Victorian Civil and Administrative Tribunal|2002-02-26

The application for review is dismissed and the special charge is confirmed.

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For the Applicant for Review: Mr Kontogeorgos appeared for himself.

1. This was an application under section 185 of the Local Government Act 1989 to review a decision by the City of Latrobe to set a special charge for the construction of Crinigan Road, Ashley Avenue and Jason Street in Morwell.

2. At the commencement of the hearing and pursuant to s.60 of the Victorian Civil and Administrative Tribunal Act 1998 (`VCAT Act'), Mr Murray French asked leave of the Tribunal for himself and his neighbours named below, to be joined as parties to the proceeding given that their interests were affected by the proceeding, pursuant to s.60(1)(b) of the VCAT Act 1998. These persons were seeking to be joined to support the special charge struck by Council in respect of the above road construction scheme and wished to be heard. As their interests were affected by the proceeding, and would definitely be affected if the scheme were set aside by the Tribunal, the following persons were joined by the Tribunal to the proceedings:

3. A secondary preliminary matter was one of the grounds of review relied upon by Mr Kontogeorgos. The grounds of review submitted under cover of letter dated

I am writing to object to a Special Charge Scheme for the sealing of Crinigan Road, Ashley Avenue and Jason Street Morwell as described in the attached letter of 5 October 2001 from Latrobe City Council.

I am concerned about the scheme which seeks to charge me $4000 as the owner of CA750 Crinigan Road. Other apportionments are described within the attached correspondence. In particular I object to the scheme on the basis that: "The basis of distribution of the rates on charge (sic) amongst those persons who are liable to pay it is unreasonable".

* The sealing of the road will be of immediate benefit to all property owners in the main, due to improved access to properties. Therefore any reduction of contribution for any property which has the sealed road to the access driveway of the property should pay full apportionment not a reduction. (Lot 7 `French' enclosed plan: att 2).

* All properties on Palm Grove benefit equally to myself and others and yet the apportionment does not include the maximum payment from each property.

* As indicated on the attached plan (attachment 3) many of the Southern properties are in the residential zones and may be subdivided as of right. Recent events give some indication that such subdivisions could take place immediately following the sealing. If a nominal subdivision was undertaken and the apportionment done on that basis Council could pay a proportion up front and require repayment as subdivision took place. This would ensure all residents paid to receive the benefit of the sealing scheme.

4. In relation to the third dot point, Mr Kontogeorgos made it clear that he was not complaining about a re-subdivision of the allotments that currently existed within the area included in the special rate scheme enclosed by a heavy black line (`included area'). Rather, his complaint was that a property owner such as Amess Nominess Pty Ltd, whose director is Mr Bond (`Amess'), owned three lots zoned residential but was only charged one unit contribution as if it was a one-lot owner. That ground of review is different to the one expressed in that letter but Mr Kontogeorgos was clear that that was the ground of review he wished to rely upon. Therefore the Tribunal notes his amended ground of review and the Council acceded to same and has varied its written submission on that basis.

5. It was clarified by Council's representative, that no difference had been accorded by Council between lots zoned residential and lots zoned rural. Accordingly, no argument concerning zoning differences has been presented at the hearing. The arguments revolved purely around the number of existing lots and the method of apportionment among those existing allotments, irrespective of their zoning.

6. Crinigan Road runs east/west off Maryvale Road, the latter which is sealed and Jason Street and Ashley Avenue run north/south off Crinigan Road. All these roads are unsealed, raise dust, are slippery in wet weather and dangerous. Accordingly, there has been public pressure from residents to have these roads sealed, in Mr French's words, for at least the last 20 years, and the pressure continues to mount for the sake of their children.

7. The vast majority of the allotments off Crinigan Road, Jason Street and Ashley Avenue are approximately 10 acres in size with the exception of the Palm Grove subdivision which has been subdivided into 9 one acre lots. The Palm Grove subdivision is owned by Mr Krausser.

8. Council charged each _`_included' lot owner one unit with the following exceptions:

(i) Mr French, who abuts Mr Kontogeorgos, was charged 0.75 units because the sealing of the road only reaches his driveway access to his Lot 7 and does not continue along the rest of the frontage to his lot;

(ii) Mr Krausser was to be charged four units for his nine lot subdivision;

(iii) Mrs Smith was to be charged 0.75 units for her Lot 19 because the sealed pavement was only to extend up to her driveway and half way along her frontage instead of along the entire frontage;

(iv) Amess was to be charged 0.75 units for its Lot 1 (opposite Mrs Smith of Lot 19) for the same reason that the road was only to be sealed for half the frontage of its Lot 1. Amess was to be charged one unit for Lot 13 because neither Ashley Avenue nor Crinigan Road were sealed and Lot 13 lies at the corner of those two roads. Amess was to be charged 0.5 units for Lot 12 because Lot 12 lies at the corner of Crinigan Road with Maryvale Road and Maryvale Road is already sealed and is potentially a sealed access route into Lot 12.

