Whitsunday Regional Council v Xstrata Coal Queensland Pty Ltd & Ors [2010] HCATrans 294 (12 November 2010)

Last Updated: 16 November 2010

[2010] HCATrans 294

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B45 of 2010

B e t w e e n -

WHITSUNDAY REGIONAL COUNCIL

Applicant

and

XSTRATA COAL QUEENSLAND PTY LTD

First Respondent

ITOCHU COAL RESOURCES AUSTRALIA PTY LTD

Second Respondent

ICRA NCA PTY LTD

Third Respondent

SUMISHO COAL AUSTRALIA PTY LTD

Fourth Respondent

Application for special leave to appeal

HAYNE J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 12 NOVEMBER 2010, AT 10.04 AM

Copyright in the High Court of Australia

__________________

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR S.P. FYNES-CLINTON for the applicant. (instructed by King and Company)

MR W. SOFRONOFF, QC: If the Court pleases, I appear with my learned friend, MR S.B. HOOPER, for the respondents. (instructed by Allens Arthur Robinson)

HAYNE J: Yes, Mr Jackson.

MR JACKSON: Your Honours, could I commence by seeking leave to amend the name of the applicant to Whitsunday Regional Council. I do not believe that is opposed.

HAYNE J: Yes, you may have that leave.

MR JACKSON: And for the matter to proceed under that name. I think that is the words of the rule, your Honour. Your Honours, this case, in our submission, merits the grant of special leave on two grounds. First, it concerns the manner of exercise of rating powers expressed in a relatively common, though not exactly the same form, in Australia. Secondly, the way the matter has been dealt with by the Court of Appeal, in our submission, in a manner which merits the exercise of the court’s visitorial, if I can use that expression, jurisdiction.

Your Honours, may I go to the circumstances to seek to make out those considerations and they commence with the fact that the applicant, as a local authority, made and levied general rates on 20 categories of land. It is empowered to do so by the provisions of the Local Government Act which is set out in the Court of Appeal’s reasons at page 36 of the application book, paragraphs [12] to [16]. Those provisions are set out in full behind tab 1 of the materials and may I go, particularly, your Honours, to the page numbered 660 up the top of the documents in tab 1. Your Honours will see that under section 966, it is provided in subsection (1):

Before a differential general rate is made and levied, rateable land must be categorised into 2 or more categories -

(2) A differential general rate . . . may be the same as or different to the differential general rate made and levied on land in another category.

Then one comes, your Honours, to the next page, section 977 and your Honours will see that provides that:

Before making and levying a differential general rate for a financial year, a local government must decide by resolution –

(a) the categories –

(b) the criteria by which land is to be categorised.

Your Honours will see that examples are given immediately succeeding that in the legislation and you will see the types of categories that obviously were contemplated going over to the next page. One of these we have referred to in our written submissions, “sugar milling land” where it would be very likely that within a local authority area there might only be one or perhaps two sugar mills.

Could we go on to say this. The rates which were actually fixed appear in the application book commencing at page 94. Your Honours will see them at page 94 commencing about line 50 where the resolution that was approved is set out. You will see category 1 at the bottom of that page – although it relates to mining it is not presently an issue. You will see various categories, for example, category 4 on page 95:

Commercial power generation . . .

A general rate of 36.78 cents -

Then one comes to Category 11 which is one of the ones presently involved – “Coal Mining”. Your Honours will see the description of it and the rate provided, that is the top of page 96. Category 17 at the bottom of the same page, then categories 18, 19 and 20 - category 18 is not in issue. The persons who owned the land upon which the rate was imposed have not challenged them, but the ones that I referred to as 11, 17, 19 and 20 are.

Your Honours, the fixing of those rates in those four categories was challenged on various grounds by the respondents and only one ground remains, that is, that it is said they were fixed by reference to a personal capacity to pay of the owners. That was the basis on which the Court of Appeal held that the determination should be set aside. Your Honours can see that at page 43, paragraphs [40] to [42] commencing at the bottom of the page. Then, your Honours, the reasons of the Court of Appeal treat us, “us” the present applicant, as having accepted that personal capacity to pay had been taken into account by the Council.

CRENNAN J: You succeeded before the trial judge on that basis, did you not? I am thinking of paragraphs [44] and [45] application book 10, where his Honour says it does not seem to be in issue that – the question is whether or not the Council took into consideration the ability of the landowners to pay the rates and his Honour finds that is a relevant consideration, as I understand it.

MR JACKSON: Could I just say this, your Honour. The position was, to put it very shortly, your Honour will see in paragraph [44] that he says “the ability of landowners to pay the rates proposed”. I will come to the particular references in just a moment but the position was, your Honours, that we said that the ability to fix a differential rate was an ability to fix a differential rate which took into account the assumed capacity of persons who were owners of land that had a particular productive nature to be taken into account. We were not suggesting for a moment - and this is clear from the submissions that we made - that it was the ability of any particular owner of that land, whether they were rich or poor, to pay. The distinction might be one that it is fine, in a sense, but it appears to be a distinction - - -

KIEFEL J: Do you mean that it was not personal, in a sense, that because the nature of the activity undertaken on the land there was an assumption of an ability to pay? That would not necessarily be correct though, would it, as an assumption?

