Jehovah's Witnesses v City of Mount Gambier No. Scciv-00-873, Scciv-01-279
[2001] SASC 163
•23 May 2001
JEHOVAH’S WITNESSES CONGREGATIONS v CITY OF MOUNT GAMBIER
[2001] SASC 163
Land and Valuation Division
DEBELLE J. Jehovah’s Witnesses Congregations have issued two sets of proceedings in this Court concerning rates paid by them to the Corporation of the City of Mount Gambier (“the Council”). Shortly stated, they claim that the Council has failed to give them the full benefit of an exemption from rates for church land. The proceedings were heard together. The evidence in one set of proceedings is evidence in the other.
The Relevant Land
Jehovah’s Witnesses Congregations own a large allotment of land on Wireless Road, Mount Gambier. The land is within the area of the Council. The land was originally purchased on 22 November 1984 by Adelaide Congregation Jehovah’s Witnesses Incorporated and until 9 December 1991 that body held the land on trust for the religious purposes of the local congregation of Jehovah’s Witnesses at Mount Gambier. On 9 December 1991 Jehovah’s Witnesses Congregations, a company limited by guarantee, assumed the functions of trustee of the trust and became the successor in title to the rights, obligations and liabilities of Adelaide Congregation Jehovah’s Witnesses Incorporated. For convenience, I will refer to both bodies as “the Congregation”.
On 1 March 1985 the Council granted development approval to the Congregation to construct a place of worship and associated car parking and landscaping on its land. The Congregation erected a church on the land in May 1985. Since that time it has been used as a place of public worship. The land immediately surrounding the church was landscaped. However, a little less than one half of the land was developed and used for the church, car parking and landscaping. The balance has always been undeveloped land. I will refer to it as “the vacant land”. The total area of the land owned by the Congregation is approximately 13,780 square metres. The church land comprises 5,891 square metres. The vacant land comprises approximately 7,889 square metres. Shortly after the construction of the church, a galvanised iron fence was erected running in a north-south direction from Wireless Road to the rear boundary of the land. It divided the vacant land from the church land. Fences also mark the rear and side boundaries of the church land.
On 17 December 1997 the Congregation was granted development approval for the division of the whole of its land into two separate allotments. The Congregation did not proceed with the division of the land.
Differential Rates
Since 1985 the Council has declared differential general rates on rateable land within its area. The differential rate is declared according to the locality of the land. Two differential rates are imposed. One applies in the City Centre Zone. The other applies in all other zones in the area of the Council. The appellant’s land is situated outside the City Centre Zone. The Council has not declared differential general rates on any basis other than locality.
Dispensation from Rates
The Local Government Act 1934 and the Local Government Act 1999 both have provided at relevant times dispensation from rating to a number of bodies or organisations including churches and other religious bodies. The manner in which the dispensation has been provided to churches and other religious bodies has varied.
The 1934 Act provided an exemption from rating. Until 1988, when the 1934 Act was amended by the Act No. 33 of 1988, that exemption was to be found in the definition of rateable property. The relevant part of s 5 of the 1934 Act originally provided:
“Ratable property—
(i)... means all buildings and land ... except any church, chapel, or buildings used exclusively for public worship.”
In 1946 the definition was amended to include land as well as buildings used exclusively for public worship. The relevant part of the definition then read:
“any land or church, chapel, or buildings used exclusively for public worship.”
The 1934 Act was amended extensively by No. 33 of 1988 in relation to, among other things, the imposition and recovery of rates by councils. The definition of rateable property in s 5 was repealed and, in its place, rateable property was defined by s 5 simply to mean land that is rateable under Part 10 of the Act. Part 10 of the Act was also amended. Part 10 comprises s 167 to s 194. Section 168(1) provided that, subject to subsection (2), all land within the area of a council is rateable. Subsection (2) then set out a list of land uses exempt from rates which, to a large extent, reflected the exemptions which had formerly existed in s 5. They included a church. The relevant part of s 168(2) provided:
“The following is not rateable: ...
(c) (i) a church or chapel and its grounds;
or
(ii) land used solely for religious purposes.”
The expression “and its grounds” is effectively an adjectival phrase which qualifies both a church and a chapel in para (i). That accords with common usage. Furthermore, to conclude otherwise would mean that the grounds of a chapel would not be rateable but the grounds of a church would. That would be both absurd and devoid of practical reality. Thus, s 168(2)(c) extended the definition to church grounds, although as a matter of practical reality that was probably the effect of the exemption in s 5.
