The Queensland Government has introduced the Local Government Legislation (Validation of Rates and Charges) Amendment Bill 2018 (Qld) (Bill) into Parliament to retrospectively validate local government rates and charges that were not properly levied.
THE LINVILLE CASE
In November 2017, we wrote about a recent decision of the Supreme Court of Queensland, Linville Holdings Pty Ltd v Fraser Coast Regional Council [2017] QSC 252 (Linville), which potentially invalidated rates and charges levied by numerous Queensland local governments.
In summary, in the Linville case, the Supreme Court decided that where the Local Government Act 2009 (Qld) (LGA) (or the equivalent City of Brisbane Act 2010 (Qld) (COBA)) requires a rate or charge to be levied by resolution, this has to be done in a specific resolution for the rate or charge, rather than simply as part of the local government's overall resolution to adopt a budget.
This meant that those local governments, like the Fraser Coast Regional Council in Linville, that had not made specific resolutions faced a risk of significant budget shortfalls, potentially dating back a number of years.
THE NEW BILL
By introducing the Local Government Legislation (Validation of Rates and Charges) Amendment Bill 2018 (Qld) into Parliament, the Queensland Government appears to have recognised the potentially serious implications of Linville,
The Bill would insert new sections into the LGA and COBA with the effect, in summary, that any rate or charge levied (and anything done in relation to the rate or charge e.g. steps to recover the charge) for a financial year up to and including the year ending 30 June 2018 is not invalidated merely because of a failure to make a specific resolution for the rate or charge.
In so doing, the Bill would retrospectively validate rates or charges that, in light of the Linville case, would otherwise be invalid.
The explanatory notes for the Bill acknowledge that, ordinarily, one of Queensland's fundamental legislative principles is that legislation should not operate retrospectively. However, the notes explain that, in this instance, the retrospectivity is considered necessary "because of the need to provide financial surety to local governments and ratepayers".
The Bill will no doubt be welcomed by local governments, but they should be aware of two constraints on the scope of the Bill.
- First, as noted above, the Bill would only apply to rates or charges up to and including the financial year ending 30 June 2018. For future financial years, local governments will need to make specific resolutions levying rates and charges, in line with the Supreme Court's approach in Linville.
- Second, the Bill would only validate rates or charges that were invalid solely because of the failure to make a specific resolution. If a rate or charge would have also been invalid for another reason, the Bill will not validate it.
Given these constraints, the Bill does not truly 'override' the Linville case. Therefore, it is important that local governments comply with the Supreme Court's approach in Linville. In this regard, we note that the Linville case is currently the subject of an appeal to the Court of Appeal, so it is possible that the Court of Appeal may provide further clarification in relation to this issue in the near future.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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