Community Housing Limited v Clarence Valley Council

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[This headnote is not to be read as part of the judgment] Community Housing Limited ("CHL") owns various blocks of land, located in the local government areas of each of the six respondent Councils. CHL claims this land is used to provide subsidised housing. In July 2013, each of the respondent Councils issued rates notices to CHL. In November 2013, CHL commenced six proceedings in the Land and Environment Court in respect of the levied rates. The proceedings were heard concurrently by the primary judge. CHL argued that it was exempt from paying rates by virtue of s 556(1)(h) of the Local Government Act, which provides an exemption for "land that belongs to a public benevolent institution or public charity and is used or occupied by the institution or charity for the purposes of the institution or charity." The Councils argued that CHL was confined to bringing an appeal against the levying of the rates under s 574 of the Local Government Act, and that accordingly, CHL's claim was barred by operation of the 30 day time limit imposed by s 574. The primary judge rejected the Councils' submission that the claim was statute-barred. However, the primary judge ultimately rejected CHL's claim. His Honour found that a proper construction of the terms of the object clause in CHL's Constitution (clause 3), which contained three subclauses, did not support a finding that CHL was a public benevolent institution or public charity for the purposes of s 556(1)(h). His Honour held that the third subclause of clause 3 did not disclose a charitable purpose. The issues arising on appeal were: (a) whether CHL's application was statute-barred; (b) whether, considering subclauses 3(a)(ii) and (c), CHL could properly be characterised as a public benevolent institution or public charity; and (c) whether the properties the subject of CHL's application were used for its nominated clause 3 purposes.

First issue: relationship between ss 574 and 674 of the Local Government Act Held by Basten JA, Gleeson JA and Leeming JA agreeing, allowing the appeal:

1. Section 574 does not impliedly carve out an exception from the power conferred by s 674 to make orders to remedy or restrain a breach of the Local Government Act: at [8].
2. Specific appeal provisions, including s 574, do not limit the jurisdiction exclusively conferred on the Land and Environment Court by s 20(2) of the Land and Environment Court Act, including over Chapter 15 of the Local Government Act: at [5]-[8].
3. Where the Land and Environment Court does not have exclusive jurisdiction, such as in relation to s 674 of the Local Government Act, the supervisory jurisdiction of the Supreme Court will be available; s 574 cannot be read so as to impliedly limit the operation of s 69 of the Supreme Court Act: at [9]. Held by Leeming JA, Basten JA and Gleeson JA agreeing, allowing the appeal:
4. There is no express conflict between the limited statutory right of appeal conferred by s 574 and the general right to invoke the supervisory jurisdiction of the Land and Environment Court by way of judicial review: at [32].
5. It is not appropriate to read an implied limitation into the terms of the statute, especially in circumstances involving a superior court and where, such as here, the subject matter of the jurisdiction concerns judicial review of executive actions: at [34]-[38]. The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404, followed; Cochran v Sutton [2014] NSWCA 185, applied

Second issue: characterisation 6. In addressing the words "low income" in subclause 3(a)(ii): the terms of the clause must be read as a whole, and when this is done, the words "low income" qualify the whole of subclause 3(a)(ii), readily connoting the idea of persons who have to "go short". This connotes a charitable purpose for the relief of poverty: at [51]-[52]. Downing v Federal Commissioner of Taxation (1971) 125 CLR 185; Lemm v Federal Commissioner of Taxation (1942) 66 CLR 399, followed. 7. In addressing the phrase "training, vocational and related education, and skills development" in subclause 3(c): a. the conception of "charity" extends to training that is vocational or practical in nature; the terms of subclause 3(c) fall squarely within this aspect of charity and that there is a public benefit in these circumstances is clear and not in dispute: at [55]-[56]. Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159; Milly Milly Case (Attorney General for NSW v Perpetual Trustee Co Ltd) (1940) 63 CLR 209; Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645; Royal North Shore Hospital of Sydney v Attorney General (NSW) (1938) 60 CLR 396, followed b. a stated purpose may fall within the legal conception of charity whether the clause is expressed narrowly, or so broadly as to be "fundamentally general in its terms", so long as what is expressed remains within that conception: at [57].

Third issue: use 8. In order to satisfy the requirement in s 556(1)(h) that the land be "used" for CHL's nominated purposes it was not necessary for every block of land owned by CHL in issue in this proceeding to be occupied at all times; it is inevitable that at any one time some of the numerous properties would be vacant: at [71]. 9. It was open to the primary judge to find, based on affidavit evidence expressed in general terms but which was not challenged in cross-examination nor in submissions, that the properties were used for CHL's nominated purposes: at [72].

