ACN 005 057 349 Pty Ltd v Commissioner of State Revenue

[2015] VSCA 332

SUPREME COURT OF VICTORIA
COURT OF APPEAL

S APCI 2015 0029
S APCI 2015 0030

ACN 005 057 349 PTY LTD	Applicant
v
COMMISSIONER OF STATE REVENUE	Respondent

---

JUDGES:	HANSEN and TATE JJA and ROBSON AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	18 August 2015
DATE OF JUDGMENT:	8 December 2015
MEDIUM NEUTRAL CITATION:	[2015] VSCA 332
JUDGMENT APPEALED FROM:	[2015] VSC 76 (Sloss J)

---

TAXATION – Land tax – Commissioner of State Revenue raised a land tax liability under the Land Tax Act 1958 twice with respect to the same landholding – Duplication error – Admission of duplication error for 2008-2011 land tax years – Refusal by the Commissioner to refund excess payments for 1990-2002 land tax years – Duplication error occurred throughout, relevantly, 1990‑2002 land tax years – Discretionary power of the Commissioner to amend assessments to ensure completeness and accuracy – Refusal to exercise power to amend – Conscious maladministration – Mandamus to compel amendments – Query whether requirement for claim for restitution necessary to establish liability – Payments made in the mistaken belief that the assessments accurately identified taxpayer’s landholdings, which they did not – Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd (1994) 182 CLR 51 discussed – Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106 and Federal Commissioner of Taxation v Futuris Corporation Ltd (2008) 237 CLR 146 applied – Land Tax Act 1958 s 19.

LIMITATION OF ACTIONS – Whether recovery of overpayments precluded by limitation periods – Postponement of limitation period – Whether mistake established – Whether mistake could have been discovered with reasonable diligence – Land Tax Act 1958 s 90AA – Limitation of Actions Act 1958 ss 5(1)(d) 20A and 27.

INTEREST – Whether compound interest recoverable – Exceptional circumstances – Conscious maladministration - Supreme Court Act 1986 ss 58 and 60.

---

APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr N J Young QC with Mr T M Grace and Ms C van Proctor	Daniel Allison & Associates Legal
For the Respondent	Mr P H Solomon QC with Mr N A Kotros	Solicitor for the Commissioner of State Revenue

HANSEN JA
TATE JA
ROBSON AJA:

table of contents

Introduction and Summary ..……………………………………………...	2
The Commissioner’s duplication error  …………………………………..	5
The taxpayer’s attempts to recover the excess payments ………………	16
The statutory framework ………………………………………………….	23
The judge’s reasons …………………………………………………………	34
Issue 1 —Are the objection and refund regimes exclusive? ………….	35
Issue 2 —Would a limitations provision bar the proceedings for restitution?.............................................................................................	41
Issue 3 — Can the power under s 19 be enforced by mandamus?........	46
Issue 4 —Would a limitations provision bar mandamus?....................	53
Issue 5 —Does compound interest apply?............................................	54
The appeals …………………………………………………………………	55
(1)       What is the nature of the power to amend assessments under s 19? …………………………………………………………..	56
(2)       Did the Commissioner engage in conscious maladministration?................................................................	66
(3)      What proposition does Royal Insurance stand for?  .................	73
(4)      What was the character of the alleged mistake?...................	85
(5)      Would an underlying restitution claim be made out?..........	87
(6)       Which limitation period applies — s 90AA, s 20A or s 5(1)?…………………………………………………………	93
(7)       Is the limitation period postponed under s 27?………………..	99
(8)       Is ACN entitled to compound interest? ………………………	104
Conclusion on the mandamus application/appeal ……………………..	105
Conclusion on the restitution application/appeal ……………………...	106

- - -

Introduction and Summary

1. These two applications for leave to appeal[1] raise the following question: Where the Commissioner of State Revenue (‘the Commissioner’) has raised a land tax liability under the Land Tax Act 1958 (‘the Act’)[2] twice with respect to the same landholding, and the taxpayer has paid, can the excess payments be recovered by a proceeding for mandamus? In our view, in the circumstances of the case, the answer is ‘yes’. We consider that the statutory power the Commissioner has to ensure assessments of land tax are complete and accurate under s 19 of the Act[3] gives rise to a duty in the circumstances of the case that can be enforced by mandamus to direct that excess payments be repaid.  In our view, in the facts and circumstances present here, any relevant limitation period has been satisfied. 

