2 On 11 July 2001 the Council declared differential general rates and other rates. Notice of the declaration of the rates was published in the Government Gazette on 26 July 2001 pursuant to s 170 of the Local Government Act 1999. Under cover of a letter dated 22 January 2002, the Council sent Envestra rate notices for the year ending 30 June 2002. It is unnecessary to examine why the notices were sent so long after the rate had been declared in July 2001. The rate notices purported to be rate notices concerning the land occupied by the gas infrastructure installed below public roads by Envestra or its predecessors within the area of the Council.

3 Envestra claims that the rate notices are invalid and of no force and effect. It seeks orders declaring that the land is not rateable land.

4 The parties have commendably agreed the relevant facts. The effect of that agreement is set out below.

5 Envestra is licensed to operate a gas distribution system in South Australia. Since 1 July 1997, when the Gas Act 1997 ("the Gas Act") came into operation, Envestra has been a gas entity within the meaning of that Act. Envestra is licensed to operate a gas distribution system in South Australia.

6 At all material times, the defendant City of Port Adelaide Enfield ("the Council") has been a council within the meaning of the Local Government Act. The Council holds the fee simple in respect of all public roads within the area of the Council: s 208 of the Local Government Act.

7 Since 1861, Envestra and its predecessors have installed, operated and maintained gas infrastructure (predominantly in the nature of pipes) under public roads in the area of the Council for the purpose of supplying gas to consumers within that area. In doing so, Envestra and its predecessors have relied on the powers conferred on them by the Gas Act and the legislative predecessors of that Act.

8 All gas infrastructure installed by Envestra and its predecessors under public roads is the property of Envestra. That is a consequence of the combined operation of the terms of s 35 of the Gas Act and s 209 of the Local Government Act 1999. No other infrastructure or service can be installed within the actual space occupied by Envestra's gas infrastructure installed under public roads within the area of the Council.

9 Before installing new gas infrastructure below a public road in the Council area, Envestra must give notice to the Council of its intention to do so pursuant to s 47(3) of the Gas Act. The parties have agreed to the admission of a notice said to be typical of the notice given by Envestra. The notice usually deals with issues which are specific to the pipeline as well as its depth below ground surface at particular points. The notice specifies the dimensions of the gas pipe and of the easement where the pipes will be laid. It also identifies the location and route of the gas pipe.

10 In addition to those agreed facts, it should be noted that Envestra is entitled by s 47 of the Gas Act to install, operate and maintain gas infrastructure on public land. Public land is defined by s 47(15) to mean

"land owned by the Crown or an instrumentality or agent of the Crown or by a council or other local government body."

Public land plainly includes public roads owned by the Council. Section 47 gives Envestra extensive powers. It may install gas infrastructure on public land; it may operate, maintain, repair, alter or add to, remove or replace gas infrastructure on public land; and it may carry out any other work on public land for the distribution or supply of gas. It may also excavate public land for the purpose of carrying out such work. See s 47(1) and s 47(2) of the Gas Act. It is quite apparent, therefore, that the gas infrastructure is placed beneath public roads by Envestra, not pursuant to any lease or licence granted by the Council, but pursuant to the statutory powers vested in Envestra by the Gas Act.

11 Envestra or its advisers initially believed that this was an action to try the validity of a rate. Such an action must be instituted within two months from the date of the publication of the notice of the declaration of the rate in the Government Gazette, in this case 26 July 2001: see s 276(4) of the Local Government Act. This action was not instituted within the prescribed time. Envestra sought an extension of time within which to bring the proceedings. This is not an action to try the validity of a rate. Envestra does not challenge the rate. Instead, it seeks a declaration that the land occupied by its gas infrastructure beneath public roads is not rateable land. The action is, therefore, an action in which Envestra seeks declaratory orders. Notwithstanding that the action is not an action to try the validity of the rate, the Council consented to an order which was made out of an abundance of caution extending the time within which to bring the action.

12 Because this was believed to be an action to try the validity of a rate, the action was commenced in the District Court: s 276(1) of the Local Government Act. The Council applied for an order transferring the action to this Court. Envestra did not object to the application. As it was not an action to try the validity of a rate, an order was made on 26 November 2002 transferring the action to this Court.

