Adrenaline Pty Ltd v Bathurst Regional Council

The Track Hire Agreement

1. The Track Hire Agreement entitled Trackcorp to the use of the track land and facilities to operate an "Event", lasting some five days, each December. It was not merely a licence of the circuit itself. The Track Hire Agreement specified a long list of inclusions (such as the use of the media centre, control tower, fuel compound, pit complex, and areas and facilities for spectators). (For clarity, there was also a list of excluded services, such as marshals, fire vehicles, and certain specified buildings in the vicinity.) The Track Hire Agreement had a term of five years, with an option. It specified a "negotiated fee" of $247,178, and escalating fees for the succeeding four years. At the time the agreement was entered into, 50% of the first year's fees had already been paid.
2. Trackcorp and Council agreed to a reduced fee for the second year of $223,850 (down from $255,829). The reduced fee was approved by Council at a meeting of councillors on 20 August 2008. However, it was asserted by Trackcorp that the original agreement fell outside of the scope of the agreement which the Council's general manager could lawfully execute, an argument based on s 377(1)(e) of the Local Government Act. Trackcorp also maintained that neither the original fee nor the reduced fee had been exhibited so as to permit members of the public to make submissions on them, such that there was no power to determine it. That submission was based on the provisions of Part 10 of Chapter 15 of the Local Government Act. The legislation underlying these submissions is reproduced below.

The evolution of Trackcorp's proceedings at first instance

1. After the first and second racing events, Trackcorp commenced proceedings in the Equity Division of this Court seeking a range of relief, all of which was consistent with the contract remaining on foot. It is not necessary to summarise Trackcorp's claims in any detail. Trackcorp's claims included that there had been a breach of an exclusivity clause under the agreement when other motor sport events were conducted on the circuit, that there was an implied term or a precontractual representation that any other promoter would be charged the same fees and that Council had breached a duty of care owed to it. It also sought rectification. Nevertheless, Trackcorp continued to pay fees and conduct race meetings, in accordance with the agreement as amended, in the third, fourth and fifth years.
2. In August 2012, after a breakdown of negotiations relating to the option, the pleadings were amended to include a claim that Council had breached an obligation to negotiate in good faith, and, most relevantly for the purposes of this appeal, a restitutionary claim seeking the following relief: "A declaration that the plaintiff paid the fees set out in the 'Schedule of Negotiated Fees' in the Agreement upon a mistake. An order that the defendant pay to the plaintiff money had and received by the defendant to the use of the plaintiff."
3. The pleading supporting those prayers for relief was quite confined. Trackcorp alleged that to the extent that Council was entitled to impose a fee, it was subject to compliance with the provisions of the Local Government Act, including ss 405 and 610, and that the Council could not, by reason of s 377(1)(e), delegate the power of fixing a fee, as had occurred in the Track Hire Agreement, but was required to determine the fee itself. It was also alleged that there had not been any public notice or submissions in relation to the fees. In the premises, Trackcorp alleged that it had paid fees for track hire under a mistake that they had been determined "properly, lawfully and in accordance with the Local Government Act and the defendant was duly authorised to impose such fees", and that it was entitled to restitution of the fees paid.
4. The defence was even more concise. All allegations were denied, and it was said in addition that Council was "entitled to and did require payment of the track hire fees as a contractual right" under the contract and the subsequent variation, and that Council had approved all fees charged. It also alleged that the claim was "precluded by sections 42, 43, 43A, 44 and/or 46" of the Civil Liability Act 2002 (NSW).
5. Trackcorp's reply said, correctly, that its claim for restitution was not a claim to which any of those provisions of the Civil Liability Act applied. No reliance was placed on these provisions on appeal.
6. Although Council enthusiastically embraced a suite of statutory defences under the Civil Liability Act, no defence based on s 729 of the Local Government Act was alleged. Nor did Council rely on ss 2, 4 or 5 of the Recovery of Imposts Act 1963 (NSW). Nor did Council allege by way of defence that it had changed its position, or that Trackcorp had passed on the fees, or that it had given good consideration for the use of the circuit over the previous five Decembers, and so there was no occasion for Trackcorp to respond to those potential answers to its claim.

The course of the trial

1. Despite its pleaded denials, by the conclusion of the trial over eight days in November 2013 and February 2014 Council in substance accepted that it had not complied with the provisions of Part 10 of Chapter 15 of the Local Government Act. In accordance with its pleaded defence, it contended that it could rely on another power to enter into the Track Hire Agreement - a general power to enter into contracts. It also asserted that the land was operational land, with which it was free to deal. Council's essential submission may be seen from what was said by senior counsel then appearing for it in final address: "What we submit is that fees in Chapter 15 have nothing to do with consideration that may be charged in agreements entered into under the general contractual power, particularly anything in relation to operational land."
2. His Honour asked whether, if Council's non-compliance with Chapter 15 made the fees unenforceable, "is that the end of the analysis in circumstances where the contract has been performed?". There was this exchange: "HIS HONOUR: It's not a question of the council seeking to enforce the contract; you've obtained the money, it's really a question of entitlement to get it back. RAYMENT: To get it back for a mistake. And we submit not, not after it's been performed. HIS HONOUR: I'm not sure precisely what the answer is on that but it does seem to me that there is more analysis required."
3. The issue was also agitated in closing submissions in reply: "HIS HONOUR: ... [A]s I was saying to Mr Rayment a bit earlier, you say that the contract was unenforceable because of the illegal imposition of the fee. SIRTES: Yes your Honour. HIS HONOUR: It's not a question of enforcing the contract, it's a question of whether you have an entitlement to, as it were, a disgorgement of the fee. SIRTES: Quite so. HIS HONOUR: And is a quantum meruit in that situation really a cross-claim matter or is it a defence? I'm not sure. ... I am not sure because doesn't David Securities v Westpac and those cases say there is a prima facie right to be repaid where the money is paid under a mistake, but it's only a prima facie right, and it depends on the justice of the case." His Honour was, with respect, correct that more analysis was required than had been provided by either party. In this respect, his Honour was not well assisted by the submissions he received.