   [1]The applications for leave to appeal were heard at the same time as the appeals.

   [2]The relevant Act that applies to each of the 1990-2002 land tax assessments is the Land Tax Act 1958 (Act No 6289/1958) (Version No 131, incorporating amendments as at 30 November 2005).

   [3]See [60] below. We set out the relevant statutory framework at [52]–[77] below.

1. The applications are brought from a judgment and orders of a judge of the Trial Division who dismissed two proceedings brought by ACN 005 057 349 Pty Ltd (‘ACN’), one for judicial review[4] of a determination of the Commissioner not to refund excess payments[5] it made as a result of assessments for the 1990–2002 land tax years, and one for restitution[6] at common law.[7]

   [4]Proceeding S CI 2013 1395, the appeal from which is S APCI 2015 0029.

   [5]The amount at issue is $363,680. See [44] below.

   [6]Proceeding S CI 2013 1396, the appeal from which is S APCI 2015 0030.

   [7]ACN 005 057 349 Pty Ltd v Commissioner of State Revenue [2015] VSC 76 (‘Reasons’). Her Honour gave joint reasons in dismissing both proceedings.

1. For the reasons we set out below, we would grant leave to appeal, and allow the appeal, in both proceedings.[8]

   [8]We refer to ‘the appeals’ in what follows.

1. In summary our reasons are as follows:

(1) The starting point is that the discretionary power of the Commissioner, under s 19 of the Act, to amend an assessment, as he thinks necessary, to ensure its completeness and accuracy, is enlivened when he becomes aware that an assessment is incomplete or inaccurate.

(2)        We consider that the evidence here was overwhelming that the duplication error[9] that the Commissioner expressly admitted making with respect to the 2008–2011 land tax years was also committed, relevantly, in the 1990–2002 land tax years.[10]

[9]The term ‘duplication error’ and the other terms used in the summary are explained in the course of the judgment.

[10]The outstanding claims relate only to the 1990–2002 land tax years.

(3)        Furthermore, we consider that the Commissioner knew that:  (i) the duplication error occurred in each of the 1990-2002 land tax years; (ii) the assessments for the 1990–2002 land tax years were thereby inaccurate;  and (iii) that he wrongly collected taxes that were not otherwise due.  Indeed, we consider that he made an implied admission to that effect.

(4) In the circumstances the Commissioner’s power under s 19 was enlivened.

(5)        The sole question for determination is whether the Commissioner was bound to exercise the discretion he has to amend the assessments and whether, if he had a duty to do so, ACN is entitled to mandamus to compel him to do so.

(6)        Finance Facilities Pty Ltd v Federal Commissioner of Taxation[11] holds that where a discretionary power can be exercised lawfully only in one way, mandamus can be ordered to compel the exercise of the discretion in the way in which it must be exercised; the ‘may’ becomes a ‘must’.

[11](1971) 127 CLR 106 (‘Finance Facilities’).

(7) Given the nature of the power under s 19, and the circumstances of the case, the power could be exercised lawfully only in one way, namely, to amend the assessments for the 1990–2002 land tax years and to give effect to those amendments by making a refund; the Commissioner was under a duty to so act.

(8)        The High Court in Federal Commissioner of Taxation v Futuris Corporation Ltd[12] recognised that an assessment is susceptible to judicial review where there has been conscious maladministration.

[12](2008) 237 CLR 146 (‘Futuris’).

(9)        The Commissioner has refused to perform his duty without good reason or justification; in the circumstances of the case he has acted with conscious maladministration.

(10) ACN is entitled to an order for mandamus compelling the Commissioner to perform his duty to exercise the power under s 19 to amend and to give effect to the amendments by making a refund.

