court
of New South Wales
CITATION: COOMEALLA ABORIGINAL HOUSING CO LIMITED v. WENTWORTH SHIRE COUNCIL [1998] NSWLEC 125 (15 June 1998) [1998] NSWLEC 56 PARTIES: COOMEALLA ABORIGINAL HOUSING CO LIMITED v. WENTWORTH SHIRE COUNCIL FILE NUMBER(S): 30117 of 1997 CORAM: Bignold J KEY ISSUES: :- Exemption from rates - public charity or public benevolent institution.. LEGISLATION CITED: Local Government Act 1993, s556(h)
New South Wales Companies Act 1961CASES CITED: Glasgow Corporation v Johnstone (1965) AC 609;
Oxfam v Birmingham City District Council (1976) AC 126;
Dareton Local Aboriginal Land Council v Wentworth Shire Council (1995) 89 LGERA 120 ;
Toomelah Co-Operative Limited v Moree Plains Shire Council (1996) 90 LGERA 48;
Maclean Shire Council v Nungera Co-Operative Society Limited (1995) 86 LGERA 430 ;
Aboriginal Hostels Limited v Darwin City Council (1985) 55 LGERA 414 ;
Maclean Shire Council v Nungera (1995) 86 LGERA 430 ;
Trustees of Church Properties of Newcastle Diocese v Lake Macquarie Shire Council (1975) 1 NSWLR 521;
Kelly v Willoughby Council (1928) 41 CLR 51 ;
in Monte St Angelo Convent v North Sydney Council (1927) 8 LGR 85;
Birt & Co Pty Limited v Leichhardt Municipal Council (1951) 18 LGR 78DATES OF HEARING:
7 and 8 May 1998DATE OF JUDGMENT:
06/15/1998LEGAL REPRESENTATIVES:
Mr B Green, Barrister
Mr T Hale, Barrister
JUDGMENT:
This is an appeal pursuant to s574(1) of the Local Government Act 1993 (the LG Act ) in respect of 33 rates notices served on the Applicant as the owner of the 33 properties situate in the Shire of Wentworth and more particularly described in Annexure ‘A’ hereto in respect of the rate year commencing 1 July 1997 .
The appeal, in respect of each rate notice, is on the ground that the land upon which the rate has been levied is not rateable because, so it is claimed, the land falls within the exemption expressly provided by s556(h) of the LG Act namely:
- “Land that belongs to a public benevolent institution or public charity and is used or occupied by the institution or charity for the purposes of the institution or charity”.
According to the Points of Claim the Applicant asserts that it is a public benevolent institution or alternatively a public charity ( paragraph 7 ) and that the relevantly lands are used or occupied by the Applicant for the purposes of the institution or charity ( paragraph 8 ).
By its Amended Points of Defence the Council denies each of these claims. Moreover in paragraph 5 it asserts that the Court “lacks jurisdiction to determine these appeals by reason of the fact that they were not commenced within 30 days after service of the rates notices”.
Section 574(3) of the LG Act provides:
- “An appeal must be made within 30 days after service of the rates and charges notice.”
B. Applicant has Invoked the Court’s Jurisdiction.
With the concurrence of the Applicant the Court on the hearing of the Appeal immediately proceeded to determine the Council’s assertion of lack of jurisdiction. At the conclusion of the argument I held that the defence had not been substantiated. A copy of my reasons for so deciding is annexed hereto and marked ‘B’.
Accordingly the Court’s jurisdiction has been properly invoked by the present proceeding.
C. Is the Applicant Relevantly a Public Benevolent Institution or Public Charity?
The decided cases have settled the question of what qualifies land for exemption under s556(h) of the LG Act and its statutory antecedents. The principles are collected and applied in two recent decisions of this Court - (i) Dareton Local Aboriginal Land Council v Wentworth Shire Council (1995) 89 LGERA 120 and (ii) Toomelah Co-Operative Limited v Moree Plains Shire Council (1996) 90 LGERA 48, and do not need to be repeated.
Evidence concerning the nature and status of the Applicant and the uses to which the Applicant devotes the relevant lands was given by Mr Milne (the Administrator of the Applicant). That evidence (which I accept) establishes that the Applicant was incorporated under the New South Wales Companies Act 1961 on 9 December 1974 as company limited by guarantee (Exhibit 2).
