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"It's about time" - Time limits apply to actions to recover overdue rates and charges

Posted by Michael Cerruto on 8 April 2020
"It's about time" - Time limits apply to actions to recover overdue rates and charges

Court finds that Council is unable to recover overdue rates and charges more than six years overdue

Highlights

No time limits apply to the commencement of procedures by councils to sell or acquire land for overdue rates and charges under the Local Government Regulation 2012 (Qld).  However, the recent decision of the High Court of Australia in Amos v Brisbane City Council has confirmed that a six year time limitation applies to the commencement of Court proceedings seeking to recover overdue rates.

Decision at first instance and in Court of Appeal

Initially, before the Supreme Court of Queensland, Brisbane City Council was successful in obtaining a judgment against the ratepayer for the overdue rates and charges and interest which had been levied across a 12 year period from 1999 and 2012. 

On appeal by the ratepayer, the Queensland Court of Appeal held that the provisions of the Limitations of Actions Act 1974 (Qld) ("LAA") barred the recovery of those overdue rates and charges and interest levied more than six years after the date they were due. 

High Court's decision

In the appeal to the High Court, the parties argued for the application of two different limitation periods under the LAA.

The Council argued that the 12 year limitation period applied to because the action was one to recover "money secured by a mortgage or other charge on a property".

The ratepayer argued that the shorter six year limitation period should be applied to an action to recover money under an "enactment".

The High Court unanimously held that both limitation periods applied to a claim to recover overdue rates and charges.

However, it also unanimously held that the ratepayer was entitled to rely on the shorter limitation period, so while the Council was still entitled to recover those rates and charges and interest which were less than six years overdue at the time the proceeding was commenced, the LAA barred the recovery of amounts overdue for a longer period.

Implications

This decision emphasises the need for local governments to routinely monitor how long rates and charges for land are overdue.  While procedures to sell or acquire land for rates and charges overdue for more than three years are not subject to time limitations, actions for recovery of overdue rates and charges must be commenced no later than six years after the date they were due.

For more information on this case, and how it affects action to recover overdue rates and charges, please email Michael Cerruto or Michael Quirk at King & Company, or call us now on (07) 3243 0000.

Michael CerrutoAuthor: Michael Cerruto
About: Michael is a senior associate in the firm's Planning & Environment Group.
Tags: Local Government Rating Litigation Rates Recovery

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