Shanvale v Council of the Shire of Livingstone

IN THE SUPREME COURT
OF QUEENSLAND
No. 630 of 1993
Brisbane

Before Mr Justice Ambrose

[Shanvale v Council of the Shire of Livingstone]

BETWEEN:

SHANVALE PTY LTD
Applicant

AND:

COUNCIL OF THE SHIRE OF LIVINGSTONE
Respondent

REASONS FOR JUDGMENT - B.W. AMBROSE J.
Judgment delivered 18 September 1998

CATCHWORDS: CIVIL LAW - judicial review - bad faith - improper purpose - lack of statutory power - unreasonableness - irrationality on the Wednesbury principle - interpretation of s. 21 (4A) of Local Government Act 1936 (Qld)

Local Government Act 1936
Local Government Act 1993
Local Government and City of Brisbane Town Planning Acts   Amendment Act 1985
Council of the City of Parramatta v Pestell (1972) 126 C.L.R. 305
Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1942) 1 K.B. 223
Secretary of State for Education and Science v. Tameside Metropolitan   Burrough Council (1977) A.C. 1014
R v. Boundary Commission for England ex parte Foot & Ors [1983] 1   Q.B. 600

Counsel: Mr T.W. Quinn for the applicant

Mr J.E. Gallagher Q.C. for the respondent
Mr T. Trotter with him

Solicitors:Lynch & Co for the applicant
Swanwick Murray & Roche for the respondent

Hearing Dates: 13, 14, 15, 16, 17, 20, 21, 22, 23, 24 July 1998

written submissions were received on 11, 26 and finally on 27 August 1998
REASONS FOR JUDGMENT - B.W. AMBROSE J.

Judgment delivered 18 September 1998

The applicant is a company which conducts the business of buying and selling real estate. It is one of a group of companies of which the substantial shareholder-director-controller is Donald John Creevey. In about mid-1991 the applicant learnt that there was a large grazing property called Marlborough Station for sale. That property had been sold by CSR to people named Murphy in the early eighties. It was a fully developed and improved grazing property which had a significant carrying capacity. The homestead was located within easy commuting distance of the town of Marlborough which is a small township on the old Bruce Highway linking Sarina and Rockhampton. It took about 1½ hours to travel by motor vehicle from the station to Rockhampton.
Apparently in the course of conducting its business operations Shanvale (or its controllers) discovered that there were a number of “historic townships” in parts of Queensland. These townships had been surveyed in or about the middle of the 19th century in the expectation that they would be developed for urban purposes. However, for one reason or another sometimes that development did not occur and although survey plans etc. were registered in the Titles Office, in fact the areas of some small township subdivisions by and large were not developed or dealt with in any different way from the surrounding countryside. The material indicates that Shanvale was interested in a number of such “historical” subdivisions.
One such subdivision which covered an area of about 115 ha.(287 acres) was discovered to exist on the Marlborough Station. It was located a kilometre or so from the bitumen highway between Sarina and Rockhampton. It had never been used for any purpose other than grazing with the exception that on part of it one of the former owners of the station had constructed an airstrip which was used for the purposes of the property and also as a public-minded gesture on the part of the owners to provide ready access to the Flying Doctor. It was also used to facilitate emergency medical and other treatment to be brought to the area in the event of injury caused to persons involved in road accidents nearby. As well as that, it was sometimes used by military forces for the purposes of training exercises. No authority had ever contemplated the acquisition of the land for public purposes because apparently it never crossed anybody’s mind that the owners of Marlborough Station would ever object to the use of its airstrip for the purposes to which I have referred.
The idea that the site of the subdivision might be suitable for the establishment of a town had been conceived in the era of the Cobb & Co coach services that apparently passed by or through the area. No effort was ever made to implement that idea other than by registering the subdivision in 1862 until the applicant embarked upon the sale of the lots in the subdivision as blocks “ready to build upon”. In doing so counsel for the respondent said it had “opened a pandora's box”. On the other hand it might be said that Mr Creevey sought merely to take advantage of a treasure discovered while searching for land with a potential for profitable resale in the course of which he came upon his own “pot of gold” which he sought to exploit without Local Government interference or obstruction.
When Shanvale contracted to purchase Marlborough Station property on 24 September 1991 it commenced forthwith to sell off the various subdivisions of that property which existed and which had to that time all been used together for grazing purposes. Completion was due about 2 months after the signing of the contract - i.e. in about mid November-December 1991; in fact it occurred on 20 December 1991. The area of the station purchased was about 18,000 hectares. It was within the “Rural A” Zone under the relevant town planning scheme. The purchase price paid for the fully improved grazing property including the “historic subdivision” was $1.25M. Ignoring altogether therefore the value of the stock, plant improvements etc on the property (agreed at $45,000) the land was acquired at a cost of less than $70 per hectare or about $28 per acre.
The applicant as might be expected, moved promptly to obtain finance to permit completion of the sale. On 18 October 1991 it sought an advance of $1.25 million on interest only terms upon the security principally of Marlborough Station and advised the financier that it expected to sell 922 one quarter acre lots for the sum of $3,688,000 within about 12 months producing “a net cash flow of $3 million within that time”. It also moved very quickly to dispose of the larger subdivisions of the aggregation to local and other persons interested in grazing cattle. It is clear that when finance was sought by the applicant it was contemplated that the whole of the money advanced would be repaid within 12 months or so. In my judgment the obvious intention of the applicant was to dispose of the whole of the property which it had acquired from Mr and Mrs Murphy as quickly as possible at a price which, at the end of the day, would return the maximum profit with the minimum of effort, expenditure and delay.
To achieve this end the applicant commenced to advertise, particularly in southern States the sale of blocks described as part of the “old Marlborough township” at prices which were a fraction of the prices for which those blocks could have been put on the market had they the sorts of facilities that most potential purchasers of house blocks, planners and local authorities in Queensland think are the minimum required for residential use at the close of the twentieth century.
Advertisements were inserted and there was obviously significant interest displayed by people who found that they could purchase large residential blocks for less than $5,000 each (on terms). If they bought a number of blocks there was a significant discount. The vendor agreed to pay the purchaser’s legal expenses. They were able to buy lots for perhaps $2,000 each or even less if 4 or 5 were purchased.
The bigger part of the historic subdivision comprised town lots of about one-quarter acre. The cost of a quarter acre of that land to the applicant had been something less than $7.00. It is interesting to note the terms of an advertisement published in Sydney in the Daily Telegraph Mirror of 28 October 1991 - nearly two months before the applicant had completed its Contract of Sale with the Murphys in respect of the land. The advertisement reads:-
“  The Don Creevey Group
ATTENTION
FREEHOLD LAND IN HISTORIC QLD
*         READY TO BUILD *
$4990 (full price)
•Large, flood free & level
•Residential lots
•Over 100 coral islands offshore
•only 5 mins to historic town &
Modern conveniences
•All blocks with magnificent
Coastal range views
•Guaranteed finance & free legals
$1000 DEPOSIT +        $13.20 PER WEEK
GREAT INVESTMENT              -   SECURE YOUR FUTURE NOW!
PHONE NOW           :          (02) 687 1633
BECOME   A   HISTORIC   QUEENSLANDER”