Judgment

1. BASTEN JA: I agree with the orders proposed by Leeming JA in this matter. I also agree with his reasons and, in particular, those for concluding, in relation to the first issue addressed, that the Land and Environment Court had jurisdiction to consider the application brought by the appellant in the Class 4 jurisdiction of that Court. What follows is not intended to be inconsistent with any aspect of that reasoning.
2. It is unfortunate, though understandable, that drafting difficulties frequently arise in relation to jurisdiction-conferring statutes. It is not uncommon for jurisdiction to be conferred both by the statute constituting a particular court or tribunal and by a statute creating rights and obligations or conferring powers on a person, corporation or government officer or entity.
3. In the present case, the argument sought to focus on rights of appeal and review conferred by the Local Government Act 1993 (NSW) in respect of matters dealt with in that legislation, and in particular decisions with respect to rateable land and the making and levying of a rate, pursuant to Ch 15 of that Act. However, another way to approach the matter is to commence with the jurisdiction and powers of the Supreme Court of the State. There is a specific reason for adopting that approach (if only as a check on conclusions reached by other means) in circumstances where it is said (or assumed) that there are limits on the scope of the Supreme Court's jurisdiction. The reason is the conferral by the Constitution on the High Court of jurisdiction to hear and determine appeals from judgments of "the Supreme Court of any State". [1] It is now firmly established that Ch III of the Constitution created an integrated national system for the administration of justice. [2] This gives rise to an implied limitation on state legislative power to interfere with the essential characteristics of a state Supreme Court. [3] Further, the construction of a state Act which appears to limit the jurisdiction of the Supreme Court might engage the requirement in s 31 of the Interpretation Act 1987 (NSW) to construe the Act so as not to exceed the legislative power of the State Parliament. There is the complementary principle identified in The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc [4] that it is "quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations that are not found in the express words".
4. These principles can, of course, operate differently depending on the circumstances. In Kirk they were held to impose a limitation on a privative clause limiting the power of the Supreme Court to review decisions of another state superior court, namely the Industrial Court. The present case involves a provision conferring on the Land and Environment Court a jurisdiction otherwise enjoyed by the Supreme Court, in relation to planning and environmental laws. That provision need not be subjected to the constraining interpretation commonly applied to a privative clause restricting review by this Court, because there is a full right of appeal from judgments of the Land and Environment Court in the Class 4 jurisdiction the subject of the exclusive jurisdiction provision.
5. Nevertheless, commencing with the jurisdiction of this Court, one commences with the broad conferral of "all jurisdiction which may be necessary for the administration of justice in New South Wales", in s 23 of the Supreme Court Act 1970 (NSW). That should be read with the powers to grant relief contained in Pt 5 of the Supreme Court Act, which include the supervisory jurisdiction to grant relief in the nature of the former prerogative writs (s 69) and the power to make binding declarations of right (s 75).
6. Turning to the Land and Environment Court Act 1979 (NSW), one finds in s 20 the conferral of Class 4 jurisdiction. That is identified in two ways. First jurisdiction is conferred to hear and dispose of "proceedings under" identified statutes, including s 674 of the Local Government Act. Secondly, jurisdiction is conferred to hear and dispose of "proceedings referred to in subsection (2)", pursuant to s 20(1)(e). Section 20(2) is in the following terms: 20 Class 4 - environmental planning and protection and development contract civil enforcement … (2) The Court has the same civil jurisdiction as the Supreme Court would, but for section 71, have to hear and dispose of the following proceedings: (a) to enforce any right, obligation or duty conferred or imposed by a planning or environmental law …, (b) to review, or command, the exercise of a function conferred or imposed by a planning or environmental law …, (c) to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function, (d) whether or not as provided by section 68 of the Supreme Court Act 1970 - to award damages for a breach of a development contract.
7. The phrase "a planning or environmental law" is defined in subs (3) and includes, amongst many specified statutes and parts thereof, Ch 15 of the Local Government Act. As is implicit in s 20(2), s 71 of the Land and Environment Court Act renders the jurisdiction conferred under s 20(2) exclusive of the jurisdiction of the Supreme Court.
