Special rates and charges – application for review

Pursuant to s.185(1) of the Local Government Act, a person may apply to VCAT for review of a decision of a Council imposing a special rate or special charge on that person.

Most disputes have centred on whether there is justification for the Council to impose a special rate or charge, whether ‘special benefit’ would be achieved and whether the proportion to be paid was fair and reasonable. In the editorial comment at 21 AATR 128, it was noted that under the new legislation objectors bore a very difficult burden in persuading the Tribunal that interference with new schemes is justified.

The Tribunal has established a number of principles concerning these matters in the years following the introduction of the Local Government Act in 1989.

In terms of justification of special rate or charge, in R Nunn & Ors v Shire of Woorayl (1993) 10 AATR 108 (editorial comment 10 AATR 108), in which a Special Charge had been imposed to construct a community health centre, the Tribunal found that the wording in s.163 of the Act related to benefit to a person rather than benefit to land and that the term ‘special benefit’ referred to a benefit “over and above that available to persons not the subject of the special charge”.

However, in McDonald & Ors v City of Hawthorn (1993) 10 AATR 201 (editorial comment 10 AATR 200), the Tribunal held that the owners benefit if the scheme benefits occupiers of premises, or “makes land more attractive to a wider range of tenants”. This approach was followed in ATO Developments Pty Ltd v City of Essendon (editorial comment 10 AATR 200).

In McDonald, it was also held that the right to request a review a decision by the Council to levy a special rate did not extend to tenants or occupiers of the rated premises and that a special rate was based on need.

In Rothelette Holdings Pty Ltd & Ors v City of Hawthorn (editorial comment 12 AATR 294), the Tribunal held that it had no jurisdiction to consider whether or not changes to the boundaries in which a special rate scheme was to be charged.

In Westernport Water Board & Ors v Shire of Phillip Island (editorial comment 12 AATR 295), the Tribunal dismissed an appeal that the Board should be exempted from the imposition of a scheme because it was a public statutory body and its land was non-rateable. Section 221(3) of the Local Government Act states:

A council may declare in relation to any land in its municipal district which is not rateable and is not Crown land a special rate or charge in respect of street construction.

However, in Barrow & Ors v Colac Otway SC [1998] VCAT 766 1 VPR 176, the Tribunal held that under s.154(2) Council owned land zoned public open space was exempt from the special charge scheme (although Council had notionally included the subject land in its apportionment modeling).

In Rosemeier & Ors v Greater Geelong CC (1999) 20 AATR 86 (editorial comment 20 AATR 78), the Tribunal held that the jurisdiction of the Tribunal to make declarations concerning special rates and charges imposed under the Local Government Act was limited to the matters in ss.185(2), which specified the grounds for appeals against special rates or charges. This decision is also noteworthy for its finding that a public highway was a species of road and was a road for the purposes of the Local Government Act.

In Hoadley & Ors v Mornington Peninsula SC (1999) 20 AATR 121 (editorial comment 20 AATR 78), which involved an appeal against a road construction and drainage scheme, the Tribunal held that the changes to the Scheme post exhibition were of such magnitude that it should have been abandoned and a new Scheme prepared. It was also held that the apportionment of the Scheme was in error because corner lots were not required to contribute on an equal basis with other lots.

In a number of cases involving the imposition of a commercial or tourism promotion charge, including HRW v Stonnington CC (1998) 21 AATR 129, Allan v Rural City of Wodonga and Kemax Constructions Pty Ltd v Wangaratta RC (editorial comment 21 AATR 128), it has been held that, in assessing ‘special benefit’, it was necessary to compare the benefit flowing to contributory properties against nearby properties which were not the subject of the special charge but which “were likely candidates for inclusion”.

The counter argument, namely, that the comparison should be made against the benefit to properties in the municipal district generally, was specifically rejected by the Tribunal. To hold otherwise, the Tribunal concluded, was to create a situation where “the Council always wins”. However, in response to this specific point, in Raine Lodge Pty Ltd & Ors v Wyndham CC (1998) 21 AATR 23 (editorial comment 21 AATR 23), it was held that it was not for the Tribunal to redress any perceived imbalance which might be created by the proper interpretation of the legislative provisions.

However, in Fabcot Pty Ltd & Ors v Brimbank CC [1999] VCAT 2142 3 VPR 265 (editorial comment 3 VPR 264), the Tribunal upheld the Applicant’s appeal that its land not be included in a scheme promoting a local shopping strip because it would be unlikely to benefit the Applicant’s properties while they retained their present character and that the character was unlikely to change in the forseeable future.

