Special Charge Scheme – Kellehers Australia

Case Alert – Today – High Court of Australia

Today, the High Court dismissed a Queensland Council’s claim to recover money spent on works as part of a special charge scheme found to be invalid. The scheme proposed works on a reserve adjacent to the landowners’ land, where the words including dredging and removing silt, rubbish, and debris from waterways, repairing revetment walls protecting the banks of the waterways from erosion, and improving the quality of the water in the waterways. The landowners paid the special charge.

Council undertook the works but the special charge, which the landowners paid, was found to have been levied pursuant to invalid Council resolutions. After the charge was found to be invalid, Council refunded a portion of the special change paid by the landowners, but retained the amount it spent on the works. Council argued that it had given good consideration for the money it retained by virtue of the works it performed.

The High Court rejected this argument. It found that Council had a statutory obligation to perform the works, and that the works were not performed on the basis of the (invalid) special charge. It found that the landowners were entitled to have the entirety of the special charge monies returned to them because:

works were performed on the basis of Council’s statutory obligations, not on the basis of the payment of special charges;
the respondents did not benefit from the works in the sense of requesting or freely accepting them, and may have obtained no financial advantage from them; and
a defence of good consideration would stultify the operation of the relevant local government act, the Local Government Act 2009 (Qld) (“the Queensland Act”).

While the provisions of the Queensland Act differ from those in Victoria, the case highlights the importance of technical compliance by Councils in all aspects involved in the preparation of a Special Rate or Charge Scheme. Such Schemes can be technically and operationally complex. Frequently officers require careful training and meticulous attention to detail.

In an era of rate caps and ratepayer sensitivity to cost of living, Special Rates and Charges Schemes provide an excellent way for Councils to provide a form of user-pays service where particular landowners will obtain a ‘special benefit’ from a set of proposed works or services.

Kellehers has particular expertise with Special Rates and Charges Schemes. We also have our long-standing Operational Training Workshops and Manual offered to update Council officers as to current procedures and practical requirements. You should contact Cameron Algie with any queries concerning special rates and charges.

Cameron Algie, B.A., B.Mus., L.L.B.(Hons)
Dr Leonie Kelleher OAM, B.A., L.L.B., Dip.TRP, MEI, PhD.

13 March 2024
KELLEHERS AUSTRALIA PTY LTD

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This fact sheet is intended only to provide a summary and general overview on matters of interest. It does not constitute legal advice. You should always seek legal and other professional advice which takes account of your individual circumstances.