Schokman v Brisbane City Council
[2001] QLC 40
•18 May 2001
LAND COURT BRISBANE 18 MAY 2001
[2001] QLC 40
Re:Appeal against Categorisation City of Brisbane Act 1924 (VC00-632)
Vincent R and Carol G Schokman v.
Brisbane City Council
D E C I S I O N
Background -
This matter relates to an appeal by Vincent Ronald and Carol Gwendoline Schokman (the appellants) against the categorisation of their land by the Brisbane City Council (the respondent). The subject land is located at 9 Waldo Street, Norman Park, and is described as Lots 84 to 86 on RP 12495, Parish of Bulimba, and contains an area of 1,215 m². The land is zoned as "Residential A", and is currently categorised for rating purposes as Category 2 under the City of Brisbane Act 1924. Mr R Jones of Counsel, instructed by Rouyanian & Co, Lawyers, appeared for the appellants. Mr R Needham of Counsel, instructed by Brisbane City Council, appeared for the respondent.
History of the Site -
The subject land had formerly been operated under a consent decision as a non-conforming use in the "Residential A" zone, initially as a hostel for disabled girls since 1940, later as a nursing home and then as accommodation for intellectually handicapped people. When the appellants acquired the property in July 1986 they transformed the premises into what has been broadly described as a hostel for financially disadvantaged and psychiatric patients.
Waldo Street is a quiet, narrow, dead-end street in a very attractive part of Norman Park. It is the stated intention of the appellants to relocate and demolish existing buildings upon the subject land, to make way for a new dwelling as the residence of the appellants. The appellants currently reside at 160 Wynnum Road, Norman Park, which adjoins the subject land to the south. That land is designated as Category 1 land, being the single-unit dwelling and principal place of residence of the
appellants. The appellants argue that once they have built their new home on the subject land, they intend selling their current place of residence.
The Nature of the Land -
The subject land contains two buildings which are connected by a covered walkway. The western building fronting Waldo Street is a large residential dwelling, which apparently has been classified as a "character building" under the Town Plan. The eastern building is a brick semi-lowset structure containing nine bedrooms, a bathroom, toilet and shower room and a small laundry. The second building has an area of approximately 156 m², and is located behind the residential building. There were no facilities for cooking in the eastern building.
Following a refusal to relocate the existing residential dwelling, the appellants obtained a decision of the Planning and Environment Court on 31 May 2000 in their favour, allowing for the removal of the western character building, and the demolition of the eastern building, with certain conditions attached to the demolition or removal of the building. The western building is proposed for relocation to Maleny.
Action to remove the building has not proceeded to the date of hearing, and the subject buildings are currently vacant, and have been in that state since 17 December 1999, and have not been used for any other purpose since that date. As a consequence of that cessation of the non-conforming use, permission for that purpose has also lapsed, as the building has remained vacant beyond the maximum period of six months allowable under the Brisbane Town Plan. (Sections 4.3.2, 7.2, and 28.1 and 28.2).
The Appellants Case -
It is agreed between the parties that at the relevant date of 17 December 1999 the subject property was vacant, and that it was the intention of the appellants to build a new dwelling as their principal place of residence upon the land. It is also agreed that as the non-conforming use as a "nursing home" had lapsed, then no commercial business could be undertaken without a fresh application to the respondent.
In accordance with the general criteria of the respondent's categorisation process for Category 2 properties, the appellants argue that the subject land cannot be used for a commercial or industrial purpose, nor for a purpose other than for residential or residential business. Accordingly, they argue that the land cannot be categorised as Category 2. The appellants argue that the most appropriate purpose would be as Category 1 (for residential purpose).
The Respondent's Case -
The respondent argues that one purpose of the respondent's rating legislation is to provide a benefit to owner/occupiers of single unit dwellings in the form of a concessional rating category (Category 1). Mr Needham notes that the appellants already obtain the benefit of Category 1 for their current principal place of residence at 160 Wynnum Road, Norman Park, and he argues that it would be, in effect, double dipping if they were to obtain a second concession under Category 1 for the subject land.
