Background
On the 27 February 2017, the NSW Land and Environment Court dismissed an appeal of the applicant seeking to invalidate the Rates and Charges notices issued by a respondent council – Prefabricated Buildings Pty Ltd v Bathurst Regional Council [2017] NSWLEC 44.
Facts
The matter concerned water availability charges and sewerage access charges (Availability Charges) being levied by Bathurst Regional Council (the Council) against the Premises which were owned by the applicant. Council had levied the Availability Charges against the Premises since 2004 under the authority of s 501 of the Act, and such charges had been paid by the applicant. Council also issued separate water usage charges and sewer usage charges (the Notices) under s 502 of the Act every three months in arrears, The applicant specifically challenged the validity of the Notices under s 574(1) of the Local Government Act 1993 (NSW) (the Act) on the basis that Council was only able to charge for water services and sewerage service according to the actual use of the service and had no power to make the Availability Charges, which were imposed independently of actual use.
Judgment
The Court considered the following questions:-
1. Whether the word “may” in s 502 of the Act should be read as must”
The applicant submitted that the word “may” should be read as must in section 502 which provides that “A council may make a charge for a service referred to in section 496 or 501 according to the actual use of the service” and Council could only make a charge according to the actual use of service. The Court rejected the applicant’s submission and found that there was a prima facie presumption the word “may” confers a discretion and distinguished the authority relied on by the applicant from the present facts and found that the word “may” in s 502 was not to be read as “must”.
2. Whether the Act confines charges to “actual use” charges?
The Court was not satisfied that Chapter 15 of the Act precludes Council from levying charges other than in accordance with the actual use of services. The Court rejected the submission by the applicant that the Act did not specify alternative means of charging for services and found that was not necessary determinative of an intention to allow charging based solely on actual use. It was not apparent from the Act that actual use charges were the only means of charging for services set out in s 496 and s 501.
3. Whether the statutory presumption against a provision imposing a tax applies to s 501 and s 502?
The Court found that the principle where a statutory presumption against a provision imposing a tax in the absence of a clearer legislative intention to do so did not displace ordinary principles of statutory construction. The Court found that the Act evinced a clear legislative intention that Council might make the Availability Charges as well as charges in accordance with actual use of services.
4. Whether there was a legislative intention that charges be levied for services set out in s 496 and s 501 solely in accordance with actual use?
The applicant submitted that the second reading speech to the Amending Act No 69 1997 which amended s 502 was instructive in demonstrating a legislation intention that services listed in ss 496 and 501 were only able to be charged according to actual use. The Court found that the Minister in the second reading speech made clear that the actual usage charge was directed at the same services to which annual charges apply, with the use of the present tense indicating that the annual charges continue to apply in respect of those services. Section 502 demonstrated a clear intention for actual usage charges to apply in addition to annual charges.
5. Whether s 502 fetters the exercise of the power in s 501 of the Act?
The Court preferred the interpretation that the reference in s 502 to ss 496 and 501 to the services listed in those sections rather than to the specific charge enabled under those sections and found that Council may charge for actual use of the specific services and may levy an additional annual charge in respect of those same services.
6. Whether the Available Charges are available under the Act?
The applicant submitted that the Availability Charges were not available under the Act as such charges were based on the size of the meter at the Premises and ignore the demands placed on the system by the property. In light of the finding that Council was not required to charge for such services only by reference to usage, the argument that Council was required to consider the demands placed on the system in making charges for services listed in ss 496 and 501 was therefore rejected. In absence of any evidence as to why the Availability Charges might be invalid, the Court refused to confine a methodology that should be used to levy annual charges.
Implications for Council
- When interpreting provisions of legislation, the Court may take a literal, purposive, and contextual approach in reading;
- The Court found that Council was entitled to charge for services based on both actual use and availability of those services and such authority was not precluded by s 502 of the Act.
For a copy of the full judgment, please click Prefabricated Buildings Pty Ltd v Bathurst Regional Council [2017] NSWLEC 44.
