Sydney City Council v Garbett Pty Limited

[1995] HCATrans 4

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney           No S129 of 1994

B e t w e e n -

SYDNEY CITY COUNCIL

Appellant

and

GARBETT PTY LIMITED

First Respondent

CHALFORD HOLDINGS PTY LIMITED

Second Respondent

BRENNAN J
DEANE J
TOOHEY J
GAUDRON J
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 8 FEBRUARY 1995, AT 10.17 AM

Copyright in the High Court of Australia

MR R.V. GYLES, QC:   If your Honours please, I appear with my learned friend, MS K.M. GUILFOYLE, for the appellant.  (instructed by Blake Dawson Waldron)

MR M.H. TOBIAS, QC:   If your Honours please, I appear with my learned friend, MR T.S. HALE, for the respondent.  (instructed by Webeck Farland Pender)

BRENNAN J:   Yes.  Mr Gyles.

MR GYLES: If your Honours please, the issue in the case is a narrow one, that is, whether there is inconsistency between the section 139 of the Local Government Act, on the one hand, and the Ordinance on the other. 

BRENNAN J:   Do we have any notes of argument, Mr Gyles?

MR GYLES:   Yes.  May I hand to your Honours firstly notes of argument.  Now the Ordinance, your Honours, in the form in which it took at the time relevant to this appeal, is set out at the top of page 61 of the appeal book, and provides that:

A rate must be levied during the year for which it is made.

And it is that injunction which founds the invalidity of the rates which were declared invalid in this case.

Your Honours, the form of the section at the relevant time is to be found at 60 of the appeal book starting at line 14, and your Honours will see that in subsection (1):

every rate shall be made and levied for one year commencing on the first day of January in the year in which the rate is made or the year following the year in which the rate is made.

Subsection (2):

Every rate shall -

(a)  be made by resolution of the Council; and

(b)  be levied by the service of a rate notice:

Then comes the proviso, the construction of which is critical to the case:

Provided that the liability of any person for rates shall not be affected by reason only of the fact that notice has not been given to such person within the year for which the rate is made.

This proviso shall have effect as if it had been inserted in this Act on the first day of January, one thousand nine hundred and thirty-six.

Your Honours may also refer to section 143 of the Act. Do your Honours have the Local Government Act section 143? As it then stood, it provided that:

Subject to section 160DA -

which is not here relevant -

every rate shall be due and payable to and recoverable by the council on the expiration of one month after service of the rate notice.

And the other statutory provision to which we would refer your Honours immediately is section 628 of the 1919 Act, which provides that:

Any notice required by or under this Act to be served upon any rateable person or upon any owner or occupier of any land, building or premises may be served as provided in this section.

And the section provides that:

The service may be -

(a) personal; or

(b) by delivering the notice at or on the premises at which the person lives or carries on business, and leaving the same with any person apparently above the age of 14 years;

(c) by posting the notice by prepaid letter -

et cetera, and -

(d) by affixing the notice on a conspicuous part of the land building or premises.

With that background in mind, may I take your Honours back to 139 of the Act.  Your Honours will observe that in subsection (1) the making and levying of the rate is referred to but it is at least unclear whether a rate need be levied in, as well as for, a particular year.  It is that question to which the proviso is directed and makes clear, in our submission, that a levy by service of a rate notice may take place later than the rating year although the levy may only be in respect of that year.  We submit that is the ordinary English construction of the proviso.

As, however, we put in paragraph 2 of our outline, the legislative history would lead to and require the same result.  If I could hand to your Honours, before going to the Blue Mountains Shire Council Case, a copy of the 1919 Act so far as it was relevant at the time of the Blue Mountains Case and then, your Honours, copies of the 1945 Amendment Act which follows.

BRENNAN J:   Mr Gyles, this is to show what the intention of the proviso is, I take it.

MR GYLES:   Yes, and in particular to explain the date of the retrospective operation of it.

BRENNAN J:   Yes, but am I right in thinking that the real problem lies in the possible inconsistency between the proviso and clause 24 of the Ordinance?

MR GYLES:   Well, your Honour, the Ordinance clearly says you must levy within the year and we did not in relation to part of the matters in issue.  It was held at first instance that the Ordinance had the force of law and would thus in the circumstances prevail.  That was an argument not pursued in the Court of Appeal and it was conceded there that if there were an inconsistency the Act must prevail.

BRENNAN J:   Well, does it come to this:  that if the Act prevails, you succeed; if the Act does not prevail, Mr Tobias succeeds?

MR GYLES:   Correct.

BRENNAN J:   Whatever the history of 139 is, it really does not take us any further, does it?

