The benefit to which the customer bargained was the benefit of being discharged from what it is supposed was its legal liability to pay the grossing-up amount. But, in the events which occurred, Section 261 of the Income Tax Assessment Act 1936 rendered void the banks attempt to pass on the withholding tax liability to the customer. Therefore, the state of affairs or reason for the customer's payment of the grossing-up amount did not exist and the customer did not receive the benefit to which it bargained.[33]

1. That is different to where the parties freely and openly negotiate what elements will lawfully comprise the overall consideration to be paid by one party to the other.
2. Here the payment of outgoings is part of the consideration paid by RFC. Its use of the Premises has no doubt contributed to the gross amount of those outgoings, at least in relation to payment of rates connected with the use of utilities. It has received a benefit in exchange for the payment of outgoings. For example, the services provided by the municipal authority or the providers of utilities, such as water and sewerage. That is a different situation to what occurred in David Securities and in Roxborough. In David Securities, the borrower got nothing in return for the payment of the grossing-up amount. In Roxborough, the retailer received nothing in return for payment of the tobacco licence fees.
3. In my opinion, the payment of outgoings is analogous to the payment of rent, in that it has a direct connection with the use and occupation of the Premises. In my view, The Dog Depot applies in respect of the payment of outgoings. Good consideration was received for the money paid in respect of outgoings. That being the case, it would be unconscionable or unfair to allow RFC to be repaid moneys in respect of outgoings.
4. Therefore, and having regard to the authorities cited above, the claim for money had and received, in so far as it relates to outgoings, must fail.

1. The position is, however, different in relation to the payment of land tax. There is a disconnect between the benefit enjoyed by the tenant and imposition of the land tax. It represents a cost that is not immediately connected with the tenant's use of the land but rather, it is connected to the landlord's capital wealth. In that sense, the term of the lease, now rendered void by the introduction of the RLA represents a situation closer aligned with what occurred in David Securities and in Roxborough. In particular, the tenant gets nothing in return for the payment of land tax. In my view, the payment of land tax is a severable component of the total consideration paid and is recoverable as money had and received.
2. A further distinguishing aspect of the claim, as it relates to land tax is that the offending provision in The Dog Depot stated that rent was not payable until the disclosure statement was furnished. In other words, there was no entitlement to claim rent under the lease until a statutory precondition had been met. It still remained a contractual obligation, albeit that the term was unenforceable until a disclosure statement was furnished. In my view, that is different to where the legislature makes a provision in the lease void.
3. In the present case, the term of the lease requiring payment of land tax is deemed void. It is of no effect and is effectively excised from the lease, as if there never was a contractual obligation to reimburse land tax. It is as if the parties had never agreed that RFC was liable to reimburse the landlord for its land tax liability. That being the case, how can it be said that the payment of something for which there is no contractual obligation to pay represents good consideration. This proposition receives some support from the following passage of the judgement of Ashley J in The Dog Depot:

The principles which their Honours have applied mean, on one hand, that a landlord whose position was unmeritorious would not be able to raise a claim for an amount equivalent to unpaid rent, or retain such an amount if the same had been paid, when once a disclosure statement was supplied; or, on the other hand, that a tenant whose position was unmeritorious would have no liability to the landlord for an amount equivalent to unpaid rent after provision to it of a disclosure statement, or be able to recoup such an amount if it had been paid. By "unmeritorious" I do not refer to some idiosyncratic notion of what would be fair; but rather focus upon the question whether the tenant, in the period in respect of which there was no liability to pay rent, got what it had bargained to pay for, as reflected by the lease.[34]

1. The comments made by Ashley J have application to the present case. In particular, his Honour focused on what the parties had bargained for as reflected by the lease. Where a term in a lease is rendered void because it offends a statutory provision, that aspect of the bargain is effectively struck out. In those circumstances, it would be unmeritorious, in the sense explained by Ashley J, for the landlord to retain monies which the legislator has expressly prohibited the parties from agreeing to procure.
2. In my view, the consideration given by Verraty for the payment of land tax is severable. It is analogous to the imposition of the withholding tax in David Securities. There is no right nor can there be a right to require RFC to pay land tax owed by the landlord pursuant to the terms of the lease. That consideration fails and in my opinion, does not give rise to a defence to the restitutionary claim made by RFC.

1. Mr Best submitted that Verraty is entitled to compensation for the lost land tax under a counter-restitutionary claim for use and occupation. In his written submissions he makes reference to the judgement of Chernov JA in the The Dog Depot, where his Honour opines that s.8 of the Retail Tenancies Reform Act, which declared that the tenant was not liable to pay rent, did not obviate a counter-restitutionary claim. Mr Best submitted that the same proposition applies in respect of both sections 46 and 50 of the RLA.

