[2025] VSC 586
General information, not legal advice.
Supreme Court of Victoria
2025-09-17
Stynes J
Original judgment source is linked above.
RESTITUTION - Claim for monies had and received - Whether roaming fees withheld under contract exceeded statutory cap.
TOLL ROADS - Interoperability - Roaming fees - Link roaming service - Net incremental marginal cost - Whether roaming fee withheld under contract exceeded net incremental marginal cost of providing Link roaming service - Melbourne City Link Act 1995, , .
INVALIDITY - Statutory interpretation - Inconsistency - Void to the extent of the inconsistency - Whether agreement providing for the imposition of roaming fees is void - Melbourne City Link Act 1995, s 93AB(2).
(a) $7,610,133 in the financial year ending 30 June 2015;
(b) $8,909,146 in the financial year ending 30 June 2017;
(c) $10,042,160 in the financial year ending 30 June 2019; and
(d) $9,561,348 in the financial year ending 30 June 2020,
(a) any application by summons for orders consequent on paragraph 5 of the Order made on 14 February 2025; > > (b) accompanying points of claim; and > > (c) any submissions and evidence in support of the application, including, but not limited to, the extent to which the remainder of the Tag Roaming Agreement and the Video Roaming Agreement is void, if at all, and the quantum of any amounts due and payable by the Plaintiff to the Defendant by reason of the invalidity of part or all of those agreements.
(a) a declaration that each of the Roaming Agreements was void in its entirety during each of the Relevant Years;
(b) in the alternative, that the Discount Amount in each Roaming Agreement was void to the extent that it exceeded the legislative cap;
(c) an order that ConnectEast pay to CML a sum comprising:
(i) The total amount retained by ConnectEast under the Roaming Agreements in the Relevant Years (the 'Retained Amount').
(ii) In the alternative the amount retained by ConnectEast that was in excess of the NIMC to CML in each of the Relevant Years (the 'Aggregate Excess').
(a) By force of s 93AB(2) of the MCL Act and consequent on the Declaration, the Discount Amount is void in each of the Relevant Years.
(b) By reason of the Discount Amount being void in each of the Relevant Years, there was no consideration for the reciprocal roaming services provided, and each of the Roaming Agreements was void in its entirety for the duration of each of the Relevant Years.
(c) By reason of the Roaming Agreements being void in their entirety during each of the Relevant Years, ConnectEast had no legal entitlement to retain any purported Discount Amount during any of those years.
(d) The Retained Amount comprises money had and received to which ConnectEast has no title and/or legal entitlement to retain.
(e) In the alternative, by force of s 93AB(2) of the MCL Act and consequent on the Declaration, the Discount Amount is void in each of the Relevant Years, only to the extent that it exceeded the legislative cap imposed by s 93AB(1), such that a reciprocal Discount Amount equal to the amount that represents the NIMC was to be withheld as consideration for the roaming service that each operator provided to the other operator. Therefore ConnectEast had no legal entitlement to retain the Aggregate Excess.
(a) The effect of s 93AB(2) of the MCL on the Roaming Agreements is that the fee imposed by CML on ConnectEast under the Roaming Agreements (CML's Discount Amount) is void to the extent it exceeds the amount that represents the NIMC to CML of providing the Link roaming service (CML's NIMC).
(b) Further, insofar as any claim is made in respect of any part of the Retained Amount or the Aggregate Excess that was retained by ConnectEast on or before 7 April 2019:
(i) The alleged causes of action accrued on the date of retention of the relevant amount.
(ii) Six years have elapsed since such retention.
(iii) Those claims are (and each of them is) statute barred by operation of s 5(1)(a) of the Limitation of Actions Act 1958 (Vic).
(a) Issue 1: What is the effect of s 93AB(2) of the MCL Act on the Roaming Agreements?
(b) Issue 2: Is the claim made by CML in respect of any part of the Retained Amount or the Aggregate Excess that was retained by ConnectEast a claim in the proceeding by way of counterclaim for the purposes of s 30 of the Limitation of Actions Act 1958 (Vic) such that the claim is deemed to have been commenced on the same date as ConnectEast's action, being 23 November 2020?
B Issue 1: What is the effect of s 93AB(2) of the MCL Act on the Roaming Agreements?