MR GYLES: Well, it does to this extent, your Honour: what the Court of Appeal said was no inconsistency on a particular basis to which I will come in a moment, but the effect of that was to find that, as a matter of construction, section 139 either required levying during the rating year or at least was silent about that point, leaving the Ordinance to fill the field.

It is our submission that both as a matter of initial construction and as a matter of legislative history section 1 of the proviso to section 139(2) expressly provides that levying can take place later, thus creating the inconsistency and, if that is what the Act says, the Act must prevail. So the legislative history may be relevant in order to understand the true effect of 139(2) or the proviso to it.

Could I then take your Honours to Blue Mountains Shire Council v Perpetual Trustee (1935) 12 LGR 93.  It was, as your Honours see, a case in the District Court and the submission which was put at the hearing is found on 94, left‑hand column, and over to the top of the next column.  Counsel for the defendant:

submitted there was no case for the defendant to answer.  The council cannot levy in 1934 a rate which was made in 1920. 

And that argument was then developed.  At 95, left‑hand column, the learned District Court judge said:

I think the point taken on nonsuit is correct, and is tenable in the circumstances ‑ that no proof of due service sufficient to create defendant’s liability has been given.  I therefore enter a verdict for the plaintiff -

et cetera.  Your Honours will note the date of that decision was 29 March 1935. 

If your Honours then go to Act No 19 of 1945 - we have not reproduced the whole of that Act because it was a general amending Act which picked up a number of matters, but section 8 omits the then proviso to 139(2) and inserts the proviso in the form in which it stood relevantly to this litigation.  There is no reference by name to the Blue Mountains Case and the second reading speech does not assist in that regard.  However, having in mind the effect of the terms of the proviso and the date of its operation, it is nearly certain that the purpose of the proviso was to reverse the effect of the Blue Mountains decision.  That certainly is the view taken in the New South Wales courts later. 

May I add to the authorities and hand to your Honours an extract from the case of Bland Shire Council v The Rural Bank of NSW (1956) SR(NSW) 14, and we have reproduced the relevant page, which is page 18.

DEANE J:   Mr Gyles, what is the distinction, if there be one, between levying a rate and serving notice?

MR GYLES:   There is none.

DEANE J:   Well, that is at the heart of your argument, is it not?

MR GYLES:   Yes, your Honour, that is so. 

DEANE J:   And, is there an argument to the contrary, that levying a rate is somehow different to serving notice of it?

MR GYLES:   We have not heard that argument, your Honour.  Page 18 of that report, your Honours, Mr Justice Maxwell and Mr Justice Roper, the first full paragraph,

The third matter of general application arises from the fact that where his Honour held the Bank to be liable for rates he held that the liability could not be carried back before 1st January, 1936. The plaintiff has appealed against this decision and its appeal is restricted to this particular point. We think it is clear that his Honour’s decision in this matter was correct. The question arises from the terms of an amendment to s. 139.....which was made by Act No. 19 of 1945 and which substituted a proviso for the existing one in sub‑s(2) of s. 139 ‑

That is then set out.

Prior to this proviso being inserted the view had been taken that a rate could not be levied on a person outside the year in which the rate was made.  This was decided in Blue Mountains S. C. v Perpetual Trustee Co. (Ltd) (2)and the decision was given in the year 1935.  It is not necessary to examine the correctness of this decision as the Act stood when it was given.  The terms of the proviso indicate that the legislature accepted it as being correct and the only question now is as to the meaning of the proviso itself.

And their Honours hold that it applies only post 1 January 1936, and:

applies only where a rate is made after the proviso is deemed to have been inserted in the Act.

So their Honours seem to be fairly clear that the effect of the proviso was to reverse the effect of the Blue Mountain Shire Council Case as from 1 January 1936. I might also say, your Honours, that my learned friend was good enough to refer us to a decision of Mr Justice Sugerman, sitting as a judge of the Land and Valuation Court ‑ and my learned friend is in a position to provide copies ‑ which also construes section 139(2) and its legislative history in a way consistent with our submissions, and that is, your Honours, the decision of Birt & Co Pty Ltd v Leichhardt Municipal Council 18 LGR 78, and the relevant passages are at page 85. 

The point which he raised in the case was a rather more complicated point than arises here, but as part of the reasoning at the foot of the left‑hand column on page 85 his Honour said:

However the mere giving of a retrospective operation to a valuation of land may not suffice to enable the Council to “levy” in respect of it a rate “made” in an earlier year.  It furnishes a prerequisite in the rating of land which has become rateable by force of the statute by reason of some change in its ownership or use. 

