Meriton Apartments Pty Ltd v Council of the City of Sydney

Baulkham Hills Shire Council v Wrights Road Pty Ltd (2007) 153 LGERA 219 CASES CITED: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Leerdam v Noori [2009] NSWCA 90 Trendlen Pty Ltd v Mobil Oil Australia Pty Ltd [2005] NSWSC 741

APPLICANT Mr D Russell, QC with Mr M Seymour SOLICITORS Mr D Grynberg of Meriton Apartments LEGAL REPRESENTATIVES: RESPONDENT Mr M J Leeming, SC SOLICITORS Ms L Byrne, City of Sydney

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40293 of 2009 Meriton Apartments Pty Ltd v Council of the City of Sydney

JUDGMENT Introduction 1 His Honour: The respondent Council has moved the court to summarily dismiss or strike out a substantial part of these proceedings, pursuant to any or all of Uniform Civil Procedure Rules 2005 (NSW) 13.4, 14.28 and/or 29.9. 2 The applicant company seeks, inter alia, to recover certain monies paid to the Council in respect of establishing "work zones" outside a building project known as "Mosaic" at the corner of Pitt & Campbell Streets, Sydney. The Council's attack is on the applicant's Points of Claim 2-5 and 7-8. (There are, in fact, 15 points of claim but two are numbered "7" and two "8"). 3 It is common ground that these disputed "Kerbside Usage Fees" (as they are called in Exhibit C1) were imposed by the Council in purported reliance on s 608 of the Local Government Act 1993 ("LG Act"), but the payments were made by Meriton "under protest", and the Council's power to require them is challenged in these proceedings. Council says (Exhibit C1) that they are designed to cover not only lost parking revenue, but also use of public space by private construction operators. 4 Council relies on the Recovery of Imposts Act 1963 ("the Imposts Act"), and the decision of the Court of Appeal in Baulkham Hills Shire Council v Wrights Road Pty Ltd (2007) 153 LGERA 219 ("Wrights Road"), and suggested to Meriton, after the present proceedings were commenced on 8 May 2009, that they should be reformulated (and reduced in their ambit) in light of that Act and that decision. The company has declined to do so. 5 Council has declined to respond to the arguments put to it in Meriton's letters dated 13 April 2007, 23 May 2007, and 25 June 2009 (see annexure 'D' to Louise Byrne's affidavit of 3 July 2009, and Exhibit M1). Accordingly, Meriton submits that Council should not be allowed to have any claims struck out without Meriton having the opportunity to put its arguments fully to the court. That argument is inadequately met, in my view, by Mr Leeming's submission that Meriton's letters did not call for a reply, as Council's position was adequately explained in its letter of 17 April 2007 (Exhibit C1), and Meriton's letters were "letters of demand", threatening these proceedings, which it then took two years to commence. The Imposts Act 6 The Imposts Act's long title is: " 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 therewith". 7 Section 1A contains definitions, including the following: "'tax' includes a fee, charge or other impost. 'pay' a tax includes recover the tax by legal proceedings. 'proceedings' includes proceedings for an order in the nature of prohibition, certiorari or mandamus or for a declaration or injunction or for any other relief." . 8 Section 2(1) relevantly provides: " 2 Limitation on time for the bringing of proceedings to recover taxes (1) No proceedings 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 paid by way of tax or purported tax and recoverable on restitutionary grounds (including but not limited to mistake of law or fact): (a) … (b) in the case of a payment made subsequent to the commencement of this Act, after the expiration of twelve months after the date of payment." 9 It is common ground that, pursuant to s 220 of the LG Act, the Council is a (statutory) corporation, but there is a dispute as to whether such corporations are caught by the Imposts Act. Meriton relies on a Hansard reference to the Act as applying only to "the Crown and its various agents" (Hon M R Egan MLC, Hansard 13.12.95, p 4769). It is, however, self-evident that these proceedings were not brought within the statutory twelve months of some relevant payments. 10 Section 5 of the Imposts Act provides: "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. " 11 Section 7 provides: "7 Application (1) This Act applies to money paid whether voluntarily or under compulsion, and applies whether or not the payment was made under protest, and applies whether or not the payment was made under the authority or purported authority of any Act. (2) This Act has effect despite the provisions of any other Act. (3) The amendments made to this Act by the Limitation of Actions (Recovery of Imposts) Amendment Act 1993 apply to money paid, and proceedings commenced, whether before or after the commencement of that Act. (4) Sections 1A and 2 (1)-(3) of this Act as amended by the Limitation of Actions (Recovery of Imposts) Amendment Act 1993 have effect for all purposes, and are taken always to have had effect for all purposes, as from the commencement of this Act." 12 The Council submits that the terms of the Act are strong and unqualified, so as to give "certainty in the revenue" (T13, L41), and that the points of claim of which Council complains clearly offend them. 13 Meriton submits that its claim is wider, and that while declarations as to liability to pay imposts are caught by the Imposts Act, declarations that certain imposts are unlawful are not. The Wrights Road case 14 In Wrights Road the developer was obliged by conditions of development consent to make monetary "contributions", pursuant to s 94 of the Environmental Planning and Assessment Act 1979. Part of the contribution regime was later held to be invalid, and the developer sought a refund of the affected part of its contributions. 15 The District Court held that a contribution under s 94 was not a "tax" within the wide definition in the Imposts Act, and so not affected by the limitations of ss 2 and 5 of that Act. 16 In the Court of Appeal, Spigelman CJ (with whom McColl JA and Gzell J agreed, without elaboration) overturned the District Court's decision and dismissed the proceedings as "time barred" by the Imposts Act. His Honour said:

"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 … 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. ..." 17 Meriton argues (1) that the Wrights Road decision should not simply be followed in this case, as the application of the Imposts Act to Councils was not argued, and that question has not been authoritatively decided (see Trendlen Pty Ltd v Mobil Oil Australia Pty Ltd [2005] NSWSC 741 at [21]), and (2) that the authority of the Court of Appeal's decision should be confined to s 94 contributions, in any event. Local Government Act s 608 18 Section 608 falls within Part 10 of the LG Act, which covers "fees". It allows Councils to "charge and recover" approved fees for a wide variety of "services" they provide, with an emphasis (in sub-sections (3)-(7)) on inspections Councils carry out for various purposes. Council includes its "works zone" charges in schedules of "fees and charges" approved, adopted and published annually. 19 Meriton does not submit that there is any element of "fraud" or "impropriety" in the setting and levying of the subject fees by Council. However, it argues in its correspondence with Council, and wishes to argue in this case, that Council has not complied with detailed requirements or tests concerning any determination of such charges, as laid down, for example, by s 610D of the LG Act. 20 Council, on the other hand, points out that s 610D(2) makes clear that the cost to Council of "providing [the] service … need not be the only basis for determining" the fee charged. 21 Meriton further argues that no "service" is provided by Council in response to the payment of these fees, that they are in the nature of a "rent" for parking spaces, and that their amount is excessive and unreasonable, in terms the benefit the builder derives from being allowed - pursuant to a condition of consent which envisages an appropriate application - to use the public streets to load and unload its construction vehicles. Consideration 22 It is now common ground that UPCR 13.4 confers on the court the power to strike out or summarily dismiss any part of this claim. 23 However, the power should be "sparingly employed", and only where it is clear that the case put is "manifestly groundless" and "cannot possibly succeed". General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, at 129; Leerdam v Noori [2009] NSWCA 90, at [75]-[77]. 24 I am satisfied that all the claims made, and the submissions put, by Meriton, briefly summarised above, are at least reasonably arguable, and not clearly "doomed to fail". 25 I should, therefore, not prejudge Council's arguments in response, at this preliminary stage. Orders

1. The Council's Amended Notice of Motion is dismissed.
2. Costs to be the parties' costs in the cause.
3. As ordered by Biscoe J on 11 September, the substantive matter stands adjourned to the List Judge's list on Friday 2 October 2009 for further directions.
4. The exhibits may be returned.

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