Federation Estate Pty Ltd v Southern Rural Water Corporation
[2016] VSC 610
•7 OCTOBER 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2014 04983
| FEDERATION ESTATE PTY LTD | Appellant |
| v | |
| SOUTHERN RURAL WATER CORPORATION | Respondent |
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JUDGE: | RIORDAN J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 20 SEPTEMBER 2016 |
DATE OF JUDGMENT: | 7 OCTOBER 2016 |
CASE MAY BE CITED AS: | FEDERATION ESTATE PTY LTD V SOUTHERN RURAL WATER CORPORATION |
MEDIUM NEUTRAL CITATION: | [2016] VSC 610 |
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WATER ACT 1989 – Whether owners of separate parcels of land constituting a ‘serviced property’ jointly liable for fees associated with delivery shares?
STATUTORY INTERPRETATION – Whether the imposition of a fee on the owner of one of several parcels of land constituting a ‘serviced property’ was invalid?
JOINT LIABILITY – Whether a liability under statute for owners of ‘serviced property’ to pay fees was joint?
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr C Tran | Morrison Sawers Legal |
| For the Respondent | Mr R J Sadler | MCC Legal |
HIS HONOUR:
The appellant appeals to this Court pursuant to s 109 of the Magistrates’ Court Act 1989 against final orders made in the Magistrates’ Court on 15 August 2014. The orders made were as follows:
1. The quantum of the Complaint be amended to the sum of $8,875.47.
2.There be an award on the plaintiff’s complaint in the sum of $8,875.47.
3.The parties have leave to file within 14 days a minute in respect of interest and costs and in default of the same that the matter be listed before me for determination on the questions of interest and costs by way of application made to the Registrar on prior written notice.
On this appeal I have determined that owners of separate parcels of land constituting a ‘serviced property’ are jointly liable for fees imposed under a tariff pursuant to div 5 of pt 13 of the Water Act 1989 (’the Act’). Accordingly, the respondent may recover such fees from the appellant as the owner of one such parcel of land.
The appellant filed a Notice of Appeal on 15 September 2014[1] and the matter came on before me for the hearing of the appeal on 27 October 2015. At the hearing of the appeal, the appellant did not ultimately press any of the grounds in its Second Amended Notice of Appeal. Rather, the appellant sought to argue that the imposition by the respondent of the delivery share infrastructure fee on the appellant, which was the basis for the order in the Magistrates’ Court, was invalid because, at the relevant times, persons other than the appellant were registered as proprietors of parcels of land constituting the serviced property to which the delivery share infrastructure fee related.
[1]The period for filing an appeal under s 109 expired on 14 September 2014; but as that day was a Sunday, pursuant to s 44(3) of the Interpretation of Legislation Act 1984, time was extended for a further day.
The respondent consented to the appellant amending its appeal to raise this question and, accordingly, I gave a direction by consent that:
By 18 December 2015, the appellant file and serve a further amended defence limited to the issue of the validity of the imposition of the delivery share infrastructure fee on the appellant at times when persons other than the appellant were registered as proprietors of parts of the serviced property.[2]
Further orders were made for the filing and serving of further pleadings and submissions.
[2]Leave to make a similar amendment to the Notice of Appeal was granted on 20 September 2016.
Pursuant to the direction, on 21 December 2015 the appellant filed an Amended Defence which raised only one ground of defence being the following:
(aa)an Authority cannot impose a fee under a tariff under s 259 of the Water Act 1989 (Vic) upon an owner or occupier of property for works or services provided to property of which that person is neither the owner nor the occupier;
(ab)the defendant was not the owner or occupier of all the property in respect of which the Plaintiff imposed a fee under a tariff under s 259; and
(ac) the fee imposed was therefore invalid.
The background facts
On 11 March 2010, the defendant was registered as the proprietor of 153–157 Duncans Road, Werribee, being the land described in lot 1 of plan TP864263H of Certificate of Title Volume 8844 Folio 518 (‘the property’). The property is zoned residential.
At the time of the purchase, the owner of the property was entitled to the service of the delivery of water to the property, as a ‘serviced property’ in the respondent’s irrigation district,[3] for the purpose of irrigation and stock and domestic use pursuant to s 222 of the Act.
[3]As defined by s 220 of the Act.
By letter dated 16 April 2010 to the respondent, the solicitors for the prior owners of the property (as vendors of the property) served a Notice of Disposition of an Interest in Land informing the respondent that the appellant had acquired the property for $1,950,000 on 5 March 2010.