This is now the relevant part:

For the levying of the rate, however, service of a rate notice is necessary.  In 1945 there was inserted into sub-s (2) the proviso -

and it is set out.

It may be that, but for that proviso, the quality of rateability might have become attached during the course of a year to land not previously rateable, and a value might also have been given to the land as from the commencement of its rateability without its being possible to enforce the payment of the statutory proportion of the rate for the broken period because of the absence of service of notice during that year. If that was the result of the Act as it stood before the 1945 amendment, the proviso to s 139(2) overcomes the difficulty.

So that we respectfully submit that this is virtually a settled construction of the provision and is, on that view, plainly inconsistent with the Ordinance.

May I take your Honours then to the reasoning by which Mr Justice Priestley, who gave the leading decision on this point, came to a different result.  That reasoning commences at 62 line 30:

It was submitted that there was no inconsistency between the section and the clause. This submission was based on the view that the proviso to s 139(2) dealt with situations where notice had not in fact reached the relevant person within the relevant year, although the rate had been levied by the service of a rate notice by virtue of the provisions for service in s 628 of the Local Government Act as a result of which effective service for the purposes of the Act could be achieved without there having been service in fact.

This seems to me to be a very fine drawn argument, and I would not be disposed to agree with it but for the following consideration. Section 143 provides -

and I have taken your Honours to that. 

This seems to be a clear indication that a rateable person does not become liable for a rate until after service of the rate notice. The proviso to s 139(2) also, fairly clearly, assumes that a person can be liable for rates although notice has not been given to that person within the year for which the rate was made. Such a person can only be liable for the rate without notice having been given to that person if the rate has been levied by the service of a rate notice (that is by one of the methods in s 628) without service in fact having been effected upon the rateable person. The proviso would therefore only operate in respect of rateable persons deemed to have been served within the meaning of the Act, but not served in fact. On this reading of the provisions there is no inconsistency between them.

Your Honours, that is a very difficult passage to comprehend and, with respect to his Honour, it does appear to be illusory. If we can take it step by step. As your Honours know, under 143 a rate is due and payable on the expiration of one month after service of the rate notice. Section 628 provides various alternative methods of service of a rate notice.

Assuming there to be service within 628 of a rate notice, which is for this purpose within the relevant time, section 143 simply operates to make the rate payable. That is the end of it and whether or not the person actually received the document is quite irrelevant to the liability.

McHUGH J:   The rate is due and payable if you leave it at the premises.

MR GYLES:   Precisely, and when his Honour says:

The proviso would only operate in respect of rateable persons deemed to have been served.....but not served in fact -

it is not clear whether he means that the proviso would help or harm that person.  The proviso seems to have the effect that liability is maintained although the document had not been received, whereas, as your Honours can see, liability is fixed as soon as there is service within 628.  So it is our respectful submission that the argument is more than finely drawn.  It really is illusory.

May I then take your Honours to the reasons which his Honour advances for adopting what he at lines 20 and 21 described as an artificial construction of the provisions:

I do so because the construction at least has the following features, which seem to me to be virtues.  First, the construction seems to me, at least semantically, to be open; it serves to give some effect to both the section and the clause in the ordinance, and I can see no other approach which would not invalidate the ordinance.

So his Honour is construing the Act in order to support the Ordinance, which we submit is an inversion or reversion of the usual order:

Second, the policy in cl 24 seems to me to be a sound one and the construction allows it to be implemented.  The clause will promote efficiency among councils and will mean that potential rateable persons will know from year to year where they stand, rather than being exposed to retrospective taxation which could reach back for any number of years.

Your Honours, the difficulty about that is that his Honour is really expressing a view about policy without any evidence or basis for it.  As the evidence produced to the Court on the special leave application shows, there is a very great area where to adopt the construction which is contended for leads to an enormous number of practical difficulties.  I do not trouble your Honours with those.  It is simply our submission that his Honour was in no position really to judge the policy virtues one way or the other of this.

Furthermore, once a rate is made for the year, a person with potential liability for those rates knows of the liability.  It is simply a question of having it ‑ in a sense, a later levying of the rate is a deferral of payment of the liability rather than creation of a new liability.

Finally -

his Honour said:

the construction should not greatly impede the financial operations of councils.

For his Honour to come to that view his Honour would have to have known what proportion of rates are levied outside the current year.  He simply had no way of knowing what the true answer to that was and, again, the evidence in the special leave application would show that to be an unsafe conclusion.

DEANE J:   That is a bit harsh, is it not?  What his Honour is really saying is councils can ‑ ‑ ‑

MR GYLES:   It can be fixed up.