The judgment of the primary judge

1. His Honour delivered a lengthy judgment of 280 paragraphs in May 2014, dismissing the whole of Trackcorp's claims for relief. Trackcorp has appealed, as of right, but only upon one aspect of its claim: its alleged entitlement to a refund of moneys paid under a mistake.
2. The primary judge found, uncontroversially, that the track hire fees had not been determined in accordance with the financing provisions of Chapter 15, Part 10 of the Local Government Act: at [275]. It is not entirely clear whether his Honour expressed a view on the other pleaded aspect of Trackcorp's claim, that Council's general manager was not authorised to execute the Track Hire Agreement. On the approach his Honour took, the point did not require decision, and it was complicated by the variation to the Track Hire Agreement in 2008 reducing track hire fees, which was approved at a meeting of Councillors. It will not be necessary for the purposes of this appeal to address this issue.
3. His Honour then recorded (at [276]-[277]) the submissions of Council: that the circuit was operational land, not community land; that the provisions of Chapter 15, Part 10 were not Council's only source of power; that the provisions of Chapter 6 of the Local Government Act contemplated that a council might enter into a licence of public land; that a council had "a general power" to contract, by references to ss 8 and 21-23 of the Local Government Act and s 50(1)(e) of the Interpretation Act 1987 (NSW), and that it would be absurd for Council to have to advertise fees each year, even if otherwise governed by a long term contract.
4. The dispositive paragraphs of his Honour's reasons, broadly accepting Council's submissions, were at [278]-[279]: "I do not think that the track hire fees under the Agreement are governed by the provisions of Part 10 of Chapter 15 of the Act. The Council has not sought to rely upon those provisions as the source of power to charge the fees. It is true that the Council, in its annual statement of revenue policy for the 2007/ 2008 year (which is required pursuant to ss 402 and 404 of the Act) refers to circuit hire in the schedule of fees and charges. However, for 'Full Circuit Closure', the amount of the fee is not stated as would be required by s 404(1) of the Act if the fee is a fee to which Division 3 of Part 10 of Chapter 15 of the Act applies. Instead, a per day minimum fee is shown, together with the statement 'actual fees on negotiation'. I further accept Mr Rayment's submission that Part 10 of Chapter 15 of the Act is not the only source of power available to the Council to charge the track hire fees. That is so, in my view, regardless of whether the fees are characterised as a fee for service so as to be capable of being dealt with under Part 10 of Chapter 15 of the Act. As shown by the provisions of Chapter 6 of the Act, a council has the power to deal with its public land, including by way of agreements for licence. There is no suggestion that the Agreement falls foul of any relevant restriction found within Chapter 6 of the Act. Moreover, the Council has the general power to contract in connection of the exercise of its functions. In my opinion, the Council had the power to enter into the Agreement with Trackcorp which included the provision requiring Trackcorp to pay track hire fees each year throughout the term of the Agreement. I do not accept the asserted basis of the claim for restitution, and that claim must therefore fail."
5. Much of the difficulty associated with the hearing of the case on appeal is a consequence of the fact that the only claim the subject of appeal was but one relatively minor claim among many advanced and rejected at trial. The relative insignificance of this aspect of the case is reflected in the fact that it was a tiny fraction of Trackcorp's closing written submissions (11 paragraphs in a document exceeding 240 paragraphs) and Council's written response (less than a page). Trackcorp's claim was rejected by the primary judge in 6 paragraphs ([274]-[279]) of a judgment of 280 paragraphs. Thus, a point which was regarded by the parties over a long trial as relatively minor has expanded on appeal into a full day's hearing, preceded by full submissions, and followed by 26 pages of submissions supplied on 9 and 14 April 2015 in accordance with directions made at the conclusion of the hearing.

Issues on appeal

1. Trackcorp appealed, challenging the reasoning of the primary judge reproduced above dismissing its restitutionary claim.
2. Council's approach on appeal was different from the way the trial had been defended. As at first instance, it accepted that there was non-compliance with Chapter 15, Part 10, and maintained it was not necessary to do so. However, Council made no attempt to substantiate the submission relating to the circuit being "operational land" on appeal. It disavowed reliance on Chapter 6. Its main answer was that there was a general contractual power. It also said that the track hire fees were not fees for services and that Part 10 of Chapter 15 did not apply where, as here, the fees had been negotiated.
3. Council submitted that parts of Trackcorp's appeal impermissibly extended beyond its case at trial. It will not be necessary to examine the details of this. Trackcorp's essential submission, which for the reasons which follow I have accepted, was essentially that advanced at first instance, and was not contended to be impermissibly outside the scope of its appeal.
4. By its original notice of contention, filed together with its submissions in December 2014, Council identified two further bases for upholding the judgment. The first was that the failure to set fees in accordance with Part 10 of Chapter 15 did not have the consequence that the "invoicing and receipt of such fees by the respondent was ultra vires, void for illegality or on the grounds of public policy". The second was that Trackcorp's claim was precluded "by reason of the irreversible detriment suffered by the respondent in facilitating and permitting the appellant to hold its annual Events on the faith of the efficacy of the payments received, and by treating the payments received from the appellant as revenue of the respondent".
5. Viewed as a matter of substance the second basis was a defence of change of position, and indeed Council's written submissions expressly invoked that defence. Trackcorp said in reply that this should not be permitted to be agitated on appeal.
6. When the appeal was heard, Council's argument ranged more broadly, and it became plain that Council wished to defend the decision on bases wider than those contained in its notice of contention. Directions were made for the service of a draft amended notice of contention, and for written submissions on the new issues. Further, on 1 April 2015 (the day after judgment was reserved), the Court brought the decision in Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6; V ConvR 54-713 at [33] to the parties' attention, and invited submissions to be made in relation to it.

