Mangoola Coal Operations Pty Ltd v Muswellbrook Shire Council

Catchwords

100 ATR 817 Adrenaline Pty Ltd v Bathurst Regional Council (2015) 97 NSWLR 207[2015] NSWCA 123 Arnold v Minister Administering the Water Management Act 2000 (2008) 73 NSWLR 196[2008] NSWCA 338 Australand Corp (Qld) Pty Ltd v Tang [2009] QSC 221 Barton v Commissioner for Motor Transport (1957) 97 CLR 633[1957] HCA 50 Baulkham Hills Shire Council v Wrights Road Pty Ltd (2007) 153 LGERA 219[2007] NSWCA 152 Bayside Council v Karimbla Properties (No 3) Pty Ltd (2018) 99 NSWLR 66[2018] NSWCA 257 Boensch v Pascoe (2019) 268 CLR 593[2019] HCA 49 British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30[1993] HCA 67 Ciprian v Commissioner of Taxation [2002] AATA 74650 ATR 1257 Citta Hobart Pty Ltd v Cawthorn [2022] HCA 1696 ALJR 476 Commissioner of State Revenue (Vic) v ACN 005 057 349 Pty Ltd (2017) 261 CLR 509[2017] HCA 6 Commissioner of State Revenue (Vic) v Royal Insurance Ltd (1994) 182 CLR 51[1994] HCA 61 Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285[1998] HCA 20 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297[1992] HCA 48 Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529

Judgment (22 paragraphs)

[1]

Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; 96 ALJR 476 Commissioner of State Revenue (Vic) v ACN 005 057 349 Pty Ltd (2017) 261 CLR 509; [2017] HCA 6 Commissioner of State Revenue (Vic) v Royal Insurance Ltd (1994) 182 CLR 51; [1994] HCA 61 Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285; [1998] HCA 20 Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297; [1981] HCA 26 Council of the City of Sydney v Wilson Parking Australia Pty Ltd [2015] NSWLEC 42 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48 Dennis Hotels Pty Ltd v Victoria (1960) 104 CLR 529; [1960] HCA 10 Deputy Commissioner of Taxation v Brown (1958) 100 CLR 32; [1958] HCA 2 Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415; 232 LSJS 58 Frevcourt Pty Ltd v Wingecarribee Shire Council (2005) 139 LGERA 140; [2005] NSWCA 107 Gammage v The Queen (1969) 122 CLR 444; [1969] HCA 68 Ha v State of New South Wales (1997) 189 CLR 465; [1997] HCA 34 Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127; [1955] HCA 28 Kelly v Willoughby Council (1928) 41 CLR 51; [1928] HCA 25 MacCormick v Federal Commissioner of Taxation (1984) 158 CLR 622; [1984] HCA 20 Maguire v Simpson (1977) 139 CLR 362; [1977] HCA 63 Mangoola Coal Operations Pty Ltd v Muswellbrook Shire Council [2020] NSWLEC 66 Mangoola Coal Operations Pty Ltd v Muswellbrook Shire Council [2021] NSWCA 46 Meriton Apartments Pty Ltd v Council of the City of Sydney (No 3) (2011) 80 NSWLR 541; [2011] NSWLEC 65 Minister for Local Government v Blue Mountains City Council (2018) 97 NSWLR 1132; [2018] NSWCA 133 Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676 Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation (1992) 173 CLR 450; [1992] HCA 4 Northern Territory v Griffiths (2019) 269 CLR 1; [2019] HCA 7 Pantorno v The Queen (1989) 166 CLR 466; [1989] HCA 18 Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429 Plaintiff M61/2010E v The Commonwealth (2010) 243 CLR 319; [2010] HCA 41 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68 Royal Insurance Australia Ltd v Comptroller of Stamps (Vic) (1992) 92 ATC 4399; 23 ATR 528 Scharer v State of New South Wales (2001) 53 NSWLR 299; [2001] NSWCA 360 Timbercorp Finance Pty Ltd v Collins [2016] VSC 776; 119 ACSR 478 Walker v Walker [1983] Fam 68 Wentworth Shire Council v Bemax Resources Ltd [2013] NSWSC 1047; 278 FLR 264 Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 Zhang v Commissioner of the Australian Federal Police (2021) 273 CLR 216; [2021] HCA 16 Texts Cited: D Bailey and L Norbury, Bennion on Statutory Interpretation (7th ed, 2017, Lexis Nexis) K Mason, J Carter and G Tolhurst, Mason & Carter's Restitution Law in Australia (4th ed, 2021, LexisNexis) P Finn, Law and Government in Colonial Australia (1987, Oxford University Press) W Gummow, "Moses v Macferlan: 250 Years On" (2011) 68 Washington & Lee Law Review 881 W Swain, "Unjust Enrichment and the Role of Legal History in England and Australia" (2013) 36 UNSW Law Journal 1030 Category: Principal judgment Parties: Mangoola Coal Operations Pty Ltd (Appellant) Muswellbrook Shire Council (Respondent) Representation: Counsel: M Izzo SC and J Wherrett (Appellant) P Tomasetti SC and T To (Respondent)