Mr Needham concedes that the subject land is no longer used for its previous purpose of "nursing home", and for which Category 2 (Land Use Code 21 or 27) would have been appropriate. Mr Needham also concedes that on the evidence provided it would be inappropriate for the subject land to continue in Category 2.
However, Mr Needham argues that does not mean that the subject land must then by default be relocated into Category 1. He notes that, for example, there is no such thing as a prohibited use under the Integrated Planning Act 1997, and either the appellants, or a new owner of the subject land, could activate by application to Council a further use of the existing buildings for a purpose not inconsistent with the current Category 2.
Mr Needham argues that, while it is the stated intention of the appellants to clear the site, and to build a new principal place of residence, that has still to be activated. He argues that it would be an unreasonable constraint upon the Council if it was to be required to amend the categorisation of land, merely because an owner expresses that view. The respondent agrees that once the eastern building has been demolished, then the subject land could be re-categorised as Category 7 (Land Use Code 70 - non-owner occupied residential). Once the western "character building" was relocated, the land could then be re-categorised to Category 1 (Land Use Code 01
- vacant urban land intended to be used for residential purposes).
The Legislation -
I turn first to the City of Brisbane Act 1924 and note that power is vested in the respondent under s.47 of that Act to rate certain lands within the area of its jurisdiction. The power to determine and levy rates for a particular financial year is vested under s.48 and s.53; and the power to determine differential rates, and the categories into which land may fall, is provided under s.55. The general powers for categorising lands for differential rating purposes is found in Division 4 of the Act, and in particular s.81 (which provides for the establishment of criteria and category),
and s.82 (which establishes that all rateable lands in the city must be categorised). The power to amend the category is exercised under s.93.
The respondent further publishes its Land Use Codes which provide a four- digit code for all land uses, and which then form part of the respondent's property record. The current Council Land Use Codes have evolved from the former Land Use Codes published by the Valuer-General on 1 March 1985. The Codes seek to establish the primary and secondary use of each land parcel.
By resolution of Council certain rates and charges were determined to provide the current budget of the Council. As part of that formal process the Council has adopted a total of seven categories including the following relevant differential general rating categories:
Category General Criteria Specific Criteria
1To meet this criteria the sole purpose for which the land is used or is intended for use must be residential purposes.
Where the land contains a single unit domestic dwelling and otherwise meets the general criteria above, then this category will apply regardless of the zoning of the area within which that land is situated.
Subject to the General Criteria,
(1)land to which the following Land Use Codes apply:-
01 - vacant urban land,
06 - outbuilding/amenity block,
(2)land to which the following Land Use Codes apply:-
02 - single-unit dwelling.
2To meet this criteria the dominant purpose for which that land is used or intended for use must be:
(a)for carrying out a commercial or industrial activity other than rural pursuits identified in Category 3 and located outside of the boundaries of the Central Business District; or
(b)for other than residential purposes or
residential business purposes.
Where the land has erected a building or buildings used or intended for a use normal to that of a commercial or industrial usage, then the dominant purpose will be determined by reference to the visual, spatial or economic aspects of the use.
Subject to the General Criteria,
(1)land to which the following Land Use Codes apply:-
01 - vacant urban land,
06 - outbuilding/amenity block, 21 - residential institution,
27 - hospital/convalescent home, 43 - motel,97 - welfare home/premises.
6Applies only where land does not fall within Categories 1, 2, 3, 4, 5 or 7.
Land not included in Category 1, Category 2, Category 3, Category 4, Category 5 or Category
7.
7To meet this criteria, the purpose for which that land is used or intended for use must be residential business purposes.
Subject to the General Criteria:
Land to which the following Land Use Codes apply:
61 - Mixed Residential,
70 - Non Owner Occupied Residential, where the land is wholly residential zoned land, and does not meet both the General and Specific Criteria of category 2 or 5;
The remaining categories provide for Category 3 (rural purposes); Category 4 (multi- residential retirement villages, but not motels); and Category 5 (CBD land).
Mr Needham argues that the relevant primary Land Use Code for the subject land could not be 02 (single unit dwelling), which states that the land use should be for a single unit dwelling house, comprising or adapted to comprise accommodation for the exclusive use of one family, and is the principal place of residence of the owner. A further extension to accommodate an aged or infirmed family member is restricted to not more than 50 m².