On 7 July 2010, a plan of subdivision with respect to the property, which had been submitted by the appellant, was approved by the City of Wyndham. The plan of subdivision, PS631996A, consisted of a two lot subdivision, lot 1 (‘Lot 1’) being some 2.038 hectares and lot 2 being .9789 of a hectare (‘Lot 2’). On registration of the plan of subdivision, Certificate of Title Volume 8844 Folio 518 was cancelled.
By letter dated 2 September 2010 to the appellant, the respondent acknowledged the Notice of Disposition and advised that the appellant was responsible for fees associated with the ‘Water Register Water Use Licence’ and, in particular, the delivery share infrastructure fee. It stated:
This fee is currently calculated annually on the daily delivery rate multiplied by $11,520. In your case the daily delivery rate is 0.15 x 11,520 = $1,728.00.
You may wish to transfer the Delivery Share to another Water Use Licence Holder or you may terminate the Delivery Share Infrastructure for a fee of $17,280 which is 10 times the annual infrastructure fee.
If you do not transfer of [sic] terminate the Delivery Share Entity you are responsible for the annual charges relating to the Water Use Licence.[4]
[4]Cf the terms of cl 20 of the delivery determination made 19 June 2008, referred to at [22] below.
On 1 October 2010, the City of Wyndham approved a further plan of subdivision submitted by the appellant, PS631993G, which subdivided Lot 1 into 46 residential lots.
Between May 2010 and April 2012, sales of various of the subdivided residential lots in Lot 1 were effected and the solicitors for the appellant sent Notices of Disposition to the City of Wyndham; but not to the respondent.
By 5 July 2010, all but six of the lots on plan of subdivision PS631993G had been sold by the appellant to third parties; and they have subsequently been developed as residential housing.
By a statement of account issued on 26 October 2010 to the appellant, the respondent set out the charges associated with the existing delivery share on the land. The statement of account included the charges for the period from 1 October 2010 to 31 December 2010. The due date for payment was 22 November 2010. The account was calculated on the basis of adjustments and new charges of $474.50 made up of service point associated charges of $42.50 and a delivery share infrastructure fee of $432.00.
In November 2012, the respondent filed a proceeding in the Magistrates’ Court to recover fees allegedly due by the appellant, which by January 2014 totalled $8,875.47.
The 2005 amendments to the Water Act 1989
By the Water (Resource Management) Act 2005, substantial amendments were made to the Act. One package of reforms changed the structure of water entitlement for rural water users by unbundling entitlements to water into their major components. The unbundling recognised that the existing irrigators’ water right or diversion licence was actually a combination of three individual components, being:
(a)a secure share of water available from a water system (‘the water share’);
(b)a right to use the water on a particular piece of land (‘the water use licence’); and
(c)an assurance for irrigators that the delivery system would enable their entitlements to be supplied (‘the delivery entitlement’).[5]
[5]Victoria, Parliamentary Debates, Legislative Assembly, 6 October 2005, 1337 (Mr Pandazopoulos, Minister for Gaming).
In other words, a water right to irrigators consisted of:
(a)an Authority maintaining a system of delivering a sufficient quantity of water to a point from where the irrigator may take the water (the delivery entitlement);
(b)an entitlement to take an identified quantity of water from the irrigation system (the water share); and
(c)a right to use that water for the purpose of irrigating a specified piece of land (the water use licence).
As an Authority under the Act, the respondent had an obligation to deliver the delivery entitlement to the appellant as the owner of the property, which arose under s 222(1) of the Act which relevantly provides:
An Authority, subject to the provisions of this Part—
(a) must provide the service of delivering water to the owner or occupier (where the occupier is not the owner) of each serviced property in its irrigation district—
(i) for the purpose of irrigation; and
(ii) for stock and domestic use—
at the volumes and for the periods that are determined by the Authority in accordance with this Part; ...
Shortly after the time of the purchase of the property by the appellant, the water share owned by the appellant was sold to another landowner within the respondent’s irrigation district. However, the appellant, as the owner of the property, retained the delivery entitlement.
The respondent, as an Authority under the Act, is:
(a)required to determine the volumes at which, and the periods for which, the water is to be delivered for irrigation, stock, or domestic use to that property;[6]
(b)empowered to determine the terms and conditions on which it provides the delivery obligation.[7] Section 227(4) sets out the conditions that can be specified in the determination; and under s 228 the Minister may give directions to Authorities on any matter about which a condition may be specified.
[6]The Act s 223(1).
[7]The Act s 227(1).
On 20 June 2007, the Minister for Water, Environment and Climate Change gave directions under s 228 of the Act which included the following directions with respect to annual access fees:
(1)An Authority must recover the costs of providing delivery services through a combination of fixed fees (which may relate to the volumes at which and the periods during which water may be delivered as specified in a delivery share) and fees that vary with the volume of water actually delivered.