[2]

Solicitors: Johnson Winter Slattery (Appellant) Moray & Agnew (Respondent) File Number(s): 2023/127087 2023/127091 Publication restriction: Nil Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Citation: [2023] NSWSC 262 Date of Decision: 27 March 2023 Before: Basten AJ File Number(s): 2022/00153777 2022/00202595

[3]

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

[4]

HEADNOTE [This headnote is not to be read as part of the judgment] Mangoola Coal Operations Pty Ltd owns land within the Muswellbrook Shire Council area which prior to August 2017 had been categorised for rating purposes as farmland. On 4 August 2017 the Council advised Mangoola that it had declared that the land was to be categorised as mining, with effect from 1 July 2016. Mangoola challenged the Council's decision, eventually leading to an appeal before the Court of Appeal, which found in Mangoola's favour. Consent orders were subsequently made on 15 September 2021 in the Land and Environment Court, which the parties agreed had the effect that Mangoola's land was recategorised as farmland with retrospective effect to 1 July 2016. Mangoola continued to pay rates in protest throughout the period from September 2017 until May 2021. In total, it made overpayments of $3,071,518.76, with the last payment being on 27 May 2021. Mangoola commenced proceedings in the Common Law Division of the Supreme Court on 27 May 2022, seeking repayment of the overpaid rates in moneys had and received. It also commenced proceedings in Class 4 of the jurisdiction of the Land and Environment Court on the same day, seeking entitlements to either a refund or a credit pursuant to s 527 of the Local Government Act 1993 (NSW), which provides that a council must make "an appropriate adjustment of rates paid or payable by a rateable person following a change of category of land". Procedural steps were taken pursuant to s 149B of the Civil Procedure Act 2005 (NSW) to have a single trial in the Supreme Court of Mangoola's two claims. The primary judge held that the entirety of Mangoola's claims (both at common law and under the Local Government Act), save for the last payment of rates, was barred by s 2(1) of the Recovery of Imposts Act 1963 (NSW), which sets a 12 month limitation period for the commencement of proceedings to recover overpaid tax that is "recoverable on restitutionary grounds". Further, in relation to the Class 4 proceedings, his Honour held that s 527 of the Local Government Act did not entitle Mangoola to either a refund of overpaid rates or a credit against future rates notices. The consequence of the primary judge's decision was that Mangoola was partially successful in its claim at common law, receiving judgment in the order of $68,000 plus interest for the last payment of rates which was brought within time, but was otherwise unsuccessful. Mangoola filed notices of appeal in relation to both proceedings. However, it did not seek to disturb the primary judge's findings in the Common Law proceeding. Rather, Mangoola argued that it had a statutory claim under s 527 of the Local Government Act, and that that claim was not subject to the limitation period under s 2(1) of the Recovery of Imposts Act because it was not one to "recover" money and was not for the recovery of money "on restitutionary grounds". The central issue on appeal was whether Mangoola's purported right to recover the overpayments under s 527 of the Local Government Act was subject to the 12 month limitation period imposed by s 2(1) of the Recovery of Imposts Act. The Court (Leeming JA, Payne and Mitchelmore JJA agreeing) held, dismissing the appeal:

[5]

JUDGMENT

LEEMING JA: Mangoola Coal Operations Pty Ltd appeals from the dismissal of one of two proceedings (the "Class 4 proceeding") heard concurrently in the Common Law Division of this Court, both of which sought the recovery of rates which, it is now conceded, were overpaid. It is also now accepted that Mangoola had a right to recover those overpaid rates at common law. In fact Mangoola obtained judgment against the defendant, Muswellbrook Shire Council, to recover the last payment it made based on its entitlement at common law in the other proceeding (the "Common Law proceeding"), and although Mangoola filed an appeal, it does not seek to disturb that judgment. The litigation arises because Mangoola brought no proceedings to recover overpaid rates until (for the most part) years after making the payments.
The issues arising on appeal are quite narrow. They are (a) whether Mangoola had a right under s 527 of the Local Government Act 1993 (NSW) to recover the overpaid rates in addition to its right at common law, and (b) if so, whether that right was subject to the 12 month limitation period imposed by s 2(1) of the Recovery of Imposts Act 1963 (NSW) because its claim was not one to "recover" money or was not for the recovery of money "on restitutionary grounds". Mangoola does not dispute that its entitlement at common law to recover all save the last of its rate payments is barred by the Recovery of Imposts Act.