In 1999 the Local Government Act was subjected to a comprehensive review including the provisions relating to the rating of land. Section 147(1) of the 1999 Act provides that all land within the area of a council is rateable except land within a specific exemption. Most of the exemptions are provided in s 147(2). The exemptions do not include church land or land used for religious purposes. Instead, a rebate is provided for such land by s 162 which is in these terms:
“The rates on land containing a church or other building used for public worship (and any grounds), or land solely used for religious purposes, will be rebated at 100 percent.”
Thus, whether by exemption or by rebate, church land or land used solely for religious purposes enjoys what is in effect a dispensation from rating.
Since 1985 when the Congregation’s land has been disposed as church land on one side of the fence and vacant land on the other, the Council has recovered rates in respect of the vacant land but not the church land. The Congregation claims that the vacant land should also enjoy the exemption as it was church land. In 1998 the Congregation claimed that the Council was wrongly recovering rates in respect of the vacant land. By letter dated 12 January 1998, the Congregation’s then solicitors wrote to the Council stating that the whole of the land was exempt from payment of rates and sought recovery of the rates paid in the past for the vacant land on the ground that they had been paid under a mistake of law. By letter dated 19 January 1998, the Council denied that it had been wrongly recovering the rates. The Council’s letter stated, in effect, that the Council adopted the assessed value of the whole of the land owned by the Congregation and then applied the rate which had been declared for that locality (then 0.0170 cents in the dollar) to the percentage of the land which was vacant land. The Congregation then did not pursue the matter any further. It continued to pay its rates.
In 1999 the Congregation instructed its present solicitor to pursue the question of the rateability of the vacant land. By letter dated 4 October 1999, the solicitors wrote to the Council claiming the land was not rateable. The Council replied by letter dated 15 October 1999 and rejected the claim. The Congregation’s solicitor and the Council exchanged further letters. On 28 March 2000 two representatives of the Congregation met the Council’s chief executive officer. The Congregation then handed the Council a copy of an opinion of counsel. By letter dated 24 July 2000, the Council replied that the vacant land was not used for religious purposes and the Council would continue to recover rates in respect of that land.
The Congregation Appeals - Action No. 873 of 2000
I turn to the issues in the proceedings in this Court which are numbered 873 of 2000, which purports to be an appeal to this Court against the rating of the vacant land pursuant to s 156(12) of the Local Government Act 1999. The proceedings were issued on 14 September 2000. The appeal is against the Council’s decision as conveyed in its letter dated 24 July 2000.
The Council objects to the competency of the appeal. The objection must be upheld. Section 156 of the 1999 Act authorises councils to declare differential rates. It includes a number of provisions which apply where a council declares a differential rate according to the use of land. Section 156(9) provides a right of objection. It is in these terms:
“(9) A ratepayer, if of the opinion that a particular land use has been wrongly attributed to the ratepayer’s land by the council for the purpose of levying differential rates, may object to the attribution of that land use to the land.”
If dissatisfied with the council’s decision on the objection, the ratepayer may appeal to the Land and Valuation Court: s 156(12). It is apparent that subsection (9) applies only where land use is relevant to the declaration of the differential rate. There is no other purpose for this provision. As already noted, the Council declares a differential rate according to locality. It does not declare a differential rate by land use. The Congregation could not, therefore, rely on s 156(9) for the purpose of challenging the Council’s decision to rate the vacant land. The consequence is that the right of appeal under s 156(12) is not available to the Congregation.
Mr Manetta, who appeared for the Council, sought to interpret correspondence from the Council to the Congregation’s solicitors as indicating that the Council was recovering a differential rate by reference to land use. The argument fails for two reasons. First, the letters do not have the meaning he puts on them. Secondly, the manner in which the Council recovers its rates precludes a differential rate by land use. As already stated, the Council declares a differential rate by locality. It applies the differential rate applying in the locality in which the Congregation’s church is located to the value of the whole parcel but only in respect of that portion of the Congregation’s land which is vacant land. The Council is thereby recovering its rates in respect of part of the land.
There are other difficulties with the purported appeal. One is that the appeal is instituted well outside the time limit of 14 days prescribed by Rule 97.04 of the Supreme Court Rules. The Congregation has made no application for an extension of time within which to appeal. However, as the appeal is incompetent, it is unnecessary to stay with those questions.
For all of these reasons, the appeal is incompetent and must be dismissed.