(11)      In Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd[13] the High Court held that the discretionary power conferred upon the Commissioner to make refunds in the event of overpayments gave rise to a duty to refund, enforceable by mandamus, where the Commissioner would be liable, under the general law of restitution, to repay payments made under a mistake. 

[13](1994) 182 CLR 51 (‘Royal Insurance’).

(12) In the context of the power under s 19, we consider that it may not be necessary for there to be an antecedent and separate liability on the Commissioner to make restitution before the Commissioner can be compelled to enforce his duty; the question of whether there is such a requirement is open.

(13)      However, if there is such a requirement, we consider that ACN’s claim for restitution at common law would be made out.  ACN made excess payments in response to the assessments for the 1990–2002 land tax years under a mistaken belief that it was legally obliged to make the payments on the basis that the assessments were accurate when, in truth, they were inaccurate.

(14) The availability of the s 19 power to provide a remedy does not circumvent the objection and refund regimes because, by contrast to those regimes, the s 19 power is enlivened only when the Commissioner knows that an assessment is incomplete and inaccurate. The power conferred by s 19 functions as a mechanism to ensure the integrity of the system of tax collection under the Act, namely, that the Commissioner collects the correct amount of tax.

(15)      ACN could not with reasonable diligence have discovered its mistake before the Commissioner’s express admission of the duplication error on 23 March 2012;  any relevant limitation period is thereby postponed. 

1. We begin by describing the duplication error committed by the Commissioner.  

The Commissioner’s duplication error

1. ACN was from 1988–2007 the registered proprietor of two adjacent properties which together carry the street address of 2 Ottawa Road, Toorak (Certificates of Title Volume 8055 Folio 686 and Volume 4567 Folio 364) (‘the two properties’).[14]

   [14]The facts are essentially agreed between the parties: Reasons [5]. The evidence before the judge was given by affidavit and there was no cross-examination.

1. Relevantly, for each land tax year from 1990–2002, ACN paid amounts to the Commissioner in response to assessments of land tax made by the Commissioner under the Act with respect to the two properties that were described as follows:

(1)      ‘2 Ottawa Road, Toorak, 3142’ carrying the Land ID/Reference ‘995176/1 27424 L’ until 2001 (inclusive), and ‘000995176/1 L27424’ thereafter;[15]  and

(2)      ‘65 Albany Road, Toorak, 3142’ carrying the Land ID/Reference  ‘22429086/1 598039 T’ until 2001 (inclusive), and ‘022429086’ thereafter.[16]

[15]For convenience, this is referred to below as land ID reference 27424, except when necessary. 

[16]For convenience, this is referred to below as land ID reference 598039, except when necessary. 

1. The total amount paid by ACN to the Commissioner in respect of the two properties for the 1990–2002 land tax years was $603,452.

1. ACN also paid amounts to the Commissioner with respect to the two properties in response to assessments of land tax for the land tax years 2003‑2007.

1. For the 2008–2011 land tax years, Streetriver Pty Ltd (‘Streetriver’) (a related company to ACN), the then registered proprietor of the two properties,[17] was assessed for land tax for ‘2 Ottawa Road’ and ‘65 Albany Road’.  On 23 March 2012, Martyn Pritchard (‘Pritchard’) of the Commissioner informed Mr Wayne Ngo (‘Ngo’), a taxation adviser to Streetriver and ACN, by email (‘the 23 March 2012 email’) that in calculating the land tax liability for ‘2 Ottawa Road’ for the 2008–2011 land tax years, an erroneous valuation had been applied that encompassed both of the two properties.  This meant that the valuation for ‘2 Ottawa Road’ had included both the landholding of ‘2 Ottawa Road’ and the landholding of ’65 Albany Road’.  This was in addition to the separate valuation for ’65 Albany Road’.  The property described as ’65 Albany Road’ had thus been determined to be a ‘duplicate property’.  Pritchard promised to send amended assessments deleting ‘65 Albany Road’ as a separate landholding and a refund.

   [17]ACN transferred the two properties to Streetriver in December 2007.

1. The 23 March 2012 email said:

Dear Mr Ngo

Streetriver Pty Ltd

2 Ottawa Road and 65 Albany Road, Toorak

I refer to the letter of 8 March 2012 from this Office advising that principal place of residence exemption cannot be granted in respect of the above lands.

