MINISTER FOR LOCAL GOVERNMENT and CITY OF GREATER GERALDTON
[2014] WASAT 116
MINISTER FOR LOCAL GOVERNMENT and CITY OF GREATER GERALDTON [2014] WASAT 116
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2014] WASAT 116 | |
| LOCAL GOVERNMENT ACT 1995 (WA) | |||
| Case No: | DR:481/2013 | 16 MAY 2014 | |
| Coram: | JUSTICE J C CURTHOYS (PRESIDENT) | 5/09/14 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Differential rates quashed | ||
| B | |||
| PDF Version |
| Parties: | MINISTER FOR LOCAL GOVERNMENT CITY OF GREATER GERALDTON CITY OF FREMANTLE |
Catchwords: | Differential rates 'Unoccupiable' Undeveloped Central Business District zone 'As determined by the local government' |
Legislation: | Local Government (Financial Management) Regulations 1996 (WA), reg 23(a)(i) Local Government Act 1995 (WA), s 6.2(4)(g), s 6.33(1), s 6.37(1)(b), s 6.76, s 6.82(3) |
Case References: | Nil |
Orders | On the application heard on 16 May 2014 by the President, Justice Curthoys, it is on 5 September 2014 ordered that:,1. The rates imposed by the City of Fremantle upon land rated on gross rental value within the City of Fremantle for the 2012 - 13 and 2013 - 14 financial years should be quashed by the Tribunal under s 6.82(3) of the Local Government Act 1995 (WA).,2. The rates imposed by the City of Greater Geraldton upon land rated on gross rental value within the City of Greater Geraldton for the 2012 - 13 and 2013 - 14 financial years should also be quashed by the Tribunal under s 6.82(3) of the Local Government Act 1995 (WA). |
Summary | The Minister for Local Government applied to quash differential rates imposed by the City of Greater Geraldton and the City of Fremantle. Geraldton and Fremantle had imposed a higher rate on derelict properties and the Minister argued that the basis used by Geraldton and Fremantle for the imposition of that rate was invalid.,The Tribunal determined that the basis on which the rates were imposed was invalid and that the rates should be quashed. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : LOCAL GOVERNMENT ACT 1995 (WA) CITATION : MINISTER FOR LOCAL GOVERNMENT and CITY OF GREATER GERALDTON [2014] WASAT 116 MEMBER : JUSTICE J C CURTHOYS (PRESIDENT) HEARD : 16 MAY 2014 DELIVERED : 5 SEPTEMBER 2014 FILE NO/S : DR 481 of 2013 BETWEEN : MINISTER FOR LOCAL GOVERNMENT
- Applicant
AND
CITY OF GREATER GERALDTON
Respondent
- Applicant
AND
CITY OF FREMANTLE
Respondent
Catchwords:
Differential rates 'Unoccupiable' Undeveloped Central Business District zone 'As determined by the local government'
Legislation:
Local Government (Financial Management) Regulations 1996 (WA), reg 23(a)(i)
Local Government Act 1995 (WA), s 6.2(4)(g), s 6.33(1), s 6.37(1)(b), s 6.76, s 6.82(3)
Result:
Differential rates quashed
Summary of Tribunal's decision:
The Minister for Local Government applied to quash differential rates imposed by the City of Greater Geraldton and the City of Fremantle. Geraldton and Fremantle had imposed a higher rate on derelict properties and the Minister argued that the basis used by Geraldton and Fremantle for the imposition of that rate was invalid.
The Tribunal determined that the basis on which the rates were imposed was invalid and that the rates should be quashed.
Category: B
Representation:
DR 481 of 2013
Counsel:
Applicant : Mr CJ Bydder
Respondent : Mr N Douglas
Solicitors:
Applicant : State Solicitor for Western Australia
Respondent : McLeods
DR 482 of 2013
Counsel:
Applicant : Mr CJ Bydder
Respondent : Mr N Douglas
Solicitors:
Applicant : State Solicitor's Office
Respondent : McLeods
Case(s) referred to in decision(s):
Nil
Introduction
1 The Minister for Local Government (the Minister) has applied to quash differential rates imposed by the City of Greater Geraldton (Geraldton) and the City of Fremantle (Fremantle).
2 In effect, Geraldton and Fremantle have imposed a higher rate on derelict properties. The Minister argues that the basis used by Geraldton and Fremantle for the imposition of that rate is invalid.
Finding
3 The Tribunal agrees that the basis on which the rates have been imposed is invalid and that the rates should be quashed.
