RUSSELL and SHIRE OF NANNUP
[2018] WASAT 123
•9 NOVEMBER 2018
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: LOCAL GOVERNMENT ACT 1995 (WA)
CITATION: RUSSELL and SHIRE OF NANNUP [2018] WASAT 123
MEMBER: MR T CAREY (MEMBER)
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 9 NOVEMBER 2018
FILE NO/S: CC 2239 of 2017
BETWEEN: CLAUDE WILLIAM RUSSELL
BRADLEY WILLIAM RUSSELL
Applicants
AND
SHIRE OF NANNUP
Respondent
Catchwords:
Local government - Rates and service charges - Huts located on Crown land leases - Whether 'rateable land' - Whether land used or held for public purpose - 'Unique circumstances' of lessees alleged - Duplication of services - Rating basis
Legislation:
Local Government Act 1995 (WA), s 1.4(a)(ii), s 3.18(3)(b), s 6.17(1), s 6.26, s 6.26(2)(a)(i), s 6.28, s 6.28(2), s 6.32(1), s 6.39, s 6.40, s 6.41, s 6.41(1), s 6.44, Pt 6, Div 6
State Administrative Tribunal Act 2004 (WA), s 18(1), s 27(1), s 27(2), s 29(1), s 29(3), Div 3, Pt 4
Result:
Review application dismissed
Decision of respondent affirmed
Representation:
Counsel:
| Applicants | : | N/A |
| Respondent | : | N/A |
Solicitors:
| Applicants | : | N/A |
| Respondent | : | N/A |
Case(s) referred to in decision(s):
Nil
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
Claude Russell and Bradley Russell (applicants) seek review of decisions of the Shire of the Nannup (Shire) the effect of which is to impose general rates, a waste management fee and an emergency services levy upon them. Their liability, if any, arises from the applicants' leasehold interest in a property located on Crown land within the D'Entrecasteaux National Park at the mouth of the Donnelly River in the south of Western Australia (property).
On the property lies a hut, one of 43 in the area in respect of which formal lease agreements were entered between with the State Government in 2015/16. The construction of the original huts was completed many years before formal approval was required by any government, and the huts have been occupied, to a lesser or greater extent, by the same people, their families and friends during those years. It was only after those responsible for the huts, the former Department of Conservation and Land Management, and local government authorities entered into an agreement for a two-year moratorium to bring huts up to current Building Code, which, when achieved, resulted in formal leases being entered into for a period of 21 years, that the Shire included the properties within its rate base under the Local Government Act 1995 (WA) (LG Act).
The applicants submit that the imposition of rates and service charges in this way was unexpected, and in their view, unfair, unreasonable and unjust. They summarise their arguments in seeking to overturn the Shire's decision in this regard as follows:
•Because the lessees' circumstances are unique, usual services and facilities provided by the Shire are unnecessary and appropriate;
•The decision by the Shire to rate lessees was opportunistic and motivated by a perceived ability to raise funds; and
•Other decisions by the Shire's Council have been poorly considered and demonstrate poor governance.
A further argument that the Shire cannot legally charge rates was contradicted by the applicants' other submissions and can be ignored.
The statutory scheme
In general terms, a local government is authorised by Pt 6 Div 6 of the LG Act to levy rates and service charges.
A general rate may be imposed on rateable land within the district of the local government and a service charge may by imposed on land within its district, in accordance with s 6.32(1) of the LG Act.
Section 6.39 and s 6.40 of the LG Act require the local government to enter details of a resolution to impose rates into a rates record compiled by it and to amend its rate record for each current financial year to ensure the information contained in it is current and correct. This information comprises prescribed details in relation to all rateable land and land on which a service charge is imposed.
Notice of the imposition of rates and services charges is required after completion or amendment of the rate record in accordance with s 6.41 of the LG Act. Section 6.41(1) states that a rate notice is to be given to the owner of rateable land and the owner or occupier of land on which a service charge is imposed. By s 6.44 of the LG Act, the owner for the time being of land on which a rate or service charge has been imposed is liable to pay the rate or service charge to the local government.