9. Meetings were held with the residents and three property owners objected to the advertised scheme. Amess' Mr Bond complained that his three allotments were `one holding' notwithstanding that it could be divided into three titles which could be sold separately without the need for any planning permission (and upon which a house could be constructed, also without the need for any planning permission).

10. Ms Smith objected to the sealing only along half of her property frontage and wanted it sealed for the entire length of Lot 19. Amess' Mr Bond objected to the extension of Ashley Avenue for the full length of Ms Smith's property and said that did not interest him and he did not wish to fund the extra sealing.

11. Mr Kontogeorgos objected to the fact that the nine lot Palm Grove subdivision was not being charged nine units. Apparently Mr Krausser did not object to the four units being charged for the nine lot subdivision. At these meetings the neighbours agreed, in an attempt to get the road sealed and get the scheme up, to the exclusion of seven of the nine Palm Grove lots from the scheme and the charging of the remaining two Palm Grove lots within the scheme, one unit each. Some residents offered to pay Mr Kontogeorgos' contribution provided he did not object to the scheme, but Mr Kontogeorgos was adamant about the fact that he was happy to contribute his fair share but wanted equity among all lot owners.

12. In an attempt to appease the objectors and come to some sort of consensus that would please most, if not all the charged land owners, the Council adopted a scheme which in relation to the Palm Grove Estate, excluded Lots three to nine from the scheme and charged each remaining lot in the Palm Grove Estate one unit each.

13. In relation to the Amess landholding, and because of the rurally managed albeit residential zoning of the land, council exercised a policy that it held in relation to rurally zoned allotments, treating it as one landholding, and charging it one unit, even though three family members resided in three houses on that landholding. Two family members reside in two weatherboard homes accessed off the sealed Maryvale Road, neither of which utilise Ashley Avenue nor Crinigan Road for their access. A third brick house occupied by a third family member is accessed off the unsealed Ashley Avenue.

14. In relation to the lot owned by Mrs Smith, the Council decided to extend Ashley Avenue along her entire frontage and charge her one whole unit but decided not to increase the Amess' allotment's unit charge above one unit because the length of road was being sealed at Ms Smith's request and Amess was disinterested in the extension. Although it cost the Council extra to extend that road, a cost which had not been initially factored into the apportionment between the included landowners, the Council subsidised any difference between the additional 0.25 units charged Ms Smith and the additional cost of the extension.

15. Mr French was charged a half unit at a cost of $2,903.20 (being half the actual single-unit sealing cost of $5,806.40) because the majority of his frontage was not sealed.

16. The Tribunal was also advised that the actual cost of one `unit' was $5,806.40 but the Council capped each owners single unit liability at $4,000 in order to make it more affordable for them, get the scheme up, construct the sealed road and assist the earlier implementation of the sealing.

17. The Tribunal was advised that when the scheme was first attempted in February 2000 the sealing would have cost $68,000 with individual contributions of $3,800 per unit. That scheme had been quashed on appeal to this Tribunal. Now, the new cost of this second attempt at a scheme is closer to $90,000 with an individual unit cost of $5,806.46 subsidised down to $4,000 per unit by the Council.

18. The first scheme was set aside by Member Moles in Smith & Others v Latrobe City Council [2000] VCAT 2338 (Application for Review 2000/23042) dated 21 November 2000. The dominant reason for the setting aside of that scheme was the discovery that the nine lot Palm Grove subdivision had been given planning approval by the council's planning department, but the local government arm of the Council was unaware of that fact when the first scheme was proposed and had only charged the Palm Grove landowner one unit.

19. Council's justification for advertising the second scheme at a four unit contribution for the nine lot Palm Grove subdivision was based on the fact that Mr Krausser had paid for the construction of the Palm Grove arm of the extension to Jason Street himself to service his subdivision and that contribution should be taken into consideration. There were two main reasons for the sealing of the asphalted roads. The first one was road safety and the second was dust. As far as road safety was concerned it was acknowledged that a contribution should be made by Mr Krausser. As far as dust emission was concerned it was acknowledged by Council that five of the lots did not front Jason Street at all and would not be affected by any dust raised if Jason Street was not sealed. Therefore Council advised a scheme whereby Mr Krausser was charged four units for the four lots which fronted Jason Street, notwithstanding that lots three and four were accessed off Palm Grove, which in turn took its access off Jason Street.

