Bayside Council v Karimbla Properties

The Proper Construction of s 516(1)(a)

1. Sydney Council and Bayside Council contend that the O'Dea Avenue Land should be categorised as "residential" only when, first, the construction phase is complete, and secondly, apartments in the buildings erected on the O'Dea Avenue Land are fit for occupation as residential accommodation, as evidenced by the issue of an occupation certificate. Sydney Council and Bayside Council also submit that the issuing of an occupation certificate is an objective guide as to when the construction phase has come to an end and the use of the property begins to be "for residential accommodation". Moreover, they argue that it is not until the issue of an occupation certificate that what was previously an ultimate and intended purpose comes to fruition and the use of land becomes "for residential accommodation". Therefore, they contend, as no occupation certificate was granted, the use of the O'Dea Avenue Land, during the construction phase, was not "for residential accommodation". Accordingly, they say, the O'Dea Avenue Land should be categorised as "business" for the whole of the construction phase.
2. North Sydney Council contends that land should not be categorised as "residential" until apartments are actually occupied and should continue to be categorised as "business" until then.
3. As the Landowners point out, nothing in s 516(1)(a) refers expressly to the lawful use of land, for example, by occupation certification. They say that if the use of land is unlawful, then that is a matter for relevant regulatory authorities and has no bearing on the categorisation of the land for rating purposes, which involves a purely factual inquiry. Instead, the Landowners propose that the lawful execution of works in accordance with a development consent, involving the erection of a building, the dominant use of which will be for, and is approved for, residential accommodation, will meet the criterion in s 516(1)(a).
4. There is no dispute that, at the relevant times, Karimbla 24 was carrying out activities in the construction phase in accordance with the Planning Act. The Landowners eschew reliance on any proposition that it is necessary to have regard to future use, intention or purpose. They contend that the actual present or current use, during the construction phase, was "for residential accommodation", as evidenced and manifested by the construction works and the relevant development consents. They assert that there can be no dispute that the purpose of those activities was the creation of buildings "for residential accommodation". They contend that the concept of "use for residential accommodation" of land involves an inquiry into "purpose".
5. In support, the Landowners rely on the proposition that the concept of use in relation to land is that of the physical deployment of the concrete, physical mass in pursuance of a particular purpose of obtaining present benefit or advantage from it. In that context, deployment must be understood as including not only activity but also inactivity deliberately adopted as a means of obtaining such actual and present advantage from the land, and purpose must be understood as objectively ascertained purpose [1] . Therefore, the Landowners contend that the issue in the present appeal calls for an inquiry into the purpose of the physical activity being carried out on the land. They say that if the purpose of the relevant activity was "for" residential accommodation, then the proper categorisation of the rateable land would be "residential", irrespective of whether the activity being undertaken was merely preparatory to a person being able to live, or reside, on the land.
6. The Landowners contend that the Councils' construction of s 516(1)(a) involves a substantial reading down of the word "use", a reading down that is not justified either textually or contextually. They assert that, if the word "use" is read down so as to require physical completion and lawful occupation of a building, it would follow that an ongoing inquiry, and monitoring, would be required to determine whether a building remains dominantly occupied by residential owners or tenants from time to time, and that that could not have been the intention of the legislature in enacting s 516(1)(a).