[6]

Factual background

There are no disputed facts. Mangoola owns land within the Muswellbrook Shire Council area which prior to August 2017 had been categorised for rating purposes as farmland. On 4 August 2017, the Council advised Mangoola that it had declared that the land was to be categorised as mining, with effect from 1 July 2016. The Council's letter attached a Rates and Charges Notice for the 2016/2017 and 2017/2018 years, showing a total amount due and payable of $2,507,858.61. The 2016/2017 amount was said to be due in 30 days, while the 2017/2018 rates were payable in instalments over the 2017/2018 year.
Mangoola applied for a review of the categorisation decision, pursuant to s 525 of the Local Government Act. After the Council's deemed refusal, Mangoola commenced two proceedings in Class 3 of the jurisdiction of the Land and Environment Court pursuant to s 526, challenging the decisions for each year. That Court found that the dominant purpose in the relevant years was mining, rather than grazing, and dismissed the appeals: Mangoola Coal Operations Pty Ltd v Muswellbrook Shire Council [2020] NSWLEC 66. However, Mangoola's further appeal to this Court (differently constituted) was allowed: Mangoola Coal Operations Pty Ltd v Muswellbrook Shire Council [2021] NSWCA 46. The appeal was confined to questions of law pursuant to s 57(1) of the Land and Environment Court Act 1979 (NSW). This Court set aside the orders made by the Land and Environment Court and remitted Mangoola's original appeals against the recategorisation decision to that Court for determination according to law. Thereafter, on 15 September 2021, consent orders were made in the Land and Environment Court upholding each of those appeals.
No issue arises in this appeal as to the correctness of this Court's earlier decision, or that the effect of the orders made on 15 September 2021 was that Mangoola's land was recategorised as farmland with retrospective effect to 1 July 2016. The litigation before the primary judge proceeded on the basis that it was agreed that: The Consent Orders had the effect that the [Council's] mining categorisation of the Land for the 2016 and 2017 rating years (as declared by the [Council] in its letter dated 4 August 2017, …) was set aside and replaced by the farmland categorisation. The Consent Orders constituted a declaration within the meaning of section 526(3) of the LG Act that the category of the Land was farmland with this declaration to take effect on and from 1 July 2016.

[7]

The two proceedings commenced by Mangoola on 27 May 2022

First, by statement of claim filed in the Common Law Division, Mangoola sought an order that the Council pay it $3,071,518.76 plus interest. It maintained that the rates had been paid under a mistake of law, with the result that the Council was required to repay the sum as moneys had and received by it.
The nature of Mangoola's claim was unremarkable. It accorded with the availability of an action at common law for moneys had and received for mistake of law, as opposed to mistake of fact, upheld by the High Court in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48 and thereafter applied in cases of overpaid taxes such as Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68 and British American Tobacco Australia Ltd v Western Australia (2003) 217 CLR 30; [2003] HCA 47. It is conventional to associate these rules with the authorities flowing from Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676. There is a large debate, in this country and elsewhere, as to the juristic nature of this claim (see without being exhaustive W Gummow, "Moses v Macferlan: 250 Years On" (2011) 68 Washington & Lee Law Review 881, K Mason, J Carter and G Tolhurst, Mason & Carter's Restitution Law in Australia (4th ed, 2021, LexisNexis) at 22-31 [120]-[123] and W Swain, "Unjust Enrichment and the Role of Legal History in England and Australia" (2013) 36 UNSW Law Journal 1030), and while I have followed the parties' usage in referring to the "Common Law proceeding", that is mere labelling. The extent to which Mangoola's claim is regarded as common law or equitable is of no significance to the outcome of this appeal.
Secondly, and rather more innovatively, by summons filed in Class 4 of the jurisdiction of the Land and Environmental Court, Mangoola sought the following declaratory relief: 1 A declaration that the [Council] received the sum of $3,071,518 in overpaid rates for the rating years commencing 1 July 2016 to 1 July 2020 from the Applicant for parcel 113969 by reason of the rates being paid in response to Rates and Charges Notices issued by the [Council] categorising the parcel as mining, a categorisation set aside by the consent orders made in matter No 242761 of 2018 by Moore J on or about 15 September 2021. 2 A declaration that the [Council] has not made an appropriate adjustment of rates paid by the Applicant for the rating years commencing 1 July 2016 to 1 July 2020 following a change in category of parcel 113969 (as per the consent orders…), by way of either a refund of the amount of overpaid rates (being the difference between the applicable mining and farmland rates in each rating year) paid by the Applicant to the [Council] for those rating years, or a credit for that amount.

