Redland City Council v Kozik

HIGH COURT OF AUSTRALIA

GAGELER CJ,
GORDON, EDELMAN, STEWARD AND JAGOT JJ

REDLAND CITY COUNCIL  APPELLANT

AND

JOHN MICHAEL KOZIK & ORS  RESPONDENTS

Redland City Council v Kozik

[2024] HCA 7

Date of Hearing: 13 & 14 September 2023

Date of Judgment: 13 March 2024

B17/2023

ORDER

1.Appeal dismissed with costs.

2. Special leave is granted to the respondents to cross-appeal from the judgment of the Court of Appeal of the Supreme Court of Queensland given on 26 August 2022.

3. Cross-appeal dismissed with costs.

On appeal from the Supreme Court of Queensland

Representation

J M Horton KC with E Hoiberg for the appellant (instructed by Gadens Lawyers)

J T Gleeson SC and A M Hochroth for the respondents (instructed by Shine Lawyers)

R C A Higgins SC with J G Wherrett for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor)

G J D del Villar KC, Solicitor-General of the State of Queensland, with F J Nagorcka and M J Hafeez-Baig for the Attorney General of the State of Queensland, intervening (instructed by Crown Law (QLD))

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Redland City Council v Kozik

Statutes – Construction – Statutory debt – Local government – Special rates and charges – Where appellant empowered by Local Government Act 2009 (Qld) ("Act") to levy special rates and charges in respect of rateable land – Where appellant purported to levy special charges on respondents' land – Where special charges levied pursuant to invalid resolutions – Where respondents paid special charges contained in rate notices – Where regulations made pursuant to Act provided for return of special rates or charges levied on land to which special rates or charges did not apply – Whether provision in regulations providing for return of special charges applicable where resolution levying special rates invalid.

Restitution – Unjust enrichment – Defence of good consideration – Where respondents paid special charges to appellant under mistake of law – Where appellant spent funds levied on works conducted on waterways adjacent to respondents' land – Where appellant statutorily obliged to conduct relevant works – Whether appellant had defence to respondents' claim for restitution.

Words and phrases – "benefit", "failure of consideration", "good consideration", "local government", "mistake of law", "money had and received", "recipient not unjustly enriched", "regulations", "restitution", "special rates and charges", "statutory construction", "statutory debt", "unjust enrichment".

Local Government Act 2009 (Qld), ss 91, 92, 93, 94.

Local Government (Finance, Plans and Reporting) Regulation 2010 (Qld), ss 28, 32.

Local Government Regulation 2012 (Qld), ss 94, 98.

1. GAGELER CJ AND JAGOT J.   In the Preface to the second edition of Mason and Carter's Restitution Law in Australia, the authors referred metaphorically to the "restitution common of the law" being "tended by judges". They encouraged preparedness on the part of judges to "tear out weeds, however ancient".[1] In the factual circumstances giving rise to the present case, Redland City Council ("the Council") tore out actual weeds from part of the actual common – in the form of waterways – within its local government area. The Council also dredged and removed silt, rubbish, and debris from the waterways, repaired revetment walls protecting the banks of the waterways from erosion and preventing subsidence, and improved the quality of the water in the waterways ("the works").

   [1]Mason, Carter and Tolhurst, Mason and Carter's Restitution Law in Australia, 2nd ed (2008) at xvi.

2. The Council was required to undertake the works in the discharge of its statutory functions as a local government authority under the Local Government Act 2009 (Qld) ("the Local Government Act") and the Coastal Protection and Management Act 1995 (Qld) ("the Coastal Protection and Management Act"). The Council also had a statutory entitlement to fund the works by levying "special charges" under the Local Government Act on land in its local government area which specially benefited from the works.

3. The Council in fact funded part of the overall cost of the works by purporting to levy special charges on land which adjoined the land on and waters in which the works were carried out. The Council funded the balance of the costs of the works from its general revenue.

4. After the Council had completed the works, it discovered that it had failed to comply with a condition of the prescribed process for the levying of special charges under the Local Government Act, as a consequence of which its levying of the special charges was invalid. The Council refunded to landowners so much of the total amount invalidly levied on and paid by them as remained unspent, but it refused to refund so much as it had spent on the works.

5. Representatives of a group of landowners who had paid the invalidly levied special charges ("the Landowners") brought a proceeding in the Supreme Court of Queensland against the Council for recovery of the unrefunded portion of the amount of the special charges each had paid. Their claim was put on alternative bases. First, it was put as a claim to a statutory debt due by way of refund under regulations made under the Local Government Act providing for the return of "special rates or charges incorrectly levied". Second, it was put as a common law claim in restitution for moneys paid under a mistake of law.

6. By way of defence (and counterclaim for a negative declaration), the Council pleaded that the claim was defeated by each Landowner having received a "direct and comparable benefit" from the Council in connection with the payment of the special charges because of the Council undertaking the works.

7. The parties agreed on stating common questions for determination in the proceeding. The primary judge (Bradley J) made orders which answered each of those questions. The effect of the primary judge's answers was that the Landowners succeeded in their claim to a statutory debt but failed in their claim in restitution at common law.[2]

   [2]Kozik v Redland City Council [2021] QSC 233.

8. On appeal and cross‑appeal, the Court of Appeal of the Supreme Court of Queensland (McMurdo JA and Boddice J, Callaghan J dissenting in part) substituted different answers. The effect of the answers as substituted was that the Landowners failed in their claim to a statutory debt but succeeded in their claim in restitution at common law.

9. In answering the common questions, the primary judge made three important findings. These findings were not disturbed on appeal to the Court of Appeal and were not sought to be disturbed in this Court. The first finding was that each Landowner paid the special charges in the mistaken belief that the Landowner had a legal obligation to do so.[3] The second finding was that the land of each Landowner specially benefited from the undertaking of the works.[4] One benefit was both quantifiable and quantified: an increase in the value of the land (or a prevented diminution of value) of at least one to two per cent, an amount which greatly exceeded the amount mistakenly paid by the Landowner as special charges. Another benefit was unquantified even if quantifiable: an increase in visual amenity. The third important finding was that the special benefit to each Landowner resulting from the works was sufficient to render each Landowner's land "susceptible" to the levy of special charges under the Local Government Act.[5]

   [3]     Redland City Council v Kozik (2022) 11 QR 524 at 542 [43].

   [4]Kozik v Redland City Council [2021] QSC 233 at [44]‑[45]. See also Redland City Council v Kozik (2022) 11 QR 524 at 536 [18]‑[20].

   [5]     Kozik v Redland City Council [2021] QSC 233 at [44]. See also Redland City Council v Kozik (2022) 11 QR 524 at 536 [18].

10. The Council appeals by special leave from so much of the orders of the Court of Appeal as substituted answers to the effect that the Landowners succeeded in their claim in restitution at common law. For their part, the Landowners seek special leave to cross‑appeal from so much of those orders as substituted answers to the effect that the Landowners failed in their claim to a statutory debt.

11. The proposed cross‑appeal depends on discrete issues of statutory construction which would render the appeal moot if resolved in the Landowners' favour. For that reason, it is appropriate for special leave to cross‑appeal to be granted and for the cross‑appeal to be considered in advance of the appeal. Adopting that course, we would dismiss the Landowners' cross‑appeal and allow the Council's appeal.

12. We consider that the answers substituted by the Court of Appeal to the effect that the Landowners failed in their claim to a statutory debt were right. On the proper construction of the regulations made under the Local Government Act, providing for the return of special charges incorrectly levied, the Landowners are not entitled to a refund.

13. We consider that the answers substituted by the Court of Appeal to the effect that the Landowners succeeded in their claim in restitution at common law were wrong. The Council had a statutory entitlement to fund the works by the levy of special charges payable by the Landowners. The Landowners cannot recover from the Council so much of the moneys as they paid and as the Council spent undertaking the works because, to that extent, the Council was not unjustly enriched at the expense of the Landowners.

14. The Council's statutory entitlement to fund the works by the levy of special charges payable by the Landowners, and its levy and expenditure in good faith of the special charges on undertaking the works (that is, the Council honestly believing that it had complied with the statutory requirements enabling it to levy and spend the special charges on those works), is an answer to the Landowners' prima facie entitlement to recover moneys paid by them under an operative mistake of law. These circumstances would also answer any prima facie entitlement of the Landowners to recover under the principle formulated in Woolwich Equitable Building Society v Inland Revenue Commissioners[6] – that "money paid by a citizen to a public authority in the form of taxes or other levies paid pursuant to an ultra vires demand by the authority is prima facie recoverable by the citizen as of right" – if that principle were to be imported into the common law of Australia. Whether the Woolwich principle should be imported into the common law of Australia is raised by the Landowners' notice of contention and was the subject of submissions by the Attorney‑General of the Commonwealth and the Attorney‑General of Queensland but, given that the circumstances described would answer any such prima facie entitlement to restitution, that question need not be determined.

    [6] [1993] AC 70 at 177.

15. Before explaining our reasoning to these conclusions on the cross‑appeal and on the appeal, it is appropriate to set out the applicable statutory provisions and record some background facts.

    Statutory provisions

16. The statutory provisions which obliged the Council to undertake the works and which entitled the Council to fund the works by levying special charges on the Landowners' land were at all relevant times to be found in the Coastal Protection and Management Act and the Local Government Act, both of which are to be understood against the background of the Constitution of Queensland 2001 (Qld) ("the Queensland Constitution").

17. The regulations made under the Local Government Act which prescribed the process by which those special charges could be levied in order to be valid, and which provided for the return of special charges invalidly levied, were consecutively: the Local Government (Finance, Plans and Reporting) Regulation 2010 (Qld) ("the 2010 LGR"), the Local Government Regulation 2012 (Qld) ("the 2012 LGR"), and the Local Government Legislation Amendment Regulation (No 1) 2014 (Qld) ("the 2014 Amendment LGR").

    Queensland Constitution

18. Expressing in modern terms a principle of parliamentary government traceable to the Bill of Rights 1688,[7] s 65 of the Queensland Constitution provides that a "requirement to pay a tax, impost, rate or duty of the State must be authorised under an Act".

    [7](1 Will & Mar sess 2 c 2). See Luton v Lessels (2002) 210 CLR 333 at 366‑367 [99].

19. Section 70(1) of the Queensland Constitution provides that there "must be a system of local government in Queensland". By s 71(1), a "local government^[[8]^] is an elected body that is charged with the good rule and local government of a part of Queensland allocated to the body". By s 71(2), an Act other than the Queensland Constitution "may provide for the way in which a local government is constituted and the nature and extent of its functions and powers".

