89 Further, the raising of financial imposts is not a regulatory function to which the second last bullet point in s 8(1) applies so that the requirement of acting consistently and without bias is not relevant (leaving aside s 8(2)). Section 8(1), the provision referring to fairness which is relied upon by the Applicant, is not intended to operate as a set of legal requirements for council decision-making. This is recognised in s 8(2) which notes that the obligation in s 8(1) cannot give rise to any civil cause of action. The Applicant's reliance on Eljo for the proposition that s 8 may be used in construing other provisions is incorrect. There are no other indications in the statutory scheme which lead to a conclusion that the Act requires all ratepayers to be treated fairly.
(iii) Council's decision-making process
90 The views of the Council's General Manager as found in various reports to the Council as to relevant matters to consider when determining rating matters are not binding on the councillors. The Applicant's submissions that the Council's decision-making processes were arbitrary are not relevant. Nor was it relevant that the councillors did not have any material before them to satisfy themselves in relation to the benefit principle and the capacity of the owners of Marrickville Metro to pay.
91 Further, the transcripts of the councillors' discussions in February and April 2002 disclose the reasons behind the decision to impose higher rates on Marrickville Metro where over 100 retail outlets are located.
(iv) Discrimination - irrelevant considerations (APOC cl 12(d))
92 That the Metro sub-category ad valorem rate is higher than any other category or sub-category (except Business-Airport, a sub-category created in 2007) does not demonstrate discrimination in relation to the Applicant. Similarly, the Applicant's claim that the rating decisions are invalid due to being discriminatory in nature is unfounded. Differential rating is recognised by the scheme in Ch 15. Discrimination is the same as fairness so that if fairness is not required by the enabling statute, discrimination is not forbidden. Bayside City Council concerned the operation of a Commonwealth law which took precedence over a state law to the extent of any conflict. No overriding Commonwealth statutory measure prohibits "discrimination" in relation to the LG Act and the LG Act allows for unequal treatment of ratepayers as it is inherent in the setting of rates by category. The High Court in Bayside City Council was not seeking to make a new principle and is distinguishable. Nevertheless the High Court in that case reiterated the legislative power of Parliament to make laws which operate differentially if it desires. The Council's power to make rates exists under the LG Act and the power to differentiate necessarily flows from that power.
Finding on fairness
93 The Applicant argues that setting ad valorem rates (s 498) within the general framework of the LG Act required that fairness be accorded to the previous owner when the new sub-category of Business-Marrickville Metro was introduced and the ad valorem rate set in 2002 and it was not. That Marrickville Metro had to pay an ad valorem rate 20 per cent higher than any other business category was not fair. The Applicant should not be the only member of a sub-category and should pay no more than other land in the Business-General category which was Marrickville Metro's rating category until 2002. The Applicant argues that fairness is a mandatory relevant consideration in the introduction of a rating sub-category and in the setting of a rate (APOC cl 12(c)). The Applicant also argues that any benefit other ratepayers would receive by treating Marrickville Metro differently was a mandatory irrelevant consideration (APOC cl 12(d)). The Applicant also argues, in the absence of an explicit statement to that effect in the LG Act, that there is a duty to act fairly on the part of the Council in making decisions about creating sub-categories and setting rates for those categories (APOC 12(d). Before addressing these specific grounds of challenge I will consider the scheme of the Act as identified in the parties' arguments.
(i) Scheme of the Act generally
94 As submitted by the Council, there is no statutory requirement in the LG Act that a council must deal with similar categories of ratepayers on the same basis. The Act specifically provides for the creation of sub-categories and the setting of different rates for each sub-category. An important requirement is that all the properties in the same category or sub-category must pay the same amount of rates. As the rate for one category is increased the other rates will decrease as an overall ceiling on rate income set by the Minister for Local Government must be maintained (s 506). There is nothing inherent in or implied by the scheme of Ch 15 which suggests that fairness to each sub-category, meaning equal treatment with other categories, is a fundamental implied principle in the Act. The various provisions in the Act relied on in argument by the Applicant do not explicitly, or implicitly, support that argument.
95 Even if fairness is an essential part of the approach required by the LG Act, what fairness means has to be assessed in the context of the whole of the rate setting exercise. That one large ratepayer pays more than others, and has a sense of grievance about that does not lead automatically to the conclusion that that ratepayer has been treated unfairly. I have held at par 43-45 that a category can consist of a single site in one ownership where that site is a centre of activity. There is only one centre of activity in the Marrickville area which is a large retail shopping centre and that is Marrickville Metro. The Council has broad discretion under Ch 15 for deciding ad valorem rates. No criteria which must be considered or satisfied are referred to in the Act unlike the provisions concerning the base rate or special rates.
