"5 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."
7 Johnstone DCJ first determined that the s94 Contribution was not a tax. His Honour relied on decisions which state that a s94 Contribution is not a tax in the common law sense. See Baulkham Hills Shire Council v Group Development Services Pty Limited [2005] NSWCA 315 at [15]-[16] and Meriton Apartments Pty Limited v Minister for Urban Affairs and Planning (2000) 107 LGERA 363 at [47]-[52]. The passage in this Court's judgment in Group Development Services was obiter. (See at [17].) However, the reasoning in Meriton Apartments was in point.
8 Judge Johnstone then focused on the word "impost". His Honour said that the word should be given what he considered to be its ordinary meaning, namely, "a compulsory exaction of money in the nature of a tax".
9 Finally, his Honour addressed "fee" and "charge". His Honour determined that to give these words their ordinary meaning would make the operation of the Imposts Act too wide, indeed absurdly so. His Honour concluded that the words "fee" and "charge" required something in the nature of an impost. The Respondent adopts this approach in its submissions.
10 On the basis of his Honour's interpretation of the word "tax", as defined, he concluded that the s94 contribution was not a "tax" within the meaning of the Imposts Act.
11 Section 94 of the EPA Act relevantly provides:
"(1) If a consent authority is satisfied that a development … will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant consent to that application subject to a condition requiring:
(a) the dedication of land free of cost, or
(b) the payment of a monetary contribution,
or both.
(2) A condition referred to in subsection (1) may be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection.
…"
12 It is pertinent to note that s94 expressly provides that any payment pursuant to such a condition is made for a public purpose and is characterised as a "contribution". Furthermore, s94(2) of the EPA Act refers to a s94 Contribution as a "condition … imposed".
13 The Respondent contended, in oral argument, that taxes and imposts share the characteristic of "non-equivalence" between the exaction and the thing obtained. In contrast, it submitted, a s94 Contribution is part of the payment in return for the Council consent and its attendant commercial advantage. I do not see that there is any relevant "equivalence" between a s94 Contribution and a consent. In no sense can the imposition of a condition be characterised as some kind of bargain. In any event this submission cannot apply to the words "fee" or "charge".
14 The Appellant contends that his Honour's interpretation is flawed for two principal reasons. First, it gives "fee" and "charge" a construction that gives them no work to do. Secondly, it ignores the intention of Parliament to widen the common law meaning of tax whilst retaining the term "tax" as convenient shorthand. The Appellant contends that his Honour's interpretation leads to the result that s1A of the Imposts Act tautologically defines "tax" to include a "tax, tax or other tax". In my opinion, these submissions should be accepted.
15 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. It was not, nor in my opinion could it have been, suggested that payment of the s94 Contribution was not "under the purported authority" of the EPA Act.
16 The word "impost" extends, in my opinion, to a requirement to make a payment for a public purpose imposed, pursuant to statutory authority expressly providing for monetary payment, as a condition for the exercise of a statutory power.
17 A clear indication of the Parliamentary intention about the scope of the definition of "tax" is found in the fact that the word "Impost" appears in the title of the Act. It is not the Recovery of Taxes Act, but the Recovery of Imposts Act. This confirms the intention that the scope of the Act goes beyond common law jurisprudence on the meaning of "tax".
18 The long title of the Act reinforces this proposition:
"An Act relating to the time within which actions may be brought against the Crown and certain other persons for the recovery of certain taxes, fees, charges and other imposts; to provide that certain taxes, fees, charges and other imposts are not recoverable in certain circumstances; and for purposes connected herewith."
19 The natural and ordinary meaning of the word "tax" would not usually extend to a "fee" or "charge". The inclusive definition was clearly intended to expand the concept of a tax, as it had developed in case law over many years in a variety of statutory and common law contexts. There is no warrant to construe the word "impost" so narrowly as to be equivalent to the word "tax" as so understood. The purpose of the extended definition was to avoid any such result. As a matter of drafting convenience the single word "tax" was used in the operative provisions of the Imposts Act.
20 In its operation as a condition of consent, the developer is not obliged to make the payment unless the development is to proceed. However, s7 of the Imposts Act expressly states that the Act applies "to money paid whether voluntarily or under compulsion". Once a s94 Contribution is paid, the payment can accurately be described as having been imposed pursuant to statutory authority.
21 In my opinion, a s94 Contribution is an "impost" and, accordingly, a "tax"' within s1A of the Imposts Act. The Respondent's claim for recovery of those funds is time barred by s2 and s5 of that Act.
22 Orders
- Appeal upheld.
- Respondent to pay the Appellant's costs.
- Proceedings No 657 of 2006 in the District Court of New South Wales are dismissed with costs.
23 McCOLL JA: I agree with Spigelman CJ.
24 GZELL J: I agree with Spigelman CJ.
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