    [8]Defined in Sch 1 to the Acts Interpretation Act 1954 (Qld), given effect by s 36 of that Act, as, relevantly, a local government under the Local Government Act 2009 (Qld).

    Coastal Protection and Management Act

20. Section 121 of the Coastal Protection and Management Act provides that a local government must maintain and keep clean each "canal" in its area. Within the meaning of that section, a "canal" is an "artificial waterway" surrendered to the State under the Coastal Protection and Management Act (or a predecessor statute) or under the Land Act 1994 (Qld).

    Local Government Act

21. The purpose of the Local Government Act, as set out in s 3, is to provide for "the way in which a local government is constituted and the nature and extent of its responsibilities and powers" and to provide for "a system of local government in Queensland that is accountable, effective, efficient and sustainable". By s 4(1)(a) and (b), performance of responsibilities under the Local Government Act is to be in accordance with, and any action that is taken under the Local Government Act is to be taken in a way that is consistent with, the "local government principles". By s 4(2), the local government principles include: (a) "transparent and effective processes, and decision‑making in the public interest"; (b) "sustainable development and management of assets and infrastructure, and delivery of effective services"; and (c) "good governance of, and by, local government".

22. Chapter 2 of the Local Government Act deals in Pt 1 with "Local governments and their constitution, responsibilities and powers". Under s 8(1), a "local government" is an "elected body that is responsible for the good rule and local government of a part of Queensland". Under s 8(2), a "part of Queensland that is governed by a local government" is called a "local government area". By s 9(1), a "local government has the power to do anything that is necessary or convenient for the good rule and local government of its local government area". By s 11, a local government is a body corporate with perpetual succession, has a common seal, and may sue and be sued in its name.

23. Chapter 4 of the Local Government Act concerns "Finances and accountability". Part 1 of Ch 4 concerns "Rates and charges". Section 91(2) provides that "[r]ates and charges" are levies that a local government imposes on land for a service, facility or activity that is supplied or undertaken by the local government or someone on behalf of the local government. Section 92(1) identifies four types of rates and charges, being general rates, special rates and charges, utility charges, and separate rates and charges. By s 92(2), "general rates" are for services, facilities and activities that are supplied or undertaken for the benefit of the community in general (rather than a particular person). Section 92(3) provides:

    "Special rates and charges are for services, facilities and activities that have a special association with particular land because –

    (a)       the land or its occupier –

    (i) specially benefits from the service, facility or activity; or

    (ii) has or will have special access to the service, facility or activity; or

    (b) the land is or will be used in a way that specially contributes to the need for the service, facility or activity; or

    (c) the occupier of the land specially contributes to the need for the service, facility or activity."

24. Under s 93(1), rates may be levied on "rateable land". By s 93(2), "[r]ateable land" is any land or building unit, in the local government area, that is not exempted from rates.

25. Section 94 provides:

    "Power to levy rates and charges

    (1)       Each local government –

    (a) must levy general rates on all rateable land within the local government area; and

    (b) may levy –

    (i) special rates and charges; and

    (ii) utility charges; and

    (iii) separate rates and charges.

    ...

    (2) A local government must decide, by resolution at the local government’s budget meeting for a financial year, what rates and charges are to be levied for that financial year."

26. Section 96 provides that a regulation, made under the general regulation‑making power conferred by s 270, may provide for any matter connected with rates and charges. The 2010 LGR, the 2012 LGR, and the 2014 Amendment LGR were each such a regulation.

    2010 LGR

27. Chapter 2 of the 2010 LGR concerned "Rates and charges". Part 6 of Ch 2 concerned "Special rates and charges". Section 28 of the 2010 LGR provided:

    "Levying special rates or charges

    (1) This section applies if a local government decides to levy special rates or charges.

    ...

    (3) The local government's resolution to levy special rates or charges must identify –

    (a) the rateable land to which the special rates or charges apply; and

    (b) the overall plan for the service, facility or activity to which the special rates or charges apply.

    (4)       The overall plan is a document that –

    (a) describes the service, facility or activity; and

    (b) identifies the rateable land to which the special rates or charges apply; and

    (c) states the estimated cost of carrying out the overall plan; and

    (d) states the estimated time for carrying out the overall plan.

    (5)The local government must adopt the overall plan before, or at the same time as, the local government first resolves to levy the special rates or charges.

    (6)Under an overall plan, special rates or charges may be levied for 1 or more years before any of the special rates or charges are spent in carrying out the overall plan.

    (7)If an overall plan is for more than 1 year, the local government must also adopt an annual implementation plan for each year.

    (8)An annual implementation plan for a financial year is a document setting out the actions or processes that are to be carried out in the financial year for the service, facility or activity to which the special rates or charges apply.

    (9)The local government must adopt the annual implementation plan before or at the budget meeting for each year of the period for carrying out the overall plan.

    ... "

28. Section 30 provided that if a local government had implemented an overall plan and not spent all the special rates or charges, it had to as soon as practicable pay the unspent special rates or charges to the current owners of the land on which the special rates or charges were levied in the same proportions as levied.

29. Section 32 provided:

    "Returning special rates or charges incorrectly levied

    (1) This section applies if a rate notice includes special rates or charges that were levied on land to which the special rates or charges do not apply.

    (2) The rate notice is not invalid, but the local government must as soon as practicable return the special rates or charges to the person who paid the special rates or charges."

30. Section 61(1)(a) provided that the current owner of land was liable to pay the rates and charges.

31. Chapter 3 of the 2010 LGR concerned "Financial sustainability and accountability". Part 7 of Ch 3 concerned "Local government funds and accounts". Section 147 required a local government to establish an operating fund and to pay into that fund all money it received other than trust money (which had to be paid into a trust account under s 145). By s 148, a local government could create a "reserve" in its operating fund either by including the reserve in its annual budget or by resolution.

    2012 LGR

32. The 2012 LGR repealed the 2010 LGR. Sections 94, 96 and 98 of the 2012 LGR substantially reproduced ss 28, 30 and 32 of the 2010 LGR. Section 94(14), however, was an additional provision stating:

    "In any proceedings about special rates or charges, a resolution or overall plan mentioned in subsection (2) is not invalid merely because the resolution or plan does not identify all rateable land to which the special rates or charges could have been levied."

33. Section 127(1)(a) of the 2012 LGR substantially reproduced s 61(1)(a) of the 2010 LGR in providing that the current owner of land was liable to pay the rates and charges. Part 8 of Ch 5 of the 2012 LGR substantially reproduced Pt 7 of Ch 3 of the 2010 LGR concerning local government funds and accounts.

    2014 Amendment LGR

34. The 2014 Amendment LGR amended the 2012 LGR in two relevant respects. First, it inserted a new s 94(14) in these terms:

    "In any proceedings about special rates or charges, a resolution or overall plan mentioned in subsection (2) is not invalid merely because the resolution or plan –

    (a) does not identify all rateable land on which the special rates or charges could have been levied; or

    (b) incorrectly includes rateable land on which the special rates or charges should not have been levied."

35. Second, it amended s 98(1) by adding to the end of the sub‑section "or should not have been levied", so that s 98 thereafter provided:

    "Returning special rates or charges incorrectly levied

    (1) This section applies if a rate notice includes special rates or charges that were levied on land to which the special rates or charges do not apply or should not have been levied.

    (2) The rate notice is not invalid, but the local government must, as soon as practicable, return the special rates or charges to the person who paid the special rates or charges."

    (emphasis added)

    Facts

    The land and waters

36. The Council's local government area included canals and lakefront reserves for which it was legally responsible under s 121 of the Coastal Protection and Management Act and as an aspect of its general responsibility under s 8(1) of the Local Government Act in conformity with the local government principles set out in s 4(2) of that Act.

37. The lakefront reserves included the Raby Bay Canal Reserve, the Aquatic Paradise Canal Reserve, and the Sovereign Waters Lake Reserve. Above the high‑water mark adjoining each waterway was privately owned residential land, including land owned by the Landowners.

    Overall plan

38. In each financial year from 2011 to 2016, the Council had an "overall plan" which identified the services, facilities and activities it proposed to carry out in that year and the rateable land on which the Council proposed to levy the special charges to fund the carrying out of those services, facilities and activities. Against the background of s 92(3) of the Local Government Act, the special charges and rateable land identified in the overall plan were charges the Council decided would have a special association with the identified rateable land because the land or its occupier would specially benefit from the service, facility or activity resolved to be provided or carried out.

39. The services, facilities and activities so identified included the works. The rateable land included that of the Landowners, whose land fronts the waterways where the works were to be carried out.

    The special charges

40. In each financial year from 2011 to 2016, the Council resolved to levy special charges on the rateable land of the Landowners in accordance with its overall plan for services, facilities or activities which included the works.

41. In each financial year from 2011 to 2016, the Council issued rate notices to the Landowners which included the special charges on their land in accordance with the resolution of the Council for that year. The special charges were identified in the rate notices. The Landowners paid the notified rates and charges, including the special charges, in accordance with the notices.

    The carrying out of the works

42. Nearly all of the works were carried out either in the waterways or on the land below the high‑water mark. The exception was works described as "private revetment walls" in respect of the Raby Bay Canal Reserve and the Aquatic Paradise Canal Reserve. These were described as revetment walls immediately adjacent to the Landowners' land intended to prevent erosion of the embankments to which the revetment walls were connected.

    Payment for the works

43. The Council created three reserves in its operating fund in which it deposited money received from the special charges applicable to each planned area of works. The Council paid for the works in part from its general account (comprised of income other than trust income, such as general rates, grants, loans and the like) and in part from one of the three reserves as relevant to the area of the works.

44. From its general account, the Council paid 34 per cent of the total cost of the works relating to the Aquatic Paradise Canal Reserve, 74 per cent of the total cost of the works relating to the Raby Bay Canal Reserve, and 22 per cent of the total cost of the works relating to the Sovereign Waters Lake Reserve. Accordingly, the respective Landowners in each area paid: 66 per cent of the total cost of the works relating to the Aquatic Paradise Canal Reserve, 26 per cent of the total cost of the works relating to the Raby Bay Canal Reserve, and 78 per cent of the total cost of the works relating to the Sovereign Waters Lake Reserve.

45. The Council did not end up spending all of the funds raised from the special charges it levied for the works. As required by s 32 of the 2010 LGR and s 98 of the 2012 LGR, the Council refunded to each Landowner the special charges that the Landowner had paid to the extent that the Council had not spent those special charges on the works.