(ii) Charter s 8 of the LG Act
96 In relation to the significance of the charter, it is a broad statement of s 8(2) states that the charter does not give rise to nor can be taken into account in any civil cause of action. Judicial review proceedings are civil causes of actions. In Eljo Bignold J had to consider the exercise of the regulatory functions of a council in relation to the granting of an approval for the transport of waste under s 68 of the LG Act. His Honour referred to s 8 as part of the relevant statutory context in which a council operated and noted the limitation in s 8(2). In concluding that he should give effect to particular provisions of the LG Act his Honour noted that this conclusion was reinforced by s 8. It is clear that his reasoning took into account s 8 as confirmatory of his approach. The judgment does not suggest that s 8 provides any basis to support the argument by the Applicant that s 8 is an aid to construction and specifies matters that are for the mandatory consideration of a council.
97 As referred to by the Council, James JA (McColl and Grove JA concurring) in Garrett v Freeman considered at [69] that s 8(2) was aimed at preventing a failure by a council to observe its charter grounding a civil cause of action against the council or being taken into account in a civil cause of action against the council. That case was a stated case in criminal proceedings considering the extent of the immunity of liability of an employee for acts done while employed under s 731 of the LG Act. That decision, while addressing a different part of the LG Act suggests that the Applicant cannot rely on the charter in s 8 as containing a set of legal requirements against which the Council's actions in setting rates can be measured, as submitted by the Council (see par 88).
(iii) Council's decision- making process
98 The Applicant reviewed in detail the decisions of the council in 2001 and 2002 relevant to the introduction of the sub-category and setting the ad valorem rate in April 2002, as identified above in par 79-82. As set out in par 81-82 the Applicant argued that an examination of the decisions demonstrates that there was no rational of fair basis for the relevant decisions made and that the decisions were instead arbitrary in the treatment of Marrickville Metro. There was not proper consideration of the benefit and capacity to pay principles. As submitted by the Council, the processes under the LG Act do not require consideration of the benefit principle or the capacity to pay rates contrary to what appears in the General Managers reports to the Council. The transcripts of the Council meetings in evidence (par 6(vii),(ix)) show that there was discussion about why the sub-category should be created and the rationale for doing so in light of the large number of retail outlets located on the Metro site.
99 I would also add that, based on the transcripts of the councillors' discussions in February and April 2002 in evidence, there was discussion amongst the councillors of why it was appropriate that a large ratepayer which has over 100 separate businesses located on the one site should pay more rates than other rating categories and that the rates for these other categories should be reduced. Part of that discussion included a recognition by the councillors (contrary to the comparison contained in the General Manager's report to the councillors) that the benefits provided to the shops in the strip shopping areas were on public land and therefore of benefit to the whole community, unlike Marrickville Metro where the improvements paid for by the owner were wholly on private land. That was part of the consideration by the Council of deciding what rates across all categories were appropriate.
(iv) Failure to take into account relevant consideration (APOC cl 12(c))
100 Turning to the specific grounds of challenge in the APOC, the Applicant argued there was a failure by the Council to consider a mandatory relevant consideration of fairness when the sub-category was created and a substantially higher rate was levied. The test for whether a matter is a relevant mandatory consideration is identified by Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40 (Gibbs CJ, Brennan, Dawson and Deane JJ concurring with this formulation):
In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard: see Reg v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd [33] , adopting the earlier formulations of Dixon J in Swan Hill Corporation v Bradbury [34] , and Water Conservation and Irrigation Commission (NSW) v Browning [35] . By analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject-matter, scope and purpose of the Act.
101 The consideration of fairness within the scheme of the Act outlined above in par 94 suggests that the Council had (and continues to have) very wide discretion in setting ad valorem rates within the overall limits identified in the Act. These include the overall ceiling on rates, that all properties in each category must pay the same amount of rates, and that the setting of the base rate must take into account specified matters. A rate can consist of an ad valorem amount (which is subject to setting a minimum amount as required by s 548) or a base amount to which an ad valorem amount can be added. Fairness is not specified as a mandatory relevant consideration within Ch 15 or elsewhere in the Act. Nor can the charter in s 8 be relied on to found a judicial review challenge. Fairness as defined by the Applicant, to mean equal treatment of all ratepayers in, or who should be in, the Business-General category is not a mandatory relevant consideration.
(v) Discrimination- irrelevant considerations (APOC cl 12(d))
102 This ground of challenge as expressed in the APOC is that the Council took into account an irrelevant matter of levying a disproportionately higher amount in rates from a single landowner in determining the sub-category and setting the ad valorem rate. As stated by Mason J in Peko-Wallsend at 40, in order to succeed on a challenge based on a decision-maker considering irrelevant matters those matters must be either expressly or by implication matters which the decision-maker must ignore. There are no matters which are specifically referred to under the LG Act which the Council had to ignore in making the rating decisions under challenge. Accordingly, in order to succeed the Applicant must establish that the matters it says are irrelevant had to be ignored as a matter of statutory interpretation in light of the objects and purposes of the legislation.