Consideration

1. It is possible to discern three different stages in relation to a parcel of land's possible use for residential accommodation, namely, acquisition and holding of the land, followed by the construction phase, and then actual occupation. At the first stage, land may be acquired and then held by the owner with the intention that, in the future, it will be developed so as to be used for the purposes of residential accommodation. At that stage, the owner might, for example, carry out surveys and testing. However, the land's use at that stage could not be said to be for residential accommodation [2] . Relevantly, a distinction can be drawn between the purpose for which land is acquired, on the one hand, and the purpose for which it is currently being used, on the other. The purpose of acquisition may or may not correspond with the current use. For example, land specifically acquired for the sowing of crops may be put either to that use or to some other use, such as cattle grazing. The inquiry must be as to the current tangible and physical deployment of the land and not to the purpose for which it was acquired [3] .
2. At the third stage, people actually reside on the land or it is used for the purpose of a kind normally ancillary to use for residential purposes, such as for lawns, gardens, tennis courts and the like [4] . It is clear that at that third stage, use of the land would be "for residential accommodation" within the meaning of s 516(1)(a).
3. It is the second or middle stage that is in issue in the present appeals, namely, the construction phase, between the commencement of activity that is designed to render the land capable of being lived in, or being residential accommodation, and the achievement of a condition of the land in which it is in fact physically and lawfully capable of being lived in, or being residential accommodation. In that regard, it is significant that s 516(1)(a) does not refer to "purpose" but only to "use", although the phrase "use for" may signify purpose. The criterion is that the use must be for residential accommodation.
4. The word "use" is a word of variable meaning. Nevertheless, in relation to land, the word has a core meaning independent of statutory context. Examination of activities undertaken upon the land in question is central to the identification of the "use" of the land [5] . In that context, the word "use" in s 516(1)(a) signifies use at large, rather than use by any particular person [6] .
5. The legislative framework outlined above requires a central focus upon the physical activities that are being conducted on, or in respect of, the land at the relevant date, and an objective characterisation of those activities in order to determine whether the use of the land that those activities constitute is "for residential accommodation". In that process, regard cannot be had to the subjective intention, past, present or future, of the owner or the occupier, or of both, except in so far as that intention sheds light on the objective characterisation of the physical activities actually being conducted on, or in respect, of the land [7] .
6. The emphasis placed by the Landowners on both the word "for" and the identification of the purpose of the "use" of the land entails a significant element of futurity and tends to conflate present use with presently intended future use. A distinction must be drawn between the present use of the land, on the one hand, and any intended future, or ultimate use that may come into existence if and when the activities that constitute the present use have been brought to a successful conclusion.
7. The concept of "use" of land being "for residential accommodation" signifies a present use. Land can be used now for a particular purpose, even though its use for that purpose may also be in preparation for its eventual use for a quite different purpose. For example, land might be used for the purpose of commercial land development at one point in time, even though the use of it for that purpose at that time is preparatory to its eventual use, after subdivision, by persons who have bought lots in the subdivision for residential purposes [8] . Similarly, while land is in the development phase, it is not being used "for residential accommodation".
8. As the Councils contend, focusing on physical acts in relation to the relevant land, as opposed to a more general inquiry into "purpose", reflects the words of s 516(1)(a) and accords with the ordinary meaning of the word "use". That interpretation also accords with the fact that the statutory language does not employ some broader phrase, such as the land being used "for the purposes of bringing into existence the conditions for residential accommodation" or the land being used "for residential purposes" simpliciter. While the Landowners' present purpose may be relevant in so far as it sheds light on the characterisation of the physical activities actually being carried out on or in respect of relevant land, the actual words used in s 516(1)(a) would be ignored if "purpose" is afforded any greater or more generalised role in the construction of the provision.
9. Further, focusing on the current or present activities on the land corresponds with the language of s 516(1)(a) in so far as the word "is", in the present tense, appears before the phrase "for residential accommodation". That focus on current or present use is consistent with the distinction drawn between the actual use of the land in s 516(1)(a) and the potential, and permissible, use of the land in s 516(1)(b).
10. Immediately following the phrase "residential accommodation" in s 516(1)(a) is a series of exceptions, contained in parenthesis, specifying types of buildings, or forms of accommodation, that would otherwise ordinarily be considered as falling within the phrase "residential accommodation". The exceptions include "hotel", "motel", "guesthouse", "backpacker hostel" and "nursing home". The types of buildings specified indicate that the focus must be on whether the acts on, or in respect of, the relevant land presently facilitate a person residing or being accommodated on the land, namely, living and sleeping there. Prior to the issue of an occupation certificate, there can be no assurance that a person can reside or be accommodated on the land in question.
11. The definition of the phrase "a boarding house or lodging house" in 516(1A), which is an exception to the exception in parenthesis in s 516(1)(a), supports the Councils' contention that the subjective intention or purpose of the Landowners should have a very limited role in relation to s 516(1)(a). It is only the fact of use and the nature of the use that is relevant [9] .