    Overall plan invalid

46. The Council levied, received and spent the special charges for the works assuming in good faith that it was empowered to do so.

47. In or about 2017, the Council realised that, contrary to its prior assumption, it had not complied with s 28(3)(b) of the 2010 LGR or s 94(2)(b) of the 2012 LGR in that each resolution to levy the special charges failed to identify "the overall plan for the service" to which the special charge applied consistently with the definition of an "overall plan" in s 28(4) of the 2010 LGR and s 94(3) of the 2012 LGR. The problem was that the "overall plan" adopted by the Council, although describing the works and identifying the rateable land to which the special charges applied (in compliance with these requirements), did not state the estimated cost of or estimated time for carrying out the overall plan as required by s 28(4)(c) and (d) of the 2010 LGR and s 94(3)(c) and (d) of the 2012 LGR respectively.

48. On this basis, it was common ground in the proceeding at first instance, and remains common ground, that each resolution of the Council from 2011 to 2016 to levy the special charges was invalid.

    The cross‑appeal: no statutory debt

49. The cross‑appeal depends on the construction of s 32 of the 2010 LGR and s 98 of the 2012 LGR.

50. It will be recalled that s 32(1) of the 2010 LGR and s 98(1) of the 2012 LGR in its unamended form provided that the obligation of a local government under s 32(2) of the 2010 LGR or s 98(2) of the 2012 LGR (as relevant) to "return" special rates or charges to the person who paid them arose only "if a rate notice include[d] special rates or charges that were levied on land to which the special rates or charges [did] not apply". In so providing, those provisions recognised that the rate notice itself created the obligation to pay.

51. For the purposes of s 32(1) of the 2010 LGR and s 98(1) of the 2012 LGR in its unamended form, it is necessarily the resolution of the local government that identifies the land to which the special rates or charges do or do not apply. This follows from the provision of s 94(2) of the Local Government Act that a local government must decide, by resolution at the local government’s budget meeting for a financial year, what rates and charges are to be levied for that financial year and from the provisions of s 28(3)(a) of the 2010 LGR and s 94(2)(a) of the 2012 LGR that a local government's resolution to levy special rates or charges must identify "the rateable land to which the special rates or charges apply".

52. Sections 32(1) of the 2010 LGR and 98(1) of the 2012 LGR in its unamended form accordingly identify land to which special rates or charges included in a rate notice do not apply as land not identified in a resolution under s 94(2) of the Local Government Act in accordance with s 28(3)(a) of the 2010 LGR or s 94(2)(a) of the 2012 LGR. Nothing more is required than to compare the land identified in a relevant resolution, being the land to which the special rates or charges apply, to the land the subject of the rate notice levying the special rates or charges. If the land in the resolution is the land in the rate notice, then s 32(1) of the 2010 LGR and s 98(1) of the 2012 LGR in its unamended form are not engaged, as the land is not land to which the special rates or charges do not apply. If the land in the resolution is not the land in the rate notice, then those provisions are engaged.

53. No determination of the validity or invalidity of the local government's resolution to levy the special rates or charges is required. Indeed, given that s 32(2) of the 2010 LGR and s 98(2) of the 2012 LGR each provided that the rate notice is not invalid, the validity or invalidity of the resolution authorising or purporting to authorise the levying of the special rates or charges is irrelevant. The beginning and the end of the operation of s 32(1) of the 2010 LGR and s 98(1) of the 2012 LGR in its unamended form involves asking only if the rate notice included special rates or charges levied on land identified in the local government's resolution as the rateable land to which the special rates or charges apply. If the answer to that question is "yes", there was no scope for s 32(2) of the 2010 LGR or s 98(2) of the 2012 LGR to operate. If the answer to that question is "no", those provisions operate according to their terms.

54. In the present case, the land on which the special charges were levied, as referred to in s 32(1) of the 2010 LGR and s 98(1) of the 2012 LGR in its unamended form, was all "rateable land to which the special ... charges appl[ied]". The fact that the Council's resolutions to levy the special charges, and the rate notices themselves, were invalid to the extent they included the special charges is immaterial to the operation of those provisions. Whether valid or invalid, the resolutions in fact identify the rateable land to which the special charges applied. The resolutions enable the identification of "land to which the special rates or charges [did] not apply" under s 32(1) of the 2010 LGR and s 98(1) of the 2012 LGR respectively. The statutory obligation to return the special rates or charges applied only to land the relevant resolutions did not identify as the rateable land to which the special rates or charges applied.

55. The 2014 Amendment LGR does not alter this outcome. The Explanatory Notes for the 2014 Amendment LGR explained that, while the previously existing provisions protected an overall plan and resolution from invalidity which omitted land where the requirement for a "special association" with that land as set out in s 92(3) of the Local Government Act was satisfied, they did not protect an overall plan and resolution from invalidity when the local government incorrectly included land where the requirement for a "special association" with that land as set out in s 92(3) of the Local Government Act was not satisfied.[9] According to the Explanatory Notes, s 94(14) of the 2012 LGR was amended to protect an overall plan and resolution from invalidity in "the converse situation where a local government resolves to impose special rates or charges on lots which receive no benefit". Further, according to the Explanatory Notes, the "minor consequential amendment" was made to s 98 of the 2012 LGR to "clarify that if a rates notice includes special rates that do not apply, or should not have applied, the rates notice is not invalid but the local government must, as soon as practicable, return the special rates to the person who paid the special rates".[10]

    [9]Queensland, Legislative Assembly, Local Government Legislation Amendment Regulation (No 1) 2014, Explanatory Notes at 4.

    [10]Queensland, Legislative Assembly, Local Government Legislation Amendment Regulation (No 1) 2014, Explanatory Notes at 4.

56. Sections 94(14) and 98(1) of the 2012 LGR, as amended by the 2014 Amendment LGR, accorded with the objects of the amendments as explained in the Explanatory Notes. Section 94(14) was extended to protect from invalidity an overall plan and resolution which included land that, in fact, did not satisfy any type of "special association" between the special rates or charges and the land as provided for in s 92(3) of the Local Government Act. The additional words in s 98(1) of the 2012 LGR ("or should not have been levied") recognised that land that, in fact, did not satisfy any type of "special association" between the special rates or charges and the land as provided for in s 92(3) of the Local Government Act should not have been included in an overall plan, a resolution, or a rate notice as the subject of a levy of special rates or charges. The additional words in s 98(1) extended a local government's obligation in s 98(2) to return special rates or charges levied on such land to the person who paid those special rates or charges because those are special rates or charges which "should not have been levied". This extension does not call for a comparison between the land in the resolution and the land in the rate notice (as did the words "to which the special rates or charges do not apply") because, for the extension to operate, the land would be in the resolution. The extension calls for a determination of fact as to whether the special rates or charges "should not have been levied" on the land. In context, this means that, as a matter of fact, the "special association" required by s 92(3) of the Local Government Act between the special rates or charges and the land does not exist.

57. Neither limb of s 98(1) of the 2012 LGR, as amended by the 2014 Amendment LGR, is engaged on the facts of the present case. Contrary to the terms of s 98(1) of the 2012 LGR as amended, the land on which the special charges for the works were levied is all land to which the special charges applied (as identified in the resolutions) and, on the primary judge's unchallenged factual finding, there is a "special association" between the special charges levied and the land as required by s 92(3) of the Local Government Act because that land specially benefited from the works.

58. The admitted invalidity of the resolutions and the rate notices to the extent they included the special charges does not have the result of making s 32(1) of the 2010 LGR and s 98(1) of the 2012 LGR, as made or as amended, applicable to the special charges in this case.

59. For these reasons, the Landowners' cross‑appeal should be dismissed.

    The appeal: no restitution at common law

    The method and structure of analysis

60. The common law of restitution developed out of and is informed by the principles which underlay the form of action known as indebitatus assumpsit "for money had and received" by the defendant to the use of the plaintiff expounded in Moses v Macferlan.[11] Lord Mansfield there described the action as one for the "refund" of money pursuant to a "debt" which "the law implies" and which was "founded in the equity of the plaintiff's case".[12] He said that the "gist" of the action was that "the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money".[13]

    [11] (1760) 2 Burr 1005 [97 ER 676].

    [12](1760) 2 Burr 1005 at 1008 [97 ER 676 at 678].

    [13] (1760) 2 Burr 1005 at 1012 [97 ER 676 at 681].

61. Illustrating the point that the action lay "only for money which, ex aequo et bono [in equity and conscience], the defendant ought to refund", Lord Mansfield said:[14]

    "[I]t does not lie for money paid by the plaintiff, which is claimed of him as payable in point of honor and honesty, although it could not have been recovered from him by any course of law; as in payment of a debt barred by the Statute of Limitations, or contracted during his infancy, or to the extent of principal and legal interest upon an usurious contract, or, for money fairly lost at play: because in all these cases, the defendant may retain it with a safe conscience, though by positive law he was barred from recovering. But it lies for money paid by mistake; or upon a consideration which happens to fail; or for money got through imposition, (express, or implied;) or extortion; or oppression; or an undue advantage taken of the plaintiff's situation, contrary to laws made for the protection of persons under those circumstances."

    [14](1760) 2 Burr 1005 at 1012 [97 ER 676 at 680‑681] (footnote omitted).

62. Where the action lay, such as for payment by mistake, Lord Mansfield said of the position of the defendant to the action:[15]

    "It is the most favourable way in which he can be sued: he can be liable no further than the money he has received; and against that, may go into every equitable defence, upon the general issue; he may claim every equitable allowance; he may prove a release without pleading it; in short, he may defend himself by every thing which shews that the plaintiff, ex aequo & bono, is not intitled to the whole of his demand, or to any part of it."

    [15](1760) 2 Burr 1005 at 1010 [97 ER 676 at 679].

63. Lord Mansfield returned to the theme of equity and conscience in Bize v Dickason:[16]

    "[T]he rule had always been, that if a man has actually paid what the law would not have compelled him to pay, but what in equity and conscience he ought, he cannot recover it back again in an action for money had and received. So where a man has paid a debt, which would otherwise have been barred by the Statute of Limitations; or a debt contracted during his infancy, which in justice he ought to discharge, though the law would not have compelled the payment, yet the money being paid, it will not oblige the payee to refund it. But where money is paid under a mistake, which there was no ground to claim in conscience, the party may recover it back again by this kind of action."

    [16](1786) 1 TR 285 at 286‑287 [99 ER 1097 at 1098].

