Jehovah's Witnesses Congregations v Mount Gambier

[2002] HCATrans 306

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A46 of 2002

B e t w e e n -

JEHOVAH’S WITNESSES CONGREGATIONS

Applicant

and

THE CITY OF MOUNT GAMBIER

Respondent

Application for special leave to appeal

GUMMOW J
KIRBY J
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT ADELAIDE ON WEDNESDAY, 14 AUGUST 2002, AT 2.58 PM

Copyright in the High Court of Australia

MR R.J. WHITINGTON, QC:   May it please the Court, I appear with my learned friend, MR M.B. MANETTA, for the applicant. (instructed by Vincent Toole)

MR B.R.M. HAYES, QC:   If the Court pleases, I appear with my learned friend, MR R.A. NORMAN, for the respondent. (instructed by Robert Norman and Associates)

GUMMOWJ:   Yes, Mr Whitington.

MR WHITINGTON:   May it please the Court, this application concerns the rating of properties by local government across South Australia.

GUMMOW J:   It is now limited to the 1999 Act, is it not?

MR WHITINGTON:   Yes it is, yes, for obvious reasons.  What we are seeking essentially, if we are granted leave, is to pursue an appeal in respect of a declaration ‑ ‑ ‑

GUMMOW J:   Well, one of the problems, I suppose, is if there was a grant of leave there would be a cross appeal or notice of contention raising competency of the proceeding in the Supreme Court, would there not?

KIRBY J:   That itself is an interesting question.

GUMMOW J:   Which is an interesting question.

MR WHITINGTON:   It is indeed.  We say a number of things about that, with respect.  First of all, there is no suggestion that the respondent has, if you like, disowned the decision in its favour, because if it had then there would be no issue.  On the other hand, it has not sought to go back to the Full Court to seek to have a final ruling on that question, nor has it sought to cross-appeal in this Court.  Now, if it went back the ‑ ‑ ‑

GUMMOW J:   It is approbating and reprobating, I think you might say.

MR WHITINGTON:   They are, yes, and of course it would always ‑ ‑ ‑

KIRBY J:   Well, in fairness to them, I think they are given in the Full Court, but the Full Court said, “Well, we would rather deal with the merits” and went straight to the merits and therefore did not get to that point, but, in a sense, it is a logical threshold point and not without some interest.

MR WHITINGTON:   That is right and, indeed, it is a point that perhaps should have been dealt with by the Full Court in any event, but it has not been, and our learned friends now have the benefit of a judgment and we are in a position where, if you like, have a judgment against us.  If, in fact, the court below had ruled that the procedure was incompetent, there was another procedure open to us but we are now, if you like, caught between the devil and the deep blue sea ‑ ‑ ‑

KIRBY J:   What was that, a sort of judicial review, was it?

MR WHITINGTON:   Judicial review, yes, but before the District Court. It was said that because of section 276 of the Local Government Act, which provides for a right to challenge the validity of a rate which, arguably, might include an assessment of rates, and also provides that there should be no other challenge in any other court, we could have pursued that option if the Full Court had finally pronounced that our appeal was incompetent.

KIRBY J:   And you are out of time to do that now, are you?

MR WHITINGTON:   We would be out of time in respect of ‑ ‑ ‑

GUMMOW J:   One year.

MR WHITINGTON:   One year, yes, but there has been another recent rates notice.

KIRBY J:   So the issue could still be litigated in the District Court.

MR WHITINGTON:   Yes, because, from my client’s point of view, the issue of principle in the future is as important as the $11,000 or $12,000 it has paid so far, because it is in the position where the land would probably stay as it is ‑ ‑ ‑

KIRBY J:   Have you ever thought of digging the fence up?

MR WHITINGTON:   That has been raised and can I tell the Court the odd thing:  the fence was put there originally as a windbreak and in fact ‑ ‑ ‑

KIRBY J:   What, to keep the sheep out.

MR WHITINGTON:   No, that came later, your Honour.  The fence did not, in fact, enclose the church originally, it ran north/south, it was a corrugated iron fence as a windbreak and then a ring-lock wire fence was added across the block 18 months later to keep the sheep out and, later again, when a boundary fence was built, the rear fence was replaced with a corrugated iron fence.

KIRBY J:   I did not think it would be to stop the sheep going astray.

MR WHITINGTON:   We did put that to the Full Court and they did not seem to take much heed of that, if the Court pleases.

GUMMOW J:   We had better get down to the tintacks of the 1999 Act, should we not.  Is there no specific exemption for church land?

MR WHITINGTON:   There is no exemption, your Honour.  There used to be an exemption.  There is now no exemption; rather, there is a provision for rebate.