Roaming fees > > (1) For the duration of the concession period (within the meaning of the Agreement) or the concession period (within the meaning of the EastLink Agreement) whichever expires first, the fee or charge that may be imposed by [CML] on [ConnectEast] under a Link roaming agreement for the provision of a Link roaming service must not exceed the amount that represents the net incremental marginal cost to [CML] of providing that Link roaming service. > > (2) Any agreement or arrangement existing on or after the commencement day that is inconsistent with subsection (1) is void to the extent of the inconsistency.
B.2 Relevant provisions of the Roaming Agreements
(a) In consideration for reimbursement by the Home Operator in accordance with clause 8, the Foreign Operator agrees to allow a Motorist to use an External Tag to satisfy the Toll (and any Fees) in respect of a Trip on the Foreign Operator's Toll Road.
(a) Section 93AB(2) requires identification of the inconsistency in the agreement, not the outcome. This was not disputed by ConnectEast.
(b) The task of identifying the extent of the inconsistency should be undertaken in a common sense way, having regard to the fact that one purpose of the exercise is to identify parts of the agreement that will remain after the avoidance and in a way that doesn't create, by the exercise of avoidance, an agreement of a different type to the agreement that the parties created.
(c) The "extent" of the inconsistency encompasses all that is inseparable from it in the agreement, that is, logically or structurally inseparable from it.
(d) Identification of the extent of the inconsistency should, to the extent possible, be done in a way that does not produce an agreement of a type that the parties, objectively, did not intend to make. The resulting agreement should still have some operation and one that, to the extent possible, doesn't depart radically from the intention of the parties who made it.
(e) The whole of cll 8.6 and 9.6 should be rendered void for the reasons addressed in submissions including, in summary:
(i) Each Roaming Agreement provides for a single (reciprocal) Discount Amount.
(ii) ConnectEast and CML are both Home Operator and Foreign Operator for the purposes of the Roaming Agreements.
(iii) The Roaming Agreements have been structured as a single regime that applies to Home Operators and Foreign Operators. The parties could have chosen to structure the agreement as Operator A agreeing to provide a service to Operator B and vice versa, but they did not.
(iv) In this single regime, the Discount Amount is the agreed consideration for the provision of the roaming service by a Home Operator to a Foreign Operator. The Discount Amount can change as a result of a price review, but the outcome of such a price review can only be a single Discount Amount. It cannot be different discount amounts applying to the two parties. It is a single inseparable Discount Amount. That is, the Discount Amount payable by CML is inseparable in the Roaming Agreements from that payable by ConnectEast. That feature is fundamental to the structure of the Roaming Agreements and agreed at a time the parties were aware of the legislative cap imposed by s 93AB(1).
(v) The Court should not alter the reciprocal Discount Amount, because that would involve re-writing the parties' bargain.
(vi) There is not some part of the Discount Amount Clauses that provides for a charge that is consistent with the legislative cap, so the only way of avoiding part of the agreement for the purpose of s 93AB(2) is to avoid the whole of those clauses.
(vii) Because the payment of consideration for the roaming service lies at the heart of each Roaming Agreement, it follows from the invalidity of those clauses that each Roaming Agreement is void in its entirety, during any period in which the Discount Amount exceeded the NIMC.
(a) Section 93AB(2) of the MCL Act provides for each Roaming Agreement to be void to the extent of the inconsistency, not for the agreements to be modified to side-step, or avoid, such inconsistency. Therefore, on its terms, s 93AB(2) does not provide for adjustment of the Discount Amount, nor does it provide for the Roaming Agreements to be re-written to differentiate between the respective rights of ConnectEast and CML to payment of consideration. Significantly, s 93AB(2) of the MCL Act does not operate in respect of a clause or provision of a contract but rather it voids any "agreement or arrangement" to the extent of the inconsistency with the s 93AB(1) of the MCL Act.
(b) It is important to note that the MCL Act does not require ConnectEast or CML to provide any roaming services to each other. Interoperable arrangements are dependent on road operators entering into roaming agreements. The statutory context underscores the point that questions of invalidity must be resolved by applying s 93AB(2) to the terms of the actual commercial agreements that the parties entered into.