Council's "general contractual power" did not permit it to charge fees outside of the provisions of the Local Government Act

1. Council asserted that the fee contained in the Track Hire Agreement was one which had been struck by negotiation between it and Trackcorp and for that reason was outside the scope of Chapter 15, Part 10. Senior counsel for the Council, who had not appeared at trial, accepted that he could point to no authority supportive of the proposition.
2. Council's main submission is not merely unsupported by authority. To anticipate what follows, it is contrary to the text of the Local Government Act and the Mount Panorama Motor Racing Act. It is also contrary to basal principles of statutory construction and of local government. And it is contrary to the reasoning in this Court's recent decision in Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429.

Legislation governing councils' financing and accountability

1. I start with the legislative regime. The Local Government Act contains elaborate provisions regulating the financial management and accountability of all local councils. Chapter 13, which is titled "How are councils made accountable for their actions", is of general application: it "applies to the functions conferred or imposed on a council by or under this or any other Act or law"; that would include functions conferred by a permit issued under the Mount Panorama Motor Racing Act.
2. In the form the statute took in 2007 and 2008, Council was required to prepare a draft management plan with respect to its activities for at least the next 3 years, and its revenue policy for the next year: s 402. In 2007 and 2008, s 404 provided that the draft management plan must, subject to the regulations, include a statement with respect to the Council's revenue policy as follows: "[A] statement of the council's proposed pricing methodology for determining the prices of goods and the approved fees under Division 2 of Part 10 of Chapter 15 for services provided by it, being an avoidable costs pricing methodology determined by the council in accordance with guidelines issued by the Director-General."
3. Public notice was required to be given of the draft management plan, for a period of not less than 28 days, specifying that submissions could be made: s 405. A management plan must be adopted by council before the end of each year, and only after considering the submissions made following the exhibition of the draft plan. The powers to fix a fee and adopt a management plan could not be delegated: s 377(1)(e), (j).
4. The regime changed with effect from 1 October 2009, following amendments made by the Local Government Amendment (Planning and Reporting) Act 2009 (NSW). The "draft management plan" was replaced by "delivery program" and a "draft operational plan" and the express requirement to include revenue policy was removed. However, the obligation to exhibit, and receive submissions which were required to be taken into account before the "final operational plan" was adopted, remained.
5. A large proportion of councils' revenues is derived from rates and charges, which are compulsory exactions, and subject to more elaborate regulation in the Local Government Act - see Parts 1-9 of Chapter 15. Councils' rating powers have a very lengthy history, ultimately deriving from the Poor Relief Act 1601 (Eng), as considered by Murphy J in Falkenberg v City of Hamilton [1987] VR 65 at 71-72. However, councils also derive revenue from fees for services provided by them. These are regulated by Divisions 1-3 of Part 10 of Chapter 15. (Anomalously, Part 10 includes Division 4, which comprised at relevant times a single section, s 611, authorising councils to impose an annual charge on rails, pipes, wires, cables and other structures in public places - this was the section relied on by the New South Wales councils in Bayside City Council v Telstra Corporation Ltd [2004] HCA 19; 216 CLR 595 to impose charges on the broadband cabling erected by Telstra and Optus in the mid-1990s.)
6. Division 2 is headed "Council fees for business activities", and Division 3 is headed "Council fees for non-business activities". Section 610C (within Division 3) provides that "[t]his Division applies to a fee for a service other than a fee to which Division 2 applies". It was not suggested that Division 2 applied. Section 610D (which is also in Division 3) provides: "610D How does a council determine the amount of a fee for a service? (1) A council, if it determines the amount of a fee for a service, must take into consideration the following factors: (a) the cost to the council of providing the service, (b) the price suggested for that service by any relevant industry body or in any schedule of charges published, from time to time, by the Department, (c) the importance of the service to the community, (d) any factors specified in the regulations. (2) The cost to the council of providing a service in connection with the exercise of a regulatory function need not be the only basis for determining the approved fee for that service. (3) A higher fee or an additional fee may be charged for an expedited service provided, for example, in a case of urgency."
7. Section 610F reinforces the transparency of the fee-setting process. In 2007 and 2008, subsections (1) and (2) provided: "(1) A council must not determine the amount of a fee until it has given public notice of the fee in accordance with this section and has considered any submissions duly made to it during the period of public notice. (2) Public notice of the amount of a proposed fee must be given (in accordance with section 405) in the draft management plan for the year in which the fee is to be made." (In 2009, the reference to "draft management plan" was replaced by "draft operational plan").
8. Subsection (3) provided, speaking generally, that a fee could be charged for a new service, so long as notice had been given for at least 28 days of the proposed fee. Subsection (4) permitted special fees in relation to filming proposals, "if that fee is consistent with a scale or structure of fees set out in a filming proposal".
9. A fee which was determined by Council in accordance with Division 2 or 3 was an "approved fee".