DEANE J:   Councils can move a bit more quickly.

MR GYLES:   But, your Honour, that assumes they can.  You see, one of the problems is you are relying upon the Valuer-General and all sorts of other subdivision problems, and so on.

DEANE J:   That might be a legitimate criticism of what his Honour says.  I do not think the further one, the earlier one, was.

MR GYLES:   Then his Honour went on to say that if he is wrong then the government or Parliament can readily correct this position and I submit that for all his Honour knew, there may be many millions of dollars of rates at stake and the financial capability of councils in New South Wales at stake, it is hardly sufficient to say that there can be presumably retrospective legislation, with all the difficulties which that entails.

So, for those reasons, your Honours, it is our respectful submission that the judgment below is plainly wrong, and that there is and was inconsistency

with the Ordinance, and that there was no invalidity in the levying of the rates by service after the rating year. 

BRENNAN J:   Thank you, Mr Gyles.  Mr Tobias?

MR TOBIAS:   I would be less than frank, your Honour, if I did not confess to the Court that my task is not an easy one.  Can I hand up an outline of argument.

BRENNAN J:   It will make your advocacy all the more valiant, Mr Tobias.

McHUGH J:   I noticed you allowed your junior to put the argument before Mr Justice Bannon.  Did you put the argument in the Court of Appeal, Mr Tobias?

MR TOBIAS:   Do I have to answer that question, your Honour?  As, your Honour knows my junior is not standing here today.

BRENNAN J:   Yes, Mr Tobias.

MR TOBIAS:   Your Honours will see from the outline that the argument is put on two bases.  The alternative argument set forth in paragraphs 8 to 11 is the argument that was put to the Court of Appeal which attracted the agreement of Mr Justice Priestley.  The first argument, your Honour, in anticipation of what my learned friend said today, is to meet his point which we must confess has some substance, that the argument that attracted Mr Justice Priestley was one which was not open to him in the circumstances that that construction of the proviso would give it no work to do.

That is why the first argument that we present in this outline seeks to meet that point, a point which one must concede has substance.

The starting point, however, your Honour, for the argument is section 118 of the Local Government Act which your Honours should have. It is in a different form to that which it was in in 1945, when the proviso was added to section 139(2). In that which your Honours should have on the Bench, I hope, section 118(1) provides that

The council of a municipality.....shall in each year make and levy a general rate -

on the land value -

of all rateable land in the area. 

That subsection in 1945 was to be found in section 118(1) but to a similar effect. May I hand to the Court the relevant provisions of part 7 of the Local Government Act taken from the New South Wales red statues in the form in which they stood in 1945.  I do it that way, not because relying upon the commentary, but because the side notes indicate when various amendments were made during the relevant period.

That contains all the provisions relevantly between section 118 and section 165 and on the last two pages of the document I have handed up are the provisions of section 628 as it stood in 1945. It has been slightly amended since then by the insertion of the subsection (2A) to deal with document exchanges but I do not think relevant for present purposes.

Section 118(1), as it stood, at all material terms up to and including 1945, was in similar form to 118(2) as it now stands. The effect of that section, in our respectful submission, is prima facie the statute required that the general rate should not only be made but must also be levied in the year in question.

The point made by my learned friend in relation to section 139(1), in its use of the pronoun “for”, has to be read against the background of the mandatory requirement of the starting point in relation to rates set forth in section 118(2), as it now is or it was at the time of the litigation, and 118(1) as it was in 1945.

BRENNAN J:   What does “levy” mean in 118(2)?

MR TOBIAS: It must have the meaning, in our respectful submission, that it has it 139(2). There is no question, in our respectful submission, and we could not argue to the contrary that the levying of a rate is carried out or performed by the service of a rate notice and by one or other of the modes of service set forth in section 628.

The peculiar thing about the subject proviso - and, of course, its wording is taken to some extent, but perhaps broadened, from its wording in the original proviso that was in section 139 as at 1919 and through until 1945 which my learned friend has handed to your Honours, and where, otherwise, section 139(2)(b) is in the same terms - is that it refers to the giving of a notice rather than the serving of a rate notice. The critical distinction and the issue that arises as a consequence of the use of the words by the draftsman is by his use of the words “given to” which would not have occurred and we would not have been here, as we point out in our outline, if he had used the words “served on”.

It is our respectful submission, for reasons that I will shortly develop, that what the draftsman was concerned about - and specifically - was to provide a particular continuation of liability in a circumstance where it would or might not be possible to actually serve a notice upon a rateable person within the relevant period prescribed by the Act; in this case the period prescribed by section 118(2) as it now is, subsection (1) as it then was.

