The City of Mandurah has lost an appeal over a decision exempting the Royal Australian Airforce Association (RAAFA) retirement estate in Erskine from paying rates.
The argument wound up in court after RAAFA lodged a number of objections over their 2008 to 2012 rates notices, arguing the organisation was a charity and therefore exempt from rates under the Local Government Act.
The City appealed to the State Appeals Tribunal, which agreed the RAAFA estate was not rateable, and then twice to the Western Australian Supreme Court’s court of appeal.
But the Supreme Court, including Chief Justice Wayne Martin, found RAAFA used the land exclusively for charitable purposes.
City of Mandurah chief Mark Newman defended the appeal and said Council was acting in the interests of equity as well as protecting an income stream.
“Council’s decision to take this action was not just born out a need to protect revenue, but was also an attempt to achieve fairness and equity for our community as we understand there are many pensioners who struggle to pay rates,” he said.
“Council’s view remains that the type of person enjoying RAAFA’s accommodation is no different to those in private villages who pay rates.
“Many Mandurah residents could simply not afford the cost to live in the RAAFA villages. The remaining community will now be subsidising RAAFA residents.”
Mr Newman said that before the appeal RAAFA had paid rates to the City, unlike other local governments that had not received rates income from charities.
“The approximate annual value of RAAFA Erskine was $250,000, and to an extent, the City was trying to protect an income stream,” he said.
Other properties would be affected by the decision, Mr Newman warned.
“There are two other local villages (with combined annual rates of approximately $300,000) where the City must now consider exemption from rates,” he said.
“This will be the subject of a Council report once they have lodged their objections to the rate book.”
The City’s legal fees for the Supreme Court appeal added up to $144,000.
“Given that the City was trying to protect an annual revenue stream of about $500,000, Council felt that the investment was worth the effort to pursue this issue,” Mr Newman said.
RAAFA was contacted for comment.
Nathan Hondros
Senior Journalist for the Mandurah Mail, Australian Community Media, and Fairfax Media.
Senior Journalist for the Mandurah Mail, Australian Community Media, and Fairfax Media.