12. Moreover, where land is being used as a boarding house, having regard to the subjective intention or purpose of the owner or occupier of the land could lead to conflicting conclusions. From the owner's perspective, the land would be being used for the dominant purpose of the business of deriving a profit through the renting out of accommodation. However, from the perspective of the occupier, the land would be being used for the dominant purpose of residential accommodation. Those two conclusions are inconsistent with each other. It must follow that neither the occupier's nor the owner's intention, or purpose, could be determinative of what the land is being "used for" within the meaning of s 516(1)(a). Rather, the focus must be on what is presently happening on, or in respect of, the land.
13. The language of s 516(1A) makes it clear that the accommodation referred to, being "a boarding house or a lodging house", must presently exist. There could not be a "tariff-paying occupant" unless there was an existing building being occupied. Moreover, ss 516(1A) and 516(1)(a) must be read together and must be capable of standing consistently together. [10] That is to say, s 516(1)(a) must be construed so as to be consistent with the language and purpose of all of the provisions of the Local Government Act in which it appears and its meaning must be determined by reference to the language of the Local Government Act viewed as a whole [11] . Those considerations further support the conclusion that, in construing s 516(1)(a), regard must be had to the activities actually being conducted and not to the ultimate purpose for which those activities are being engaged in. The Landowners contend that the Councils' reliance on s 516(1A), as demonstrating that actual occupation of land is necessary where s 516(1)(a) is applicable, must therefore be rejected.
14. Moreover, the construction propounded by the Councils is consistent with the operation of s 516(1)(b). Where land is vacant, and is in a sense not being used, it is highly likely that the owner would lack the capacity to pay the higher rates it would otherwise be required to pay when development and construction is taking place on the land. That is because it is unlikely that the land would be able to generate an income for the owner if it was zoned as "residential" and vacant. Therefore, while the land may be categorised as "residential" whilst it is vacant, it makes practical sense for it to be categorised as "business" rateable land once commercial land development takes place as it is more likely to be able to generate an income for the owner.
15. The legislative purpose of categorisation under the Local Government Act also throws some light on the construction of these provisions. Clearly, the purpose of different categories of rateable land is to enable councils to levy higher rates on particular categories. Land categorised as "business" tends, as a matter of fact, to have a higher rate levied than land characterised as "residential" and, accordingly, has the potential to support higher rates than land categorised as "residential". On the construction advanced on behalf of the Councils, an owner of land will only get the benefit of the presumptively lower rate for land categorised as "residential" when people are legally able to, and do in fact, reside on or are accommodated on the land. That accords with the rationale for different categories.
16. The Councils accept the Landowners' submission that their construction of s 516(1)(a) may require an ongoing factual inquiry into the present actual use of the land. That is to say, because the physical activities being conducted on the land may change from day to day, it must follow that the use of land, for the purpose of s 516(1)(a), could change from day to day. However, to the extent, if any, that that may cause inconvenience, it is merely the by-product of the deliberate decision of the legislature.
17. Moreover, as indicated above, s 524 imposes an obligation on a rateable person to notify the local council, within 30 days after rateable land changes from one category to another, of the fact of the change. The presence of s 524 recognises the fact that changes in use of land will occur from time to time. The rateable person will normally be in the best position to be aware of such a change. It is interesting, but perhaps irrelevant to the present question of interpretation, that none of the Landowners notified any of the Councils of any change pursuant to s 524.
18. The Landowners postulated the hypothetical circumstance of homeowners deciding to demolish their existing "residential" categorised home and engaging a builder to construct a larger one. They say that, on the Councils' construction of s 516(1)(a), the homeowners would be required to notify the local council that the construction phase had commenced. Accordingly, the property would then be categorised as "business" and the higher rate would be levied for the duration of the construction phase. It would only be upon completion, or the commencement of the lawful occupation, of the new home that the category of the land would revert to "residential". They say that that demonstrates the alleged "absurdity" of the Councils' contention as well as their concern that the Councils' construction of s 516(1)(a) would require an ongoing inquiry into the use of the land in question.
19. The answer to the Landowners' hypothetical circumstance is that the Councils' interpretation of s 516(1)(a) would not necessarily lead to the conclusion that the present use, and therefore categorisation, of the land would change during the construction phase of the new home. Rather, the past activity on the homeowners' rateable land may impact the characterisation of present activity, or inactivity, on the land [12] . Therefore, in the hypothetical circumstance, the homeowners' land may continue to be categorised as "residential" as it was categorised as such prior to the construction of their new home. A significant difference between the Landowners' hypothetical and the present appeals, however, is that the land in question in the appeals was not used "for residential accommodation" and was not categorised as "residential" prior to the construction phase. The land in question was always categorised as "business". In any event, the Councils have accepted, as summarised above, that an ongoing inquiry into the present actual use of land may be required, even in circumstances similar to those set out in the Landowners' hypothetical circumstance.
20. Finally, if the examination of the physical activities that are presently being carried out on land indicates more than one present use, further inquiry must be undertaken in order to determine which use is the dominant use. Only if the dominant use is "for residential accommodation" will categorisation of the land as "residential" be appropriate. Of course, if the current physical activities cannot objectively be characterised as "residential", or as "farming" or "mining", it is not necessary to characterise the activities at all since, by the operation of s 518 of the Local Government Act, the activities will be categorised as "business". As no suggestion has been made that the land in question should be categorised as mining or as farmland, it is unnecessary to characterise the land in question where the dominant use of the land is not for residential accommodation.