Council's submissions and the reasons for rejecting them

1. Acknowledging all of that, and the fact that it had not complied with those provisions if they applied to the track hire fees imposed pursuant to the Track Hire Agreement, Council submitted that they were not mandatory. As it was put orally: "[T]hat is one method, in our submission, whereby return or reward or fees for services may be set and enforced, but it does not on its face, in our respectful submission, exclude the entitlement of the council to charge for matters which may include fees if the mechanism whereby those fees are derived is through a process of negotiation and consensual process. In other words, this is not the exclusive mechanism for the council being entitled to perform a service and charge money for it if somebody wants to agree with it."
2. There are many reasons for not accepting that submission. The first indication to the contrary is that the text and structure of Divisions 1, 2 and 3 of Part 10 on their face are made applicable to all fees. Council submitted to the contrary. It pointed to the words "if it determines the amount of a fee for a service" in s 610D and described Division 3 as facultative as opposed to the mandatory regime in Division 2. It was put thus in written submissions: "Thus, fees captured by Division 2 must be set in accordance with s 610B. But other fees for services may be set under Division 3 but only if the Council determines to set a fixed amount and follows the procedures to give 'public notice of the amount' set out in s 610F" (original emphasis).
3. That submission must be rejected. The Act needs to be read as a whole, and Council's submission gives what I regard as a strained construction to one provision without regard to the rest. It is quite plain that Divisions 2 and 3 of Part 10 of Chapter 15 exhaust the universe of fees which Council may impose. Council's submission to the contrary pays no regard to the generality of s 608, which is in Division 1, headed "Council fees for service" and provides that "[a] council may charge and recover an approved fee for any service it provides ...". Council's submission also ignores s 610C. Section 610C makes it plain beyond argument that any fee to which Division 2 does not apply is governed by Division 3.
4. The second indication to the contrary is the provision for exhibition and consultation. Spigelman CJ observed (in the context of formulating local environmental plans) that "the detailed scheme of consultation and public exhibition indicates the significance attached by Parliament to such public involvement in order to ensure the integrity of the process": Smith v Wyong Shire Council [2003] NSWCA 322; 132 LGERA 148 at [59]; see also Vanmeld Pty Ltd v Fairfield City Council [1999] NSWCA 6; 46 NSWLR 78 at [37]-[38]. Those considerations are regularly invoked in a Project Blue Sky analysis, but they likewise undermine the Council's submission.
5. There are further textual indications tending against Council's submission. One may be seen in the express power to reach an agreement between council and the owner or occupier of private land to carry on work in s 67. Another may be seen in the express provision in ss 67A and 67B to remove graffiti work, either by agreement with the owner or occupier, or unilaterally, so long as it may be carried out from a public place and the council bears the cost of doing so. In contrast, the carrying out of graffiti removal work pursuant to agreement with the owner is governed by the regime in Division 2 of Part 10 of Chapter 15, and the fee to be charged accordingly must be determined either (a) in accordance with a pricing methodology adopted by the council in its management plan, or (b) adopted by council by a determination made by a resolution at an open meeting: s 610B. That is to say, even when the Local Government Act confers a power in terms upon councils to reach an agreement or arrangement with a landowner, the price it can charge for work performed by it remains subject to Part 10 of Chapter 15. To that extent at least, the "general power to contract" cannot permit a council to escape the statutory restrictions upon it. Why ever would the position be any different in the case of track hire fees?
6. The next two matters are basal. The Local Government Act distinguishes rates and charges (which are compulsory exactions and therefore conventionally regarded as taxes), and fees for services. A person such as a landowner has no choice but to pay a rate on his or her land, or a charge (for example, for sewerage or waste collection) but may have a choice to pay the fee for a service provided by a council. True it is that the "choice" may in any particular case be more or less real. People may, for example, more or less readily choose to use (and pay a fee), or else not to use a council's swimming pool or community hall. On the other hand, a developer may have little practical choice but to pay fees for work zones (so as to use part of a road for construction purposes - typically, loading or unloading construction materials): see Meriton Apartments Pty Ltd v Council of the City of Sydney (No 3) [2011] NSWLEC 65; 80 NSWLR 541. In both cases, Council is providing a service - the temporary use of public land and facilities - for which it charges a fee. Yet the Local Government Act imposes substantially the same level of transparency and consultation upon all fees for services as is imposed on rates and charges. Both forms of revenue were required to be included in a draft management plan. Both were required to be exhibited. Neither rates and charges, nor fees for services, could be imposed until submissions following the exhibition of the draft proposal had been considered by Council. Section 377(1) prevented Council from delegating its powers to make rates and charges and to fix a fee. All this tells against Council's submissions that it is freed from the constraints of Part 10 of Chapter 15 of the Local Government Act when it comes to services provided by it more or less consensually. In short, fees for services are regulated in essentially the same way as rates and charges, even though the latter are compulsive and the former are, in a sense, consensual.
7. It is also a basal principle of construction that when statute confers a power subject to qualifications and conditions, general expressions in the statute are to be read as subject to those qualifications and conditions. The basic approach was stated by Gavan Duffy CJ and Dixon J in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7: "When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power."
8. The principle has been applied on many occasions, such that it must be taken to be appreciated by the Legislature. The joint judgment in Plaintiff S4/2014 v Minister for Immigration and Border Protection [2014] HCA 34; 88 ALJR 847 referred at [43] to what had become known as the Anthony Hordern principle to the effect that: "[A]n enactment in affirmative words appointing a course to be followed usually may be understood as importing a negative, namely, that the same matter is not to be done according to some other course."
9. Here, there is elaborate affirmative language imposing conditions and restrictions on local councils, which the Council seeks to outflank by resort to another source of power. It is a very clear case where the principle applies.
10. Next, there is nothing to suggest that the fact that a separate statute, the Mount Panorama Motor Racing Act, is involved in any way alters the position. The permit granted by the Minister expressly permitted Council to enter into contracts or arrangements with organisers of racing events, and owners and occupiers of land affected by the holding of motor racing meetings, in each case in accordance with the Local Government Act: s 5(2)(b) and (c) reproduced above. The permits granted expressly conferred such powers. Once again, it would be strange if the expressly qualified conferral of power upon Council to enter into a contract or arrangement with an organiser "in accordance with the Local Government Act" could be side-stepped by a general power to enter into any contract it chose.
11. Against all of the above, Council asserted that it had a "general power to contract" and that, in any event, the track hire fees were not fees for services. Both submissions should be rejected.
12. Council's submissions based on a general power to enter into contracts were founded on it having the legal capacity and powers of a natural person (prior to 20 November 2008, Council was a body corporate, by reason of s 220 of the Local Government Act, to which s 50 of the Interpretation Act 1987 (NSW) applied. Thereafter, following the Local Government Amendment (Legal Status) Act 2008 (NSW), the Council became a body politic and s 220(1) directly conferred upon it the legal capacity and powers of a natural person.) But that submission collides with the qualification upon councils' powers in s 24, which ensures that the powers on which Council relied are made subject to the Local Government Act. Section 24 of the Local Government Act provides that: "A council may provide goods, services and facilities, and carry out activities, appropriate to the current and future needs within its local community and of the wider public, subject to this Act, the regulations and any other law."
