Landowners win appeal against rating categorisation

Local governments in Queensland have a broad discretion to impose rates on land which are a major source of funding for local government. However, landowners have the right to challenge the rating categorisation applied to their land.

In BWP Management Limited v Ipswich City Council; W & V Nominees Pty Ltd as Tte for the Elton Family Trust No. 3 v Ipswich City Council [2018] QLC 14, the appellants owned two Bunnings retail outlets in West Ipswich and Springfield (Bunnings Properties).

Both Bunnings Properties were categorised by Council as being ‘Category 52a’ Drive-In-Shopping Centre. The appellants claimed that the correct categorisation for the properties was the commercial rating ‘Category 44b’. The monetary difference between the two different rating categories was 4.5054 cents versus 2.3682 cents in the dollar, on the rateable value of all rateable land in rating categories 52a and 44b, respectively.

The appellants initially objected to Council against the rating category imposed for the purposes of the rating of land in respect of both Bunnings Properties. The Council rejected both objections and confirmed the Bunnings Properties as being within rating Category 52a under the Council’s 2015/2016 Budget (the Budget).

The appellants subsequently lodged an appeal in the Land Court under the Local Government Regulation 2012 against the Council’s decision to reject the two objections.

Council argued that each of the Bunnings Properties fell within differential rating Category 52a. The only primary Council land use code applicable to rating categories 51A to 53D was Number 16 ‘Drive-In Shopping Centre’.

The appellants argued that both Bunnings Properties should be under differential rating Category 44b. There are 31 primary Council land use codes which apply to Category 44b. One of these is Number 11 ‘Shop – Single’, which is the primary Council land use code that the appellant said applied to the Bunnings Properties.

Land Court Member Smith held that the Council’s Budget is a statutory instrument. The issues in the appeal effectively came down to a matter of statutory construction and the proper interpretation of the Budget.

The Land Court determined that there was no doubt that the facts relevant to each of the Bunnings Properties meant that they both fell squarely within Category 44b (primary Council land use code number 11 ‘Shop – Single’) and Category 52a (primary Council land use code number 16 ‘Drive-In Shopping Centre’). This meant that more than one applicable rating category applied to both of the Bunnings Properties.

Given the finding that both rating categories applied, the case was ultimately determined on the basis of what the correct position is when two different rating categories apply.

In assessing the correct position, section 14A of the Acts Interpretation Act 1954 (AIA) was considered. Section 14A(a) of the AIA sets out that ‘in the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation’.

Section 14A of the AIA sets out the following example:

‘There is judicial authority for a rule of interpretation that taxing legislation is to be interpreted strictly and in a taxpayer’s favour (for example, see Partington v AG (1869) LR 4 HL 100 at 122). Despite such a possible rule, this section requires a provision imposing taxation to be interpreted in the way that best achieves the Act’s purpose, whether or not to do so would be in a taxpayer’s favour’ (our emphasis).

Council submitted that section 14A of the AIA has the effect of making it inappropriate to apply common law principles that taxing legislation, such as the Budget, should be interpreted strictly and in the taxpayer’s favour. The appellants submitted that to take such an interpretation takes the operation of section 14A of the AIA too far.

Ultimately, Land Court Member Smith agreed with the submission made on behalf of the appellants and held that ‘doubts should be determined in the taxpayers favour’.

Accordingly, the Land Court determined that it was appropriate that the rating category for each of the Bunnings Properties be changed from Category 52a to Category 44b.

Key takeaway

If you believe your property is in the wrong rating category, you should consider lodging an objection. The sole ground in which an owner may object is that the relevant local government has miscategorised the land with respect to the description in which the land has been included. If your objection is successful and your land is included in another rating category, an adjustment of rates will be a made.

Authored by: 
Stafford Hopewell, Partner
Sarah Day, Associate