Insights

In brief

The case of Mount Isa City Council v The Mount Isa Irish Association Friendly Society Ltd [2018] QCA 222 concerned an appeal against the decision of the Queensland Supreme Court in the matter of Mount Isa Irish Association Friendly Society Ltd v Mount Isa City Council [2017] QSC 316. The Supreme Court held in 2017 that the Mount Isa City Council (Council) had not complied with requirements regarding working out utility charges for water services under section 101 of the Local Government Regulation 2012 (LGR). The Supreme Court further determined that the Council failed to exercise its powers to levy utility charges for water services contrary to section 4 of the Local Government Act 2009 (LGA). On this basis the Supreme Court held that the Council's utility charges for water services were invalid.

The Council appealed to the Court of Appeal which found that the Supreme Court had erred at law in respect of its interpretation of sections 101(1) and 101(2) of the LGR and incorrectly assumed that compliance with section 4(2)(a) of the LGA required the Council in its Revenue Statement to offer a range of charging options along with providing reasons for the chosen charging option. The Court of Appeal additionally found that if non-compliance with section 4(2)(a) of the LGA occurred it would not result in the invalidity of the relevant water charges. The Court consequently allowed the appeal.

Council's grounds of appeal

The Council appealed to the Court of Appeal on seven grounds:

  1. The Supreme Court erred in law by holding that there is an apparent conflict between section 101(1)(a) and section 101(2)(b)(ii) of the LGR.

  2. The Supreme Court erred in law by holding that section 101(2)(b)(ii) of the LGR states a basis for making water utility charges which only apply if the local government is using a 2-part charges system referred to in section 101(1)(b).

  3. The water utility charges were worked out on the basis stated in section 101(2)(b) of the LGR and on the proper construction of section 101(1)(a).

  4. The Supreme Court erred in law by holding that the Council did not comply with section 101 of the LGR.

  5. The Supreme Court erred in law by holding that the validity of the water utility charges was not reserved by section 101(3) of the LGR.

  6. The Council did not fail to comply with section 94 of the LGA by failing to comply with section 4 of the LGA.

  7. The Council did not fail to comply with section 4 of the LGA, where section 4 of the LGA is not a prerequisite to the validity of the water utility charges.

Grounds 1 to 4

The Court of Appeal considered grounds 1 to 4 as interrelated. The Respondent submitted that there was a tension between section 101(1)(a) of the LGR and section 101(2) of the LGR, which the Supreme Court had accepted. On this basis, the Court of Appeal considered the language of section 101(1)(a) of the LGR.\

Section 101(1)(a) stated that water utility charges for a water service must be charged "wholly according to the water used". The Court interpreted the words "according to the water used" to signify a "relationship between the quantum of the charge and the volume of the water used" (at [40]) and does not prescribe the permissible way in which charges for water are to be worked out. The Court of Appeal held that section 101(2) provides the mechanism for how water utility charges are worked out and, rather than conflicting with section 101(1) of the LGR, section 101(2) is intended to complement section 101(1) of the LGR by specifying how utility charges are to be levied. The Court of Appeal concluded that there was no conflict between sections 101(1) and 101(2) of the LGR. 

The Court of Appeal additionally rejected the finding of the Supreme Court which found that the ability to work out charges in accordance with section 101(2)(b)(ii) of the LGR was only available in circumstances where the Council had adopted a 2-part charge. The Court of Appeal held that section 101(2)(b)(ii) of the LGR is a fixed charge for water usage and does not reflect a 2-part charge.

The Court of Appeal decided that, other than in the case of a 2-part charge, utility charges are to be charged wholly according to the water used and worked out by one of the methods specified in section 101(2)(b)(ii) of the LGR.

The Court of Appeal on this basis accepted that the Council had correctly worked out the water utility charges on the basis of section 101(2) of the LGR, and that the Supreme Court had erred in law in holding that the Council did not comply with section 101 of the LGR.

Based on the above reasons, the Court held that the water utility charges as levied complied with section 101 of the LGR and upheld grounds 1 to 4.

Ground 5

The Court of Appeal found that as the water utility charges as levied complied with section 101 of the LGR, it was unnecessary for the Council to rely on section 101(3) of the LGR.

Grounds 6 and 7

Grounds 6 and 7 concerned the finding by the Supreme Court that the Council was non-compliant with section 94 of the LGA due to the failure to comply with the Local Government Principles under section 4 of the LGA. The Court of Appeal found that the Supreme Court inferred that the Council failed to perform their duties under section 4(2) of the LGA due to the Council failing to "provide an explanation of the chosen method for determining utility charges for water and did not give consideration to the charging of water used by the ratepayer" (at [58]).

The Court of Appeal found this criticism unwarranted as it assumed that the Council's per unit charge of $202.00 was not in respect of water usage as permitted under section 101(2) of the LGR. 

The Court of Appeal held that there was no implied or express requirement for the Council in its Revenue Statement to articulate a range of charging options and reasons for the Council's final choice; and to do so would also go beyond the matters which are to be included in a Revenue Statement under section 172(2) of the LGR.

The Court of Appeal found that the Council did demonstrate the required transparency in accordance with section 4(2)(a) of the LGA, and therefore complied with section 94 of the LGA.

Conclusion

The Court found that on the basis that grounds 1 to 4, 6, and 7 were made out, the appeal was allowed.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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