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Norman Waterhouse

Councils’ powers to allocate rates considered by Supreme Court

In a recent decision of the Supreme Court of South Australia (Supreme Court), Justice Parker considered the particular powers and functions Councils have pursuant to the Local Government Act 1999 (LG Act) with respect to the allocation of rates.

The decision of Atkins v District Council of Coober Pedy [2020] SASC 156 concerned an application for an extension of time by Mr Atkins to appeal against an interlocutory decision of the Magistrates Court of South Australia (Magistrates Court) to strike out Mr Atkins’ claim. Mr Atkins’ appeal was ultimately dismissed by the Supreme Court.


Mr Atkins and the District Council of Coober Pedy (Council) were engaged in a dispute with respect to the payment of Mr Atkins’ Council rates. Mr Atkins had outstanding rates for the 2018/2019 year.

In September 2019, Mr Atkins made a payment to the Council of approximately $26,000 and made clear that he intended that this payment be applied to meet his rates for the 2019/20 year. A Council officer subsequently advised Mr Atkins that the Council could not accept the payment in relation to the 2019/20 rates, because the 2018/19 rates remained outstanding.

The Council offered to repay the amount that had been paid by Mr Atkins, but this did not eventuate.

In November 2019, Mr Atkins lodged a claim in the Magistrates Court against the Council seeking payment of the total sum of $29,098.01. The Council successfully applied to the Magistrates Court to strike out Mr Atkins’ claim on the basis that it did not disclose a cause of action.

Mr Atkins belatedly appealed that decision to the Supreme Court and sought an extension of time to file the appeal on the following grounds:

  • The ‘very late delivery’ of the case outcome file;
  • The COVID-19 pandemic; and
  • The introduction of the new Uniform Civil Rules 2020.

Norman Waterhouse acted for the Council initially in the Magistrates Court and then subsequently in the Supreme Court appeal.

Summary of decision and Councils’ powers to allocate rates

Section 183 of the LG Act prescribes the process by which Councils must apply money received in respect of rates. Specifically, if a Council receives or recovers an amount in respect of rates, the amount must be applied as follows:

  • Firstly – in payment of any costs awarded to, or recoverably by, the Council in any court proceedings undertaken by the Council for the recovery of the rates;
  • Secondly – in satisfaction of any liability for interest;
  • Thirdly – in payment of any fine;
  • Fourthly – in satisfaction of liabilities for rates in the order in which those liabilities arose.

Justice Parker confirmed that Mr Atkins’ notice of appeal was lodged two weeks after the statutory deadline and was not persuaded by the grounds of appeal submitted. His Honour also emphasised that the Council in that case was required to apply the money it received from Mr Atkins in accordance with section 183 of the LG Act and “it did not have any choice in the matter”.

Therefore, even though the Council promised to repay the $26,000 to Mr Atkins, such promise could not be enforced because it was contrary to section 183 of the LG Act.

The Supreme Court relevantly held that section 183 of the LG Act “sets an order of priority and requires that monies received as rates not be applied other than in accordance with that provision”. The Supreme Court upheld the decision of the Magistrates Court and refused Mr Atkins’ permission for the late lodgement of the appeal.

The Supreme Court’s decision serves as a reminder for Councils in relation to their powers to allocate rates received from ratepayers. The statutory framework is clear as to the order of priority and Councils should not make separate agreements with ratepayers that will contravene section 183 of the LG Act.

For more information about the matter contained in this article, please contact Felice D’Agostino on +61 8 8210 1202 or or Dale Mazzachi on +61 8 8210 1221 or

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