Many Victorian councils are about to consider draft Budgets and authorise their public exhibition. Following the public exhibition of the draft Budget and the consideration of any submissions a Budget will need to be adopted. Rates and charges will also need to be declared.

A recent decision of the Queensland Supreme Court – Linville Holdings Pty Ltd v Fraser Coast RC – confirms the importance of a council keeping the Budget adoption and rate declaration processes distinct. Otherwise there is the risk of no valid rates and charges ever being declared.

The Linville Holdings case was, of course, decided with reference to Queensland legislation. However, the legislation was (and is) not dissimilar to relevant provisions in Parts 7 and 8 of Victoria’s Local Government Act 1989.

Fraser Coast Regional Council adopted a Budget. The Budget listed the rates and charges that would be imposed. The Queensland Supreme Court held that the council was required to both adopt a Budget and resolve to levy rates and charges. Adopting a Budget that referred to the rates and charges was insufficient.

It followed that no rates and charges had ever been validly levied on any ratepayer. It took extraordinary legislation enacted by the Queensland Parliament to validate the rates and charges and obviate the need for the council to refund every ratepayer who had paid the rates and charges levied on them.

All of this is a timely reminder of the importance of taking care in the Budget and rate declaration processes. The two are linked but discrete. Has your council considered the form of its Resolutions? Is your council confident that the intended Resolutions will meet the requirements of the Local Government Act 1989?