The nature of the benefit provided by the scheme needs to be considered in the light of precisely what Council are trying to achieve. The Council is not attempting to facilitate development or enhance a development potential to any of this land. All that is being attempted is a rough seal on a rural road, at effectively, an absolute minimum standard. It is a standard of work commensurate with the rural/residential nature of the area. It quite specifically ignores the future development potential of the land.

It is relevant to consider the nature of the benefit being provided by the proposal. That benefit effectively falls into two parts, namely:

5.4.1 the loss of dust creation across land and affecting houses; and

Notably, also, the Council has decided to subsidise the scheme to the extent of (at this stage) of $27,097.00.

In the present situation, bluntly, a very simplistic approach has been adopted recognising the level of works being put in place reflects the relevant benefit to all of the land in question. The "special benefit" to all of the lots (including those which may be the subject of subsequent subdivision) is the provision of a rural standard road. It is not as if by provision of this basic road that the relevant land has been provided with infrastructure consistent with its underlying residential zoning and theoretical potential to develop.

21. Mr Kontogeorgos has made it clear that he agrees the works for the purpose of which the special charge was imposed will provide him a special benefit (s.185(2)(b)(i)).

22. Mr Kontogeorgos also agreed that he does not wish to vary the special charge in relation to its application to him (s.185(3)(a)). He is happy to pay the one unit/$4,000 charged him.

23. His complaint is purely "the basis of distribution of the rate or charge amongst those persons who are liable to pay it is unreasonable", pursuant to s.185(2)(b)(ii).

24. On review the Tribunal's powers pursuant to s.185(3)(b) are to set aside the special rate or special charge if the Tribunal is satisfied that the ground in subsection (2)(b)(ii) is established. The onus lies on Mr Kontogeorgos to establish the unreasonableness of the basis of distribution.

25. It is patent on the face of s.185(2)(b)(ii) that my power is limited to assessing the basis of distribution amongst those persons who are liable to pay it. In other words, because seven out of the nine Palm lots have been excluded by Council in its adopted special charge scheme, I do not have the power to look at the excluded lots and complain that they should have been included. All I can do is assess whether the basis of distribution among those persons who are liable to pay it, in other words those who are included in the special charge scheme, is reasonable or not.

26. Therefore the two units charged for the two Palm Grove lots included in the scheme is patently reasonable.

27. As was held by Deputy President Macnamara and Senior Member Lyons in Walter v Manningham City Council, Application for Review 1999/4171:

We believe it is no part of the Tribunal's jurisdiction in considering whether a special benefit has been shown to exist to make findings as to whether there are other properties outside the area of the special charge which do derive a special benefit".

28. As to the Council's charging Mr French only 0.5 units because the road is not being constructed the full length of his property boundary and not increasing Amess' contribution for the Smith's requested sealing extension (Smith's unit charge was increased) I do not think that is an unreasonable apportionment in circumstances where the remaining landowners are not being burdened with the additional cost of the road extension but Council is bearing any additional cost over and above that paid by Ms Smith. In Mr French's case, of course, there is no additional sealing extension cost anyway.

29. The sole remaining issue is therefore the Amess one unit contribution, rather than the two units which Mr Kontogeorgos maintains Amess should be charged. Mr Kontogeorgos says it is fair to charge the three-lot Amess holding for only two units because one of the lots already fronts the sealed Maryvale Road and so a real benefit is being obtained by them in respect of the Crinigan Road and Ashley Road sealing, whereas Lot 12 already has the benefit of the Maryvale Road sealed access.

30. The `included' residents are desperate for this sealed road and have been waiting for it for a considerable time. Their desperation extended to their spokesperson, Mr French, even offering to increase his contribution to one unit ($4,000) from a half unit at $2,903.20 even though Crinigan Road was not being extended for the full length of his property frontage. However, it was too late for the Tribunal to extend time for him to lodge an application for variation of his special charge contribution, pursuant to the VCAT Act 1998 Schedule 1 Clause 65(1)(a).

31. Mr Sherman for the Council tried valiantly to persuade me that the basis of distribution of the charge among those persons liable to pay it (including Mr Kontogeorgos) is reasonable and should not be set aside because:

(i) The heavily subsidised nature of the contribution by each individual contributor means that each individual does not pay the actual cost of the sealing and even if Amess is charged one extra unit the additional cost of setting aside this scheme, commencing and advertising a new scheme and the subsequent inflationary increases in cost of construction when the third scheme gets up will be such as to increase each lot owner's liability significantly.