MR JACKSON: Well, your Honour, if one looks at the provision which allows the making of differential rates, there has to be some criterion determined - criterion or criteria - and those determined are by saying what is the nature of the land? The land is of a particular kind. It has particular uses and suitability for particular uses. You will see, for example, in the list which I gave, that particular areas that are selected as having a particularly high rate are ones where there is a concentration of persons living on it, for example, or capable of having concentration of persons living.

Your Honours, it does not matter whether people who are living on it are paying a lot or a little for living there, the land has a certain capacity for a certain kind of development and it does not matter whether the owner of it at any particular time is, in fact, making a great deal of money from it or very little. It is the capacity of the land which gives rise to the differential rate.

Your Honours, that is, in our submission, a distinction. What one sees, however, is that the Court of Appeal has treated us as advancing the other proposition that it is in some way related to the capacity of the person who at the moment is the owner to pay and that is why one sees, in the paragraphs to which I referred a few moments ago, in the Court of Appeal’s reasons, that one sees the references to – that no one can know whether a person is rich or poor, to put it shortly.

CRENNAN J: Is it possible to point to any passage, either in the trial judge or in the Court of Appeal’s decision which shows that this matter was clearly argued on the basis which is now put. as distinct from the personal capacity point?

MR JACKSON: Your Honour, I am about to do that, if I may. What I want to go to is to say that we accepted - and I can come to the references in just a moment - that personal capacity was irrelevant but that capacity to pay inferred from ownership of valuable land could be taken into account. Could I go to what we said at the trial, your Honours. You will see that at page 117 commencing at paragraph 46 and one could go on beyond the paragraphs I am going to refer to, but it is put first of all in paragraph 46:

It is submitted that the proposition that ability to pay is an irrelevant consideration in the making of differential rating decisions cannot be sustained.

Then we said in paragraph 47:

The first point in this regard is that the question must necessarily be raised, not in respect of the particular financial circumstances of an individual ratepayer (which are freely conceded to be irrelevant), but in terms of the financial capacity of the owners of all lands included within a particular category, as compared to the financial capacity of owners of lands in other categories.

Your Honours, that is the heart of the proposition. The same was said on appeal. You will see that at page 138 in paragraphs 16 to 24. Could I refer particularly to paragraph 17 where we said:

Oral evidence given at the hearing indicated that capacity of landowners to pay was taken into account in terms of the overall financial capacity to pay of owners of all lands included within a given category, as compared with the overall financial capacity to pay of owners of land in other categories.

Your Honours will see, then, something set out from the evidence and then about line 48:

Thus, the comparison was not individualised with the Council setting the general rate for any category, or apportioning the general rates burden between categories, by reference to some measure of the financial resources of particular individual ratepayers.

Your Honours will see the remainder of that paragraph. Now, the Court of Appeal appears to have recognised that the distinction we were drawing might properly be drawn and you will see that at page 39 in paragraph [22] and it said the point in contention - your Honours will see what is set out in that paragraph and it seems to have been recognised that the distinction was properly drawn.

It then proceeded to hold that we had not applied that test and that is for the reasons set out at page – or proceeded to hold that we had not applied such a test. You will see that at page 42, paragraphs [34] and [35] and you see particularly the reference at the top of page 43 to the Council documents and the reasons and the chief executive’s evidence.

Your Honours, the material to which is referred, to which reference is there made is of the very briefest kind. Apart from the actual resolution to which I have taken your Honours already, one sees the material at page 82 commencing at the bottom of the page where the revenue statement sets out various policies and one comes then to about line 27 on 83 where the heading is set out “Principles used for the making of rates and charges”. Your Honours will see the factors there set out and you will see, then, about line 49:

On this basis the Council is of the opinion that a more effective system . . .

• is more able to be adjusted to changing economic circumstances;
• more effectively relates the ratepayers’ ability to pay to the level of benefit received from the expenditure of rates revenue -
  

Your Honours will see a reference to mining at the top of the next page, the last dot point, and then about line 52 the determination:

that there shall be twenty (20) categories of land.

Your Honours, that is the evidence. Now, there was nothing at all, in our submission, to support the view, we would submit, that the Council had relied on personal capacity to pay and the provisions of the Act which enable the fixing of differential general rates, we would submit, one would think the most obvious places for doing so is that some lands are more valuable than others. In particular, your Honours, land that has coal or gold or diamond mine upon it is more likely to be valuable than grazing land and being more valuable means that the owner pro tem is more likely to have the capacity to pay rates. Now, if I could go back to page 43 in the - - -

HAYNE J: What then would you identify as having been the evidentiary foothold for the proposition that an irrelevant consideration was taken to account. You point to these minutes and say there is no evidentiary foothold in those for the proposition. What generates this creation of an elaborate superstructure, as seems to have been the case of trial and on appeal, where there are distinctions drawn which, from one point of view may be distinctions that are not easily drawn?