13. The words "subject to" are "the standard way of making clear" that the unqualified provision prevails: Newcrest Mining (WA) Ltd v The Commonwealth [1997] HCA 38; 190 CLR 513 at 580-581 (McHugh J), citing Harding v Coburn [1976] 2 NZLR 577 at 582.
14. In Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429 (a decision post-dating that of the primary judge, but on which Trackcorp relied on appeal), this Court rejected a submission that a local council had a general power in respect of its revenue raising activities to side-step the requirements of the Local Government Act. The leading judgment was delivered by Ward JA, with whom McColl and Meagher JJA agreed. Her Honour said at [151]: "It cannot be said that the general power to enter into contracts overcomes this difficulty. In Darkinjung Pty Ltd v Darkinjung Local Aboriginal Land Council [2006] NSWSC 1008, Barrett J (as his Honour then was) said at [72]: In all cases where a corporation owes its existence to a statute, it is open to the corporation to do only those things that the statute contemplates are to be done by it. It is commonplace for a founding and enabling statute to contain express statements with respect to the purposes, objects, functions, powers and duties of the corporation. Those express statements, together with the necessary implications to which they give rise, are the source of the corporation's authority and capacity and the limits upon them. Where the corporation purports to act beyond the field of its authority and capacity thus defined, its acts are void. and at [129]: These cases proceed on the basis of three main principles. First, it is recognised that a grant of incorporation by Parliament carries with it not only rights and privileges but also duties and responsibilities. Second, the duties and responsibilities, as well as existing for the benefit of the section of the population directly affected, are of a public or quasi-public nature. Third, the corporation may not act to abdicate or evade its statutory duties and responsibilities, even if the means by which it purports to do so otherwise appear to lie within the scope of its objects, functions and powers." Unsurprisingly, I agree with Ward JA.
15. McColl JA also observed, of the qualified grant of power in s 24, that Campbell J (as his Honour then was) had said in Sanpine v Koompahtoo Local Aboriginal Land Council [2005] NSWSC 365 at [332] that substantially the same language in the Aboriginal Land Rights Act 1983 (NSW) demonstrated a legislative intention that a council's powers will be broad, but not unlimited: at [21]. Her Honour said that "a council does not have power to do away with a mandatory requirement imposed by the Local Government Act". It was in that context that her Honour said, of the attempt to fix rates outside the regime established in the Local Government Act at [22]: "[T]he mandatory requirements of the exercise of the Council's rate-making function, accordingly, are at least that it undertake that exercise annually, that it do so after setting out its proposals for its revenue policy in a draft management plan which is explicit as to proposed ordinary rates, including the proposed ad valorem rate, that that plan is subject to public scrutiny and only adopted after any submissions received have been considered. The requirement that the rates only be made after public submissions and only by the elected council demonstrates the public interest in the proper exercise of the rate-making power. Such public interest is readily comprehensible as the exercise of the rate-making power affects every owner of rateable land in the council's area."
16. Substantially the same applies, in my view, to the exercise of the Council's fee-fixing function. As has already been observed, there are strong similarities in the legislative regime governing councils' powers to levy rates and charges, and to impose fees for services; I do not accept Council's submission that the former are a "very different statutory structure".
17. True it is that these principles do not apply where there are two separate powers conferred: see Minister for Immigration and Citizenship v SZKTI [2009] HCA 30; 238 CLR 489 at [45]-[48]. Trackcorp gave prominence to the fact that, so far as appears from the evidence, all involved in Council at the time proceeded on the assumption that the provisions of Chapter 15, Part 10 applied. For that reason there was reference in the negotiations to the costing of component fees so as to produce a total fee of $258,000 to the drafting of heads of agreement which "now includes the 2007/08 fees & charges which weren't [previously] available". The clearest indication of the fact that Council officers considered they were complying with the provisions of Part 10 of Chapter 15 emerges from the statement of revenue policy 2007/2008 for Council, which contains two pages directed to fees charged in respect of "Mount Panorama", which fell within the "business and economic development" category of fees. That category also included fees for saleyards and tourism and promotion. Consistently with what was agreed in the Track Hire Agreement, a line item for "Mount Panorama Racing Circuit Hire" was included in the following terms: "Full Circuit Closure - actual fees on negotiation Per day (minimum fee stated) $6000 (2006/2007) $6222 (2007/2008)"
18. That fee was described to fall within category 3 of the pricing policy principles contained within the statement of revenue policy. Category 3 was described as follows: "Category 3 - Market Pricing When Council provides a similar service 'in competition' with other councils or agencies, e.g. saleyard fees, hall hire, etc, where alternative service providers are available. This category also includes prescribed or recommended fees. Council will not use subsidies to aggressively price others out of the market or compete unfairly."
19. In short, Trackcorp demonstrated that Council officers brought into existence a series of documents consistent with their contemporaneous view that Part 10 of Chapter 15 applied.
20. I give little weight to this. The question is one of power, and the difficulty with Trackcorp's reliance on what Council officers did at the time is that in certain circumstances, it does not matter if the donee of executive power purports to exercise an inappropriate head of power when another was available: the principles are analysed by Spigelman CJ in VAW (Kurri Kurri) Pty Ltd v Scientific Committee [2003] NSWCA 297; 58 NSWLR 631 and John Holland Pty Ltd v Industrial Court of New South Wales [2010] NSWCA 338 at [95].
21. This appeal does not turn on what Council officers believed at the time. It is decided on the basis that when Council was given a special power to hold or authorise the holding of a motor racing meetings on the Mount Panorama Circuit, it was required to comply with the Local Government Act. That made the position no different from that which obtained when it supplied other services. It was free to set fees for the services it applied, but to the extent that it did so, it had to comply with the general provisions applicable to all fees.
22. Council also submitted, it may in fairness be said weakly, that the track hire fees were not "fees for services", essentially because (a) the fee was negotiated and (b) the "bundle of contractual and commercial rights written into the Track Hire Agreement was not and is not the supply by the respondent Council of a service, product or commodity". Both aspects of Council's submission are, with respect, plainly wrong. In relation to the first, an architect or a lawyer may supply services for a negotiated fee; that does not deny to what is supplied its character as a service. In relation to the second, a licence to use particular real property (consider the booking of a hotel room or the hire of a hall) is readily regarded as a service. Moreover, Trackcorp received not merely the use of the circuit, but a suite of services identified as "inclusions" in the Track Hire Agreement (for example, the use of a medical centre, a Race Control Tower, a media centre, toilets, various grandstands, a bunded fuel compound, a crash crew for race track and barrier repair, ticketing gates, "pre-cleaning" and many other services). In oral submissions, senior counsel conceded, properly, that "I accept that it's a fee for a whole lot of things that would very likely be services". Services are very often bundled together; the fact that the constituents of a bundle are themselves services reinforces, rather than detracts from, the character of the bundle as a whole.
23. For those reasons, I have concluded that the primary judge was wrong to regard Council's "general power to contract" as permitting it to stand outside of Part 10 of Chapter 15, and that Council's primary submission on appeal must be rejected.

