Koutlakis v City of West Torrens - [2009] SASC 140

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
KOUTLAKIS v CITY OF WEST TORRENS
[2009] SASC 140
Judgment of The Honourable Justice Layton
22 May 2009
MAGISTRATES - APPEALS AND REVIEW
REAL PROPERTY - RATING OF LAND - RATES UNDER LOCAL GOVERNMENT LEGISLATION - RECOVERY OF RATES
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - RULES OF CONSTRUCTION - WHERE MEANING AMBIGUOUS OR UNCERTAIN - PRESUMPTIONS AS TO LEGISLATIVE INTENTION
Respondent Council commenced sale of land owned by the appellant under s 184 of Local Government Act 1999 (SA) in order to recover outstanding rates - appellant sought and obtained an interlocutory injunction in the Magistrates Court - after unsuccessful mediation the matter went to trial where the Council sought to recover rates and costs - Council was successful at trial and obtained a judgment sum comprising outstanding rates and the costs of proceeding under s 184 - whether Magistrate had power to give judgment for costs associated with s 184 - whether s 184 contains an implied right of action for a council to recover costs as a debt - whether notice pursuant to s 184 valid when it includes the costs of preparation of that notice.
Held: appeal allowed - it is not appropriate for a s 184 notice to include an amount for costs associated with its preparation and service - the inclusion of costs on the notice in this matter can be severed so that the notice is not invalid - the costs associated with a sale of property pursuant to s 184, including the costs of preparation and issue of the notice, can only be recovered after the sale or if voluntarily paid prior to sale - section 184 contains no right of action for a council to recover costs associated with that section as a debt.
Local Government Act 1999 (SA) ss 178, 183, 184, referred to.
Cobar Corporation Ltd v Attorney-General (NSW) (1909) 9 CLR 378; Josephson v Walker (1914) 18 CLR 691, applied.
Partington v Attorney-General (1869) LR 4 HL 100; Shepherd v Hills (1855) 11 Exch 55; 156 ER 743, discussed.

KOUTLAKIS v CITY OF WEST TORRENS
[2009] SASC 140
LAYTON J:

This appeal arises out of a dispute over the payment of council rates and costs imposed upon the appellant by the respondent council. The appellant and his wife are the registered proprietors of a property in Mile End. The respondent is the City of West Torrens, being the council responsible for imposing rates upon the Mile End property. The appellant appeals against an order of a Magistrate that judgment be entered against the appellant and his wife for the sum of $32,806.91.
The grounds of appeal are that the Magistrate erred in deciding that the appellant was indebted to the respondent for an amount of $32,806.91; in failing to find that the respondent’s right for recovery of debts was limited to unpaid “rates” as this is defined within the Local Government Act 1999 (SA) (“the Act”); and in failing to find that the amount that the respondent could recover was limited to arrears of rates, fines and interest by s 181(8) and (10) of the Act.
Background Circumstances
Prior to November 2000, the appellant and his wife paid rates for the Mile End property as they fell due. This dispute commenced in November 2000 when the appellant[1] failed to pay levy rates in the amount of $12.13. The appellant at that time maintained that he was not obliged to pay the rates. In the following years the appellant failed to pay more instalments of rates which became due. These amounts were left unpaid and accrued interest and fines while the appellant continued to dispute his obligation to pay rates.
[1] The appellant was acting for both himself and his wife. He was the person who dealt with the respondent, initiated the litigation and gave evidence. Hereafter a reference to the appellant includes his wife.
In the following years the respondent made numerous unsuccessful attempts to recover the unpaid rates from the appellant. Finally, on 26 June 2006 the respondent resorted to utilising its rights under s 184 of the Act whereby a council is permitted to sell land if an amount payable by way of rates in respect of that land is outstanding for three years or more. The respondent sent a notice to the appellant in accordance with the requirements of s 184 in the following terms (“the 26 July Notice”):
Rate Arrears – Assessment 24824 5, 12 Devon Street, Mile End 5031
Notice is hereby given that Council resolved at its meeting on 20^th June 2006 to take action pursuant to section 184 of the Local Government Act 1999 in respect of your land at 12 Devon Street, Mile End.
Section 184 of the Local Government Act 1999 provides that if an amount payable by way of rates in respect of land has been in arrears for three years or more, the council may sell the land.
Rates for 12 Devon Street, Mile End have been in arrears from 2000/2001, a period in excess of 3 years, as set out below:
[Inserted were specific amounts in relation to rates, fines and “legal fees”.]
The amount of the total liability for rates presently outstanding in relation to the land is $3,364.83.
If the amount of $3,364.83 is not paid in full within one month of service of this notice, the Council intends to sell the land for non-payment of rates.
Should you require further information, please contact Neil Lloyd on 84166232.