Conclusion

1. During the construction phase in respect of the O'Dea Avenue Land, prior to the issue of occupation certificates, there was no residential accommodation available on, or in respect of, the land and no person in fact resided or was accommodated on any part of the land. Not only would it have been unlawful for a person to reside there, it was not physically possible during most of the construction phase for a person to reside or be accommodated on any part of the O'Dea Avenue Land.
2. Whatever use was being made of the O'Dea Avenue Land prior to the issue of occupation certificates, it was not use "for residential accommodation". It may be, and probably was, the fact that the ultimate and intended future purpose of the construction phase on the O'Dea Avenue Land was to create buildings that were capable of being used "for residential accommodation", as evidenced by the development consent. However, no buildings were capable of being used for residential accommodation until after the issue of occupation certificates. Only upon the issue of an occupation certificate was it legally permissible for a person to reside on or be accommodated on the O'Dea Avenue Land. In any event, even if it may have been physically possible, a short time before the issue of an occupation certificate, for a person to reside or be accommodated in some part of a new building, albeit unlawfully, an inference could probably be drawn that that would have been practicable only a very short time before an occupation certificate was issued in respect of that part.
3. The issue of an occupation certificate is an indication that a future intended use for residential accommodation has come sufficiently to fruition to become a present use for residential accommodation. It is difficult to discern, on the Landowners' contentions, how the actual and present pursuit of the residential accommodation use could constitute a singular and identifiable event that would trigger a change in category. Therefore, it is impossible to discern when, as a matter of fact, an intended future use would become a present use for the purpose of s 516(1)(a).
4. Moreover, development consent, contrary to what was contended by the Landowners, provides limited to no assistance in determining whether the present use is "for residential accommodation". First, at the point in time at which development consent is granted, the land in question may be unused and vacant, or only in the construction phase. Secondly, development consent is directed at future use of land. That is, it is only upon receiving development consent that development for the purpose of constructing residential accommodation can lawfully commence, and, again, the present actual use of the land at that stage would not be "for residential accommodation" but for commercial land development.
5. The primary judge erred in concluding that the O'Dea Avenue Land should be declared to be within the residential rating category prior to the issue of occupation certificates in relation to the buildings constructed on that land. The appeals should be allowed in respect of each parcel of land that is the subject of an appeal.
6. Accordingly, it is not strictly necessary to deal with the other grounds raised by North Sydney Council in its appeal. However, since the grounds were fully argued, it is appropriate to say something about them. First, it is desirable to outline the statutory framework against which the second issue arises, which is concerned with the entitlement of Karimbla 7 to a refund of rates levied and paid in respect of the Miller Street Land during the construction phase on the basis that it was categorised as "business".