The Recovery of Imposts Act 1963 (NSW)

1. At no stage during the trial was attention given to the operation of the Recovery of Imposts Act 1963 (NSW). Perhaps that was because Council was keen to submit that it had not imposed a fee, although even then it would have been open to invoke the legislation in the alternative.
2. The Recovery of Imposts Act applies to "taxes", "fees", "charges" and "imposts". It is established that s 94 contributions imposed by councils engaged the provisions of that Act because they are "imposts": Baulkham Hills Shire Council v Wrights Road Pty Ltd [2007] NSWCA 152; 153 LGERA 219. This Court (Spigelman CJ, McColl JA and Gzell J agreeing) held at [15] that: "Section 2(1) of the Imposts Act extends to any amount 'paid under the authority or purported authority of any Act'. Each of the words, 'tax', 'fee', 'charge' and 'impost', are confined in their possible scope by this definite criterion. The words, whilst wide, are not of extraordinary scope. There is no warrant to give them a meaning of the character for which the Respondent contends. The directly relevant inquiry is whether a payment was made under the authority of an Act."
3. Plainly enough, a "fee" imposed under Part 10 of Chapter 15 answers the description in the Recovery of Imposts Act at least as clearly as a s 94 contribution paid upon the grant of development consent. The decision in Meriton Apartments Pty Ltd v Council of the City of Sydney (No 3) [2011] NSWLEC 65; 80 NSWLR 541 is correct so to hold.
4. The Recovery of Imposts Act imposes a 12 month period to recover fees paid: s 2(1). It will be recalled that the restitutionary claim was first advanced in August 2012, more than 12 months after the final payment. Moreover, s 4 of the Act obliges the claimant to satisfy the court that it has not charged to or recovered from and will not charge to or recover from any other person any amount in respect of the whole or any part paid. That is to say, it places an onus upon the person who has paid the fee to demonstrate that it has not been passed on. It may be doubted that Trackcorp would have been able to discharge that onus; certainly, it did not attempt to do so. However, neither change in position nor passing on were pleaded by the Council in its defence, even for the general restitutionary claim which it faced.
5. The fact that neither passing on nor change of position had been pleaded means that the appeal cannot be decided on those bases. However, s 5 goes further. It provides that that right to recover money is extinguished: "5 Ending of right of recovery "If because of this Act money paid by way of tax or purported tax ceases to be or is not recoverable, the right to recover the money is extinguished."
6. The extinguishment of Trackcorp's causes of action effected by s 5 is in a different category from the unpleaded consequences of the other provisions of the Recovery of Imposts Act. It is not up to a party to choose to rely, or not to rely, on a provision which extinguishes a right of action. "If a claim is extinguished, it cannot be brought. An omission to plead the statute does not revive the claim": Carr v Thomas [2009] NSWCA 208 at [35]. When this Court determines an appeal by way of rehearing in accordance with s 75A of the Supreme Court Act 1970 (NSW), it cannot ignore a statute which potentially extinguishes the appellant's claim.
7. If I were otherwise minded to allow the appeal, I would have required further submissions as to why s 5 had not extinguished any rights Trackcorp had. However, the appeal can and therefore should be decided on issues which were argued by the parties.

