Costly Challenge To Council's Right To Charge Land Rates
Property owners who claim that Council's have no constitutional right to charge and collect land rates - BEWARE!
There is generally always one or two ratepayers in each municipality who refuse to pay their land rates on this basis, and their written responses to ourselves or the Council are truly something to behold. But as one property owner in Central Victoria discovered in late 2013, defending legal proceedings (initiated by the Council) on this basis can be a fruitless and expensive exercise.
The background to the Rutledge -v- State of Victoria & Greater Bendigo City Council case in the High Court of Australia is as follows:
- Mr Rutledge refused to pay rates and charges levied by the Greater Bendigo City Council ("the Council") on his residence at Woodvale and also on another property in West Bendigo.
- The Council sued Mr Rutledge through the Victorian Magistrates' Court for unpaid rates and charges, and in regards to (at least) the West Bendigo property, the Council obtained a court ordered Judgment against him.
- After obtaining the Judgment order in relation to the West Bendigo property, as more than 3 years arrears was outstanding and there was no payment arrangement being adhered to (quite obvious given the ensuing High Court case), under s.181 of the Local Government Act (1989) the Council sought to transfer ownership of that property to itself and then subsequently sell it.
- Presumably to thwart the Council acquiring and selling his West Bendigo property, Mr Rutledge launched action initially in the Supreme Court of Victoria against both the State of Victoria and the Council challenging the validity of the Victorian Constitution and therefore the Council's ability to lawfully raise, charge and collect land rates.
The basis of Mr Rutledge's argument was that the Constitution Act 1975 (Vic) was invalid as it had not obtained Royal Assent, and so the flow-on effect was that the creation of the Greater Bendigo City Council was not properly authorised, and neither was the Local Government Act 1989 (Vic) under which councils in Victoria have the power to raise, charge and collect land rates. The proceedings in the Supreme Court of Victoria were dismissed after the Court determined that Royal Assent to the Constitution Act 1975 (Vic) had infact been granted. Importantly, Mr
Rutledge consented to Orders dismissing these proceedings.
Not satisfied with the dismissal of these proceedings, Mr Rutledge then issued almost identical proceedings in the High Court of Australia, which was heard on 21 November 2013. The only apparent difference to the earlier proceedings was that Mr Rutledge also argued that, for Royal Assent to be properly and lawfully given to the Constitution Act 1975 (Vic), it required the 'Royal Sign Manual' (i.e. Her Majesty the Queen's signature). The Honourable Justice Hayne ruled that Royal Assent to the Act in question had been properly recorded by an order in Council (Privy Council) and therefore did not require the Royal Sign Manual.
With the remainder of Mr Rutledge's writ filed in the High Court mirroring that filed in the earlier (dismissed) Supreme Court of Victoria proceedings, the co-defendants applied for the High Court proceedings to be dismissed and summary judgment ordered in their favour on the same grounds as in the first case. Both defendants additionally (and successfully) argued that Mr Rutledge was also precluded from filing the proceedings in the High Court of Australia because he had consented to the Orders dismissing the earlier Supreme Court of Victoria proceedings.
Judgment was ordered in favour of both defendants and Mr Rutledge was ordered to pay costs. Including the costs associated with the Council acquiring and then selling the West Bendigo property, it is anticipated that this exercise will have cost Mr Rutledge between $30,000 to $50,000, most of which we presume will be added on to the rates arrears and collected as part of the settlement proceeds.
Side Note - Mr Rutledge was arrested in July 2011 accused of firing a rifle at the process server (who served the original Complaint on behalf of the Council) as the process server left the property. He was found Not Guilty by a jury one year later, apparently on the basis that the police were never able to locate any firearm or ammunition on the West Bendigo property (or anywhere else).