Since that decision was made the State Revenue Office (SRO) has detected an error in the 2008, 2009, 2010 & 2010 [sic] assessments.

The lands owned by Streetriver are lot 1 Lodge Plan 27424 and lot 1 Title Plan 598039.

These lots appeared on the land tax assessment notices as 2 Ottawa Rd and 65 Albany Rd.  Toorak respectively.

The property at 65 Albany Rd has been determined to be a duplicate property.  This is because the valuation applied to 2 Ottawa Rd encompasses both lot 1 Lodge Plan 27424 and lot 1 Title Plan 598039.  This has been confirmed by Peter Fitzgerald, Valuer/City of Stonnington.

Therefore the assessments have been amended by the deletion of 65 Albany Rd.  Fully settled re-assessments for 2008 to 2011 will issue shortly.

As a result a refund is to be issued.

… 

1. The Commissioner issued a cheque dated 12 April 2012 in favour of Streetriver for the amount of $300,238.75.

1. Ngo was aware that before 2007, ACN, which was then known as 65 Albany Road Pty Ltd, had owned the two properties.[18]  Ngo raised with Kim Davis (‘Davis’), a company director with both ACN and Streetriver, whether the duplication error referred to in the 23 March 2012 email may have extended to land tax assessments issued to ACN in earlier years.  Until 23 March 2012 when the Commissioner notified Streetriver that he had committed the duplication error, ACN was unaware that the valuation used by the Commissioner for ‘2 Ottawa Road’ had included the landholding of Lot 1 Title Plan 598039 as well as the landholding of Lot 1 Lodge Plan 27424.

   [18]ACN became the owner of Lot 1 Lodge Plan 27424 (‘2 Ottawa Road’) in 1986 and acquired Lot 1 Title Plan 598039 (’65 Albany Road’) in 1988.

1. On 27 March 2012, Ngo conducted a property search of the site reflecting the street address of ‘2 Ottawa Road’ through the Victorian Department of Environment and Primary Industries.  The property report showed the site as comprising two parcels of land with a combined total of 1,967 square metres.  Lot 1 Lodge Plan 27424 (the landholding referred to as ‘2 Ottawa Road’ in the 23 March 2012 email) has a total land area of 1,058 square metres and Lot 1 Title Plan 598039 (the landholding referred to as ‘65 Albany Road’ in the 23 March 2012 email) has a total land area of 909 square metres.

1. Davis located the land tax assessments issued to ACN for the 2002–2007 land tax years but could not locate those for the years before the 2002 land tax year.

1. Ngo arranged for a request to be made of the Commissioner to obtain the land tax assessments for the 1983–2001 years.  However, the Commissioner advised that the land tax assessment notices from 1983–2001 could no longer be retrieved from the State Revenue Office (‘SRO’) records.[19]  However, assessment reports from the SRO (‘the SRO assessment reports’) could be located for each of those years.  These are in the form of an Excel spreadsheet and contain all the relevant information used by the Commissioner in raising the land tax assessments for the 1983–2001 land tax years. 

   [19]The Commissioner was unable to produce at trial notices of assessments for the 1990–2005 land tax years: Reasons [69].

1. Ngo reviewed the land tax assessment notices for the 2002–2007 land tax years and the SRO assessment reports for the 1983-2001 land tax years.  These revealed that the assessments for ‘2 Ottawa Road’ for the 1990-2007 years included the land described in Lot 1 Lodge Plan 27424 as well as the land described in Lot 1 Title Plan 598039;  that is, the landholding for ‘2 Ottawa Road’ included the landholding for ‘65 Albany Road’, representing a combined total of about 2,000 square metres of land.  The land tax assessments before 1990 did not contain the duplication error.