Legislative Framework relevant to Refund of Rates

1. Part 4 of Ch 15 of the Local Government Act, which consists of ss 532 to 545 inclusive, deals, relevantly, with the making of rates. Under s 532, a council must not make a rate until it has given public notice of its draft operational plan for the year for which the rate is to be made and has considered any matters concerning the draft operational plan. Under s 533, a rate must be made before 1 August in the year for which the rate is made and, under s 534, each rate is to be made for a specified year, being the year in which the rate is made or the next year. Under s 535, a rate is to be made by resolution of the council.
2. Part 5 of Ch 15, which consists of ss 546 to 550 inclusive, deals with the levying of rates. Under s 546, a rate is levied on the land specified in a rate notice by the service of the rate notice on the rateable person for the land. The rate notice may be served at any time after 1 July in the year for which the rate is made or in a subsequent year. A rate notice that is required to effect an adjustment of rates may be served in the year for which the rate is made or a subsequent year.
3. Part 7 of Ch 15, which consists of ss 560 to 574, deals with the payment of rates. Section 560 relevantly provides that the owner for the time being of land on which a rate is levied is liable to pay the rate to the council. Under s 562, annual rates may be paid in a single instalment or by quarterly instalments. If payment is made in a single instalment, the instalment is payable by 31 August. If payment is made by quarterly instalments, the instalments are payable by 31 August, 30 November, 28 February and 31 May. However, if the rate notice is not served by 1 August, the single instalment or the first two instalments, if applicable, is or are payable by 30 November or by the day that is 30 days after service of the rate notice, whichever is the later.
4. Under s 574, a person who has an estate in land in respect of which a rate notice is served may appeal to the L&E Court against the levying of the rate on the ground that the land or part of it is not rateable. An appeal must be made within 30 days after service of the rate notice. However, s 574 expressly provides that an appeal may not be made under that section on the ground that the land has been wrongly categorised under Pt 3.
5. Part 8 of Ch 15, which consists of ss 575 to 601 inclusive, deals with concessions. Some of the provisions of Pt 8 may have relevance to the construction of s 527. Division 2 of Pt 8 enables a ratepayer to apply for a postponement of the part of rates on land that is used only as the site of a house or rural land but, because of its zoning or permitted use, is valued for rating purposes in a way that reflects its permitted use rather than its actual use. Under s 585, the rateable person for certain land may apply to the council for a postponement of rates payable for the land in the current or following rating year. Under s 591, a council must postpone the payment of rates for land in any rating year for which a determination or re-determination of the attributable part of the land value is in force. Under s 593, the Council must refund to a rateable person any amount of rates paid by the person that exceeds the amount of the rates remaining after part of the rates is postponed.
6. Under s 594, on a re-determination of the attributable part of the land value of land, a Council must adjust amounts payable for rates to be postponed as appropriate. Any amounts paid in excess are to be refunded and amounts short paid are recoverable as arrears of rates. North Sydney Council place weight on the distinction drawn between the requirement to adjust rates and the requirement to refund excess rates paid. It draws attention to the absence of any reference in s 527 to refund of rates after the adjustment required by s 527.
7. Section 602 may also have some relevance to the construction of s 527. Under s 602, a Council is required to keep a record of each rate made by it and, in relation to each separate parcel of land within its area, the land value of the parcel, whether the parcel is rateable and the category declared under Pt 3 for the parcel. The Council is also required to keep a record of the owner or lessee of each such parcel. The Council may amend the record as the occasion requires. Again, there is no reference to any refund of rates.