The legislation
4 The power of local governments to impose differential general rates is found in s 6.33(1) of the Local Government Act 1995 (WA) (LG Act). Section 6.33(1) of the LG Act provides:
(1) A local government may impose differential general rates according to any, or a combination, of the following characteristics -
(a) the purpose for which the land is zoned, whether or not under a local planning scheme or improvement scheme in force under the Planning and Development Act 2005; or
(b) a purpose for which the land is held or used as determined by the local government; or
(c) whether or not the land is vacant land; or
(d) any other characteristic or combination of characteristics prescribed.
6 Section 6.76 of the LG Act provides:
(1) A person may, in accordance with this section, object to the rate record of a local government on the ground
…
(b) if the local government imposes a differential general rate, that the characteristics of the land recorded in the rate record as the basis for imposing that rate should be deleted and other characteristics substituted.
The stated basis for the differential rates
Geraldton
7 In the 2012 13 financial year, Geraldton imposed the 'Unoccupiable City Centre Zone' differential rate on three properties. The criteria set by Geraldton stated:
The Un-occupiable City Centre Zone Property Differential Rate applies to each property that is located in the City Centre Zone and on which there is one or more completed buildings where:
a the completed building or buildings:
i. have a total building occupancy rate of less than 50%; and
ii. are unfit for use for occupancy because of the deterioration of one or more of the buildings; or
b. the completed building or buildings have been boarded up, or enclosed, or left to deteriorate in such a way as to deter or deny occupancy to potential tenants, irrespective of the condition of the building or buildings.
(Geraldton Agreed Bundle A, page 15)
8 In the 2013 2014 financial year, Geraldton imposed the 'Unoccupiable City Centre Zone' differential rate on four properties. The criteria set by Geraldton stated:
This [GRV Un-occupiable City Centre Zone Property] category will include any City Centre Zone GRV rated property that, as determined by the City, is held for the purpose of being unoccupiable, by being vacant or not leased or occupied or used by more than 25%of its permitted usable area, by virtue of the property or a substantial majority of the property being unfit for or incapable of occupancy or use for its zoned permitted uses.
The City will determine that properties in the City Centre Zone are held for the purpose of being unoccupiable by virtue of nonoccupation and/or nonuse by tenants or occupants or potential tenants or occupants by assessment applying the following criteria:
• Completed building or buildings on the land being vacant or having an aggregate permitted building occupancy or use rate of less than 25% of usable area; or
• 75% or more of usable area of completed building or buildings on the land being unfit for or incapable of occupancy or use for zoned permitted purposes for any of, or any combination of the following factors:
• Physical deterioration of the building or one or more of the buildings on the land, rendering it/them unfit for zoned permitted occupancy or use; or
• Failure to remedy reasonably repairable physical deterioration of buildings and/or their electrical, water or sewerage services, deterring or denying permitted occupancy or use; or
• Disconnection of one or more enabling utility services, including electricity, water or sewerage, rendering a building or buildings unfit and denying occupancy or use for zoned permitted purposes;
or
• Disconnection or removal of any mandatory fire fighting services or facilities, rendering a building or buildings unfit and so denying occupancy or use for permitted purposes; or
• Boarding up or otherwise enclosing or securing a building or majority portion of a building in such a way as to deter or deny occupancy or use for permitted purposes. (original emphasis)
Fremantle
9 In the 2012 - 2013 financial year, Fremantle imposed an 'Undeveloped CBD Zone Property' differential rate. The criteria set by Fremantle were:
Land which is located in the CBD zone of the local planning scheme that is not fit for purpose or is vacant or does not have significant building development on site of more than 20% of the site area will have a undeveloped CBD zone property differential rate applied to it.
The criteria for this differential rate are properties located within the City Centre zone under LPS4 [City of Fremantle Local Planning Scheme No. 4], which is [sic] either:
1) Unfit for occupancy or use for its intended purpose by virtue of the deterioration of the condition of existing buildings on the land; or
2) Vacant or developed with buildings which occupy 20% or less of the site area, excepting where a current valid Planning Approval and Building License [sic] exists for the development of the land to occupy greater than 20% of the site area.
(Fremantle Agreed Bundle A, page 5)
10 In 2013 2014, Fremantle imposed an 'Undeveloped Commercial/Industrial Zone Property' differential rate. The criteria set by Fremantle stated:
An undeveloped Commercial or Industrial zoned property, outside of the City Centre Zone under LPS 4, will incur a differential rate to land under LPS 4 that is held for a purpose determined by the City to be an undeveloped site purpose.
Land will be determined by the City to be held for an undeveloped site purpose if it is:
a) unfit for occupancy by virtue of the deterioration of the condition of one or more of the buildings on the land; or
b) vacant land for a period of 12 months or more; or
c) developed with a building or buildings which, in aggregate, occupy 20% or less of the site area, except where a current valid Planning Approval and Building Licence exist for the development of the land to occupy greater than 20% of the site area.
