Overview

The recent decision of Sea Swift Pty Ltd v Torres Strait Island Regional Council [2023] QSC 203 is a timely reminder for Local Governments to understand and comply with the powers afforded by the Local Government Act 2009 (Qld) (Local Government Act), regulations and Councils respective Local Laws.

Key Takeaways

Councils are given power to take action that is necessary or convenient for the good rule of the local government or the local government area. However, that power is not unlimited.

This decision is a welcome reminder of the benefits conferred by timely, pragmatic and sound legal advice given the complexities that can arise in exercising powers delegated by the Local Government Act and recovering monies from third parties.

The Facts

The Council issued 253 invoices for “Default Maritime Fees” for the period April 2015 to June 2018. Council required any appeal from the invoices to be made within seven-days despite Christmas Day (Sunday 25 December), Boxing Day (Monday 26 December) and a Christmas Day Public Holiday (Tuesday 27 December) falling within that period.

The reason for the Default Maritime Fees was alleged non-compliance by Sea Swift as an operator of Council landing facilities to self-report for Sea Swift’s actual use.

Sea Swift’s contention was that the Default Maritime Fees were an unauthorised form of penalty which disregarded actual use. Further, that the Default Maritime Fees did not account for fees paid in the same period.

Council’s contention was that Default Maritime Fees were merely an alternative method for calculating the standard Maritime Fees that would be payable under the Local Government Act.

As put by the Honourable Justice Applegarth:

[89] [Council] appears to have imposed DMFs on the basis of alleged non-compliant reporting, without regard to and in disregard of the actual extent of the alleged underreporting. For example, if Sea Swift reported four visits to an island in a certain month, but its records revealed that there were five, then the DMF invoice would not be a fee for the additional stop or a fee for the month calculated on the basis of five stops, giving credit for the amount previously paid for four stops. It would be an additional invoice calculated on the basis of 60.67 stops at that island, that month.

[101]     … Information available to [Council] and its lawyers about scheduled services and information provided in all of the documents disclosed to it and its own analysis show that the figure of 60.67 visits per island per month is divorced from reality about actual use. The assumption that the vessel unloaded or loaded all of its cargo at each island does not reflect actual operations.

The Power

Councils are afforded power under sections 9 and 262 of the Local Government Act to respectively:

“do anything that is necessary or convenient for the good rule and local government of its local government area.”

And:

(2) The local government has the power to do anything that is necessary or convenient for performing the responsibilities.

(3) The powers include all the powers that an individual may exercise, including for example—

(a) power to enter into contracts; and

(b) power to acquire, hold, deal with and dispose of property; and

(c) power to charge for a service or facility, other than a service or facility for which a cost-recovery fee may be fixed.

Councils are empowered to make and enforce local laws, including Model Local Laws approved by the Minister and published by gazette.

Further, Councils are capable of granting approvals for prescribed activities and, on conditions which must:

“(a) be reasonably necessary to ensure that the operation and management of the prescribed activity will be adequate to protect public health, safety and amenity and prevent environmental harm; and

 (b) be consistent with the purpose of any relevant local law.”

These approvals may include the charging of fees.

Conclusions

The Supreme Court found that the Default Maritime Fees issued were:

• a penalty (paragraph 158);
• inconsistent with the statutory scheme (paragraph 168);
• not authorised by the Local Government Act (paragraph 175);
• departed from the provision of the applicable Model Local Law (paragraph 187);
• did not appear to have been validly authorised by Council (paragraphs 193 and 195);

Further, Council ought to have:

• notified that it intended to impose Default Maritime Fees on a different basis to that previously notified (paragraph 215); and
• that the seven-day appeal right was illusory, arbitrary, capricious and lacking any justification in the circumstances (paragraph 216).

The Court left open that a Default Maritime Fee which based on an approximate actual use and being “for” use of the facility may have had sufficient connection to fall within the Local Government Act and encouraged the parties to mediate and reach a commercial settlement.

Given that Sea Swift enjoyed substantial success, the Court indicated that it expected the substantial costs of the proceedings to follow the event.

To ensure that your council properly understands and complies with the powers afforded by the Local Government Act, regulations and respective Local Laws or if you have any queries regarding the article please get in touch with authors Andrew Kerr, Partner, Joshua McDiarmid, Senior Associate, Martin Wright, Senior Associate or your usual contact at Moray & Agnew.