Brisbane City Council v City Point Hotels Pty Ltd [2011] QSC 93

1 SUPREME COURT OF QUEENSLAND CITATION: Brisbane City Council v City Point Hotels Pty Ltd [2011] QSC 93 PARTIES: BRISBANE CITY COUNCIL (plaintiff) v CITY POINT HOTELS PTY LTD (defendant) FILE NO/S: BS 8094/09 DIVISION: Trial Division PROCEEDING: Application for summary judgment ORIGINATING COURT: Supreme Court, Brisbane DELIVERED ON: 21 April 2011 DELIVERED AT: Brisbane HEARING DATES: 2 September, 22 October 2010; Further submissions in writing JUDGE: Margaret Wilson J ORDERS: 1. That the application for summary judgment be dismissed; 2. That the costs of and incidental to the application be reserved. 3. Direct that by 27 May 2011, or such further time as the court may allow, the parties meet in a genuine endeavour to resolve this proceeding, or if it is impossible to resolve the whole proceeding, to resolve one or more issues in the proceeding, including identification of the amount claimed, the amount admitted and the amount presently disputed under each head of rate or charge; and 4. Further direct that each party be represented at that conference by someone with the requisite authority to settle the dispute. CATCHWORDS: REAL PROPERTY – RATES AND CHARGES – Water, sewerage and drainage rates and charges – where defendant property owner converted commercial office building into multi-storey residential building – where plaintiff Council could levy charges on any land or structure for sewerage services pursuant to City of Brisbane Act 1924 (Qld) s 48 – where defendant disputes claims for sewerage connection -- 1 of 9 -- 2 charges from 24 July 2003 to 20 January 2010 – where defendant argues a number of toilet pedestals were disconnected in 2003 – whether issues relating to sewerage charges can be determined on a summary judgment application REAL PROPERTY – RATES AND CHARGES – where plaintiff gave defendant a fire levy notice pursuant to Fire and Rescue Service Act 1990 (Qld) s 114 – where defendant unsuccessfully appealed notice to Chief Executive – where defendant contends that fire service levy was based on wrong classification of the building – whether issues realting to fire service levy can be determined on a summary judgment application City of Brisbane Act 1924 (Qld), s 48, s 49, s 56, s 60, s 65, s 67 Income Tax Assessment Act 1936 (Cth), s 177 Federal Court of Australia Act 1976 (Cth), s 31A Fire and Rescue Service Regulation 2001 Fire and Rescue Service Act 1990 (Qld), s 69, s 107, s 108, s 113, s 114, s 115 Plumbing and Drainage Act 2002 (Qld), s 78, s 79 Uniform Civil Procedure Rules 1999 (Qld), r 292 Coldham-Fussell v Commissioner of Taxation [2011] QCA 045, cited Spencer v The Commonwealth (2010) 269 ALR 233; [2010] HCA 28, cited COUNSEL: A L Wheatley for the applicant/ plaintiff G N Gunn for the respondent/ defendant SOLICITORS: Brisbane City Legal Practice for the applicant/ plaintiff Corums Solicitors for the respondent/ defendant [1] MARGARET WILSON J: This is an application for summary judgment brought by the plaintiff pursuant to r 292 of the Uniform Civil Procedure Rules 1999 (Qld) ("UCPR"). [2] The defendant owns a property in Spring Hill. There is a high rise building on the land which was previously used as a commercial office building. Sometime in 2002 the defendant decided to convert it into a multi-storey residential building. This would involve partial demolition and rebuilding and very substantial changes to the fit-out. [3] On 20 September 2002 a notice was issued under s 69 of the Fire and Rescue Service Act 1990 (Qld) requiring the defendant immediately to cease use and occupation of the building until the requirements of the notice were satisfied. [4] The premises were vacated by at least 31 December 2002, and building work commenced early in 2003. The work is still incomplete. -- 2 of 9 -- 3 [5] In this proceeding the plaintiff seeks to recover rates and charges levied with respect to the property for periods as early as 1 April – 30 June 1999. By its amended statement of claim filed on 6 May 2010 the plaintiff seeks to recover $372,362.33 plus interest at 11 percent per annum. The claim as pleaded is for general differential rate charges, separate rates and charges for the environmental management and compliance levy and the bushland preservation levy, utility charges for waste management services, utility charges for sewerage services, and utility charges for water services. There is also a claim for the fire service levy: this is in fact a State Government charge which the plaintiff collects on behalf of the State Government. [6] At the hearing of the summary judgment application, counsel informed the Court that there were only two matters still in dispute: (i) utility charges for the connection of sewerage services; and (ii) the fire service levy. Legislative scheme [7] The plaintiff’s power to levy utility charges is found in s 48 of the City of Brisbane Act 1924 (Qld).1 By s 49 rates and charges may only be made for a financial year by resolution at the Council’s budget meeting for the year. The defendant has admitted the passing of relevant resolutions. [8] By s 56 the plaintiff may levy utility charges on any land or structure for, inter alia, sewerage services. [9] "Rate" is defined as meaning any rate or charge mentioned in s 48 2 and including any interest accrued, or premium