It emerged in the evidence that within 12 months of completion the applicant sold a large area of the historic township to another real estate dealer, Kirkee Pty Ltd, which commenced to sell lots from the historic subdivision to purchasers in Sydney. It seems that some sort of booth was set up at Central Railway Station and it is clear that by the end of August 1992, Kirkee Pty. Ltd. had embarked upon the sale of these allotments and a significant number had been put under contract by mid-November 1992.
In my evaluation of the material the applicant’s plan was to dispose of the whole of the land as quickly as possible; it effected sales of the larger lots within the old township fairly quickly; 200 lots in the old township of varying sizes - many of them being little more than ¼ acre lots were sold by the end of 1991.
Suddenly and without warning the respondent Council found itself inundated by requests for information about the lots relevant to construction on them of residential buildings.
I might mention that potential purchasers of the applicant's lots were referred to its solicitors who purporting to act in the interests of those purchasers presumably gave them advice as to their rights and obligations under the contracts they had signed, the terms of which I infer those solicitors had either settled or given legal advice on to the applicant. The legal fees incurred by the purchasers appear to have been paid by the applicant which in some cases at least directed its solicitors to deduct their fees from moneys held in their trust account for the applicant.
Under the Town Planning Scheme for the area, the erection of a single unit dwelling on land zoned “Rural A” was a permitted use. This is unsurprising because under the Town Planning Scheme the minimum area into which land within that Zone could be subdivided was 40 hectares. However, as a consequence of the subdivision of the old township site, with an area approaching 300 acres which presumably by oversight had been included within the “Rural A” Zone, it only ever having been used for grazing purposes, there were about 940 ¼ acre allotments (between 1012 m² and 1315 m²) each of which was capable of separate ownership with the right to erect upon it a dwelling house. There were also a relatively smaller number of larger areas between 2810 m² and 3.653 hectares.
Unsurprisingly, when the respondent Council became aware of the marketing efforts of the applicant (and their result), it took planning and legal advice as to options which might be available to avert what appeared to it to be a looming disaster. The quality and quantity of underground water on the subdivision seemed uncertain. The capacity of a 287 acre area to accommodate 940 septic systems and the effect of them on underground water supplies was unknown although doubtless of concern to the Health Department of the Council. It was at this stage that the relationship between the applicant and the respondent became somewhat strained to say the least. Because Marlborough Station had only ever been used for grazing purposes, it seems unlikely that the former owners had ever adverted to the possibility of selling separately 940 relatively small allotments which constituted part of the “old Marlborough township”. As a consequence the trafficable roadway which in fact led through that township subdivision was not really confined within the boundaries of the dedicated roadways which passed through it. There had “grown up” a road known as Coorumburra Road, which joined the Sarina-Rockhampton Highway a kilometre or so from the north-western boundary of the old township subdivision and then proceeded through it and past another road called Nine Mile Road which gave access to grazing country and some mining developments and then continued on for many miles to give access of sorts (mainly secondary access) to a couple of grazing properties. To the extent that Coorumburra Road as it was developed over the years, lay within the confines of dedicated strips of roadway resulting from the historic township subdivision, it seems to have been more by accident than design. The road seems to have been located having regard to the topography of the grazing country through which it passed. It passed along the edge of the airstrip to which I have referred and obviously was used in connection with that airstrip. All told, it would seem that there may have been perhaps half a dozen grazing properties or paddocks that might use that road for access from time to time. It would seem also that there were a couple of mining leases the operators of which might also use it from time to time. There was no evidence as to the extent or frequency of such use or Council knowledge of these matters.
One of the problems with Coorumburra Road was that it crossed a number of creeks to gain access to the historic township from the main road about a kilometre away. A consequence of this was that from time to time the creeks flood and access to that subdivision is denied. This seems to have presented no significant problem for owners of the various grazing properties/paddocks who presumably made use of it from time to time although the evidence is silent on this point. They could gain access to their land by other means when necessary. Their lifestyle and grazing practices in any event have undoubtedly accustomed and permitted them to remain self sufficient if their house or grazing paddock occasionally became flood bound during the wet season perhaps for days or even weeks at a time. There was no evidence as to the frequency of flooding, however, a flood plan was prepared and although the respondent was roundly criticized for the lack of in-depth investigations which had preceded it, I am prepared to accept it as indicating in broad terms the level to which flood waters would rise at least once in every five years. The flood plan (contained in Volume 12 of the documentary evidence) shows that flooding occurred a little upstream of the confluence of Marlborough Creek and Coppermine Creek which was located about half way along the western boundary of the historic township subdivision. When that flood level was reached it is clear that access to that subdivision would be prevented at those creek crossings. Photographs were tendered to illustrate this although there was no evidence as to precisely how long flood water would remain at this level. Undoubtedly that would depend upon the amount and duration of rainfall. It suffices to say that roughly one-third of the old historic township subdivision bounded by the whole of its northern boundary and about 4/5ths of its western boundary would be covered by flood waters with a one in five year flood frequency. Quite apart from the extent of flooding however the significant point is that the creeks over which Coorumburra Road passed would regularly deny access to the subdivision area during periods of wet weather which did not lead to a one in five year flood level.
Photographs of the crossings were tendered from which I conclude that it was open to the Council to take the view that for all practical purposes in times of wet weather those creeks even carrying waters insufficient to flood the subdivision would deny access to the subdivision to ordinary vehicular traffic.
Although much of Coorumburra Road does not appear ever to have been dedicated it was well known to Council officers. In fact the respondent Council regularly levelled and rolled it. From photographs tendered it looks to be in better condition than a mere “bush track”. There were local supplies of gravel and clay which apparently had been used to maintain it over the years and generally speaking Council engineers and Councillors themselves were familiar with the road construction and obviously the access problems it posed in times of wet weather. It was the practice of members of the Council to regularly inspect such roads and for Shire engineers and persons employed in this particular area to determine what road maintenance was required in the following financial year - or perhaps that which demanded immediate attention - in the context of preparing budgetary estimates etc.
Whatever marks or pegs or other materials may have indicated the layout of the subdivision and the boundaries of the lots and dedicated roadways within it when it was surveyed and presumably pegged in 1862, those had long since disappeared. Perhaps if wooden pegs were used, they had succumbed to the attention of termites in the area. However that may be, shortly after the applicant acquired Marlborough Station it proceeded to have the land re-surveyed and re-pegged. This was obviously necessary to market those lots. As well as that, it had a couple of road signs erected to indicate the location of roads formally dedicated and named in 1862 the boundaries of which of course were quite imperceptible in 1991. In about July 1992 solicitors for the applicant wrote to the respondent demanding that that part of Coorumburra Road which traversed land owned by the applicant be re-located onto land which had been dedicated - or alternatively that the applicant’s land be resumed to permit the road to remain in its present location. When agreement was not forthcoming threats of legal action to obtain an injunction were made.
I am satisfied that all this occurred about mid-1992 although it is unnecessary to descend to detail as to times and particulars of various discussions and threats. Correspondence was still passing between the applicant's solicitors and the respondent's solicitors on this topic in November 1992.
It seems clear that the applicant wished to sell a large number of residential size lots over which the airstrip had been constructed many years ago. Indeed, indicating that he did not wish peremptorily to deprive the local community of airfield facilities, Mr Creevey suggested that in lieu of the subdivided land which the applicant desired to sell upon which the airstrip was constructed, he would make available to the Council for airfield purposes a portion of land outside the historic township subdivision in consideration of course of suitable compensation. 22 To dispose of all the historic township subdivision lots as promptly as possible the applicant entered into contracts of sale with Kirkee Pty Ltd in August and October 1992; these contracts conveyed the applicant's interest in lots it had already sold and as well its interest in lots not yet subject to contract. On the material Kirkee then commenced to sell blocks as speedily as possible and material in the volumes of documents indicate that by 4 January 1993 about 152 of the blocks had been sold for a total of $235,170. The location of these lots is shown on a plan indicating the sale by the applicant to Kirkee of 100 allotments on 9 October 1992 and another sale of 659 allotments on 28 August 1992. Kirkee on-sold many of those allotments but for the purpose of this application it is unnecessary to analyse those sales in more detail.
On 9 October 1992, the applicant transferred to some of its associate companies an area of land which had formerly comprised roads dedicated in the course of effecting the 1862 subdivision but which had been closed by one of the applicant’s predecessors in title. The dedicated roadway was closed on the undertaking of the owner at that time to amalgamate it with the various small subdivided blocks. However, this was not done and although the respondent investigated the possibility of trying to force the amalgamation on the applicant, it was decided on advice not to proceed with this stratagem. However, the applicant transferred the land comprising the closed roads to various “road companies” to enable shares in them to be held by the purchasers of the subdivided lots with no road frontage or immediate access to a dedicated road. The system to be implemented to enable the sale of these landlocked small blocks was apparently to make available to each lot holder a share in one or more of the “road companies” which would entitle him (and presumably his licensees) to use that land for the purpose of gaining access to his lot from nearby dedicated roadways. I might add that all the road closure areas did have access to one or more of the remaining dedicated roads.