McHUGH J:   But on that hypothesis, would the proviso have any scope for operation, having regard to the terms of 143 and 628?

MR TOBIAS: Yes, it would, your Honour, because it would operate in those circumstances where the Council, for whatever reason it saw fit, had elected one particular mode of service, that is, personal service. It would not operate, and we submit it does not operate, in those circumstances where the Council adopts a mode of service over which it has total control, that is, those referred to in section 628(2)(b), (c) and (d).

One can understand that the legislature may well take the view that where the Council determines to serve a rate notice personally, for whatever reason ‑ ‑ ‑

McHUGH J:   That hardly ever happens, does it?

MR TOBIAS:   In matter of practice it does not, but what the position was in 1945 may well have been different.  We just do not know and that is one of the difficulties with the material that was put before this Court on the special leave application to which Mr Gyles referred as to the difficulties of the councils as at 1995 in terms of serving of rate notices or the levying of rates is really irrelevant because one does not know what the situation was in 1945 in those respects and we would just be speculating if we tried to determine what the difficulties were then.

No doubt shortages of staff, difficulties with the Valuer‑General may or may not have been the situation in 1945, whatever they might be in 1995.  So one does not get any help one way or the other there, but, your Honour, it is, in our respectful submission, and gives the proviso work to do if one contemplates a situation, as we submit the draftsman did and thereby chose his language accordingly and specifically, to postulate a situation where service of the rate notice required co‑operation of the person to be served and, in particular, in circumstances where the form of service that the Council, for whatever reason, considered appropriate was not wholly within the Council’s control.

Now, the modes of service set out in section 628(2)(b), (c) and (d) are all modes of service totally within the Council’s control and do not require either the rateable person to make him or herself available for service or otherwise require that person’s co‑operation. One can fully understand situations when that person is not available is avoiding service overseas or whatever.

The draftsman obviously thought, in our submission, that it was appropriate in those circumstances, where that co‑operation was required, to provide in the statute for a situation where liability on that person would apply, notwithstanding that that person was not given notice or did not receive notice personally of the rate.

But that reason does not apply, and there is no necessity for it to apply, in relation to those modes of service, which were totally within the Council’s control.  In those circumstances, in our respectful submission, the draftsman carefully chose his words in relation to the width that he was going to provide in terms of the proviso itself.

BRENNAN J: Mr Tobias, it seems to me that perhaps the draftsman has not quite carefully chosen his words in 118(2), because he does not speak of levying a rate on a person; he is speaking of levying a rate on the land value. Is not section 118 designed to govern the exercise of a power of making a rate?

MR TOBIAS:   I am not so sure, your Honour, with respect.  The words “on the land value” are related, in our respectful submission, to the word “rate”, because you rate on the land value.  You do not levy.  You levy the rate.  But the words, “on the land value” are related to the fact that rates are made based on land value, that is X amount of cents in the dollar of unimproved land value, whatever it might happen to be.

BRENNAN J:   That is not borne out by subsection (6A)(a), third line.

MR TOBIAS:   Well that was a section, of course, that is of more recent origin.  That is why we sought to hand up to your Honour the legislation as it was in 1945.  Will your Honour excuse me for a moment ‑ (6A)(a)?

BRENNAN J: No, section 118, subsection (6A), paragraph (a), third line “levied on the land value”.

MR TOBIAS:   No, I understand what your Honour is putting.  If your Honour goes to ‑ and there seems to be some confusion ‑ 118(1) in that part of the statute I have handed up to your Honour, your Honour will see that the words in 1945 was that:

The council.....shall in each year make and levy a general rate ‑

and then purports to set out what the minimum amount of that rate shall be.  The rate itself, as a matter of practicality and reality, is a rate based on so much in the dollar of the value of the land, as otherwise defined.  But the making of the rate and the levying of the rate are two steps that the Council was required to take, as 118(1) or (2) makes clear, not for each year, but in each year.  It is repeated, of course, at 139(1), in terms of the rate being “made and levied for” a particular year commencing on a particular date, namely “the first day of January” next preceding the making.  But, in terms of the obligation upon the Council to make and levy, that obligation, in our respectful submission, is to be found in 118(2) or (1) as the case may be.

GAUDRON J:   But why does not “make and levy” in that context simply mean strike?

MR TOBIAS:   No, your Honour, because  ‑ ‑ ‑

GAUDRON J:   But how do you levy a general rate?

MR TOBIAS:   Well, you only levy the rate by notifying the party who is rateable.

GAUDRON J:   But we are talking about a general rate.

