Opinion Number. 195



Key Legislation


The Minister for Home Affairs

It appears that in November 1902, an arrangement was entered into between the Metropolitan Board of Water Supply and Sewerage (Sydney) and the Commonwealth, whereby the Board undertook to render water and sewerage services at a sum specified for each building, which sum was equivalent to the rates which the Board claimed was payable in respect of the building.

The Board has now notified the Department of Home Affairs that it has determined to discontinue this arrangement from 30 June 1904, and has intimated that, from 1 July 1904, rates will be charged upon assessments in the usual course, in the same manner as all other properties.

The Minister for Home Affairs asks to be advised on the matter.

From a newspaper extract (Sydney Daily Telegraph, 7 July 1904) with the file, it appears that the Board's action has been taken on the advice of its solicitor, who was of opinion that the decision of the High Court in Municipal Council of Sydney v. Commonwealth 1 C.L.R. 208 was not applicable, inasmuch as the rates imposed by the Board were charges for services rendered, and not taxes. He advised that:

With a view to securing increased rates from July 1 two courses were open-(1) to notify the Federal authorities of the increased charge for each building, and request their acquiescence (which was an implied acknowledgment the Board could not levy rates), or (2) to give them notice that from July 1 the Board would discontinue the temporary arrangement referred to, and charge rates upon assessment in the usual course.

I do not understand the reference to 'increased rates' and an 'increased charge', in view of the statement that under the temporary arrangement the Commonwealth was paying for each building a specified sum equivalent to the rates-unless it be that in respect of some of the buildings no service is actually rendered or accepted and therefore no payment is made.

In my opinion, the Commonwealth, if it accepts any services rendered by the Board, is bound to pay for those services; and in the absence of Federal legislation providing for some means of determining the amount of the payment, the Board can decline to perform the services, for any particular building, except upon payment of an amount equivalent to the rate.

But I am also of opinion, although the point may be open to argument, that the rates imposed by the Board, though they are imposed for the purpose of special undertakings, and though they entitle the ratepayers to certain special services, are nevertheless in the nature of taxes. Water rates are chargeable in respect of any premises within 150 feet from any highway along which a main water pipe of the Board is laid, 'although such premises are not actually supplied with water from such main' (Metropolitan Water and Sewerage Act of 1880, section 88); and sewerage rates are chargeable in respect of any premises within 150 feet from any sewer or drain belonging to the Board, 'whether there be any communicating drain between such premises and any sewer or drain belonging to the Board or not' (ibid, section 105). These rates are therefore not a charge for services rendered, but a compulsory charge for services available-whether rendered or not, or at least whether accepted or not.

I am of opinion that the Commonwealth-though it is bound to pay for services rendered by the Board and accepted by the Commonwealth, is not otherwise liable for rates imposed by the Board.

Probably, in the absence of agreement or Federal legislation, the acceptance of a water or sewerage service would be some evidence of an implied agreement to pay a sum equivalent to the ordinary rate, or on a quantum meruit.

[Vol. 4, p. 356]

  1. * See also Opinion No. 331.