There was significant delay in providing to the applicant certificates of title for the urban lots which I infer accommodated the respondent's desire to “curtail the activities of Mr Creevy”. (Vide letter from the respondent to Deputy Premier 8 November 1991.)
The initial reaction of the Council seems to have been to advise as many interested people as possible that it had no plan or intention to provide any services of the sort that a 940 block residential subdivision would normally have. In particular it had no plans to give all weather road access to the subdivision or to provide water, sewerage or other infrastructure services. It also took steps to have that part of the subdivided area below the one in five flood line declared a flood problem area. This would enable the Council to refuse permission to build residential buildings beneath the flood level shown on the flood plan contained in Book 12 of the documents. Towards the end of 1992 the Council had obviously obtained planning, legal and engineering advice and decided to give a Notice of Intention to Resume the flood free lands within the old Marlborough township for the purpose of an airport. It had already given Notice of Intention to Resume 26 lots within the historic township subdivision for the purpose of “regularizing” the location of Coorumburra Road. The area the subject of the Notice with respect to the airport was significantly larger than that part of the land over which the airstrip had been constructed for so long. In fact it emerges that part of the Coorumburra Road passing through the subdivision towards the east of that subdivision actually cut across portions of the subdivided land that were used as part of the airfield. The Council was accustomed carefully to keep that part of the road in particular in good order.
While all this was going on the Council also took steps to have the Town Plan amended so that land within the historic town subdivision although contained in the “Rural A” Zone could be used for the construction of a dwelling house only with Council planning permission. The Council was aware of course in taking this step that it might become liable to pay compensation to the applicant should that amendment reduce the value of the blocks of land to it. Whether or not it would and did is a matter which will ultimately be determined in the Planning and Environment Court where the applicant has already lodged a claim for compensation on the basis that it did. Just before the amendment to the Planning Scheme took effect, the Council approached the Minister of the day with a long report and “background paper” setting out the history of the problem which emerged in 1991 and which at least to some extent would be constrained by the amendment to the Town Planning Scheme effected on 23 February 1993. The visit to the Minister was designed to persuade the government of the day to pass what legislation was necessary to remove any obligation on the Council to pay the applicant compensation for the amendment to the town planning scheme.
The document is a political one really in which the Town Planner employed by the respondent and the respondent’s legal adviser set out a statement of facts and made observations on the commercial morality of the applicant to persuade the government to introduce legislation to prevent the Council (and ultimately of course the Council ratepayers) from incurring an obligation to pay out large sums of money to the applicant by way of compensation upon the amendment to the town plan.
Unsurprisingly, some of the terminology contained in the report is rather colourful; its use one would think was designed to persuade the government to give serious consideration to adopting a politically acceptable legislative procedure to relieve the ratepayers of the Shire from the obligation to pay enormous compensation to the applicant which had purchased the land containing the registered historical subdivision which it had discovered on it, for $28 per acre but had sold lots in it to persons described in the report as “gullible” at a price the equivalent of approximately $20,000 per acre within a period of a little over a year.
In my judgment the language of the report demonstrates that the persons responsible for its preparation expressed a critical view of the commercial morality of Mr Creevey. It is unnecessary for me to analyze what was said in different parts of the report. It suffices I think to select one paragraph to represent the flavour of the language used from time to time. Paragraph 9.18 reads:
“The individuals who have purchased the blocks are in the main victims of circumstance and the unprincipled greed of the developer Shanvale Pty Ltd. Council is very sympathetic to the plight and has done what it reasonably can to notify them that the blocks are unsuitable for residential development. However both they and the Council are left to deal with the situation as best they can while the developer moves on. The developer takes his money and runs. The individuals are left to endure and Council wins the prize of picking up the tab!”