64. Over the ensuing 250 years, the principles established in Moses v Macferlan and Bize v Dickason have become "more or less canalized or defined, but in substance the juristic concept [has remained] as Lord Mansfield left it".[17] The common law of restitution has not, and especially not in this country, become separated from its "equitable roots".[18]

    [17]Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 at 63.

    [18]Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 593 [68].

65. The principled answer to the claim of the Landowners to be entitled under the common law of Australia to restitution from the Council of the unrefunded portion of the moneys they mistakenly paid as special charges involves a contemporary appreciation and application of the equitable foundations of the action explained in Moses v Macferlan and Bize v Dickason.

66. The continuing vitality of the equitable foundations of the common law action for restitution was emphasised by Gibbs CJ in National Commercial Banking Corporation of Australia Ltd v Batty[19] and elaborated upon by Gummow J in Roxborough v Rothmans of Pall Mall Australia Ltd.[20] Gummow J referred in Roxborough to the development of the common law of restitution as an example of "the absorption or adoption by the common law of equitable notions".[21] Illustrations of that absorption or adoption of equitable notions into the common law of restitution given by Gummow J[22] included statements in the Supreme Court of the United States in Myers v Hurley Motor Co[23] and in Atlantic Coast Line Railroad Co v Florida.[24]

    [19] (1986) 160 CLR 251 at 268.

    [20](2001) 208 CLR 516 at 545‑555 [76]‑[100].

    [21] (2001) 208 CLR 516 at 554 [99].

    [22](2001) 208 CLR 516 at 548‑549 [85]‑[86].

    [23](1927) 273 US 18.

    [24] (1935) 295 US 301.

67. In Myers, Sutherland J said of the action for money had and received:[25]

    "Such an action, though brought at law, is in its nature a substitute for a suit in equity; and it is to be determined by the application of equitable principles. In other words, the rights of the parties are to be determined as they would be upon a bill in equity. The defendant may rely upon any defense which shows that the plaintiff, in equity and good conscience is not entitled to recover in whole or in part."

    [25](1927) 273 US 18 at 24.

68. In Atlantic Coast Line Railroad Co, with reference to Moses v Macferlan and Bize v Dickason, Cardozo J described a "cause of action for restitution" as "a type of the broader cause of action for money had and received, a remedy which is equitable in origin and function", and continued:[26]

    "The claimant to prevail must show that the money was received in such circumstances that the possessor will give offense to equity and good conscience if permitted to retain it. The question no longer is whether the law would put him in possession of the money if the transaction were a new one. The question is whether the law will take it out of his possession after he has been able to collect it."

    [26] (1935) 295 US 301 at 309‑310 (citations omitted).

69. The stress Cardozo J placed in Atlantic Coast Line Railroad Co on the circumstances of the individual case determining whether the court would "lend its aid" or "stay its hand and leave the parties where it finds them"[27] has been pointed out in the United States to reflect central features of equity jurisdiction: the "ability to assess all relevant facts and circumstances and tailor appropriate relief on a case by case basis" and "to mould each decree to the necessities of the particular case", "the hallmarks of equity [having] long been flexibility and particularity".[28]

    [27](1935) 295 US 301 at 314.

    [28]Texaco Puerto Rico Inc v Department of Consumer Affairs (1995) 60 F 3d 867 at 874, quoting Rosario-Torres v Hernandez-Colon (1989) 889 F 2d 314 at 321, Hecht Co v Bowles (1944) 321 US 321 at 329, and Lussier v Runyon (1995) 50 F 3d 1103 at 1110.

70. The centrality of these features of equity jurisdiction to the common law of restitution in Australia is apparent in Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation ("ANZ v Westpac")[29] where Mason CJ, Wilson, Deane, Toohey and Gaudron JJ identified that "contemporary legal principles of restitution or unjust enrichment can be equated with seminal equitable notions of good conscience". In Equuscorp Pty Ltd v Haxton,[30] Gummow and Bell JJ also stressed the need for principled consideration of "the degree of flexibility in fashioning the just measure of recovery on an action such as that for money had and received, given that, while it is a legal action not an equitable suit, it is settled in Australia that the action is a liberal action in the nature of a bill in equity".[31]

    [29](1988) 164 CLR 662 at 673.

    [30] (2012) 246 CLR 498.

    [31] (2012) 246 CLR 498 at 545 [114], referring to Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215 at 231.

71. These equitable foundations inform both the content of the concept of "unjust enrichment" as adapted into the common law of restitution in Australia in Pavey & Matthews Pty Ltd v Paul,[32] ANZ v Westpac[33] and David Securities Pty Ltd v Commonwealth Bank of Australia[34] and the analytical framework utilising that concept set out in ANZ v Westpac[35] and David Securities.[36]

    [32] (1987) 162 CLR 221.

    [33](1988) 164 CLR 662.

    [34](1992) 175 CLR 353.

    [35] (1988) 164 CLR 662 at 673.

    [36] (1992) 175 CLR 353 at 378‑379.

72. Unjust enrichment was said in David Securities,[37] quoting Pavey & Matthews,[38] to constitute not "a definitive legal principle according to its own terms" but "a unifying legal concept which explains why the law recognizes, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognize such an obligation in a new or developing category of case". The concept of unjust enrichment has since been said to perform a "taxonomical function referring to categories of cases in which the law allows recovery by one person of a benefit retained by another",[39] without founding or reflecting any "all‑embracing theory of restitutionary rights and remedies".[40]

    [37] (1992) 175 CLR 353 at 378‑379.

    [38](1987) 162 CLR 221 at 256‑257.

    [39]Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 516 [30].

    [40]Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 516 [30], quoting Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 544 [72]. See also Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 595 [74], 615 [130], 617 [136], 618‑619 [139]‑[141]; Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560 at 642 [199].

73. The analytical framework for a common law action for restitution set out in ANZ v Westpac and refined in David Securities involves a two‑stage inquiry into the entitlement of a plaintiff to recover from a defendant an amount of money paid by the plaintiff to the defendant. At the first stage, it is sufficient to give rise to a prima facie entitlement to restitution that the plaintiff point to a recognised "qualifying or vitiating factor", such as mistake or duress, having operated on the making of the payment.[41] At the second stage, it is open to a defendant to displace the prima facie entitlement of the plaintiff by pointing to "circumstances which the law recognizes would make an order for restitution unjust".[42] For that purpose, "the recipient of a payment, which is sought to be recovered on the ground of unjust enrichment, is entitled to raise by way of answer any matter or circumstance which shows that his or her receipt (or retention) of the payment is not unjust".[43]

    [41]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379; Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673. See Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 156 [150].

    [42]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379.

    [43]    David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379 (emphasis added).

74. This analytical framework accordingly draws a clear distinction between a specific qualifying or vitiating factor giving rise to the prima facie entitlement to restitution and the circumstances which may enable a "defence" to be established. ANZ v Westpac and David Securities provide no reason for considering that the range of circumstances which may enable a defence to be established to the whole or some part of a prima facie entitlement to restitution should be narrowly confined. The equitable underpinning of the common law action for restitution provides every reason for considering that it should not.

    The prima facie entitlement

75. The common law entitlement of a taxpayer to recover from a taxing authority moneys paid by the taxpayer for which the taxpayer is later found not to have been liable has traditionally been understood to be governed by the same principles as would render those moneys "recoverable as between subject and subject".[44]

    [44]Mason v New South Wales (1959) 102 CLR 108 at 117.

76. Qualifying or vitiating factors recognised as potentially available to found a prima facie entitlement on the part of a taxpayer to recover such moneys in an action for restitution have traditionally been recognised to include duress arising from the conduct of the taxing authority or from the operation or purported operation of the taxing statute, and mistake of fact.[45] To those two factors, since David Securities, has been added mistake of law.[46]

    [45]See Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 67, referring to Sargood Bros v The Commonwealth (1910) 11 CLR 258, and Mason v New South Wales (1959) 102 CLR 108.

    [46]See Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 67, 100.

77. The third of those qualifying or vitiating factors, mistake of law, is engaged in the present case by the finding of the primary judge that each Landowner paid the special charges in the mistaken belief that the Landowner had a legal obligation to do so. There is accordingly no dispute as to the prima facie entitlement of the Landowners to recover the invalidly levied special charges as moneys paid under an operative mistake of law.

78. The Landowners' attempt to invoke the Woolwich principle as an additional reason for them to have a prima facie entitlement to recover the invalidly levied special charges must be resisted. Whether the Woolwich principle should be imported into the common law of Australia is a large question. Answering that question in an appropriate case would involve consideration not only of the continuing authority of Mason v New South Wales[47] and South Australian Cold Stores Ltd v Electricity Trust of South Australia[48] but also of the scope and content of the prescription in s 64 of the Judiciary Act 1903 (Cth) that "[i]n any suit to which the Commonwealth or a State is a party, the rights of parties shall as nearly as possible be the same ... as in a suit between subject and subject".[49] As the Attorney‑General of the Commonwealth submitted, answering the question whether the Woolwich principle should be imported into the common law of Australia should await a case in which it would be determinative.

    [47](1959) 102 CLR 108. Compare Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 at 172‑173.

    [48](1957) 98 CLR 65. See David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 372‑374. Compare Test Claimants in the FII Group Litigation v Revenue and Customs Comrs [2012] 2 AC 337 at 374‑375 [76]‑[79].

    [49]See Mason v New South Wales (1959) 102 CLR 108 at 125. Compare Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at 407 [150]‑[151].

79. Neither in Woolwich nor in any case in England or elsewhere in which the Woolwich principle has been applied does it appear to have been suggested that the entitlement of a taxpayer to recovery on the Woolwich principle is other than prima facie.

80. In Woolwich itself, Lord Goff left open the development of potential defences to a Woolwich claim, saying that if tax has been paid pursuant to an unlawful demand, "[c]ommon justice seems to require that tax to be repaid, unless special circumstances or some principle of policy require otherwise"[50] but that it was not "necessary to consider for the purposes of the present case to what extent the common law may provide the public authority with a defence to a claim for the repayment of money so paid".[51] The reasoning of Henderson J in Test Claimants in the FII Group Litigation v Commissioners for Her Majesty's Revenue & Customs concerning the unavailability of the defence of change of position to a Woolwich claim on the basis that the taxing authority was a "wrongdoer" in levying invalid taxes was not endorsed on appeal.[52] His Honour later reworked his reasoning to reflect the view that a better basis for excluding the defence was the potential stultification of the "high principles of public policy which led to recognition of the Woolwich cause of action as a separate one in the English law of unjust enrichment, with its own specific 'unjust factor'", but did so in circumstances where the availability of the defence had not been put in contest.[53]

    [50][1993] AC 70 at 172.