[8]

Chapter 15 of the Local Government Act

The starting point is to observe, as Emmett AJA did in Bayside Council v Karimbla Properties (No 3) Pty Ltd (2018) 99 NSWLR 66; [2018] NSWCA 257 at [135]-[137], that Chapter 15 of the Local Government Act distinguishes between making rates, levying rates, and paying rates. Parts 4, 5 and 7 respectively deal with each of those concepts.
The power (or more accurately, the power coupled with a duty) upon local councils to make and levy rates each year is tightly circumscribed by Chapter 15. Councils are obliged, by reason of s 494(1), to "make and levy an ordinary rate for each year on all rateable land in [the council's] area". Each rate is to be made for a specified year "being the year in which the rate or charge is made or the next year" (s 534), and not more than a year in advance. By way of further constraint upon these powers, s 506 empowers the Minister to make orders which "specify the percentage by which councils' general income for a specified year may be varied".
A rate is to be made by resolution of the council (s 535), which power cannot be delegated (s 377(1)(b)). On the other hand, a rate is to be levied by the service of a notice: s 546(1). It is the service of the notice that gives rise to the liabilities of rateable persons, and the statutory charge on the land.
The Act and its predecessors distinguish between "ordinary rates" and "special rates". The latter are not presently relevant. Ordinary rates presuppose a categorisation of land (s 514), and the provisions bearing upon this are central to this litigation.
An ordinary rate must include an ad valorem amount and may also include a base amount: s 497. The ad valorem amount must contribute the majority of the revenue from any particular rate: s 500. The ad valorem rate is "an amount in the dollar determined for a specified year by the council and expressed to apply … in the case of an ordinary rate - to the land value of all rateable land in the council's area within the category or sub-category of the ordinary rate …": s 498(1)(a). The ad valorem amount of a rate is to be levied on the land value of rateable land, which (speaking generally) is determined by the Valuer-General under the Valuation of Land Act 1916 (NSW).
The scheme governing the categorisation of land for rating purposes is mostly contained in Pt 3 of Ch 15 of the Local Government Act. Pursuant to s 520(1), a council is to give notice to a rateable person of "the category declared for each parcel of land for which the person is rateable". The declaration is to specify the date on which the categorisation takes effect: s 521. The declaration ceases to have effect when a subsequent declaration takes effect: s 522.

[9]

The reasons of the primary judge

After addressing the procedural and jurisdictional complexities, the primary judge commenced with the Recovery of Imposts Act, and recorded concessions made by Mangoola at the hearing (abandoning contentions made in its pleaded reply) that the payment of rates were a "tax or purported tax" within the meaning of the statute, and that the Council was a "person" referred to in s 2. Both concessions were properly made. As to the first, in Baulkham Hills Shire Council v Wrights Road Pty Ltd (2007) 153 LGERA 219; [2007] NSWCA 152 this Court held that a s 94 contribution fell within s 2. The same must be true of a Council's rate, which is exacted compulsorily, rather than as the price of development consent. As to the second, the position of the Council was explained by Pepper J in Meriton Apartments Pty Ltd v Council of the City of Sydney (No 3) (2011) 80 NSWLR 541; [2011] NSWLEC 65 at [136]-[138], by reference not only to the status of a council under the Local Government Act but also to the deeming provision in s 220(4) which provides that "A law of the State applies to and in respect of a council in the same way as it applies to and in respect of a body corporate (including a corporation)", with the result that "there can be no doubt whatsoever that s 2(1) of the Imposts Act applies". This Court said in Adrenaline Pty Ltd v Bathurst Regional Council (2015) 97 NSWLR 207; [2015] NSWCA 123 at [69] that Pepper J's decision that a fee imposed under Pt 10 of Ch 15 of the Local Government Act fell under the Recovery of Imposts Act was correct.
Before the primary judge Mangoola resisted the operation of s 2(1) on the bases that (a) the claim in the Class 4 proceeding was a statutory claim and did not involve "restitutionary grounds", (b) s 2(2) disapplied s 2(1), because the Local Government Act provided a mode for challenging the validity of the impost with a specified limitation period, and (c) the proceedings were commenced within 12 months because Mangoola's cause of action did not arise until orders were made in the Land and Environment Court on 15 September 2021. The latter two of those contentions did not form part of Mangoola's appeal, and it is unnecessary to summarise his Honour's reasoning rejecting them. The primary judge also rejected the Council's reliance on defences based on Anshun estoppel and change of position in respect of the last payment. No cross-appeal has been brought by the Council in respect of the judgment in Mangoola's favour in the Common Law proceedings based on the last payment, nor has any notice of contention been filed in relation to his Honour's findings on either of those defences, and thus once again it is unnecessary to summarise his Honour's reasoning.

[10]

The Recovery of Imposts Act

Mangoola resisted the applicability of the Recovery of Imposts Act on two grounds. It said that the statutory claim in the Class 4 proceeding fell outside s 2(1) because the overpaid rates were not "recoverable on restitutionary grounds". It also said that insofar as it sought a credit against future liability to pay rates, the proceeding did not seek to "recover" amounts of tax paid. The emphasis in Mangoola's submissions was heavily upon the former.