13 Rates may be assessed against any piece or section of land subject to separate ownership or occupation: s 148(1) of the Local Government Act. Usually the owner of land is the principal ratepayer but, if the name of an occupier is entered in the assessment record as the principal ratepayer or the land is held from a council under a lease or licence, the occupier rather than the owner of land within a council area is the ratepayer: s 178(2) of the Local Government Act.

14 By virtue of s 147(1) of the Act, all land within the area of a council is rateable land except land exempted from rating by s 147(2). It is common ground that the only relevant exemption is to be found in s 147(2)(f) which exempts "land occupied or held by the council, except any such land held from a council under a lease or licence".

15 Before examining the meaning of s 147(2)(f), it is necessary to determine whether the space occupied by Envestra's gas infrastructure is capable of being rateable land. Several well-settled propositions establish that it is. I list those propositions.

(1) The space occupied by gas pipes or gas mains beneath public streets or roads is land for rating purposes. That has been a well-established proposition since at least 1823: R v Birmingham Gas-Light & Coke Company [1823] EngR 474; (1823) 1 B&C 506, 107 ER 187; R v The Brighton Gas Light & Coke Company [1826] EngR 610; (1826) 5 B&C 466, 108 ER 173; Commissioner of Main Roads v North Shore Gas Co Ltd [1967] HCA 41; (1967) 120 CLR 118 at 131 - 132; Gas and Fuel Corporation of Victoria v City of Williamstown [1978] VicRp 64; (1978) 40 LGRA 390 at 394. See also Melbourne Tramway and Omnibus Company Ltd v Mayor of the City of Fitzroy [1900] UKLawRpAC 53; [1901] AC 153 and Borough of Glebe v Lukey [1904] HCA 8; (1904) 1 CLR 158 at 171, 172, 173.

(2) A gas utility which has laid the gas pipes or mains beneath public streets or roads is an occupier of the land which is represented by the space occupied by the gas pipes and mains: Commissioner of Main Roads v North Shore Gas Co Ltd (supra) at 131 - 132; Borough of Glebe v Lukey (supra) at 172; Gas and Fuel Corporation of Victoria v City of Williamstown (supra) at 394 - 396.

(3) A gas utility does not have a proprietary interest in the land in which the gas pipes and mains are embedded but has a licence in respect of that land: Newcastle-Under-Lyme Corporation v Wolstanton Ltd [1947] 1 Ch 92 at 101, 103 ‑ 105; Commissioner of Main Roads v North Shore Gas Co Ltd (supra) at 127 - 129 and at 133 - 134.

Thus, the space occupied by the gas infrastructure beneath public streets and roads is rateable land unless it is exempted by reason of s 147(2)(f). It is common ground that there is no other relevant exemption. If the land is rateable land, Envestra as occupier of that land will be liable for rates declared in respect of that land.

16 Envestra contends that its land is not rateable land on two grounds. The first is that the land is exempted by reason of s 147(2)(f). The second is that, even if the land does not fall within the exemption, the statutory powers by which Envestra installs gas infrastructure do not give it any proprietary interest in land but merely constitute a statutory mandate to carry out those works. It is convenient to deal with the second question first.

17 The statutory powers held by Envestra have already been mentioned. The power to carry out such works as are necessary to install the gas infrastructure and the power to occupy the land in a limited way in order to maintain the infrastructure in the land on which it has been placed do not confer any interest or estate in the land. Instead, it is a bare licence without any title, legal or equitable in the land itself. Its interest is the same as that held by other gas utilities and identified in Newcastle-Under-Lyme Corporation v Wolstanton Ltd (supra) at 104 and in Commissioner of Main Roads v North Shore Gas Co Ltd (supra), decisions based on statutory provisions very similar in terms to those in the Gas Act. The powers of Envestra pursuant to s 47 to install and maintain gas infrastructure on public roads and other public land, therefore, result in a statutory licence to occupy land for that purpose. Thus, Envestra's contention that the Gas Act does not create any proprietary interest in the land in which its infrastructure is embedded but, instead, has a statutory mandate to do what it could not do but for that mandate fails to understand the nature of the licence which Envestra holds. In other words, while it may be correct to describe the bundle of rights held by Envestra pursuant to the Gas Act as a statutory mandate, that description begs the question whether Envestra has a licence resulting in the land being rateable land. On any view, Envestra holds a licence.