8. Submissions in this Court focused on the question whether the availability of an appeal under s 574 of the Local Government Act in respect of the levying of the rate, on the ground that the land is not rateable, or is not rateable at the particular rate identified in the notice, impliedly carves out an exception from the breadth of s 674 and the concomitant powers to make orders to remedy or restrain a breach of the Local Government Act. The question in the present case concerned the application of s 556(1)(h), to land owned by the appellant. Absent the provisions of the Land and Environment Court Act referred to above, the Supreme Court would have jurisdiction to hear and dispose of proceedings seeking declaratory relief or orders quashing decisions of local councils. However, s 556, and the functions of the Council which followed from the operation of that section, all fell within Ch 15 of the Local Government Act. To the extent that Ch 15 of the Local Government Act constitutes a planning or environmental law for the purposes of s 20(2), that provision confers jurisdiction on the Land and Environment Court separately from the jurisdiction conferred by s 674 of the Local Government Act. Whilst it is tolerably clear, as Leeming JA explains, that the appeal provisions such as, but presumably not limited to, s 574 do not carve out an exception from the broad power to seek relief for a breach of the Act, conferred by s 674, the argument that s 574 is to be read as limiting the jurisdiction separately conferred on the Land and Environment Court by s 20(2) is even more tenuous.
9. There are two further considerations. First, the conferral of jurisdiction on the Land and Environment Court to hear and dispose of proceedings under s 674 of the Local Government Act does not fall within the conferral of exclusive jurisdiction pursuant to s 71 of the Land and Environment Court Act. Without pausing to consider the precise scope of the power of review conferred by s 674, it is clear that a similar jurisdiction will be available in the Supreme Court. Thus, whether or not s 574 impliedly limits the operation of s 674 of the same Act, it is again implausible that it would limit s 69 of the Supreme Court Act. There are thus three possible statutory bases of review, other than the specific appeal provision.
10. Secondly, if proceedings to enforce rights arising under Ch 15 of the Local Government Act were limited in the way proposed by the Councils, they would presumably not fall within the jurisdiction conferred by s 20(2) of the Land and Environment Court Act and would therefore not fall within the exclusive jurisdiction of that Court. The same result would then follow, namely that the supervisory jurisdiction of this Court could be available.
11. This line of reasoning provides further support for the conclusion reached by Leeming JA (and by the primary judge) that the appellant was not precluded from seeking relief in the Land and Environment Court because the time for appeal against the rates notices had expired. It was not contended that the existence of the appeal provision should lead to refusal of declaratory relief on a discretionary basis, nor would such a contention have had any superficial attraction in the circumstances surrounding the commencement of the proceedings, so far as they are known.
12. GLEESON JA: I agree with Leeming JA. I also agree with the additional observations of Basten JA.
13. LEEMING JA: The appellant, Community Housing Limited (CHL), is a public company limited by guarantee, whose Constitution states that its object is to provide shelter and housing, housing advice and referral services, and training, vocational and related education and skills development. CHL owns land in the local government areas of each of the six respondent Councils, which it claims is used to provide subsidised housing. By six separate proceedings in Class 4 of the jurisdiction of the Land and Environment Court, CHL sought a variety of declaratory and injunctive relief, to the detail of which it will be necessary to return, but which centred upon the land being exempt from rates under s 556(1)(h) of the Local Government Act 1993 (NSW), which applies to: "land that belongs to a public benevolent institution or public charity and is used or occupied by the institution or charity for the purposes of the institution or charity."
14. The primary judge, sitting as an acting judge of the Land and Environment Court, heard all six proceedings concurrently, and delivered a reserved judgment dismissing each proceeding with costs: Community Housing Limited v Clarence Valley Council [2014] NSWLEC 193. CHL has appealed, pursuant to s 58 of the Land and Environment Court Act 1979 (NSW), and the Councils have filed a notice of contention.
15. There are essentially three issues on appeal. The first turns on the relationship between s 574(3) of the Local Government Act, which imposes a 30 day time limit for appeals against the levying of rates, and s 674 of the Act, which authorises proceedings to remedy or restrain a breach of the Act, and which is not subject to a time limit. Despite CHL having commenced proceedings after 30 days had passed from the levying of the rates, the primary judge found in its favour on this issue, and the Councils challenge that conclusion by their notice of contention.
16. The second is whether CHL is a public benevolent institution or a public charity. That issue has been treated at all times as turning on the terms of its Constitution, especially, clause 3, which contains three paragraphs identifying CHL's object. The primary judge found that the first and second were either charitable or incidental to a charitable purpose, but that the third was not charitable, with the result that CHL was outside the scope of the exemption. The parties, by their appeal and notice of contention, challenge two aspects of this issue.
17. The third issue on appeal is whether CHL established that it used or occupied the land for the purposes of the institution or charity. The primary judge found in favour of CHL, but the issue is raised by the Councils' notice of contention. This turns on what is established by the affidavit evidence adduced by CHL, which was the subject of relatively limited cross-examination.