Part 11 of the Applicant’s Acticles of Association deals with “members”, the following provisions being relevant for present purposes:
- “3. At the date of adoption of these Articles the registered numbers of the members of the Company is five-hundred (500). The Directors may from time to time register an increase in the number of members.
(a) The persons whose are entered in the Register of members of the incorporated body of Coomealla Aboriginal Housing Project as members at the date of adoption of these articles shall be admitted as members of the company subject to article 6.
(b) The Directors and the members may from time to time elect additional members….
(c) Only persons of aboriginal or island descent shall be elected as members of the company.”
Part 7 of the Articles of Association dealing with “Directors” includes the following clause:
- “34. Only persons of aboriginal and island descent shall be elected as Directors of the Company.”
The Applicant’s Memorandum of Association conformably to s18(1)(b) of the Companies Act 1961 states in clause 2 the objects of the Company. A copy of the relevant extracts from the Memorandum of Association is annexed hereto and marked ‘C’ .
Clause 3 requires income and property of the Company to “be applied solely towards the promotion of the objects of the Company…”. Clause 6 deals with the aftermath of the winding up or dissolution of the Company. It provides as follows:
- “If upon the winding up or dissolution of the Company there remains after satisfaction of all its debts and liabilities and property whatsoever the same shall not be paid to or distributed among the members of the Company but shall be given or transferred to instructions (sic) having objects similar to the objects of the Company and which shall prohibit the distribution of its or their income and property among its or their members to an extent at least as great as is imposed on the Company under or by virtue of clause 3 hereof such institution or institutions to be determined by the members of the Company at or before the time of dissolution and if as so far as effect cannot be given to the aforesaid provision then to some charitable object.”
On 13 August 1997 the Applicant resolved to amend its Memorandum of Association (notification thereof being registered on 10 November 1997 at the Office of Australian Securities Commission). Although a copy of the resolution was not evidence there was in evidence a copy of the Amended Memorandum of Association.
The principal amendments include the following:
(i) The objects clause is now amended to read as follows:
“The objects of the company are to relieve the poverty, sickness, destitution, distress, suffering, misfortune or helplessness of needy members of the aboriginal and Torres Strait Islander communities through:…”
There immediately follows an enumeration of paragraphs (a) to (dd) inclusive along similar if not identical lines to the same paragraphs in the original Memorandum of Association; and
- “None of the powers or functions conferred upon the Company in this clause may be exercised or performed for purposes other than the objects of the Company and are to be construed as ancillary.”
These amendments appear to be a deliberate adoption of the formulation of the objects of the Nungera Co-Operative Society Limited which were considered by the Court of Appeal in the Maclean Shire Council v Nungera Co-Operative Society Limited (1995) 86 LGERA 430 and were held to qualify that society as a public benevolent society within the meaning of the exemption from rates granted by s132(1)(d) of the Local Government Act 1919 (the statutory antecedent to the present exemption granted by s556(h) of the LG Act ).
The Applicant’s undertakings are non-profit in nature and involve the (i) provision of personal welfare services to aboriginals in need, by the Administrator, the Manager Aged Care Program, an assistant age care program worker, disabilities worker, receptionist and a manager of the fruit block (all of whom are salaried employees of the Applicant) and (ii) the provision of low cost rental housing for aboriginals by virtue of the ownership and management of residentially developed properties which are let to needy aboriginal families at rents of less than 50% of comparable private rental housing available in the area.
The Applicant derives its income from Government funding and ATSIC finance. The properties owned by the Applicant were acquired by funding from ATSIC by way of specific grants for the purchase of welfare housing. Government funding provides for the employment of staff by the Applicant all of whom are available to provide welfare services for members of the aboriginal community. The Dareton Aboriginal community consists of approximately 1,500 persons of aboriginal descent with unemployment levels of 80%. The community is afflicted with social problems including domestic violence, car thefts, fighting, alcohol and drug abuse and petrol sniffing.