Mr Jones directs me to the legislation and the fact that there is no reference to a past use included in the Act. On that basis he concludes correctly that as the subject land is now no longer used as a nursing home, and has no potential for such use without further application to Council, then it is inappropriate for the land to be categorised for that purpose.
In respect of whether the subject land could be categorised under Category 2, Mr Jones further directs me to the primary use of the Land Use Codes which states that the criteria for "dominant use" should consider the visual, spatial or economic aspects of the property. He notes that there is no current evidence of any commercial purpose or use which could be defined as the dominant use of the land, and the subject land just cannot be considered as effectively meeting either the general or the specific criteria for that category.
It is agreed by both parties that Category 2 is no longer appropriate for the subject land, and I will ignore that category in the current matter. Further reference to specific criteria (Category 2) for 21 - residential institution, and 27 - hospital/convalescent home, has no current application.
In seeking guidance on the appropriate alternative strategies for categorising the subject land, I am directed by Mr Jones to directions in respect of matters as they relate to legislation dealing with taxing regimes. I note also that the purpose of the categorisation process is to equitably direct the appropriate liability of the appellants for rating purposes. The key principle of such a scenario rests upon the principle that areas of doubt should be resolved in the appellants' favour.
The appellants seek support for their conclusion that the subject land could be seen to meet the general criteria for Category 1, inasmuch as the intended purpose is for residential use. Mr Jones argues further that land should not lose its Category 1 category merely because of a combination of a dwelling and an outbuilding. However, it would extend credibility to see the current eastern building as an "outbuilding" in terms of the relevant 06 code of the Land Use Codes, which specifically excludes buildings designed for human habitation occupation.
Mr Jones then concludes that there would appear to be some tension in the current criteria as it relates to the subject land. He notes that if we were to consider whether the land would meet the requirement of Category 1 lands, then the "specific criteria" in respect of Land Use Code 02 (single unit dwelling) would appear to provide a hurdle for the appellants. However, Mr Jones notes that the general criteria stipulate that the intended use must be for residential purposes. Mr Jones then argues that the specific criteria is conditioned by the wording "subject to the general criteria", which he argues should have its ordinary statutory meaning, and should not be read down so as to fit the specific criteria and the philosophical purpose of the categorisation process.
Mr Needham argues that the use of the general criteria as the sole purpose for categorisation, in spite of failure to satisfy the specific criteria, is a misunderstanding of the intentions of the legislation. Mr Needham notes that the words "subject to the general criteria" is to provide for cases where a particular code will not fall specifically within the general criteria. Indeed, he notes that some codes can be in different categories depending upon the general criteria. He notes, for example, that a "building unit" can be in Categories 1, 2 or 7, depending upon the use that is made of it.
Mr Jones argues that as the purpose of the subject land is now for future residential uses, then it would be inconsistent with the stated taxing philosophy of the Council to rate the appellants on land as if it were to be used for a commercial purpose, rather than for the residential purpose to which it is now agreed they will eventually proceed.
Mr Jones seeks support for that conclusion in s.14A of the Acts Interpretation Act 1954 which states:
"14A.(1) In the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation."
Mr Jones refers to guidance in respect of interpreting the purpose of the legislation in "Halsbury's Law of Australia" Volume 24 at 385-425, which notes that the directions of the Parliament must be in plain words, and the intentions of the Parliament are to be followed when viewing the words as a whole, and from the language used by the Parliament (see Federal Commissioner of Taxation v. Westraders Pty Ltd (1980) 144 CLR 55, per Barwick CJ at 59. However, strict literal
interpretation of the legislation must be conditioned by the purpose of the legislative body (per Murphy J at p.80).
Where there is serious doubt as to the construction of the statute, then ambiguity should be resolved in favour of the taxpayer. That was clarified in Inland Revenue Commissioners v. Ross and Coulter & Ors (Bladknoch Distillery Co Ltd) [1948] 1 AllER 616, where Lord Thankerton said at p.625:
"I cannot think that there can be much doubt as to the proper canons of construction of this taxing section. It is not a penal provision; counsel are apt to use the adjective 'penal' in describing the harsh consequences of a taxing provision, but, if the meaning of the provision is reasonably clear, the courts have no jurisdiction to mitigate such harshness. On the other hand, if the provision is reasonably capable of two alternative meanings, the courts will prefer the meaning more favourable to the subject. If the provision is so wanting in clarity that no meaning is reasonably clear, the courts will be unable to regard it as of any effect."