Yours sincerely
Trevor M Starr
Chief Executive Officer
On 25 August 2006 the appellant was served with a further notice which was expressed in the following terms (“the 25 August Notice”):
NOTICE REQUIRING PAYMENT OF RATES
ISSUED ON BEHALF OF CITY OF WEST TORRENS (‘the Council’)
Section 184 of the Local Government Act 1999 as amended
To:                  GEORGE KOUTLAKIS of 12 Devon Street, Mile End, SA, 5031
Also at:             293 Magill Rd, Trinity Gardens, SA, 5068
And to:             CHRISI KOUTLAKIS of 12 Devon Street, Mile End, SA, 5031
Also at:             293 Magill Rd, Trinity Gardens, SA 5068
And to:             REVENUE SA, GPO Box 1353, Adelaide, SA, 5001
1.In the Assessment Book the Principal Ratepayer(s) of the land comprised and described in Certificate of Title Register Book Volume 5666 Folio 541 (‘the land’) are GEORGE AND CHRISI KOUTLAKIS.
2.COMMISSIONER OF STATE TAXATION is registered on the said Certificate of Title as caveator.
3.Payment of rates to Council on the land has been in default since 2000.
4.At the date of this Notice the total amount owing to the Council is $5014.83 comprising rates (including fines and interest) charged on the land of $3364.83 and other amounts (including legal costs) of $1650.00.
5.Until full payment of the total amount, fines and interest continue to be raised pursuant to the Local Government Act 1999 as amended.
6.If the total liability for rates and other amounts is not paid in full within one month of service of this Notice, the Council intends to sell the land by public auction for non-payment of rates pursuant to Section 184 of the Local Government Act 1999 as amended.
DATED:9 August 2006
Peter J. Thatcher & Associates
Solicitor for City of West Torrens
The amount stated to be outstanding in this notice was $1,650 more than the 26 June Notice. The respondent submitted that this increase was due to the accumulation of legal fees and collection fees. On 4 September 2006 the appellant attended the premises of the respondent and met with the acting Chief Executive Officer, Ms Russo. During this meeting the appellant produced to Ms Russo a schedule of rates which he had calculated to be outstanding. The total amount outstanding as calculated by the appellant was $3,275.37. He at that point gave Ms Russo cash to that amount. Ms Russo accepted the money and wrote on Mr Koutlakis’ file receipt that “Mr Koutlakis paid $3,275.37 in rates and still owes Council $2,239.46 as per council records”.
On 5 September 2006 the respondent’s solicitors wrote to the appellant advising that the amount of $3,056.66 remained outstanding. This amount included the addition of further legal fees. The appellant responded by requesting a breakdown of the fines and costs, which led to further correspondence between the parties.
By letter dated 20 December 2006 the respondent’s senior accounting officer provided the appellant with a schedule of rates, fines and legal charges. The relevant text of that letter is:
Rate Arrears Assessment 24824 5, 12 Devon Street, Mile End
I refer to your letter dated 18/12/06 concerning the Final Notice issued for the above assessment.
You will be aware that Council commenced action under section 184 of the Local Government Act 1999 to sell the abovementioned land by auction due to the non payment of rates within the relevant time frame.
In proceeding with this action, costs have been incurred by Council, and those costs must be paid by the ratepayer along with the outstanding rates. To date you have only paid $3,275.37 on 4/09/06.
The costs incurred by Council along with the balance of rates due and the fines charged for non payment each month are reflected in the current outstanding balance shown on the Final Notice.
Please take note that until the amount is paid in full, the action to sell the land will continue and consequently costs will continue to accrue.
A schedule of the rates, fines and legal charges outstanding is attached.
Yours sincerely
Neil Lloyd
Senior Accounting Officer
The schedule of that letter, without descending into detail, began with the figure of $3,364.83 referred to in the 25 August Notice, indicated a receipt of $3,275.37 on 4 September 2006 and calculated that the balance with the further incursion of legal fees and fines was, at that date, the sum of $3,726.16.
On 10 January 2007 the appellant replied to Mr Lloyd’s letter, requesting particulars of the legal fees claimed as they were not particularised in the schedule but simply stated as lump sum amounts.
By letter dated 24 January 2007 the respondent provided the appellant with further particulars of the legal fees incurred.
On 8 February 2007 the respondent sent a further letter to the appellant which, inter alia, stated that the respondent had provided adequate notice of the outstanding amounts and therefore action under s 184 of the Act would continue unless the rates and costs were paid.
On 26 February 2007 a letter was sent by the respondent’s solicitors to the appellant advising that they had been instructed to proceed with the sale of the Mile End property in accordance with the notices served upon the appellant.
Six months later, on 20 August 2007, real estate agents were engaged to sell the Mile End property. On 17 September 2007 a “For Sale” sign was placed on the property, and the first open inspection was scheduled for 23 September 2007.
