Judicial Review of Rating Decisions

Challenge to differential general rate dismissed

In the recent decision of the Supreme Court in Ostwald Accommodation Pty Ltd v Western Downs Regional Council ([2015] QSC 210), a ratepayer's challenge to the Council's decision to impose differential general rates on land used for workforce accommodation was dismissed.

King & Company represented the Council.

In the judgment handed down by His Honour David Jackson this week, the Court confirmed that it is lawful for local governments to levy differential general rates on land having regard to: -

• the partial use of land, as opposed to the predominate use of land;
• the economic value of the use of land; and
• the fact that certain land uses generate much greater income for the owner of land than other uses.

The decision considered other recent authorities dealing with the differential general rating power of local governments, including Paton v Mackay Regional Council and Xstrata Coal v Bowen Shire Council.

The Court found that the Council had not acted unreasonably in adopting descriptions of rating categories which referred to land being used "in whole or in part". This aspect of the decision is particularly significant, as it validates the practice of many local government across the State which rate land on this basis.

The Court also found that having regard to the characteristics of the occupants of the land, rather than the characteristics of the land itself, was acceptable. His Honour noted that it is lawful for local governments to have regard to the use of land in levying rates. As a consequence, the Court held that, "....the economic value of the use or uses to which improved land in the local government area is or may be put [is]a relevant consideration", in the exercise of a local government's rating power.

His Honour's analysis of the Xstrata decision is of particular significance. His Honour held that, "....Xstrata is not authority for the proposition that the capacity of an owner of land to pay a differential rate is an irrelevant consideration, except in the sense that it is personal capacity of the owner, independent of any quality of the land".

The decision serves as an important confirmation that it is lawful for local governments to impose a comparatively higher differential general rate on land used for economically valuable uses.

The ratepayer now has twenty-eight days to appeal the Court's decision.

If you are interested in knowing more about this issue, please contact King & Company Dispute Resolution and Litigation Partner, John Butt or King & Company Executive Partner, Tim Fynes-Clinton.