Plath v Snowy Monaro Regional Council

Judgment (7 paragraphs)

[1]

Introduction

This appeal is regulated by the provisions of s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act). This means that the appellant is able to bring the appeal as of right on any question of law or with leave on other grounds. The other grounds are stipulated in cl 12 of Sch 4 to the NCAT Act.
The Notice of Appeal does not rely upon the leave grounds and, although it does not identify any questions of law, it is clear that the appellant submits that this appeal is brought as of right on questions of law.
We will return to the five grounds of appeal later in these reasons. However, we are of the opinion that the respondent did not supply the impugned services in the course of carrying on (or purporting to carry on) a business and that therefore, the appellant's claim is not a consumer claim. This is because the respondent is not in the sense relevant to the impugned services a "supplier" as defined in s 79D of the FT Act. Specifically the respondent is not relevantly carrying on a business. We will explain our reasons for coming to this view and then return to the specific grounds of appeal.

[2]

The Impugned Services

The services giving rise to the charges which the appellant finds objectionable have been explained in some detail in a letter dated 2 August 2018 from the respondent. That letter formed part of an agreed bundle of documents provided by the parties to this appeal and the facts contained in the letter were not the subject of any objection by the parties. That letter states that the charge for the onsite sewerage management system is a renewal fee for the approval to operate. The charge in this case relates to two onsite sewerage management systems on the appellant's property. The letter also states that in respect of the waste management charge, the respondent makes an annual charge levied on all rateable properties to cover the provision of certain facilities. The letter describes those facilities or services as recycling collection points, transfer stations, illegal dumping clean-up, land fill restoration and rehabilitation, public education expenses, and administrative and management costs.
The appellant submits that the authority to charge for the two impugned services arises out of s 501 of the LG Act. That section provides that a council may make an annual charge for any of the following services "provided or proposed to be provided, on an annual basis by the council". The services listed include sewerage services and waste management services.
However, one of the points made by the appellant is that s 501 only permits a charge to be made for services provided or proposed to be provided rather than services which are available. That submission is not relevant to this appeal as it is a submission which does not go to the question of whether the Tribunal has jurisdiction but rather goes to the basis of whether the charge made by the respondent is in fact authorised by s 501 or not.
The respondent submitted that the onsite sewerage services are performed by the respondent pursuant to ss 68 and 113 of the LG Act whereas the waste management services are performed pursuant to s 24.
Insofar as the onsite sewerage services are performed by the respondent pursuant to ss 68 and 113, it is relevant that s 68 is a section which prohibits identified activity unless prior approval of the respondent has been given. Section 113 requires a record to be maintained of approvals given. Section 24 of the LG Act provides that the council may provide goods and services but does not mandate that the council does so.
The appellant relied on evidence concerning the respondent's overall activities in support of the submission that the respondent was carrying on a business. The evidence included evidence as to the respondent's "vision and values statement" and that the respondent manages its affairs having regard to the principles of sound financial management. The evidence included evidence from the respondent's accounts concerning profits earned and retained. In our view, such evidence is not persuasive in determining whether the impugned services were provided (or made available) by the respondent in the course of carrying on a business. As stated in Murphy, the focus must be on the impugned conduct. Accordingly, we will consider the issues before us having regard to that focus. It is convenient to deal with the two charges separately and we will deal with the onsite sewerage management system approval first.
The onsite sewerage management system approval charge arises out of the council's obligation to consider applications for approval under s 68. There is a statutory obligation to maintain a record (s 113). In our view, these functions do not have the characteristics which enable the services to be fairly described as performed in the course of carrying on a business. Rather, in our opinion, the service is one which appears to be governmental or regulatory in that it regulates an activity which must only take place with prior approval of the respondent. The provision of the renewal charge has the characteristics of the provision of a governmental or regulatory service designed to regulate the activity (presumably for reasons of public safety and considerations of health) rather than having the characterisation of a commercial activity. These conclusions are consistent with the approach and analysis contained in decisions including but not limited to Murphy, J S McMillan, and those cited above in [23].