The applicants' potential liability as owner arises by reason of the following alternative in the definition of 'owner' in s 1.4(a)(ii) of the LG Act:
a Crown lessee or a lessee or tenant under a lease or tenancy agreement of the land which in the hands of the lessor is not rateable land under this Act, but which in the hands of the lessee or tenant is by reason of the lease or tenancy rateable land under this or another Act for the purposes of this Act[.]
Section 6.26 of the LG Act states relevantly:
(1)Except as provided in this section all land within a district is rateable land.
(2)The following land is not rateable land
(a)land which is the property of the Crown and
(i)is being used or held for a public purpose[.]
Section 6.28 provides for the basis of rates as follows:
(1)The Minister is to
(a)determine the method of valuation of land to be used by a local government as the basis for a rate; and
(b)publish a notice of the determination in the Government Gazette.
(2)In determining the method of valuation of land to be used by a local government the Minister is to have regard to the general principle that the basis for a rate on any land is to be
(a)where the land is used predominantly for rural purposes, the unimproved value of the land; and
(b)where the land is used predominantly for non rural purposes, the gross rental value of the land.
(3)The unimproved value or gross rental value, as the case requires, of rateable land in the district of a local government is to be recorded in the rate record of that local government[.]
Section 6.17(1) deals with how the level of fees and charges is set:
(1)In determining the amount of a fee or charge for a service or for goods a local government is required to take into consideration the following factors
(a)the cost to the local government of providing the service or goods; and
(b)the importance of the service or goods to the community; and
(c)the price at which the service or goods could be provided by an alternative provider.
The Tribunal's review
This matter falls within the review jurisdiction of the Tribunal, the subject of Div 3 Pt 4 of the State Administrative Tribunal Act 2004 (WA) (SAT Act). In exercising its review jurisdiction, the Tribunal is required to deal with a matter in accordance with the SAT Act and the enabling Act (in this case, the LG Act): s 18(1) of the SAT Act.
The review is by way of a hearing de novo and may involve consideration of new material whether or not it existed at the time the decision was made: s 27(1) of the SAT Act. The purpose of the review is to produce the correct and preferable decision at the time of the decision upon review: s 27(2) of the SAT Act.
The Tribunal has functions and discretions corresponding to those exercisable by the decision maker in making the decision under review: s 29(1) of the SAT Act. The Tribunal may make any order it considers appropriate, including to affirm the decision, vary the decision or set it aside and substitute its own decision, or send the matter back to the decision maker for reconsideration: s 29(3) of the SAT Act.
Details of the applicants' grounds for avoidance or exemption and change to the rating basis
The applicants' 18 page written submission contains a great amount of detail in relation to the circumstances of the applicants' lease and those in similar and dissimilar situations; usage of the hut on their lease in the context of their argument based upon its alleged 'public use'; criticism of the Shire in relation to the rating of the applicants' and other property holdings and extraneous matters; the question of the appropriate basis of rating land (unimproved value or gross rental value); and assertions going to the legislative basis upon which the Shire is entitled to charge rates and services and whether that basis applies to the property and others like it.
Much of the detail provided in the written submission has little or no significance to the task of the Tribunal as identified by me. This lack of significance is reflected in two of the general heads of argument referred to in my introduction. The motivation of the Shire (alleged to have been an opportunistic money grab) is neither here nor there on the Tribunal's review, the objective of which is to determine the correct and preferable decision when the same functions and discretions available to the Shire are applied. The claim that the Shire's Council has demonstrated poor governance in relation to decisions other that those under review is even further removed from the Tribunal's task.