    [51][1993] AC 70 at 177.

    [52]Test Claimants in the FII Group Litigation v Commissioners for Her Majesty's Revenue & Customs [2008] EWHC 2893 (Ch) at [336]‑[346]; Test Claimants in the Franked Investment Group Litigation v Commissioners of the Inland Revenue [2010] EWCA Civ 103 at [189]‑[193].

    [53]Test Claimants in the FII Group Litigation v Commissioners for Her Majesty's Revenue & Customs [2014] EWHC 4302 (Ch) at [249], [307], [309]‑[315].

81. In considering the same "high principles of public policy" underlying the Woolwich principle, Mason CJ in Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd referred to the "fundamental principle of public law that no tax can be levied by the executive government without parliamentary authority, a principle which traces back to the Bill of Rights 1688 (Imp)" and described the applicable principle in terms consistent with a prima facie, not an absolute, right to recovery in these terms:[54]

    "In accordance with that principle, the Crown cannot assert an entitlement to retain money paid by way of causative mistake as and for tax that is not payable in the absence of circumstances which disentitle the payer from recovery. It would be subversive of an important constitutional value if this Court were to endorse a principle of law which, in the absence of such circumstances, authorized the retention by the executive of payments which it lacked authority to receive and which were paid as a result of causative mistake."

    [54]    Commissioner of State Revenue (Vict) v Royal Insurance Australia Ltd (1994) 182 CLR 51 at 69 (emphasis added).

82. In Roxborough, Gleeson CJ, Gaudron and Hayne JJ observed that it was "impossible" to explain the decision in Royal Insurance "upon the ground that there is some constitutional reason for treating restitutionary claims against governments differently from claims against private citizens".[55]

    [55](2001) 208 CLR 516 at 530 [29].

83. Accordingly, whether or not the Australian law of restitution recognises a Woolwich claim is not determinative of the issues on the appeal. The determinative question in the present case is whether a defence to the Landowners' prima facie entitlement to recovery is available and, if available, established.

    The defence of payment for good or valuable consideration

84. In ANZ v Westpac, an example given of a circumstance recognised to displace a prima facie entitlement to restitution of a payment of money was "that the payment was made for good consideration such as the discharge of an existing debt".[56] On the authority of ANZ v Westpac, "the 'defence' of valuable consideration" was acknowledged in David Securities to form part of the common law of Australia.[57]

    [56]Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673. See Barclays Bank Ltd v W J Simms Son & Cooke (Southern) Ltd [1980] QB 677 at 695.

    [57] (1992) 175 CLR 353 at 380. Compare Burrows, "Good Consideration in the Law of Unjust Enrichment" (2013) 129 Law Quarterly Review 329 at 331‑332.

85. Despite acknowledging the existence of the defence, David Securities rejected an argument that the defence was established by a lender so as to displace a prima facie entitlement of borrowers to restitution of mistaken payments made by the borrowers to the lender under a void provision of a loan agreement on the basis that the lender would have negotiated a higher interest rate on the loan had it known that the provision was void.[58] The reasons given for the rejection of the argument involved two propositions of general significance. The first was that the availability of the defence turned not on a counterfactual or hypothetical analysis of whether the borrowers' payments were absolute (in the sense of intended, irrespective of the void provision) or conditional (in the sense of dependent on the validity of the void provision) but on an examination of the actual rights and obligations of the parties.[59] The second was that payment being made for "consideration" received in this context referred to "the state of affairs contemplated [by the payer] as the basis or reason for the payment".[60] As such, "consideration" includes but is not confined to contractual counter‑performance. The severability of the void provision of the loan agreement under which the borrowers made the mistaken payments meant that the lender failed to establish the defence because it failed to prove that the borrowers "received consideration for the payments which they [sought] to recover".[61]

    [58](1992) 175 CLR 353 at 380.

    [59](1992) 175 CLR 353 at 381.

    [60](1992) 175 CLR 353 at 382, quoting Birks, An Introduction to the Law of Restitution (1989) at 223.

    [61](1992) 175 CLR 353 at 383 (emphasis omitted).

86. In Roxborough, Gleeson CJ, Gaudron and Hayne JJ also conceived of a failure of consideration as a "payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared".[62] Gummow J in Roxborough identified a failure of consideration as "the failure to sustain itself of the state of affairs contemplated as a basis for the payments the appellants seek to recover".[63] The relevant "purpose" of or "basis" for the payment, although assessed from the perspective of the payer, is objectively and not subjectively determined.[64]

    [62](2001) 208 CLR 516 at 525 [16].

    [63](2001) 208 CLR 516 at 557 [104].

    [64]Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd (2005) 63 NSWLR 203 at 252 [239], 254 [250].

87. Since David Securities, the defence of good consideration has been held to be available to displace a prima facie entitlement to restitution of payments of money in two decisions of intermediate courts of appeal in Australia. The correctness of these decisions is not in dispute. In each case, the good consideration was contractual counter‑performance by the payee.

88. In Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd,[65] a tenant who had taken possession of premises paid the rent due to the landlord under a lease agreement unaware of a statutory entitlement to withhold the payment of rent for so long as the landlord failed to provide a statutorily prescribed disclosure statement. The prima facie entitlement of the tenant to restitution of the rent as money paid under a mistake of law was held by the Victorian Court of Appeal to be defeated by the tenant having "received good consideration for the money it paid, namely, exclusive possession of the premises that were obviously of use and benefit to it".[66]

    [65] (2006) V Conv R 54‑713.

    [66](2006) V Conv R 54‑713 at [21]. See also at [33].

89. In Adrenaline Pty Ltd v Bathurst Regional Council,[67] the promoter of an annual racing event paid to a local council an annual fee for the right to use a racing circuit and for ancillary services under an agreement with the council, mistakenly believing that the council had complied with its statutory obligations in setting the fee. The prima facie entitlement of the promoter to restitution of the annual fee as money paid under a mistake of law was held by the New South Wales Court of Appeal to be defeated by the promoter having received "good consideration" being "precisely what it bargained for".[68]

    [67](2015) 97 NSWLR 207.

    [68](2015) 97 NSWLR 207 at 225 [86].

90. Likening the scheme of the Local Government Act and the Coastal Protection and Management Act to a contract between the Council and the Landowners, the Council argued that its performance of the works to the benefit of the Landowners should be treated as equivalent to the contractual performance treated as good consideration in each of Ovidio and Adrenaline. The lack of agreement by the Landowners to the performance of the works means that the analogy is imperfect, even allowing for the expansive notion of "consideration" adopted in David Securities. The imperfect analogy points, however, to another, potentially overlapping, category of circumstances in which the law recognises the making of an order for restitution to be unjust.

    Another defence?

91. The American Law Institute's Restatement (Third) of Restitution and Unjust Enrichment treats the mistaken payment of a statute barred debt[69] (to which Lord Mansfield referred both in Moses v Macferlan and in Bize v Dickason[70]), counter‑performance by a payee of an unenforceable agreement[71] (of which Ovidio is an instance[72]), and counter‑performance by a payee of an agreement beyond the statutory authority of the payee[73] (of which Adrenaline can be treated as an instance[74]) each as a type of "defence" which it labels "Recipient Not Unjustly Enriched".

    [69]Restatement (Third) of Restitution and Unjust Enrichment §62 (Illustration 1). See also Clifton Mfg Co v United States (1935) 76 F 2d 577 at 581; Span v Maricopa County Treasurer (2019) 437 P 3d 881 at 887.

    [70]See [60]‑[63] above.

    [71]Restatement (Third) of Restitution and Unjust Enrichment §62, referring to Restatement (Third) of Restitution and Unjust Enrichment §31(1).

    [72] See [88] above.

    [73]Restatement (Third) of Restitution and Unjust Enrichment §62, referring to Restatement (Third) of Restitution and Unjust Enrichment §32(2). See also, in the context of municipal corporations, Restatement (Third) of Restitution and Unjust Enrichment §33(1).

    [74]See [89] above.

92. The Restatement propounds the defence in the following terms:[75]

    "Even if the claimant has conferred a benefit that results in the unjust enrichment of the recipient when viewed in isolation, the recipient may defend by showing that some or all of the benefit conferred did not unjustly enrich the recipient when the challenged transaction is viewed in the context of the parties' further obligations to each other."

    [75]Restatement (Third) of Restitution and Unjust Enrichment §62. See also, in the context of municipal corporations, Restatement (Third) of Restitution and Unjust Enrichment §33.

93. The Restatement founds the defence squarely on the "baseline of unjust enrichment" understood in accordance with the principles of equity expounded in Moses v Macferlan and elaborated in Bize v Dickason.[76] Comment within the Restatement explains the defence to have "practical application" in a "limited class of cases" different from cases in which it is "a proper answer (and not an affirmative defense) to plead 'no unjust enrichment'" or "in which the recipient of a benefit has suffered a detrimental change of position". The class to which the defence is applicable is explained to comprise cases which "arise when the claimant alleges facts supporting a prima facie claim in unjust enrichment – typically a payment by mistake – but the recipient is able to show that the resulting enrichment is not unjust, in view of the larger transactional context within which the benefit has been conferred".

    [76]    Restatement (Third) of Restitution and Unjust Enrichment §62.

94. The defence as so propounded in the Restatement looks to the transaction or dealing within which the prima facie entitlement of the payer to restitution has arisen and to the entirety of the circumstances relating to the transaction or dealing including those arising subsequent to the making of the payment or the conferring of the benefit the defendant's entitlement to which is vitiated or qualified by some operative factor. It admits of the prima facie entitlement of the payer to restitution being negated or reduced by reference to other rights and obligations of the payer and payee. Accordingly, the "standard application" of the defence is "to a case in which a payment by the claimant, viewed in isolation, creates unjust enrichment of the recipient and a prima facie right to recovery in restitution",[77] but the larger transactional circumstances disclose otherwise.

    [77]Restatement (Third) of Restitution and Unjust Enrichment §62.

95. The breadth and specificity of the inquiry posited reflects the traditional technique of equity: "[a] court of law works its way to short issues, and confines its views to them ... [a] court of equity takes a more comprehensive view, and looks to every connected circumstance that ought to influence its determination upon the real justice of the case".[78]

    [78]Jenyns v Public Curator (Q) (1953) 90 CLR 113 at 119, quoting The Juliana (1822) 2 Dods 504 at 521 [165 ER 1560 at 1567].