(2)Annual access fees must be the principal mechanism to recover the fixed costs of providing ongoing access to water delivery services, …
(3)Any annual access fee levied on the holder of a delivery share must not include any [certain excluded costs specified]
…
(5)An Authority may also recover fixed costs through other fees, such as service point fees, usage fees and casual use fees.
…
Note: the holder of a delivery share should be able to choose whether to continue to hold the delivery share and pay the annual access fee, or to reduce or surrender the delivery share and pay the relevant termination fee.
Upon reduction or the surrender of a delivery share, for the level of delivery service given up:
· the Authority will no longer be obligated to deliver water, or be obligated to be able to deliver water, as specified under the delivery share; and
· the obligations to pay future annual access fees in relation to the delivery share will be cancelled.
On 19 June 2008, the respondent made a determination under s 227 with respect to the terms and conditions on which it would provide the delivery obligation (‘the delivery determination’). The delivery determination included the following:
(a)The delivery entitlement was defined to mean ‘delivery share’.[8]
[8]‘Delivery share’ is not a term used in the Act. However, it is described by Kate Stoeckel et al, Australian Water Law (Law Book Co, 2012) 116 as ‘an unbundled entitlement held by irrigators in an irrigation district to have water delivered to their land and to have a share of the available water flow in a delivery system.’ The delivery share ‘sets out an irrigator’s right to receive a defined volume of water over a defined period’ and is ‘granted over land and attaches to that land, even if the water share is traded away from that land.’ In the present case, the determination under s 227 defined ‘delivery share’ to mean ‘an entitlement to the service of having water delivered under section 222(1)(a) of the Act, at the specified volumes during specified periods recorded for the serviced property in the Victorian Water Register’.
(b)Delivery of water must be through a service point authorised by the Authority and recorded in its water management system.[9]
[9]Cl 5.
(c)A delivery share entitles the holder to connect to a service point authorised by the Authority and recorded in its water management system. A delivery share does not entitle the holder to provision by the Authority of infrastructure or rights of access between the service point and any location where the holder may use, or wish to use, water under that delivery share.[10]
[10]Cl 9.
(d)It set the annual charges that apply to delivery shares as the following three fees: [11]
[11]Cl 18.
(i) A ‘delivery infrastructure fee’, which was based on the size of the delivery share.
(ii) A ‘delivery share service point fee’, which was based on the number and category of service points.
(iii) A ‘delivery share water usage fee’, which was based on usage of water through the service point.
(e)It provided that an application for the removal of the delivery share from a serviced property was conditional on the payment of a termination fee;[12] and set the termination fee as no more than 15 times the sum of the delivery share infrastructure fee and the delivery share service point fee associated with the delivery share.[13]
[12]Cl 34.
[13]Cl 20.
The delivery share for the property
Under s 223(1), the respondent determined the delivery entitlement for the property. The delivery entitlement was recorded in the Water Register in a document called a ‘Delivery Share’, which noted:
(a)the appellant as the holder of the delivery share;
(b)the ‘Land to which water is delivered’ was described by the title particulars of the property, as set out at [6] above;
(c)the service point ID as SP066175; and
(d)the delivery entitlement under the Act, to that service point, as 0.150 megalitres per day and 54.6 megalitres per year.
As the owner of a serviced property, the appellant is entitled to apply for the following:
(a)Variation of the delivery determination of the delivery entitlement that applies to the property.[14]
(b)A transfer of the whole or part of the delivery entitlement to another owner in the respondent’s irrigation district.[15] If the whole of the delivery entitlement is transferred from the property, the Authority may declare that the property ceases to be a serviced property.[16]
(c)A declaration that the property cease to be a serviced property.[17] The Authority may refuse to so declare ‘unless the owner of the property pays to the Authority an amount that the Authority reasonably believes represents the present value of fees that would otherwise be payable by the owner of the property in respect of the irrigation service provided by the Authority under a tariff under section 259(1)’.[18]
[14]The Act s 224.
[15]The Act s 226(1).
[16]The Act 226(5).
[17]The Act s 229(1).
[18]The Act 229(6).
By letter dated 2 September 2010 to the appellant,[19] the respondent informed the appellant of the option to transfer or terminate the delivery entitlement; and that if he did not do so he would be responsible for the annual charges, comprised of the three fees as outlined in [22(d)] above. From that time, the respondent has purported to impose the delivery share infrastructure fee and the delivery share service point fee (‘the Fees’) on the appellant.
[19]Referred to at [10] above.
