Rural Bank of New South Wales v Council of the Shire of Bland

The Rural Bank of New South Wales, a statutory body representing the Crown, appealed to the High Court of Australia from a decision of the Supreme Court of New South Wales. The dispute concerned the liability of the Bank to pay rates levied by the Council of the Shire of Bland in respect of certain conditionally purchased land of which the Bank was the mortgagee in possession. The Council sought to recover arrears of rates, and the District Court had initially found for the Bank, holding the land not ratable.

The legal issues before the High Court were whether the Rural Bank, as a mortgagee in possession and a statutory body representing the Crown, was liable to be rated as the "owner" of the land under the Local Government Act 1919-1945 (N.S.W.), and whether the land was exempt from rating as "land owned by the Crown." Specifically, the Court had to determine the meaning of "owner" and "owned" within the Act, particularly in relation to the Crown and statutory bodies, and the scope of the exemption for land owned by the Crown under section 132(1)(g).

A majority of the High Court (Rich, Starke, McTiernan, and Williams JJ., with Latham C.J. dissenting) held that the Rural Bank was liable to be rated. The majority reasoned that the definition of "owner" in section 4 of the Act expressly included a mortgagee in possession, and the Bank, being a statutory body representing the Crown, fell within the definition of "Crown" in section 4. Therefore, the Bank was an "owner" for the purposes of section 144, which mandates payment of rates by the owner. Crucially, the majority found that the exemption in section 132(1)(g) for "land owned by the Crown" did not apply to land held by the Crown or a statutory body merely as a mortgagee. They interpreted "land owned by the Crown" in its natural sense, meaning land of which the Crown or statutory body was the absolute owner, and concluded that land held as security did not fall within this category. Consequently, the land was ratable, and the Bank, as mortgagee in possession, was liable for the rates.