[11]

Ground 1 - "recoverable on restitutionary grounds"

The primary judge held that proceedings seeking relief under s 674 of the Local Government Act for a breach of s 527 were proceedings to recover an amount "recoverable on restitutionary grounds", and so were caught by s 2(1) of the Recovery of Imposts Act: at [40]-[44]. In reaching this conclusion, his Honour was of the view that the phrase "recoverable on restitutionary grounds" was apt to include statutory claims, as well as claims at common law.
Mangoola's ultimate contention was that, on its proper construction, the words "recoverable on restitutionary grounds" required recovery to be grounded upon a restitutionary cause of action recognised by the common law. Unlike a claim at common law, s 527 did not require the establishment of any vitiating factor (such as mistake of fact or law) calling for restitution. Mangoola advanced five reasons in support of its construction.

[12]

First reason - the primary judge's construction results in a tautology

Mangoola's first reason was that the primary judge's construction results in a tautology. Section 2(1) applies to proceedings brought "to recover … the amount or any part of the amount paid by way of tax or purported tax". If "recoverable on restitutionary grounds" means nothing more than a facility for securing the repayment of money, it was said to be entirely repetitive of what comes before it, and thus gave the phrase no work to do.

[13]

Second reason - language of "restitutionary grounds" in ss 2 and 3

Mangoola submitted that the words "restitutionary grounds" in s 2(1) connote only common law claims for restitution. The primary judge reached the opposite view at [43], finding that the term was apt to include a statutory obligation, in accordance with the usage in K Mason, J Carter and G Tolhurst, Mason & Carter's Restitution Law in Australia (4th ed, 2021, Lexis Nexis) at 113 [229] to the effect that such obligations may be described as "an order for restitution".
Mangoola conceded that, in a broad sense, certain statutory powers may be described as "restitutionary" because they involve the repayment of money, but maintained that there was a distinction between "the character of the relief" and the "basis of the claim". It relied upon observations of Doyle CJ in Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415; 232 LSJS 58, where his Honour held that claims for breach of fiduciary duty and dishonest assistance were not actions "based on restitutionary grounds" for the purposes of s 38(1) of the Limitation of Actions Act 1936 (SA). The relevant passage of Doyle CJ's reasons is at [105]: While this remedy involves the effecting of restitution to KO for what it has lost, and can readily be described as restitutionary in character (Greater Pacific Investments Pty Ltd (in liq) v Australian National Industries Ltd (1996) 39 NSWLR 143 at 154) or as intended to ensure restitution (O'Halloran v R T Thomas & Family Pty Ltd (1998) 45 NSWLR 262 at 277) or as intended to ensure restoration of an asset lost (O'Halloran at 281), neither the cause of action nor the remedy itself is "based on restitutionary grounds": see also Parkinson (ed) The Principles of Equity (LBC Information Services, 1996) at [406] and Mason and Carter, Restitution Law in Australia (Butterworths, 1995) at [319].
Reliance was placed upon decisions where similar language had been used, primarily SCI Operations. In that case, a question arose as to whether a statutory right to recovery under the Customs Act 1901 (Cth), which would not permit interest to be recovered, excluded the possibility of a common law claim for recovery, in which interest may be recovered. Gaudron J described the common law claim as a claim "on restitutionary grounds": at [42], [45]. Two members of the Court referred to the claim as being under "restitutionary principles": see Gaudron J at [44] and Kirby J at [83]. McHugh and Gummow JJ made reference to "restitutionary considerations" at common law: at [76]. Mangoola submitted that this use of language was significant, because it was used in contrast to the statutory right for recovery under the Customs Act. Mangoola also relied on this Court's decision in Frevcourt Pty Ltd v Wingecarribee Shire Council (2005) 139 LGERA 140; [2005] NSWCA 107, where Beazley JA referred to a common law right to recover a statutory contribution as being on a "restitutionary basis": at [104].

[14]

Third reason - purpose and history

The Recovery of Imposts Act has taken three different forms: (1) as it was enacted in 1963 (when it was called the Limitation of Actions (Recovery of Imposts) Act 1963 (NSW)); (2) the form it took between 30 November 1993 and 31 December 1995 following amendments in the Limitation of Actions (Recovery of Imposts) Amendment Act 1993 (NSW), and (3) the form it presently takes, which was altered by the State Revenue Legislation Further Amendment Act 1995 (NSW), which took effect from 1 January 1996.
Mangoola contended that the legislative history disclosed that, at each of these iterations, the purpose of the legislation has been to impose a time bar on common law restitutionary claims for the recovery of tax; it has never been directed to statutory claims. The legislative history is a little complex, and it may be convenient at the outset to note that Mangoola's ultimate submission was that: [It] disclose[s] with some clarity that the Imposts Act has at all times been directed to common law claims, claims which you would now call restitutionary, and that the changes made to it over time have been directed to improving the Act's efficacy at capturing those claims. The Act was never concerned with statutory claims in the sense of a right to recover tax created by statute. It wasn't concerned with those claims for the unsurprising reason that when the legislature had the opportunity to create such a statutory right, it would typically use that opportunity to prescribe the terms and conditions on which the right should be available. Generally, those terms and conditions and, in fact, the right is bespoke to the statute under which the impost has arisen. One didn't need to deal with statutory rights of recovery of tax, and the history …, in our submission, makes that quite clear.
As enacted, the only operative provision, s 2, provided: (1) No action or proceeding shall be brought to recover from the Crown or the Government or the State of New South Wales or any Minister of the Crown, or from any corporation, officer or person or out of any fund to whom or which it was paid, the amount or any part of the amount of any tax, fee, charge or other impost paid, under the authority or purported authority of any Act, - (a) before the commencement of this Act, after the expiration of the time within which such action or proceeding but for the enactment of this Act might have been brought or the expiration of twelve months after the date of the commencement of this Act, whichever period first expires; or (b) subsequent to the commencement of this Act, after the expiration of twelve months after the date of payment. (2) Subsection one of this section shall not apply to any action or proceeding brought pursuant to any specific provision of any Act providing for the mode of challenging the validity, or for the recovery of the whole or any part of any tax, fee, charge or other impost actually paid.