First issue: was CHL's application statute-barred?

1. The rates were levied in each case in July 2013. There was correspondence between CHL and the Councils before and after the rates were levied. However, proceedings were only commenced in November 2013. By their points of defence the Councils claimed that the proceedings were properly characterised as an appeal against the levying of rates on the ground that the lands were not rateable, such that they were barred by the operation of s 574 of the Local Government Act.

Two mechanisms to review rate-making functions by local councils

1. The Local Government Act contains two mechanisms which, on their face, permit a challenge to the exercise of the rate-making functions of local councils.
2. First, s 574 provides: "574 Appeal on question of whether land is rateable or subject to a charge (1) A person who has an estate in land, or who is the holder of a licence or permit for land under the Crown Lands Act 1989, in respect of which a rates and charges notice is served may appeal to the Land and Environment Court: (a) in the case of a rate-against the levying of the rate on the ground that the land or part of it is not rateable or is not rateable to a particular ordinary rate or a particular special rate, or (b) in the case of a charge-against the levying of the charge on the ground that the land is not subject to any charge (excluding a charge limited under section 503 (2)) or is not subject to the particular charge. (2) An appeal may not be made under this section on the ground that land has been wrongly categorised under Part 3. (3) An appeal must be made within 30 days after service of the rates and charges notice."
3. Further, s 712(1), on which the Councils relied, provides that a Council may commence proceedings to recover a rate "at any time within 20 years from the date when the rate … became due and payable", and s 712(5) provides that: "(5) No matter in respect of which a right of appeal is given under section 574 may be called into question in any proceedings for the recovery of a rate or charge so as to prevent its recovery if the time within which the right of appeal may be exercised has expired."
4. The appeal created by s 574 lies within Class 3 of the jurisdiction of the Land and Environment Court: Land and Environment Court Act 1979 (NSW), s 19(d), which identifies six particular sections in the Local Government Act conferring rights to apply or appeal and allocates them to Class 3. Several consequences flow from that allocation, including that the rules of evidence do not apply, costs do not follow the event, and an appeal lies only on a question of law (see Land and Environment Court Act, ss 38(2) and 57(1) and Land and Environment Court Rules 2007 (NSW), r 3.7(1)(c)(iv)).
5. "An appeal is a creature of statute and, subject to constitutional limitations, the precise nature of appellate jurisdiction will be expressed in the statute creating the jurisdiction or inferred from the statutory context": Lacey v Attorney-General (Qld) [2011] HCA 10; 242 CLR 573 at [56]. The effect of subsections (1) and (2) of s 574 is to identify grounds which may and may not be advanced in the appeal. The effect of subsection (3) is to require that the appeal be commenced within 30 days after service of the notice. Argument in this Court proceeded on the basis that the 30 day time period could not be extended.
6. The second mechanism arises from s 674 of the Local Government Act and s 20(2) of the Land and Environment Court Act. The former provides that: "674 Remedy or restraint of breaches of this Act-other persons (1) Any person may bring proceedings in the Land and Environment Court for an order to remedy or restrain a breach of this Act. (2) The proceedings may be brought by a person on the person's own behalf or on behalf of the person and on behalf of other persons (with their consent), or a body corporate or unincorporated (with the consent of its committee or other controlling or governing body), having like or common interests in those proceedings. (3) Any person on whose behalf proceedings are brought is entitled to contribute to or provide for the payment of the legal costs and expenses incurred by the person bringing the proceedings."
7. "Breach" is defined in s 672 to mean: "(i) a contravention of or failure to comply with this Act, (ii) a threatened or an apprehended contravention of or a threatened or apprehended failure to comply with this Act".
8. Class 4 of the jurisdiction of the Land and Environment Court expressly includes proceedings under s 674 of the Local Government Act: Land and Environment Court Act, s 20(1)(d). Further, Class 4 jurisdiction also includes proceedings to enforce any right, obligation or duty, or to review, or command, the exercise of a function, conferred or imposed by, a "planning or environmental law", and proceedings to make declarations of right in relation to any such right, obligation or duty or the exercise of any such function: s 20(2). Chapter 15 of the Local Government Act is one such "planning or environmental law" (s 20(3)(a)), and the provisions dealing with the levying of rates are found in that Chapter.
9. Neither the rights given to "any person" by s 674 of the Local Government Act nor those under s 20(1)(d) of the Land and Environment Court Act are expressed to be an appeal. The latter is best seen as making statutory modifications (notably, by relaxing the requirement of standing) to the supervisory jurisdiction of a superior court in respect of the exercise of executive power. It may be, as CHL submitted, that the rights conferred by s 674 are broader still; it will not be necessary in order to resolve this appeal to express a view on that question.

CHL's application, the reasons of the primary judge and the Councils' submissions

1. On one view the proceedings commenced by CHL sought relief which went outside the scope of an appeal under s 574. CHL sought five declarations: as to its status, as to its use of the land, that it was exempt from previous and future rates on the land when it was the registered proprietor, that the rates notices issued in July 2013 were issued in breach of ss 554 and 556 of the Local Government Act and that those notices were "a nullity and/or invalid". CHL also sought two mandatory orders: an injunction preventing the Council from taking steps to enforce the rates notices, and an "order that the [Council] pay [CHL] an amount equal to the amount paid previously by [CHL] for rates on the Land declared to be exempt". The orders seeking repayment resembled those sought in Marrickville Metro Shopping Centre Pty Limited v Marrickville Council [2010] NSWCA 145; 174 LGERA 67, which Tobias JA noted at [7] were largely abandoned as a consequence of the effect of the Recovery of Imposts Act 1963 (NSW).
2. The primary judge rejected the Councils' submissions on s 574. His Honour said that CHL "does not appeal against the rate that has been levied but rather challenges the entitlement of the councils to levy the rates in the particular circumstances in the first place": at [16]. Further, his Honour observed that the relief sought by CHL was wider than the relief contemplated by s 574: at [18]. Finally, his Honour considered that there was "a clear distinction between a challenge to a rate properly levied by a council authorised and entitled to do so on the one hand, and a challenge to the right or power of the council legally to levy the subject rate at all on the other hand": at [20].
3. In seeking to overturn this conclusion, the Councils submitted that there was a false dichotomy between an appeal against a rate which has been levied, and the entitlement to levy the rate, noting that the ground that the land was not rateable was squarely within the scope of an appeal conferred by s 574. The Councils also submitted that, to the extent that his Honour proceeded on the basis that the relief sought was broader than that contemplated by an appeal in Class 3 of the court's jurisdiction, his Honour had fallen into error. They submitted that orthodox principles applied, whereby a specific prohibition is not outflanked by, but instead is read as a proviso to, a general provision.
4. Neither CHL nor the Councils directed this Court to any authority on point.