As I understand the applicant, it relies principally upon the language used in this report to support the proposition that the Council was motivated by bad faith in passing a resolution which it did on 28 July 1993 imposing upon each separate lot within the old Marlborough township subdivision irrespective of its area a special rate of $900 estimated to be the cost to each lot of providing an all-weather access road to the centre of that subdivision from the main Sarina to Rockhampton Road passing a kilometre or so to the north of it.
Basically it is the contention of the applicant that it was simply exercising its legal rights under the Town Planning Scheme in force when it acquired Marlborough Station to sell off subdivided historic township lots. Copies of contracts of sale signed by purchasers of those lots contain conditions which make it clear that no warranties express or implied are given as to any services on the land and that the purchaser is obliged to satisfy himself of the services (or lack of them) to the lot he agrees to purchase. Similarly, the contract absolves the vendor from providing any relief based upon what the purchaser may have been informed concerning services etc. to the land prior to his becoming a party to a written contract to purchase a lot.
It is the contention of the applicant that it acted strictly within the law and to the extent that the Council and the ratepayers of the Shire generally might incur financial obligations to provide minimal services to a township of 940 allotments or compensation in respect of the effect of the rezoning, it was the fault of the Council in not taking an opportunity that existed for 12 months in 1985-86 to avoid the inevitable consequences of having to pay the applicant compensation upon rezoning the land in the old subdivision on the basis that prior to that rezoning each had a permitted use for the construction of a residential dwelling. I refer to s.33A of Local Government and City of Brisbane Town Planning Acts Amendment Act 1985.
It was the applicant’s contention that the notices put up and handed out by the respondent to persons interested in purchasing subdivisional lots from the applicant in 1991-92 as well as the steps taken to have part of the land declared flood prone and to have issued the Notice of Intention to Resume Land for airport purposes constitute evidence of steps improperly taken by the respondent Council with a view to hindering by impermissible means the lawful sale by the applicant of each of the lots to individual purchasers as unserviced lots upon which they had the right to construct a dwelling house. It is said that this motivation of Council for taking those steps is confirmed by the steps it took to have the Town Planning Scheme amended so that each of the lots could then have constructed on it a dwelling house only with Council permission - which it was unlikely ever to give.
It is said that the document delivered to the Minister on 22 February 1993 traces the history of Council activities designed to impede the sale of blocks for the purpose of erecting a dwelling house on each of them and the amendment to the Town Planning Scheme changing the erection of a dwelling house on each lot from a permitted use to a permissible use simply reflects the “obsession” that the Council and Council officers had in impeding the applicant from selling its lots and making the enormous profit which it would obviously make by selling them to people as unserviced lots out in the bush upon which if they so desired, they might erect a dwelling house. It is the contention of the applicant that it is against that background that the resolution by the Council of 28 July 1993 must be viewed; it contends that the imposition of the special rate levy upon each of the blocks within the historic subdivision was not really for the purpose of obtaining from the lot owners within the township area a fund of money sufficient to provide adequate all-weather access to the township subdivision area for persons separately occupying 940 lots. It is the applicant’s contention that against the background of earlier efforts made to inhibit the sale of those lots when they could lawfully have been used for that purpose, one is drawn to the irresistible conclusion that when passing the resolution imposing the special rate the Councillors were acting in bad faith to achieve the improper purpose of mulcting the applicant on the basis only of the large profits it might lawfully achieve as the result of the exercise of its “skills” in buying and selling real estate. As a fall back argument it is said that having regard to the matters known to the Council and proved in Court, the decision on the facts in any event was not lawful because it did not conform with the requirements of s.21(4A) of the Local Government Act 1936 (as amended, 13 May 1992) which remained in force to 26 March 1994 when s.971(1) of the Local Government Act 1993 came into operation.
An enormous amount of time was spent (in my view much of it unprofitably) and a very large collection of documents was tendered in 13 bound volumes to assist in the determination of these short points.
Indeed, 7 Councillors were called by the applicant to give evidence as to what motivated them in passing the impugned resolution and as to what knowledge and information they had germaine to the decision they made on 28 July 1993.
It emerged clearly on the evidence that the only person voting on that Council meeting who had had the opportunity to read or had any knowledge whatever of the content of the background submissions/report submitted to the Minister upon which the applicant laid so much stress was the Mayor who had taken it down to see the Minister on 22 February 1993. She had no part at all in its preparation. It was prepared as a joint effort by the Shire Planner and the solicitor for the respondent; to the extent that it had technical information in it that was obtained from Council Engineers and other technical officers. The Mayor was called by the respondent, however, she was cross-examined (unsurprisingly) on the use of some of the more colourful language in the submissions referring to Mr Creevey and his companies but she made it clear that it was not her language and she was not sure whether she had given it more than cursory inspection even though, as demanded of the office she held, she carried the report down to the Minister and personally gave it to him. She shortly addressed the Minister as I assume was required of her political office and I infer that she contented herself with handing to him for his or more probably his advisers’ consideration the report and submissions that had been prepared by the Town Planning Department of the respondent Council and its solicitors as a last ditch effort to avoid the payment of compensation as the result of changes to be effected by the amendment to the Town Planning Scheme so that land in the historic subdivision could then be used for the purpose of constructing a dwelling house only with the planning consent of the Council.
Paragraph 1.1 of the “Executive Summary” handed to the Minister (contained in Volume 13 of Ex. 1) I suspect summarizes the principal oral observations and views probably expressed by the Mayor. It reads as follows:
“1.1The situation of the old Marlborough township exposes the gap in the existing legislative scheme which allows the issue of separate Certificates of Title from plans registered under the Real Property Acts before any planning controls required local authority consent for the original plan of subdivision. The existence of the gap is well recognized by unscrupulous developers who exploit the situation for their own benefit without assuming any obligation to contribute to the cost of normal infrastructure services.

1.2Exploitation of the gap by developers subverts not only local authority planning schemes but also Queensland State planning policies.”

It would be unprofitable for me to examine the various options advanced to the Minister to avoid the situation with which the Council was dealing as the result of the applicant’s marketing of the various lots in the old Marlborough township subdivision; it suffices to observe that the levy of a special benefit rate on each lot in that subdivision to meet the cost of infrastructure thought necessary for the lots was one of them. I do not propose to analyze or refer in detail to the mass of documentary material placed before me in 13 or more volumes. Most were tendered by the applicant. I believe I have sufficiently set forth the history of events which led to this application for judicial review. Applications for judicial review were made of other Council decisions but I do not derive any assistance in determining the real issue to be determined in this case by having regard to the nature of those decisions sought to be reviewed or the ultimate outcome of those review applications. It suffices to say that the applicant did not succeed on any of them.
I will turn now to consider the impugned resolutions resulting in the imposition of the rate levy.
On 27 July 1993 at its Pre-Budget Meeting the Council considered the public infrastructure requirements of the historic town subdivision for about one hour. The matter of imposing the impugned rate was debated and ultimately it was resolved -
“That Council propose to:-

1.Undertake roadworks on the area of land known as Old Marlborough Township near Marlborough in the 1993/94 financial year at a cost of $750,000.00 such road works to comprise -

(a)upgrading of the intersection of Coorumburra Road with Sarina-Marlborough Road;

(b)the undertaking of all necessary engineering studies to confirm the suggested appropriate level of flood immunity and Q5 for Coorumburra road from the intersection with the Sarina-Marlborough Road to Turner street.