The Course of Litigation
On 21 September 2007 the appellant filed a claim in the Magistrates Court seeking an injunction preventing the respondent from dealing with the Mile End property. The appellant denied that he had not paid council rates for three years and asserted that the respondent did not have authority to sell the property. In the alternative, the appellant disputed the amount owing to the respondent. According to the supporting affidavit, the appellant’s primary argument was that his name was not properly stated on the rate notices.
On the same day that the application was filed, Magistrate Forrest granted the injunction sought subject to an undertaking by the appellant to pay such damages as may later be found to be appropriate.
On 9 October 2007 a Defence was filed by the respondent asserting that it was entitled to sell the Mile End property, and seeking an order permitting the sale to proceed.
On 4 March 2008 the parties attended a mediation conference before Magistrate Forrest. At the conclusion of the conference, the Magistrate ordered the respondent to file a statement setting out the respondent’s “points of claim” against the appellant. In accordance with that order, the respondent filed a document termed “Statement of Claim in Substitution of Defence” in which it claimed that the appellant was indebted to the respondent in the sum of $19,872.81. This amount was subsequently amended to read $23,120.26.
On 2 May 2008 the appellant then filed a document in response termed a “Defence and Counterclaim in Substitution of Claim”. In this document the appellant asserted that it had paid the respondent the sum of $3,275.37 “in full and final settlement” of the respondent’s claim for rates incurred from the 2000/2001 financial year to the 2005/2006 financial year. It also stated that an employee of the respondent, Mr Simpson, had advised the appellant not to pay rates until such time as the name of both the appellant and his wife correctly appeared on the Rate Assessment Notice. The appellant also counterclaimed alleging loss of rental income due to a tenant vacating the Mile End property because the tenant did not want to continue occupying the property during the sale process. The amount of the counterclaim was $12,721, plus costs and interest.
A trial was conducted before Magistrate Millard (“the Trial Magistrate”) over two days in August 2008. The Trial Magistrate gave reasons for decision on 23 September 2008, followed by supplementary reasons given on 14 November 2008 and 26 November 2008. The ultimate effect of these reasons was that judgment was entered for the respondent in the amount of $32,806.91 and that the appellant’s counterclaim was dismissed.
It is clear therefore that the history of this matter is somewhat unusual in that it began as an application by the appellant for an injunction and was later transformed into a claim by the respondent for unpaid rates and a counterclaim by the appellant for damages. It is for this reason that the respondent had commenced the process under s 184 but did not finalise the sale. One would expect that in the ordinary course of events, a council would not usually interrupt the s 184 process in order to attempt to recover the money by court proceedings.
The Reasons of the Trial Magistrate
The Trial Magistrate generally accepted the evidence of the respondent’s witnesses. Adverse comments were made in relation to the appellant, who was described at [91] as “an unimpressive witness”. The Trial Magistrate at [96] specifically rejected the appellant’s allegation that Mr Simpson had agreed to take no action with regard to unpaid rates. The Trial Magistrate found at [99] that it was not in dispute that the following amounts were outstanding:
·$4,015.41 in outstanding rates;
·$47.05 in outstanding levies; and
·$572.20 in fines for late payment.
The Trial Magistrate noted at [100] that the central dispute related to the claim for legal fees and agent’s costs, in that the respondent claimed to be entitled to recover legal fees on a solicitor/client basis and its agent’s costs in accordance with the provisions of s 184(11)(a) of the Act. Further, it was submitted by the respondent that these costs were recoverable regardless of whether or not there was a sale of the property.
The Trial Magistrate, at [106], was satisfied that the respondent was entitled to proceed pursuant to s 184 to recover rates, fines, levies and costs, and that the respondent had lawfully instructed its agent to sell the property to recover all outstanding amounts. However, the Trial Magistrate found at [121] that s 183(a) did not enable the respondent to recover fees paid to a collection agency, as there was an absence of clear statutory provisions entitling recovery of such costs and there were no contractual arrangements applicable.
In the final result, judgment was ordered for the respondent in the amount of $32,806.91 which included legal costs of, and incidental to, the s 184 process. Such costs included costs associated with the 26 June Notice, the preparation and serving of the 25 August Notice as well as legal and real estate agent’s costs incurred thereafter.
In the course of the argument before me on appeal, it was apparent that there was some lack of clarity as to the quantum of the legal costs claimed by the 26 June Notice, which was included in the sum of $3,364.83. The respondent submitted that the legal fees referred to in that notice were the consequence of a 2002 Magistrates Court judgment relating to a different dispute between the parties. However, the amount shown in the court judgment differed from that set out in the Notice. This minor discrepancy was overcome by the appellant conceding that as at 26 June 2006 the amount outstanding and which could appropriately be the subject of a s 184 notice was in fact a figure of $3,364.83.