An Authority is empowered to impose fees (including the Fees) under s 259 of the Act, which provides that an Authority may impose fees under a tariff on serviced properties within its district. A tariff is defined to mean ‘a scale of charges by reference to which a fee is imposed by an Authority on the owner or occupier of a property for works or services provided by that Authority.’[20] Sub-sections 274(4) and (4A) provide:
[20]The Act s 257.
(4) Any amount due to an Authority in relation to a property (including interest and including any amount in respect of a licence under Part 4, 4B or 5) is a debt due to the Authority by the person liable to pay the amount.
(4A) If—
(a) the person liable to pay an amount to an Authority in relation to a property owns that property; and
(b) a code made by the Essential Services Commission under the Water Industry Act 1994 does not otherwise provide—
the amount owed is a charge on the property, whether or not the Authority has agreed to defer the payment of the whole or any part of that amount.
The submissions of the appellant
The appellant challenged the validity of the imposition of the Fees, in circumstances where persons other than the appellant were registered as proprietors of parcels of land[21] constituting the serviced property (‘the Parcel Owners’). The appellant’s written submissions rested on the following five propositions.[22]
[21]A ‘parcel’ is not defined in the Act proper. However in sch 15 ‘Transitional Arrangements’ of the Water (Resource Management) Act 2005 it is defined as follows:
parcel, in relation to—
(a)land under the Transfer of Land Act 1958, means land that comprises an individual folio of the Register under the Transfer of Land Act 1958; and
(b) land not under the Transfer of Land Act 1958, means land that, under section 8A of the Sale of Land Act 1962, can be disposed of separately, without subdivision;…
[22]Appellant’s Written Submissions (21 December 2015) [11].
Proposition 1: Scope of power
In respect of the scope of an Authority to impose a fee, the appellant argued that the definition of ‘tariff’ in s 257(1) only contemplated a fee being imposed on ‘the owner or occupier’ of a property; and s 259(1) only authorised the respondent to impose fees under a tariff on ‘serviced properties’. Therefore, it was submitted that a fee could only be imposed on an owner or occupier.
Proposition 2: Meaning of owner
In respect of the meaning of ‘owner’, the appellant submitted that it ought to be defined according to its ordinary meaning; and that where the real property is Torrens title land, the owner is the person who is the registered proprietor of the property.
Proposition 3: Meaning of occupier
In respect of the meaning of ‘occupier’, the appellant submitted that it ought to be defined as ‘a person who has not only the exclusive right to occupation, but a right for some definite substantial term’.[23]
[23]Melbourne and Metropolitan Board of Works v Pyke (1900) 25 VLR 563, 572 (Madden CJ).
Proposition 4: The appellant was neither the owner nor occupier of some of the property
The appellant argued that it was not the only owner or occupier of all the land which was designated as a ‘serviced property’. By 5 July 2010, of the land designated as a ‘serviced property’, the appellant was the registered proprietor of only six lots on PS631993G and Lot 2 on PS631996A.
Proposition 5: Scope of Authority’s power to impose a fee
Based on the construction of the Act set out on Propositions 1 to 3 and the appellant’s position in respect of the property set out in Proposition 4, the appellant argued that the Fees were invalid for the following reasons:
(a)The appellant was not ‘the’ owner or occupier of a property, within the definition of ‘tariff’ in s 257(1), because s 259(1)(a) requires such a property to be a ‘serviced property’.
(b)In respect of such land, the appellant did not itself receive ‘works or services provided by that Authority’; but instead, the owner or occupier of that land received those works. For this reason, the appellant did not meet the terms of the definition of ‘tariff’ in s 257(1) because it was not an owner or occupier of ‘a property for works or services provided by that Authority’.
(c)Despite being one of the owners of a single ‘serviced property’, it does not follow that one owner or occupier of many may be levied with a fee in respect of the other land comprising the serviced property.
In oral submissions, Mr Tran, who appeared as counsel for the appellant, further developed the submissions with respect to Proposition 5. He contended that, on a proper construction, the liability of the Parcel Owners for the Fees under the Act was not joint or joint and several for the following reasons:
(a)The liability was not expressed to be joint.[24]
[24]Cf Land Tax Act 2005 (Vic) ss 50, 50A; Duties Act 2000 (Vic) ss 21E, 85; Taxation Administration Act 1997 (Vic) ss 14A, 46.
(b)The context of the following provisions of the Act did not support such a construction:
(i) Section 159 required the service of a Notice of Disposition so that the Authority could impose fees on relevant owners.
(ii) Section 259(9) empowered the Authority to impose fees under a tariff on each separate occupant of a property.
(iii) Section 274(4A) charged the property with unpaid amounts owed by the owner. It is unlikely that the Parliament contemplated that part of a serviced property could be encumbered with liability for fees associated with the whole of the serviced property.