1. On the basis of this review, Ngo prepared a table transcribing the ‘site value’ of the land described for the two properties, as referred to in the assessments or the SRO assessment reports used by the Commissioner, for the 1990–2007 land tax assessments.  The site value of a taxpayer’s landholdings provides the basis for the land tax assessments raised by the Commissioner.  The aggregate taxable value of all land held by a taxpayer is multiplied by the applicable land tax rates to determine the taxpayer’s land tax liability for the year.  The table Ngo prepared is as follows:

Table 1[20] — Site Values used by Commissioner

[20]In Table 1 there is a reference to TP598038 rather than TP598039 in respect of 65 Albany Road.  This appears to be a slip.

1. It was not in dispute that the assessments generated by the Commissioner on the basis of these site values for the two properties were paid by ACN.  Senior Counsel for ACN invited the Court, during the hearing of the appeals, to infer that the site values ascribed to ‘65 Albany Road’ (Table 1) were internally generated within the SRO and were based on the site value of ‘2 Ottawa Road’ which the Commissioner understood to refer to a landholding of 1,058 square metres (rather than based on an area of about 2,000 square metres) from which he calculated what the site value of ‘65 Albany Road’ should be, given that it represented a landholding of 909 square metres.  In other words, a site value was adopted for 65 Albany Road that was only a little less than the site value for ‘2 Ottawa Road’.  The ratio between the site values thus reflected the ratio between the relative landholdings.[21]

   [21]ACN relied on the ratio between the site values, as represented on the assessments, as one of the reasons why it could not with reasonable diligence have discovered the duplication error or the mistake under which it made excess payments. See [232] below.

1. The 23 March 2012 email referred to the City of Stonnington (‘the Council’), and its Valuer, Peter Fitzgerald (‘Fitzgerald’), as having confirmed to the Commissioner that the valuation that had been applied to ‘2 Ottawa Road’ encompassed both Lot 1 Lodge Plan 27424 and Lot 1 Title Plan 598039.  Ngo arranged for Fitzgerald to be contacted by an employee of his firm, Daniel Mitchell (‘Mitchell’), to determine the valuation history.  On 2 May 2012 Fitzgerald provided Mitchell, by email, with a list of the dates when a new valuation was determined by the Council for ‘2 Ottawa Road’ between 1992–2007 and the amount of each new site value:

Table 2 – Council Valuations

1. On the basis of that history, Ngo prepared a table showing the date when a new valuation was determined for ‘2 Ottawa Road’ and the new site value of the property between 1992–2006.

Table 3 — New Valuations

1. The new site values provided by Fitzgerald broadly correspond to the site values used by the Commissioner in the land tax assessments issued to ACN.  For example, it is apparent from Table 2 (and recorded in Table 3) that on 1 October 1996 the new site value for ‘2 Ottawa Road’ was $1,300,000.  ACN’s land tax assessment for 1998, based on land owned at midnight at 31 December 1997,[22] shows the site value of ‘2 Ottawa Road’ as having increased to $1,300,000 (as recorded in Table 1).  Similarly, on 1 July 2002 the new site value for ‘2 Ottawa Road’ increased to $2,941,000 (as is apparent from Table 2 and recorded in Table 3) and ACN’s land tax assessment for 2004, based on land owned at 31 December 2003, shows the new site value for ‘2 Ottawa Road’ as having increased to $2,941,000 (as recorded in Table 1). 

   [22]Section 8 of the Act provides that land tax is assessed on the total unimproved value of the land at midnight on the 31^st of December immediately preceding the year for which the tax is assessed. See [52] below.

1. In response to Fitzgerald furnishing the valuation history in Table 2, Mitchell sent him a follow-up email on 3 May 2012 seeking confirmation of the land area used in respect of each of the valuations, and, in particular, whether the land area used for each of the valuations of ‘2 Ottawa Road’ was approximately 2,000 square metres. 

1. As indicated above,[23] a landholding of approximately 2,000 square metres would reflect the total combined area of Lot 1 Lodge Plan 27424 (1,058 square metres) and Lot 1 on Title Plan 598039 (909 square metres).

   [23]See [14] above.

1. Mitchell said:

Thanks Peter.

Are you able to confirm the land area in relation to each of the valuations below [Table 2], or alternatively simply confirm that each of the valuations below was based on a property size of approximately 2,000 sqm?

Thanks again for your help.

Regards,

Daniel.

