Wrights Road Pty Limited v Baulkham Hills Shire Council

The relevant legislation 14. The relevant provision of the EPA 1979 is s 94, which provides:

" 94 Payment towards provision or improvement of amenities or services (1) Subject to subsection (2), if a consent authority is satisfied that a development…will or is likely to require the provision of or increase the demand for public amenities and public services within the area, the consent authority may grant consent to that application subject to a condition requiring:

(2) A condition referred to in subsection (1) is to be imposed only to require a reasonable dedication or contribution for the provision, extension or augmentation of the public amenities and public services mentioned in that subsection.

(6) The consent authority is to hold any monetary contribution…for the purpose for which the payment was required and apply the money towards the public amenities or public services or both within a reasonable time and in such a manner as will meet the increased demand for those amenities or services or both.

The relevant provisions of the Recovery of Imposts Act 1963 (NSW) are:

2 Limitation on time for 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 from any corporation, officer or person or out of any fund to whom or to 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):

(b) in the case of a payment made subsequent to the commencement of this Act, after the expiration twelve months after the date of payment.

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."

Counsel for the plaintiff submitted that the Recovery of Imposts Act does not apply to a monetary contribution under s 94 of the EPA 1979, because it is not a tax within the meaning of the Recovery of Imposts Act. It was submitted that it is neither a tax under the general law: Baulkham Hills Shire Council v Group Development Services Pty Ltd [2005] NSWCA 315; nor a tax within the meaning of the extended definition in s 1A of the Recovery of Imposts Act.

Shortly stated, the plaintiff contended that a monetary contribution under s 94 of the EPA 1979 is not a "fee, charge or other impost", because it is not an impost within the ordinary meaning of that word, and because it is not on, the proper construction of that phrase, a fee or charge. It contended that the deliberate use by the draftsman of the word "other", in the phrase "fee, charge or other impost" operates so as to qualify or restrict the words "fee" and "charge", that is to say a fee or charge will only come within the definition if it is also an impost: Tuck v Priester (1887) 19 QBD 629 at 638.

The plaintiff submits that taxing and fiscal statutes are to be interpreted strictly and literally: see generally the discussion in Pearce & Geddes, "Statutory Interpretation in Australia", 5th Ed, [9.30] - [9.32]. It also submits that where legislation seeks to override the common law, the courts require that it be clearly shown that the legislature intended to do so: Federal Commissioner of Taxation v Citibank Limited (1989) 85 ALR 588 at 614; or if there are two alternative constructions open, that which is consonant with the common law is to be preferred: Balog v Independent Commission Against Corruption (1990) 169 CLR 625 at 6635-6.

The application of these principles supports the plaintiff's contention as to the proper construction of the extended definition of "tax" in s 1A of the Recovery of Imposts Act.

The defendant's submissions 20. The defendant's counsel submitted that the plaintiff's cause of action is out of time and is, therefore, extinguished by the Recovery of Imposts Act. 21. It was contended by the defendant that the purpose of the Recovery of Imposts Act is perfectly plain and is reinforced by consideration of the second reading speeches both in respect of the bill for the Act in 1963 and in respect of the amendment bill in 1993. Reference was made to s 33 of the Interpretation Act 1987 (NSW) which requires the construction of an Act to promote its underlying purpose, and to the duty to interpret legislation according to the intent of parliament: Master Retailers' Association of NSW v Shop Assistants' Union of NSW (1905) 2 CLR 94 at 106. 22. The defendant further submitted that the ordinary meaning of the words "fee" and "charge" includes a monetary contribution under s 94 of the EPA 1979. 23. Use of the "words "fee" and "charge" in the extended definition of "tax" in the Recovery of Imposts Act is consistent with a legislative intent to broaden the protection of revenue in the face of judicial findings, the meaning of "tax" under the common law having been interpreted to exclude "fees" and "charges", even where they have some positive attributes of a tax imposition. 24. A monetary contribution under s 94 of the EPA 1979 is clearly a charge for the use of real property or a fee for the privilege of developing it. 25. In any event the word "impost" is a word which, construed ejusdem generis, embraces the exaction of payments to councils, including monetary contributions under s 94 of the EPA 1979. The word "impost" is a catchall expression in relation to other terms such as "tax", "rates", "fees", "charges" or "duties" used in a number of legislative provisions relating to the collection of revenue: eg the Constitution Act1902 and the State Owned Corporations Act 1989. 26. Furthermore, there are a number of instances where a monetary contribution under s 94 of the EPA 1979 has been recognised and treated judicially an "impost", albeit that none of these references were in the context of the Recovery of Imposts Act: Tegra (NSW) Pty Limited [1998] NSWLEC 155, GHD Pty Ltd v Pristine Waters Council [2001] NSWLEC 186 at [12] and [13], Longboard Developments Pty Ltd v Byron Shire Council [2001] NSWLEC 143 at [75], K Richarsdson & Associates Pty Ltd v Yarrowlumla Shire Council (2002) LGERA 189 at [3], and Pioneer Homes Pty Ltd v Liverpool City Council (1992) LGRA 237 at 241 and 242. 27. In response to the plaintiff's submissions, the defendant submitted that the use by the draftsman of the word "other", in the phrase "fee, charge or other impost" does not operate so as to qualify or restrict the words "fee" and "charge" in the way suggested by the plaintiff, as such a construction would be to interpret the extended definition of "tax" in s 1A of the Recovery of Imposts Act as a "tax, tax or other tax".

Is a monetary contribution a "tax" under the general law?