Having conceded the amount stated in the 26 June Notice, the argument in this case, so far as quantum is concerned, begins with the payment of $3,275.37 by the appellant to Ms Russo on 4 September 2006. It was submitted by the appellant that this payment reduced the total amount of rates outstanding to just $89.46. The appellant says that it is this amount, plus any additional rates, interest and fines imposed up to the date of filing the claim, for which the respondent was entitled to claim. This amount was calculated by the appellant to be $759.56, plus interest and fines. It was also conceded that the judgment should include an order for costs as agreed or taxed pursuant to the Court Rules. In effect, the appellant submitted that the respondent was entitled to an amount which is substantially less than $32,806.91, which was ordered by the Trial Magistrate.
The respondent took issue with the calculation of $759.56 and submitted that this figure should be $4,015.41 exclusive of any argument as to legal costs.
There was therefore an issue between the parties as to the very basic starting point for the calculation of rates outstanding at the time of the judgment in the Magistrates Court. Accordingly, it was agreed between the parties that following my decision on appeal as to the primary arguments, there would need to be further submissions in respect of the records of the respondent on the amounts payable for the quarterly instalments, levies, interest and fines as well as any costs orders in respect of the trial and the appeal. I will therefore limit these reasons to the primary arguments and give leave to the parties to address me further on orders which I should make following the delivery of my decision.
The Issues and the Relevant Statutory Context
The primary argument of the appellant centres around a statutory interpretation point, which was not raised before the Trial Magistrate. There being no dispute over the capacity of the respondent to recover rates, the issue here is whether the overall effect of s 184 of the Act is that it permits the respondent to take action to recover costs incurred by proceeding under that section without a sale of land having occurred. As this is a matter of law based on facts which were already before the Trial Magistrate, it can appropriately be argued on the hearing of the appeal.
The relevant statutory context is as follows.
In s 178(3) of the Act it is made clear that a council can recover rates, from certain people, as if the rates were a debt. The meaning of “rates” in this context is defined in s 176 to include a service charge imposed under the relevant part of the Act. The meaning of “rates” within that section is further informed by s 181(8) and (10). Section 181(8) provides:
If an instalment of rates is not paid on or before the date on which it falls due –
(a)     the instalment will be regarded as being in arrears; and
(b)     a fine of 2 per cent of the amount of the instalment is payable; and
(c)     on the expiration of each full month from that date, interest at the prescribed percentage of the amount in arrears (including the amount of any previous unpaid fine and including interest from any previous month) accrues.

Section 181(10) provides:
An amount payable under subsection (8) in respect of outstanding rates is recoverable as a part of those rates.
In short, in a situation where rates are in arrears, the rates include any service charge, the outstanding instalments of rates (which are described in s 181(1)), together with a possible fine of 2 per cent, and interest in accordance with s 181(8)(c) of the Act. Each of these amounts are then recoverable as part of the rates.
The section, however, does not make any reference to the collection of costs by a council. The only relevant references to a council recovering its costs are in ss 183 and 184. Section 183 states:
183—Application of money in respect of rates
If a council receives or recovers an amount in respect of rates, the amount will be applied as follows:
(a)     firstly—in payment of any costs awarded to, or recoverable by, the council in any court proceedings undertaken by the council for the recovery of the rates;
(b)     secondly—in satisfaction of any liability for interest;
(c)     thirdly—in payment of any fine;
(d)     fourthly—in satisfaction of liabilities for rates in the order in which those liabilities arose.
Section 184 sets out a regime for the sale of land in order to recover outstanding rates. The relevant sections for the purposes of this appeal are as follows:
184 – Sale of land for non-payment of rates
(1)     If an amount payable by way of rates in respect of land has been in arrears for three years or more, the council may sell the land.
(2)     Before a council sells land in pursuance of this section, it must send a notice to the principal ratepayer at the address appearing in the assessment record –
(a)stating the period for which the rates have been in arrears; and
(b)stating the amount of the total liability for rates presently outstanding in relation to the land; and
(c)stating that if that amount is not paid in full within one month of service of the notice (or such longer time as the council may allow), the council intends to sell the land for non-payment of rates.
…
(5)     If the outstanding amount is not paid in full within the time allowed under subsection (2), the council may proceed to have the land sold.
…
(8)     An auction under this section must be advertised on at least two separate occasions in a newspaper circulating throughout the State.
(9)     If, before the date of such an auction, the outstanding amount and the costs incurred by the council in proceeding under this section are paid to the council, the council must call off the auction.
(10)   If –
(a)an auction fails; or
(b)an auction is not to be held because the land is held from the Crown under a lease, licence or agreement to purchase,
the council may sell the land by private contract for the best price that it can reasonably obtain.