(iv) Section 278(2)(d) provided (prior to its repeal) that an Authority could not sell a property for unpaid fees imposed under a tariff, if ’the person liable to pay is not the owner of the property’.
(c)Joint and several liability could give rise to double taxation or arbitrary taxation.
(d)Under s 257(1) a fee is imposed ’for works or services provided by that Authority’; and, from the perspective of each owner or occupier, that owner or occupier is receiving a service which is separate from the service obtained by other owners or occupiers of that same serviced property and ought not be held liable to pay for the service being received by those others.
(e)It may be accepted that the purpose of these provisions is to permit an Authority to recover fees with the greatest of certainty and to the maximum extent. For that reason, an Authority is equipped to impose a fee upon both owners and occupiers. So much may be accepted without accepting joint and several liability, because this purpose is adequately achieved by recognising that ownership can be easily determined by reference to registration on a Certificate of Title. In any event, ’no legislation pursues its purposes at all costs.’[25]
[25]Rodriguez v United States (1987) 480 US 522, 525–526; Carr v Western Australia (2007) 232 CLR 138, 142–143 [5]–[7] (Gleeson CJ); Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619, 632–633 [40]–[41] (Crennan, Kiefel, Bell, Gageler and Keane JJ).
The appellant concedes that it did not notify the respondent of the sale of each of the lots and is prima facie liable to a penalty of 10 penalty units. But it argued that the failure to notify is no reason to compel the appellant to pay a fee in respect of property of which it was neither ‘the’ owner nor occupier in fact.
The submissions of the respondent
The respondent submits that the words in s 259(1)(a) ‘a tariff on serviced properties’ are used collectively as a noun and that the respondent is authorised by ss 257(1) and 259(1)(a) to impose a fee upon an owner of ‘a property’, regardless of whether it be a serviced property or part of a serviced property, by reference to its ‘tariff on serviced properties’ set by it under s 260.[26]
[26]Respondent’s Written Submissions (29 January 2016) [9].
The respondent argues that upon the proper construction of ss 257(1) and 259(1)(a), the lawful imposition of a fee upon an owner requires:
(a)ownership of a property in the Authority’s district;
(b)the provision of works or services by the Authority; and
(c)the imposition of the fee by reference to the Authority’s scale of charges (tariff) on services properties.
These being the requirements, the Fees imposed on the appellant were argued to be valid because:
(a)the appellant owned at least Lot 2, which was a property in the district of the respondent;
(b)the appellant received services from the respondent, which were delivered pursuant to the delivery share that it held and which were provided to the service point on Lot 2; and
(c)the Fees were imposed under a ‘tariff on serviced properties within its district’.
For these reasons, the respondent contended that the appellant’s ownership of a ‘property’ within the respondent’s district (which may be part of a larger serviced property) coupled with the provision of works or services and the imposition of the Fees by reference to the tariff on serviced properties, conferred power upon the respondent to impose the Fees.[27] It was submitted that there was no limitation that can be found to the effect that a fee imposed under s 259(1)(a) is limited to being imposed on the owners or occupiers of the whole of a serviced property.
[27]Ibid [20].
If s 259(1)(a) only authorises the imposition of fees on the owner of the whole of a serviced property (contrary to the respondent’s previous submission), the respondent alternatively submitted as follows:
(a)The sale of part of the land does not mean that the part of the physical land not sold is no longer a serviced property.[28] Despite the sale of part of the land, the appellant is still entitled to services provided by the respondent.[29]
(b)The word ‘owner’ in the Act includes the plural and the appellant was one of the owners of the serviced property.[30] There is no suggestion that the owners of the serviced property should be limited to mean the owners who jointly own the whole property rather than each owning separate allotments that make up the whole of the titles constituting the serviced property.
(c)The respondent is obliged under s 222(1)(a) to provide the service of delivering water to the owners of the serviced property.
(d)The owners of the serviced property are jointly and severally liable for the Fees imposed with respect to that service provided to the serviced property.
[28]Ibid [30].
[29]Ibid.
[30]Interpretation of Legislation Act 1984 s 37(c).
The respondent submitted that it is obliged to provide the service to the service point on the property (in fact on Lot 2) and the responsibility to pay a fee levied on owners is joint and several.
The respondent had not levied fees upon any owner other than the appellant for the following reasons:
(a)It had not been informed of a change of ownership.
(b)The delivery share is held in the appellant's name and none of the other owners hold a delivery share.
(c)The service point is on Lot 2 and none of the other owners are entitled under the delivery determination to connect to it.
(d)Under the delivery determination, the respondent provides the service of delivering water to the service point, located at all times on the appellant's land.
