Surf Coast Shire Council v Cameron
[2011] VSC 604
•21 November 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION AND PLANNING LIST
S CI 2011 02577
| SURF COAST SHIRE COUNCIL | Appellant |
| v | |
| JOHN CAMERON AND OTHERS | Respondents |
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JUDGE: | KYROU J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 21 November 2011 | |
DATE OF JUDGMENT: | 21 November 2011 | |
DATE OF REASONS: | 24 November 2011 | |
CASE MAY BE CITED AS: | Surf Coast Shire Council v Cameron | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 604 | |
JUDGMENT APPEALED FROM: | Cameron v Surf Coast Shire Council [2011] VCAT 714 (27 April 2011, Hadjigeorgiou M) | |
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ADMINISTRATIVE LAW – Victorian Civil and Administrative Tribunal (‘VCAT’) – Successful appeal from an order of the VCAT – The VCAT exceeded its jurisdiction under s 185(3)(b) of the Local Government Act 1989 in setting aside a special charge imposed on certain landowners by a municipal council pursuant to s 163 of that Act – Victorian Civil and Administrative Tribunal Act 1998, s 148(1).
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Miss E Peppler | Macquarie Lawyers & Strategists |
| For the Respondents | Mr J D McKay | Glenys N Dolphin Solicitors |
HIS HONOUR:
Introduction and summary
This is an appeal by the Surf Coast Shire Council (‘Council’) against an order made by the Victorian Civil and Administrative Tribunal (‘VCAT’) on 27 April 2011 (‘Order’) setting aside a special charge that was imposed on certain landowners in the town of Jan Juc by the Council pursuant to s 163 of the Local Government Act 1989 (‘LG Act’).[1]
[1]Cameron v Surf Coast Shire Council [2011] VCAT 714 (27 April 2011).
The Order was purportedly made under s 185(3)(b) of the LG Act in a proceeding in the VCAT that was commenced by 67 landowners (‘Applicants’)[2] against the Council (‘VCAT Proceeding’). Five of the Applicants, namely, John Cameron, John Bleazby, Lisa Costin, David Coldrey and Glenys Dolphin, were named as applicants and the remaining 62 Applicants were members of a group that was represented by Ms Dolphin.
[2]Co-owners of land have been treated as a single landowner.
The Council’s sole ground of appeal was that the VCAT exceeded its jurisdiction under s 185(3)(b) of the LG Act on the basis that a precondition for the making of an order under that section, namely, a finding against the Council under s 185(2)(b)(ii), (iii) or (iv), was not satisfied. The question of whether the VCAT had exceeded its jurisdiction is a question of law for the purpose of an appeal to this Court under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’).[3]
[3]Johnson v Director of Consumer Affairs Victoria [2011] VSC 595 (23 November 2011) [40]-[44].
On 21 November 2011, pursuant to s 148(7) of the VCAT Act, I made an order which allowed the Council’s appeal, set aside the Order and remitted the VCAT Proceeding to the VCAT to be heard and decided again. At the time that I made the order, I said that I would publish my reasons at a later date. These are my reasons.
Section 185 of the LG Act
Section 185 of the LG Act relevantly provides:
Application to VCAT
(1)A person may apply to VCAT for review of a decision of a Council imposing a special rate or special charge on that person.
(2) The person must apply—
…
(b) on the ground that—
(i)the works and projects or the period of maintenance for the purposes of which the special rate or special charge was imposed are not or will not provide a special benefit to that person; or
(ii)the basis of distribution of the rate or charge amongst those persons who are liable to pay it is unreasonable; or
(iii)if the planning scheme for the area contains any relevant policies or specific objectives, the works and projects proposed for the construction of a road or for the drainage of any land are inconsistent with those policies or objectives; or
(iv)if the planning scheme for the area does not contain any relevant policies or specific objectives, the works and projects proposed for the construction of a road or for the drainage of any land are unnecessary, unreasonable, excessive, insufficient, unsuitable or costly, having regard to the locality or environment and to the probable use of the road or drainage of the land.
(3) On a review, VCAT may, by order—
(a)vary the special rate or special charge declared by the Council in relation to its application to the applicant; or
(b)set aside the special rate or special charge if satisfied that the ground in subsection (2)(b)(ii), (iii) or (iv) is established; or
(c)dismiss the application and confirm the special rate or special charge.
VCAT proceeding
On 24 March 2010, the Council decided to construct concrete pathways in Jan Juc (‘Works’) and to fund the Works by imposing a special charge on landowners – including the Applicants – that the Council considered would benefit from the Works (‘Scheme’). The Scheme is known as the Jan Juc Pathways Special Charge Scheme.