GUMMOW J:   For a rebate, yes.

MR WHITINGTON:   That is section 162.

GUMMOW J:   Yes, that is right.

MR WHITINGTON:   And we would ask your Honours to really put side by side section 148 and section 162, because that is really where the matter turns.  Section 148 says that:

Rates may be assessed against –

(a)  any piece or section of land subject to separate ownership or occupation;

GUMMOW J:   Well, that is not the way the Full Court approached it, is it?

MR WHITINGTON:   No, not at all.  No, the Full Court, we say, did not approach it through the provisions at all, which is why we are here.  We accept, ordinarily, this is not a matter which would interest this Court, because it is a matter of unique local legislation, but, regrettably ‑ ‑ ‑

KIRBY J:   Well, as far as I am concerned, I agree with Justice Callinan, I mean we are the Supreme Court of Australia and if it is a mistake, just because it is a local statute does not mean we do not deal with it.

MR WHITINGTON:   If I put that another way, we perhaps would not be here if the Full Court had addressed the matter through the legislation, but rather they skated over the surface, in our respectful submission.

GUMMOW J:   Well, that may be right, but they did say that 148 was an enabling provision.

MR WHITINGTON:   Yes.

GUMMOW J:   Where, if anywhere, did they locate the taxing provision?

MR WHITINGTON:   They did not, but, in fact, if one turns back to section 146, it is there.

GUMMOW J:   Section 146, yes.

MR WHITINGTON:   Can I explain the structure to the Court, briefly?

GUMMOW J:   Yes.

MR WHITINGTON:   Section 146 confers the power to impose the rates.  Section 147 then defines the subject matter of the power.  It says, “All land within the area of a council is rateable”, but it then goes on to exclude certain land as a matter of description or definition and that exclusion, therefore, involves the application of the words of the section, for the facts and circumstances of each case.

HAYNE J:   Now, is any of those exceptions in 147 engaged?

MR WHITINGTON:   No, but can I just point this out to your Honour ‑ ‑ ‑

HAYNE J:   So, can I just understand, if we pause the inquiry at that point, all land in the area of the council, at least including this land, is rateable?

MR WHITINGTON:   Yes, precisely.

HAYNE J:   Yes.

MR WHITINGTON:   Yes.  We then go to section 148, and this sets in train the mechanism for the imposition of rates, and the first step is to say, you must identify the unit of land to be rated, because, your Honour, you must then value that unit of land to apply the percentage rate to it.  So section 148 identifies the unit of land to be the subject of the assessment.

KIRBY J:   And the key for separate assessment is “separate ownership or occupation”?

MR WHITINGTON:   Yes, precisely.

KIRBY J:   And you say that that is not engaged in this case.

MR WHITINGTON:   Yes, it is engaged, your Honour, because we would say that this is land in one title, one allotment, in the “same ownership and occupation”, so prima facie it is engaged and an assessment can be made against this land, but only against this land.

KIRBY J:   But there is no separation of ownership or occupation of the land on the other side of the corrugated fence.

MR WHITINGTON:   Precisely, and that is where we say the Full Court fell into error.  We then go to section 162, if I can be short about it, and there is the rebate provision, and the Court will note it is not discretionary; it provides for an automatic rebate.  It says:

The rates on land containing a church or other building used for public worship (and any grounds) –

and I will omit the next phrase –

will be rebated at 100 per cent.

Now the land there can only be the land first identified in section 148 ‑ ‑ ‑

KIRBY J:   Well it has to be rateable land, because it is the rates on there.

MR WHITINGTON:   Yes, and it has to be the unit of rateable land.

HAYNE J:   How do you take that step?  That is the critical step that you have to take; how do you take it?

MR WHITINGTON:   We say, your Honour, that land is rateable, but certain rates are rebatable.  Now they are rebatable on the land, which is rateable.  The only land which can be rated, the only land which is rateable, for these purposes, is the land which is assessable and so section 148 says that what is assessable to rates is an entire allotment; that is using a label.  Section 148 provides one authorised exception for subdivision by the council.  That is if the one title is in separate occupation.

GUMMOW J:   Now the Full Court said 148 was not a restraint on power in any way; they just presented local authorities with a choice.

MR WHITINGTON:   Yes, but, with respect, we do not understand that. Our submissions is this:  the power is in section 146, but that is the broad power to impose a rate, but then a mechanism must be engaged by which a valuation then and an assessment and an imposition takes place and so we say the Full Court has really not gone into the matter at all deeply.

KIRBY J:   But I agree with Justice Hayne; the key thing you have to overcome is an ambiguity in 162 and you have to say 162 is really referring back to 148 in the one unit of land, but it does not say that; it just says, “the rates on land containing a church will be rebated”.