(c) CML submits that the purpose of the MCL Act was to impose a "one way" statutory cap, because it was concerned not to allow CML to effectively pass some of its own costs on to ConnectEast.[3] However, the fact that the cap applies only to CML is not determinative of the question of what it means for each of the Roaming Agreements to be void to the extent of the inconsistency. In this case the parties were aware that a statutory cap applied only to CML, but the parties opted for a single Discount Amount. Having done so, that drafting choice must necessarily inform the extent to which the Roaming Agreements are void.
(a) the question before the Court is about the construction and application of a statutory provision, it is not a question of common law severance;
(b) a central feature of the provision is the qualification, "to the extent of";[4]
(c) the provision does not prohibit the making of contracts;
(d) differential application of legislation to parties is commonly seen;[5] and
(e) the question for the Court is what should happen when a provision speaks to one party only.[6]
(a) The question of whether a contract prohibited by statute is void is a question of statutory construction.[7]
(b) Many statutes produce the consequence that making or performing a contract is illegal for one party but not for the other. When that occurs, the result is not necessarily general unenforceability of the contract.[8]
(c) Whether or not a statute that contains a unilateral prohibition on entry into a contract has the effect of vitiating that contract depends upon the mischief which the statute is designed to prevent, its language, scope and purpose, the consequences for the innocent party, and any other relevant considerations. Ultimately, the question is one of statutory construction.[9]
(a) The process of statutory construction starts with the actual text of the statute. The text, however, is to be considered in light of the context and purpose of the statute or particular provision.[10]
(b) Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text.[11]
(c) The context includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.[12]
(d) Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials.[13]
(a) an existing agreement or arrangement; and
(b) that the agreement or arrangement is inconsistent with s 93AB(1).
(a) There is no statutory obligation imposed on toll road operators to provide interoperability. Interoperability is implemented pursuant to roaming agreements between toll road operators. However, statutory obligations are imposed on CML in relation to interoperability with respect to ConnectEast under the MCL Act.
(b) The MCL Act is an extensive statute, the main purposes of which are:
(i) to ratify the agreement for the Melbourne City Link Project;
(ii) to give the Link corporation (defined to be CML) certain powers in relation to certain roads; and
(iii) to empower the fixing, charging and collection of tolls in relation to the use of vehicles on toll zones.
(c) In 2007, the Road Legislation Amendment Act 2007 (Vic) ('Amendment Act') introduced Division 5 into Part 4 of the MCL Act. The division came into effect on 1 January 2009.
(d) One of the express purposes of the Amendment Act was to amend the MCL Act to limit the roaming fee that may be charged by CML for providing a roaming service in relation to the use of EastLink.
(e) It was common ground that:
(i) The purpose of Division 5 of Part 4 of the MCL Act, specifically s 93AB is to facilitate interoperability between ConnectEast and CML, by ensuring that CML is able to recover its additional costs of providing the Link roaming service, but limiting the roaming fee that may be charged by CML by imposing a statutory cap. In the second reading speech for the Amendment Bill, the Minister explained:
This amendment reflects the commercial reality that the interoperable arrangements will only be effective once EastLink and CityLink enter into an agreement regarding interoperability. A standard provision in an interoperable arrangement, often called a roaming agreement, is for the payment of a fee called the roaming fee. This fee is not payable by the customers of toll roads but is paid by one toll road operator to another. It represents reimbursement primarily for the cost and effort involved in collecting tolls from its own customers on behalf of another toll road operator.
In order to ensure that CityLink is reimbursed for the fair cost of upgrading its systems to provide for interoperability, the Melbourne City Link Act 1995 will be amended to provide that the roaming fee recoverable by CityLink from EastLink (for the use of EastLink by CityLink account customers) must not exceed the net incremental marginal cost of providing that service. The bill assists in the determination of the roaming fee by enabling the Secretary of the Department of Infrastructure to publish guidelines in the Government Gazette to facilitate the calculation of the net incremental marginal cost. If guidelines are not published, the concessionaires for EastLink and CityLink may simply agree on a roaming fee that does not exceed the net incremental marginal cost.[15]
(ii) The mischief to be addressed by the statutory cap imposed by s 93AB(1) was identified in the Explanatory Memorandum for the Road Legislation Amendment Bill 2007 as follows:
Once an interoperability agreement, usually called a "roaming agreement", is entered into between the tollway operators of EastLink and CityLink, those operators will not be able to directly bill the customers of the other operator for the use of their own toll road. Instead, they recover tolls and fees from the other operator who in turn charges those tolls and fees to their own customers. A fee, usually called the "roaming fee", is charged by each tollway operator to the other for the service of collecting toll revenue from its customers and remitting that revenue to the other operator.