owing, on such rate or charge. By s 60 the plaintiff may levy a rate by a rate notice. By s 65 the plaintiff must decide, by resolution at its budget meeting, the date by which, or the time within which, each rate must be paid. By s 67 unpaid rates bear interest. [10] General rates are assessed by reference to the unimproved value of the land. If that unimproved value alters, the plaintiff must adjust the amount of the rate accordingly, and refund any excess rate paid.3 [11] By s 114 of the Fire and Rescue Service Act 1990 (Qld) a fire levy notice may be given to the owner of a property on a rate notice, and by s 115 it is taken to be a general rate levied by the local authority and the relevant provisions relating to general rates apply with necessary modifications. [12] The plaintiff’s counsel submitted that under the City of Brisbane Act 1924 (Qld) the defendant was obliged to pay the outstanding sewerage connection charge and the fire service levy despite the dispute about whether they had been properly levied, and that if ultimately they were found to have been improperly levied, the defendant would be entitled to a refund. 1 Counsel provided Reprint No. 4E, in force 1 July 2009. 2 See Schedule 2, Dictionary. 3 See ss 70 and 72 of the City of Brisbane Act 1924 (Qld). -- 3 of 9 -- 4 [13] The defendant’s counsel submitted that his client was obliged to pay only those rates and charges which were properly levied. He submitted that the outstanding sewerage connection charges and the fire service levy were not properly levied. Sewerage connection charges [14] The plaintiff’s claims relate to two periods: 23 February 2001 to 23 July 2003 and 24 July 2003 to 20 January 2010. Its claim for the first period has been conceded, but its claim for the second is disputed. [15] The plaintiff’s resolution with respect to sewerage pedestal charges for the year 2003 – 2004 was passed on 13 June 2003. So far as presently relevant it provided: – "(iii) Subject to (iv), the sewerage pedestal charge for each property shall be assessed according to the total number of pedestals connected within the property and to the categories of that property and charge per pedestal specified in the Sewerage Pedestal Charge Table. The sewerage pedestal charges for that property will be calculated by multiplying the applicable rate per pedestal in the Sewerage Pedestal Charge Table by the number of connected pedestals less one. ... (v) If the number of sewerage pedestals in respect of which any sewerage pedestal charges are payable alters during the financial year, the charges are to be apportioned from the date of connection to, or disconnection from, the Council sewer by determining the number of days applicable within the year." [16] The sewerage connection charge is levied by reference to the number of toilet pedestals connected. Mr Churven, a director of the defendant, has sworn that 34 pedestals were disconnected in 2003. [17] In about February 2010 the plaintiff carried out a site inspection of the premises. Only one pedestal was actually connected. The plaintiff determined to alter the pedestal numbers and applicable charges prospectively, but did not make any decision to adjust them retrospectively. The defendant then sought an adjustment retrospectively, but this was refused. [18] According to Mr Churven, in July 2003 he contacted the plaintiff by telephone and spoke with one Jennifer Leis, who was an employee of Brisbane Water, which was then part of the plaintiff. He says that he advised Ms Leis of the disconnection of the pedestals and enquired as to the procedure for having charges with respect to the pedestals removed from the defendant’s rates accounts. He says he was told it would be necessary to complete a pedestal declaration, which she would send him. He says she did this, that he completed it, and that he believes it was posted to the defendant. He has produced a copy of the declaration from the defendant’s records. It is a declaration by him dated 23 July 2003. He declared that there was one pedestal connected, the balance of 34 having been disconnected. He declared that he had not visually counted the pedestals or counted them on a building plan, but they had been counted by a plumber. -- 4 of 9 -- 5 [19] The plaintiff has no record of receiving the declaration form which Mr Churven says he completed and sent to it. [20] According to Mr Churven, between 2004 and 2009 he had at least five telephone conversations with officers of the plaintiff in which they enquired as to the arrears of charges in respect of the property. He says that on each occasion he advised the officer that the sewerage charges had not been paid as the pedestals had been disconnected, and that the fire levies had not been paid as they had been calculated on an incorrect classification of the building. He says that on each occasion the officer advised him that he or she would investigate the matter and sort it out. However, at no time did he receive any return call in respect of those conversations. [21] Ms Leis has sworn an affidavit responding to that of Mr Churven. She does not recall whether she had a telephone conversation with Mr Churven in or about July 2003. She does not recall whether she told him it would be necessary to complete a pedestal declaration or whether she sent one to him. She concedes that she may have had