Southern Cross Care wins appeal against retirement village rates

Four councils are facing a hit to their budget bottom line after they were ordered by the Supreme Court to repay tens of thousands of dollars in rates.

The Southern Cross Care village Fairway Rise in Lindisfarne.

FOUR Tasmanian councils are facing a hit to their budget bottom line after the Supreme Court ordered them to pay back tens of thousands of dollars in rates to not-for-profit retirement villages.

Under the decision handed down on Monday, the Hobart, Clarence, Kingborough and Meander Valley councils will no longer be able to charge general rates for residents living in retirement villages run by not-for-profit bodies.

The councils will also have to repay any money paid in rates since 2016.

The matter was referred to the Full Court by not-for-profit aged-care provider Southern Cross Care after the Administrative Appeals Division of the Magistrates Court knocked back its case in February.

At the time, Magistrate Reg Marron ruled that the land was not both owned and occupied exclusively for charitable purposes.

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However, in the Supreme Court on Monday Chief Justice Alan Blow, Justice Stephen Estcourt and Justice Gregory Geason agreed the order should be set aside.

“It would, to my mind, be distinctly odd to assert that a charity caring for the aged could build accommodation for elderly residents on land that it owned and which attracted rate relief, but yet must lose that exemption the moment it houses the objects of its charity in the built fabric,” Justice Estcourt said in his reasons for judgment.

Southern Cross Care Tasmania chief executive officer Richard Sadek. Picture: LUKE BOWDEN

Southern Cross Care Tasmania chief executive officer Richard Sadek said the decision was a big win, particularly for pensioners who live in retirement villages.

“The decision reaffirms that the services provided by not-for-profit organisations in retirement villages, including Southern Cross Care, are for charitable purposes,” Mr Sadek said.

“I’m so delighted for our residents that have been out of pocket because of a misinterpretation of the Local Government Act.”

Mr Sadek said the organisation had paid out more than $500,000 in rates to the Hobart, Clarence, Kingborough and Meander Valley councils during the 2016-2017 and 2017-2018 financial years.

Southern Cross Care Tasmania currently has 13 retirement villages in the state, with close to 750 residents.

Kingborough Council general manager Gary Arnold said his council, which is home to two of the retirement villages, would have to refund about $21,000 if the appeal was upheld.

“We will seek guidance from our legal counsel as for the implications and discuss the remaining options with those councils that joined us on this matter,” Mr Arnold said.

City of Hobart general manager Nick Heath, Meander Valley Council general manager Martin Gill and City of Clarence general manager Andrew Paul agreed, saying they were disappointed but would wait for legal advice before deciding on the next step.

Local Government Assoc-iation of Tasmania chief executive officer Katrena Stephenson said she felt strongly there should be equity and fairness in the application of rating formulas.

“It is simply not enough that the landowner is a charitable institution if the purpose for the occupancy is also not charitable,” Dr Stephenson said.

“An older person living in their own home pays rates, yet someone living in a retirement village owned by a charity doesn’t. Further we would note pensioners can apply to receive a rates rebate like any other pensioner residing in their own home,” she said.