MR JACKSON: Well, your Honour, if the challenge had been on the basis that the adoption of these criteria was unreasonable, that might be a challenge. If there had been a challenge on the basis that one could not properly draw the distinctions, then it showed that the power to fix them could not have been properly exercised but none of those bases is presently involved, your Honour.

HAYNE J: No, all you have is an irrelevant consideration case. The point of my inquiry is this, Mr Jackson, do we end up trawling through the way in which this case was conducted at trial and appeal and assigning the outcome according to the particular way in which the parties conducted their cases. That would not be a productive exercise for us to engage in.

MR JACKSON: Your Honour, may I say two things? The first is to correct an error that I think I made when I was saying something before. It was when I said, “that was the only evidence”. I should have referred to the fact that there was a little evidence, oral evidence, on the point from Mr Finlay, the Council’s officer, which you can see at pages 145, 146 and 147, the relevant parts being between lines 30 and 55 on 145; on 146, lines 1 to about 32 and then lines 43 to 52 on page 147. Your Honours, that is it.

CRENNAN J: I thought the evidence, relevant evidence, behind the resolution of 27 June was summarised on page 38 of the application book so that there was – what was taken into account included a revenue policy, revenue statement, as well as the comments of the Council’s chief executive officer and the resolution. So it was not just the resolution.

MR JACKSON: Not just the resolution fixing the rates. It is the earlier resolution, but I have referred to that. That is it, your Honour.

CRENNAN J: Yes.

MR JACKSON: Now, if one goes back - - -

HAYNE J: You have that proposition at paragraph 20 which in the hands of the uninformed third party might be liable to some cruel misconstruction.

MR JACKSON: I have taken your Honours to what there was. Could I just say, your Honours, in relation to this that the – we would say if one looks at pages 43 and 44, the strictures that appear in the Court of Appeal’s reasons at pages 40 to 42 are correct but, your Honours, we would say assumed capacity to pay by reference to land, type of land is relevant.

Could I just say one further thing, your Honours. There is a recent decision of the New South Wales Court of Appeal which is behind tab 11 in our written materials. The argument put on behalf of the landowner in that case is very similar to the contention put in our learned friend’s written submissions in paragraph 35(c) which is at page 157. The point made in the decision of the Court of Appeal behind tab 11 was that, inevitably, the provisions allowing for differential rates are ones which contemplate that there will be a discrimination between or amongst various types of landholders and the fact that one landholder is the only person in the category is just a consequence of that. You will see it referred to, your Honours, at paragraphs 142 to 144 which appear at page 31of the print.

Now, your Honours, our submission is that that is an approach which is rather different from that adopted by the Court of Appeal in this case and there is not a significant difference between the provisions and if there is a difference, it should be settled by a - - -

HAYNE J: Although your time has gone, Mr Jackson, may I just ask two questions further. One, if the Court of Appeal decision is left standing that presumably has an effect on the Council’s budget for this year but that, I take it, is something that can be taken up in the next budget year?

MR JACKSON: Your Honour, there may be limitations on what can be achieved - - -

HAYNE J: Of course there are.

MR JACKSON: Because of limitations on the – one can have different categories, no doubt. There is a limit, I think, your Honour, on the maximum amount that can be - - -

HAYNE J: Of course, I understand that, but also, having regard to what has now been decided in the courts of Queensland it would appear to me, at least, at first blush, to be possible for a Council to strike a differential rate in respect of coal mining land that properly took to account that the highest and best use of that land is the winning of coal and that the winning of coal is a profitable enterprise. Is that so?

MR JACKSON: Yes, your Honour, and your Honour, that is, in our submission, exactly what was done in this case.

HAYNE J: I understand that fact, yes.

MR JACKSON: The point we would seek to make about anything is that the decision of the Court of Appeal really disregards, if I may say so, with respect, what was actually done.

HAYNE J: Thank you, Mr Jackson. We will not trouble you, Mr Sofronoff.

The decision of the Court of Appeal in Queensland turned in a critically important respect upon its assessment of the particular evidence given at trial. We are not persuaded that the conclusion of fact drawn from that evidence is attended by sufficient doubt to warrant a grant of special leave to appeal. Special leave is accordingly refused.

MR SOFRONOFF: We ask for costs, your Honour.

HAYNE J: Can you resist that, Mr Jackson?

MR JACKSON: No, your Honour.

HAYNE J: With costs.

The Court will adjourn to reconstitute.

AT 10.28 AM THE MATTER WAS CONCLUDED