(11)   Any money received by the council in respect of the sale of land under this section will be applied as follows:
(a)firstly – in paying the costs of the sale and any other costs incurred in proceeding under this section;
(b)secondly – in discharging any liabilities to the council in respect of the land;
(c)thirdly – in discharging any liability to the Crown for rates, charges or taxes, or any prescribed liability to the Crown in respect of the land;
(d)fourthly – in discharging any liabilities secured by registered mortgages, encumbrances or charges;
(e)fifthly – in discharging any other mortgages, encumbrances and charges of which the council has notice;
(f)    sixthly – in payment to the owner of the land.
…
(19)   This section does not apply where the payment of rates has been postponed under, or in accordance with, another provision of this Act (until the postponement ceases to have effect or unless the rates become rates in arrears under the terms of the relevant provision).
In short, s 184 allows a council to sell land upon which rates have been levied if those rates have been in arrears for three years or more. There are several preconditions to such a sale, in particular, that the council send to the principal ratepayer of that land a notice which complies with s 184(2) and (3); and that the amount due is not paid within a period provided for in the notice (being at least a period of one month). Thereafter a sale process by auction or private contract is set out in s 184(5) to (10). At this point, s 184(9) allows a person to prevent the sale of the land if he or she pays “the outstanding amount and the costs incurred by the council in proceeding under” s 184. Once a sale has been effected under s 184, the council must attribute the proceeds of the sale according to the priority set out in s 184(11), which provides that the “costs of the sale and any other costs incurred in proceeding under this section” must be paid in preference to rates and the discharge of other securities over the land.
The Recovery of Costs
With reference to the terms of s 184 set out above it is common ground between the parties that a council has power to recover its costs of proceeding under that section when:
1those costs are voluntarily paid pursuant to s 184(9); and
2when a sale has actually occurred pursuant to s 184(11).
However, the question that arises is whether a council has a right of action to recover those costs from a ratepayer outside of these two circumstances.
The appellant contended that the ability of a council to recover costs in relation to outstanding rates from a ratepayer is limited to that which is contained within the Act itself. Counsel for the appellant submitted that, unless a ratepayer voluntarily makes a payment pursuant to s 184(11), there are only two avenues by which a council may pursue recovery of their costs in relation to rates. The first is to take action as a debt pursuant to s 178(3) which would allow a council to claim costs pursuant to the relevant court rules and to distribute the proceeds of such recovery in accordance with the order of priority set out in s 183. Of course the costs awarded will be limited by the Court Rules and will often be substantially less than the actual costs incurred by a council. This is not the process which the respondent sought to activate in this case.
The second avenue which the appellant says would allow for the recovery of a council’s costs is by a sale of land pursuant to s 184. This section, as discussed above, delineates a process by which a council may recoup its rates and other costs, but it is not an action to recover a debt. No sale has occurred in this case.
Accordingly the appellant submitted that the respondent cannot recover its actual costs in this action as the claim falls outside the second abovementioned avenue for recovery.
The respondent says however that another avenue exists for a council to recover costs incurred under s 184, notwithstanding that a sale has not occurred. In effect, counsel for the respondent submitted that s 184 of the Act is couched in terms which acknowledge that a council has a right to receive costs incurred by it under s 184. That is to say that, given the obvious contemplation of a ratepayer’s financial obligation to pay costs as evidenced by s 184(9) and (11), a common law right must exist in order to satisfy that obligation (of a ratepayer to pay) and its corresponding right (of a council to receive).
In argument, counsel for the respondent initially couched this submission in terms of a right arising under the law of assumpsit. In subsequent written submissions, this argument was abandoned in preference of a more general claim to a common law right to enforce a debt. In my view this correction was warranted. Assumpsit is a doctrine based, historically (and etymologically), upon a private undertaking to perform, as a result of a bargain struck between the parties. The obligation to pay in the present case however, if one exists, has not been agreed or bargained for, but has been unilaterally imposed by a combination of statute and administrative act.
What was ultimately contended by the respondent, although it was not so articulated, was an application of the maxim, ubi jus, ibi remedium – where there is a right, there must be a remedy. The effect of the rule for present purposes is that if legislation provides for a new obligation (and therefore a corresponding right) there is a presumption that Parliament intended that right to be capable of enforcement in the courts. The rule was expressed in Shepherd v Hills (1855) 11 Exch 55; 156 ER 743 by Parke B as follows (at 747):
There is no doubt that wherever an Act of Parliament creates a duty or obligation to pay money, an action will lie for its recovery, unless the Act contains some provision to the contrary.
The presumption is, as the final words of the above quote suggest, rebuttable. One consideration for rebuttal that is commonly discussed, and which is of particular relevance here, is whether the relevant Act already provides for a remedy. The logic of this consideration is that if a new right is created, and there is provision by the legislature for a corresponding remedy, this suggests that the remedy provided is intended to be exhaustive of the procedure for enforcement of that right.