Turning now to the other charges we note that the parties agree that the charge for waste management arises as a consequence of the council exercising its discretionary function under s 24. From the letter from the respondent dated 2 August 2018, the charge is made in respect of the provision of certain facilities. The appellant says that the facilities are available rather than provided to the appellant. That fact appears to us to indicate that this service is provided by the respondent in its capacity of offering governmental services rather than in the course of carrying on a business. The respondent is making a charge upon all "rateable assessments" (to quote the letter from the respondent dated 2 August 2018) which we would understand to include ratepayers. Some ratepayers will use the services very little (or not at all) and others will use them a lot. In our view, the provision of these facilities do not have the characteristics of the respondent being engaged in a commercial activity such that the respondent could be described as carrying on a business in respect of waste management.
The appellant sought to argue that an indicia of governmental services is that they are mandated and an indicia of services provided in the course of carrying on a business are that they are discretionary. In Mid Density Development Pty Limited v Rockdale Municipal Council (1992) 39 FCR 579; [1992] FCA 1036, the Court was asked to consider whether the provision of a s 149 certificate under the Environmental and Planning Assessment Act 1979 (NSW) was subject to the obligations contained in s 52 of the then Trade Practices Act. That in turn involved a consideration of whether the council was engaged in the conduct of a business in the provision of such certificates. The Court held that the carrying out of a function of government in the interests of the community is not a trading activity. A submission was put to the Court that a charge for an expedited certificate was discretionary and therefore the provision of such certificate was a trading activity. Notwithstanding that the charge may have been discretionary, the Court held that council was engaged in the performance of a statutory duty in respect of which the relevant act permitted the charging of fees.
In our view, the fact that the respondent is authorised by s 24 to engage in certain activities, but not mandated to do so, does not necessarily result in the conclusion that the impugned service is provided in the course of the respondent conducting a business. Rather, the characteristic of the service as a whole needs to be considered. Having regard to the indicia set out in J S McMillian and Murphy and other case law applying these indicia, we are of the opinion that that service is in the nature of a governmental service intended to support the council's objectives outlined in the LG Act. Indeed s 24 limits the services which the section authorises the respondent to engage in to those "appropriate to the current and future needs within its local community and of the wider public". Such services do not have the character of a commercial enterprise or a business character (using the language from Murphy). Rather, they have the character of the performance of a statutory function. Because the respondent has a discretion as to whether it will provide the services and, if so, the extent, or to whom, does not thereby make the service one which is provided in the course of carrying on a business. It is also difficult in our view to argue that the impugned services (being services appropriate to the current and future needs within its local community and of the wider public) are services made in the course of carrying on a business because a business would not necessarily have regard to community needs as opposed to having regard to what the community is willing to acquire.
Finally, we see no error in the reasoning contained in the Decision including in the application of the legal principles identified in the Decision. Nothing turns on the fact that our reasoning is expressed differently from the reasoning contained in the Decision because we have come to the conclusion that the decision to dismiss the application for want of jurisdiction was the correct decision. Given our conclusion on jurisdiction, it is not necessary to express a view as to whether the Decision was in error in stating that the services did not fit within the definition of s 79F of the FT Act.
The above reasoning disposes of Grounds 2 to 5 of the Grounds of Appeal. With respect to Ground 1, in our view, nothing turns on the fact that the Decision contained references to the ACL. The basis of the Decision was not dependent upon any aspect of the ACL and therefore, to the extent that references to the ACL were irrelevant, those references do not affect the decision to dismiss the application.
As we have dismissed each of the Grounds of Appeal, the appropriate order is that the appeal be dismissed. An order to that effect is made.
We express the tentative view that there should be no order for costs of the appeal. This is because: 1. The respondent has not sought costs; 2. Section 60 of the NCAT Act provides that each party should pay its own costs unless special circumstances exist. We express the tentative view, subject to any submissions which the respondent wishes to put forward, that special circumstances would not seem to arise; and 3. Rule 38 of the Civil and Administrative Tribunal Rules 2014 does not apply in this case.
However, if the respondent wishes to seek costs, it must file and serve submissions within 21 days and the appellant will be given the same period to respond. Directions dealing with costs have been included in the orders below.