The Construction of s 527

1. On 14 February 2018, having declared that the Miller Street Land was within the "residential" category under the Local Government Act on and from 20 December 2008, the primary judge ordered North Sydney Council to pay Karimbla 7 the sum of $260,466.92, being an adjustment of rates for the period 20 December 2008 to 30 June 2016, consequential upon that declaration.
2. In its Notice of Appeal, North Sydney Council contends that his Honour erred in holding that s 527 of the Local Government Act provided a statutory right for the recovery of a refund, or repayment of rates, and that the L&E Court had jurisdiction to order a refund or repayment. North Sydney Council also asserts that the primary judge erred in holding, first, that the words "must make an appropriate adjustment" in s 527 imposed an obligation on a local council to make an appropriate refund or repayment and, secondly, that s 527 affords a statutory right for the recovery of such a refund or repayment.
3. That question requires an analysis of the scheme of the Local Government Act in relation to the making and levying of a rate on all rateable land in the area of the local council, as summarised above, in the context of s 527. Section 527 provides as follows: "A council must make an appropriate adjustment of rates paid or payable by a rateable person following a change in category of land."
4. North Sydney Council contends that the phrase "rates paid or payable" clearly refers to the rate or rates levied on land, the particulars of which are provided in a rate notice. The phrase is a composite one and refers to that portion of the levied rates that has been "paid" and that portion that has not been paid but is "payable" under s 562. The aggregate of the amount "paid" and the amount that is "payable" will be equal to the amount of the rates levied on the land by the service of the rate notice. The rateable person will be liable to pay the rate so levied, being the amount specified in the rate notice.
5. Following a change in category of land, one adjustment that a council will be required to make under s 527 is to serve a new rate notice under s 546(3), which provides as follows: "A notice that is required to effect an adjustment of rates or charges may be served in the year for which the rate or charge is made or a subsequent year." Such a rate notice will specify the rate levied on the land in consequence of the change in category. The notice will "effect" an adjustment of rates, being "rates paid or payable" by the rateable person upon whom the notice is served.
6. If the change in category results in a lower rate, the amounts payable will be reduced. If an instalment has already been paid, the records of the council will record that the amounts payable have been reduced by the amount of the instalments that have been paid. That will require an adjustment in the record required to be kept by the council under s 602. That is to say, the record will be adjusted in relation to both the category and the rate made by the council in respect of each parcel of land in the council's area.
7. Section 527 makes no reference to a refund, repayment or any other means for recovery by a rateable person of overpaid rates. North Sydney Council contends that the absence of such a provision is consistent with the legislative scheme of the Local Government Act. Thus, the rating year is from 1 July to 30 June and, ordinarily, a rate notice will be served before 1 August. Because of the importance of the categorisation of land in the rating process, a rateable person is required by s 524 to notify the council within 30 days after land changes from one category to another. An appeal in respect of a rates notice, other than in respect of a change of category, must be brought within 30 days after service of the rate notice. Those time limits are important in the context of the raising of funds by a council for the purposes of its operations.
8. North Sydney Council then points to the absence of any requirement for promptness in making an application under s 524 for a review of a declaration that rateable land is within a particular category or to have rateable land declared to be within a particular category for the purposes of s 514. Such an application may be made at any time, notwithstanding that the rateable person may be in breach of obligations imposed under s 524 to notify the council of a change of category within 30 days of the change. Accordingly, a rateable person would have an incentive to comply with the obligation imposed by s 524 and make a prompt application under s 525 if the change of category would lead to a lower rate. If there has been no change of category declared before an instalment of the rates is payable, the rateable person will have an obligation to pay the rates. The absence of an entitlement to a refund is consistent with the statutory context and scheme, as well as the language of s 527 itself.
9. As indicated above, Karimbla 7 did not notify North Sydney Council in accordance with s 524 that its rateable land had changed from "business" category to "residential" category, as it now contends had occurred. There was nothing unlawful or invalid about the rate notice pursuant to which Karimbla 7 paid the rates. It paid the amount of the rates voluntarily and without protest. It did not pay the rates under any mistake.
10. Had there been a change of category, contrary to the conclusion reached above, Karimbla 7 was required to notify North Sydney Council within 30 days of the change. At that point, North Sydney Council would have been required to make an appropriate adjustment of rates paid or payable, in accordance with s 527. If, before the rates became due for payment, North Sydney Council had failed to make a declaration under s 525 that the Miller Street Land was within the residential category or the L&E Court failed to make such a declaration on appeal under s 526, Karimbla 7 could have taken steps to defer payment of the rates if North Sydney Council insisted upon payment.
11. There appear to be cogent reasons for concluding that s 527 created no right or cause of action entitling Karimbla 7 to a refund of rates paid voluntarily without protest under a lawful rate notice. However, in the circumstances where the question does not arise, it is undesirable to embark on a consideration of whether or not Karimbla 7 may have had a basis for pursuing a claim against North Sydney Council.