In fact, the provision of a remedy for the right is such a forceful consideration that it is seen as creating a presumption in itself; a presumption against the existence of any action other than the remedy which is provided. This can be seen in the approach of Isaacs J in Josephson v Walker (1914) 18 CLR 691, where his Honour said (at 701):
Prima Facie, where the same Statute creates a new right and specifies the remedy, that remedy is exclusive. The natural presumption to begin with is that Parliament in creating the novel right attaches to it the particular mode of enforcement as part of its statutory scheme.
[Emphasis added.]
Similar issues to the present appeal were considered by the High Court in Cobar Corporation Ltd v Attorney-General (NSW) (1909) 9 CLR 378 (“Cobar”). In that case the respondent, the State of NSW, attempted to pursue court action against an individual for unpaid stamp duties and fines arising from non-payment of those duties. The relevant legislation provided that certain penalties incurred under the Act could be pursued as a debt but it did not specifically provide for the collection of duties and fines as a debt. The appellant in that case argued that the failure of the legislation to provide for a specific method for recovery of duties prevented the State from bringing the claim. Isaacs J set out the predicament in the following terms (at 396):
[T]he general rule [is] that, where a Statute gives a right to a sum of money and provides no means of recovering it, the remedy is by action.
The appellants' argument in reply to this is, virtually, that the tax granted by Parliament is a stamp duty only, to be charged, levied, collected and paid by stamping the specified instruments in the specified way, and that no other method of charging or collecting it is permissible. The principle relied on for this purpose may be taken to be that stated by Lord Tenterden CJ in Doe d Murray v Bridges 1 B & Ad 847, at 859 in these words:—"Where an Act creates an obligation, and enforces the performance in a specified manner, we take it to be a general rule that performance cannot be enforced in any other manner." This was affirmed by the House of Lords in Pasmore v Oswaldtwistle Urban Council (1898) AC 387, at 394. The Crown in turn answers this by saying that the rule does not apply because there are no prohibitory words excluding an action, and the reasonable and necessary implication from the words quoted from sec. 4 is that taxes granted by Parliament and required to be "paid" must be enforceable by action. (citations omitted)
Each of the judges to the appeal (Griffith CJ, O’Conner and Isaacs JJ) considered the wording and operation of the Act and determined that Parliament did not intend for the obligation to pay stamp duty to be enforceable at common law. Isaacs J concluded (at 400-1):
I give the fullest effect to the words actually used in … [the] … Act in their natural meaning, but I cannot extend them so as to include other words not found in the Act, namely, words creating a personal liability to pay, or any obligation to pay otherwise than in the manner and circumstances designated by the Act itself.
And finding specific modes of enforcement expressly provided by the Statute in respect to the newly created statutory obligations, there comes into play the rule laid down by Lord Tenterden already quoted, and consequently I am not at liberty to apply the common law rule ubi jus ibi remedium as a necessary instrument to give some effect to an obligation, and so call into operation the ordinary common law remedy as if there were a gap left by the legislature, and assumed to be met by the common law. There is no gap, and a Court is not justified in creating one, and then filling it with a remedy which might or might not be convenient. Such a step as Lord Collins says must be left to the legislature. As to the effect of assessment I agree with the learned Chief Justice that it creates no personal liability that would not otherwise exist. An application to assess is only a precautionary measure to ensure that the document shall never be held invalid for want of a proper stamp, and that no penalty shall be incurred. Once made and acceded to it binds both sides as to the proper amount of duty for that instrument, but nothing more. I therefore agree that the first ground taken by the appellants is sustained.
In coming to that conclusion his Honour had considerable regard for another rule of statutory construction which is relevant to the present case. Namely, there is a well established rule that legislation which imposes tax must be construed strictly, to the precise letter of the law and not any further: Commissioner of Stamp Duties (NSW) v Simpson (1917) 24 CLR 209.
On this issue Isaacs J referred to Partington v Attorney General (1869) LR 4 HL 100, in which Lord Cairns said (at 122):
[A]s I understand the principle of all fiscal legislation, it is this: If the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown, seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of the law the case might otherwise appear to be. In other words, if there be admissible, in any Statute, what is called an equitable construction, certainly such a construction is not admissible in a taxing Statute, where you can simply adhere to the words of the Statute.
Applying these principles to the legislation in this case, given that the scheme for the imposition of council rates is a form of tax regime,[2] a court must be wary to read words into the legislation that do not appear on its face.
[2] See, eg, s 150(1) of the Act: “…rates constitute a system of taxation for local government purposes…”.