Should the studies recommend a different level, the determination of the appropriate level to be referred to Council with the supporting recommendations;

(c)upgrading of Coorumburra Road from the intersection with the Sarina-Marlborough Road to Turner Street -

(i)raising of road level where necessary to the determined level of flood immunity;

(ii)construction and sealing of roadway eight metres wide to provide for two lanes of traffic;

(iii)construction of culverts across Marlborough and Coppermine Creeks.

2.That pursuant to Section 23(1)(i)(cc) of the Local Government Act the Council propose to establish a Separate Fund to be known as the Old Marlborough Township Infrastructure Fund - Area E, and levy a separate charge of $900 on each of the allotments within the proposed benefited area which is rateable land for the purposes of Section 24 of the Local Government Act 1936.

3.That the draft budget for the proposed Separate Fund be framed as follows:-

Disbursements

Studies/Surveys  $50,000
Sarina-Marlborough intersection  $100,000
Construction - Coorumburra Road  $600,000

$750,000
=======”

4.That it be a recommendation to the Budget Meeting that appropriate resolutions and a budget be adopted to give effect to the above proposals.”

On 28 July 1993 the Council passed the following resolution at its Budget Meeting (attended by the Shire Engineer):
“That:-

(1)Pursuant to Section 23(1)(i)(c) of the Local Government Act 1936 Council establish a separate fund in relation to a separate charge to be made and levied on each of the allotments within the area outlined in red identified on the map designated Area “E” attached to these Minutes which is rateable land for the purposes of Section 24 of the Local Government Act 1936; such fund to be known as the Old Marlborough Township Infrastructure Fund and the area subject to the separate charge to be known as Area “E”.

(2)The separate charge made and levied for Area “E” be in addition to the differential general rate and the Rural Road Construction and Maintenance charge for Area “B” in which Area “E” is situate.

(3)For the purposes of Section 21(4A) of the Local Government Act 1936, Council is of the opinion that each of the allotments within the area outlined in red identified on the Area “E” map attached will benefit from proposed works.

(4)For the purposes of Section 21(4B) of the Local Government Act, Council considers that the separate charge be made and levied equally on each of the allotments within the area outlined in red identified on the Area “E: map attached to these Minutes which is rateable land for the purposes of Section 24 of the Local Government Act 1936.

(5)Pursuant to Sections 21 and 21(4-4D) of the Local Government Act 1936, Council hereby makes and levies a separate charge of $900.00 on each of the allotments within the area outlined in red identified on the Area “E: map for the cost of proposed works.

(6)For the purposes of calculating the respective levy, each allotment within a rating assessment shall be designated as one (1) unit of charge at $900.00.

(7)That the Separate Charge Fund budget for the Old Marlborough Township Infrastructure Fund - Area “E” totalling $750,000.00 be adopted, and be signed and sealed with the Corporate Seal of the Council.”

I will deal with the principal contentions of the applicant under three broad headings -

(1)Bad faith-improper purpose;
(2)Lack of statutory power under s. 21(4) of the Local Government Act 1936 (as amended) on 13 May 1992; and
(3)Unreasonableness-irrationality on the Wednesbury principle.

Bad faith-improper purpose
On my assessment of the evidence there is not the slightest direct evidence to support the applicant’s proposition that in passing the impugned separate rating resolution the Council was acting for the improper purpose of mulcting the applicant to which I have referred. In my judgment the Council had decided forthwith to provide all weather access to a 940 urban lot subdivision at a stage when several hundred lots were under contract to persons who wished to use them for permitted and with Council planning consent for permissible uses - including permanent and/or temporary personal occupation. Whether the decision was unreasonable within Wednesbury is a matter for later consideration.
The applicant called seven Councillors to give evidence as to the information that they had available to them when they passed the resolutions of 27 and 28 July 1993 and as well to some extent as to why they passed those resolutions. Unsurprisingly, the applicant obtained no support for its case by calling those witnesses. On the contrary on my appreciation of their evidence, which was the only direct evidence in the whole case as to the bona fides of the Council in passing those resolutions, it makes it very difficult if at all possible, for the applicant to succeed on its first and primary contention.