(e)Only the appellant is lawfully entitled to take up the service provided under s 222(1)(a) because all of the 0.15ML available to the serviced property is allocated and held in the appellant's name.
Accordingly, it was submitted that the proper construction of the Act requires that the person who has the entitlement to the benefit of the service should pay for the entitlement to the service.
Conclusion
The relevant principles of statutory construction were accepted by the parties to be as set out by the Court of Appeal in Commissioner of State Revenue v EHL Burgess Properties Pty Ltd.[31]
[31] [2015] VSCA 269 [47]–[80] (Tate, Kyrou JJA and Robson AJA).
The appellant accepts that, if the owners of the serviced property were co-owners of a single parcel of land comprising the whole of a serviced property (ie joint tenants or tenants in common), the co-owners would be jointly liable for the Fees due to the respondent.
However, the appellant submits that, as the property comprises land owned by a number of Parcel Owners, the respondent is required to impose separate fees for each Parcel Owner based on the area of each Parcel Owner’s land.
I am unable to accept this submission for the following reasons:
(a)The Act makes no provision for an Authority to charge separate fees for parcels of land within a serviced property, except for separate occupancies on a property (s 259(9)) and lots affected by an owners corporation (s 263A). There is no provision for the separate charging of Parcel Owners.
(b)The Act includes no requirement for apportioning fees between Parcel Owners on the basis of area. Section 259(2) relevantly provides that the fee may be:
(i) a fixed amount; or
(ii) an amount fixed according to the value or size of the property; or
(iii) an amount fixed according to the extent of use of or benefit from the service; or
(iv) a combination of the above.
(c)In my opinion, the relevant provisions of the Act do not indicate a legislative intention that an Authority must apportion a fee between the separate owners of a serviced property. The contention that such an apportionment must be on the basis of area alone is without foundation. I can only conclude that the appellant was driven to make this submission because, if the respondent had a discretion to apportion Fees applicable to the property among the owners, it may be in the circumstances of this case that it would be appropriate for the respondent to apportion the entirety of the Fees to the appellant, as the owner of the agricultural land being Lot 2, and nothing to the owners of Lot 1.
The appellant supports its submission by reference to s 259(9), which provides that an ‘Authority may, in respect of property, separately impose fees under a tariff … in respect of each separate occupancy on that property’. However, I do not consider that this sub-section indicates that the Parliament intended to require an Authority to apportion the liability under a tariff between Parcel Owners for the following reasons:
(a)The power under s 259(1)(a) is limited to imposing separate fees on occupants, not owners.
(b)The power under s 259(1)(a) is a specific power to impose fees on owners of serviced properties. A general power under s 259(9) does not derogate from this specific power.
(c)Section 259(9) is permissive and the Authority holds a discretion as to whether to exercise it.[32] It is not a mandatory provision compelling the Authority to separately impose fees on separate occupancies.
[32]Interpretation of Legislation Act 1984 s 45.
I consider this appeal is determined by the answer to the question: whether, under the provisions of the Act, each of the Parcel Owners are jointly liable or jointly and severally liable for ‘a fee imposed by an Authority on the owner[s] … of a property for works or services provided by that Authority’.[33]
[33]The Act s 257(1) definition of ‘tariff’.
Despite their undoubted best efforts, the parties were unable to find authority that was directly on point, or even relevant by analogy. However, the fact that a statute may, as a matter of statutory construction, impose joint liability or joint and several liability is well established.[34] In this case, the question of whether the liability would be joint as opposed to joint and several does not arise because, in either event, the appellant would be liable. Accordingly, references to ‘joint liability’ in these reasons are intended to include joint liability or joint and several liability.
[34]Glandville L Williams, Joint Obligations: A Treatise on Joint and Joint and Several Liability in Contract, Quasi-Contract and Trusts in England, Ireland and the Common-Law Dominions (Butterworth & Co Ltd, 1949) 45; Vestry of Bermondsey v Ramsey (1870-1871) L. R. 6 C. P. 247, 251 (Willes, Montague Smith and Brett JJ).
In my opinion, on a proper construction, the Act imposes joint liability on each of the Parcel Owners for the following reasons:
(a) A fair reading of the text of the Act is consistent with the imposition of joint liability.[35]
(b)The imposition of joint liability is harmonious with the legislative purpose.[36]
(c)The imposition of joint liability is less likely to result in anomalous and inconvenient outcomes.[37]
[35]Commissioner of State Revenue v EHL Burgess Properties Pty Ltd [2015] VSCA 269 [56] (Tate, Kyrou JJA and Robson AJA) citing Alcan (NT)Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27, 46–47 [47] (Hayne, Heydon, Crennan, and Kiefel JJ).