[15]

Fourth reason - contextual errors in the primary judge's approach

The primary judge held that "if satisfaction of the phrase 'restitutionary grounds' is a necessary condition for the engagement of s 2, other provisions of the Imposts Act will have little or only limited operation": at [41]. Mangoola contended that each of the three examples provided by his Honour did not weigh against its construction.
First, the primary judge explained that "the definition of 'proceedings' to include forms of what were once known as prerogative relief would be inapt" because "[s]uch relief is not dependent upon common law principles of restitution". Mangoola noted that the reference to prerogative relief was made in November 1993, mirroring a change to the Victorian legislation made earlier that month, which was itself directed to reversing the Victorian Full Court's holding in Royal Insurance that the Victorian Limitation of Actions Act did not apply to an action for mandamus which indirectly vindicated a common law restitutionary right: see ACN 005 057 349 at [52], [54], referring to the second reading speech for the Victorian amendments. Consequently, it was said that such relief was the "appropriate means to compel a public officer to perform a statutory obligation to refund money in a case, such as Royal Insurance, where the statutory obligation is triggered by the existence of an underlying common law ground for restitution (such as mistake)".
Secondly, his Honour said that the removal from s 2(1) of the words "of any tax paid, under the authority or purported authority of any Act" but their inclusion as an immaterial consideration in s 7(1) would seem to be inapt. Mangoola contended that nothing turned on this difference because the use of the words in s 7(1) was specifically directed to reversing the finding in Royal Insurance that a mistaken payment is not paid under the authority or purported authority of any Act, which was made exclusively in the context of a common law claim for recovery of a mistaken payment.
Thirdly, the primary judge referred to the disengagement of subs (1) by subs (2) in cases where statutory remedies are sought, which assumes that subs (1) is engaged where such remedies are sought. Mangoola conceded that this was a matter of some complexity, but submitted that the legislative history showed that the addition of subs (2)(b) did not signal an intention for s 2(1) to capture statutory claims. Subsection (2)(b) mirrors s 20A(1)(b) of the Victorian Limitation of Actions Act, which was itself inserted in 1993. Mangoola drew attention to the legislative debates for s 20A which suggest that it was directed toward provisions which regulate independently of existing rights to a refund of tax, without creating a statutory right to refund. An example was said to be s 90AA of the Land Tax Act 1958 (Vic), considered by Sloss J in ACN 005 057 349; see also Royal Insurance and Commissioner of State Revenue (Vic) v ACN 005 057 349 Pty Ltd (2017) 261 CLR 509; [2017] HCA 6 at [72], [87]. The submission was put orally as follows: [Section 2(2)(b) of the Recovery of Imposts Act] is perfectly capable of being directed, as the Victorian one is directed, to a right that exists independently but is regulated by statute. That's what s 90AA of the Land Tax Act did and that if there's a disconformity it exists in the Victorian provision. My point is not only does the Victorian provision, which is only about common law claims, show that it's not necessarily a disconformity, but the fact that the New South Wales one has come along two years afterwards leads to an inference that it is serving the same purpose. … [T]he only point I'm seeking to make is that the point that … s 2(2)(b) undermines my argument, is not so because there is no difficulty with a provision like s 2(2)(b) co-existing with s 2(1) on the basis that s 2(1) is only about common law claims. That's the submission.

[16]

Fifth reason - consequences justified a narrow construction

Mangoola observed that, if the primary judge's construction was correct, then "s 2 would have the effect of depriving Mangoola of any right to claim back overpaid rates because it did not bring its action within 12 months of paying the rates, notwithstanding that it was not established that it had made any overpayment until the Consent Orders were made on 15 September 2021, some four years after the first payments were made". That is because the gist of Mangoola's cause of action under s 674 was not the payment of charges, but rather the failure of the Council to act under s 527 to make adjustments, an action that could not occur until after 15 September 2021 when it was established that Mangoola had made overpayments. This was said to result in a "manifestly unfair" operation of the provision, which therefore favoured adopting Mangoola's narrower construction: see Royal Insurance at 64, 99.