It is clear that Council officers and indeed members of the Council themselves were all greatly concerned at the efforts of the applicant to sell off the old historical subdivision in 1991/92. Early in 1992 all the Councillors travelled to the old subdivision site by bus accompanied by engineers and other council officers to see for themselves the nature of the road which gave access to the subdivision, the lots of which were then in the process of being sold by the applicant.
It is clear from the evidence that the estimate of the cost of upgrading the road to the standard which the Councillors thought was reasonable was fixed after obtaining estimates from the Council engineers who were familiar with the cost of road construction in the district. It is also clear from evidence completely independent of those Council officers that the estimate was a reasonable one. Expert evidence was called by the applicant to suggest that it wasn’t reasonable but no effort was made on the part of the applicant to lead evidence to show what would have been a reasonable cost of constructing a road necessary to give all-weather access to and from the historic subdivision.
A great deal of emphasis was placed by the applicant upon the fact that the Council had proceeded on the unreasonable assumption that all 940 lots would be quickly sold individually to different people; and it was likely that even had they been sold as the applicant was hoping to sell them within 12 months of putting them on the market it was unlikely that there would be a large number of those blocks used for residential purposes immediately - particularly after the amendment to the Town Planning Scheme. The contention seems to be that although they may all have been sold to people who intended to use them for a residential purpose, nevertheless in the ordinary course of events, perhaps years might pass before there was a sufficient number of purchasers willing and intending to use those lots for that purpose sufficient to justify the provision of the proposed road access. It was said that having regard to the notice of intention given by the Council to resume much of the land for the purposes of an airfield and/or the notice of intention to resume parts of the historic subdivision for the purpose of regularising the location of Coorumburra Road and indeed the action of the Council declaring as flood-prone land about one-third of the historic township subdivision to make it impossible or at least very difficult and expensive for people to build houses on that flood-prone land it is clear that the imposition of the special rate on 28 July 1993 was a mala fide exercise of the Council’s power designed not indeed to give all-weather access to the historic subdivision site but simply to mulct the applicant who still owned much of the historic township. Indeed, the applicant and Kirkee Pty Ltd (its transferee of much of the land) owned most of the land. Only a couple of hundred of blocks had been sold to end-user purchasers.
It was contended that when the Council procured the amendment to its Town Plan it achieved a result which would allow it to prevent the erection of dwelling houses on any part of the historical subdivision without its planning consent. In that situation so it was said, there was no need to improve the road to the standard the Council proposed because it was unlikely that the Council would ever give planning consent to the erection of a dwelling house on a quarter-acre block in that subdivision and that consequently there would be many less than 940 lots in the ownership of 900 or more people which would be required to generate a great increase in vehicular traffic over Coorumburra Road.
It was contended that in the circumstances this change in zoning which preceded the levying of the special rate strongly supports if not compels an inference that the resolution was mala fide and directed to achieve an improper purpose.
The plain fact of the matter however under the current zoning of the land is that the owners may apply for planning permission to erect on even a quarter acre lot a dwelling house. It is clear from the evidence that some people purchased four lots or more. It is a matter of common knowledge that many homesteads in remote areas are constructed in a house paddock of an acre or less in locations far removed from the infrastructure and amenities that one would expect in a 940 lot urban subdivision.
Local authorities in the administration of town planning schemes in my view are obliged to look at each application for planning approval on its individual merits. It may well be the case that if a number of people purchased four or more lots with a view to amalgamating them into areas of an acre or so, they may be able to advance arguments leading to the grant of planning permission to construct a dwelling house on those lots if amalgamated. The development constraints upon the erection of perhaps 200 dwelling houses on this 940 lot subdivision resulting from problems with septic systems, underground water contamination etc., may well be much less than constraints should efforts be made to develop 940 or more individual lots each with its own septic system and perhaps underground water supply. It may well be the case having regard to the rainfall in the area that houses could be constructed with large roof water tanks to provide sufficient water for residential use. After all that has been the situation with many rural homesteads located well away from urban centres during the past century or more.
Even if of 940 lots sold, most were used as a single lot, it is probable under the Town Planning Scheme and By-laws made under it that persons who purchased a quarter acre lot would have the right to build a farm shed of some sort with a sufficient roof area to catch water for drinking, bathing, etc. If there were insufficient capacity in the tank to provide water for a septic system, the evidence suggests that there is underground water available which would probably be suitable for it. The owner of such a lot would have a right to park a caravan on it which could be used for three weeks at a time should that person desire to use the lot as an inexpensive bush retreat, perhaps a few times a year for a few weeks at a time. It is not uncommon for people who enjoy the absence of urban amenity and the pleasures of “roughing it” in interesting bush country for a few weeks a year to achieve their ambition by the use of caravans which they leave on small areas of “bush” land.
These are all matters in my view which must or should have crossed the mind of the Council when it decided that forgetting about any other of the infrastructure that 940 residential sized lots might need, at least one need which should urgently be met was an upgrading of the road access to the subdivision.
Quite apart from the pressure which the Council could reasonably expect from purchasers of those lots for an upgraded road - when they were paying the specified minimum rate that all landowners were required to pay, although because of the sale price of the land the rates may have been less than they would have been had it enjoyed the amenities expected of a 940 lot urban subdivision - it was also required in my view to consider the impact of a large number of people on small lots - particularly those only there for a few weeks at a time who might be marooned on the subdivision or denied access to it by reason of the low standard of the road stretching from the Sarina-Rockhampton Road to Turner Street which seems to be a main street (which has not been closed) passing through the historic township subdivision. I am unimpressed by the contention of the applicant that it would have been fair and reasonable for the Council to have done nothing to upgrade the road until pressure was brought to bear by persons either building a dwelling house or using a caravan on the historic subdivision - whenever that might occur. There would obviously be a danger to persons in times of perceived emergency travelling over the creek crossings with water flowing through them; in my view it is ludicrous to suggest that the Council would have been acting reasonably in making no provision for proper access to the subdivision which was being sold to people all around Australia as being “ready to build on” until serious consequences were experienced as the result of the poor standard of the road.
I have had the opportunity of perusing briefly the submissions on behalf of the applicant which have been expanded to 216 foolscap pages plus a few pages of schedules.
The onus is on the applicant in this case to prove mala fides and improper motivation. There is no direct evidence in my view to support such a finding. Indeed, the only direct evidence on the matter which was called by the applicant fails to persuade me that there was in fact any such improper conduct or mala fides on the part of Council when it passed the resolutions of 27 and 28 July 1993.
I am unpersuaded that the other actions taken by the Council with respect to the giving of the Notice of Intention to resume the land for airfield purposes or the declaration of part of the land as being flood-prone or the procuring of the amendment to the Town Plan were undertaken for any improper purpose. The Council was liable to pay compensation for loss suffered by the applicant in the event that the proposed resumption did not proceed; the resumption not having proceeded, a claim for compensation for loss suffered as the consequence of the giving of the notice is in fact currently pending in the Land Court.
There was no evidence whatever called to show what smaller area and its best location for an airport within the subdivision might be. There was no expert evidence as to the desirable buffering or separation of residential land from an airfield of the size in issue. On balance I think the giving of the Notice of Intent to Resume part of the historic subdivision for airport purposes was not merely an urgent step taken towards the maintenance/and/or provisional protection of what had for long been regarded as an important facility available for public use but also one which would indeed inhibit the sale of the ¼ acre lots within the subdivision. Accepting that there was such an ancillary purpose or motivation in giving that notice I am certainly unpersuaded, even having regard to the colourful language in the submissions taken to the Minister in February 1993 - that the Council in levying the impugned rate was making any effort to mulct or financially penalize the applicant because it disapproved of the enormous profits that it had made and/or was hoping to make by selling individual lots in this historic subdivision. The suggestion that the money collected upon the levy of the rate was intended in some fashion to be “set off” against compensation which might be recovered by the applicant ignores the clear provisions of s.23(4) of the Local Government Act which requires that such money be spent for the purpose for which the rate was levied.
I say that subject to the observation that the only avenue reasonably open to the local authority in the circumstances to enable it to establish what, in my view, it reasonably concluded was a necessary and/or desirable all-weather road access to this fairly large subdivision was to levy a separate rate over land it concluded would benefit from that improved access to a more substantial extent than would other land in the shire. Even had the applicant obtained subdivisional approval for this land from the Council - in spite of the content of the Strategic Plan - it is clear that approval would have been given only on condition that the applicant provide essential infrastructure for that subdivision.
The evidence indicates that the cost of providing the essential infrastructure for a 940 plus lot urban subdivision on this site would have exceeded $23 million. The most important basic and indeed essential part of that infrastructure was the provision of safe all-weather road access to those lots; the Council in my view acted reasonably in accepting the estimated cost of such provision by the Council engineers at $750,000.
In my view, on the basis of direct evidence called by both parties, the Council acted without mala fides in imposing the rate levy; I am quite unwilling to draw any inference of improper purpose or mala fides from the earlier actions of the Council motivated to the extent that they may have been by the desire to impede the sale of lots until the amendment of the town planning scheme could be effected.
The applicant had actually sold lots on or immediately adjacent to the air field at about the time the notice of intention to resume was given; it had obtained certificates of title to enable the lots upon which the airfield had been constructed to be transferred; it had made it quite clear that it proposed to sell those lots and indeed had offered to sell to the Council an alternate site for an airfield. I am quite unpersuaded in the circumstances that in giving the notice of intention to resume the Council was doing more than attempting to preserve what had generally been regarded as a very useful community facility until it resolved after due consideration whether it would in fact effect the resumption which it then contemplated. The giving of the notice certainly had the consequence of impeding the sale of lots on and in the vicinity of the airfield until after further investigation the Council decided not to proceed with the resumption. The applicant has pending a claim for compensation in respect of the loss if any it suffered as a consequence of it being given that notice of intention to resume to which I have referred and upon which the applicant heavily relied to support its case.
Lack of Statutory Power under s.21(4)
I will turn next to the second argument advanced on behalf of the applicant - that is that on all the facts before it the resolution of the Council was not lawful because it did not meet the requirements of s.21(4A) of the Local Government Act as it stood in July 1993.
It is convenient at the outset to set forth the relevant statutory provisions of s.21(4) of the Local Government Act or its equivalent before, at the time of and subsequent to the passing of the resolutions imposing the special levy under consideration when construing the legislation at the time the resolutions were passed.
Immediately prior to its amendment on 13 May 1992, s.21(4) of the Local Government Act (1936-85) provided as follows:-
“              SEPARATE RATES FOR PARTICULAR FUNCTIONS
s.21     ...
(4) Separate rates for particular functions. The Local Authority may in each           year make and levy a separate rate for a particular function or particular functions of local government under this Act or any other Act for the special benefit of any particular part of the Area.