[36]Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355, 381–382 [69]–[70] (McHugh, Gummow, Kirby and Hayne JJ).
[37]Commissioner of State Revenue v EHL Burgess Properties Pty Ltd [2015] VSCA 269 [70]–[72] (Tate, Kyrou JJA and Robson AJA).
Consideration of the text of the Act
In my opinion, a reading of the text of the Act demonstrates that it was the legislature’s intention that each of the owners of land constituting a serviced property would be jointly liable for a fee imposed under a tariff on the serviced property for the following reasons:
(a)Pursuant to s 222(1), the respondent is obliged to provide ‘the service of delivering water to the owner … of each serviced property in its irrigation district’. It is common ground between the parties that:
(i) the application of s 37(c) of the Interpretation of Legislation Act 1984 means that the singular ’owner’ includes the plural ‘owners’; and
(ii) the owners of the serviced property, in this instance, are the Parcel Owners.
(b)Pursuant to s 259(1), the respondent is empowered to impose fees under a tariff on serviced properties; and it is apparent from the definition of tariff in s 257(1), that the fee is to be imposed on the owners for ‘works or services provided by the Authority’. After inserting the definition of ‘tariff’ in s 257(1), s 259(1) relevantly reads as follows:
An Authority may impose fees under a scale of charges, by reference to which a fee is imposed by an Authority on the owner(s) … of a property for works or services provided by that Authority, on serviced properties within its district.
(c)The Authority sets a tariff by resolution which is of no effect until notice of the resolution ‘is published in a newspaper circulating generally in the area concerned.’[38] The notice must specify:
(i) the district to which the tariff applies; and
(ii) the method of calculating fees imposed under the tariff; and
(iii) the period for which the tariff is set.[39]
(d)Section 274 provides that:
(i) a fee imposed under a tariff is due and must be paid by the date specified in the notice requiring payment, being a date after publication of the notice of the resolution setting the tariff under s 260(2);[40] and
(ii) any amount due to an Authority is a debt due the Authority by the person liable to pay the amount.[41]
[38]The Act s 260(2). There was no issue about the resolution or its publication in this case.
[39]The Act s 260(3). No submission was made that the issues were affected by the fact that the notice requiring payment by a date was only served on the appellant.
[40]The Act s 274(1).
[41]The Act s 274 (4).
Consequently, the effect of the above sections is that an Authority is entitled to impose a fee on the owners of the serviced property for a service provided to the serviced property. The corollary is that the owners are liable to pay the fees due to the Authority.
The obligation on the owners is to perform the single act of paying the fees, which is indicative of a joint obligation.[42] Where two or more persons are made liable for a sum of money, without any words of severance (whether in contract, quasi contract or under statute) the liability is generally joint.[43] I do not consider there is anything in the text of the relevant sections supporting the appellant’s contentions that the Parliament intended that the liability of the owners of the serviced property should be different depending on whether the owners are co-owners or Parcel Owners.
[42]Toyota Motor Corporation Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106, 129 (Brooking J) with respect to an obligation arising from co-promisors.
[43]Glandville L Williams, Joint Obligations: A Treatise on Joint and Joint and Several Liability in Contract, Quasi-Contract and Trusts in England, Ireland and the Common-Law Dominions (Butterworth & Co Ltd, 1949) 24, 35; also see Lawbook, The Laws of Australia (at 1 July 2012) 7 Contract, ‘4 Joint and Several Contractual Obligations’ [7.3.680]; also see with respect to covenants Thomas Platt, A Practical Treatise on the Law of Covenants (Saunders and Benning, 1829) 117 cited in White v Tyndall (1888) 13 App Cas 263, 269 (Lord Halsbury L.C.).
Legislative purpose
In my opinion, the interpretation that each of the Parcel Owners is jointly liable is consistent with the purpose of the provisions of the statute.[44]
[44]Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355, 381–382 [69]–[70] (McHugh, Gummow, Kirby and Hayne JJ).
The legislative purpose for the imposition of fees for the delivery entitlement under
s 222 of the Act on the owners of serviced properties is to recover the fixed maintenance and renewal costs of the delivery infrastructure by charging regular contributions and exit fees to such owners wanting to terminate their delivery entitlements. These purposes are apparent from the sections, referred to in the following paragraph, and were specifically referred to in the second reading speech in the Legislative Assembly presenting the Water (Resource Management) Bill 2005 in which it was said:
Separating delivery from supply obligations also represents a fairer system by ensuring that all owners of land with access to irrigation infrastructure contribute to fixed maintenance and renewal costs, as well as protecting irrigators against price rises when water is traded out of the district. Currently when irrigators leave a district and sell off their water right, they can leave a financial burden for the water authority and remaining customers to maintain infrastructure. Irrigators may end the ongoing obligation to pay for delivery of water if they are prepared to forfeit their access to the channel system and pay an exit fee. Delivery obligations will also provide the basis of an exit fee calculation where land-holders no longer wish to access the channel system and want to end the obligation to pay.[45]
[45]Victoria, Parliamentary Debates, Legislative Assembly, 6 October 2005, 1340 (Mr Pandazopoulos, Minister for Gaming) (emphasis added).