Another similarity between the imposition of rates under the present Act and the stamp duty regime considered in Cobar, is that rates, like stamp duties, are taxes which are not imposed upon individuals directly. Rather, stamp duty is imposed upon a document and rates are imposed upon land.[3] Whilst the relevant Acts may provide a mechanism by which the tax may be collected from a person, it does not impose the tax liability directly upon that person. One problem with such a situation, according to the High Court in Cobar, is that it makes the determination of against whom a common law debt may be recoverable potentially multiplicitous.[4] That is, whilst the principal ratepayer is ordinarily the person against whom rates will be recovered, the Act provides for a council to recover the rates from several other classes of person in certain circumstances.[5] Accordingly, if a common law action is to be implied, there is a real danger that it will be ambiguous as to whether it is an action against, in the words of Isaacs J (at 400), “[e]ach and every one of these possibly separate … individuals…”.
[3] See, eg, s 146 of the Act.
[4] Cobar, 391 (O’Connor J), 399-400 (Isaacs J).
[5] See, eg, s 178(3) of the Act. Also note that there is no reference in s 184(9) to the person or class of persons who may pay the costs.
Ultimately the High Court in Cobar declined to imply a common law action for enforcement of the payment of stamp duties because the relevant Act had already provided for a means of enforcing that obligation. The Court said that the consequences of not having a document stamped is a sufficient mechanism to give effect to the obligation provided for in the Act without the need for a common law right to enforce the obligation. This is particularly clear in the reasons of O’Connor J, where his Honour said (at 393):
The scheme, following that of English legislation on the subject, is not to impose a duty in respect of which a liability to pay is created, but to make it to the interest of every person who executes an instrument or is interested under an instrument that it should be stamped. The instrument, if not stamped, confers no rights and imposes no obligations which can be enforced in a Court of Justice. It cannot be registered. If the instrument is not stamped within a certain time, a fine of 20 per cent is imposed, and the person failing to stamp it, or the person who seeks to use it unstamped, is liable to pay the penalty. The scheme of the Act is to rely upon these inducements appealing to the self interest of persons executing or taking advantage of the instrument. That being so, it seems to me that the legislature of this State, following English legislation, has relied upon these sanctions as sufficient for the effective collection of the tax laid…
Similarly here, the Local Government Act 1999 (SA) provides for a mechanism of the obligation to pay costs arising from proceeding under s 184. Namely, a council has the right to recover by commencing a sale of property under s 184(1). Thus a remedy has been provided for by the legislature and it must therefore be presumed that no common law action is permissible to enforce payment of the costs referred to in s 184(9) and (11). I am not satisfied that this presumption is displaced in relation to this legislation, and I am fortified in this view because of the “fiscal” nature of the relevant division of the Act.
Conclusion on Costs
I therefore agree with the appellant that there are two basic approaches whereby a council may recover or recoup its legal costs in relation to an action taken to recover rates. I agree that one of the processes is through the avenue of s 178(3) which allows a council to recover as a debt outstanding rates, being the instalment amounts due quarterly, any fines or any interest to be recovered, together with, in accordance with s 183, any costs which may be “awarded to or recoverable by the council in any court proceedings” undertaken for recovery. Namely, those costs provided for in the relevant court rules.
However, if a council wishes to recover its actual legal costs (above those allowed under the court rules) and those other costs associated with proceeding under s 184 then, in the absence of a voluntary payment by a ratepayer, the council must proceed to sale.
The respondent submitted that, if I were to accept the appellant’s interpretation, it would lead to an absurd and undesirable result. Namely, that the Trial Magistrate did not have the jurisdiction to enter judgment but that the appellant would still have to pay the respondent the same amount, pursuant to s 184, to prevent the sale of his property. Accordingly, even though this appeal would be allowed, the respondent could still recover its costs by proceeding with the sale of the land. The consequence would be that both parties were put to great expense in conducting a trial, and an appeal, for no real purpose.

This is an unfortunate consequence of this litigation but it is not an unusual one. In many instances parties may seek to enforce rights in a manner that is misconceived only to find that they are not able to get relief and must start over. In the absence of any issue estoppel this poses a difficulty, which only affects the parties by reminding them to choose their actions carefully prior to litigation.
In this case both parties proceeded before the Trial Magistrate on the basis that an action existed which allowed the respondent to recover its s 184 costs prior to effecting a sale. This assumption was erroneous. If the costs are to be recovered it must be done through the proper mechanisms.
Validity of Notice
An additional but related argument raised before me was the validity of the 25 August Notice. The argument of the appellant was that the Notice did not accord with the criteria for a valid notice set out in s 184(2) and (3), and therefore is invalid. In particular the Notice is said to be invalid because it does not state the period of arrears contrary to s 184(2)(a); and because it does not state the “rates presently outstanding in relation to land”, contrary to s 184(2)(b).