While Mr Needham accepts the principles outlined in Westraders Pty Ltd, he agrees with Mr Jones that subsequent cases have clarified that a taxing regime is no different to other legislation, and must be construed in accordance with the words of parliament.
I note, for instance, that statutory interpretation of legislation is conditioned by a series of guidelines which have been adopted by the courts, but which leave considerable flexibility to the courts. The weight applying to those rules or guidelines has varied over time, but current practice has tended to change from the previous practice of the literal interpretation espoused by Barwick CJ in Westraders Pty Ltd, to an approach seeking to ascertain the purpose underlying the legislation (the mischief rule). Having ascertained the purpose, the court then seeks to identify the mischief or problem which has arisen, and then interprets the provision so as to deal effectively with that problem.
That principle was followed in Mills v. Meeking (1990) 169 CLR 214, at 223- 234, per Mason CJ and Toohey J. The process for applying the rule was encapsulated by McHugh J when he said at p.243:
"However, as Lord Diplock pointed out in Jones v. Wrotham Park Estates [1980] AC 74, at page 105, 'the task on which a court of justice is engaged remains one of construction; even where this involves reading into the Act words which are not expressly included in it'. His Lordship said that words could only be read into a statute if three conditions were fulfilled. First, the court must know, from a consideration of the legislation read as a whole, precisely what the mischief was that it was the purpose of the legislation to remedy. Secondly, the court must be satisfied that by inadvertence Parliament has overlooked an eventuality
which must be dealt with if the purpose of the legislation is to be achieved. Thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect."
The Use of the Land -
Fundamental to the determination of the appropriate categorisation of the subject land, is an understanding of the use of the land as defined by the Council for the purposes of determining differential rating categories. The criterion by which land is to be categorised is by reference to the specific criteria established in the differential general rating tables (p.155), included in the Budget 2000-2001 document. The criteria relates to the current use of the land, or its intended use.
It is agreed that the land is currently not used, but it is intended for use as residential purposes. While the current buildings have been appraised in terms of their visual, spatial and economic appearance, I note that those criteria relate only to activities of a non-residential nature being carried out upon the land. As the land could not currently be used for a non-residential type purposes, without a fresh application to the Council, I believe those three criteria have no relevance in the current matter.
If I then consider whether the subject land could be used for some type of residential purpose in its current state, I find that the only services remaining connected to the site are for water and sewerage. However, there is no evidence that other normal utilities such as power and telephone could not be reconnected, subject to applications to the appropriate authorities. On that basis the dwelling, even in its current configuration, could be quickly adapted for some residential purpose.
Mr Needham argues that the presence of the second (eastern) building, containing some nine bedrooms, a bathroom, toilet, shower and laundry, precludes any use of the two structures for the use of a single family unit. He concedes, however, that should a very large family seek Council approval of the building, as particularly suitable for their single family purposes, then that could be a matter for reconsideration of the use of the land.
However, I find no definition in the legislation that would preclude the acceptance of a large family unit, so long as it contained only the basic elements of a "single family unit". While a family so large as to require many bedrooms is not an every-day occurrence in modern society, it should not be excluded as a possibility. However that, in my opinion, should not be misconstrued to be interpreted as defining anything other than two partners and their directly dependent children, or a
permanently residing communal group deemed to represent a "single family unit". While the second building exceeds the maximum permissible floor space of 50 m², that second building is not self-contained, as there are no cooking facilities available.
While I note the above conclusions, I can understand the Council's reluctance to accept the expanded complex as a place for a single family unit, within the normal residential environment. However, without legal standing for excluding, say, use for residential business under Category 7, that was likely to be no more inconsistent than continuing the use for commercial purposes under Category 2.