such a conversation and that she may have arranged for such a declaration to be sent to him. However, she says it is "inconceivable" to her that she "would not have advised him of the need to make an application to the [plaintiff’s] Plumbing Services Group in order to obtain a compliance certificate with respect to… disconnection of pedestals at the Subject Premises". [22] According to Mr Churven, the construction work has been performed in accordance with a Development Approval by the plaintiff, including hydraulic drawings approved by the plaintiff’s Plumbing Department. He says that those drawings show the location of all sewerage and plumbing fixtures. The location of the pedestals in the pre-2003 building was different from their location in the refurbished building. The sewerage and plumbing works have been inspected by officers of the plaintiff during the course of the construction. [23] The plumbers for the development were Northend Plumbing. According to Mr Churven, the pedestals were disconnected by Thomas Cramb, a sub-contractor to Northend Plumbing. Mr Cramb died in May 2009. He has produced statements from the architect, the builder and a real estate agent, which refer in somewhat general terms to the disconnection of services. [24] Counsel for the plaintiff submitted that the disconnection referred to in the resolution was necessarily a lawful disconnection, and that there was no evidence of lawful disconnection in the present case, because the requirements of the Plumbing and Drainage Act 2002 (Qld) had not been satisfied. In particular, she submitted, there was no compliance permit and/or certificate as required by ss 78(4) and 79(3) of that Act. [25] Mr Churven maintains that it was not until February 2009 that he was told that the defendant was obliged to provide the plaintiff with a Certificate of Compliance, and that had he been told of this earlier, he could have obtained one from the plumbers. [26] On 1 June 2010 a supervisor in the employ of Northend Plumbing, completed another pedestal self-declaration. He declared that as of 30 June 2003 there was one pedestal remaining, 34 having been removed. He said he had not visually counted the pedestals or counted them on the building plan but the declaration was “as advised by plumber on site”. [27] Counsel for the defendant submitted that the dispute is simply about the timing of the disconnection, which is a matter which ought to go to trial. He submitted that charges referable to the time since disconnection were not properly levied. He submitted that -- 5 of 9 -- 6 summary judgment should not be ordered as the plaintiff had levied his client for services which it had not provided and which had not been consumed. Fire services levy [28] By s 107 of the Fire and Rescue Service Act 1990 (Qld) owners of prescribed properties must contribute to the cost of administering and giving effect to the Act. By s 108 a regulation may prescribe the amounts of the contributions to be paid by owners of prescribed properties for a financial year. By s 114 a fire levy notice may be given to the owner of a prescribed property as an item on a rate notice, and by s 115 it is taken to be a general rate levied by the local government and the relevant provisions relating to general rates apply with necessary modifications. [29] The amount of the levy payable by an owner of a prescribed property depends upon the classification of the property within the Fire and Rescue Service Regulation 2001 (Qld). The levies demanded of the defendant were based upon a classification of the land as a "Brisbane Category A fire levy group 11.05 (office, shop, commercial premises, other than drive-in shopping centre – 11 – 20 levels)". The defendant contends that it should have been categorised as a "Brisbane Category A fire levy group 3.07 construction site" as from 1 January 2003. [30] In sch 5 to the regulation there is a definition of "construction site" – "Premises on which, when construction is complete, will be a building to which a category (other than 'construction site') in fire levy groups 3 to 16 applies." [31] By s 113 of the Fire and Rescue Service Act 1990 (Qld) a property owner to whom a fire levy notice is given may appeal to the Chief Executive on grounds including wrong classification pursuant to s 108. The defendant lodged such an appeal. It was unsuccessful, the decision being handed down on 1 September 2010. By s 113(7) of the Fire and Rescue Service Act 1990 (Qld) the determination of the Chief Executive in respect of an appeal is final. [32] In giving his decision on the appeal, the Commissioner of the QFRS said: – "After giving due consideration to the facts of this appeal and the relevant legislation I have determined that the premises situated at 139 Leichhardt Street Spring Hill are clearly a multi-level building and not a 'construction site' as defined by the Queensland Fire and Rescue Regulation." The defendant contends that this decision involved an error of jurisdiction. The point taken is that the Regulation does not contain any definition of, reference to or classification as a "multi-level building". [33] This argument was not developed on the hearing of the summary judgment application, perhaps because the decision had been handed down only the day before. Summary judgment [34] Rule 292 of the UCPR provides – "292 Summary