The Councils' submissions should be rejected

1. The direct answer to this issue is that there is, in truth, no conflict between the limited statutory right of appeal and the general right to invoke the supervisory jurisdiction of the Land and Environment Court by way of judicial review. A recurring feature of litigation within the Australian legal system is the overlap between judicial review and statutory rights of appeal. Typically, the existence of a right of appeal will give rise to discretionary considerations attending judicial review. See for example Brennan v New South Wales Land and Housing Corporation [2011] NSWCA 298; 83 NSWLR 23 at [101]; recent examples may be seen in Navazi v New South Wales Land and Housing Corporation [2015] NSWCA 308 and Day v Sanders [2015] NSWCA 324.
2. In order to succeed on this issue, the Councils need to establish a prohibition upon a ratepayer invoking the jurisdiction conferred by s 674 and s 20. Certainly, there is no express conflict between the two. A number of considerations tell against there being any such implication.
3. The first is the importance of the grant of supervisory jurisdiction to a superior court. It is basic that it is not appropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations which are not found in the express words: The Owners of the Ship "Shin Kobe Maru" v Empire Shipping Co Inc (1994) 181 CLR 404 at 421. That principle, to which Basten JA referred in Cochran v Sutton [2014] NSWCA 185 at [8], has particular application in the case of a superior court, and in my view has even greater force when the subject matter of the conferral of jurisdiction is judicial review of executive action.
4. The second is the limited immunity conferred by s 712(5). That subsection prevents calling into question matters which fall within the scope of an appeal under s 574, but only "in proceedings for the recovery of a rate or charge" where "the time within which the right of appeal may be exercised has expired". That subsection thereby expressly confers a limited immunity upon Councils after the 30 day period in s 574 has elapsed, but only in recovery proceedings. The subsection, and the rest of the Local Government Act, is silent as to putting in issue matters falling within the scope of an appeal under s 574 in proceedings other than recovery proceedings. The narrowness of the immunity may be contrasted with more general language in the same Act. For example, s 246 provides that: "A determination of the Remuneration Tribunal may not be challenged, reviewed, quashed or called into question before any court in any legal proceedings, or restrained, removed or otherwise affected by proceedings in the nature of prohibition, mandamus, certiorari or otherwise".
5. The third is the express words in s 674. As CHL submitted, s 674(4) and (5) in terms provide for exceptions: "(4) Subsection (1) does not apply in relation to an alleged contravention of Part 2 (Duties of disclosure) of Chapter 14 (Honesty and disclosure of interests). Note: Section 486A confers exclusive jurisdiction on the Civil and Administrative Tribunal to deal with such a matter at first instance. (5) Subsection (1) does not apply in relation to anything done or omitted to be done under Division 3 of Part 1 of Chapter 14."
6. Accepting as I do that the point is in the nature of an expressio unius argument, the express exclusion by the Legislature of some particular provisions of the Local Government Act from the general supervisory jurisdiction of the Land and Environment Court tells against the implied exclusion of others.
7. Fourthly and more generally, it may be seen that the overlapping provisions are in fact complementary rather than conflicting. A dissatisfied ratepayer is given the right, within a strictly limited time period, to challenge the levying of a rate, in a jurisdiction which is relatively informal, where ordinarily there is no sanction as to costs, and which is subject to only relatively limited appeals. Those features are important considerations in the case of many ratepayers, and help to explain why such a right of challenge has long been given by statute (for example, the right of appeal to the nearest court of petty sessions or district court (and after 1921, to the Land and Valuation Court) conferred by s 133 of the Local Government Act 1919 (NSW), from which a further appeal lay, but only on a point of law, to the Supreme Court). The existence of the particular right of appeal conferred on a ratepayer by s 574 and its predecessors does not detract from the more general right, not confined to ratepayers, to seek judicial review of the exercise of a council's rate-making powers in the supervisory jurisdiction of a superior court.
8. For those reasons, I have concluded that there is no sound basis for discerning an implied prohibition upon a ratepayer invoking the Class 4 jurisdiction conferred by s 674 of the Local Government Act and s 20(2) of the Land and Environment Court Act. I also agree with Basten JA's reasons which provide further support for that conclusion. The primary judge was, with respect, correct so to conclude. This appeal is an appropriate case for the exercise of such jurisdiction, given the quantity of land and commonality of the issue.

Second issue: characterisation of CHL

1. The object of CHL is stated in clause 3 of its Constitution: "The object for which the Company is established is to be a non profit corporation that: - (a) acquires on its own behalf, or manages or holds as trustee on behalf of any public, government, semi or local government or charitable person, association, bodies, funds, institutions or organizations, land and buildings so that: (i) shelter is provided to persons in crisis and/or who have inadequate access to safe and secure housing; (ii) housing may be provided to low income persons including members from ethnic groups, young people (single, dependent or otherwise), people with disabilities, people who are aged, childless couples, single parent families, families and/or other households in need; (b) provides housing advice and referral services which may assist homeless persons into stable and long term housing. (c) Provide [sic] training, vocational and related education, and skills development to improve employment opportunities."
2. It appears that the principal submission advanced by CHL at first instance was that there was a single object, the nature of which was reflected in paragraphs (a) and (b), and to which paragraph (c) was subservient. Textually, little reliance is to be placed upon the opening words of the clause being in singular form, because elsewhere in the Constitution there are references to the "objects" of the Company (for example, in cll 4(b), (d) and (e)); and cl 1(b) provides that "[w]ords importing the singular shall mean and include the plural". However, CHL also submitted that cl 3(c) could, if considered separately, fall within the advancement of education head of charity. It was common ground both at first instance and on appeal that it was necessary for CHL's purposes to be exclusively charitable: Bodalla Aboriginal Housing Company Ltd v Eurobodalla Shire [2012] NSWCA 408; 195 LGERA 114. The submissions on appeal were directed to cll 3(a)(ii) and (c). I deal with each in turn.