Initially the "roaming fee" will have a disproportionate impact on the operator of EastLink, as CityLink has been in operation for many years and will have a significant customer base when EastLink commences operation. ...The State is committed to ensuring that the roaming fee will permit the operator of CityLink to recover its additional costs in providing the interoperable roaming service to its customers but without allowing City Link to effectively pass some of its CityLink costs on to the operator of EastLink.[16]
(a) the reciprocal nature of the Discount Amount;
(b) the reciprocal nature of the roaming service; and
(c) the single Discount Amount that is central to the bargain struck between the parties.
C Issue 2: Has CML made a claim in the proceeding by way of counterclaim for the purposes of s 30 of the Limitation of Actions Act 1958 (Vic)?
(a) s 5(1)(a) of the Limitation of Actions Act 1958 (Vic) limits CML's action to six years from the date on which the cause of action accrued;
(b) if CML succeeds in Issue 1 to establish a failure of consideration, then the consideration failed on each occasion that ConnectEast retained the relevant Discount Amount;
(c) CML's claim is not a counterclaim; and
(d) consequently, CML's claim is statute barred in the period prior to 7 April 2019.
[1] ConnectEast Pty Ltd v CityLink Melbourne Limited (No 2) [2024] VSC 788 ('Reasons').
[3] Transcript of Proceedings, ConnectEast Pty Ltd v CityLink Melbourne Limited (Supreme Court of Victoria, Stynes J, 18 June 2025) 23 (S Lawrance SC) ('Transcript').
[4] Melbourne City Link Act 1995 (Vic), s 93AB(2) ('MCL Act').
[5] Australian Competition and Consumer Commission v Baxter Healthcare (2007) 232 CLR 1, 28 [44] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ) ('Baxter Healthcare').
[7] Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd [1978] HCA 42; (1978) 139 CLR 410, 423 (Mason J); SST Consulting Services Pty Ltd v Rieson [2006] HCA 31; (2006) 225 CLR 516, 532 [49], 533 [52] (Gleeson CJ, Gummow, Hayne, Heydon, and Crennan JJ); Master Education Services Pty Ltd v Ketchell [2008] HCA 38; (2008) 236 CLR 101, 107 [11] (Gummow A-CJ, Kirby, Hayne, Crennan and Kiefel JJ) ('Master Education'); Gnych v Polish Club Ltd [2015] HCA 23; (2015) 255 CLR 414, 425 [36]-[39] (French CJ, Kiefel, Keane and Nettle JJ) ('Gnych').
[8] Baxter Healthcare, 37 [70] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ); Master Education, 109 [16] (Gummow A-CJ, Kirby, Hayne, Crennan and Kiefel JJ).
[9] Baxter Healthcare, 29 [46] (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ); Gnych, 426-7 [45] (French CJ, Kiefel, Keane and Nettle JJ).
[10] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, 46-7 [47] (Hayne, Heydon, Crennan and Kiefel JJ) ('Alcan').
[11] Alcan, 46-7 [47] (Hayne, Heydon, Crennan and Kiefel JJ).
[12] Alcan, 46-7 [47] (Hayne, Heydon, Crennan and Kiefel JJ); Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378, 389-90 [24]-[25] (French CJ and Hayne J) ('Certain Lloyd's Underwriters').
[13] Certain Lloyd's Underwriters, 389-90 [24]-[25] (French CJ and Hayne J).
[14] National Acceptance Corporation Pty Ltd v Benson (1988) 12 NSWLR 213, 214 (Kirby P).
[15] Victoria, Parliamentary Debates, Legislative Council, 19 April 2007, 918 (Jon Lenders, Minister for Education).
[16] Explanatory Memorandum, Road Legislation Amendment Bill 2007 (Vic) 6.
ConnectEast Pty Ltd
CityLink Melbourne Limited
(2007) 232 CLR 1
(1978) 139 CLR 410
(2006) 225 CLR 516
(2008) 236 CLR 101
(2015) 255 CLR 414
(2009) 239 CLR 27
(2012) 248 CLR 378
(1988) 12 NSWLR 213