In my view, there is no statutory prohibition against such a claim. It seems to me that, on its proper construction, s.8 of the Act is of a like character to that considered in Pavey, in that it merely renders the rent covenant void for the period in question. The section says nothing of the landlord's rights at common law to compensation for use and occupation of the premises, and a prohibition depriving the landlord of such compensation cannot be implied into it. If Parliament intended to achieve that result it would have said so in terms in that section as it did, for example, in s.11 in relation to "key-money" which specifically prohibits a lessor from, amongst other matters, retaining key-money that has been paid to it.[35]

1. I accept that a counter-restitutionary claim may arise in respect of rent and outgoings. As I have already indicated, payment of rent and outgoings comprise the quid pro quo of giving over use and occupation of the Premises. However, I do not accept that this same proposition applies to the payment of land tax.
2. In my view, a counter-restitutionary claim cannot succeed in circumstances where no consideration is given for the payment. As in the case of David Securities, it was of no consequence that the bank would have charged a higher interest rate but for the existence of the payment of the withholding tax. Similarly, it is of no consequence that Verraty might have sought to negotiate a higher base rent but for the fact that RFC had agreed to reimburse it in respect of its land tax liability. At its core the counter-restitutionary claim rests on principles of unjust enrichment. In my opinion, it cannot be said that RFC has been unjustly enriched by not having to pay Verraty's land tax in circumstances where it never had an obligation to do so.
3. In my opinion, the counter-restitutionary claim must therefore fail.

1. Mr Best submitted, as a further line of defence, that the action brought by RFC, or at least a part of it, is statute barred. He made reference to ss.5 (1)(a) and 5(8) of the Limitation of Actions Act 1958 which provides:

(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued -

Subject to subsections (1AA), (1AA) and (1A), actions founded on simple contract (including contract implied in law) or actions founded on tort including actions for damages for breach of a statutory duty.

(8) This section shall not apply to any claim for specific performance of contract or for an injunction or for other equitable relief, except in so far as any provision thereof may be applied by the Court by analogy in like manner as an enactment corresponding to that provision was applied before the repeal of that enactment by the Limitation of Actions Act 1955.

1. Mr Best submitted that insofar as the claim for moneys had and received is a claim in restitution, s.5(1)(a) would apply as a consequence of s.5(8). Mr Northrop did not contest that proposition.
2. Mr Best further submitted that the cause of action for recovery of moneys paid under a mistake of law accrues on the date of payment. He referred to the judgement of Brennan J in David Securities:

If under a mistake, money is paid to and unjustly enriches a payee, the payers right to recover the money paid accrues at the moment when the payee received the money.[36]

1. Again, Mr Northrop did not contest that proposition. Consequently, Mr Best submitted that the six-year period began to run on the day of each payment.
2. This proceeding was filed in the Tribunal on 29 October 2010. According to Mr Stahl, the only land tax payment made by RFC outside the six-year period was a payment made on 1 April 2004 for $18,355. All other payments were made within the six-year limitation period.
3. Accordingly, in the absence of any contrary argument, I accept the submissions made by Mr Best and find that the claim for money had and received is statute barred in so far as it relates to the first payment of land tax made on 1 April 2004.
4. Therefore, I find that Verraty is obligated to repay RFC $125,320 being money had and received in respect of land tax mistakenly paid by RFC after 29 October 2004.

[1] Redfern and Cassidy Australian Tenancy Practice and Precedents at [18.05]; Croft & Hay Retail Leases Victoria at [30,025]; Woodfall Landlord and Tenant at [17.026]; Re Saville Settled Estates; Saville v Saville [1931] 2 Ch 210 at 217; Pascoe-Webbe v Nusuana Pty Ltd (1985) 3 BPR 9620 at 9622

[2] Re Saville Settled Estates; Saville v Saville [1931] 2 Ch 210

[6] [1993] AC 552 at 565

[7] Witness statement of Mario Abbotto dated 25 August 2011 at paragraph 33

[8] [1999] VSC 110

[10] [1986] HCA 14; (1986) 160 CLR 226

[12] (1995) ANZ ConvR 436

[14] [2006] VCAT 2299 at paragraph [144]

[15] [2004] VCAT 1450 at (62]

[16] Witness statement of Michael Stahl dated 4 August 2011 at paragraph 8

[17] Witness statement of Michael Stahl dated 4 August 2011 at paragraph 10

[18] Witness statement of Michael Stahl dated 4 August 2011 at paragraph 13.

[19] Witness statement of Michael Stahl dated 4 August 2011 at paragraph 14.

[20] Witness statement of Michael Stahl dated 4 August 2011 at paragraph 15-16.

[21] [1992] HCA 48; (1992) 175 CLR 353

[22] [2001] HCA 68; (2001) 208 CLR 516

[23] [1992] HCA 48; (1992) 175 CLR 353 at 378

[27] (2006) VSCA 6

[30] [1992] HCA 48; (1992) 175 CLR 353 at page 381

[31] [2001] HCA 68; (2001) 208 CLR 516 at 526 [17]

[33] [2006] VSCA 6 at [31]

[36] [1992] HCA 48; (1992) 175 CLR 353 at 389