In April 2010, the Applicants applied to the VCAT under s 185(1) of the LG Act for review of the Council’s decision to impose the special charge on them. The applications for review relied on the grounds in s 185(2)(b)(i), (ii), (iii) and (iv).
The applications for review were heard on 15 February 2011 by a single member of the VCAT, Mr Hadjigeorgiou. On 27 April 2011, the VCAT published its reasons for the Order (‘Reasons’).
In the Reasons, the VCAT relevantly stated:[4]
[4]All errors appear in the original.
20[T]he four grounds available for objectors to the scheme are set out in section 185(2)(b) of the Local Government Act 1989.
21[T]he last of these two grounds are grounds in the alternate. For the purpose of these reasons I propose to respond Ground 1 - Special Benefit: Ground 2 - Apportionment and Ground 4 - Works unnecessary or out of character with the area.
Special Benefit
…
28[A] large number of proposed properties to the south east and south west of the catchment of the special charge area, are located in an area where it will be difficult to ascertain any special benefit arising out of the proposed pathway network.
29As Mr Bleazby submitted, in respect of 7 Sandwich Avenue, there were no new pathways which would serve as a special benefit to that property. I agree with his submissions in respect of his property but of a number of other properties in those areas. I do not accept that the special benefit is of the indirect kind contemplated by the legislation. That may be applicable to a down stream underground drainage scheme but I don’t think it applies to a remote pathway which is of no benefit to that property through any direct new link.
30That is, in my opinion it is equally applicable to a number of the properties in those two precincts referred to earlier.
31A sealed pathway already exists alongside Sunset Strip connecting to the parkland reserves to the west and leading on to the Torquay township to the east. There are also additional unsealed pathways running south along Ocean Boulevard which are proposed to be retained and utilised.
32While I can understand the council’s wish to include as many properties as possible within the scheme to minimise the cost per property, the test must be that these properties will receive a ‘special benefit’.
33While one option is to exclude the properties referred to above from the Special charge scheme I do not propose to adopt this course as the number of properties potentially affected is uncertain and too great.
34As a consequence of the above I being satisfied the scheme includes a number of properties within, at least, the two areas I have previously referred to and identified, that will not receive a special benefit from the special charge scheme and as a consequence that, the special charge scheme must fail.
Apportionment
35In terms of the method of apportionment applied in this instance other than finding that some properties within the scheme will not receive a special benefit, I have found that the apportionment methodology used by the council to be an acceptable approach. The use of a 1, 0.8, 0.6, 0.4 and 0.2 apportionment factor appears to be sound and acceptable.
…
Conclusion
40As indicated earlier I am satisfied that the special charge scheme proposed will not result in a special benefit to a number of the properties contained within the scheme. As a consequence of this conclusion I have proposed to set aside the decision to adopt the special charge scheme pursuant to section 185(3)(b) of the Local Government Act 1989.
The interrelationship between sub-ss (2) and (3) of s 185 of the LG Act
Before considering whether the VCAT exceeded its jurisdiction under s 185 of the LG Act, it is necessary to examine the scope of that section and, in particular, the interrelationship between s 185(2) and (3).
The VCAT’s jurisdiction is invoked under s 185(1) when a person upon whom a special charge has been imposed by a municipal council applies to the VCAT for a review of the municipal council’s decision to impose the special charge on that person.
The application for review may rely on one or more of the grounds in s 185(2)(b). Apart from the grounds in s 185(2)(b)(iii) and (iv), the grounds are not mutually exclusive. In other words, depending on the VCAT’s factual findings, more than one ground may be made out.
The ground in s 185(2)(b)(i) differs from the other grounds in that it requires a finding about whether the works for which the special charge was imposed are or will provide a special benefit to the person who has made the application for review, that is, the applicant. The other grounds deal with features of the special charge scheme which do not depend on the impact upon the applicant. A finding under s 185(2)(b)(i) that there is no special benefit must be confined to persons who have made an application for review under s 185(1).
A finding that s 185(2)(b)(i) is made out in relation to an applicant enables the VCAT to make an order under s 185(3)(a) in favour of the applicant. An order under s 185(3)(a) cannot be made in favour of a person who is not an applicant.
An order under s 185(3)(a) can vary the special rate that was imposed on an applicant to a zero value but cannot set aside a special charge scheme.
In contrast, a finding that the ground in s 185(2)(b)(ii), (iii) or (iv) is made out enables the VCAT to make an order under s 185(3)(b) setting aside a special charge scheme. This is understandable, as those provisions deal with matters that go to the integrity of the special charge scheme as a whole.