The Congregation Seeks Declarations - Action No. 279 of 2001
The Council’s objection to the competency of the appeal was raised at an early stage. In order to circumvent that difficulty, the Congregation’s solicitor issued the summons in action number 279 of 2001. In that action, the Congregation seeks various orders in the nature of declarations and other consequential relief. Shortly stated, the declarations which the Congregation seeks are that the whole of the land was at all relevant times either not rateable property under the 1934 Act or that the rates were subject to a rebate pursuant to s 162 of the 1999 Act. The Congregation then seeks consequential orders that the assessment of rates in respect of the land are void and of no effect. The Congregation seeks a further consequential order that the Council pay the Congregation the sums unlawfully demanded as rates in the years ending 30 June 1986 to 30 June 1999.
The Council contended that at all material times there was a statutory bar to an action seeking declarations of this kind. Insofar as relief was sought under the 1934 Act, the Council relied on s 708 and s 709 of the 1934 Act which provided:
“Certiorari taken away
708. No valuation, assessment or rate, no order for declaring or making a valuation, assessment or rate, or for making or allowing any alteration of a valuation, assessment or rate, and no proceedings in relation to a valuation, assessment or rate, can be removed by certiorari or otherwise to the Supreme Court.
Jurisdiction to try title to certain office, etc.
709. The proceedings— ...
(e) to try the validity of any rate; ...
may be taken before, and be determined by, a court of summary jurisdiction in a summary way.”
Insofar as the Congregation made its claim under the 1999 Act, the Council relied on s 276(1) and (7) of that Act:
“Special jurisdiction
276. (1) The following proceedings may be taken before, and determined by, the District Court: ...
(e) proceedings to try the validity of a rate or service charge; ...
(7) Except to the extent that this or another Act provides an express right to bring particular proceedings, no proceedings may be brought before a court or tribunal constituted by law— ...
(c) to challenge a valuation, assessment, rate or service charge, or to make or allow an alteration to a valuation, assessment, rate or service charge.”
For the following reasons, the Council’s argument misconceives the operation of these provisions. They do not apply to the relief which the Congregation seeks.
The declarations that the Congregation’s land is not rateable do not in any respect challenge a valuation, assessment or rate, nor seek to try the validity of a rate. The Congregation accepts that the Council has adopted the Valuer-General’s assessment of the value of its land and it accepts that the Council has declared a rate for the locality in which its land is situated and does not seek to challenge either. Instead, the Congregation merely seeks a declaration that its land is not rateable land. At no time was there any statutory bar either under the 1934 Act or under the 1999 Act to this action insofar as the Congregation seeks such a declaration.
However, different considerations affect the Congregation’s application for the consequential declaration that the assessments of rates in respect of its land are void and have no effect. The relief sought in that application discloses what appears to be some confusion between the adoption of the assessments by the Council, the declaration of the rate, and therecovery of rates from the Congregation. While in popular usage, people might speak of an assessment of rates, that does not in law occur. Instead, a council adopts an assessment or assessments of the value of the land in its area and, with that knowledge and with the knowledge of what revenue it seeks, it declares a rate in the dollar. Having discharged both tasks, it then recovers what is due by way of rates from owners or occupiers in the assessment book. That procedure has long existed and has statutory expression in both the 1934 Act (in s 167 to s 194(a)) and in the 1999 Act (in s 146 to s 188). Unfortunately, the distinction between assessment of value, declaration of rates and recovery of rates has not always been recognised in the legislation. So, s 168(5) of the 1934 Act and s 148(1) of the 1999 Act are in the same terms and provide:
“Rates may be assessed 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.”
Instead of the word “assessed” it would have been preferable to use a word such as “levied” or “recovered”.
Mr Hayes QC, who appeared for the Council, relied on the use of the word “assessed” in s 168(5) and s 148(1) and contended that the word “assessment” in both s 708 of the 1934 Act and in s 276(7) of the 1999 Act referred, among other things, to an assessment made pursuant to those provisions. I do not agree. So far as the 1934 Act is concerned, there is ample work for the word “assessment” to do without relying on the incorrect usage of “assessed” in s 168(5). The drafting of s 276(7) of the 1999 Act reflects that in s 708 of the 1934 Act without, it seems, a consideration of what is meant by an assessment. I do not think it was intended to pick up the use of the word “assessed” in s 148.
I turn to the substantive question whether the Congregation is entitled to the declarations it seeks. As is apparent from the statutory provisions already mentioned, the effect of both the 1934 Act and the 1999 Act is the same, namely, that the Congregation is not obliged to pay rates in the case of its church and the church grounds or in respect of land solely used for religious purposes.
The first question is whether the Council is authorised by the Local Government Act to recover rates in respect of land in one ownership and in one occupation. Mr Manetta relied on s 168(5) and s 148(1) and contended that it could not. It is convenient to repeat s 168(5).
“Rates may be assessed 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.”
