Land use code can still be incorporated to rating category description even though it is not approved by resolution

Ugarin Pty Ltd v Lockyer Valley Regional Council – What’s the case about? The Supreme Court of Queensland delivered a decision in the case of Ugarin Pty Ltd v Lockyer Valley Regional Council [2017] QSC 122 which involved a judicial review challenge by Ugarin Pty Ltd against the Lockyer Valley Regional Council’s decision relating to differential general rates.

Numerous grounds for challenge were submitted by Ugarin in its challenge of the validity of the Council’s rating decision which included the Council’s rating decision was so unreasonable that no reasonable local government could so exercise the power. Nonetheless, the outcome of the case ultimately came down to the Court’s determination on whether the Council was required to approve the land use codes by resolution in order to use them to establish the differential rating categories.

The Court found that it was not necessary for the Council to approve the land use codes by resolution. The land use codes referenced in the rating categories were “simply” codes set out in the Council’s land record database and it was sufficiently clear which land use codes would apply to a particular parcel of rateable land by searching the database.

In considering Ugarin’s “unreasonable” argument, the Court relevantly noted the inherent difficulty in demonstrating unreasonableness on the part of the local government given the nature of the rating power and the limited constraints on its exercise. Ugarin experienced a similar difficulty and could not sustain its argument in that regard.

It was found by the Court that Ugarin’s land was used for a shopping centre and met all the other criteria set out in the rating category description and therefore was appropriately categorised. The judicial review challenge was dismissed accordingly.

Snapshot of Court’s consideration and findings

The Council chose to use land use codes in the descriptions for rating categories which added another criterion to the descriptions. In the Court’s view, the reference to the land use codes within the description for a differential rating category was therefore characterised as part of the description of the category.

The term “land use codes” was defined in the Council’s revenue statement to mean “those land use codes approved by the Lockyer Valley Regional Council effective from 1 July 2015”.

Ugarin submitted that the land use codes used by the Council to establish the rating categories must be approved formally by resolution. Since the land use codes were not approved by a Council’s resolution, its rating decision was invalid.

However, the Court did not accept Ugarin’s submissions having regard to the following:

• the requirements of a resolution for the decision in respect of the differential rating categories and the description of each of the rating categories were clearly set out in the Local Government Regulation 2012;
• there were no specified constraints on the exercise of the Council’s discretion in deciding the differential rating categories and the description of each of the categories (see Ostwald Accommodation Pty Ltd v Western Downs Regional Council [2016] 2 Qd R 14);
• the land use codes referenced in the descriptions for the rating categories were accessible from the Council’s land record database, of which the Council’s councillors would have been aware, at the time of the making of the Council’s rating resolution;
• by using the land use codes in the descriptions for the rating categories, the Council had “approved” the codes;
• further, in this instance, no owner or potential purchaser of rateable land would be disadvantaged in working out which of the rating categories would apply to the land as a search of the Council’s land record database would reveal the applicable land use codes.

Points worth noting

It is permissible for local governments to incorporate land use codes to the descriptions for differential rating categories even though those land use codes may not have been approved by resolution. However, it will still depend on how the land use codes are being incorporated in the descriptions in the revenue statement and how they can be identified.

As reinforced by this case and other previous cases in Queensland, it is often difficult for a ratepayer to successfully challenge a local government’s differential general rating decisions by way of judicial review.

However, whilst in general terms a local government’s rating power is broad and reasonably unconfined, its exercise of the power is still subject to limitations established by a number of long standing case authorities.