Court of Appeal confirms the correct time limitation period for the recovery of overdue and unpaid rates

In brief

The case of Amos v Brisbane City Council [2018] QCA 11 concerned an appeal to the Court of Appeal against a decision of the Supreme Court of Queensland in respect of proceedings commenced by the Brisbane City Council (Council) for the recovery of unpaid rates levied upon the Appellant's land over a period of more than 12 years.
 
The first question in the appeal was whether the Council’s claim for the unpaid rates was statutorily barred because the Council had commenced proceedings too late. The question was whether the correct time limitation period for the recovery of unpaid rates is six years or 12 years under the Limitation of Actions Act 1974 (LAA).

The second question in the appeal was whether the Appellant is liable for utility charges levied by the Council on a different property owned by the Appellant at the time the charges were levied.

With respect to the first question, the Court held that the primary judge made an error in finding that the correct time limitation period is 12 years. The Court confirmed that the correct time limitation period is six years. As a result, the Court held that any claims for unpaid rates that fall outside the six year time period cannot be pursued. The Court reiterated that the intention of time limits is to restrict the scope for legal action in favour of the debtor.

With respect to the second question, the Court accepted the primary judge's findings that the Appellant is liable for the utility charges on the land as the Appellant implicitly asked the Council for the supply of the relevant services.

Council argued that the relevant time limitation period for the recovery of overdue and unpaid rates and charges is 12 years under the LAA

The Council commenced proceedings in the Supreme Court of Queensland for the recovery of overdue and unpaid rates levied upon the subject land between April 1999 and January 2012. The Council argued that the relevant time limitation period for recovering unpaid rates is 12 years under section 26(1) of the LAA. This section provides that a claim to recover a principal sum of money secured by a mortgage or other charge on property cannot be brought after a period of 12 years from the date on which the cause of action arose. 

The Council argued that section 97 of the City of Brisbane Act 2010 (CBA) allows the Council to register overdue rates and charges as a charge on the subject land in accordance with section 26(1) of the LAA. The primary judge accepted the Council’s argument and held that the relevant time limitation period was 12 years. As a result, the primary judge ordered the Appellant to pay the full cost of unpaid rates levied on the subject land.

Appellant argued that the relevant time limitation period for the recovery of overdue and unpaid rates and charges is six years under the LAA

The Appellant appealed the primary judge’s decision to the Court and argued that the relevant time limitation period is six years under sections 10(1)(d) and 26(5) of the LAA. Section 10(1)(d) of the LAA provides that claims to recover sums recoverable under legislation cannot be brought after a period of six years from the date on which the cause of action arose. The Appellant argued that the circumstances of this case better fits the description of section 10(1)(d) of the LAA. The Court did not discuss the effect of section 26(5) of the LAA in this appeal. 

Court found that both section 26(1) and section 10(1)(d) of the LAA are applicable 

The Court considered section 66(1) of the City of Brisbane (Finance, Plans and Reporting) Regulation 2010 (CB Regulation) to determine the relevant time limitation period to recover the unpaid rates. This section provides that the Council may recover overdue rates by bringing court proceedings for a debt against the liable person.

The Court found that the Council’s argument under section 26(1) of the LAA clearly falls within the description of section 66(1) of the CB Regulation. However, the Appellant argued that section 66(1) of the CB Regulation does not allow the Council to recover overdue rates as a “principal sum of money” under section 26(1) of the LAA. The Court considered relevant legislation and cases to reject this argument and held that the unpaid rates are a “principal sum of money”. Therefore, the Court was satisfied that section 26(1) of the LAA was applicable to the Council’s recovery of overdue and unpaid rates levied upon the subject land.

The Court found that section 10(1)(d) of the LAA also falls within the description of section 66(1) of the CB Regulation. Section 66(1) of the CB Regulation is the legislative provision that allows the Council to recover unpaid rates from the liable person in accordance with the requirement found in section 10(1)(d) of the LAA. The Court held that, in these circumstances, sections 26(1) and (10)(1)(d) are both applicable. This raised the question as to whether the 12 year time limitation period under section 26(1) of the LAA or the six year time limitation period under section 10(1)(d) of the LAA is the correct time limitation period for the Council’s recovery of the unpaid rates. 

Court considered relevant case law to determine the correct time limitation period 

The Court considered the cases of Sutton v Sutton (1882) 22 CH D 511 (Sutton decision) and Barnes v Glenton [1899] 1 QB 885 (Barnes decision) to determine the correct time limitation period. In the Sutton decision, a claim for breaching a deed was brought to court more than 12 years after the breach. The Court was required to decide which of the 12 year time limitation period and the 20 year time limitation period found in separate legislation was applicable. In the Barnes decision, a claim to recover money lent to the defendants was brought to court more than six years later. The Court was required to decide which of the six year time limitation period and the 12 year time limitation period found in separate legislation was applicable.

In the Sutton decision and the Barnes decision, the shorter time limitation period was applied when an action fell within the description of two different provisions. The Court acknowledged that these decisions recognise that the objective of limitation periods is to place restrictions on legal action for the benefit of the debtor. Therefore, when the shorter time limitation period ends, the debtor obtains the right to defend themselves against the legal action. 

The Court held that the approach used in the Sutton decision and the Barnes decision is the approach to be favoured in this case. Accordingly, the Court confirmed that the shorter time limitation period of six years under section 10(1)(d) of the LAA is the correct time limitation period. The Court reinforced that the intention of time limitation periods is to limit, not expand, the scope for legal action in favour of the debtor.

Court held that the Council can recover some, but not all, of the unpaid rates under the LAA

The Court held that the primary judge made an error by concluding that the 12 year time limitation period under section 26(1) of the LAA is the correct time limitation period. The Court found that the six year time limitation period under section 10(1)(d) of the LAA is the correct time limitation period. Accordingly, the Court held that the Council can only claim unpaid rates within six years from the date the cause of action arose. As a result, the Council could recover some, but not all, of the unpaid rates levied upon the subject land between April 1999 and January 2012.

Appellant argued that he is not liable for utility charges levied by the Council 

In regard to the second ground of appeal, the Appellant argued that he is not liable for utility charges owed to the Council. The Appellant was the registered owner of a rental property located in Sandgate between October 2000 to April 2015. During this time, water and sewerage services stayed connected to the property. The Council levied utility charges on the property for the consumption of these services by tenants. 

The Appellant argued that section 59(1)(b) of the CB Regulation clearly requires that water and sewerage services must be “asked for”. The Appellant argued that he did not explicitly ask for these services. The primary judge rejected the Appellant’s argument and held that the services can be implicitly requested to satisfy the requirements of section 59(1)(b) of the CB Regulation. Further, the primary judge held that the Appellant implicitly asked for the services because the property was occupied by rent-paying tenants and the services were being used by these tenants. The Court accepted the primary judge’s findings and dismissed the second ground of appeal in this case.