MR TOBIAS   The striking of the rate, one would have thought, is the making of the rate.  You strike a rate, by resolving to make the rate, subject to certain preconditions.  You levy the rate in order to give rise to liability in the person rated.  The term “strike” in that context, in our respectful submission, which is of course not used in the section, is only confined as a matter of English, in our submission, and in the context of rating to the making of the rate.  The council is obliged to make the general rate for the year, which is simply a general rate on all rateable land of X cents in the dollar, of land value.

That is the step one.  That strikes the rate.  But in order to make a rateable person liable, it is necessary to levy the rate as in the manner that 139(2)(b) sets forth.

McHUGH J:   Mr Tobias, I must say that I am confused.  I am not sure I understand your argument at all.  Does it mean this, that if, on 10 September 1991 when they serve by post the notice on your client, they had gone down and served personally another shopkeeper or lessee in the building, the proviso would have operated in that situation and the shopkeeper would be liable, but your client is not liable?

MR TOBIAS:   That is probably right.

McHUGH J:   Well, that just strikes me as absurd.  So if they go down tomorrow and serve the notice personally on the  ‑ ‑ ‑

MR TOBIAS:   Well, it has to be served on the rateable person at the time of the levying of the rate.

McHUGH J:   Well, if they go down and serve it on his secretary, it would be valid.

MR TOBIAS:   Only if my client was then the rateable person.

McHUGH J:   Yes.

MR TOBIAS:   But leaving aside personalities  ‑ ‑ ‑

McHUGH J:   If you had two neighbours and it was posted out to one and they served it on the other, the proviso would protect one but not the other.

MR TOBIAS:   That gives the proviso work to do.  It may not be a particularly sensible result because the council has the option of avoiding that problem, but what the statute is doing, in our submission, is requiring the council, within a specified time, if it is going to use modes of service that do not bring the liability, or the potential liability, to pay the rate to the notice of an individual, it requires it to be done within a specified period, no doubt so that people can order their financial affairs accordingly.

McHUGH J:   But the only effect, then, on your argument, is that it is only as long as the Council refrained from serving personally that they do not get the protection of 139.

MR TOBIAS:   Our submission is, if they decide in their wisdom not to serve personally, then they do not get the protection of the proviso they are bound to, or if they do, to serve the notice within the specified time. 

McHUGH J:   But as long as the person remains a rateable person they can keep coming back?

MR TOBIAS: If the person is a rateable person they can come back and serve it personally, but the point then, of course, is at that time that person gets actual notice of a liability and they are then only bound to pay one month thereafter and if they do not pay interest only runs from that time. On the other hand, if they are served in a non-ordinary way ‑ that is, other than personally as Mr Gyles points out ‑ section 143 imposes the liability one month after the date of service and interest, under the interest provisions of the Act, runs from that time in those circumstances, without the rateable person necessarily being aware, not only of his or her liability but also of the fact that interest is running. In relation to personal service, then in terms of interest ‑ which at this time was some 20 per cent and had been for many years ‑ interest only runs from one month after liability arises, which would be two months after the date of personal service.

So one can see that the purpose of the proviso, in our respectful submission, is to certainly permit the Council to personally serve out of time, but the benefit that has in terms of the ratepayer is that he, a) has actual notice of his liability and also, of course, the fact that interest runs one month thereafter in circumstances where he is actually aware of that liability. 

Where the notice is served using one of the other, what I might refer to as the impersonal modes of service, then not only does liability attach but interest runs and it may well be without the ratepayer being aware of his liability.

BRENNAN J:   And how is a rate notice served personally under the Act on a corporation?

MR TOBIAS:   At the registered office in accordance with the relevant provisions at the time of the Companies Code, or the Companies Acts as they then were, by leaving at the registered office.

BRENNAN J:   So they are imported into the Local Government Act?

MR TOBIAS:   I think so, your Honours, yes. 

DEANE J: Mr Tobias, how does your argument stand with section 631?

MR TOBIAS: Your Honour, there is no inconsistency there, your Honour. Section 631 merely ‑ ‑ ‑

DEANE J:   It applies 628.

MR TOBIAS:   To the form of notice referred to in ‑ ‑ ‑

DEANE J:   No, what it says is 628 applies to any requirement of the giving of notice, which means the requirement of giving of notice in the proviso would include giving in any of the ways set out at 628 ‑ ‑ ‑

MR TOBIAS:   That is correct.

DEANE J:   ‑ ‑ ‑ which would take you back to the beginning unless you exclude 631.

MR TOBIAS:   Your Honour, it permits you to give - well, except this, your Honour:  the proviso is not related to a requirement to give a notice or, for that matter, to serve a notice.