In Gobbett and Ors v Colac Otway SC [2005] VCAT 638 (editorial comment 19 VPR 243), the Tribunal quashed a special charge to cover the cost shortfall of installing a television transmission tower on the basis that, due to the issue of impending obsolescence, the Appellants would not receive the special benefit.

In terms of apportionment, in the Raine Lodge Pty Ltd case referred to above, the Tribunal held:

To be reasonable, the basis must be understandable and workable. Some bases, attempting to achieve ultimate levels of equity, whether mathematical, equitable or other, could become so complex, unmanageable or expensive as to cease to be unreasonable. The ground is not that the basis is not the ultimate equity, but rather that it is unreasonable.

In Masuda Pty Ltd & Ors v Casey CC [2000] VCAT 654 (editorial comment 3 VPR 26), the Tribunal held that, in relation to a streetscape improvement plan in a shopping area, that “the test is the reasonableness of the distribution, not its equity. While an inequitable would no doubt be unreasonable, it may be that the ‘reasonableness’ test allows some scope where it is difficult to quantify the comparative benefits as between one property and another”.

In Pedler & Ors v Brimbank CC [2001] VCAT 2275 10 VPR 128 (editorial comment 10 VPR 128), the Objectors contended that the special charge scheme for roadworks were “unnecessary and unreasonable” within the terms in s.185(2)(iv). The Tribunal held that the assessment of necessity and reasonableness must be made from the viewpoint of the Council rather than that of the objectors. In so doing, it rejected the basis of the decision in Ginnivan v East Gippsland SC [2001] VCAT 1663 (editorial comment 8 VPR 244). It was noted in the editorial comment at 10 VPR 128 that the finding in “Pedler “regarding “necessity and reasonableness” serves to preclude one of the few grounds upon which objectors have hitherto been able to overturn special charge schemes”.

In Scheurer & Ors v Brimbank CC [2002] VCAT 175 11 VPR 208, the Tribunal held that a Scheme for the construction of a service road parallel to a primary arterial road was flawed because the elements of benefit would be enjoyed to an equivalent extent by properties which were required to contribute to the Scheme. 

In Jacra Nominees Pty Ltd v Surf Coast SC [2006] VCAT 1190 28 VPR 10, the Applicants sought to challenge the Council’s imposition of a Special Charge Scheme to construct roads and drains on the basis, inter alia, that some of the roads had been previously constructed and the Council was precluded to seeking further contribution from the owners. In dismissing this ground, the Tribunal considered that the issue was be decided on the balance of probabilities as to whether the road had been previously constructed under a prior statutory charge scheme, having regard to the weight of the material adduced by each party and the reasonableness of the investigations rather than on the basis of a formal onus of proof being met by one side or the other. Having regard to this, the Tribunal found:

On the evidence before the Tribunal there was no basis for finding that Council had failed to take into account a relevant consideration, that being, previous construction of the road pursuant to a statutory scheme. [58]

In Hirst & Ors v Surf Coast SC (Red Dot) [2008] VCAT 1544 31 VPR 153, the Council declared a special rate scheme affecting all properties in the coastal township of Lorne. The Scheme was to fund various streetscape works along the commercial/retail strip of Lorne together with part of another road. Applications sought to have the Scheme varied or struck out on the basis that there was either no special benefit, or that the basis of apportionment was unreasonable, or otherwise, the works were unnecessary, unreasonable and excessive. Further, one Applicant submitted that because there was to be some delay between the declaration of the Scheme and when the works were to be completed, that only the future owners of the units in a tourist facility currently part sold would receive the special benefit. It submitted that the critical point in time to review the ‘reasonableness of the apportionment’ was the time at which the special benefit from the Scheme works actually accrued. Further, it was argued that with the transition to owner/occupier units the rate designation should be changed from commercial to residential. In response to this particular submission, the Tribunal held:

The critical time for determining whether it was unreasonable for the Council to use the commercial designation, rather than the residential designation, was at the time that the declaration was made. It was beside the point to move forward in time and try to assess the reasonableness as at the time of the hearing. [37]

In Kemp v Mornington Peninsula SC [2009] VCAT 245 34 VPR 98, the Applicants contended that pursuant to s.185AA of the Local Government Act no council acting reasonably could have made a decision to impose a special charge. Expert evidence was called on behalf of the Applicants concerning the use of the roads. The Applicants further contended that pursuant to s.185 of the Act, the basis of distribution among those liable to pay was unreasonable. The Tribunal found:

No traffic counts had been carried out and even if they had been, what was of issue was not traffic movements at present but what they would be in the future. Council had formed a view about future traffic movement and it had not been demonstrated that this view was so manifestly wrong that no reasonable Council could possibly hold it. [47]

See also:

  • Natural justice
  • Special Rates and Charges