103 The Applicant relied on Bayside City Council which considered whether state legislation breached Commonwealth legislation prohibiting discrimination. The Telecommunications Act 1997 (Cth) prohibited state laws from discriminating against a particular carrier, class of carriers or carriers of telecommunications generally. The state legislation under challenge made provision for levying rates and charges on land occupied by, inter alia, cables, wires, pipes and poles. Exemptions for Crown carriers of non-telecommunication services such as water supply and distribution, electricity, pipeline networks and retail gas supply applied. After considering that the Commonwealth legislation was constitutionally valid, Gleeson CJ, McHugh, Gummow, Kirby, Hayne and Heydon JJ (Callinan J dissenting on the question of constitutional validity for breach of the Commonwealth law) held that the state legislation exempting Crown authorities from being subject to rates was invalid as it breached the Commonwealth legislation. The legislation discriminated against telecommunications carriers (including the applicants, Telstra and Optus) by comparison with the treatment of non-telecommunication suppliers and distributors.
104 In making this finding, the majority judgment of Gleeson CJ, Gummow, Kirby and Heydon JJ (McHugh J concurring, Callinan not considering this issue) considered the meaning of discrimination. At [40] the majority stated:
Discrimination is a concept that arises for consideration in a variety of constitutional and legislative contexts. It involves a comparison, and, where a certain kind of differential treatment is put forward as the basis of a claim of discrimination, it may require an examination of the relevance, appropriateness, or permissibility of some distinction by reference to which such treatment occurs, or by reference to which it is sought to be explained or justified. In the selection of comparable cases, and in forming a view as to the relevance, appropriateness, or permissibility of a distinction, a judgment may be influenced strongly by the particular context in which the issue arises. Questions of degree may be involved.
The distinction between discrimination and permissible differentiation was made at [41]:
…it is in the nature of taxing statutes that not all taxpayers are treated with absolute equality, and the fact that some taxpayers enjoy exemptions that are not available to others does not necessarily involve discrimination. It may involve nothing more than differentiation based upon criteria within its constitutional power which it is well open to the legislature to regard as appropriate. …
105 I agree with the Council's submission that Bayside City Council is entirely distinguishable from this matter as the statutory context is quite different to that under the LG Act. I also agree with the Council's submission that alleging discrimination as an irrelevant consideration does not found a separate challenge from the ground based on fairness. Given my finding above in relation to the APOC cl 12(a) and (b) that it is legally open for a council to create a sub-category referring to a single site where that satisfies the requirement of being a centre of activity, this ground falls away. It is entirely open under the scheme of the Act to determine and levy sub-categories differently for rating purposes. The same essential issue was considered in relation to whether fairness was a relevant consideration and I held it was not.
106 Further, even if this ground of challenge could exist separately from the ground of challenge based on fairness as a mandatory relevant consideration, there is nothing in the scope of the LG Act and the rate setting scheme in relation to ad valorem rates that suggests that it is an irrelevant consideration giving rise to illegality to seek to impose a greater rates burden on one category than another similar sub-category. The fact alone that the Applicant pays more that the other business categories (being Business-General, Business-Industrial-Marrickville, Business-Industrial-St Peters, Business-Industrial St Peters North and Business-Industrial Camperdown, amongst which there is also variation of the ad valorem rate) when it is the only centre of activity of its kind in the LGA does not lead immediately to a conclusion of discrimination. Being treated differently is not necessarily discriminatory in the context of the whole complicated exercise that is rate setting under the LG Act. As referred to by the majority of the High Court in Bayside (quoted above), whether discrimination exists will depend on the particular context of decision-making in determining the permissibility of differentiation between different rating categories. The distinction between discrimination and permissible differentiation was elaborated upon (par 104). That distinction applies in this case in relation to the setting of a different ad valorem rate for one sub-category as permissible differentiation.
107 The Applicant is unsuccessful in relation to the grounds of challenge in APOC 12(c) and (d).
4. "Manifestly unreasonable" (APOC cl 12(f))
Applicant's submissions
108 The Applicant argues that the determination of the sub-category Business-Marrickville Metro was manifestly unreasonable because no reasonable decision-maker would impose a sub-category on a single site rather than a centre of activity and/or there was unreasonable discrimination against Marrickville Metro in the determination of the category. Although not stated in the APOC this ground of challenge also extends to the ad valorem rate set for the sub-category. The Applicant relied particularly on the judgment of Gummow J in Fares Rural Meat & Livestock Co Pty Ltd v Australian Meat & Livestock Corporation (1990) 96 ALR 153.