Council's Project Blue Sky submission

1. The first ground in Council's original notice of contention is that the admitted contravention of the Local Government Act does not entail that the exaction of fees by it was void or ultra vires, in accordance with Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355. That is a pure question of law, but one which, as I see it, is complex, important, and not fully argued. What was not argued included the effect of s 729 of the Local Government Act, mentioned by neither party, and whose effect is not absolute, and the Recovery of Imposts Act. The fact that the question is not straightforward may be seen in the analyses in respect of other powers of councils: see Marrickville Metro Shopping Centre Pty Ltd v Marrickville Council [2010] NSWCA 145; 174 LGERA 67 at [176]-[194] and [214]-[222] (power to levy rate) and Burwood Council v Ralan Burwood Pty Ltd (No 3) [2014] NSWCA 404; 206 LGERA 40 at [153]-[193] (power to issue construction certificate).
2. Where as here the question is important, but was not fully argued, was not free from difficulty, was not determined by the primary judge, and need not be determined on appeal, it is appropriate not to deal with it: Environment Protection Authority v Condon as Liquidator for Orchard Holdings (NSW) Pty Ltd (in liq) [2014] NSWCA 149; 86 NSWLR 499 at [69]-[70].

Council's proposed change of position defence

1. This is a matter that was raised by Trackcorp's counsel at first instance in final address ("they could put on a defence such as change of position, but there are no such defences that have been pleaded"). It is sufficient that it be possible that evidence which stood in the way of the defence succeeding might have been adduced, and I would readily infer that the cross-examination of Council officers and the production of documents sought by Trackcorp not merely could have been, but would have been, affected had such a defence been pleaded.
2. It follows that Trackcorp is correct to submit that it is too late now, on appeal, to advance such a claim: see Cassegrain v Gerard Cassegrain & Co Pty Ltd [2015] HCA 2; 89 ALJR 312 at [64] and Attorney General of New South Wales v Homeland Community Ltd [2015] NSWCA 15 at [59].