Section 51 of the VCAT Act does not empower the VCAT to make an order that would be inconsistent with the carefully structured legislative scheme in s 185 of the LG Act.[5]
[5]See s 159 of the VCAT Act.
VCAT did not properly exercise its jurisdiction under s 185(2)(b)(i) of the LG Act
Section 185(2)(b)(i) of the LG Act, when invoked by an applicant, requires the VCAT to determine whether the works for which the special charge was imposed are or will provide a special benefit to the applicant.
In the VCAT Proceeding, each of the 67 Applicants invoked s 185(2)(b)(i). However, with the possible exception of Mr Bleazby,[6] the VCAT did not make a finding on whether any of the Applicants satisfied the requirements of s 185(2)(b)(i), that is, whether the Works are or will provide a special benefit to them. Rather, the VCAT purported to make general findings about whether properties within particular areas of Jan Juc will benefit from the Works.
[6]See para 29 of the Reasons, which is set out above at [9].
It follows that the VCAT did not perform the function conferred upon it by s 185(2)(b)(i) and thus erred in law.
VCAT’s order was not authorised by its finding under s 185(2)(b)(i) of the LG Act
I will now consider what the position would be if the conclusion set out at [19] above is wrong and the VCAT did in fact make a finding that the Works will not provide a special benefit to one or more of the Applicants.
For the reasons set out at [14] and [15] above, such a finding would have authorised the VCAT to make an order under s 185(3)(a) varying the special charge – including a variation to a zero value – in relation to the relevant Applicants. Such a finding, however, would not have authorised the VCAT to set aside the Scheme.
Paragraph 40 of the Reasons makes it clear that the VCAT purported to set aside the Scheme based on its purported findings under s 185(2)(b)(i). It follows that the Order was beyond the VCAT’s jurisdiction.
The VCAT did not make findings under s 185(2)(b)(ii), (iii) or (iv) of the LG Act
It was common ground before me that the VCAT did not make any findings under s 185(2)(b)(iii) or (iv). There was, however, a dispute about whether the VCAT had made a finding under s 185(2)(b)(ii).
James McKay, who appeared for the Applicants, submitted that para 35 of the Reasons contains a finding by the VCAT that s 185(2)(b)(ii) was made out. Mr McKay contended that the words, ‘other than finding that some properties within the scheme will not receive a special benefit’ in para 35, in the context of the preceding paragraphs in the Reasons, could only mean that the VCAT found that the basis of distribution of the special charge was unreasonable because it was levied on owners of properties who did not receive a special benefit.
I reject Mr McKay’s submission. Paragraph 35 of the Reasons does not contain a finding, either express or implied, that the basis of distribution of the special rate among those persons who are liable to pay it is unreasonable. On the contrary, that paragraph contains a finding that the method of apportionment is reasonable.
In paras 28 to 34 of the Reasons, the VCAT stated that an indeterminate number of properties in at least two areas of Jan Juc will not receive a special benefit from the Works. It is apparent from the Reasons that the VCAT was of the opinion that the owners of those properties should not be required to pay the special charge. The words, ‘other than finding that some properties within the scheme will not receive a special benefit’ in para 35 of the Reasons reflect this opinion. Those words mean no more than, as those properties would not receive a special benefit, their owners should not be liable to pay the special charge. Those words do not mean that the basis of distribution of the special charge among those persons who are liable to pay it is unreasonable.
Emma Peppler, who appeared for the Council, informed me from the Bar table that the practice among municipal councils is that, if the VCAT makes an order varying the special charge for an applicant, the amount of the charge that is no longer payable by the applicant is borne by the relevant council rather than being apportioned among other landowners who are liable to pay the special charge.
In any event, even if para 35 of the Reasons contains a finding under s 185(2)(b)(ii) that the basis of distribution of the special rate is unreasonable, para 40 of the Reasons makes it clear that the VCAT did not purport to make an order under s 185(3)(b) on the basis of such a finding. The only finding upon which the VCAT relied for the Order was the purported finding under s 185(2)(b)(i) that the Scheme will not provide a special benefit to a number of properties.
I reject Mr McKay’s submission that the words, ‘the special charge scheme proposed will not result in a special benefit to a number of the properties contained within the scheme’ in para 40 of the Reasons refer to the alleged implied finding in para 35 under s 185(2)(b)(ii). Those words plainly refer to the purported finding in para 34 of the Reasons under s 185(2)(b)(i). The words, ‘and as a consequence of that, the special charge scheme must fail’ in para 34 of the Reasons leave no room for doubt.
For the reasons set out at [15] above, the Order was beyond the VCAT’s jurisdiction, as it was based solely on a purported finding under s 185(2)(b)(i) of the LG Act.
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