(ii) The Council's objectives have at all times been honourable and an attempt to appease and obtain a `meeting of minds' of all of these contributing owners. That is not an easy task and never one that can be achieved with mathematical precision or perfection. That being the case, its discretion should not be lightly interfered with by a court given that it was exercised by a representative local government body taken to be possessed of local knowledge and experience. Raine Lodge Pty Ltd & Ors v Wyndham City Council (1998) 22 AATR 23 held:

The decision has to be one that no reasonable body could justifiably come to. It is beside the point, and the court will not consider, whether some other view was preferable, provided the one adopted was reasonably open.

(iii) Following the reasoning of the High Court in City of Parramatta v Pestell [1972] HCA 59; (1972) 128 CLR 305 and repeated in Raine Lodge, the Tribunal should accept the Council's decision unless it is vitiated by the taking into consideration of extraneous matters or not being open to the Council on any reasonable basis.

32. I can see the reasonableness in Mr Kontogeorgos argument that there does, on the face of it, appear to be an inequity in charging Mr Bond of Amess one unit for three Crown allotments that can be separately owned and sold without requiring planning permission. But even Mr Kontogeorgos agrees that Amess should only be charged two units for its three properties, not three units. Mr Kontogeorgos also acknowledges that there are other ways in which contributions could have been apportioned. For example, Lot 14 Panther and Crown Allotment 76 N Durlis front two unsealed roads (Crinigan and Jason/Ashley) but have only been charged one unit each instead of two units. One could not say that an alternative assessment would have been unreasonable. There may well be more than one reasonable way in which the contributions could have been apportioned. My task is to assess whether the current method is reasonable or should be interfered with.

33. In the final analysis, I am highly sympathetic with Mr Kontogeorgos' arguments and can see the equity therein. However, at present, 15 lots are being charged one unit each at $4,000.00 which totals $60,000.00 (I am not including the French lot at a half unit at $2,903.20). If the Amess lots should be charged one more unit (as Mr Kontogeorgos maintains) each unit holder is thus subsidising the Amess lots to the tune of $266.66. Even if the Amess lots should be charged two more units (which Mr Kontogeorgos does not maintain but it mathematically plausible) each unit holder is thus subsidising the Amess lots to the tune of $533.33.

34. Even though I sympathise with Mr Kontogeorgos' principles of pure equity, I have exercised my discretion not to set aside the special charge for the following confluence of reasons:

(i) this monetary differential is too minimal to justify a second setting aside of the special charge;

(ii) by the time a third attempt at a special charge is promulgated, the cost to each individual lot holder will be well in excess not only of $4,000.00, but of the differential calculated above;

(iii) given the heavy subsidisation of the individual contributions by Council (from $5806.40 down to $4,000), the setting aside of this scheme may mean that the council may decide not to so heavily subsidise, or even subsidise at all in the future;

(iv) the vast majority of contributors strongly support the scheme.

35. I have decided not to set aside the special charge as the basis of distribution of the charge is not so unreasonable among those persons who are liable to pay it, as to justify the exercise of my discretion under s.185(2)(b)(ii).

36. Accordingly the Tribunal will dismiss the application for review and confirm the special charge.

ADDITIONAL CORRESPONDENCE ARRIVING AT THE TRIBUNAL AFTER THE HEARING

37. I record that about three weeks after the hearing ended, correspondence arrived relating to this matter. I did not read same and placed the correspondence in a sealed envelope, which remains on the Tribunal file. I believe it was sent by the council.

38. I draw the parties' attention to the comments of Southwell, J in City of Springvale v Heda Nominees Pty Ltd [1982] 1 PABR 287 at 290, and of Phillips JA in Stockdale v Alesios & Ors [1999] VSCA 128; [1999] 3 VR 169 at 179 (paragraph 31) and Brooking JA ibid. at 171 (paragraph 5). Additional comments or submissions unsolicited by the Court or Tribunal, should not be sent after a hearing has ended, unless they signal a change in the law or a critical precedent which should be taken into consideration. And then, all parties should be given copies of that correspondence.

39. As I have not read the correspondence, I have not taken it into consideration.

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Kontogeorges v Latrobe SC [2002] VCAT 139 (26 February 2002)

Kontogeorges v Latrobe SC [2002] VCAT 139

At a glance

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Judgment (67 paragraphs)

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Legislation Cited (1)

Cases Cited (2)

Kontogeorges v Latrobe SC [2002] VCAT 139 (26 February 2002)