Nash Bros Builders Pty Ltd v Riverina Water County Council

The Applicants Seek Leave to Join an Additional Party and to Amend their Further Amended Summons 1The applicants, Nash Bros Builders Pty Ltd ("NBB") and Nash Bros Construction Pty Ltd ("NBC"), apply for leave to amend their Further Amended Summons and their points of claim. The purpose of the amendments is to add Grange Lifestyle Village ("Grange") as a third applicant to the proceedings and to add a claim by Grange for repayment of $107,159, and to plead the additional matters necessary to establish this claim. 2The application was made on the second day of a two day hearing after evidence was elicited in cross-examination from Mr Chris Nash, a witness appearing for the applicants. In order to ensure that the hearing finished in the time allocated, the Court dismissed the application with a promise to publish its reasons at a later date, which it now does.

Background to Application 3The proceedings concern a challenge to the respondent's, Riverina Water County Council ("Riverina"), lawful authority to charge the applicants development servicing charges in connection with the supply of water to Grange Retirement Village, a seniors' living residential development at Lake Albert, a suburb of Wagga Wagga. 4Development consent was obtained from Wagga Wagga City Council on 21 July 2008 and was subsequently modified. The consent now provides for the development of 196 detached residential dwellings, 63 assisted living units and a community centre. 5The applicants have acted for the owner of the land (Grange, a trustee of a unit trust) in obtaining the approvals necessary for the development and in carrying out the development, including its construction, since April 2009. 6Upon the construction of the dwellings, units and community centre in the Grange Retirement Village, the buildings are to be connected to a water supply. Riverina is the provider of that water supply. It builds and owns the water supply infrastructure and installs and activates the connection between the water supply works and the development. 7The applicants initially agreed to pay the development servicing charges and connection fees associated with the provision of water by Riverina to the development as individual residences were constructed and that works on the water extension and connections would commence upon payment of 50% of the costs of that work. As a consequence, Riverina issued invoices to the second applicant, NBC, which included amounts described as "development servicing charges". 8These invoices were paid by the applicants without complaint until mid July 2013, whereupon Mr Chris Nash contacted Ms Tamarin Langley at Riverina and expressed concern about the amount of the increase in the charges in the July 2013 invoice. The increase was due to Riverina no longer applying a commercial development discount to the development. The discount had been applied previously in error by Riverina. 9On 26 September 2013 solicitors acting for the applicants wrote to Riverina objecting to the payment of the development servicing charges and asserting that Riverina had no legal basis for requiring payment of the charges. Thereafter the payment by the applicants of development servicing charges were said by the applicants to be made "under protest and without prejudice". 10The applicants commenced proceedings on 23 January 2014, seeking a declaration that Riverina had no statutory power to charge the applicants development servicing charges in relation to the development of the Grange Retirement Village and an order that Riverina repay to the first applicant, NBB, an amount of $127,234, being development servicing charges paid by NBB to Riverina. 11Proceedings were also commenced by NBB in the Supreme Court of New South Wales on 10 April 2014. However, the Supreme Court made an order transferring those proceedings to this Court pursuant to s 149B(2) of the Civil Procedure Act 2005 ("the CPA"), to be heard and determined together with these proceedings. 12Riverina contends that the proceedings should be dismissed because it has the statutory power to charge the applicants development servicing charges conferred either by s 608 of the Local Government Act 1993 or s 306 of the Water Management Act 2000. 13With respect to the order for repayment of the amount referred to above, Riverina asserts that it should not be made because, in addition to the argument that Riverina was entitled, by statute, to charge and receive payment for development servicing charges: the applicants have received a material benefit in consideration of the payments that they have made to Riverina, namely, the benefit of water supplied to the development; Riverina has not been unjustly enriched, so that it would be inequitable to require repayment to the applicants; and the applicants have not discharged their onus of establishing that they have not passed on the charges to other persons (in which case, s 4 of the Recovery of Imposts Act 1963 provides a defence to the claim for repayment), or in the alternative, that the payments were made under compulsion or colour of office so as to enliven any right of recovery or restitution of the payments. 14In Mr Chris Nash's affidavit affirmed 20 May 2014, he stated (at paragraph 41): Nash Bros has not passed on the costs of the development servicing charges to the purchasers of villas. The price for the villas in the development is determined by the market and Nash Bros has no ability to increase the price of villas to pass on the development servicing charges to purchasers. 15The clear inference sought to be projected by this testimony was that NBB was out of pocket by reason of payment of the development servicing charges and that they had not passed on the charges to any other person. 16However, during the course of Mr Nash's cross-examination he revealed that the applicants had been completely reimbursed by Grange for all of the invoices it had paid to date in respect of the development servicing charges. That is to say, the applicants had passed on the charges to another person, namely, Grange. 17This evidence was plainly problematic for the applicants insofar as it engaged s 4 of the Recovery of Imposts Act and provided a complete defence to Riverina for the claim for repayment. 18The applicants submitted that the evidence solicited in cross-examination of Mr Nash established that in carrying out the development, including in making payments to Riverina, the applicants acted on behalf of, and as agent for, Grange and that Grange reimbursed the applicants for the payments made in respect of the development servicing charges. The applicants submitted that it is clear law that a principal may recover money paid by its agent (in these circumstances, the applicants) where, had the principal paid money, the principal would be entitled to recover the money in an action for money had and received. Accordingly, subject to Grange establishing that it has not passed on the cost of the development servicing charges to consumers, Grange is entitled to recover the amounts paid to Riverina within 12 months of the date of the proposed amendment to the Further Amended Summons. The applicants further submitted that the evidence of Mr Nash elicited in cross-examination and re-examination supported the proposition that Grange had not, and could not, pass on the cost of the development servicing charges to its ultimate customers. 19It is in these circumstances that Grange is sought to be added as the third applicant to the proceedings, together with a claim that Grange be permitted to recover the amount of the development servicing charges paid by NBB in the last twelve months prior to 3 September 2014 (the date of filing the Second Further Amended Summons).