Jehovah's Witnesses' Congregation v City of Mount Gambier No. Scciv-01-279

JEHOVAH’S WITNESSES’ CONGREGATION v
CITY OF MOUNT GAMBIER
[2002] SASC 94
FULL COURT: Prior, Nyland and Gray JJ

PRIOR J: The appellant issued proceedings in the Land and Valuation Division of this Court, claiming that the respondent council had failed to give it or its predecessor the full benefit of an exemption from rates for church land.
The appellant is the present registered proprietor of a large allotment of land in Mount Gambier. The total area of the land is approximately 13780 square metres. In May 1985, a church was erected there. A little less than one-half of the land was developed and used for the church, car parking and landscaping (the church land). 7889 square metres of that land remain vacant and undeveloped (the vacant land).
Shortly after the construction of the church, a galvanised iron fence was erected to divide the vacant land from the church land. A fence also marks the rear and side boundaries of the church land. In 1997, development approval for division of the land into two separate allotments was granted. However, this has not been proceeded with.
Since 1985, the respondent has recovered rates in respect of the vacant land but not the church land on the other side of the fence. In these proceedings, the appellant claimed that the vacant land should also enjoy an exemption from rates. It is said to be church land. The Local Government Act was amended extensively in 1988. A result was that a church or chapel and its grounds are not rateable[1]. A further exemption applied to land used solely for religious purposes[2].
[1] Local Government 1934 - 1988 s 168(2)(c)(i)
[2] s 186 (2)(c)(ii)
By the provisions of the Local Government Act 1999, all land within the area of a council is rateable except land within specific exemptions, most of which are provided for in s 147(2) of the Act. The exemptions do not include church land or land used for religious purposes. Section 162 provides a rebate at 100 per cent on rates on land containing a church or other building used for public worship and any grounds or land solely used for religious purposes.
In January 1998, the appellants claimed by letter sent to the council that the respondent was wrongly recovering rates in respect of the vacant land. The council denied that it was wrongly recovering the rates. The matter was not pursued at that time. Rates were paid with respect to the vacant land.
In October 1999, the issue was pursued. Again, the council rejected the claims. On 14 September 2000, the appellants purported to appeal to this Court against the rating of the public land. Section 156(12) of the Local Government Act 1999 was invoked. The appeal was said to be against the decision of the council, conveyed by letter dated 24 July 2000. In that letter, the council said that the vacant land was not used for religious purposes and that the council would continue to recover rates in respect of the vacant land.
An objection to competency of the appeal was upheld by a judge in the Land and Valuation Division[3]. Declaratory relief was sought in separate proceedings. The present appeal is against the dismissal of the claim for declarations as to invalidity of rates and other consequential relief. The appellant sought orders that the council repay sums unlawfully demanded as rates in the years ending 30 June 1986 to 30 June 1999.
[3] Local Government Act 1999 s 156(9), s 156(12)
The respondent maintains that the proceedings are incompetent[4]. The matter was nonetheless argued on the merits.
[4] Local Government Act 1934 s 708, s 709; Local Government Act 1999 s 276(1), s 276(7)
The appellant says that the effect of s 168 of the Local Government Act 1934 and s 162 of the Local Government Act 1999 is that the whole of the land in question, both the church land and the vacant land is and, since 1985, has been exempt or rebateable land under those provisions. The council could not properly separately determine the use that each of the blocks was put to for the purpose of levying rates or assigning exemptions or rebates because the council has no power to levy rates on separate portions of a contiguous stretch of land in identical ownership and occupation.
The appellant refers to s 168(5) of the earlier Local Government Act, 1934 and s 148 of the 1999 Act. Those provisions empower a council to levy rates against:
“(a)any piece or section of land subject to separate ownership or occupation;
or
(b)any aggregation of contiguous land subject to the same ownership or occupation.”
The submission was that the legislation confines a council’s power to levy rates to the two stipulated types of land holding and no other. The vacant land, in this case, is in neither category. Therefore, so the argument ran, the council had acted illegally. The two sections are not the source of authority to impose a rate at all. They are enabling provisions with respect to the power to rate all land. The provisions afford the council with a choice. They are not restraints on power.
The single judge acknowledged that neither the 1934 nor the 1999 Act contains express power to recover rates in respect of part of land. However, His Honour’s view was that that power was a necessary incident of the exceptions from rating in the 1934 and 1999 Acts and in the rebate system in the later Act. His Honour said:
“... it is not difficult to envisage a number of instances where a council would be entitled to recover rates in respect of part only of a parcel of land. A church might hold one part of a large parcel of land for use as a church and the other part, say, for the operation by the church of a retirement village. The retirement village would not be exempt from rating. If a church congregation in a rural area held a five acre parcel of land all of which was used for agricultural purposes with a church in one small corner of the land, it is readily apparent that, if the church conducts the agricultural enterprise, the land used for agricultural purposes is not church land and so is not exempt from rating.”
I agree with the single judge. A council has power to recover rates in respect of part of land. The language of the sections quoted does not oust the obvious power to identify parts of land on the same title as either exempt or liable to rates.
In this case, it was patently obvious to the casual observer that one part of the land was being used as a church and the other was vacant land not used in association with the church. The vacant land could not be said to be land solely used for religious purposes. It therefore failed to avoid liability for rates or attract an exemption or rebate.
Land is not the subject of an exhaustive definition in either the 1934 or 1999 Acts. There is no definition confining its meaning by reference to certificates of title or boundaries. Rather for the purpose of a liability or exemption or rebate, use of land is the relevant criteria. Use is not made dependent upon boundaries identified in register books.
I would dismiss this appeal, assuming the proceedings were competent. That is not to say that the arguments advanced as to competence of the proceedings were at all persuasive.
NYLAND J I agree that the appeal should be dismissed for the reasons given by Prior J.
GRAY J:                I agree that the appeal should be dismissed for the reasons given by Prior J.
JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT
1.     Local Government 1934 - 1988 s 168(2)(c)(i)
2.     s 186 (2)(c)(ii)
3.     Local Government Act 1999 s 156(9), s 156(12)
4.Local Government Act 1934 s 708, s 709; Local Government Act 1999 s 276(1), s 276(7)

[2002] SASC 94

20 March 2002