HAYNE J:   And when read in the context of other rebates, which fasten exclusively on use or occupation, but not be it said ownership, how do you make that link between 148, dealing with “separate ownership or occupation” ‑ ‑ ‑

KIRBY J:   And can I add, and in a society, which is a secular society, in which, at least arguably, a church might have an area which is discrete in a church used area of land, but a vast mass of other land on missions and so on that one would think ought not, or may not be, in the decision of the local authority, the rating authority, be given this rebate.

MR WHITINGTON:   Well there are a number of questions there, if the Court pleases.  Can I say first that the matter extends beyond churches to schools and there has been a proliferation, in this State at least, of private schools, and the same issue arises for them; if they have immediately surplus land, they are liable to have the council notionary subdivide and rate then.

KIRBY J:   Well what is so wrong with that?  At least, why is that not available to the rating authority?

HAYNE J:   When a rebate is dictated by occupied and used; “occupied . . . and being used”, see 165(1)(b).

GUMMOW J:   Or it starts back at 160, 161.

MR WHITINGTON:   Well, perhaps could I draw the Court’s attention first of all to section 159(6), which I think goes to the heart of some of the questions the Court is posing.  If the Court pleases, there are two techniques the Act adopts to deal with the issue of mixed use that the Court is raising with me:  the first technique is to allocate by reference to relative degrees of use and so, in certain of the rebate provisions there is a predominant use test; the other technique the Act adopts is to separate out relative uses by reference to the portion of the whole land that hosts that use.  Now one sees that in section 159(6).  It says:

If –

(a)  land is used by a person or body for purposes on which an entitlement to a rebate is based in pursuance of this Division (Category A purposes) and for business purposes or other purposes connected with the production of income (Category B purposes); and

(b)  it is possible to separate the part of the land used for Category A purposes from the part of the land used for Category B purposes

the council is not required to grant a rebate –

in respect of the Category B land.  So to answer your Honour Justice Kirby’s question, if, in fact, there was a large tract of land containing a church and it was being put to another use, which was a productive use, it could be divided up pursuant to the power contained in section 159.  But we say that implies there is no other basis to read into the rebate provision a power to divide up the land by reference to dairies which host different uses.

HAYNE J:   Well, the argument against you, I would anticipate, would be that subsection (6) reveals that “land” is used simply as a generic term and the critical question for rebate is use, and that part of the area of the earth’s surface that is subject to use is the critical element.

MR WHITINGTON:   Well, your Honour, I accept that that is, in a sense, the argument.  We say the answer is pretty clear our way.  If I could take the Court through the various provisions briefly ‑ ‑ ‑

KIRBY J:   Yes, but if we concentrate on use, you are not actually using that land for religious purposes; that land does not contain a church or other building used for public worship.  Just as land, you can discern a border and the particular land, which is on the other side of the corrugated fence, cannot be said to be used for public worship; the church is on the other side of the fence that you have erected.

MR WHITINGTON:   But that, we say, makes the matter quite arbitrary, but, depending on precisely where the ‑ ‑ ‑

HAYNE J:   Taxing commonly is.

GUMMOW J:   Yes, but your argument makes the exemptions rather extravagant.

MR WHITINGTON:   But it would be a rare thing for land containing a church to be an extravagant tract of land.

GUMMOW J:   Well this one seems extravagant though.

MR WHITINGTON:   Well it is, I think, a little over three acres and fit for a few sheep to graze on, who have strayed on the other side of the fence, but ‑ ‑ ‑

GUMMOW J:   But in the old Ecclesiastical law, it is not part of a curtilage of the church.

MR WHITINGTON:   No, it is not; the curtilage is a very narrow expression and the notion of church grounds is far wider than the curtilage.  We come back to the notion of the rates on land containing a church.  The expression “land containing a church” implies something to contain it; that implies some boundary.  Now, in the ordinary course, that would be a title boundary, it would not be some geographical or geophysical boundary, because it would not necessarily be the case that there would be internal boundaries within a title boundary.  To make the Act work that way makes the Act turn on a fortuity.  So that the concept of the land containing a church, we say, must involve title boundaries and that is consistent then with the rest of the rebate provisions, because, as I say, section 159(6) permits a real division of land within one title boundary, where the separate area is hosting separate uses can be identified.

Section 160 does rely on use, where there is a mixed use; it uses the expression, “predominant use” and that is the test.  Section 161 relies on a predominant use test.  Section 162 is our case.  It does not rely on a predominant use test.  Section 163 relates to public cemeteries; perhaps I will not stay with that, but it does not rely on it, but ‑ ‑ ‑

GUMMOW J:   Well, it does not say “predominantly used for a cemetery”.