The function or functions in respect of which the separate rate is made and levied shall be specified in the resolution making and levying such separate rate.

The Local Authority -
(a)shall define the part of the Area specially benefited by the particular function or particular functions in question;
(b)if it thinks it is fit and proper to do so, may divide the part so defined into subdivisions according to the extent to which each is respectively benefited;
(c)may include in the one subdivision lands that are not contiguous.

Where the Local Authority as defined a part of the Area to be specially benefited by a particular function or particular functions of local government and has not divided the part so defined into subdivisions, the separate rate shall be made and levied equally on the rateable value of land in the benefited area.”

Section 23(4) of that Act provided as follows:-
“Separate funds. (i) A separate fund shall consist of the moneys following, that is to say:-

(a)All moneys received in respect of the separate rate for which the separate fund was established;

(b)All moneys received by the Local Authority in respect of the particular function for which the separate rate is made and levied.

(ii) A separate fund shall be applied to expenditure necessarily incurred in respect of the particular function for which the separate rate for which the separate fund was established is made and levied.

(iii) Where a separate fund is closed any balance therein shall be transferred to the general fund.”

On 13 May 1992, s.21(4) was amended by repealing the section as it had previously stood and inserting in lieu the following:-
“s 21 ------
(4) A separate rate or charge is a rate or charge made and levied on all or any rateable land in a local authority’s area for or towards meeting the cost of any works, services, facilities or activities supplied or undertaken, or proposed to be supplied or undertaken, by or on behalf of the local authority.
(4A) A separate rate or charge must be made and levied on the rateable land in the local authority’s area that, in the local authority’s opinion, has or will benefit from, or have access to, the work, service, facility or activity because of which the rate is made and levied.

(4B) A separate rate or charge may be made and levied on such bases as the local authority considers appropriate.

(4C) A local authority’s resolution making a separate rate or charge must identify the rateable land to which the rate or charge applies.

(4D) Parcels of rateable land may be identified for the purpose of making or levying a separate rate or charge in whatever way the local authority considers appropriate.

(4E) Despite subsection (5), a separate rate or charge may be used for the purpose of defraying interest and redemption charges incurred by the local authority in relation to the works, services, facilities or activities because of which the separate rate or charge is made and levied.”

Section 21(4A) as amended was repealed by the Local Government Act 1993. The repeal operated from 26 March 1994. From that date the relevant special rating provisions of the Local Government Act 1993 provided as follows:
“Special rates and charges

971.(1) A local government may make and levy a special rate or charge
on rateable land if -

(a)the rate or charge is for a service, facility or activity; and

(b)in the local government’s opinion, the land has or will specially benefit from, or has or will have special access to, the service, facility or activity.

(2) The special rate or charge may be made and levied on the bases the

local government considers appropriate.

(3) Without limiting subsection (2), the amount of the special rate or charge may vary according to the extent to which, in the local government’s opinion, the land has or will specially benefit from, or has or will have special access to, the service facility or activity.

(4) The local government’s resolution making the special rate or charge must identify the rateable land to which the rate or charge applies.

(5) The local government may identify parcels of rateable land to which the rate or charge applies in any way it considers appropriate.

(6) Subsection (1) is taken to have been complied with if the special rate or

charge is made and levied on -

(a)all rateable land that, at the time of making and levying the rate or charge, could reasonably be identified as land on which the rate or charge may be made and levied; or

(b)all rateable land on which the rate or charge may be made and levied, other than land accidentally omitted.”

It is the contention of the applicant that whatever may have been the constraint imposed on the Council’s power to impose a special rate prior to 13 May 1992 and subsequent to 26 March 1994 it is clear from the terms of s.21(4) -(4E) that at the time the Council passed the impugned resolutions s.21(4) required that all lands that took benefit from the proposed road upgrading must be the subject of a separate levy and indeed, all lands which had access to that 1.3 kilometre length of upgraded road in the local authority area should also be subject to the separate rate.