[17]

Consideration

Mangoola's written and oral submissions were advanced thoughtfully and effectively. Yet I remain unpersuaded.
Mangoola's first point accords with the settled principle of construction that all words in a statute should be given work to do: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [71]. But I do not accept the submission that reading "recoverable on restitutionary grounds" as extending to Mangoola's statutory right to an adjustment leaves those words with no work to do. There is a much more natural dichotomy which those words invoke, namely, the difference between payments sought to be recovered because they were overpaid, and payments sought to be recovered in order to compensate for loss caused by breach of a contractual, tortious or statutory duty. For it is not difficult to think of other bases upon which a plaintiff might seek to recover rates from a council. It might be alleged that a council negligently stated that the land would not be recategorised in the next five years, which induced a purchaser to buy the land, in which case a component of the damages sought by the purchaser might include the rates actually paid. Or it might be alleged that the council had promised that rates would be calculated in a particular fashion (such as the promise alleged to have been given to the landowner in Peregrine Mineral Sands Pty Ltd v Wentworth Shire Council [2014] NSWCA 429 as to the valuation of its quarry upon which rates would be calculated, leading to proceedings for their recovery mentioned at [61] of that decision). Or a council's conduct in relation to rates might be alleged to be misleading and deceptive, entitling a plaintiff to damages under the Australian Consumer Law based on the rates actually paid (for example, part of the relief sought in the Peregrine Mineral Sands litigation was statutory damages "equivalent to the excess of rates levied to what had been promised": see Wentworth Shire Council v Bemax Resources Ltd [2013] NSWSC 1047; 278 FLR 264 at [5]). None of those actions would engage s 2(1), because the basis of the claim to recover rates was to compensate the plaintiff for loss suffered by reason of the council's breach of tortious or contractual duty, or from the contravention of the prohibition against misleading or deceptive conduct, rather than on restitutionary grounds. The examples demonstrate that the words "recoverable on restitutionary grounds" have work to do even if they extend to all claims for overpaid rates.

[18]

Ground 2 - proceedings to "recover" an amount

This ground alleged that, contrary to the reasoning of the primary judge, insofar as the proceedings sought a credit for overpaid rates (as opposed to a refund), there was no claim to "recover" an amount within the meaning of s 2(1), such that the Recovery of Imposts Act did not apply. Mangoola contended that, on its proper construction, a claim to "recover" must involve the payment of money.
In support of this discrete ground Mangoola pointed to two textual considerations. First, it directed attention to s 3(4) of the Recovery of Imposts Act, which provides: Subsection (2) does not apply to proceedings for the recovery of money that, assuming the legislation concerned had been valid, would have represented an overpayment of a tax, if the legislation provides for the refund of the money.
Mangoola submitted that "[t]he apparently interchangeable use of the concepts of 'recovery of money' and 'refund of money' suggests that 'recovery' as it is used in s 2(1) is concerned with proceedings designed to result in the payment of money".
Secondly, Mangoola directed attention to s 4(1) of the Recovery of Imposts Act, which provides: Proceedings referred to in section 2 or 3(4) to recover an amount paid are however maintainable only to the extent that the person bringing the proceedings (the claimant) satisfies the court that the claimant 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 of the amount paid. This applies whether or not any such amount has been itemised or otherwise separately identified in any invoice or other documentation. (Emphasis added.)
This was said to draw a distinction between the concepts of a "charge" and "recovery". The concept of a charge in s 4(1) - which accommodates obtaining an offset or credit from a third party - was said to support a reading of "recover" as confined to the narrower concept of the payment of money alone.
I do not accept Mangoola's submissions.
First, the purpose of the Recovery of Imposts Act would be frustrated if it prevented claims for a refund of overpaid tax, but did not extend to their economic equivalent (save as to timing), namely, proceedings to establish a credit, and that is contrary to s 33 of the Interpretation Act.

[19]

Conclusion on Recovery of Imposts Act

For those reasons, the primary judge correctly held that Mangoola's Class 4 proceeding was barred by the Recovery of Imposts Act. The appeal must be dismissed.