As mentioned earlier, s 148(1) is in the same terms. Mr Manetta submitted that it was appropriate to apply the principle of expressio unius with the consequence that the authority of a council to recover rates in respect of any piece of land in separate ownership or occupation excluded an authority to recover rates in respect of part of land in one ownership and one occupation. I do not agree. That is not a correct application of the principle of expressio unius. That principle cannot be used to imply from a power or authority to do one thing a prohibition on doing another. It would not only be contrary to the ordinary use of language but contrary also to logic to use the principle in this way. Warnings as to the care to be taken with the principle have been repeatedly expressed: see, for example, Houssein v Under Secretary of Industrial Relations (NSW) (1982) 148 CLR 88 at 94; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 575; Wentworth v NSW Bar Association (1992) 176 CLR 239 at 250; Re Wakim; Ex parte McNally (1999) 198 CLR 511 at 605. Those warnings serve to emphasise the conclusion that the principle cannot be used in the way Mr Manetta contends.
Neither the 1934 Act nor the 1999 Act contains express power to recover rates in respect of part of land. However, that power is a necessary incident of the exceptions from rating in the 1934 Act and in the 1999 Act and in the rebate system in the 1999 Act. I refer first to the 1934 Act. In the case of the exceptions listed in either s 5 or after 1988 in s 168, 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. Other instances where a Council would rate part of land are provided by s 168(2)(b) which exempts from rates the land used or held by the Crown and by s 168(2)(e) which exempts from rates land occupied by a university. In each case, domestic premises are not included within the exemption. Thus, in each case, if domestic premises existed on part of the land, they would be excluded from the exemption and would be rateable land. The Council would then be required to decide what land was used for the domestic premises and what fell within the exemption. It is unnecessary to multiply the examples. Thus, a council has power to recover rates in respect of part of land. In each of the listed examples, the Council will look at all of the relevant facts and circumstances and objectively decide which land is exempt and which is not, and will be entitled to recover rates in respect of the land which is not exempt. What is to be examined is the use of the land and, as with other rating issues, regard is not to be had to the subjective attitude of the owner or occupier towards the land: Abbott v Commissioner of Land Tax (1978) 38 LGRA 417 at 420 – 421.
In the case of the Congregation’s land, part of the land is unquestionably exempt from rating being the church and its grounds and the Council has always allowed the exemption for that part of the land. The land on the other side of the fence has always been vacant land. The vacant land is divided from the church land by a substantial fence. Apart from the fact that the two parts of the Congregation’s land adjoin one another, there is no obvious connection between them. It was not suggested that the fact that the fence has two gates had any relevance. The existence of the gates means no more than that access is directly available, if required, from one parcel to the other without having to proceed on to Wireless Road. The church land is one integral unit comprising the church, car parking and landscaping, and is readily apparent as such. That fact, together with the existence of a substantial fence dividing the church land from the vacant land would cause a reasonable passer-by to conclude that one part was being used as a church and the other part was vacant land not used in association with the church.
I do not think that the Congregation’s intentions in respect of the land are relevant since what is required is an objective assessment of the use made of the land in each rating year. Even if those intentions were relevant, the Congregation has not proved any particular intention at any time to use the land for any purpose. The fact that the Council obtained development approval to subdivide the land does not point to any use of the land and should, I think, be ignored.
Mr Manetta sought to rely on evidence that the vacant land has, on occasions, been used for car parking. The evidence is not strong. It is contained in an affidavit sworn by Mr Horsell, who has been a member of the Congregation since 1980. The effect of his evidence is that the vacant land has occasionally been used to provide overflow car parking for persons coming to the church for worship but this has not occurred regularly. He says that his memory is a little vague on the topic and he could only recall a number of occasions when cars were parked on the land. Those occasions are limited to about five special occasions. He says that cars have been parked on the vacant land on other occasions but, because of the effluxion of time, he cannot recall specific instances. The evidence is not compelling. Furthermore, this use is altogether too infrequent to cause the land to be treated as part of the church land or as land used for religious purposes.
Mr Manetta also sought to rely on the decision in South Australian National Football League v City of Charles Sturt (1998) 97 LGERA 293 at 308. But that decision is of no assistance to the Congregation since it was common ground in that case that the parcel of land occasionally used for car parking and other uses was part of the SANFL land and used for football purposes. Furthermore, the evidence in that case indicated a greater usage of the land for car parking than the very infrequent and occasional use of the vacant land in this case.