(Fremantle Agreed Bundle C, page 100)
The crucial phrase
11 The determination of the validity of the rates depends upon the meaning and application of the phrase 'a purpose for which the land is held or used as determined by the local government'.
'Purpose for'
12 The meaning of the words 'purpose for' must be determined in the context in which the word is used in the LG Act.
13 The words 'purpose for' appear both in subsection 6.33(1)(a) and (b) of the LG Act.
14 There is nothing in the context of s 6.33(1)(b) to suggest that the meaning of 'purpose for' is intended by the Parliament to be different in s 6.33(1)(b) than in s 6.33(1)(a).
15 'Purpose' is not defined in the LG Act. The Macquarie Dictionary (4th ed, 2006) definition of 'purpose' when used as a noun is:
1. the object for which anything exists or is done, made, used etc.
2. an intended or desired result; end or aim.
3. intention or determination.
4. that which one puts before oneself as something to be done or accomplished.
5. the subject in hand; the point at issue: to the purpose.
6. practical result, effect, or advantage: to good purpose.
16 'Purpose', when used in association with 'for', must fall within the first three meanings set out in the Macquarie Dictionary definition.
17 The respondents cited a large number of cases that referred to purpose. However, each of those cases refers to an ultimate use to which the land is to be put. For example:
(a) 'the purpose of having land available for [future] use for coal industry or transferred allied activities …' (National Coal Board v Hornby [1950] Ch. 10, page 17);
(b) 'the true owner of land intends to use it for a particular purpose in the future, but meanwhile has no immediate use for it, and so leaves it unoccupied' and on that basis, the Court concluded that 'the owners of the disputed land had left it unoccupied for the purposes of eventual use in connection with the proposed new road' (Wallis's Cayton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [1975] Q.B. 94 at pages 95 and 103);
…
(d) '… the land was held for the purposes of future development, in that it was always his intention to use the land for development after the applicants abandoned their plan to build a house on the land' (Maggiotto v Roads and Traffic Authority of New South Wales BC200600824 at [128])[.]
18 Each of those cases identifies the owner's purpose in relation to a future intention. That future intention can be determined by objective facts. Those objective facts give rise to an express or implied purpose for which the land is to be used.
19 In s 6.33(1)(a) the use of the phrase 'purpose for' in association with zoning reflects the use to which the land is intended to be put.
20 Whether it is being put to that use is determined by the application of well understood objective principles as to what constitutes various types of zoning; for example, residential land.
21 The use of 'purpose for' in s 6.33(1)(b) reflects a similar requirement to objectively identify the use to which the land is intended to be put.
'As determined by the local government'
22 Section 6.33(1)(b) of the LG Act contains the phrase 'as determined by the local government'. The determination by the local government must have objective characteristics by which the purpose for which the land is held or used can be identified.
23 Section 6.33(1)(b) of the LG Act requires the local government to identify characteristics which meet the statutory description of a 'purpose for which the land is held or used'.
24 It is important to note that s 6.33(1)(b) does not permit a differential rate to be imposed simply on the basis of nominated characteristics.
25 A local government does not have an unfettered power to determine the basis on which it imposes a differential rate.
26 Local government could not, for example, determine that the colour of a house could be used as a basis for determining the purpose for which the land is held or used.
27 The determination must both identify the purpose for which the land is held or used and characteristics that are capable of determining whether the land is held or used for the nominated purpose.
28 It is not sufficient for a local government to say that a purpose can be inferred. The purpose must be stated in such a way that the characteristics are able to be tested against the stated purpose. Even if as a matter of statutory construction a purpose can be inferred, it must be able to be done objectively.
29 Both Geraldton and Fremantle make similar arguments as to how the purpose for which land was held or used was to be determined (e.g. Fremantle 2012 2013):
(a) in ascertaining and determining a purpose for which land was held, it was reasonable for the City to proceed on the basis that -
(i) it was the actions or omissions of the owner, in allowing or failing to address the deterioration, that resulted in the land being unfit for occupancy or use for its intended purpose; and
(ii) those actions or omissions, and their consequences, evidence the purpose, or a purpose, for which the land was held by the owner; and
(b) that purpose, which may be more briefly described as an 'unfit for occupancy or use' purpose, is a 'purpose for which the land is held ... as determined by the local government' within section 6.33(l)(b) of the LG Act.
30 Geraldton's determination for the 2012 2013 year fails to identify the purpose for which the land is held or used so as to enable a determination to be made as to whether the identified characteristics are capable of meeting that purpose.
31 Geraldton's determination for the 2013 2014 year endeavours to identify a purpose, that is, 'the purpose of being unoccupiable'. It then sets out the criteria.
32 The expression 'unoccupiable' has a certain awkwardness about it. It seems inherently wrong. The reason for that is that it is difficult to comprehend a landowner holding land so that it is unoccupiable.