All of the properties are used by the Applicant in the provision of welfare housing for aboriginals except for the non-residential portion of the property which comprises 80 acres most of which are under commercial cultivation, the income of which is deployed by the Applicant in running expenses and in property maintenance and staff salaries. In addition to its commercial horticultural use the property is used for the purpose of providing permanent employment and employment training opportunities for aboriginals. The property is an approved site for community work programs for aboriginals sentenced through the court system.
Counsel for the Applicant submitted that the evidence established:
(i) that the Applicant qualified as both a public charity and a public benevolent institution; and
(ii) that the Applicant’s use of all the properties was relevantly a use for the purposes of that charity or that institution.
In so submitting the Applicant, not surprisingly, placed considerable reliance upon the decision of Stein J (as he then was) in Toomelah where his Honour followed the decision of Nader J in Aboriginal Hostels Limited v Darwin City Council (1985) 55 LGERA 414 in holding the co-op to be relevantly a public charity. Stein J also held (at 56) the co-op to be relevantly a public benevolent institution. In doing so he applied the Court of Appeal decision in Maclean Shire Council v Nungera (1995) 86 LGERA 430 noting : “(W)hile the wording of the Toomelah Co-Operative Society rules is different to that employed in the Nungera rules the underlying object of the two societies is the same.” His Honour went on to hold that the primary object of the co-op was “to relieve poverty through the provision of housing”.
In similar vein the Applicant submitted that all of its objects are directed to the charitable and benevolent purposes either as primary or anciliary purposes. Those objects which were not primary were anciliary and hence not disqualifying of the status of the Applicant as a public charity or a public benevolent institution. In particular there was nothing in the Applicant’s objects which savoured of the independent object or power held to be relevantly disqualifying in Dareton, “(such other functions as are conferred by this Act)” or in Trustees of Church Properties of Newcastle Diocese v Lake Macquarie Shire Council (1975) 1 NSWLR 521, (“any other activities which the synod of the diocese or Council may from time to time determine”).
The Applicant further submitted that if this is the correct analysis of the objects of the Memorandum of Association as in force when the rate notices were issued, the position was a fortiori after the Memorandum of Association was amended on 13 August 1997 to reformulate the objects of the Applicant.
Faced with the obvious fact that the relevant amendments to the Memorandum of Association occurred after the 1st July 1997, being the commencing date of the relevant rate year, Counsel for the Applicant advanced the ingenious argument that the determination of the issues raised by the Appeal were not confined to the facts and circumstances existing as at 1 July 1997, particularly since the rate notices were issued on 17 July 1997 and s574(3) of the LG Act enables on appeal (against the levying of the rate on the ground that the land is not rateable) to be made within 30 days after service of the rate notice. Moreover reliance was placed upon s572(1) of the Act which deals with a change in the rateability of land occurring in the rate year, providing:
- “A rate is proportionate to the portion of the year for which the land is rateable, and to the portion of the land which is rateable.”
Alternatively it was submitted on behalf of the Applicant that any material changes in the facts concerning the rateable land from the facts that obtained as at 1 July 1997 were cognisable by the Court in its determination of Appeal under s574 of the LG Act and that the Court had the power “to adjust the rateability of the land” under s572 of the LG Act .
The Council’s competing arguments can be summarised as follows:
(i) The question of whether the Applicant qualifies as a public charity or public benevolent institution is to be determined by reference to the objects and powers contained in the Applicant’s Memorandum of Association as in force at the commencement of the rate year and accordingly the subsequent amendments to the Memorandum of Association are not relevant to the determination of the question;
(ii) Although the Applicant’s purposes and objects included some objects which satisfy the criterion of “charitable” or “benevolent” there were other objects which were not relevantly charitable or benevolent and these other objects were independent and collateral to the objects which satisfy the requisite criteria. In particular the objects expressed in clause 2(e), 2(f), 2(h), (i) and (k) were all independent objects and were not themselves relevantly “charitable” or “benevolent”. Moreover the object expressed in clause 2(a) was too wide or uncertain to satisfy the criteria of “charitable” or “benevolent” purposes; and
(iii) In consequence of (ii) the Applicant was not relevantly a public charity or public benevolent institution and hence its claim that its lands are exempt from rates by virtue of s556(h) of the LG Act, must fail.