Jurisdiction of the L&E Court

1. North Sydney Council's third ground of appeal is that the primary judge erred in holding that the L&E Court had jurisdiction to make an order that it pay Karimbla 7 a sum of money by way of refund of rates paid pursuant to the rate notice issued before the L&E Court made the declaration as to the category of the land. His Honour made the order, it appears, on the basis that that question was a matter ancillary to the matter that was before the L&E Court, namely, the appeal under s 526 of the Local Government Act concerning the failure of North Sydney Council to declare that the land was within the residential category. In the circumstances, it is undesirable to express an opinion about a matter that is entirely hypothetical.

Costs

1. The fourth ground relied upon by North Sydney Council is that the primary judge erred in declining to order that Karimbla 7 pay North Sydney Council's costs of a hearing on 19 October 2017. On 26 June 2017, his Honour published reasons for concluding that all of the land owned by the Landowners should be declared to be within the "residential" category. His Honour then directed the parties to bring in short minutes of order to implement his finding and to address the question of costs that had not at that stage been argued.
2. North Sydney Council consented to an order that it should pay Karimbla 7's costs of the proceedings. However, on 19 October 2017, there was a further hearing before the primary judge, in relation to a possible stay of the proceedings pending appeals and a claim by Karimbla 7 for interest on the rates that his Honour ordered to be repaid. For reasons published on 29 January 2018, the primary judge concluded that Karimbla 7 was not entitled to interest or to a stay. Nevertheless, his Honour concluded that North Sydney Council and Karimbla 7 should each pay its own costs of the hearing on 19 October 2017. At the hearing of the appeal, Karimbla 7 conceded that his Honour erred in principle in so far as he relied on an earlier decision of the L&E Court in reaching that conclusion. It was therefore necessary for this Court to re-exercise the discretion.
3. Having previously conceded that an order should be made against it for Karimbla 7's costs of the proceedings, and in the light of his Honour's conclusion that Karimbla 7 was not entitled to interest or a stay, there does not appear to be any reason why North Sydney Council should not have had its costs of 19 October 2017. However, that question appears to be academic in the light of the conclusion reached above, namely, that his Honour erred in the disposition of the principal question before him as to the declaration as to the category of the relevant parcels of land.

Conclusion and Orders

1. It follows from the above that each of the appeals should be allowed. The orders made by the primary judge should be set aside. The Landowners should be ordered to pay the costs of the Councils of their respective appeals, such order to include North Sydney Council's costs of the hearing on 19 October 2017.
2. That leaves the question of whether this Court should make orders in lieu of those set aside or whether the matters should be remitted to the L&E Court for further consideration. The Councils formulated orders to which they contend they would be entitled. However, the Landowners disputed some aspects of the proposed orders. The parties agreed that the preferable course was to await this Court's decision before arguing the question of orders. The parties should be required to bring in short minutes to give effect to the conclusion reached above. If need be, the Court will hear the parties further as to the terms of the orders if they cannot be agreed.

Endnotes

1. See Chief Commissioner of State Revenue v Metricon Qld Pty Ltd [2017] NSWCA 11; (2017) 105 ATR 11 at [60]-[61] (Chief Commissioner v Metricon), referring to the observations of Isaacs J in The Commonwealth v New South Wales (1923) 33 CLR 1 at 33; [1923] HCA 34.
2. See Bosa Development Corporation v Assessor of Area #12 Coquitlam (1996) 30 BCLR (3d) 263 at [16] (Bosa Development Corporation); Roman Catholic Bishop of Perth v Perth Road Board (1933) 49 CLR 37 at 43, 45-47; [1933] HCA 7.
3. See Chief Commissioner v Metricon at [59]; cf Meriton Apartments Pty Limited v Parramatta City Council [2003] NSWLEC 309 at [23]-[25].
4. See Bosa Development Corporation at [18].
5. See Chief Commissioner v Metricon at [45]-[46].
6. Ibid at [47].
7. Ibid.
8. See Leda ManorsteadPty Ltd v Chief Commissioner of State Revenue [2011] NSWCA 366; (2011) 85 ATR 775 at [40] and [50].
9. See Chief Commissioner v Metricon at [63], "residential accommodation".
10. See Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 35; [1998] HCA 28 at [69].
11. Ibid.
12. See Chief Commissioner v Metricon at [46]; Sandhurst Holdings (Australia) Ltd v Commissioner of State Revenue (2009) 25 VR 59; [2009] VSCA 167 at [17]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 14 November 2018