DEANE J:   That is a narrow approach.  The other approach would be to take advantage of the proviso you are required to have given notice.

MR TOBIAS: It is not a question of - well, to take advantage of the proviso you have to serve the notice by that method referred to in section 628, being personal service.

DEANE J: But 628 says the requirement in the proviso is notice being given to, section 628 and 631 in combination.

MR TOBIAS: Yes, your Honour, but, in our respectful submission, the proviso does not require, in terms of section 631, the giving of notice.

DEANE J:   I follow the way you put that.  As I was saying, the other approach would be that the requirement for the proviso to operate is that notice has been given and “notice has been given” means 628’s definition as applied by 631.

MR TOBIAS:   Yes, your Honour.  With respect, that would be an artificial approach, in our respectful submission, because the obligation as contemplated by the section is to serve the notice, which would include, of course, the giving of the notice by way of personal service, but would not be confined to it.  Your Honour, there are two other points we would wish to make, your Honour.  The first is the second reading speech, as we have set out in our outline, provides little assistance, as these things tend to do, except in relation to the synopsis of principal provisions that the Minister in his second reading speech appended thereto at the page that we are handing up.

As your Honour will see from pages 1846 and 1847, there were some 52 amendments to the legislation.  This was, I think, probably one of the first times the Local Government Act 1919 had been overhauled. The relevant one for present purposes is number 5:

Enable rate notices to be served out of time when not possible to serve in the ordinary way.

It is our respectful submission, your Honours, that the use of the narrow terms adopted by the draftsman in the proviso creates an ambiguity which can be resolved by reference to the second reading speech and the purpose as set out there of what the Parliament intended to achieve.

The manner in which the draftsman then went about achieving that objective as set forth in Hansard, was to confine the proviso in the manner that we have suggested, because it is in that situation that it would not be possible to serve, “in the ordinary way”.  “In the ordinary way” being a reference, in our respectful submission, to the ordinary way of service, which is personal service. 

The other modes of service set forth in section 628 in our submission, in the context in which they are to be found, could not be regarded as ordinary. They are artificial because, in fact, service in the sense of receipt by the person intended to be served, of that to be served, is not necessarily achieved.

TOOHEY J:   But as a matter of ordinary language, Mr Tobias, if you ask the question of someone, did you give notice to X, they could say, “Yes, yes of course I did.  I sent him a letter”.

I mean, the only possible basis for giving the word “given” the meaning you wish to attach to it is to contrast it with service.

MR TOBIAS:   That is correct, or served.

TOOHEY J:   It really stands or falls on that, does it not?

MR TOBIAS:   It does.  We concede that in the first paragraph of our outline.  One must accept that if the draftsman had used the words “served on”, the argument obviously would not be available.  But that is the word that the draftsman has decided to adopt.

Your Honour, so far as the two cases referred to, and I will be short in relation to that, the Blue Mountains Case, of course, was decided on a non-suit.  Interesting enough, the Ordinance provision, which is set out at the bottom of page 93 of the report, was in a form which, if it had remained, would have disposed of this case as well, namely:

“The Council shall make the general rate within the first three months of the year and may levy it at any time and thereafter within the year:  Provided that this shall not invalidate rate notices served after the expiration of such period.”

Can I hand up to your Honours a history of that clause which we have summarised on the front page and attached thereto, the relevant extracts from the Ordinances.  Peculiarly enough, the Ordinance remained in that form, as set out at the bottom of page 93, right‑hand column of the Blue Mountains Case, until 1 May 1990, when it was changed to what it is now.  Why, one does not know.

The reason why clause 24 of Ordinance 5 did not determine the Blue Mountains Case is because his Honour the learned judge, at page 94, right‑hand column, about the middle of the page, construed the proviso wrongly, in our submission, to confine it to the period between the expiration of the first three months and the expliration of the year.  He said:

The word “period” in that ordinance appears to refer to “the first three months” and not “year”.

So that he confined the proviso to where the rate notice was served after the expiration of three months, but before the expiration of 12 months; one would have thought a construction that has some difficulty.

As to the Bland Shire Council Case, your Honour, although their Honours there were of the view that the proviso was as a result of the ultimate decision in the Blue Mountains Case, the question of construction with which they had to deal is quite different to that with which your Honours are faced.