The applicants referred to the lessees' circumstances as 'absolutely unique', a reference to the isolation of the landholdings with no road access, providing low-cost holidays for extended families. Access to all leases is by boat, about 12 kilometres downriver from a landing. The landing is at the end of an unsealed road which starts at the Vasse Highway. This access is part of the D'Entrecasteaux National Park and maintained by the State. As a consequence of its location, lessees are self-dependent and supply all necessary materials for the purposes of their hut stays. Additionally, it is said, lessees take all rubbish home with them.
By reason of the alleged uniqueness of their situation, the applicants contend that the services provided by the Shire for other ratepayers within its district are neither needed nor used by lessees including the applicants.
The applicants' next argument is that they are exempted by s 6.28(2) of the LG Act by reason of an alleged requirement of the lease that their hut be available for public use.
The applicants rely upon the incorporation of a recommendation by a Senate Standing Committee considering shack sites in Western Australia into a National Park Management Plan that the huts be retained 'for the public and members of the Association' on certain conditions. The reference to 'Association' is to the Lower Donnelly River Conservation Association, of which Bradley Russell is Chairman.
The applicants also rely upon a provision of their lease, clause 10(3), in terms that:
The lessees shall ensure that members and guests, the general public and other guests have access to and use of the huts held under this lease in accordance with the public use plan.
The 'public use plan' is described by the applicants as an agreement between the lessor, Association and lessee regarding implementation of public use. Apart from some huts being trialled for 'more commercial up-market purposes', all huts, it is asserted, facilitate free basic public use.
According to the applicants:
It is further contended that the Council has not recognised the cost of facilitating public use, the extent of public use available or the ongoing arrangement to develop further public use and is therefore unreasonable in its action to rate the lessee.
The applicants assert that the community comprising the extended families and friends who use the Donnelly River hut leases have provided active support of the relevant Park Management Authority for over 20 years in matters including emergency, public access and environmental are matters, including removal of rubbish left by public visitors and providing its own fire protection and medical emergency facilities.
The applicants point to the factors identified in s 6.17(1) of the LG Act to underline their submission that the lessees, in light of their unique circumstances, do not need or use any services provided by the Shire, and as such, should not be charged by way of rates for those services.
Finally, the applicants submit that by charging lessees for a rubbish service they do not provide the lessees, and numerous other services such as provision of roads, management of health (sanitation and sewerage) and housing (building permits and inspections) charged for through general rates, in relation to which, it is said, the services are either not provided, or performed by the lessees themselves or other authorities (for example, health and housing services which for historical purposes continue to be carried out by the Shire of Manjimup), the Shire has duplicated services contrary to s 3.18(3)(b) of the LG Act.
Turning to the basis used by the Shire for current rating purposes, that is, to charge rates on the unimproved value of the leased land, the applicants note the land the subject of the lease is essentially the floor area of the hut plus one additional meter around it. The permitted use is short stay recreational accommodation. This, it is submitted, is a nonrural purpose, suggesting that any valuation for rating purposes should be based on gross rental value. The legal preconditions to obtaining a valuation based on gross rental value, including certification of a plan or diagram of the land by Landgate and gazettal of the lease area, have not been met. Therefore, the Shire having wrongly charged rates based on unimproved value, those rates should be refunded to lessees.
Consideration
I agree with the thrust of the submission filed on behalf of the Shire that the principal consideration of the Shire, and of the Tribunal on review, is the application of the relevant legislation: the LG Act. The scheme of the Act requires consideration of, first, whether or not the land the subject of a party's interest is rateable land within the district of the Shire, and land within the same district; and, if it is, the appropriate rating basis.
There is no question here that the land the subject of the applicants' lease falls within the district of the Shire for rating purposes. A possible issue for debate is whether or not one of the exceptions appearing in s 6.26 (2) of the LG Act applies. The only exception for which the applicants contend is that which appears in s 6.26(2)(a)(i) of the LG Act where Crown land is being used or held for a public purpose.