It is the applicant’s contention essentially that the failure of the local authority to impose the separate rate on all rateable land in its area which would or might “benefit from” or “have access to” the roadworks rendered the resolution invalid and the separate rate therefore is unenforceable against the applicant’s land - or indeed against any of the other blocks of land of which the applicant had disposed which fell within the historic Old Marlborough Township subdivision.
In my view, s.21(4) of the Local Government Act at the time of the impugned resolutions empowered the respondent to levy a separate rate for the improvement of road access to the subdivision which would be of more benefit to “any particular part of the area” of the shire than it would to other areas of the shire generally.
In my view on the plain wording of the section, the respondent would prior to its amendment in May 1992 be empowered to levy a separate rate for the funding of those roadworks for the special benefit of the land within the historical subdivision which was of course part of “the area” of local government for which the respondent had responsibility.
Under that section the respondent was obliged to identify or define the part of its area specially benefitted by the construction of the roadworks.
There is no doubt that the respondent in this case did define that part of its area which would be “specially benefitted” by the road construction works.
It is clear in my view that the Council formed the opinion that the only area in its local government area which could be said to really benefit from or have access to the road improvement proposed was the site of the historic subdivision.
When one considers the terms of s.21(4) after the May 1992 amendment, it seems to me that it has substantially the same effect as the section it replaced. Section 21(4A) requires a separate rate to be levied “on the rateable land in the local authority’s area” that in the local authority’s opinion will benefit from or have access to the work because of which the special rate is made and levied.
Although there is no reference to “special benefit” as in the former legislation under s. 21(4), s.21(4A) requires a local authority to form an opinion as to the rateable land in its area which “will benefit from or have access to” the relevant work.
On one view, all rateable land and the occupiers of all rateable land within the whole of the local authority area will have access to the roadwork proposed by the respondent. After all, the road is to be a dedicated roadway to which all members of the public - whether they occupy or use land within the local authority area or not will be entitled to access. Similarly, to the extent that the occupier of any land within the local authority area - perhaps one hundred kilometres away from the proposed road improvement work wishes to travel on it, that land - will logically “benefit from” the roadworks. Land far removed from the proposed roadwork or even land close by, the occupiers of which, might only consider using the road for inessential purposes and quite infrequently, might also be said logically “to benefit” from and to “have access to” it.
The whole object however of the imposition of a separate rate is to burden only those lands within the whole of the local authority area which the local authority perceives to be benefitted to such an extent by the works as to make it right to require the owners of those lands to pay a special rate - over and above the general rate which all lands in the local government area attract - because of the use and benefit the local authority perceives will accrue to those areas of land which perhaps will be different in kind, degree and utility from the use or benefit to other areas of land upon which a special rate to meet the cost of those works is not imposed.
In my view, in spite of the change in expression in the legislation no underlying philosophical change is apparent so that any lot of land whose occupier might however infrequently, and however unnecessarily use or have the ability to use roadworks for example in connection with land so occupied must “be subject to a separate rate”. If that were the situation, it would seem quite unnecessary to require the local authority to reach any opinion as to “the rateable land” in its area which “has or will benefit from or have access to the work” in respect of which the rate is made and levied. The fact that s 21(4A) requires the local authority to arrive at an opinion obviously endows it with a discretion to consider the works to be constructed in the context of the benefit it perceives will accrue to part only of the rateable land in its area over and above that accruing to the rateable land generally within its area.
Strictly speaking, the occupier of every lot of land in the local authority area and his invitees, licensees etc. will have the same legal access to and the same benefit of travelling over the newly constructed road as the occupier of every other lot in the local authority area.
This being so, the opinion of the local authority can only be relevant if the owners of some lots will be perceived to derive a greater or more substantial benefit and improvement of access than the owners of other lots in the shire. In my judgment the opinion of the local authority under s.21(4A) was to be based on the same considerations substantially as the opinion to be formed on both the earlier and later statutory provisions to which I have referred.
In my judgment a common-sense approach is required in construing the statutory effect of s.21(4A) as it stood for a relatively short period of time including the occasion of the impugned resolutions.
In my view the second leg of the applicant’s argument based upon the construction of s.21(4A) requiring every parcel of rateable land the owner of which may however infrequently and however unnecessarily, make use of the road for access to or from his property or to or from some other part of the local authority area be separately rated is unsupported by the history of similar legislation designed to achieve a similar spread of burden of rates collected for such local authority works. The construction of similar sorts of legislation is reflected in Council of the City of Parramatta v Pestell (1972) 128 CLR 305 and particularly in the discussion of Barwick C.J. at pp. 310-315.
On my view that decision gives no assistance or support to the applicant’s argument.
The adoption of the construction for which the applicant contends, would produce the absurd result that the owners of land having any access to Coorumburra Road - however secondary it may be and however infrequently resort may be had to such access would be obliged to be subjected to a separate rate equal to that to be paid by persons in the historical subdivision area to whom in the respondent’s opinion obviously, such road access was essential having regard to the size of the rateable areas of land in that subdivision and the nature of the use which might be expected of such urban-sized lots.

3. Unreasonable - Irrational Decision - The Wednesbury Principle

The locus classicus statement of this principle of course is that of Lord Green M.R. in Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948) 1 K.B. 223 where at 230 the Master of the Rolls dealt with an argument advanced that a decision of the local authority was “unreasonable” in the following terms:
“Once that is granted Mr Gallop is bound to say that the decision of the authority is wrong because it is unreasonable, and in saying that he is really saying that the ultimate arbiter of what is and is not reasonable is the court and not the local authority. It is just there it seems to me that the argument breaks down. It is clear that the local authority are entrusted by Parliament with the decision on a matter which the knowledge and experience of that authority can be trusted to deal with. The subject matter with which the condition deals is one relevant for its consideration. They have considered it and come to a decision upon it. It is true to say that if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere. That I think is quite right; but to prove a case of that kind would require something overwhelming and in this case the facts do not come anywhere near anything of that kind. I think Mr Gallop in the end agreed that his proposition that the decision of the local authority can be upset if it is proved to be unreasonable really meant that it must be proved to be unreasonable in the sense that the court considers it to be a decision that no reasonable body could have come to. It is not what the court considers unreasonable, a different thing altogether. If it is what the court considers unreasonable the court may very well have different views to that of a local authority on matters of high public policy of this kind. Some courts may think that no children ought to be admitted on Sundays at all. Some courts might think the reverse and all over the country I have no doubt when a thing of that sort, honest and sincere people hold different views. The effect of the legislation is not to set up the court as an arbiter of the correctness of one view over another. It is the local authority that are set in that position and provided they act as they have acted within the four corners of their jurisdiction this court in my opinion cannot interfere.”

I refer to only a couple of the many authorities that have explained and applied this principle - Secretary of State for Education and Science v Tameside Metropolitan Burrough Council (1977) A.C. 1014; R v. Boundary Commission for England ex parte Foot & Ors (1983) 1 Q.B. 600 particularly at 626.
The essence of the applicant’s argument as I understood it on this point - which was really a very subsidiary point I thought - was that the respondent was unreasonable in imposing the levy when it did because there was not at that time a sufficient development on the land being sold generating a sufficient use of the road in question to justify the imposition of a rate then. Presumably on this approach it could only be reasonable for the respondent to impose a separate levy after the applicant had managed to sell if not all of the blocks of land for $5,000 a block or less, then at least the greater part of them. The approach would seem to involve the respondent doing nothing to upgrade the road until perhaps 400 people regularly were wishing to gain access to their blocks off the main highway. This approach would of course be to the economic advantage of the applicant. The smaller the number of unsold lots within the subdivision at the time any levy or rate might be imposed, the smaller the “development costs” it would incur in this “development project”. The greater the number of lots sold, the greater the number of lot owners would be required to share with the applicant the costs of providing infrastructure which the Council concluded was essential to the safe use of the land within the historical subdivision.
While undoubtedly the matters canvassed by the applicant suggesting that the levy of the rate was premature may have been advanced in an effort to dissuade the Council from imposing the separate rate when it did, it is very difficult in my view to say that its decision to levy it then rather than to wait for a year or two before making such a levy was so unreasonable as to amount to irrationality on its part on reaching the conclusion which it did in July 1993 which justifies interference upon the Wednesbury principle.
Clearly, the respondent would have been subjected to much criticism had it postponed providing a safe all-weather access to the subdivision until matters of safety made the improvement of the road a matter of urgency.
I am unpersuaded that the resolutions of the respondent imposing the separate rate were unreasonable within the Wednesbury principle.
In my judgment the applicant has failed on all three grounds argued in support of its application for judicial review.
I dismiss the application.
I will hear argument on the question of costs.

[1998] QSC 188

18 September 1998

Key Legal Topics

Areas of Law

Administrative Law

Legal Concepts

Judicial Review

Natural Justice & Procedural Fairness

Legitimate Expectation

Proportionality