Christine Deborah Anderson v The Council of the City of Lismore & anor

Judgment (ex tempore) 1HIS HONOUR: The plaintiff Christine Deborah Anderson, a disability pensioner, claims a declaration that a contract made between the first defendant Lismore City Council ('Council') as vendor, and the second defendant Nathan Meuleman as purchaser, for sale of her home at Elliott Street, South Lismore, purportedly pursuant to the power of sale conferred by (NSW) Local Government Act 1993, s 713, in respect of outstanding rates, is void, and an injunction restraining the Council from completing that contract. She alleges that the contract is void by reason that it was not executed in compliance with the Council's resolution - said to require that it be executed under Common Seal by the Mayor and General Manager - whereas it was executed by the General Manager alone, contrary to Local Government Act, s 377(1)(h). She also argues that the contract is void on the ground that she was denied procedural fairness (often, and incorrectly, in the course of argument described as "due process") in connection with the sale; most particularly, that she was not given a reasonable opportunity to enter into an arrangement satisfactory to the Council of the type referred to in Local Government Act, s 715(2)(b). 2Local government councils are given power to sell land for the purposes of recovering overdue rates under Local Government Act , Chapter 17, Part 2, Division 5, which contains the relevant following provisions: 713 Sale of land for unpaid rates and charges (1) For the purposes of this Division, a rate or charge is overdue if: (a) in the case of vacant land, it has remained unpaid for more than one year, or (b) in the case of any other land, it has remained unpaid for more than 5 years, from the date on which it became payable. (2) A council may, in accordance with this Division: (a) sell any land (including vacant land) on which any rate or charge has remained unpaid for more than 5 years from the date on which it became payable, and (b) sell any vacant land on which any rate or charge has remained unpaid for more than one year but not more than 5 years from the date on which it became payable, but only if: (i) the council obtains a valuation of the land from the Valuer-General, and (ii) the total amount of unpaid rates or charges on the land exceeds the valuation, and (iii) the council sells the land within 6 months after the date when the council received the valuation. (3) The council must not sell any such land unless the general manager or the public officer certifies in writing: (a) what rates and charges (including overdue rates and charges) are payable on the land, and (b) when each of those rates and charges was made and how it was levied, and (c) when each of those rates and charges became payable, and (d) what amounts are payable by way of overdue rates and charges on the land, and (e) what amounts are payable by way of rates and charges (other than overdue rates and charges) on the land. (4) The council may, in the case of adjoining parcels of land (whether in the same or different ownerships) each of which may be sold under this Division: (a) sell them separately or as a single parcel and under whatever conditions of sale it considers proper, and (b) do such things as it considers appropriate for the purpose of selling the land at its full value. ... 715 Notice of proposal to sell land (1) Before selling land under this Division, the council must: (a) fix a convenient time (being not more than 6 months and not less than 3 months from the publication in a newspaper of the advertisement referred to in paragraph (b)) and a convenient place for the sale, and (b) give notice of the proposed sale by means of an advertisement published in the Gazette and in at least one newspaper, and (c) take reasonable steps to ascertain the identity of any person who has an interest in the land, and (d) take reasonable steps to notify each such person (and the Crown, if the land concerned is owned by the Crown) of the council's intention to sell the land under this Division. (2) If, before the time fixed for the sale: (a) all rates and charges payable (including overdue rates and charges) are paid to the council, or (b) an arrangement satisfactory to the council for payment of all such rates and charges is entered into by the rateable person, the council must not proceed with the sale. 716 Sale of land by public auction (1) Any sale of land under this Division must be by way of public auction, except as provided by this section. (2) Land that fails to sell at public auction may be sold by private treaty. (3) Land may be sold under this Division to the council, a councillor, a relative of a councillor, a member of staff of the council or any relative of a member of staff of the council in the case of sale by public auction, but may not be so sold in the case of sale by private treaty. ... 718 Application of purchase money The council must apply any purchase money received by it on the sale of land for unpaid rates and charges in or towards payment of the following purposes and in the following order: (a) firstly, the expenses of the council incurred in connection with the sale, (b) secondly, any rate or charge in respect of the land due to the council, or any other rating authority, and any debt in respect of the land (being a debt of which the council has notice) due to the Crown as a consequence of the sale on an equal footing. 719 What if the purchase money is less than the amounts owing? If the purchase money is insufficient to satisfy all rates, charges and debts referred to in section 718 (b): (a) the amount available is to be divided between the rates, charges and debts in proportion to the amounts owing on each, and (b) the rates, charges and debts are taken to have been fully satisfied. 720 What if the purchase money is more than the amounts owing? (1) Any balance of the purchase money must be paid into the council's trust fund and held by the council in trust for the persons having estates or interests in the land immediately before the sale according to their respective estates and interests. (2) The council may pay the balance of the purchase money or any part of the balance to or among the persons who are, in its opinion, clearly entitled to it, and the receipt of the person to whom any payment is so made is an effectual discharge to the council for it. ... 722 Conveyance or transfer of the land The council, on payment to it of the purchase money, may convey or transfer the land to the purchaser without any other authority than that conferred by this section ... 725 Transfers not invalid because of procedural irregularities A transfer or conveyance issued by a council under this Division is not invalid merely because the council has failed to comply with a requirement of this Division with respect to the sale of the land to which the transfer or conveyance relates. 726 Registration of transfer of land under the Real Property Act 1900 (1) On lodgment of a transfer of land under the Real Property Act 1900 , the Registrar-General is to make such recordings in the Register kept under that Act as are necessary to give effect to this Division. (2) The transfer does not operate at law until it is registered under the Real Property Act 1900 . 3Councils have a discretion to make concessions in respect of the recovery of rates in the case of pensioners. Section 582 and 583 relevantly provide as follows: 582 Abandonment of pensioners rates and charges A council may waive or reduce rates, charges and interest due by any person prescribed by the regulations who is in receipt of a pension, benefit or allowance under the Social Security Act 1991 of the Commonwealth. 583 Writing off of pensioners rates and charges (1) A council is to write off amounts of rates, charges and interest which are reduced or waived under this Division. (2) A council may not take proceedings to recover an amount so written off unless the amount has been written off because of a wilfully false statement in an application under this Division or except as provided by section 584. 4This Council adopted a policy, contained in its Policy Manual of 12 May 2009 as policy number 1.5.11, and entitled "Rates and Charges Hardship", the objective of which is stated in it to be "To provide assistance to those ratepayers who are experiencing financial hardship in paying their rates and charges". The policy relevantly provides as follows (emphasis added): Background. The Local Government Act 1993 provides for Councils to make concessions to ratepayers experiencing financial hardship. The purpose of this policy is to provide guidance as to how Council would respond to ratepayer requests for assistance because the payment of rates and charges would cause financial hardship.