96. Application of that technique in the context of the common law of restitution in Australia accords with the equitable nature of that common law doctrine already discussed. For example, in Fitzgerald v F J Leonhardt Pty Ltd,[79] to which Gummow and Bell JJ referred in Equuscorp Pty Ltd v Haxton,[80] McHugh and Gummow JJ observed that "it was held long ago that where a borrower had paid interest in excess of the rate permitted by statute, whilst the debtor could not recover the whole back, an action would lie to recover the surplus". In support of this proposition their Honours cited Smith v Bromley, in which it was said that the assistance of equity was the source of the entitlement to recover the amount paid over and above the amount "the debtor was obliged, in natural justice, to pay".[81]

    [79](1997) 189 CLR 215 at 231.

    [80](2012) 246 CLR 498 at 545 [114].

    [81]See Jones v Barkley (1781) 2 Dougl 684 at 697 [99 ER 434 at 444].

97. Understanding "unjust enrichment" as a unifying legal concept as distinct from a definitive legal principle[82] and understanding "defence" to refer to a category of circumstances in which the law recognises the making of an order for restitution to be unjust,[83] the inquiry posited by the defence involves no "direct application" of the concept of unjust enrichment but rather indicates circumstances which can operate to deny an "occasion[] of unjust enrichment supporting claims for restitutionary relief".[84] It therefore fits comfortably within the second stage of the analytical framework for determining the entitlement of a payer to recover money from a payee set out in ANZ v Westpac and David Securities.

    [82]Compare [72] above with Restatement (Third) of Restitution and Unjust Enrichment §1, §62.

    [83]Compare [73] above with Restatement (Third) of Restitution and Unjust Enrichment Introductory Note to Ch 8 and §62.

    [84]Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 579 [20].

98. In answering the essential question whether an enrichment resulting from a payment is not "unjust" in view of the larger transactional and related context within which the payment has occurred, the required evaluation is qualitative but does not invoke a subjective view of "what is fair or unconscionable".[85] The relevant quality of unjustness, or its lack, is to be understood in a sense that is "descriptive, accumulative and incremental".[86] The quality of unjustness required is also not to be evaluated "by reference to some preconceived formula framed to serve as a universal yardstick" but rather "involves a 'real process of consideration and judgment' in which the ordinary processes of legal reasoning by induction and deduction from settled rules and decided cases are applicable but are likely to be inadequate to exclude an element of value judgment in a borderline case".[87]

    [85]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379.

    [86]    Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 619 [141].

    [87]    Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 619 [140], quoting The Commonwealth v Verwayen (1990) 170 CLR 394 at 441, 445 (citation omitted).

99. The defence can accordingly be treated as broadly descriptive of categories of circumstances in which Australian law might recognise the making of an order for restitution to be unjust when receipt and retention of a payment affected by a vitiating factor, such as mistake or duress, is viewed in the context of other rights and obligations of the payer and payee.

100. There is no need to examine whether every illustration of the defence propounded in the Restatement would be treated as illustrative of a category of circumstances in which Australian law would recognise the making of an order for restitution to be unjust. For the purposes of the present case, it is sufficient to note a number of related illustrations for which analogues can readily be found in decided cases in other jurisdictions.

101. The Restatement provides the following illustration of the defence operating in the context of the unauthorised levying of municipal taxes ("[t]ax" meaning, in this context, "every form of imposition or assessment collected under color of public authority"[88]):[89]

     "City assesses a property tax on a nondiscriminatory basis. The tax is subsequently determined to be improperly authorized and void. In response to Taxpayers' suit against City to recover the tax collected from them, City demonstrates that the revenues illegally collected were spent exclusively on ordinary municipal services benefiting Taxpayers among other residents. Under the circumstances, the court may find that neither City nor its residents have been unjustly enriched at Taxpayers' expense."

     [88]Restatement (Third) of Restitution and Unjust Enrichment §19.

     [89]    Restatement (Third) of Restitution and Unjust Enrichment §19 (Illustration 17).

102. The illustration is explained to be based on the decision of the Supreme Court of Florida in Dryden v Madison County.[90] The informing principle affirmed in that decision was that "[w]here an invalid tax scheme applies across the board and confers a commensurate benefit ... 'equitable considerations' may preclude a refund".[91] These considerations were identified as "(1) the assessments were nondiscriminatory, ie, they applied across the board to all property owners; (2) the assessments conferred a commensurate benefit on the taxpayers, ie, in return for the assessments, the taxpayers were provided with garbage collection and disposal, landfill closure, ambulance service, and fire protection; and (3) the assessments were enacted in good faith".[92] The requirement of "good faith" is to be understood as an honest belief on the part of the authority that it was empowered to exact the imposts.[93]

     [90](1999) 727 So 2d 245, affirming Dryden v Madison County (1997) 696 So 2d 728.

     [91]Dryden v Madison County (1997) 696 So 2d 728 at 730.

     [92]Dryden v Madison County (1999) 727 So 2d 245 at 247, fn 2.

     [93]See Dryden v Madison County (1997) 696 So 2d 728 at 730, fn 4.

103. Another illustration in the Restatement better illustrates the operation of the defence in the broader context of the unauthorised demand and receipt of moneys by a public authority in relation to the provision of services by the public authority. That illustration is introduced by the following commentary:[94]

     "If a regulation affecting prices has been set aside as procedurally defective, buyers and sellers who have either paid too much or received too little – in consequence of interim compliance – have a prima facie claim to restitution ... Subsequent proceedings may reveal, however, that an invalid regulation established a correct price, measured by substantive criteria. In such a case the court may find that transactions carried out in compliance with the invalid regulation did not result in unjust enrichment; or that the extent of any unjust enrichment was less than the whole of the price differential in question."

     [94]Restatement (Third) of Restitution and Unjust Enrichment §62.

104. The commentary describes the "[s]ubsequent proceedings" as "collateral circumstances, outside the scope of prior transactions between claimant and recipient", but the example in both the previous illustration and this illustration are best understood as being "a specific application of the more general rule", applying to the levy of all imposts (be they taxes in the strict sense[95] or not), that recovery in such a case is confined by the fact and to the extent of the unjustness of the enrichment.[96]

     [95]See Matthews v Chicory Marketing Board (Vict) (1938) 60 CLR 263 at 276.

     [96]Restatement (Third) of Restitution and Unjust Enrichment §62.

105. The illustration given is of an unauthorised fare increase by a municipal transit authority:[97]

     "Agency charged with regulation of municipal transit system authorizes a 50‑cent fare increase. After the new fares have been in effect for some time, it is established on judicial review that Agency's action was improperly authorized and therefore illegal. Acting this time in compliance with legal requirements, Agency rescinds its previous order and authorizes a 30‑cent fare increase instead. Transit passengers have a prima facie claim in restitution ... but they will not necessarily recover the whole of the increased fares collected under the illegal order. Restitution in such a case is measured, not by the amount improperly exacted, but by the amount of the recipient's unjust enrichment. If the court finds that Agency might properly have authorized a 30‑cent fare increase for the whole of the period in question, it will restrict any recovery to the remaining 20 cents of the contested fares."

     [97]Restatement (Third) of Restitution and Unjust Enrichment §62 (Illustration 6).

106. The illustration is explained to be based on the decision of the Court of Appeals for the District of Columbia Circuit in Williams v Washington Metropolitan Area Transit Commission.[98] There, it was said that "[o]rdinarily ... the proper disposition on setting aside a rate increase unlawfully ordered by the Commission would be to compel the regulated company to restore the entire difference between the higher fares collected under the invalid order and the amount that it would have received from the fare schedule previously in effect".[99] Treating the proper disposition as "governed by the equitable considerations which apply to suits for restitution generally" as explained by Cardozo J in Atlantic Coast Line Railroad Co,[100] however, the conclusion reached was stated in terms that "in the circumstances of this case it clearly does not offend 'equity and good conscience' to permit Transit to retain that part of the fare increase essential to avoidance of an undisputedly unfair return".[101]

     [98](1968) 415 F 2d 922. See also Moss v Civil Aeronautics Board (1975) 521 F 2d 298.

     [99] (1968) 415 F 2d 922 at 944.

     [100] (1968) 415 F 2d 922 at 944‑945. See [68]‑[69] above.

     [101] (1968) 415 F 2d 922 at 946.

107. In Atlantic Coast Line Railroad Co,[102] to which it will be recalled Gummow J drew specific attention in Roxborough,[103] a regulated railroad carrier had collected freight charges from customers in accordance with an order of the Interstate Commerce Commission setting applicable rates which was found invalid for "procedural mistake" with the result that the collection of those freight charges was unlawful.[104] The freight charges actually collected by the carrier were not shown to be other than reasonable rates within the range which the Commission would have been lawfully entitled to prescribe by a procedurally valid order. The "field of inquiry", the reasonableness of the rates, was accepted to be "one in which the search for certainty [would be] futile" and "[o]pinions will differ as to the qualifications of experts, the completeness of their inquiry into operating costs, the accuracy of their methods of computation, the soundness of their estimates".[105] The fact that the Commission subsequently prescribed the same rates pursuant to a second order that did not suffer from the procedural error affecting the first order was adjudged, however, to demonstrate valid rates within the "zone of reasonableness within which judgment is at large".[106] Cardozo J observed that the claimants for restitution could not succeed by demonstrating that other rates (as recommended by a master appointed for that purpose in the proceedings) were reasonable. Rather, the claimants had to demonstrate that the rates as subsequently and validly determined by the Commission were unreasonable.[107] His Honour concluded that "[i]n the absence of such a showing the carrier does not offend against equity and conscience in standing on its possession and keeping what it got" pursuant to the first, invalid order.[108] No part of the unlawfully collected freight charges was therefore to be subjected to an order for restitution. Instead, Cardozo J said, "in the light of its present knowledge the court will stay its hand and leave the parties where it finds them".[109]

     [102](1935) 295 US 301.

     [103]See [66] above.

     [104](1935) 295 US 301 at 305, 316.

     [105](1935) 295 US 301 at 317.

     [106](1935) 295 US 301 at 317.

     [107](1935) 295 US 301 at 318.

     [108](1935) 295 US 301 at 318.

     [109](1935) 295 US 301 at 314.

108. Other illustrations of circumstances giving rise to a complete or partial defence along these lines can be found in the case law of comparable common law jurisdictions.

109. An early illustration is Steele v Williams,[110] which has been regarded as a paradigm case of restitution of money paid to a public official under duress.[111] There, a parish clerk demanded that an attorney pay a specified total amount for searching the parish register and taking extracts.[112] The clerk was entitled by statute to charge for the search but not for the taking of the extracts. The attorney recovered from the clerk not the whole of the amount demanded and paid but rather so much of that amount as exceeded the permissible fee for the search.[113]

     [110](1853) 8 Ex 625 [155 ER 1502].