MR WHITINGTON:   No, I do not think that is going to attract the attention of the Court; I prefer to focus on the schools and the churches rather than the cemeteries.  Section 164 really stands in a class of its own.

GUMMOW J:   Well, it is a special arrangement for the zoo.

MR WHITINGTON:   Yes, and there was under the old Act as well.  Section 165 talks about “occupation” ‑ ‑ ‑

HAYNE J:   And “use”.

MR WHITINGTON:   And “use”, but it does not use a predominant use test.

HAYNE J:   No, you have to have both, occupation and use.

MR WHITINGTON:   You have to have occupation and use but, you see, we would say that it is land which has both been occupied and used, that begs the question, “What is the land?”  We are back to the notion of land being defined in some legal way and we say why should that definition not be the definition adopted in section 148 for the assessment.  If section 148 permits an assessment by reference to allotments of land or separate titles of occupation, why should it not be so that the rebate, when it talks about land, is talking about the same concept of land?

GUMMOW J:   Because it will unnecessarily deplete the revenue without furthering the particular purpose for the giving of the exemption.

MR WHITINGTON:   But, we would submit, from the point of view of the revenue, that is probably likely to be a minimal problem; there is no suggestion that the coffers of Mt Gambier have been ruptured by an argument over the size of this land and the fence internally dividing it, but, of course, we do say on a State-wide basis, viewed from the other perspective, this is a very serious matter for churches and schools.  Take the case for school, for instance:  the school is contained on land, the school occupies the land, but it cannot at present, in an immediate sense, use all of that land.  That is, it has not the resources to develop it, but it intends to in the future.  On the council’s approach, it would be entitled to, if you like, arbitrarily sever the undeveloped land and rate that and impose a burden on that institution which is really contrary to the intention of these benevolent provisions.  After all, they are intended to be benevolent provisions.  I accept that is a taxing Act, but, on the other hand, they are intended to be beneficial and benevolent provisions.

KIRBY J:   Well they are, but then you have to ask, what is the formula for the beneficence, and it does seem to be use and occupation.  On that basis, by your corrugated fence, use and occupy the part with the church for the purpose relevant to the rebate, you do not use and occupy the part that is beyond the fence for the rebate.  The rebate is a special privilege, the rate is the general and you have not brought yourself within the scheme of the rebates in respect of that part of the land which is not being used for the church for religious purposes or anything connected with that.

MR WHITINGTON:   But, in our respectful submission ‑ ‑ ‑

KIRBY J:   Query, what would happen if you take your fence down?

MR WHITINGTON:   Yes, but with great respect, your Honour, that really highlights the structure of section 162.  Can I take the Court back to it for a moment.  It does use the expression “used”, but that is only in the context of the alternative identification.

KIRBY J:   Yes, but it goes on:

or land solely used for religious purposes ‑ ‑ ‑

MR WHITINGTON:   We are not relying on that limb, your Honour; we are relying on the first limb:

The rates on land containing a church or other building used for public worship ‑ ‑ ‑

KIRBY J:   Well the words:

church or other building used for public worship –

that is an adjectival clause.

MR WHITINGTON:   Yes, “used for public worship” qualifies the building, so as to make it, if you like, justum generis with the church, but ‑ ‑ ‑

GUMMOW J:   You are not saying the church can qualify if it is not used for public worship, are you?

MR WHITINGTON:   Well, we are saying that is treated as being self‑evident in the case of a church ‑ ‑ ‑

GUMMOW J:   Well, it is not true of all religious buildings.

KIRBY J:   There are derelict churches too, nowadays.

GUMMOW J:   There are churches used for private worship.

KIRBY J:   And some churches are used as restaurants nowadays.

MR WHITINGTON:   Yes, and I accept ‑ that is why the expression “used for public worship” does qualify both nouns.  It must be a church used for public worship.  But the critical thing, we say, is that it is land containing a church; this is land containing a church, this is land within the boundaries defined by section 148 and when the two interact and are harmonised, we say, that is the only reasonable construction.  If the Court pleases.

GUMMOW J:   Thank you, Mr Whitington.  We will take a short adjournment.

AT 3.21 PM SHORT ADJOURNMENT

UPON RESUMING AT 3.22 PM:

GUMMOW J:   We do not need to hear you, Mr Hayes. 

In our view, the construction placed on the legislation by the South Australian Full Court in the decision now reported in (2002) 81 SASR 382 was correct. Accordingly, special leave is refused and refused with costs.

We will adjourn to reconstitute.

AT 3.23 PM THE MATTER WAS CONCLUDED