As to Mr Justice Sugerman’s decision in Birt which, as far as I am aware, and I cannot give you an explanation, was not mentioned in any of the courts below ‑ in fact, I only found it yesterday ‑ is a decision which, I must confess, is obviously against me.  However, his Honour was not confronted and did not appear to be confronted in argument directly with the question of construction which we have sought to articulate before this Court.  His Honour there was concerned ‑ although in some respects the case does have similarities to the present, because the question in that case, and the major part of the judgment is devoted to whether the land was exempt from rating, as occurred in the present case, as a consequence of being at least for private purposes from the Crown.

His Honour held against that proposition and held the land was rateable, but it only became rateable at the time of the grant of the lease as some point of time during the rating year and, therefore, his Honour said that section 139(7) applied thereto to make the land rateable in respect of that part of the year, the proportionate part of the year, during which the land was no longer exempt.

The question that then arose and which was articulated by Mr White for the respondent, at page 80 the right-hand column, towards the bottom of the page, that is:

The proviso to 139(2) empowers a council to serve a rate notice in any year subsequent to that in which the rate was levied -

a submission which was upheld and which Mr Bowen, as he then was, one assumes, submitted to the contrary although the argument attributed to him in the report does not explicitly say so. 

His Honour - there is no question, and one does not know the extent of the submissions that were put - was of the view that the effect of the amendment to the proviso in 1945 was to overcome the problem that he articulated.  All one can say about the decision is that his Honour, it would not appear, was not taken to the argument that we wish to press upon this Court and, to that extent, in our submission, we would submit this decision would not be followed.  Of course, we do not know from the report the method of service that the Council adopted in that case.  I have attempted to find it; it just says, “The notices were served in 1951 without indicating the method of service.”

McHUGH J:   Your argument does not depend on the Ordinance at all then?  You would still have this same argument if the Ordinance did not exist, would you?

MR TOBIAS: It would have it under 118. What we submit is that clause 24(b) of Ordinance 5 merely sets out specifically in the Ordinance what we submit is both explicit and implicit in section 118(2).

McHUGH J:   Except is not clause 24(2) invalid even on your argument, because it purports to operate generally, and you concede it cannot operate in respect of personal service?

MR TOBIAS:   To that extent it would be cut down.  To that extent, yes.

McHUGH J:   Maybe not merely cut down, maybe it is invalid generally.

MR TOBIAS:   It does not matter for the purposes of my argument.  Those are our submissions, your Honour.

BRENNAN J:   Thank you, Mr Tobias.  Mr Gyles.

MR GYLES: Your Honours, I would ask your Honours when considering my learned friend’s reliance upon section 118 to consider the scheme of the Act. It does not really matter on what point you take it, it is the same. Division 2 of the Act in 1945, which is when my friend wishes to look at the matter, dealt with four kinds of rates - general rates, special rates, local rates and loan rates - and then went through each of them, defining them and laying down certain principles in relation to them.

And those provisions go through to section 132. 132 then deals with what is rateable land, which is another principal issue; 134 deals with values and valuation and then there is the part of the Act which deals with the making and levying of rates. So one can take it that the references in sections like 118 are not seeking to draw a distinction between making and levying or dealing with procedural matters at all; they are defining what a general rate is, what a local rate is, and so on. When one comes to how this is to be done, section 139 forms part of that provision and would not be read down or altered by reference to section 118, which does use levying in a rather perhaps general sense and does not turn to its more particular use, that is levying upon the individual who bears the statutory responsibility for payment of the rate.

Your Honours, our second point is that the distinction my learned friend draws between personal service and other methods of service or giving of notice, as he would have it, would lead to an irrational result, and a result which is not hinted at by the Blue Mountains’ decision which, on all hands in previous decisions of the New South Wales courts it has been accepted was the reason for and the rationale for the proviso. We would submit that you would not now read the section to provide such a distinction in a way which ignores legislative history. We also, with respect, submit that the argument is without merit when section 628 is combined with section 631 in the manner put to my learned friend.

The last point I wish to make, Your Honours, is the reliance upon the synopsis in the second reading speech.  What is said is, enabling rate notices to be served out of time when not possible to serve in the ordinary way.  It is rather a Delphic statement, but as

one would normally read it it is opposed to the result which my learned friend argues for, because the proviso, as he reads it, enables councils to serve personally, which may be a difficult method of service, when not possible to serve in the ordinary way - he would have to read “ordinary way” as service by posting on the block or post, pre-paid post, and so on.  It would hardly ever not be possible to serve in those ways.  So whatever is meant by that synopsis, it does not, with respect to my learned friend, support his arguments and we respectfully submit that they are no answer to the case we make.

BRENNAN J:   Thank you, Mr Gyles.  The Court will consider its decision in this matter and will adjourn until 10.15 tomorrow morning.

AT 11.23 AM THE MATTER WAS ADJOURNED SINE DIE