     [111]See Mason v New South Wales (1959) 102 CLR 108 at 140‑141; Bell Bros Pty Ltd v Shire of Serpentine-Jarrahdale (1969) 121 CLR 137 at 145‑146.

     [112](1853) 8 Ex 625 at 630‑631 [155 ER 1502 at 1504‑1505].

     [113](1853) 8 Ex 625 at 625, 631 [155 ER 1502 at 1502, 1505].

110. Yet another early illustration is Great Western Railway Co v Sutton,[114] where a railway company was found to have exceeded its statutory authority by demanding and being paid more for the carriage of goods of the plaintiff than it charged for the carriage of the goods of other persons in like circumstances. The plaintiff was held to be entitled to restitution not of the whole of the sum demanded and paid for the carriage of his goods but the amount by which that sum exceeded the permissible non‑discriminatory charge.[115]

     [114](1869) LR 4 HL 226.

     [115](1869) LR 4 HL 226 at 246.

111. The decision of the House of Lords in South of Scotland Electricity Board v British Oxygen Co Ltd,[116] which concerned an impermissibly discriminatory charge by an electricity authority for the provision of electricity to industrial consumers, was to similar effect: the consumers were held to be entitled to restitution of "whatever sum they may be able to prove was in excess of such a charge as would have avoided undue discrimination against them".[117]

     [116] [1959] 1 WLR 587; [1959] 2 All ER 225.

     [117] [1959] 1 WLR 587 at 596; [1959] 2 All ER 225 at 233.

225. In Roxborough v Rothmans of Pall Mall Australia Ltd,[265] after a lengthy excursus[266] that considered the decision in Moses v Macferlan and subsequent cases that described the deep equitable foundations of a claim for money had and received,[267] Gummow J turned to "The law in Australia". His Honour referred to specific instances described by Lord Mansfield where restitution is now recognised to be available including money paid by mistake or "upon a consideration which happens to fail" and explained that "[u]sually, recourse to that particular body of authority will be sufficient", although when considering novel cases at the "boundaries of the established categories" it is permissible to do so by reference to notions of equity.[268]

     [265](2001) 208 CLR 516.

     [266](2001) 208 CLR 516 at 545-551 [76]-[89].

     [267]Including Myers v Hurley Motor Co (1927) 273 US 18 at 24; Atlantic Coast Line Railroad Co v Florida (1935) 295 US 301 at 309.

     [268](2001) 208 CLR 516 at 552-553 [93]-[95].

226. The statement by Gummow J about the development of the law of restitution in novel cases cannot be taken to be a suggestion that Australian law should regress to the state of English law some time before 1849[269] where notions of equity, conscience and natural justice might have been seen as premises capable of direct application. Rather, it was no more than a reference to the basic notions of justice that motivate the development of established legal rules by reference to the underlying principles.[270] As this Court has repeatedly emphasised, restitutionary claims and defences do not today involve "a judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate" but instead require "determination, by the ordinary processes of legal reasoning" of whether an obligation arises to make restitution.[271] "[I]t is not legitimate to determine whether an enrichment is unjust by reference to some subjective evaluation of what is fair or unconscionable."[272]

     [269]Swain, "Unjust Enrichment and the Role of Legal History in England and Australia" (2013) 36 University of New South Wales Law Journal 1030 at 1046, discussing Miller v Atlee (1849) 13 Jur 431 at 431. See also Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 553 [96] and Sinclair v Brougham [1914] AC 398 at 455-456.

     [270]See also Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (2003) 214 CLR 51 at 73 [43].

     [271]Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 256-257. See also David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 378-379; Lumbers v W Cook Builders Pty Ltd (In liq) (2008) 232 CLR 635 at 664-665 [83]-[85]; Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at 515-516 [29]; Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560 at 649-650 [213].

     [272]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379.

227. An instance of a discretionary or equitable approach to the defence of "Recipient Not Unjustly Enriched" that is cited by the Restatement is the decision of the Supreme Court of the United States in Atlantic Coast Line Railroad Co v Florida.[273] In that case, a railroad carrier collected freight charges from its customers for the performance of carriage services. An order for increased carriage charges made by the Interstate Commerce Commission was held to be invalid for a period during which it was not supported by proper findings. The Supreme Court of the United States held that the customers were not entitled to restitution of any part of their payments.

     [273](1935) 295 US 301.

228. The result of that case is plainly correct and consistent with present Australian law. In terms of Australian law, assuming that the invalidity of the charges removed any contractual obligation to pay and that restitution would not stultify the statutory policy, the carrier had given good consideration for the payments. The carrier had performed on the basis of payment by customers who had requested, and received, that performance by the carrier. In determining the value of the counter-performance by the carrier, the Supreme Court noted that the later, appropriate findings by the Commission had "looked into the very years covered by the claims for restitution". The Court treated those higher rates as applicable as they were based on "the opinion of a body of experts upon matters within the range of their special knowledge and experience".[274]

     [274](1935) 295 US 301 at 312, 317.

229. Although the result of the decision in Atlantic Coast Line Railroad Co is consistent with Australian law, the reasoning is not. Cardozo J sought to rely directly upon general principles of equity as though they were capable of direct application, adding that "[r]estitution is not of mere right. It is ex gratia, resting in the exercise of a sound discretion, and the court will not order it where the justice of the case does not call for it".[275] As explained earlier in these reasons, in Australian law, restitution is not a matter of judicial discretion by reference to notions of equity or fairness. Restitution is not a gift that can be bestowed by the court in the application of judicial discretion. It is not legitimate to assess whether restitution should be ordered by reference to subjective evaluation of fairness or conscience.[276]

     [275](1935) 295 US 301 at 310.

     [276]David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379.

230. Indeed, to the extent that the Restatement supports such a discretionary approach to a defence of "Recipient Not Unjustly Enriched", the first section of the Restatement expressly recognises substantial objections and dangers in doing so, in terms that could be adopted directly in Australia:[277]

     "[T]he purely equitable account of the subject is open to substantial objections. Saying that liability in restitution is imposed to avoid unjust enrichment effectively postpones the real work of definition, leaving to a separate inquiry the question whether a particular transaction is productive of unjust enrichment or not. In numerous cases natural justice and equity do not in fact provide an adequate guide to decision, and would not do so even if their essential requirements could be treated as self-evident. Unless a definition of restitution can provide a more informative generalization about the nature of the transactions leading to liability, it is difficult to avoid the objection that sees in 'unjust enrichment', at best, a name for a legal conclusion that remains to be explained; at worst, an open-ended and potentially unprincipled charter of liability."

     [277]Restatement (Third) of Restitution and Unjust Enrichment §1.

     Elements of "good consideration" in the §62 defence

231. There is, nevertheless, one respect in which the §62 defence has strong echoes in Australian law. In the comment to the §62 defence, the American Law Institute explains that "a specific application of the more general rule of this section" is the defence to restitution of the value of performance under an unenforceable agreement that "[t]here is no unjust enrichment if the claimant receives the counter-performance specified by the parties' unenforceable agreement".[278] That is, in broad substance, an example of the Australian defence of good consideration.

     [278]Restatement (Third) of Restitution and Unjust Enrichment §31(1), §62, comment a.

232. One illustration given in the discussion concerning §62 is capable of falling within the defence of good consideration:[279]

     "Agency charged with regulation of municipal transit system authorizes a 50-cent fare increase. After the new fares have been in effect for some time, it is established on judicial review that Agency's action was improperly authorized and therefore illegal. Acting this time in compliance with legal requirements, Agency rescinds its previous order and authorizes a 30-cent fare increase instead. Transit passengers have a prima facie claim in restitution by the rule of §18 [judgment subsequently reversed or avoided], but they will not necessarily recover the whole of the increased fares collected under the illegal order. Restitution in such a case is measured, not by the amount improperly exacted, but by the amount of the recipient's unjust enrichment. If the court finds that Agency might properly have authorized a 30-cent fare increase for the whole of the period in question, it will restrict any recovery to the remaining 20 cents of the contested fares."

     [279]Restatement (Third) of Restitution and Unjust Enrichment §62, illustration 6.

233. There is an ambiguity in this illustration concerning the effect of the judicial review decision on the obligations of the parties. That ambiguity is not resolved by the reasoning in the case upon which it is based.[280] The passengers had an agreement with the municipal transport company (regulated by the Agency) by which the passengers paid money in exchange for being provided with their requested transport. If the effect of the invalidation of the fare increase were that the obligation of passengers to pay the price for the transport was void or unenforceable, then the passengers might have had a prima facie claim for restitution if they had paid on the basis that the fare was owed. For the reasons that we have explained,[281] the municipal transport company would then have a defence of good consideration because it provided the passengers with the benefit of a service that had been requested on the basis that the service would be remunerated. The valuation of that benefit, according to the illustration, might include a 30-cent (rather than 50-cent) increase over previous fares if that reflected its objective value at the time.

     [280]Williams v Washington Metropolitan Area Transit Commission (1968) 415 F 2d 922.

     [281]Above at [200]-[203].

234. On the other hand, if the effect of the judicial review decision in the illustration were merely to invalidate the 50-cent fare increase, leaving the passengers with a contract with the municipal transport company for transport at the previous price, then, in Australia, the courts could have no role effectively to rewrite that contract on the basis that the municipal transport company, in a counterfactual world, might have charged (but, in the real world, did not charge) fares that were 30 cents more. In this scenario, the passengers received what they paid for at the price that had validly been agreed. Their contract was valid and enforceable. They were not overcharged.

235. In any event, cases of overcharging have nothing to do with a defence of good consideration. No defence of good consideration applies in such cases. This point requires further explanation.

     Cases to which a good consideration defence does not apply

236. No questions of good consideration or valuation of counter-performance will arise in response to a claim for restitution of excess payments made for a service provided under an agreement or other obligation. If the agreement or obligation provides for a particular price for a service and the amount paid exceeds that price then the claim for restitution will itself be limited to the excess of the agreed price. No issue of defences to a claim for restitution will arise because the excess is the only amount as to which the basis for the payment will have failed and it is the only amount which the defendant was not entitled to receive. As Willes J said in Great Western Railway Co v Sutton,[282] when a person pays more than they are bound to pay for a service they are "entitled to recover the excess" and "[t]his is every day's practice as to excess freight". So too, "[i]f a person is authorised to receive money by virtue of an Act of Parliament, it is like a contract between the parties, that the sum allowed shall be all which he is to receive".[283]

     [282](1869) LR 4 HL 226 at 249. See also South of Scotland Electricity Board v British Oxygen Co Ltd [1959] 1 WLR 587.

