In a major win for the owners of two Bunnings warehouses in Ipswich, the Court of Appeal has held that the Ipswich City Council wrongly categorised their properties for rating purposes. The decision highlights the financial impact, as well as the difficulties, that can arise in applying differential rating categories to land.
The long running dispute in BWP Management Limited & Anor v Ipswich City Council  QCA 104 dates back to the council’s 2015-2016 budget.
From each of the appellant’s respective land at Springfield and West Ipswich, a Bunnings retail business was operated from a standalone warehouse with substantial parking – a not unfamiliar weekend sight for many of us (although at the time, presumably a ‘Bunnings sausage’ could safely be consumed and there was far less queuing).
At the heart of the dispute was whether the properties were a single shop or a shopping centre as defined by the rating categories adopted by the council.
Known as ‘differential rates’, councils in Queensland have the power to levy general rates that differ for different categories of rateable land. Governed by the Local Government Act and regulation, in order to do so, councils must decide the different rating categories and provide a description for each category.
Property owners have no right to object against the rating categories or the amount of rates levied on each category by councils.
Owners however have the limited right to object on the basis that the owner considers the land should belong to a different rating category.
For the 2015-2016 budget, the council categorised both Bunnings properties as ‘Category 52a’ Drive-In-Shopping Centre.
The description for a category 52a property is one “which meets all of the following criteria:
A “drive-in shopping centre” was defined in the 2015-2016 budget as “a premises or cluster of premises that:
It was not disputed that the predominant use of both properties was a “retail business”.
However, the owners both argued that their properties should more correctly be categorised as ‘Category 44b’ Shop – Single. A ‘Category 44b’ property is described as “Land used for a commercial purpose with a rateable value of $5,000,000 or greater” which included the description of “land that meets the criteria:
One of Primary Council Land Use Codes (PCLUC) for this category is ‘Shop – Single’.
The council initially refused the owners’ objections following which the owners successfully appealed to the Land Court.
In the Land Court, the Member:
The council then appealed to the Land Appeal Court which overturned the Land Court’s decision.
The Land Appeal Court determined:
The owners of both properties appealed the decision of the Land Appeal Court to the Court of Appeal.
The Court of Appeal held that it was necessary to resolve the dispute by implying a qualification to the words of one of the Primary Council Land Use Code or the other adopted by the council. This came down to a choice between:
In a unanimous decision and a significant win for the owners, the Court of Appeal:
The Court of Appeal also ordered that the council pay the owners’ legal costs in the proceedings in the Court of Appeal, Land Appeal Court and Land Court.
Queensland’s differential rating system provides councils with a broad discretion to determine different rating categories with differing amounts of rates. Councils, however, need to carefully consider the language used in defining the different rating categories as the consequences of overlap can have costly implications.
The protracted litigation concerning whether Bunnings warehouses were a single shop or shopping centre as defined under the council’s budget shows that while these documents may not be drafted with the same precision as legislation, they are subject to the same rules of statutory interpretation and it is essential that councils ensure that their differential rating categories are precisely defined.
For property owners, if you believe your property is in the wrong rating category, you should consider lodging an objection as the financial impacts are potentially substantial.
Stafford Hopewell, Partner
Gail Black, Partner