In addition, Mr Manetta relied on the decision in Re St John’s Church, Bishop’s Hatfield [1967] P.113 which discussed the meaning of the curtilage of a church. It was held that, for land to be curtilage to a church, both must be occupied together and belong together in a physical sense. This decision does not assist. First, the decision was not followed in Re St George’s, Oakdale [1976] Fam. 210; [1975] 2 All ER 870. Secondly, as comparison of those two decisions indicates, in the ultimate result, what might constitute the curtilage of a church is a question of fact. Finally, the existence of the fences around the Congregation’s church and its land defines the curtilage of the church land. In particular, the dividing fence separates that curtilage from the vacant land. The two parts of the Congregation’s land appear to be two separate parcels of land. They do not appear to belong together.
For all of these reasons, the vacant land is separate from the church land and is not church land. There is nothing which points to any use of the vacant land for church purposes. Instead, the land is held by the church for some future and as yet unidentified purpose. For like reasons, it is not either land used solely for religious purposes or land used exclusively for public worship. The vacant land is not exempt from rates. There is, therefore, no basis for interfering with the decision of the Council requiring the Congregation to pay rates in respect of the vacant land. It follows that the Congregation is not entitled to the declarations it seeks.
The Claim for Overpaid Rates
For like reasons, it follows that the Congregation’s claim to recover overpaid rates must also fail. There is another difficulty with that claim in that part of the claim is statute barred. The orders sought in relation to the recovery of overpaid rates are expressed in these terms:
“5.An order that the defendant do pay to the plaintiff the sums unlawfully demanded by the defendant and paid by the plaintiff on account of the said assessments as follows:
Year Amount
85/86 $ 633.08
86/87 $ 567.00
87/88 $ 515.44
88/89 $ 628.92
89/90 $ 586.11
90/91 $ 772.44
92/93 $ 814.65
92/93 $ 827.32
93/94 $ 793.55
94/95 $ 840.18
95/96 $ 776.60
96/97 $ 1,083.35
97/98 $ 1,139.00
98/99 $ 1,139.00
TOTAL $ 11,116.64
6.To the extent necessary to permit recovery of any of the sums referred to in the preceding paragraph hereof, an extension of time within which to bring this action pursuant to s.48 of the Limitation of Actions Act, 1936.”
As this is a claim for money paid under a mistake of law, it must be commenced within six years after the cause of action arose: s 38(1) of the Limitation of Actions Act 1936. The action commenced on 29 January 2001. The claim is therefore out of time in respect of all rates paid more than six years before 29 January 1995.
The Congregation, therefore, seeks an order extending time and relies on s 43(3)(ii) of the Limitation of Actions Act. That provision authorises the court to extend time if it is satisfied:
“(ii)that the plaintiff’s failure to institute the action within the period of the limitation resulted from representations or conduct of the defendant, or a person whom the plaintiff reasonably believed to be acting on behalf of the defendant, and was reasonable in view of those representations or that conduct and any other relevant circumstances.”
The only evidence of a representation is contained in an affidavit sworn by Mr Kowarik. He says that, in May 1985, about the time when the church building was completed, he and the presiding overseer of the Congregation, Mr Collin Edwards, made a special visit to the Council to enquire about rates. His affidavit continues:
“We were introduced to someone who I understood was in charge of rating. I said to him words to the effect: ‘You’ve got our Kingdom Hall plans, now what is the situation with rates?’ He replied with words to the effect: ‘It’s only the land occupied by the Kingdom Hall itself and the sealed car park that is free of rates. But we’ll also give you the landscaped area around the car park. The rest of the land is not free and will have rates imposed on it.’ He further said: ‘That’s the way it is according to the law.’”
That is very vague evidence. It does not identify the person who is alleged to have made the statement. Furthermore, even if the statement was made, it is not a representation of the kind which would justify the Congregation acting upon it. In other words, it was not reasonable for the Congregation to fail to obtain advice and issue proceedings. The unidentified officer of the Council is plainly doing no more than stating his understanding of the operation of the rating provisions in the Local Government Act. It was open to the Congregation to get legal advice and issue proceedings. Finally, the obligation to pay rates occurs in each year. Each year marks a fresh obligation. In all the circumstances of the case, it is not just to grant an extension of time.
Orders
The Congregation has, therefore, failed in both of its proceedings.
In the action number 853 of 2000 there will be orders:
1. That the appeal is incompetent.
2. That the appellant pay the respondent’s costs of the appeal.
3.That the appellant pay the respondent’s costs of and incidental to the directions hearings on 10 January 2001, 31 January 2001 and 14 February 2001.
In the action number 279 of 2001 there will be orders:
1. That the plaintiff’s claims be dismissed.
2. That the plaintiff pay the respondent’s costs of and incidental to this action.
I direct the taxing officer proceed on the footing that both actions were heard together so that counsel fees for the hearing should be allowed on that basis.
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