• Council CEOs, CFOs, Council finance managers, Council corporate services and governance managers and in-house legal counsel.


  • As it is budget time for Queensland Local Governments, the article provides guidance on the exercise of establishing rating categories for differential rating and challenges that may occur to decisions made.


  • Councils should carefully consider, as part of the budgeting process:
    • how differential rating categories are established and described
    • the procedures to be adopted for the identification of rateable land into rating categories and any need for delegation of Council's statutory powers, and
    • the definitions used in a Revenue Statement.

On 12 June 2018 the Queensland Court of Appeal handed down its decision in Ugarin Pty Ltd v Lockyer Valley Regional Council [2018] QCA 121 (Ugarin's case). Our firm acted for Lockyer Valley Regional Council (Council).

The Court of Appeal comprising Sofronoff P, Philipipides JA and Henry J unanimously upheld the original decision of Mullins J.

Ugarin's case dealt with a judicial review challenge of two decisions made by Lockyer Valley Regional Council relating to differential general rates. The first decision was made by Council on 28 July 2015 under sections 80 and 81 of the Local Government Regulation 2012 (Qld) (LGR) to adopt categories of rateable land and different rates for different categories at its budget meeting.

The second decision made by Council between 28 July and 10 August 2015 under section 81(4) of the LGR related to the identification of differential general rates by applying 'category 8' as the rating category applicable to the appellant's land.

The focus of the appeal was whether there had been actual approval by Council of land use codes by resolution. In this case Council's rating category resolutions and adopted Revenue Statement included land use codes in the description of some of the categories.

The appeal was dismissed and costs were ordered in favour of Council.

Facts and legislative regime

The appellant owned land within Council's local government area upon which the Plainland Shopping Centre was located.

Under the Local Government Act 2009 (Qld) (LGA) every local government in Queensland must levy general rates on all rateable land and may also categorise rateable land and decide differential rates for rateable land.

Under sections 81(1),(2) and (3) of the LGR any local government which adopts a differential rating system must do the following at its budget meeting:

  • decide the different categories of rateable land in the local government area
  • make that decision by resolution at Council's budget meeting
  • ensure that the resolution states:
    • the rating categories of rateable land in the local government area, and
    • a description of each of the rating categories.

The above process requires a local government to embark on an exercise of setting out the 'description' of rating categories for rateable land and decisions must be made by resolution.

Separately, under section 81(4) of the LGR after the rating categories and descriptions have been decided, the local government must identify the rating category to which each parcel of rateable land in the local government's area belongs. Council may do so in any way it considers appropriate.

This process is typically understood to be the 'identification' exercise which does not need to occur at Council's budget meeting but can occur after that meeting, often by Council officers exercising powers under delegation.

The adoption of Council's 2015/2016 budget

At Council's budget meeting held on 28 July 2015, Council resolved to adopt 45 rating categories.

The category that was under scrutiny in Ugarin's case was as follows:

No. NAME Description
8 Shopping Centres >7,000 sq m Land used or capable of being used for a Shopping Centre that has a property land area greater than 7,000 sq metres, or more than 120 onsite carparking spaces. Includes all land of the relevant size with land use code 16 and as otherwise identified by the Chief Executive Officer.

The Revenue Statement defined land use codes to mean 'those land use codes approved by the Lockyer Valley Regional Council effective 1 July 2015'. The term 'Shopping Centre' was also defined in that Revenue Statement to mean land which has a 'predominant use' of major retail activities or retail warehouses or to which land use code 16 applies.

Land use code

Council regularly received 'land use code' information by the Department of Natural Resources and Mines (DNRM). Evidence was provided by Council that its rating system is linked to the land valuation process administered by DNRM. DNRM maintains a State-wide database of Queensland Valuation and Sales Information (QVAS). The QVAS information in this case was replicated in Council's land record which is a fully electronic record and is updated and reviewed from time to time.

The appellant's land was assigned land use code no. 16 'Drive In Shopping Centre' and that information for that land was included in Council's land record database.

Findings of Mullins J at first instance

The Court noted that most of the categories established by Council in its resolutions contained references to the relevant 'land use codes' in the description of the categories.

Her Honour noted that there may have been some conflation by Council in setting out the description for each rating category between description and identification, but Council elected to use 'land use codes' in the descriptions which assist in adding another criterion to the description of the category. It was held that the reference to the 'land use codes' within the description for a differential category of rateable land must therefore be categorised as part of the description of that category.

In dealing with the issue of whether land use codes needed to be approved by resolution, Her Honour noted the evidence provided by Council that it is unequivocal that the 'land use codes' obtained by Council from DNRM were in use in Council's land record database when the descriptions for the categories were approved by resolution of Council.

Her Honour acknowledged that perhaps the definition of 'land use codes' in the Revenue Statement could have been more precise. However, in context Council's existing statutory land record database (of which the councillors must have been taken to be aware) and the incorporation of the 'land use codes' in the descriptions of the differential rating categories must be construed as a reference to those 'land use codes' used by Council in the descriptions, and thereby approved.

Her Honour found that the use of the word 'approved' in this context within the Revenue Statement does not mandate any separate resolution being required for Council adopting the 'land use codes' with the 'effective date' according to the timing of the relevant resolutions required under the LGR.

Her Honour dismissed the application for judicial review with costs.

The Grounds of Appeal

The appellant submitted that there had been no actual approval of the land use codes by resolution. The appellant also contended that Mullins J was wrong to conclude that 'the resolution of the respondent of 28 July 2015 constituted an approval of the land use codes' because 'the descriptors (or explanations) of the land use codes are not themselves part of what has been 'approved' by the Council.'

The findings of the Court of Appeal

Sofronoff P wrote the lead judgment and the reasons and orders His Honour proposed were agreed to by Philippides JA and Henry J.

His Honour referenced principles of statutory construction and concluded that the question is not what is in the writer's mind as the resolutions and documents prepared were the work of a group. The task is to determine what meaning the words convey. Context is the starting point. Part of that context is established by the nature of the document, its purpose and, in this case, the legislative environment in which the words came to be selected.

His Honour found that in the case of local government resolutions it is necessary to bear in mind that such resolutions may not have been drafted by a lawyer. The task is to give the resolution a meaning having regard to the background – namely the statutory duty imposed on Council which it was intending to fulfil. As noted above, Council has an obligation to levy general rates on all rateable land within the local government area.

His Honour held that that the Council officer providing the recommendations on resolutions and preparing the Revenue Statement (which had the definition of 'land use codes' noted above) would have anticipated that, by Council's approval of the categories proposed, Council will thereby also have approved the land use codes as part of the description of the categories of rateable land. His Honour stated:

'No sensible reading could involve thinking that the respondent was expected, and itself expected, to approve the Land Use Codes as part of the categorisation formula by means of a special resolution devoted to that single subject but that it then neglected to do so.'

His Honour concluded that Mullins J was correct in her conclusion about Council approving the land use codes identified in the categories as part of the rating resolutions.

The Appeal was dismissed with costs.

Key takeouts

This case demonstrates the broad discretion that a Queensland local government has in deciding the different categories of rateable land and how it goes about describing each of the categories.

The Appeal decision provides guidance and recognition of the context of the legislative environment a local government faces in order to comply with its statutory duties to levy general rates on all rateable land. That context also recognises that many local government resolutions are not drafted by lawyers.

In this case the Court of Appeal and Mullins J were satisfied that Council, in passing the relevant resolutions relating to rating categories that referenced 'land use codes', approved those codes and a separate specific resolution approving them was not required.

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.