The case of City of South Perth and Minister for Local
Government  WASAT 177 in the State Administrative
Tribunal (SAT), clarified that a service charge may only be imposed
by a local government when adopting an annual budget or, if a
service charge is quashed by the SAT or a court, when adopting a
budget in form and manner similar to the annual budget.
The City of South Perth Decision
The City of South Perth sought a declaration as to the validity
of a service charge it imposed to recoup its contribution for
Salter Point underground electrical power system.
The City did not impose the service charge when it adopted the
2011/2012 annual budget in July 2011, primarily because it did not
know at that time how much individual landowners, who were to pay
the service charge, were liable to pay.
After the annual budget was adopted the City received a report
from Western Power identifying the City's share of the cost for
the underground power system (UGP) in Salter Point.
At an Ordinary Meeting of Council in September 2011 the Council
resolved to impose a service charge on the Salter Point residents.
In March 2012 the City issued rate notices to the owners of each
property requiring payment of the Salter Point UGP service
The City argued that section 6.38 of the Local Government
Act 1995 (LGA), which enables a local government to impose a
service charge, allows the imposition of a service charge at any
time, not just at the time of imposing the annual budget. Section
6.38(1) LGA is in the following terms:
A local government may impose on —
of land within the district or a defined part of the
district a service charge for a financial year to meet the cost to
the local government in the provision of a prescribed work, service
or facility in relation to the land.
The City also argued that the wording in section 6.32(1)(c) LGA
that "when adopting the annual budget a local government
... (c) may impose a service charge on land within its
district" does not preclude the possibility that a
service charge may be imposed at another time.
The Tribunal dismissed these arguments. In considering the
proper interpretation of section 6.38 LGA. The Tribunal stated that
the inclusion of the words "for a financial year" in
section 6.38(1) suggest that a service charge is only to be imposed
in an annual budget, rather than during the course of a financial
The Tribunal took the view that the wording in section 6.32(1)
LGA "when adopting an annual budget..." serves to
restrict the time when a local government may impose a service
charge under section 6.38 LGA to when a local government is
adopting the annual budget.
The Tribunal stated, amongst other things, that it could not
have been the intention of parliament to enable the requirement for
an absolute majority under section 6.32(1) LGA to impose a service
charge to be avoided by allowing a service charge to be imposed
under section 6.38 other than when adopting an annual budget.
If a service charge that has purportedly been imposed other than
when adopting the annual budget is invalid and quashed, section
6.32(3)(b) LGA requires that the relevant local government impose a
new service charge. Under section 6.3 LGA the local government must
prepare and adopt a budget in form and manner similar to the annual
budget with such modification as are necessary.
Findings of the Tribunal
The Tribunal determined that, on its proper interpretation,
section 6.38 of the LGA only permits the imposition of a service
charge by a local government when adopting the annual budget or, if
a service charge is quashed by the SAT or a court, when adopting a
budget that is in a form and manner similar to the annual
The Tribunal found that the City did not impose the Salter Point
UGP service charge when adopting its annual budget for 2011/2012,
rather it purported to impose the service charge two and a half
months after it had adopted its annual budget. The Salter Point UGP
service charge was not therefore imposed in accordance with the
There is a legislative purpose discerned from the LGA to
invalidate any service charge purportedly imposed by local
government other than when adopting its annual budget.
The Tribunal declared the Salter Point UGP service charge
invalid and of no effect, and quashed it.
Lessons for Local Government
A local government may only impose a service charge when
adopting its annual budget. To seek to impose a service charge
outside the annual budget will risk a declaration from the SAT or a
court declaring the service charge invalid and quashing it. The
local government will then be required to impose a new service
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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