Local Government Act 1995 (WA)

Trecap Pty Ltd v City of Swan [2006] WASAT 142

(This judgment was delivered extemporaneously on 2 February 2011 and has been edited from the transcript.)

1 The plaintiff in CIV 2853 of 2010, the Shire of Katanning (the Shire), moves for a number of orders including the striking out of the amended defence and counterclaim that was filed by the defendant on 18 January 2011 and, in the alternative, for summary judgment on the basis that the defendant has no arguable defence to the plaintiff's claim. This matter has to be viewed in the context of the earlier proceedings in CIV 2994 of 2009 between the same parties in which not dissimilar claims were made.

2 In essence, the Shire claims rates from the defendant, Mr Bride, in respect of a property situated in the Shire of Katanning for a period commencing in about 1985. The proceedings in CIV 2994 of 2009 have been conducted on the basis that the primary issue that needs to be determined in relation to the Shire's claim for rates is whether or not Mr Bride was relevantly an owner under the definition of the Local Government Act 1995 (WA) between 1985 and 2004, when those proceedings were commenced in the Magistrates Court. In particular, the question is whether Mr Bride was relevantly the owner and liable to pay rates over that period or, alternatively, whether there was a mortgagee in possession of the property over that period which was relevantly in possession and therefore liable to pay rates. Those proceedings have been conducted on the basis that if there was a mortgagee in possession, then that mortgagee carried the obligation to pay rates. The Shire has not submitted that, irrespective of whether there was a mortgagee in possession, Mr Bride as owner of the freehold was nevertheless liable to pay rates. That stance has been reiterated by the Shire in the course of submissions this morning.

3 The proceedings in CIV 2853 of 2010 are different to those commenced in 2009 in that they cover a broader period. The Shire claims for rates up to the present, and relies upon an additional line of argument to that advanced in the previous proceedings, namely, that irrespective of whether or not Mr Bride was the 'owner' between 1985 and 2004 (in the sense described in s 1.4 of the Local Government Act), he became the owner in that sense in 2005 by re-entering occupation of the land.

4 The Shire submits that because of an admission by Mr Bride in the course of previous argument before the court that he squattered at the property, and other evidence regarding his re-entry to physical occupation, that he became the 'owner' in 2005 under the terms of the Local Government Act and, if he was not already the owner, he thereupon became liable to pay all unpaid arrears of rates in respect of the previous years.

5 There are a number of difficulties with the Shire's proposition, most of which stem from the almost unfathomable terms of the definition of 'owner' in the Local Government Act. The problems with that definition have previously been addressed in the State Administrative Tribunal in a decision of Mr Parry (Senior Member) in the matter of Trecap Pty Ltd v City of Swan [2006] WASAT 142. Consistently with that decision, the Shire submits that the word 'possession', when used throughout the definition of 'owner', means legal possession, not actual occupation, so that to fall within the category of 'owner' identified in the definition, a person must be in legal possession, not merely in physical occupation.

6 As Mr Parry points out in Trecap, were it otherwise land that had been leased out by the owner of the freehold, would not fall anywhere within the definition and would not, therefore, be rateable land under the Local Government Act - an intention that cannot have been intended by the Parliament. The difficulty which that proposition seems to me to pose for the Shire is that if 'possession' throughout the term 'owner' means legal possession rather than actual occupation, it is difficult to see why anything that happened in 2005 regarding actual occupation can have any bearing upon the entitlement to legal possession at any material time. The Shire reiterated in submissions to me this morning that if the bank had gone into possession of the land in 1987, as Mr Bride says, then only the bank would have been liable to pay rates from then on because Mr Bride would not have been relevantly in legal possession as the holder of an estate of freehold in possession. Despite having been given the opportunity by me a number of times, the Shire does not say that both the mortgagee in possession and the holder of the freehold in possession, are liable to pay rates where a mortgagee is in possession of the land. If that is so, then it seems to me that the circumstance in which physical occupation of the land changes is fundamentally irrelevant unless that circumstance is capable of pointing to a change in the legal possession of the land. Whether or not a change in physical occupation gives rise to a change in legal possession of the land is a complex and difficult question and may well depend upon an appreciation of the circumstances in which, for example, the mortgagee went into possession some years earlier as well as an appreciation of the precise circumstances in which physical occupation was taken. If, for example, the retaking of physical occupation by the holder of the freehold is associated with an agreement by the mortgagee in possession to relinquish possession, then it may be relatively easy to conclude that thereafter the freeholder is in legal possession, but that is not the evidence in this case. The evidence in this case is that physical occupation was taken without reference at all to the bank.

7 Nevertheless, it may be possible to construe the factual circumstances as giving rise to the relinquishment of any claim to legal possession by the mortgagee of the land, reinforced by the retaking of physical occupation by the owner of the freehold. However, these are difficult questions of fact, circumstance and degree. They need to be evaluated with reference to findings of fact and law bearing on whether or not the bank had gone into legal possession some time earlier.

8 It seems to me that because there are contentious issues both of fact and law and, in particular, contentious issues relating to the proper construction of the definition of 'owner' and the question of what exactly was done by the bank, and the status of those actions as at 2005, it cannot be said that there is no triable issue in this case or that this is a proper case in which a determination should be made without trial.