Clause 3(a)(ii) - low income

1. The primary judge considered that paragraphs (a) and (b) identified a charitable purpose for the relief of poverty. The Councils accepted at first instance and on appeal that cll (a)(i) and (b) were charitable, but maintained that the provision of housing to persons of "low income" in cl (a)(ii) was in a different category.
2. The Councils pointed to the relative nature of the term "low income", which was not defined, and submitted that "it cannot be assumed that the provision of 'housing' for 'low income persons' under clause 3(a)(ii) exclusively addresses the relief of poverty". The Councils also pointed to the express provision in s 560(4) that the Crown was liable to pay rates for land owned by it which is subject to the Housing Act 2001 (NSW).
3. The latter submission is readily dealt with. The fact that specific statutory provision has been made in relation to social housing provided by the government does not bear upon whether cl 3(a)(ii) is exclusively charitable (although it may explain the origins of the dispute, because it appears that CHL has recently acquired a number of properties from the State Department of Housing).
4. The specific provision in s 560(4) of the Local Government Act on which the Councils rely is a consequence of two policy choices in the same Act. The first is that the Crown's exemption from rates is limited so as to exclude land leased by it for private purposes (s 555(1)(a)). The second is that ordinarily landlords, not tenants, are primarily liable to pay rates (s 560(1)). Section 560(4) is essentially arbitrary, and says nothing as to the case of privately held land.
5. Turning to the Councils' principal submission, it is well established, as Walsh J said in Downing v Federal Commissioner of Taxation (1971) 125 CLR 185 at 193 with the agreement of Menzies and Gibbs JJ, that "a person may be in need without being destitute". His Honour continued at 193-194: "The word 'poverty' and similar expressions, as used in the law in relation to charities, refer to persons who, although they may not be in abject poverty, are subject to some degree of financial necessity."
6. The same point was made in Lemm v Federal Commissioner of Taxation (1942) 66 CLR 399 at 410-411 by Williams J, with whom the other members of the Court agreed.
7. In Downing, Walsh J went on to approve what had been said by the Master of the Rolls in In re Coulthurst, deceased; Coutts and Co v Coulthurst [1951] Ch 661 at 666 that the word "poverty" was: "a word of wide and somewhat indefinite import and that it may not unfairly be paraphrased as meaning persons who have to 'go short' in the ordinary acceptation of that term, due regard being had to their status in life."
8. The relevant clause of the will in question in Downing, after listing a number of obviously charitable purposes including "for the relief of persons in necessitous circumstances", provided "or for the amelioration of the condition of the dependants" of servicemen or ex-servicemen. The submission rejected by the High Court at 193 bears some similarity to that advanced by the Councils: "It was argued that the word 'amelioration' does not convey necessarily the notion of providing relief from poverty nor does the word 'dependants' point necessarily to persons who are impoverished."
9. Walsh J rejected the submission (at 194): "When the clause refers to the amelioration of the condition of dependants, I think it is right to regard those words, in their context as part of the whole trust which, in my opinion, has a character which is predominantly charitable, as indicating that the object of the amelioration clause is to benefit persons whose lot needs improvement."
10. A similar approach applies here. The earlier subclause is concededly charitable, and conveys the notion of relief from poverty. The words "low income" and "households in need" are stronger than those considered in Downing ("amelioration" and "dependants"). The Councils accepted that, as a matter of construction, the words "low income" qualified the whole of cl 3(a)(ii). I agree, and would add that the classes of persons identified in the clause are all to be read as answering the description of "households in need" (that is the natural force, in this context, of the word "other").
11. The words of the clause are to be read as a whole. When that is done, they readily connote the idea of persons who have to "go short". This is a clear case where the requisite charitable purpose may be discerned.

Clause 3(c) - training, vocational and related education

1. The primary judge concluded that cl 3(c) did not disclose a charitable purpose. The dispositive paragraph of his Honour's reasoning was at [53]: "The provision of training, vocational and related education, and skills development to improve employment opportunities is in my opinion neither an independently charitable purpose nor merely incidental to some otherwise evident or identifiable main charitable purpose of the company. It is fundamentally general in its terms and incapable as a matter of language of being accommodated within any recognised description or category of charitable purpose. 'Training' does not have any charitable content standing alone and does not acquire any from the context in which it appears. The same can be said of 'vocational'. The reference to 'related education, and skills development' does not succeed in qualifying the clause as an independent charitable purpose for the advancement of education. Even if it were capable of meeting the description of a charitable purpose for the advancement of education, the exemption sought by the company would not be available to the extent that there is no evidence that any of its properties are used for any such purpose."
2. CHL submitted on appeal that this reasoning was erroneous. It is not necessary to deal with all of CHL's submissions. Among others, CHL submitted that the words of cl 3(c) described a charitable purpose for the advancement of education, or alternatively, a charitable purpose falling within the fourth category of Lord Macnaghten's classification in Commissioners for Special Purposes of Income Tax v Pemsel [1891] AC 531.
3. I respectfully agree with that submission. It is settled law that the legal conception of charity extends to training that is of a vocational or practical nature. The practical agricultural training given to boys committed to the Salvation Army Bayswater Home Training Farm and Vocation Centre was "plainly a charitable purpose as being either for an educational purpose or alternatively for a purpose beneficial to the community": Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation (1952) 85 CLR 159 at 173-174. In the same case, Fullagar J observed at 185 that the training farm in the Milly Milly Case (Attorney General for NSW v Perpetual Trustee Co Ltd) (1940) 63 CLR 209 was "plainly a charitable trust". The practical training given by the Navy Sea Cadet Corp which "would teach a lad whose ambitions lie towards a sea-going career some of the rudiments of his intended craft and afford him some intellectual equipment and some stimulus towards further preparation" was "essentially and predominantly educational": Lloyd v Federal Commissioner of Taxation (1955) 93 CLR 645 at 676. In a different context, Dixon J said in Royal North Shore Hospital of Sydney v Attorney General (NSW) (1938) 60 CLR 396 at 426, "No one disputes that the spread of technical education is a charitable purpose".
4. The "training, vocational and related education and skills development" to which cl 3(c) is directed falls entirely within this aspect of charity. That there is a public benefit is clear and not in dispute.
5. Against this, the Councils submitted in writing that the "very broad terms of clause 3(c) are readily contrasted with the more detailed descriptions of the objects of institutions" referred to in some of the cases mentioned above, and relied upon what the primary judge had said about the clause being "fundamentally general in its terms". I cannot agree that this is an answer to CHL's submission. The question is whether a purpose expressed in the clause falls within the legal conception of charity. That may occur whether the clause be broadly or narrowly expressed, so long as what is expressed remains within that conception.
6. In oral address, the Councils indicated, very properly, that the submission upheld by the primary judge had not been advanced by them, and that they did not otherwise wish to be heard in relation to cl 3(c).
7. Accordingly, I have concluded that this ground of appeal is made out.