The Council placed particular reliance on the Court of Appeal’s decision in Nungera and upon the significant differences in the manner in which the respective objects of the Applicant and the Co-op in that case had been formulated, capping the argument with reliance upon the subsequent amendments to the Applicant’s Memorandum of Association to bring the stated objects into identical alignment with the objects in Nungera, and thereby gain the benefit of the precedent established by that case.
I have given anxious consideration to the question whether the amendments made to the Memorandum of Association on 13 August 1997 can truly be regarded as merely cosmetic and stylistic rather than fundamental or constitutional to the Applicant’s expressed objects. However a comparison of the texts of the original objects and the amended objects of the Applicant leads me inevitably to the conclusion that the changes are fundamental and constitutional. In so concluding I have necessarily disregarded, conformably to the majority judgments in Trustees of Church Properties of the Diocese of Newcastle, (i) the fact of the uses to which the Applicant is actually devoting the subject land and (ii) the fact that those uses have apparently not changed from what they were before the amendments were made to the Memorandum of Association.
The consequence of this conclusion is that unless regard can be had to the Applicant’s objects according to the amended Memorandum of Association, it must be concluded that the objects and powers of the Applicant are such, by virtue of their width, diversity, uncertainty and most particularly the absence of a dominantly charitable or benevolent purpose, as to not qualify as charitable or benevolent purposes. In my judgment the objects clause is simply incapable of an interpretation that yields a dominant charitable or benevolent purpose such as was able to be adopted by Nader J in Aboriginal Hostels and by Stein J in Toomelah.
What then is the relevance, if any, of the amended Memorandum of Association, which adopts an objects clause almost identical to that considered in Nungera and held to qualify the co-op in that case a public benevolent institution? I have earlier set forth the parties competing submissions. Regrettably for the Applicant’s position, there is existing authority, as I pointed out in the course of argument, that suggests that the Applicant’s arguments based upon s572 and 574 are legally untenable. I refer in particular to the decision of the High Court of Australia in Kelly v Willoughby Council (1928) 41 CLR 51 and to the decision of Pike J in Monte St Angelo Convent v North Sydney Council (1927) 8 LGR 85. Both those decisions demonstrate that the question of whether land is rateable land is to be determined by reference to facts existing on the first day of the rate year (in both cases that day was 1 January). In Monte St Angelo Pike J at 87:
- “When it is necessary to determine on an appeal similar to this whether a property is rateable or not the crucial date for so determining is in my opinion the first of January of that year in question.”
In my judgment this principle is equally applicable to the present appeal under s574 of the LG Act , the provisions of the present LG Act not being materially different from the Local Government Act 1919 relating to (i) the levying of rates (except under the LG Act the rate year commences on 1 July) and (ii) appeals against rate assessments on the ground that the land is not rateable.
It follows that the amended Memorandum of Association is not relevant to the determination of the present appeal.
In Monte St Angelo Pike J went on to hold that on an appeal against the assessment of rates on the ground that the land in question was not rateable, the Land and Valuation Court had no jurisdiction to determine whether, and for what period, the property was rateable upon the coming into force later in the rate year of an Amending Act which conferred certain exemptions from rateability which benefited the ratepayer.
It had been argued for the ratepayer in that case that the effect of s139(9) of the Local Government Act 1919 which provided:
- “Where land which was rateable becomes not rateable part of the rate paid thereupon proportionate to the period of the year during which the land was not rateable shall be refunded by the Council”,
was to extend the jurisdiction of the Land and Valuation Court to hear and determine appeals against rate assessments.
Pike J in rejecting the argument at 87 stated:
- “It was urged, however, that if the court had no jurisdiction to determine this matter in this particular case and there was a dispute between the Council and the ratepayer as to the rateability, or the quantum of rateability, then there was no tribunal appointed to determine this dispute. This appears to me, however, not to be so. I can see no reason why the affected ratepayer should not pursue his remedy in the ordinary civil courts for a refund to which he might be entitled by virtue of the provisions of subsection 9.”
Kelly was just such a case (as Pike J had contemplated) where the High Court upheld the ratepayer’s entitlement to a refund of rates pursuant to s139(9) of the Local Government Act 1919 .