[20]

Inappropriate to determine whether Mangoola had a statutory right under the Local Government Act

The foregoing is premised on the assumption, favourable to Mangoola, that it enjoys a statutory right under the Local Government Act to a refund or credit of the overpaid rates. The primary judge decided this adversely to Mangoola, and Mangoola, necessarily, challenged that conclusion, and the challenge was fully argued.
Determination of whether Mangoola enjoyed a statutory right under the Local Government Act will not affect this Court's order. It is not necessary to resolve that issue; and for the reasons that follow, I have concluded that it is inappropriate to do so, in accordance with Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49 at [7]-[8] and [101].
At trial and in its written submissions in this Court, Mangoola's case was confined to an entitlement based on the obligation to make an "appropriate adjustment of rates" under s 527 of the Local Government Act. Section 546 was invoked merely by way of support, and not as an alternative basis for a refund or credit. The primary judge rejected this, for reasons with which I respectfully agree. His Honour relied upon the absence of any terminology for "refund" or "repayment" in s 527, in contrast with ss 593 and 594 which in terms imposed obligations on the Council ("must refund" and "are to be refunded"): at [64]. His Honour also relied upon the basal distinction between making a rate and levying a rate, the latter being effected by service of a notice under s 546, with his Honour observing at [66] that "[t]he simple point is that s 527 is not concerned with the recovery of unpaid rates which are payable, nor with any possible refund of overpaid rates". Finally, his Honour relied upon the dicta in Bayside, which his Honour considered to be correct, as do I.
That conclusion is reinforced by two further considerations. The first is that the liability to pay rates is a statutory charge on land, and is brought about by the service of a notice. The notice will enable a third party (such as a purchaser or secured lender) to determine the extent to which the land is charged. That is a further reason not to accept that an adjustment under s 527 without any service of a notice cannot affect a liability.
The second is that the ordinary meaning of s 527 accords with s 602 and the traditional obligation upon a council to maintain a record (what was previously called a "rate-book"). Once land has been recategorised, either by council decision or on appeal, then s 527 obliges the council to adjust its rate-book. The rate-book will itself be used to determine the notices which when created and served effect a liability to pay rates. This was perhaps clearer under the Local Government Act 1919 (NSW) (in what follows I have relied upon the 22 July 1991 reprint of Pt 7 of the 1919 Act). Section 142(1) provided that "Every rate shall be entered in a rate-book which shall be in the prescribed form". Pages from the rate-book could be tendered in enforcement proceedings, and were prima facie evidence of matters therein: ss 600, 621. Section 142(2) bears some resemblance to s 527 of the current Act. It provided: An alteration or amendment in the rate-book may be made in respect of any rate by - (a) inserting the name of any person claiming and entitled to have his name inserted as owner or as holder of a lease, as the case may be; (b) inserting the name of any person who ought to have been rated or who has since the making of the rate become liable to be rated; (c) striking out the name of any person who ought not to have been rated; (d) raising or reducing the sum at which any person has been rated, if it appears to the council that owing to any error in entering the rate in any rate notice or in the rate-book or in transcribing any figures from any valuation book the person has been under-rated or over-rated; (e) inserting any land which ought to have been rated and the necessary particulars in respect thereof; (f) making such other alterations or amendments as will make the rate conformable to this Act or to any ordinance.

[21]

Conclusion and orders

Mangoola's appeal must be dismissed for the reasons already given. However, there is another reason not hitherto elaborated which points to the same result.
As mentioned at the outset of these reasons, Mangoola did not seek to disturb the judgment in the Common Law proceeding. That judgment creates an estoppel that the Recovery of Imposts Act applies to all save the last of Mangoola's payments of rates. Section 5 of the Recovery of Imposts Act extinguishes "the right to recover the money". Section 7(2) provides that the Recovery of Imposts Act has effect despite the provisions of any other Act. If as Mangoola contends it had any right under the Local Government Act to recover rates paid, s 5 extinguishes that right. I see no reason for confining s 5 which speaks of "the right to recover the money" only to Mangoola's rights at common law to recover the money, and not to extend to such rights as Mangoola may have under the Local Government Act to recover the money. To the contrary, I see no reason to depart from the ordinary meaning of s 5, which looks to money ceasing to be recoverable because of some provision of the statute, and then holds that "the right" to recover that money is extinguished.
Although res judicata was mentioned during the hearing, the combination of res judicata and s 5 was not. Had anything turned upon this, I would have favoured permitting the parties to be heard further on the point. But because the appeal must be dismissed for other reasons, no useful purpose would be served by taking that course.
There is no reason for costs not to follow the event. I propose that in each proceeding this Court order "Appeal dismissed with costs".
PAYNE JA: I agree with Leeming JA.
MITCHELMORE JA: I agree with Leeming JA.

[22]

Amendments 15 April 2024 - replaced "133" by "1132" in case citation in [21] and coversheet

replaced "to" by "and" in [58], so it reads "between 30 November 1993 and 31 December 1995"
replaced "if" by "of" in the first quote in [68], so it reads "of any tax paid"
replaced "an amount" by "of any tax" in quote in [76]
replaced "Any" by "any" in point (f) of quote in [107]
replaced "s 132(h)" by "s 132(1)(h)" in [110] 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: 15 April 2024

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (22 paragraphs)

Parties

Legislation Cited (21)

Cases Cited (79)

Cited By (1)