Contrary to the applicants' submission, the Public Use Plan, which is in evidence, is, on its face, an agreement between the Department of Parks and Wildlife and the Association. Further, the substantive provisions of the Public Use Plan require that only three of the 43 lease holdings comprising the collective Donnelly River huts 'be made available for public use', on the following conditions:
•for a minimum of 100 days per year;
•the huts' availability to be advertised through a publically accessible booking service; and
•the huts are to be offered to the public at the 'price' of $250 per night.
The fee is payable to the leaseholder, not the State Government.
The three huts subject to the 'public use' requirement are specified, and the applicants' hut is not included. Although it is not something I have to decide, even if it were, it seems to me that it would be a stretch to regard the type of requirement for public use in the case of the three huts, on a commercial basis to the advantage of the leaseholder, as commensurate with either previously accepted interpretations or common perceptions of 'public purpose'.
The applicants' arguments for the application of the public purpose exception (to which it repeatedly alludes with the less exacting 'public use') are even more tenuous than had they been able to rely upon any such requirement. They rely on an expression of encouragement in a National Park Management Plan regarding the huts' preservation, and the reference to 'the general public' in a clause in the lease the main concern of which is to ensure compliance with the public use plan. In circumstances where any member of the general public must be invited by the leaseholder before being allowed to access the applicants' hut, which, were it to occur, would presumably be on a commercial fee paying basis, the leasehold property can hardly be described as being used or held for a public purpose.
The 'unique circumstances' ascribed by the applicants' submissions to the Donnelly River huts do not advance their claim that they should not be subject to the rating provisions of the LG Act. The asserted uniqueness is linked to arguments of the alleged lack of service provision. But, as I have explained, the application of the LG Act provisions does not depend upon the identification of ratepayer benefit. It would be entirely unwieldy to permit exemption for reasons of a lack of quid pro quo. In any event, the Shire's submissions identify the facilities and services made available to all land holders in the Shire through the agency of rates and service charges. Decisions by individual land holders not to avail themselves of those facilities and services are, again, not relevant to the question of their liability under the LG Act for rates and service charges.
Similarly, no aspect of the statutory scheme supports the applicants' submissions that the Shire forfeits its rating entitlements because services funded by rates are not provided to individual leaseholders due to their own activities or because individual leaseholders receive similar services by some other means. The antiduplication provisions of the LG Act relied upon by the applicants such as s 3.18(3)(b) are concerned with efficiency of the provision of services and facilities. They are not intended to, and do not, have any bearing upon the entirely different matter of a person's liability for rates or service charges.
I turn to the applicants' challenge to the basis upon which the rating of the property has been made, namely, the unimproved value of the land. They point out that the general principal, identified in s 6.28(2) of the LG Act, is that where land is used predominantly for non-rural services, the gross rental value should be used.
The parties are in agreement that in order for it to apply gross rental valuation, the Shire must hold a copy of the lease and house plan for the hut in respect of each leasehold property. Currently, of the 33 lease holdings within the Shire, only 13 plans are held.
Submission of the plans is a matter for the individual lessees. The Shire follows a perfectly reasonable policy that all similar land is rated in the same way, and avoids individual 'spot rating' where possible. The Shire's Council has, however, resolved to change the rating classification for all the hut properties in its district from unimproved values to gross rental values once plans all of all buildings on the individual lease holdings have been supplied in full to the Shire.
Section 6.28(2) of the LG Act is, on the face of it, for guidance rather than prescription. Although, as a general rule, land use predominantly for non-rural purposes (which includes the property) would generally be rated on a gross rental value basis, an exception may arise where a proper ground exists. I regard the reason advanced by the Shire to not apply the rule currently to the property to be such a ground, particularly given its resolution consistent with the application of the general rule once the current obstacle to that application is removed.
Conclusion
For the reasons given above, the application must be dismissed.
Orders
1.The review application is dismissed.
2.The decision made on 29 September 2017 to dismiss the applicants' objection to the respondent's decisions imposing general rates on an unimproved value basis, waste management fee and emergency services levy is affirmed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR T CAREY, MEMBER
9 NOVEMBER 2018
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