If owners of a serviced property want to avoid the effects of joint liability for the fees relating to their delivery entitlement, on sale of the property or part thereof, the Act makes the following provisions:
(a)The owner and the purchasers may apply to transfer the whole (or part) of the delivery entitlement of the remaining part of the property, in this case Lot 2.[46] If the effect is that the delivery determination would cease to apply to a parcel of land (for example, part or all of Lot 1), the Authority could declare that Lot 2 was a serviced property; and Lot 1 would cease to be part of the serviced property.[47]
(b)The owner could apply for a declaration by the Authority that the property as a whole cease to be a serviced property.[48]
(c)The owner could apply to vary the delivery determination to reflect a reduction in the need for water to be delivered consequent on the sale of Lot 1.[49]
(d)On a reduction or termination of the delivery entitlement, the owner would be liable for a fee.[50] In the case of a termination, in respect of the property in issue the fee is fixed at 15 times the sum of the delivery share infrastructure fee and the delivery share service point fee associated with the delivery share.[51] As the second reading speech in the Legislative Assembly reflects, it was the legislative intention that Authorities could recover an exit fee to avoid ‘a financial burden for the water authority and remaining customers to maintain infrastructure’.[52]
[46]The Act s 226(1).
[47]The Act s 226(5).
[48]The Act s 229, as contemplated by the second reading speech referred to above at n 42.
[49]The Act s 224(1).
[50]The Act s 224(5) and s 229(6).
[51]See the delivery determination under s 227 referred to in paragraph [22] above.
[52]See extract at [55] above.
Anomalous or inconvenient results
If Parcel Owners in a serviced property are not jointly liable; and an Authority is required to apportion the fee between such owners, the legislative purpose of recovering contributions towards its costs could be seriously compromised. For example:
(a)The failure to notify of a disposition of part of a serviced property in breach of s 159 of the Act, as in this case, would be likely to cause serious practical difficulties in the collection of fees payable with respect to a serviced property. If the transfer of even a small portion of the serviced property had the effect contended for by the appellant, before issuing notices under s 274(1) an Authority would need to at least undertake a title search of each parcel of land within serviced properties.
(b)The apportionment of the fees for the serviced property between the Parcel Owners, without any guidance in the Act as to the appropriate method, would be likely to be very contentious.
On the other hand, the appellant submitted that permitting an Authority ‘to impose a fee in respect of an entire serviced property upon only one owner or occupier of many’ would lead to ‘inconvenient if not absurd results’ being that, without a statutory mechanism, Parcel Owners would be left to their own devices to strike a private bargain as to how liability is to be shared.
I reject this submission because I consider that Parcel Owners should be in the best position to make arrangements and protect their individual interests based on relevant matters such as their need for irrigation water, the rights to access the service point and the area and value of their parcel. In the present case, the Parcel Owners should have been aware of the need to provide for the payment of the Fees under the tariff or the exit fee for the following reasons:
(a)A purchaser, properly advised, should be aware of issues that may arise as a result of purchasing a lot in a serviced property. The fact that a property is part of a serviced property should be discernible from appropriate inspections of the property, an inspection of the Water Register,[53] or from a statement provided by an Authority under s 158 of the Act.
(b)A vendor of a lot on serviced property, who has not arranged for the lot to cease to be part of serviced property, would be required to disclose the particulars of the Authority’s charge affecting the land in the Vendor’s Statement required to be served on a purchaser pursuant to s 32 of the Sale of Land Act 1962.
(c)Compliance by the owner with the requirements of s 159 of the Act,[54] by serving a Notice of Disposition of an Interest in Land, would put the Authority on notice of the issue.
[53]See pt 5A of the Act.
[54]See Water (Notice of Disposition of Land) Regulations 2000, Water (Notice of Disposition of Land) Regulations 2010 as amended.
Further, a Parcel Owner required to discharge the joint liability may well be entitled to claim equitable contribution from other persons who have co-ordinate liability.[55]
[55]Burke v LFOT Pty Ltd (2002) 209 CLR 282, 298-303 [38]–[50] (McHugh J).
Orders
I propose to dismiss the appeal.
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