33 One can imagine circumstances where an owner might let a building fall down through lack of maintenance to avoid a heritage listing. However, in order to establish that purpose, far more would be required to be stated than the characteristics listed by Geraldton.
34 The characteristics identified by Geraldton to determine whether a property is held for the purpose of being 'unoccupiable' do not provide a basis for determining whether the land is held or used for that purpose.
35 It is not clear how one moves from the characteristics nominated by Geraldton to an unoccupied purpose. Those characteristics are equally consistent with the property being held for future development or some other purpose. They do not provide any objective criteria for determining whether the properties are being held for the purpose of being unoccupiable.
36 Fremantle's determination for the 2012 2013 year refers to land that is 'not fit for purpose or is vacant or does not have significant building development on, site of more than 20% of the site area'. No purpose is identified. 'Fit for purpose' is a legal term that relates to the tenancy or sale of goods rather than planning.
37 Fremantle's determination for the 2013 2014 year similarly fails to properly state a purpose. The determination refers to an 'undeveloped site purpose' but it is not clear what an 'undeveloped site purpose' is intended to identify. An 'undeveloped site' is a reference to what the site is rather than to the purpose for which the land is held or used. The determination identifies an undeveloped site. It does not identify a purpose.
Geraldton and Fremantle's primary argument
38 Both Geraldton and Fremantle submitted that:
Section 6.33(1)(b) should be construed on the bases that –
(a) it is for the local government to determine 'a purpose for which the land is held or used', as a characteristic by reference to which the imposition of the differential general rate is based;
(b) the local government ascertains (or may ascertain) the purpose for which a particular parcel of land is held or used by reference to the relevant circumstances in which that land is held or used;
(c) those relevant circumstances include the actions taken, or not taken, by the owner of the land - and the effect of those actions or inactions on the land, including their effect on any buildings on the land;
(d) a purpose for which land is held or used may be to leave the land unoccupied, or to ensure that it is unoccupiable. This may be in furtherance of a longer term purpose, such as to hold the land for future development purposes; and
(e) property may be held -
(i) for a current purpose of being vacant (in the case of land with no buildings), or for a current purpose of being unoccupied or unoccupiable (in the case of land with one or more buildings); and
(ii) for a longer term purpose of being available for future development.
40 There is no objective link between the characteristics and the alleged purpose for which the land is held.
41 I do not accept the argument advanced on behalf of Geraldton and Fremantle that an owner can have a shortterm purpose and a longterm purpose. The characteristics must provide the basics for determining the relevant purpose. The argument serves only to illustrate the difficulty of determining a purpose from a statement of physical characteristics.
42 The LG Act no longer requires a dominant purpose for differential rates. Even if more than one purpose may be inferred, it is still the case that a specific purpose must be identifiable by inference. It is not sufficient to say it is potentially this purpose or that purpose. A purpose must be identified, not a choice of purposes.
Have the determinations been made only on the basis of s 6.33(1)(a) and s 6.33(1)(c) of the LG Act
43 Neither Geraldton nor Fremantle have identified any collective landholding purpose which is identifiable by reference to their nominated characteristics.
44 Geraldton referred to its 2013 2014 determination as an example of the combination of characteristics in fixing other rates contemplated by s 6.33(1).
45 However, each of the characteristics residential, vacant, exMullewa Shire District - identified in that determination are all capable of being determined by objective characteristics.
46 Geraldton and Fremantle argued that their determinations could be justified on the basis of a combination of s 6.33(1)(a) and s 6.33(1)(c). However, the terms of the determinations do not purport to rely on only s 6.33(1)(a) and s 6.33(1)(c). Section 6.33(1)(b) is also invoked.
47 For example, the differential general rate imposed by Fremantle is not land that is in the city centre zone and vacant. The differential general rate is broader than that and it is not possible to sever the balance of what Fremantle has defined as the differential general rate for that purpose.
Should the rates be quashed?
48 I am satisfied that I should exercise my discretion to quash the rates. The differential rates are invalid and no reason has been advanced as to why those rates should not be quashed.
Orders
49 The Tribunal makes the following orders:
1. The rates imposed by the City of Fremantle upon land rated on gross rental value within the City of Fremantle for the 2012 - 13 and 2013 - 14 financial years should be quashed by the Tribunal under s 6.82(3) of the Local Government Act 1995 (WA).
2. The rates imposed by the City of Greater Geraldton upon land rated on gross rental value within the City of Greater Geraldton for the 2012 - 13 and 2013 - 14 financial years should also be quashed by the Tribunal under s 6.82(3) of the Local Government Act 1995 (WA).
I certify that this and the preceding [49] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUSTICE J C CURTHOYS, PRESIDENT
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