Appellant's Submissions

The appellant's submissions may be summarised as follows: 1. The Tribunal considered irrelevant legislation, namely the Australian Consumer Law; 2. The Tribunal did not identify any legislative provision that shows that the respondent is responsible for providing waste management services and onsite sewerage services. Rather, the respondent has the power to provide such services and a discretion as to whether to do so. Section 21 of the LG Act provides; 21 Functions under this Act A council has the functions conferred or imposed on it by or under this Act. Note. This Act classifies certain of a council's functions as service, that is, non-regulatory (Chapter 6), regulatory (Chapter 7) or ancillary (Chapter 8). Ancillary functions are those functions that assist the carrying out of a council's service and regulatory functions. A council also has revenue functions (Chapter 15), administrative functions (Chapters 11, 12 and 13) and functions relating to the enforcement of this Act (Chapters 16 and 17). 1. The note to s 21 states that the LG Act classifies certain of a council's functions as service. They are "non-regulatory, regulatory or ancillary". There are also revenue functions, administrative functions and functions relating to enforcement; 2. Chapter 6 of the LG Act deals with non-regulatory functions and includes s 24 which provides: 24 Provision of goods, services and facilities and carrying out of activities A council may provide goods, services and facilities, and carry out activities, appropriate to the current and future needs within its local community and of the wider public, subject to this Act, the regulations and any other law. 1. Section 24 provides the respondent with the power to provide waste management services and on site sewerage services. It is apparent that council has a discretion as to whether it exercises this power. 2. Under s 501 of the LG Act the respondent may make an annual charge for the services specified. Such annual charge may be levied on each parcel of rateable land for which the services are provided or proposed to be provided. Section 501 does not allow the respondent to charge for services made available or to be made available. Making something available is a different concept to providing something; 3. By way of contrast, Chapter 7 of the LG Act does not give the council a discretion regarding the giving of approvals and the making of orders under that chapter; 4. The Tribunal failed to consider remarks made in the decision in Murphy v State of Victoria & Anor [2014] VSCA 238 (Murphy). That case held that an entity can, regarding certain activities, be both carrying on a business and performing statutory obligations. That case held that if legislation (such as ss 3 and 6 of the FT Act) binds the Crown, insofar as the Crown carries on a business (including a business not carried on for profit) there is an intention in the legislation that the commercial activities of the Crown are caught by the legislation. In Murphy it was held that, although there is a distinction between those functions of a government which are purely governmental or regulatory and those which entail a carrying on of business, the two may co-exist; 5. The respondent is a person that is in the course of carrying on (or purporting to carry on) a business insofar as the relevant services are provided. In J S McMillan Pty Ltd & Ors v Commonwealth of Australia (1997) 77 FCR 337; [1997] FCA 619 (J S McMillan), the Court held that there is a distinction between those functions of a government which are purely governmental or regulatory and those functions which entail the carrying on of business. In deciding that the services in question were services provided in the course of carrying on a business, the Court said that regard should be had to the fact that the services are services of a nature which an entity carrying on a business could well provide. Here, the provision of waste management services and sewerage services are services which an entity carrying on a business could well provide; 6. Regard should be had to the objects of the consumer claim provisions of the FT Act. Those objects are to provide for remedies for, and the straight forward resolution of, disputes concerning the supply of goods and services to consumers. The supply need not be under a contract; 7. It is also relevant that if the appellant's claim is not a consumer claim, then the appellant has no recourse in relation to the charge for services which were not provided. There is no provision in the LG Act providing for a relevant recourse; and 8. The appellant also submits that the respondent is carrying on a commercial enterprise. The indicia that the respondent is carrying on a commercial enterprise are: that in setting the charge the cost of providing the service is taken into consideration, the respondent is required to have sound financial management policies (s 8B of the LG Act), the respondent may make a profit (s 539 of the LG Act), the accounts of the respondent show that it makes and retains profits, that it assesses its performance against industry indicators (see page 49 of the accounts for the period 2016/2017). These indicia and other indicators demonstrate that the respondent could not be said to be engaging in regulatory or government activity. Such activity is something mandated.

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Judgment (7 paragraphs)

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Legislation Cited (7)

Cases Cited (11)

Cited By (6)