Council Rates and Charges back in the spotlight: New Bill proposes to soften the effect of ‘Linville’

Home Blog Council Rates and Charges back in the spotlight: New Bill proposes to soften the effect of ‘Linville’

Published by Preston Law on 02/03/2018

Most local governments will be aware of the Supreme Court of Queensland’s November 2017 legal decision in Linville v Fraser Coast Regional Council [2017] QSC 252 (“Linville”), which considered the validity of Council resolutions that sought to levy rates and charges.

Although the Council has appealed the case to Court of Appeal, on 15 February 2018 the Local Government Legislation (Validation of Rates and Charges) Amendment Bill 2018 (“the Validation Bill”) was introduced to the Queensland Legislative Assembly, to deal with some of the legal fallout that ‘Linville’ caused.

What did the Court decide?

‘Linville’ considered resolutions passed by Council in 2014/15, 2015/16 and 2016/17 to adopt its budget.  The resolutions were found to have been invalid, and the Court decided that Council had “failed to validly make and levy rates and charges within its local government area”.  The Court did not decide exactly what the consequence of that invalidity would, or should be.

The reason for the invalidity turned on a very literal interpretation of sections of the Local Government Act 2009 (“LGA”) and Local Government Regulation 2012 (“LGR”) that deal with adoption of rates and charges.

In a key part of his judgment, Justice Jackson said:

Having regard to the text and structure of s 94(2) in the context of the other provisions of the LGA, a resolution to adopt a budget (as is required by s 107A of the LGA) does not, without more, satisfy the requirement for a resolution to decide what rates and charges are to be levied.

Justice Jackson’s view was that the resolution failed the test.

The Validation Bill

The Validation Bill amends the Local Government Act 2009 (“LGA”) in relation to any rate or charge levied for a financial year up to and including the financial year ending 30 June 2018.

The Validation Bill states that any rate or charge levied in a financial year up to and including 2017-18, that was not validly decided to be levied by a resolution of a local government, is nevertheless taken to have been validly levied. 

While the Validation Bill, when enacted as an Act, will go some way to giving Councils greater certainty here following ‘Linville’, Councils should be aware that:

  • the Validation Bill does not otherwise change the requirements of the LGA or the Local Government Regulation 2012 (“LGR”), so for rates and charges levied after the 2017-18 financial year, Council should assume that the interpretation given to the LGA and LGR by ‘Linville’ represents the current state of play;
  • The Validation Bill only validates rates and charges that are otherwise invalid because of a defect in the Council resolution.Other reasons for invalidity are not cured by the Validation Bill.

What does this all mean?

The Validation Bill gives Councils some certainty in respect of any resolution-related issues with rates and charges levied for and before the 2017-18 financial year.

However, moving forward, and unless ‘Linville’ is successfully appealed or the LGA or LGR is more extensively amended, a very literal interpretation will be applied to resolutions for rates and charges, and to the sections of the LGA and LGR that deal with them.

Some tips are:

  • the resolution made under section 94(2) must list the particular rates and charges to be levied;
  • the resolutions under section 94(2) and 107A(1) should be separate.  Although Justice Jackson suggested that combined resolutions might do the job, his judgment strongly implies that separate resolutions are preferable.

With six lawyers and three paralegals, Preston Law in Cairns has the largest Local Government team outside southeast Queensland, with in excess of 50 years’ combined experience working for councils.  Preston Law’s lawyers have assisted local governments across the State, particularly in north and west Queensland, to prepare resolutions for rates and charges, and for advice on rates and charges matters generally.  For any queries, please contact our office in Cairns on 07 4052 0705 or 07 4052 0717.

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