Third issue: Use for the purposes of cl 3

1. The primary judge found that "the properties held by the company are used for its nominated clause 3 purposes": at [73]. Consistently with what was held by the majority of this Court in Macquarie University v Ryde Municipal Council [1977] 1 NSWLR 304, it was common ground that the exemption in s 556 of the Local Government Act could be satisfied where the landowner had granted a lease over the land.
2. The primary judge found in favour of CHL on the basis of uncontroverted affidavit evidence to the effect that each of CHL's properties was "occupied by a tenant of CHL or is available to be tenanted", at rents which were "significantly less than what the market value for rent is for an equivalent property". By their notice of contention, the Councils submitted that this "bare assertion" was insufficient to sustain declaratory relief. The evidence did not establish, so it was submitted, which properties were vacant, or for how long they had been vacant.
3. Further, the Councils gave prominence, at first instance and on appeal, to an inconsistency in CHL's affidavit evidence. That evidence disclosed that one third of CHL's properties were intended to be occupied by "very low income tenants", one third by "low income tenants" and one third by those earning "moderate incomes". The New South Wales State Manager of CHL originally gave evidence that the latter third "are not necessarily persons for whom it is the object of CHL to provide housing". In a later affidavit, served very shortly before the hearing, he said that he regarded his earlier statement to be incorrect, by reason of the fact that those persons were chosen pursuant to policies which had the result that they "do not have sufficient household income to obtain adequate access to safe and secure housing". He was cross-examined on his altered opinion.
4. The primary judge recorded the Councils' submissions directed to the third of CHL's tenants who were on moderate incomes, and also to the failure in the evidence to establish which properties were actually used for the purposes of residential accommodation, as opposed to being available to be tenanted. He did not accept those submissions.
5. By their notice of contention, the Councils submitted that the evidence did not permit a finding that all of the properties were used for the purposes in cl 3(a). They also submitted that the primary judge had elided ownership and use contrary to the limits of the exemption, and that the Court's "wholesale finding" in favour of CHL was not supportable on a proper construction of s 556(1)(h).
6. The first submission focussed upon the correcting affidavit referred to above, and the reasoning of the primary judge directed to it at [74]: "Nor am I troubled that any of the properties may be leased to people with 'moderate incomes'. Different adjectival gradations of 'income', such as 'very low', 'low', or 'moderate' do not foreclose the company's ability to decide who is or may be properly the beneficiary of its assistance for the relief of poverty. The current issue is the use limb of the s 556(1)(h), not the purpose limb. The non-exclusive terms of clause 3(a)(ii) mean that housing may be provided to households in need. That description is apt in present day circumstances in particular to contemplate people who are in need of relief from poverty, in the form of the provision of shelter or housing, notwithstanding that their income may in the opinion of the company be moderate, whatever 'moderate' may mean at any particular time."
7. The Councils submitted that the primary judge "inappropriately passed over the difficulties with the appellant's evidence", asserting that the later affidavit provided "a strained revision of his evidence apparently calculated to meeting the respondents' submissions in the court below". I would not accept this submission. CHL's witness was cross-examined on that topic, and rejected the suggestion that his evidence was a response to the Councils' submissions. Although it is unusual to see a concession made so transparently, only to be corrected shortly before the hearing, the deponent gave an explanation in cross-examination of how what he had come to regard as an error had come about. His explanation was not implausible. It was not put to him that his evidence was false.
8. The Councils also submitted that error was disclosed in reading the references in CHL's constitution to "low income" as extending to persons with "moderate income". They submitted that, "Clause 3(a)(ii) simply does not allow, as the Court appears to contend, for an interpretation to the effect that 'housing may be provided to low income persons including ... [moderate income tenants]'". Again, I do not agree. Neither "low income" nor "moderate income" is a term of art. The evidence was that CHL's tenants "do not have sufficient household income to obtain adequate access to safe and secure housing". In the context of cl 3(a)(ii), I would regard such a person as being of "low income".
9. As revealed in the evidence, the term "moderate income" was derived from a Community Housing Eligibility Policy, published by the State Department of Family & Community Services, which in turn adopted "income bands" found in the Housing Regulation 2009 (NSW) (repealed from 1 January 2014). For financial reasons, CHL may need to apply different policies for different purposes. The language used in a government regulation does not, absent express or implied adoption, govern or necessarily affect the construction of a clause of a corporate constitution.
10. The Councils' second submission focussed upon the minority of parcels of land which were untenanted, and the reasons of the primary judge at [72]: "The company either owns or will soon own hundreds of properties. Having regard to the evidence, and in the nature of things, some of them will be tenanted and some of them will be vacant from time to time. Provided they are owned for purposes that otherwise qualify for an exemption under s 556(1)(h), I do not consider the fact that some of the properties are or may be temporarily untenanted means that they are not relevantly being "used" by the company for its purposes. Part of that use includes the holding of properties in anticipation of letting them to appropriate tenants. It is unrealistic to suggest otherwise in my view. The position would be different if the properties or some of them were clearly used for some purpose not contemplated by clause 3. The situation is not analogous to the permissible use status of a property that is, for example, dependent upon the receipt of development consent or approval, without which the land could not legally be used for the purpose in question."
11. It was put that in order for land to be used for a purpose, it was necessary to show something more than an intention to use the land. The Councils invoked the reasoning in Peabody Pastoral Holdings Pty Limited v Mid-Western Regional Council [2013] NSWLEC 86 at [72] to the effect that a change in use required the land to be "devoted to use for the different purpose". Finally, the Councils advanced a subsidiary submission to the effect that "section 556(1)(h) envisages a property-by-property exemption process", and that the "general and omnibus evidence" relied on by CHL did not allow for such a process.
12. I do not agree with these submissions. It is inevitable that any tenanted property will, from time to time, become vacant. It is inevitable, as the primary judge observed, that a landlord which owned hundreds of properties the subject of relatively short term tenancies would, at any time, have some properties which were vacant. That does not mean that the land was not being used for the purpose stated in CHL's constitution. The evidence elicited in cross-examination was that all of CHL's properties were tenanted, or else "when they become vacant again we try and tenant them within seven days". Peabody Pastoral does not apply. That decision concerned a different statutory regime, and the present is not a case where there was a change of use.
13. The Councils' final submission was rightly regarded by them as subsidiary. There is no reason in principle that a generalised approach could not be used to satisfy the court that the properties fell within the exemption. Although the affidavit evidence of CHL was expressed in terms of generality, CHL also apparently produced and tendered a large volume of primary documents going to the tenancies and the market values of its land in each of the six local government areas, none of which was the subject of cross-examination or submissions by the Councils. The Councils submitted that the generalised affidavit evidence did not discharge the onus borne by CHL which sought declaratory relief, and that it was not for the Councils to seek to disprove the sworn evidence by analysing the documents. I do not agree. It was open to the primary judge to accept the testimonial evidence, in circumstances where the Councils adduced no evidence whatsoever. No error is shown in the finding made by the primary judge.