18 The reference to a licence in s 147(2)(f) is wide enough to include a statutory licence of the kind held by Envestra. A licence in land is a mere right to occupy and, without more, confers no interest in the land: Thomas v Sorrell (1673) Vaugh. 330 at 351; 124 ER 1098 at 1109, Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209 at 218 and 221. That is the kind of licence which Envestra has in respect of the Council's roads. This kind of statutory licence is not unique. Other examples of the creation of an entitlement to occupy the land of another include the statutory extension of a lease by s 20B of the Retail and Commercial Leases Act 1995 and the power to declare roads available for motor car racing pursuant to s 20 of the Australian Formula One Grand Prix Act 1984.

19 I turn to the question whether the land occupied by Envestra falls within the exemption in s 147(2)(f). It is convenient to repeat it.

"(f) land occupied or held by a council, except any such land held from a council under a lease or licence."

Thus, the public roads in which the Council holds the fee simple are not rateable being land occupied or held by the Council. The question in this case is whether the land beneath the road and occupied by the gas infrastructure falls within the exception to s 147(2)(f).

20 The meaning of the exception in the latter part of s 147(2)(f) is not entirely clear. The issue is whether the exception applies only where a person occupies council land pursuant to a lease or licence granted by the council or whether it applies also to those instances where a person occupies council land under a statutory lease or licence. At first sight, it might appear to refer only to those cases where a person occupies council land pursuant to a lease or licence granted by the council. However, for the following reasons, I do not believe that to be the intended meaning of the exception.

21 The issue turns on the meaning of the adjectival phrase "from a council". In my view, that phrase refers to a person who is occupying council land under a lease or licence be that lease or licence granted by the council or otherwise created. The adjectival phrase "from a council" simply qualifies the word "land". It does not qualify the expression "lease or licence". In other words, had Parliament intended that those who occupied council land under a statutory lease or licence would not be exempt, s 147(2)(f) would have been expressed in these terms:

"land occupied or held by a council except any such land held subject to a lease or licence from a council."

Thus, a person who occupies council land pursuant to a statutory licence is just as liable for rates as a person who holds a lease or licence granted by the council. All that is different is that in the one case the council has granted the interest and in the other it has not. In short, the purpose of s 147(2)(f) is to exempt only council land which is occupied by a council and no other person. The effect of the expression "land held from the council under a lease or licence" is repeated in s 178(2) of the Local Government Act but the meaning I have found applies with equal, if not greater, force in that provision.

22 Mr Hayes QC, for Envestra, submitted that the phrase "from a council" means that the lease or licence must be granted by the Council. The effect of his submission is that the clause should read "except any such land held under a lease or licence from a council". However, that is not what the section says. To invert the words in that way is to give the provision a different meaning.

23 Any doubts as to the meaning of the provision are removed if regard is had to the purpose and history of this provision. The purpose of the provision is to enable the recovery of rates where a person other than the council has an interest in the land. The immediate predecessor of s 147 was s 168 of the Local Government Act 1934. It exempted land occupied by a council: s 168(2)(l). The terms of that exemption prevented councils from recovering rates from those who occupied council land. That exemption plainly did not exempt those who occupied land held by a council pursuant to a licence of the kind held by Envestra or its predecessors. There might have been some doubt whether those who occupied such land pursuant to a lease or licence from a council were liable for rates. Thus, s 147(2)(f) is expressed in different terms from s 168(2)(l) so that councils might recover rates from those who occupied council land under a lease or licence. There was no reason why the amendment should be limited to persons who hold pursuant to a lease or licence granted by the council. The amendment was no doubt made in consequence of a recommendation on behalf of councils. It could hardly be imagined that the councils intended to deny themselves the benefit of rates from those who occupied council land pursuant to an entitlement other than a lease or licence granted by the council. In addition, land occupied or held by Envestra and its predecessors, including the South Australian Gas Company, has never been exempt from rates. It could not have been intended by a legislative side wind of this kind to effect such a significant change as to exempt a gas entity under the Gas Act from a liability for rates.

24 There is another reason for this conclusion. If the contention of Envestra was correct, a person holding land from a council under a lease or licence granted by that council would be liable for rates but a person who holds pursuant to some other lease or licence would not. I do not think that is the intention of the provision. The purpose is limited to exempting land occupied or held by the Council where no other person occupies the land under a lease or licence.

25 For these reasons, the claims by Envestra that the rate notices are invalid and the land is not rateable land are dismissed.