Counsel for the appellant conceded that the first ground for invalidity is purely technical and goes far more to form than substance. As I understand it the submission is simply that the period of default was provided in clause three of the notice, rather than the period of arrears as required by s 184(2)(a). As the date of default and the date of arrears are not different, and because there is no suggestion that the date is incorrect in any event, in the circumstances, I consider that this is not a valid ground upon which to challenge the Notice.
The more substantial submission is that the Notice does not properly state the “rates presently outstanding in relation to land” as required by s 184(2)(b). The substance of this submission is that the word “rates” in this section is limited to the definition provided in the Act, namely it is restricted to the instalments fallen due, any service charge imposed, fines and interests. In particular, it does not include costs. It is submitted that claiming costs as part of the total liability renders the Notice invalid, in that it states an amount which exceeds the actual “rates presently outstanding”.
In my view, the s 184(2) process, requiring provision of a notice with a time limit and an indication of total liability, limited as it is to the rates, is meant to be a final opportunity for the ratepayer to pay the full amount of outstanding rates to avoid the sale of land. After the expiry of the notice period, there is a further opportunity in s 184(9) of the Act for the ratepayer to have a council call off the auction. The ratepayer may voluntarily pay the outstanding amount of rates set out in the notice and the costs which have been incurred by the council in proceeding under s 184. The phrase “rates presently outstanding” as it appears in s 184(2) does not include costs. Similarly, the use of the term “outstanding amount”, as it appears in s 184(5), appears to refer to the total liability which is set out in the notice, and no more.
Section 184(2) and (5) limit the amount of the total liability to that which relates only to outstanding rates in accordance with its definition within the statutory context. It does not permit the inclusion of costs as part of the total liability to which a notice may relate.
The Notice given by the respondent went beyond that which it could claim as due and owing at that time because it included costs which had been incurred in the very institution of the Notice. That amount, as I have said, could not be set out in the notice and could only be recouped, either by a later voluntarily payment before auction or, alternatively, following the sale of the land itself.
Despite this error, I do not agree with the appellant that the Notice was invalid. The additional claim for costs, which is specifically articulated, is severable. The costs did not have to be paid in order to ensure that the respondent did not then start to further progress the proceedings under s 184.
Recovery of Legal Costs Incurred Prior to Expiry of Notice
Further submissions were provided as to whether a council is ever able to recoup the legal costs incurred by it in issuing and serving a notice, or for that matter, any other costs incurred under s 184 prior to the expiry of the notice period.
Counsel for the appellant submitted that the costs referred to in s 184(9) and (11) do not include costs incurred prior to the expiry of the notice period set out in s 184(2). The consequence of this submission is that upon the sale of the land, the costs recoverable would exclude the costs of drafting and serving the notice itself.
In order to determine what costs the legislation contemplates to be recoverable, regard must be had to the precise wording of the section. The appellant says that, because s 184(5) allows the appellant to pay the outstanding rates (exclusive of costs) within the notice period and thereby prevent the respondent from ever proceeding to sale and recovering its costs of the notice, then it cannot be intended that those costs would later become recoverable simply because the appellant allows the respondent to proceed with the sale.
I disagree with this submission. It is clearly the intention of the legislation that “costs” would include those legal costs involved in drafting and settling the Notice as well as arranging for its service by a process server. This intention is apparent in the words of s 184(9) and (11). In particular s 184(11) refers to “paying the costs of the sale and any other costs incurred in proceeding under this section”. Those words clearly show that it is not merely the costs incurred after the notice period (i.e. the costs of the sale) but also the other costs of proceeding under s 184. The serving of a notice is required by s 184 and is therefore a cost incurred in proceeding under the section. In short, those costs are all part of the process for the sale of land and may be recovered as such, either by voluntary payment or after sale of the land. This does not affect the fact that these costs cannot be included in the Notice. Nor is it inconsistent with the fact that those costs will not be recoverable if the full amount stated on the Notice is paid before the end of the notice period. For the reasons indicated, only if there is a voluntary payment or if a sale is effected, can a council recover its costs under s 184, including those relating to the notice.
Conclusion
On 4 September 2006 the appellant made a payment to the respondent of $3,275.37. As discussed above, that payment was not subject to the schemes of priority set out in either s 183 or s 184(11). Accordingly, the payment must be attributed to rates rather than costs. The result of that payment therefore is that there was, as at 4 September 2006, a balance of $89.46 still outstanding to the respondent. For the reasons stated above it was only this amount plus subsequent impositions of rates, fines and interest that the respondent was able to recover in a Magistrates Court action. The respondent’s costs of proceeding under s 184, however, were not recoverable.
It follows from my reasoning that the Trial Magistrate was wrong in making the orders that he did. In the absence of having similar arguments put to him, of which I have had the benefit, he was lulled into error by the approach of the parties to the section.
I would allow the appeal. I will hear the parties as to the appropriate orders.