Orders

1. For those reasons, I propose that the appeal be allowed. There being no other discretionary considerations applicable, CHL is entitled to declaratory relief, but not nearly so broad as it seeks. Senior counsel for CHL acknowledged, properly, that what was said in Commissioner of Taxation v Word Investments Ltd [2008] HCA 55; 236 CLR 204 at [34] warranted a more precise formulation of relief than had originally been sought in the notice of appeal. Further, he acknowledged that CHL remained bound by a concession made at trial in relation to four parcels of land in the Port Macquarie-Hastings local government area.
2. CHL is entitled to declarations that, as presently constituted, it is a public charity for the purposes of s 556(1)(h) of the Local Government Act 1993, that the land identified in each summons as land it owns was used or occupied for the purposes of clause 3 of its Constitution within the meaning of s 556(1)(h) and that the rates notices issued in July 2013 in relation to that land are invalid. It was common ground that no injunction is needed to prevent the Councils from taking steps to enforce the invalid notices issued by them. Although pecuniary relief had been sought at first instance, the appeal proceeded on the basis that declaratory relief was sufficient.
3. I propose the following formal orders: 1. Appeal allowed. 2. In each proceeding, set aside the orders made on 22 December 2014, and in lieu thereof, declare that: 1. as presently constituted, Community Housing Limited is a public charity for the purposes of s 556(1)(h) of the Local Government Act 1993, 2. the land identified in each summons owned by Community Housing Limited was, on and from July 2013 until the date of this judgment, used or occupied by it for the purposes in clause 3 of its Constitution, within the meaning of section 556(1)(h) of the Local Government Act 1993 (NSW) (excepting, in the case of the proceedings against Port Macquarie-Hastings Council, the land identified in paragraphs (p), (q), (r) and (s) of the identification of "the Land" in the summons in matter 2013/40924), and 3. the rates notices issued by the respondent Council in July 2013 in respect of the land referred to in (b) above are invalid. 1. The respondent Councils are to pay the costs of Community Housing Limited at first instance and on appeal.

Endnotes

1. Constitution, s 73.
2. Kable v Director of Public Prosecutions (NSW) (1996) 189 CLR 51 at 102-103 (Gaudron J), 112, 114 (McHugh J) and 137-139 (Gummow J).
3. Kirk v Industrial Court of New South Wales (2010) 239 CLR 531; [2010] HCA 1.
4. (1994) 181 CLR 404 at 421.

Amendments 06 May 2016 - Heading above [18] - dash replaced with colon [32] - "Day v Harness Racing NSW" replaced with "Day v Sanders" [34] - "it" inserted after "It is basic that" [61] - "for rent" inserted after "the market value" 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: 06 May 2016