Council rates debt stands but costs order removed after payments found applied in wrong order (NTCAT, 2026)

What happened

The City of Darwin applied to NTCAT in its original jurisdiction to recover unpaid council rates and additional charges from a ratepayer who owned three properties. On 24 June 2025 a Member ordered the ratepayer to pay the council $3,325.20, or any lesser amount that might be owing at the date the orders were published, by no later than 22 July 2025. The order was framed that way because the ratepayer had been making payments towards the amount claimed.

The ratepayer's defence in the original hearing was that the council had broken the rules in Chapter 11, Part 2, section 253 of the Local Government Act 2019 about how payments are applied. Section 253 requires money paid by a ratepayer to be applied to debts in the order in which they fell due, that is, oldest debt first. The council accepted that it had not initially done this. Instead, the ratepayer's payments were applied to accrued interest first and then to the oldest debt.

By the time the original hearing came on, the council had engaged an external auditor, Nexia Edwards Marshall, to work out what was properly owing. The auditor calculated a total amount payable across all three properties for the period 30 September 2014 to 7 May 2024 of $16,185.45, made up of outstanding rates, interest and recovery costs, and concluded that on those calculations the ratepayer had in fact been undercharged by $3,002.05 over that period. Those correct calculations were not provided until 28 January 2025, well after the council had filed its tribunal application.

The ratepayer then applied under section 140 of the Northern Territory Civil and Administrative Tribunal Act 2014 for an internal review, which is a review of a tribunal decision by the tribunal itself. He asked for the council's original application to be dismissed outright.

What each side wanted

The ratepayer argued that the council's failure to follow section 253 made its accounting unlawful, and that because the debt had been calculated unlawfully it was not payable by him at all. His application asserted errors of fact and law, a failure to consider evidence and a denial of procedural fairness in general terms, attached a 90-page document, pointed to section 78 of the NTCAT Act, and relied on earlier court decisions, including a case where speed camera evidence was excluded for non-compliance with legislation and a line of cases about rates that had never been validly levied. He also disputed the auditor's figures. The council's position was that the incorrect method of calculation did not make the debt void, and that any discrepancy was likely to be, and could be shown to be, in the ratepayer's favour.

What the tribunal decided

The Tribunal granted leave for the internal review to be brought, because the argument that the council's non-compliance barred recovery had not been dealt with in the original decision. It then decided that the non-compliance did not void the debt, and that it would not interfere with the original decision as it related to the debt itself.

The Tribunal did revisit costs. The orders were: the orders made on 24 June 2025 in the original file are varied by being replaced; the respondent (the ratepayer) is to pay the applicant (the City of Darwin) the amount of $2,554.40, or such lesser amount as may be owing at the date the orders are published; and the parties are to bear their own costs. The Tribunal said it did not know what amount remained outstanding, and noted that there appeared to be an error of calculation in the original decision. The removal of the costs order means the council no longer recovers its NTCAT filing fee and service costs from the ratepayer.

Why the tribunal decided it that way

Section 140 of the NTCAT Act lets a party to a proceeding in the Tribunal's original jurisdiction ask for an internal review, and section 140(3) requires a written statement of the grounds. Section 140A limits that review to deciding whether the original decision was affected by an error of fact or law, and to correcting any such error. The Tribunal found the 90-page attachment did not clearly identify any particular error, but it recognised that the ratepayer was pressing the same "illegality" point he had raised at the original hearing, and that this point had not been considered, so leave was granted.

On the substance, the Tribunal said the authority of a council to impose rates and a ratepayer's duty to pay them come from statute, not contract, so the original Member's analogy with a breach of contract was not helpful. Section 253 of the Local Government Act tells the council how to allocate payments to existing debts. Failing to follow it at the outset did not mean a debt was never validly raised. The Tribunal distinguished the authorities the ratepayer relied on. In the speed camera case, non-compliance made the evidence of speed unreliable and there was no way to work the speed out after the event. In the rates cases, no debt had ever accrued because the rates had never been levied by valid resolutions. By contrast, an accounting error of this kind can be fixed, and here it had been fixed by the audit and recalculation. Nothing in the Act suggests initial non-compliance with section 253 makes the debt void. Section 78 of the NTCAT Act was held to be about procedure rather than substance and was not the basis of the original decision.

On the figures, the ratepayer challenged the auditor's calculations on several bases but offered only his own interpretation of perceived errors and no alternative expert opinion. The Tribunal accepted the auditor's evidence.

On costs, the Tribunal rejected the council's argument that the discrepancy was probably in the ratepayer's favour. It held that as a ratepayer he was entitled to rely on the method of accounting set out in the legislation and entitled to know with certainty what he owed. It was the council's job to issue rates notices calculated in compliance with the Act, the correct calculations only arrived on 28 January 2025, after the application was filed, and the filing of the proceeding was the catalyst for the correct calculation being done. In those circumstances the ratepayer's demand that the amount be properly calculated was reasonable, he was within his rights to resist payment until that happened, and the costs order against him could not stand.

What this means if you are in a similar position

If you are in a similar position, this decision shows how a tribunal separates two different questions: whether a body got its paperwork or accounting wrong, and whether that error wipes out what you owe. Here the council admitted it had applied payments in the wrong order, and the Tribunal agreed the ratepayer was entitled to rely on the method set out in the legislation. But because the error was one that could be recalculated after the event, it reduced and corrected the debt rather than cancelling it. The cases where a debt disappeared were ones where the charge had never been validly made in the first place, or where the breach meant the evidence itself could never be reconstructed.

The decision also shows the practical value of challenging a figure. The costs order was removed because the ratepayer had asked for a properly calculated amount, and the correct calculation only came after the council started proceedings. At the same time, disputing an expert's numbers with your own reading of them, without any competing expert evidence, did not shift the figure the Tribunal accepted.

It is worth noting that an internal review of this kind is not a second hearing. The tribunal is confined to looking for an error of fact or law in the original decision and correcting it, and the grounds have to be set out in writing. In disputes about a charge, a bill or an account, most people start with a written complaint or demand to the organisation that sets out exactly what they say is wrong and asks for a corrected calculation in writing, and only make a tribunal or review application if that does not resolve it.

How to apply: our step-by-step guide to a NTCAT application. More decisions: NTCAT cases and unpaid debts and invoices.

Source: Bofilios v City of Darwin [2026] NTCAT 4 (read the full decision). This summary was prepared from the published decision for general information. It is not legal advice, and the tribunal’s own reasons are the authoritative record.