The case of Island Resorts (Apartments) Pty Ltd v Gold Coast City Council  QCA 19; (2021) 248 LGERA 1 concerned an appeal to the Queensland Court of Appeal (Court of Appeal) against the dismissal in the case of Island Resorts (Apartments) Pty Ltd v Gold Coast City Council  QSC 145 by the Supreme Court of Queensland (Supreme Court) of an application for judicial review (Judicial Review Proceeding) of the following decisions of the Gold Coast City Council (Council):
- First Decision – The decisions of the Council that adopted the relevant differential rating categories, namely Category 2T and Category 3T, and levied a minimum general rate within Category 2T and Category 3T.
- Second Decision – The decisions of the Council to issue rates notices to the Applicant.
Our November 2020 article considered the Judicial Review Proceeding in detail.
In the Judicial Review Proceeding, the Applicant alleged that the First Decision and Second Decision were an improper exercise of the powers to categorise land for differential general rates under section 81 of the Local Government Regulation 2012 (Qld) (LGR) and to levy rates and charges under section 94 the Local Government Act 2009 (Qld) (LGA), because the Council took into account whether an occupier of rateable land was a "permanent resident" or "itinerant", which the Applicant submitted the Council was not authorised to consider because the "personal characteristics" of the occupier was not an "attribute or characteristic" of the land.
On appeal to the Court of Appeal, the Applicant alleged that one or both of the following grounds of appeal supported a finding that the Supreme Court erred in failing to find that the Council took into account an irrelevant consideration (at ):
- First Ground – Deciding a differential rating category based on whether an occupier of rateable land was a "permanent resident" or "itinerant" characterised land solely on the personal characteristics of the occupant.
- Second Ground – As an alternative to the First Ground, Category 2T and Category 3T "characterised land based upon the personal characteristics of a person who may occupy the land…".
The Court of Appeal relevantly held the following in respect of the appeal:
"[G]ood governance by a local government in levying differential general rates" was informed by the specific provisions of the LGA and LGR relating to deciding a rating category and levying differential general rates, as well as the "broader considerations of context…" provided by the surrounding provisions of the LGA and LGR (at ).
The case of Xstrata Coal Qld Pty Ltd & Ors v Council of the Shire of Bowen  QCA 170 (Xstrata) was confirmed in Ostwald Accommodation Pty Ltd v Western Downs Regional Council  QSC 210 not to be authority for the capacity of an owner of land to pay a rate being an irrelevant consideration, "except in the sense that it is the personal capacity of the owner, independent of any quality of the land or its use." (at ).
The key principle in Xstrata was that a differential rating category must be based on an "attribute of the land" and that the local government's resolution must state a description of the rating category, but that does not require the description of the rating category to be an "attribute of the land" (at ).
An attribute or characteristic of land as described in Xstrata is to be understood as "some quality of the land or its use" (at ).
It would be contrary to the context of section 94 and section 96 of the LGA and section 80 and section 81 of the LGR to treat Xstrata as authority for a rating category being required to be decided only by reference to an attribute of the land which does not extend to the use of the land (at ).
Section 81(3)(b) of the LGR provides examples of rating categories and their descriptions, five of which relate to the use of land (at ).
The power and duty of a local government to levy general rates is stated in general terms in section 94(1)(a) of the LGA, and section 94(1A) of the LGA permits the categorisation of rateable land and a decision in respect of differential rates for rateable land "according to whether or not the land is the principal place of residence of the owner." (at ).
The amendment on 14 June 2014 of section 94 of the LGA to include subsection (1A) arose after the Supreme Court's decision that the LGA did not permit a local government to categorise land by reference to whether or not it was occupied by the landowner in the case of Paton & Ors v Mackay Regional Council  QSC 75, which supported a conclusion that the use of land may form the basis of a rating category (at  and  to ).
There is a difference in the use of residential land by an owner as an occupier and as an investment property (at ), which the Council was entitled to take into account.