     [283]Steele v Williams (1853) 8 Ex 625 at 632 [155 ER 1502 at 1505].

237. An example of this principle in operation is the decision of the Privy Council in Waikato Regional Airport Ltd v Attorney-General.[284] In that case, the Ministry of Agriculture and Forestry entered into an agreement with Waikato Regional Airport Ltd by which the latter agreed to pay charges for biosecurity services calculated in accordance with s 135 of the Biosecurity Act 1993 (NZ), which required the charges to be "recovered in accordance with the principles of equity and efficiency".[285] The charges imposed by the Ministry exceeded those that were permitted by s 135 of the Biosecurity Act because they went beyond what was required by principles of "fairness" and "proportionate sharing".[286] The Ministry was required to make restitution of the excess. Although the primary judge spoke in terms of a "reverse-restitutionary" obligation upon the Ministry,[287] there was no need for a defence of good consideration. The basis for the payment by Waikato Regional Airport Ltd had failed only to the extent of the excess payment, in part because the contract itself was not found to be ultra vires.[288] By the time the case reached the Privy Council, this point was disposed of in a single sentence: "Their Lordships can see no ground for departing from the Judge's decision to allow partial recovery only (that is, of the excess over what would have been a fair and proportionate charge)".[289]

     [284][2004] 3 NZLR 1.

     [285]Waikato Regional Airport Ltd v Attorney-General [2001] 2 NZLR 670 at 676 [11], 709 [151], [153].

     [286]Waikato Regional Airport Ltd v Attorney-General [2004] 3 NZLR 1 at 22-23 [64], 25 [74].

     [287]Waikato Regional Airport Ltd v Attorney-General [2001] 2 NZLR 670 at 713 [177].

     [288]Waikato Regional Airport Ltd v Attorney-General [2001] 2 NZLR 670 at 709 [155].

     [289]Waikato Regional Airport Ltd v Attorney-General [2004] 3 NZLR 1 at 27 [84].

238. The same principle was applied as Scottish law by the House of Lords in South of Scotland Electricity Board v British Oxygen Co Ltd.[290] In that case, a Scottish electricity board supplied consumers with electricity and was required by s 37(8) of the Electricity Act 1947 (UK) to charge consumers by reference to a tariff that did not show "undue preference" or "undue discrimination". Section 37(8) did not have the effect that no tariff at all was required if undue preference or discrimination was shown. Rather, to the extent that there was undue preference or discrimination, the consumers had been "charged more than is warranted by the statute". Any amount beyond that was an amount by which the consumers had been "overcharged".[291] The consumers were found to be entitled to restitution of the excess. No question of good consideration arose and no defence was considered.

     [290][1959] 1 WLR 587.

     [291][1959] 1 WLR 587 at 596. See also at 599.

239. Any doubt about this principle, and its independence from a defence of good consideration, was removed by the decision of the Court of Appeal for England and Wales in Vodafone Ltd v Office of Communications.[292] In that case, mobile network operators paid licence fees to the appellant, the Office of Communications ("Ofcom"), by reference to 2015 regulations that were subsequently, and retrospectively, quashed. The effect of quashing the 2015 regulations was that the 2011 regulations had been in force at the time of the payments. The 2011 regulations obliged the mobile network operators to pay lower amounts to Ofcom than had been paid under the 2015 regulations. Vodafone succeeded on the simple proposition that it was entitled to restitution of the difference between what it paid (by reference to the 2015 regulations) and what it was required to pay (by reference to the 2011 regulations).[293] Ofcom had "no claim for counter-restitution"[294] and Ofcom could not defend Vodafone's claim for the amount paid in excess of that which was due by arguing a counter-factual concerning the amount which would have been properly charged by a regulation that had been validly enacted in 2015.[295]

     [292][2020] QB 857.

     [293][2020] QB 857 at 886 [100], 888 [109], 889 [111].

     [294][2020] QB 857 at 872 [27].

     [295][2020] QB 857 at 885 [96].

240. Importantly, in each of these cases, restitution was allowed only of the excess that was paid over the amount that was lawfully due. If no payment had been lawfully due then full restitution should have been made: a taxing authority cannot "justify taking a taxpayer's money without Parliamentary authority by saying that they could alternatively have taken the money in an authorised way".[296] As Underhill LJ said in Vodafone Ltd v Office of Communications,[297] allowing restitution for the excess of the amount paid over the amount "lawfully authorised at the time of payment" is a "necessary consequence of upholding the principle of legality"; namely, "the Government can always seek to validate the payment retrospectively by primary legislation".

     [296]Mitchell, Mitchell and Watterson (eds), Goff & Jones on Unjust Enrichment, 10th ed (2022) at 728 [22-35]. See also Stevens, The Laws of Restitution (2023) at 60; Bhandari, "Undoing Transactions for Tax Purposes: The Hastings-Bass Principle", in Elliott et al (eds), Restitution of Overpaid Tax (2013) 149 at 163-164.

     [297][2020] QB 857 at 888-889 [109]-[110].

     No defence of fiscal chaos or change of position

241. The Restatement recognises other possible defences to a claim for restitution of tax independently of the defence of "Recipient Not Unjustly Enriched". One of those separate defences recognised in §19 is where restitution would "disrupt orderly fiscal administration".[298] Elsewhere, this has been described as a defence concerned with "fiscal chaos".[299] In the comment to §19, it is suggested that this defence is a broader application of the defence of change of position. In Australian law the defence of change of position to a restitutionary claim requires an "adverse"[300] or "irreversible"[301] change of position by the recipient in good faith and in reliance upon the payment. But, in the Restatement, a taxing authority is treated as having a unique advantage in that it is said that a defence of change of position by a taxing authority does not need to be "irrevocable". In other words, the defence of fiscal chaos "is potentially broader than in the typical contest between private parties, because of judicial concern for the stability of public revenues".[302]

     [298]Restatement (Third) of Restitution and Unjust Enrichment §19(2).

     [299]See Kingstreet Investments Ltd v New Brunswick [2007] 1 SCR 3 at 21 [29].

     [300]Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 384.

     [301]Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at 582 [24]-[25], 602 [95], 604 [102]. See also Bant, The Change of Position Defence (2009) at 130-143.

     [302]Restatement (Third) of Restitution and Unjust Enrichment §19, comment f.

242. One illustration of this point which the Restatement gives is based on the decision of the Supreme Court of Florida in Dryden v Madison County,[303] where a City tax is found to be void but the "City demonstrates that the revenues illegally collected were spent exclusively on ordinary municipal services benefiting Taxpayers among other residents". The comment in the Restatement relies upon this case as justifying a broader defence of change of position in §19(2) in the context of payments of tax where restitution "would disrupt orderly fiscal administration or result in severe public hardship" so that "the court may on that account limit the relief to which the taxpayer would otherwise be entitled".[304]

     [303](1999) 727 So 2d 245.

     [304]Restatement (Third) of Restitution and Unjust Enrichment §19(2).

243. The Restatement does not seek to justify the result of Dryden v Madison County on the terms expressed by the Supreme Court of Florida in its original decision in that proceeding.[305] The original decision was appealed to the Supreme Court of the United States, which granted certiorari, vacated the judgment and remanded the matter back to the Supreme Court of Florida.[306] The Restatement focuses instead upon the decision made on remand, which was not quashed.[307] The reasoning of the Supreme Court of Florida in the earlier, quashed decision had suggested that "[w]here an invalid tax scheme applies across the board and confers a commensurate benefit ... 'equitable considerations' may preclude a refund".[308] But when the Supreme Court of the United States quashed that decision it did not engage with what was meant by "commensurate benefit" to taxpayers or "equitable considerations". The Supreme Court did, however, remand the decision for reconsideration in a manner that did not prejudice the complainant merely because the complainant (like the respondents in this appeal) did not refuse to pay but instead paid the tax and later sought restitution.[309]

     [305]Dryden v Madison County (1997) 696 So 2d 728.

     [306]Dryden v Madison County (1998) 522 US 1145.

     [307]Restatement (Third) of Restitution and Unjust Enrichment §19, reporter's note f.  

     [308]Dryden v Madison County (1997) 696 So 2d 728 at 730 [2].

     [309]See Newsweek Inc v Florida Department of Revenue (1998) 522 US 442 at 444-445.

244. No defence of change of position is available in this case, directly or indirectly, for two reasons. First, and most importantly, no defence of change of position was pleaded by the Council. In the Court of Appeal, as McMurdo JA observed, "[t]he Council disavowed a defence of change of position".[310] In this Court, the Council again disavowed such a defence.

     [310]Redland City Council v Kozik (2022) 11 QR 524 at 543 [48].

245. Secondly, it would be a very large step for this Court to recognise, especially without argument and without evidence, an extended defence of change of position and fiscal chaos that applies only to taxing authorities. The recognition of this extended defence in the United States was said to take "on a significant federal constitutional dimension".[311] In England, a defence based on fiscal chaos was abandoned by Her Majesty's Revenue and Customs Commissioners,[312] and was rejected by the Law Commission on the basis of "fundamental questions of fairness to taxpayers" and the "substantial investment of discretion in a tribunal or court to afford it power to deny [a right of recovery] on the basis of expediency".[313] In the Supreme Court of Canada it has been held that in relation to a rule permitting restitution of invalid taxes, "[c]oncerns about fiscal chaos and inefficiency should not be incorporated into the applicable rule".[314] If an extended change of position defence based on fiscal chaos were to be considered in Australia, then it would also be necessary to confront notions of constitutional equality between private parties and government that have underpinned much of the development of the common law.[315]

     [311]Restatement (Third) of Restitution and Unjust Enrichment §19, comment b. 

     [312]Prudential Assurance Co Ltd v Revenue and Customs Commissioners [2014] 2 CMLR 10 at 378 [166].

     [313]Law Commission, Restitution: Mistakes of Law and Ultra Vires Public Authority Receipts and Payments (1994) at 126 [11.6]. See also Williams, Unjust Enrichment and Public Law (2010) at 157-159.

     [314]Kingstreet Investments Ltd v New Brunswick [2007] 1 SCR 3 at 21 [29].

     [315]Dicey, Lectures Introductory to the Study of the Law of the Constitution (1885) at 215. See Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 530 [29].

     Conclusion

246. The Council's appeal should be dismissed with costs. The respondents should be granted special leave to cross-appeal but the cross-appeal should be dismissed with costs.