The Relevant Categories -
Before deciding the most appropriate category for determination, I find that power to so direct is vested in this Court in s.91(1) of the City of Brisbane Act 1924. If the determination of the objection by the Council is set aside by this Court, then the category so determined by the Court is to have effect for the period of the relevant rate notice (see s.91(3)).
Having decided that Category 2 is not appropriate for the current nature of the subject land, I am left with considerations only in respect of Categories 1, 6 or 7. If I then consider Category 1, I note that the resolution of rates and charges approved by the Council refers to "residential purposes" as meaning land which is used or intended for use solely as:
"(a) residential; and
(b)for the exclusive use of one family, and may include self-contained accommodation, either detached, semi-detached or integrated, for the care and shelter of an aged or infirmed family member of the occupant/s. The gross floor area of any such self-contained accommodation is not to exceed 50 square metres."
The general criteria for Category 1 can only apply to residential purposes meeting that requirement. I note also that there is no specific direction in that resolution that Category 1 is to refer only to the principal place of residence of the owner of the land.
However, if I then consider the general criteria for Category 7, I note that relevantly refers to "non owner-occupied residential" lands. The establishment of a separate Category 7 for "non owner-occupied residential" purposes would, in my opinion, seek to differentiate those purposes from the other owner-occupied lands (Category 1). Fundamental to the difference between Category 1 and Category 7 lands would appear to be the use of the latter for residential "business purposes".
On that basis, following guidance in Mills v. Meeking (supra), I accept that Category 1 lands are intended to relate specifically to owner-occupied lands, or the
principal place of residence of the owner. As the principal place of residence of the appellants is 160 Wynnum Road, the subject land does not meet the fundamental purpose of Category 1, and I reject the appeal for that category.
I turn then to what other category might be suitable for the subject land. As noted previously, I find that a use for "non owner-occupied residential" purpose is not legally excluded from consideration, as I believe the definition of a single unit dwelling for the exclusive use of one family as adopted by the respondent, while constrained by the general experience of current single family units, is too restrictive. The conclusion of the respondent would appear to be directed to placing responsibility upon a large family unit to demonstrate why they should be considered to satisfy the legislation. That would appear to conflict with the normal processes of our free democracy.
I also have the evidence of the respondent that once the eastern building is demolished, then the subject land could be considered for categorisation under Code 70 - non-occupied residential - and therefore Category 7. That opinion would appear to accept that the subject land was moving towards some type of residential use. The only difference between the parties would then appear to relate to the timing of the demolition of the eastern building. I note that the eastern building is not really a separate stand-alone structure, as it is connected to the western building by an enclosed passageway. (See photographs Exhibits 4 and 5). Should the owners subsequently seek to rent the entire complex to other than a single family unit, I have no doubt that the respondent would rescind the permitted use.
I have considered the findings of Pearlman J in Wyong Shire Council v. Ardi Pty Ltd (2000) 112 LGERA 85, and cases reported in it at p88 and p.89. Those matters confirm that a "dwelling house" is generally taken to be defined as a building designed for use as a dwelling for "a single family group in the ordinary way of life and that it is not a use and occupation more appropriately described in other categories of residential buildings". (South Sydney Municipal Council v. James (1977) 35 LGRA 432, at p.440). However, those cases provide no clarification of the accepted size of the single family unit, but they do exclude the use of the land for such purposes as a "boarding house" where other than a single family unit is domiciled.
In the James matter Samuels JA noted at p.444:
"The scheme seeks to distinguish between the many different kinds of residential accommodation which it contemplates eg dwelling house, boarding houses, lodginghouses, flats and so on. Dwellinghouses and flats may conveniently be defined in terms of their physical character,
and this is the solution which the scheme adopts. Boardinghouses and lodginghouses are, on the other hand, essentially descriptive of function, rather than structure, and so are defined by reference to their use. Moreover, the only development which the scheme permits to be undertaken without consent is the erection and use of dwellinghouses, but other than semi-detached and terrace buildings, in areas zoned residential A and residential B. Hence, the scheme in this aspect has regard to the ordinary town planning criterion of suitability of physical structures to the character of the area in which they will be erected and used. Structural conformity is obtained by requiring a dwellinghouse to be of a particular design. It may still be capable of a number of different uses; but conformity of use is ensured by imposing restrictions, ie the necessity to obtain consent, framed in terms of use. A dwellinghouse as defined may be capable of use as a boardinghouse or lodginghouse, or, as the scheme recognises (see the definition in clause 4(1)) as 'professional consulting rooms'. But the use or intended use for any of those purposes requires consent."