Category 2T applies where residential land is used for rental accommodation by a person as their home on a permanent basis or where the owner does not rent out the land nor live in it as a principal place of residence (at  and  to ), and Category 3T applies where residential land is temporarily rented by a visitor or tourist (at ).
Although the Court of Appeal did not consider the issue in detail because it was not argued by the Council in the appeal, the Court of Appeal observed (at  and ) that a resolution to levy differential general rates under section 94 of the LGA may not be a "decision of an administrative character" amenable to judicial review because it is a "taxing power" described as being "quasi legislative" rather than administrative.
The Court of Appeal also observed (at ) that it may have been useful to the appeal had the parties submitted evidence other than the Council's Revenue Statement relevant to the "economic concepts and theories that may inform a local government's decision making as to the determination of rating categories of rateable land."
The Court of Appeal held that the Council had the power to make the First Decision and Second Decision according to the nature of the occupation of the relevant residential land. The appeal was dismissed with costs.
Judicial Review Proceeding
The application in the Judicial Review Proceeding was made under section 20(2)(e) and section 23(a) of the Judicial Review Act 1991(Qld).
In the Judicial Review Proceeding, the Applicant sought that the First Decision, and the Second Decision, which related to approximately 70 properties owned by the Applicant for the financial years ending 30 June 2015 to 30 June 2020, be set aside because the Council took into account an irrelevant consideration by considering whether an occupier of rateable land was a "permanent resident" or an "itinerant".
Category 2T was relevantly described as "[a] residential lot…used to provide rental accommodation to permanent residents at any time during the financial year…". A "permanent resident" was defined as "a person who lives in the local government area, as distinct from an itinerant".
Category 3T was relevantly described as "[a] residential lot…used to provide rental accommodation to itinerants at any time during the financial year.". An "itinerant" was defined as "a visitor or tourist, as distinct from a permanent resident".
The Supreme Court relevantly rejected the Applicant's submission that letting a property to a "permanent resident" of the local government area rather than an "itinerant" was irrelevant to the Council's setting of differential rating categories and minimum rates, and held that the use of land to provide rental accommodation was an "attribute" of the land.
No implied restriction on the use of land forming the description of a rating category
The Court of Appeal rejected the Applicant's submission that the "general language" of section 94 and section 96 of the LGA and section 80 and section 81 of the LGR are to be construed as implying a requirement that the description of a rating category under section 81 of the LGR must be to an "attribute of the land", and that it would exceed a local government's power to describe a rating category by reference to the use of residential land (see ).
In respect of the First Ground, the Court of Appeal held that the use of land was an "attribute of the land" (at ), and that section 94(1A) of the LGA "strongly indicate[d]" that a rating category may turn on the nature of the occupation of residential land (at  and ).
Category 2T and Category 3T each had a "discernible reasonable purpose"
In respect of the Second Ground, the Applicant's proposed construction of Category 2T and Category 3T was that Category 2T related to the use of residential land as temporary rental accommodation for a visitor or a person living elsewhere in the local government area, and that Category 3T related to the use of residential land as temporary rental accommodation for a person who did not live in the local government area.
The Court of Appeal rejected the Applicant's construction on the basis that there would be "no apparent purpose" in distinguishing between Category 2T and Category 3T in that way (at ).
The Court of Appeal agreed with the Council's construction that Category 2T applied where residential land was used for rental accommodation by a person who resides on the land on a permanent basis or where the owner of the land does not provide the land for rental accommodation and does not live in it as a principal place of residence, and Category 3T applied where residential land was rented temporarily by a visitor or tourist (at  to ).
The Court of Appeal held that the Council's construction had a "discernible reasonable purpose" because a higher rate would be applied to residential land used by visitors for temporary periods as opposed to a person who lives there, or in circumstances where the land is not rented out nor used as a principal place of residence (at ).
The Court of Appeal held that the use by an occupier of land was an "attribute of the land" that may form the basis of a rating category and the levying of rates, in particular in respect of residential land categorised by whether or not the residential land is used as a principal place of residence or temporarily by a visitor. The Court of Appeal found no error in the Supreme Court's findings in the Judicial Review Proceeding.
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