judgment for plaintiff -- 6 of 9 -- 7 (1) A plaintiff may, at any time after a defendant files a notice of intention to defend, apply to the court under this part for judgment against the defendant. (2) If the court is satisfied that— (a) the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and (b) there is no need for a trial of the claim or the part of the claim; the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate." (Emphasis added). [35] In Coldham-Fussell v Commissioner of Taxation4 White JA (with whom the Chief Justice and the President of the Court of Appeal agreed) said – "[98] …Rule 292 is expressed in clear and plain language. It requires no judicial gloss to understand its meaning. What ['no real prospect' and 'there is no need for a trial of the claim'] mean is best understood, in the time honoured way, on a case by case basis, informed by judgment about the relevant legal principles." Her Honour considered a number of English and Queensland authorities, and continued – "[101] All of the Queensland decisions mentioned above5 note that rule 292 must be applied in the context of the overriding purpose of the UCPR to 'facilitate the just and expeditious resolution' of the matter in dispute.6 " Her Honour considered Spencer v The Commonwealth,7 a recent decision of the High Court on s 31A of the Federal Court of Australia Act 1976 (Cth). While observing that s 31A is differently worded from r 292 of the UCPR with the result that the High Court’s elucidation of its meaning does not particularly assist in identifying the approach to r 292, her Honour said – "[102] ...However, their Honours’ acceptance 'that the power to dismiss an action summarily is not to be exercised lightly'8 is applicable to any phrase which broadly has as its purpose the test for summary dismissal 4 [2011] QCA 045. 5 Queensland University of Technology v Project Constructions (Aust) Pty Ltd (in liq) [2003] 1 Qd R 259; Bernstrom v National Australia Bank Limited [2003] 1 Qd R 469; Gray v Morris [2004] 2 Qd R 118, 133; Jessup v Lawyers Private Mortgages Pty Ltd [2006] QSC 003, [18]; Spencer v The Commonwealth (2010) 269 ALR 233; [2010] HCA 28. 6 Uniform Civil Procedure Rules 1999 (Qld), r 5. 7 (2010) 269 ALR 233; [2010] HCA 28. 8 At [60]; 251 -- 7 of 9 -- 8 of a claim or defence. Their Honours referred to Agar v Hyde9 and the statement by Gaudron, McHugh, Gummow and Hayne JJ: 'Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.'" [36] Neither the City of Brisbane Act 1924 (Qld) nor the Fire and Rescue Service Act 1990 (Qld) contains any express provision to the effect that the issue of a rates notice creates a liability to pay whether or not the rates were properly levied. Unlike the Income Tax Assessment Act 1936 (Cth),10 this legislation does not provide that the issue of a rates notice is conclusive evidence that the rates and charges were duly made. [37] In relation to the sewerage charges, the defendant has raised questions about the meaning of "disconnection" in the resolution of 13 June 2003, when the 34 pedestals were disconnected in the relevant sense, the extent of the defendant’s obligation to inform the plaintiff of the disconnection and the relevance (if any) of the defendant’s not having provided the plaintiff with a Certificate of Compliance under the Plumbing and Drainage Act 2002 (Qld). These are issues of fact and law which cannot be determined on this application. [38] The defendant contends that the fire service levy was based on a wrong classification of the building. Its counsel has submitted that this is ultimately a factual question, and that the finality of the administrative determination on classification is a matter which should be explored at trial. It may have been open to the defendant to challenge that determination by a timely application for judicial review. Whether it may do so in this proceeding for the recovery of rates proper was not fully argued on the summary judgment application. In all the circumstances it cannot be said that there is no need for a trial in relation to the fire service levy. [39] It seemed to me that, in light of the way the application was argued and in particular defence counsel’s submission that the only matters still in dispute were the fire service levy and the sewerage connection charges, the parties should be able to agree upon what part of the amount claimed has been paid and what is still in issue. I caused my associate to send an email to counsel asking them to complete the attached schedule. [40] My approach proved to be over-simplistic, and my request was met with quite lengthy further written submissions and spreadsheets. The parties could not agree even upon what is in issue. [41] In all the circumstances the application for summary judgment should be dismissed. 9 (2000) 201 CLR 552; [2000] HCA 41, [57]. 10 s 177. -- 8 of 9 -- 9 Annexure “A” BRISBANE CITY COUNCIL v CITY POINT HOTELS PTY LTD GENERAL DIFFERENTIAL RATES and CHARGES WATER ACCESS and CONSUMPTION CHARGES SEWERAGE ACCESS and PEDESTAL CHARGES FIRE SERVICE LEVY Amount claimed as at 2 September 2010 For what period $ $ $ $ Amount admitted For what period $ $ $ $ Amount disputed For what period $ $ $ $ Total claimed as at 2 September 2010 $ ___________ Total admitted as at 2 September 2010 $ ___________ Amount (if any) paid since 2 September 2010 $ ___________ -- 9 of 9 --