Bride v Shire of Katanning [2013] WASCA 154

The Council Shire was seeking a judgment against the borrower for outstanding rates unpaid since 1984. The borrower had been the registered proprietor of the property since 1983, but had defaulted on the mortgage in 1984 and left the land. The Bank had appointed receivers. The borrowers became bankrupt. The Bank made no claim to possession since 1989 and denied that it was a mortgagee in possession on a number of occasions. The Bank had not entered into physical possession or exercised any physical control over the land.

In 2005, the borrower returned to the property after buying the adjoining property. He enclosed the whole of the land and cleared the land against fire hazards. He repaired an old building and stored some property on the land. He allowed a friend to operate a business from the land. The borrower then wrote to the solicitors for the Shire and advised them he had retaken possession and would be responsible for rates into the future.

At the heart of the case was the question of whether the borrower was the “owner” of the land within the meaning of the Local Government Act 1995 (WA) such that he owed payment of rates to the Shire. The borrower argued that the Bank was the owner for the purpose of rates. The Bank denied that it had never been in possession of the land. Relevantly, the Local Government Act also stated that rates were recoverable by a person who “became” the owner at any time while the rates are unpaid. Ultimately it was this construction of the provision that meant that the borrower, who had come back into possession in 2005, was liable for all of the rates.

The Judges (on appeal) found that, while the Bank had been the “owner” of the land for a period of time under the definition, it had ceased being the “owner” when the borrower returned to the land and was exercising rights to enjoy the freehold title to the Land and that the borrower was therefore liable for the rates.

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