Section 139(7) and (9) of the Local Government Act 1919 was the statutory antecedent to s572(1) of the LG Act. The effect of the former sections was also considered by Sugerman J in Birt & Co Pty Limited v Leichhardt Municipal Council (1951) 18 LGR 78. However it will suffice for present purposes for me to say that the decision of Pike J in Monte St Angelo to the effect that the statutory antecedents to s572 of the LG Act did not extend the jurisdiction of the Land and Valuation Court to hear and determine an appeal against a rate notice on the ground that the land was not rateable, is in my opinion directly applicable to this Court in the exercise of jurisdiction conferred on it by s574 of the LG Act. Accordingly I would hold, that it is not within this Court’s jurisdiction in determining an appeal under s574 of the LG Act to make an order in respect of s572 of the Act or to grant any relief by reference to that section.
However I would stress that his does not mean that the Court does not have any jurisdiction in relation to s572 (otherwise than in the context of determining an appeal pursuant to s574 of the LG Act). On the contrary Part 15 of the LG Act (which includes s572) is declared to be a “planning or environment law” for purposes of s20(2) of the Land and Environment Court Act 1979 which vests this Court with plenary jurisdiction to enforce rights and to review the exercise of functions under a “planning or environment law” and to make declarations of right in relation to any such right or to the exercise of any such function.
Accordingly it would be open to the Applicant, if so advised, to commence Class 4 proceedings, invoking the jurisdiction of the Court conferred by s20(2) of the Land and Environment Court Act 1979 in relation to any rights it claims to have under s572(1) of the LG Act by virtue of any claim that it may wish to advance that its lands fall relevantly within the exemption provided by s556(h) of the LG Act by virtue of the amended Memorandum of Association reformulating the objects of the Applicant to substantially accord with the objects in Nungera which were held by the Court of Appeal to qualify that body a public benevolent institution.
Since, for the reasons given, this Court in the present proceedings, does not have jurisdiction in relation to any claims the Applicant may wish to bring based upon (i) s556(h) of the LG Act in the light of the reformulated objects in the amended Memorandum of Association and (ii) s572 of the LG Act, it is not appropriate for me to express any view on those matters, save to make the obvious observations that the Council, in contesting the Applicant’s present appeal has heavily relied upon the differences contained in the Applicant’s original Memorandum of Association and those considered in Nungera and that in the circumstances of the amendments made to the Memorandum of Association on 13 August 1997, it would appear to be extremely difficult for the Council to resist the ready application of that authority.
For all the foregoing reasons I must hold that the Applicant’s lands were not as at 1 July 1997 lands belonging to a public benevolent institution or public charity within the meaning of s556(h) of the LG Act. Accordingly the present appeal must be dismissed.
D. Are the Subject Lands Used or Occupied for the Purposes of a Public Benevolent Institution or a Public Charity?
Since I have held that the Applicant was not as a 1 July 1997 relevantly a public benevolent institution or public charity, it follows that this question must be answered in the negative. However if I had concluded that the Applicant was relevantly a public benevolent institution or public charity I would thereupon have been satisfied on the evidence that the lands that are relevantly occupied or used by the Applicant were used or occupied for the purposes of the institution or charity.
However applying what I held in Dareton as to the legal requirements of “use” and “occupation” I would have held that those parcels of land that are vacant were not relevantly used or occupied. However I would have held that all lands developed by housing and let by the Applicant to tenants were relevantly so used or occupied. I would also have held that the whole of the 80 acre horticultural lot ( and not just the part containing the dwelling) was relevantly used or occupied: Glasgow Corporation v Johnstone (1965) AC 609 and Oxfam v Birmingham City District Council (1976) AC 126.
E. Conclusions and Orders
For all the foregoing reasons I make the following orders.
1. Appeal dismissed.
2. Question of costs reserved.
3. Exhibits be returned.
--------------OoO--------------
Associate
I HEREBY CERTIFY THAT THIS AND THE PRECEDING 17 PAGES ARE A TRUE AND ACCURATE COPY OF THE REASONS FOR JUDGMENT HEREIN OF HIS HONOUR MR JUSTICE N R BIGNOLD.
0
2
2