28. The question of whether a monetary contribution under s 94 of the EPA 1979 is a tax under the general law was considered by the Land and Environment Court in Meriton Apartments Pty Limited v Minister for Urban Affairs and Planning (2000) 107 LGERA 363. The court said first that it was obvious " that the Act was not intended to operate as a statute for the purpose of taxation", and then, having reviewed the relevant authorities (at [47] - [52]), held that a monetary contribution under s 94 of the EPA 1979 does not constitute a tax. This finding was adopted by the Court of Appeal in Baulkham Hills Shire Council v Group Development Services Pty Ltd [2005] NSWCA 315 at [15] - [16].
29. I conclude, therefore that a monetary contribution under s 94 of the EPA 1979 is not a tax in accordance with general principle.

Is a monetary contribution an "impost"? 30. The next issue for consideration is whether a monetary contribution under s 94 of the EPA 1979 is an "impost" within the meaning of the Recovery of Imposts Act. 31. The fact that the word "impost" has been used in a number of cases to refer to a monetary contribution under s 94 of the EPA 1979 is not conclusive of this issue. Nor, in my view, can the word be construed ejusdem generis so as to embrace the exaction of payments to councils, including a monetary contribution under s 94 of the EPA 1979. Nor is it a catchall word for other terms such as "tax", "rates", "fees", "charges" or "duties". 32. The word is to be construed having regard to its ordinary and grammatical meaning, unless the whole context indicates otherwise: Cooper Brookes (Wollongong) Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 at 305. 33. There is, in my view, nothing in the whole context of the Act that indicates that the word "impost" should be construed other than according to its ordinary meaning. The ordinary meaning of "impost" is a compulsory exaction of money in the nature of a tax. 34. Accordingly, in accordance with the principle established in Meriton Apartments Pty Limited v Minister for Urban Affairs and Planning, a monetary contribution under s 94 of the EPA 1979 is not an "impost" within the meaning of the Recovery of Imposts Act.

Is a monetary contribution a "fee" or "charge" within the meaning of s 1A? 35. The next issue for consideration is whether a monetary contribution under s 94 of the EPA 1979 is a "fee" or "charge" within the meaning of the Recovery of Imposts Act. 36. The defendant submitted, in my view correctly (at paragraph 33 of its written submissions), that a court construing a provision in an Act must strive to give meaning to every word of the provision: Rural Press Ltd v Australian Competition & Consumer Commission (2003) 216 CLR 53 at 62. 37. Why, then, did the legislature include the word "other" in the phrase "fee, charge or other impost" in s 1A of the Recovery of Imposts Act? 38. "Parliament manifests its intention by the use of language, and it is by determining the meaning of that language, in accordance with principles of construction established by the common law and statute, that courts give effect to the legislative will": Wilson v Anderson [2002] HCA 29 at [8].

39. One such principle of construction is that in resolving uncertainty, the court should choose the interpretation that avoids uncertainty or inconvenience: Cooper Brookes (Wollongong) Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297:

" Generally speaking, mere inconvenience of result in itself is not a ground for departing from the natural and ordinary meaning of the language read in its context. But there are cases in which inconvenience of result or improbability of result assists the court in concluding that an alternative construction which is reasonably open is to be preferred to the literal meaning because the alternative interpretation more closely conforms to the legislative intent discernible from the other provisions of the statute…" 40. The interpretation of the words "fee" and "charge" by reference to their ordinary grammatical meaning, in the context of the Recovery of Imposts Act, would give rise to a clear absurdity: it cannot have been the intention of the legislature to prevent the recovery on restitutionary grounds of every fee or charge paid to any corporation or person: see Potter v Minahan (1908) 7 CLR 277 at 304, Bropho v State of Western Australia (1990) 93 ALR 207 at 215 and Thompson v Australian Capital Television Pty Ltd (194) 120 ALR 317 at 329. 41. It follows that the legislature intended some alternative interpretation, hence the inclusion of the word "other" in the phrase "fee, charge or other impost". 42. Other principles of statutory construction relevant to the resolution of this issue are the presumption that "words of a feather flock together" (Noscitur a sociis): Prior v Sherwood (1906) 3 CLR 1054, and the presumption that words are not redundant unless the word would render the operation of the statute "insensible, absurd or ineffective": McMonagle v Wesminster City Council [1990] 1 All ER 993 at 997. (See generally the papers by Spigelman CJ, "The poet's rich resource: Issues in Statutory Interpretation", (2001) 21 Australian Bar Review, and by Denis Rose QC, "Statutory Interpretation", Blake Dawson Waldron Continuing Legal Education, Sydney, 24 November 2003.) 43. It is clear therefore, that the words "fee" and "charge" are to construed having regard to the words: "or other impost" that follow them. The words "fee" and "charge" in the context of s 1A of the Recovery of Imposts Act are to be read as meaning a fee or charge which is in the nature of an impost. 44. Having regard to the nature of a monetary contribution under s 94 of the EPA 1979 and that that Act was not intended to operate as a statute for the purpose of taxation: Meriton Apartments Pty Limited v Minister for Urban Affairs and Planning [2000] NSWLEC 20 at [46], in my view such a payment is not a fee or charge which is in the nature of an impost. 45. I find, therefore, that the monetary contribution paid by the plaintiff does not constitute a tax, either in the general law meaning of that word or within the meaning of the word as defined in s 1A of the Recovery of Imposts Act.

46. It follows that the Recovery of Imposts Act does not apply in respect of the plaintiff's claim and any cause of action for recovery on restitutionary grounds of the $279,799.94 "indexation component" of the monetary contribution paid by the plaintiff is not statute barred, nor is it extinguished, by that Act.
47. In the circumstances it is unnecessary to consider whether the Recovery of Imposts Act is valid or not.
48. For these reasons I order that the defendant's motion be dismissed.
49. I will hear argument as to the costs of the motion.

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