Trackcorp received good consideration

1. At the hearing of the appeal, Council maintained that there was a "good consideration" defence, because the payments were made pursuant to a contract. That is true, except in respect of the first half of the first payment (which was made prior to entry into the Track Hire Agreement). This was not the subject of detailed submissions below, or written submissions in advance of the appeal being heard. It was implicit in the exchanges in final addresses at trial reproduced above. But Council acknowledged, properly, that it had not been put to the trial judge.
2. In Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd [2006] VSCA 6; V ConvR 54-713, a landlord had been ordered to repay to its tenant amounts mistakenly paid by its tenant as rent under a commercial lease. Section 8(2) of the Retail Tenancies Reform Act 1998 (Vic) provided that the tenant was not liable to pay the rent attributable to the period before the landlord gave the tenant a copy of a disclosure statement. The tenant claimed that it had paid rent and was ignorant of its rights under the provision.
3. The Victorian Court of Appeal held that the landlord had a good defence to the tenant's claim for restitution because the tenant had received good consideration for the money it paid, namely, exclusive possession of the premises that were of use and benefit to it. Chernov JA said at [21]: "[U]nlike the position of the payers in David Securities and Roxborough, the tenant here has received good consideration for the money it paid, namely, exclusive possession of the premises that were obviously of use and benefit to it, as is demonstrated not only by the fact that it occupied them since entry for its business purposes, but also by its continued possession of them after it became entitled to terminate the lease pursuant to s 8(2)(c) of the Act. And it is irrelevant that the landlord might have been under an obligation to provide the premises under the lease. The question is not whether the landlord was under such an obligation, but rather whether the tenant gained or accepted a benefit in the form of exclusive use of the premises (as a quid pro quo for the payments in question). As I have said, on the evidence, it is apparent that the tenant received such a benefit and, thus, from its point of view, it received good consideration for its payments."
4. Similarly, Nettle JA said at [33]: "Whereas in Davids Securities the borrower got nothing in return for its payment of the grossing-up amount, and in Roxborough v Rothmans of Pall Mall the tobacco retailer got nothing in return for its payment of the tobacco licence fees, in this case the respondent got the benefit of the use and occupation of the demised premises in return for the rent which it paid. As I see it, that is the benefit which it had in view - the benefit for which it bargained - when it agreed to pay the rent. It is true that the respondent was not under a legal duty to pay the rent and, therefore, it is true that the payment of what it perceived to be rent did not discharge it from an obligation to pay rent. But as I have said, I do not consider that s 8(2) prohibits the lessor receiving or recovering any consideration in respect of the lessee's use and occupation of the demised premises. There does not seem to be any statutory imperative for concluding that the tenant was intended to have the benefit of free use and occupation."
5. The third member of the Court agreed, Ashley JA, agreed with both Chernov and Nettle JJA (at [55]).
6. The authors of Mason and Carter's Restitution Law in Australia (2nd ed, LexisNexis Butterworths, 2008) write at [2041] that "[r]ecovery of the (invalid) licence fee after enjoyment of the right for which it was the consideration would result in unjust enrichment, not its prevention". That passage was applied by Pepper J in Meriton at [172] to conclude that the developer's recovery of fees would be inequitable where Meriton had enjoyed the benefit of the exclusive use of the kerb and road for its construction.
7. So too here. Trackcorp received precisely what it bargained for. True it is that at trial Trackcorp contended that Council was in breach and that it had been misled, but these claims have fallen away. Indeed, Trackcorp prepared a budget which projected a profit despite the $250,000 fee it paid. It would create unjust enrichment were Trackcorp having enjoyed the benefit of the Mount Panorama circuit over five years to recover the fees it agreed to pay and did pay in order to secure that benefit.
8. The only possible point of distinction between this appeal and Ovidio is the fact that half of the first year's track hire fee was paid prior to the Track Hire Agreement being executed. But nothing turns on that. That payment was expressly treated by the parties (in cl 3.5(a)) as "the first instalment of 50% of such fees from the Promoter in respect of the first Event", and evidently was part of the consideration for what Trackcorp received in December 2007. It is in the same category as the payments made after the agreement had been executed.
9. Accordingly, Trackcorp must be taken to have received precisely what it bargained for (for it did not seek to reagitate its failed claims for breach and rectification on appeal). It obtained good consideration for the fees it paid each year. Irrespective of whether its claim was extinguished by the Recovery of Imposts Act, there can be no injustice in Council retaining the monies paid by Trackcorp for services bargained for and received by Trackcorp.
10. Finally, no question of fact prevents Council from relying on this defence on appeal. The position resembles that in Ford v Perpetual Trustees Victoria Ltd [2009] NSWCA 186; 75 NSWLR 42, where no restitutionary defence had been pleaded. Allsop P and Young JA said at [119]-[121] that there was no injustice in the retention by the payee, such that the restitutionary claim was dismissed: 1. "119 It is the case that the right to recovery is prima facie enlivened by the relevant legal circumstance accompanying the payment, here mistake, or the request for the loan (if made by Mr Ford): David Securities Pty Limited v Commonwealth Bank of Australia [1992] HCA 48; 175 CLR 353 at 379. Nevertheless, underpinning recovery is the "unifying legal concept" of unjust enrichment .... 2. 120 No separate defence of change of position or any other particular restitutionary defence was pleaded. 3. 121 The relevant enquiry as to the availability of the order for payment or repayment does not cease with the identification of the relevant qualifying consideration, such as mistake. The enquiry is as to the injustice of the retention of any money or benefit. This lies at the root of the claim and of any defence such as change of position." The same considerations may be seen in Ovidio at [22] and [47]-[50]. They suffice to dispose of the appeal.

Council's proposed causation defence

1. Council also sought leave to amend its notice of contention to include the ground that Trackcorp did not prove that any mistake of fact was causative of the payments made by it. Although Trackcorp must be taken on this appeal to have received the benefits for which it had bargained, it is plain that the question whether a belief as to the Council's compliance with the Local Government Act caused the entry into the Track Hire Agreement gives rise to factual questions. Council should not be permitted to raise this issue in its notice of contention.

Orders and costs

1. For those reasons, I propose that the appeal be dismissed. Given that (a) parts of Council's submissions at first instance were not sought to be maintained on appeal and appear to have contributed to leading the primary judge into error, (b) Council's primary submission on appeal about a general contractual power has been rejected, and (c) the dispositive ground was only raised by way of an amended notice of contention filed after the appeal was heard, the appropriate order is that there be no order as to costs of the appeal. That accords with the rule stated in the reserved decisions of the Supreme Court of Victoria in Great Gulf Company v Sutherland (1873) 4 AJR 164 and more recently in Armstrong v Boulton [1990] VR 215 at 223. Although I have concluded that not all aspects of the reasoning of the primary judge can be sustained, there is no occasion to interfere with the costs ordered at first instance.
2. The formal orders I propose are:
3. Grant leave to the respondent to rely on ground 1B of its proposed Amended Notice of Contention dated 1 April 2015, and direct the Council to file within 7 days an Amended Notice of Contention in accordance with that leave.
4. Appeal dismissed.

Amendments 19 December 2018 - [12]: fourth sentence, "fees" changed to "fee". [13]: first sentence, "maintaining" changed to "remaining". [58]: "Campbell JA" changed to Campbell J (as his Honour then was". [65]: fifth sentence, "Medical centre" changed to "media centre"; final sentence "that fact" changed to "the fact". [89]: case citation, "The Great Gulf" changed to "Great Gulf"; "4" inserted before "AJR". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 December 2018