In that matter Samuels JA noted that the meaning of "a single family unit" was not a relevant issue in determining the classification of the building, but rather the purpose for which the building was designed.
That was also followed in Masters v. Padley (1984) 53 LGRA 417, where the Full Court found that the classification of a building or portion of a building is determined by reference to the physical character of the building and not the intentions of the owner or users. If it is desired to use the building for a purpose other than those appropriate to its classification, it is necessary to apply to the Council for approval of the new use (per King CJ at p.421).
The meaning of "a single family unit was also discussed in Burwood Municipal Council v. Aboriginal Hostels Limited (1978-80) 39 LGRA 150, where the New South Wales Court of Appeal determined that the use of buildings in that matter did not represent the use associated with a single family unit. Two buildings had been acquired by the respondent for the purpose of providing temporary accommodation for Aboriginal youth undertaking technical education.
Samuels JA distinguished the findings in James (supra) where a group of adults not associated by ties of blood or marriage had voluntarily chosen to live a communal life, on a permanent basis, in what was deemed to represent a single family. However, in the Aboriginal Hostels Limited matter the residents were found to be a group "not based on family or kin relationship, nor upon choice arising from some personal or social association, or community of interest" (p.152).
However, I note that in the further submission by the appellants in paragraph 13, it is argued that it is not appropriate for the respondent to argue that "by default
the land must fall into Category 7, and thereby incur a financial burden clearly meant to be applied to land use, or intended to be used, for commercial purposes". The appellants seek support for excluding the substitution of any arbitrary taxation for taxation made under the rule of law in Federal Commissioner of Taxation v. Westraders Pty Ltd (supra). On that basis the appellants also seek to exclude the subject land from Category 7.
If I then consider Category 6, I note that really forms the basis of a "catch all" type of situation, where land cannot be satisfactorily placed in any of the other six categories. I note also that in his address in reply Mr Needham argues that the subject land should really go into a hiatus situation until the land actually assumes a use, which it currently does not. On that basis Mr Needham concedes that Category 6 would be appropriate. However, as noted, that really provides no relief to the appellants as the current differential general rate in the dollar is identical to Category
2. The appellants resist Category 6 which they see as disadvantaging themselves as the proposed future single residence owners of the land, and with no capability to earn commercial income from the property.
I could understand the use of Category 6 when land is transitional between a lower rating category to a higher land use rating category. In that circumstance there would be logic in requiring the owner to contribute rates commensurate with the future land use. However, it would appear inconsistent to require the owner to pay rates at the higher rate, when the land is moving towards the lesser Land Use Category (single residence), and there is no capacity to continue use at the higher Land Use Category.
On the evidence I believe that classification of the land, in its current configuration, as Code 70 - non occupied-residential use - is not excluded by the legislation, and it would be an appropriate designation. I could simply reject the appeal for Category 1, and leave the new classification from Category 2 to resolution by the Council. However, that would leave the appellants in the powerless position of having to accept the respondent's determination of a new category.
However, while I accept that the intended future purpose for the subject land is for a single family residence, precedents dictate that it is the character of the building which is paramount, not the intentions of the owners. The physical character of the building complex, until the eastern building is demolished, is inconsistent with the character of the area in which it is located. Once the eastern building has been demolished, the remaining single dwelling would satisfy reclassification to Category
7. The timing of that event is entirely within the power of the owners. However, until that occurs, I believe the appropriate classification is for Category 6.
On that basis I determine that, until the eastern building is demolished in accordance with directions of the Planning and Environment Court, the land is to be designated as Category 6.
In respect of any possible application for costs that might arise as a consequence of this matter, in view of the complex nature of the use of the land, I believe the matter was likely to have required resolution by the Court. On that basis I believe either parties should bear their own costs.
NG DIVETT MEMBER OF THE LAND COURT
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