1. Fitzgerald confirmed by email on 3 May 2012 that a landholding of approximately 2,000 square metres had been used for the valuation of ‘2 Ottawa Road’ for all the valuations he had provided.  He said:

Can confirm that the same land area (2,000 approx.) was used in relation to all.

R’gds

Peter Fitzgerald

City Valuer

City of Stonnington

1. Viewing the email chain as a whole, Fitzgerald’s confirmation was to the effect that each of the new site valuations determined for ‘2 Ottawa Road’ between 1992–2007 (as recorded in Table 2) had been based on a landholding of approximately 2,000 square metres. 

1. In our view, as the actual landholding of Lot 1 Lodge Plan 27424 is only 1,058 square metres, the uncontested evidence of Ngo demonstrates that the new site valuations determined by the Council for ‘2 Ottawa Road’ between 1992–2007 (as recorded in Table 2) were based upon the combined total landholding of Lot 1 Lodge Plan 27424 (1,058 square metres) together with the landholding in Lot 1 Title Plan 598039 (909 square metres).  This is important for our disposition of the appeals.  More significantly, as many of the site valuations used by the Commissioner between 1990–2007 (as recorded in Table 1) broadly correspond to the valuations used by the Council, and particularly the new site values determined by the Council (as recorded in Table 2), in our view it should be inferred from the evidence that ‘65 Albany Road’ was a duplicate property throughout 1990–2007, especially as the land tax assessments between 1992–2007 for ‘2 Ottawa Road’ were based upon the valuations used by the Council for that period.  Indeed, in the judge’s reasons, she described it as ‘common ground that the valuation used for land tax purposes in each relevant year from 1993 was essentially the same as that which was used by the City of Stonnington for municipal purposes’.[24]

   [24]Reasons [146]. See [97] below.

1. It follows that the assessments between 1990–2007 were based on an assumption that the landholding for ‘2 Ottawa Road’ was approximately 2,000 square metres.  For each of those years it was a mistake for the Commissioner to issue a separate assessment for ’65 Albany Road’ because its landholding of 909 square metres (Lot 1 Title Plan 598039) had already been included within the 2,000 square metreage attributed to ‘2 Ottawa Road’.  We infer that without the mistaken inclusion of the landholding of 909 square metres (representing Lot 1 Title Plan 598039) the land tax assessment for ‘2 Ottawa Road’ would have reflected a landholding of only 1,058 square metres (representing Lot 1 Lodge Plan 27424) and given rise to a proportionately smaller liability for land tax.  The error made by the Commissioner was thus to raise an assessment for ‘2 Ottawa Road’ that applied a valuation reflecting both the landholding of Lot 1 Title Plan 598039 in addition to the landholding of Lot 1 Lodge Plan 27424, as well as raising a separate assessment for land tax for ’65 Albany Road’ that applied a valuation for the landholding of Lot 1 Title Plan 598039.  The Commissioner precisely identified the error when he conceded in the 23 March 2012 email that ’65 Albany Road’ (Lot 1 Title Plan 598039) had been determined to be a ‘duplicate property’.  In other words, the Commissioner had erroneously raised a land tax liability twice with respect to the same landholding. 

1. The uncontested evidence of Ngo, including his evidence of the site values used by the Commissioner for the land tax years 1990–2007 and his evidence of the valuations used by the Council for the years 1992–2007, supports the proposition, which we accept, that the Commissioner erroneously raised a land tax liability twice with respect to the same landholding for each of the land tax years 1990–2007, and not only for the land tax years 2008–2011 which he conceded.  We consider that this inference especially follows from a comparison between the valuations used for ‘2 Ottawa Road’ by the Commissioner as recorded in the assessments or the SRO assessment reports (Table 1) and the valuations provided by the Council (Table 2 (New SV)) together with the evidence that the Council valuations for ‘2 Ottawa Road’ were based upon a landholding of approximately 2,000 square metres, the metreage of the two properties.  As mentioned, we consider that the congruence of valuations between those used by the Commissioner and many of those used by the Council indicates that the Commissioner relied on the Council’s valuations for ‘2 Ottawa Road’ between 1990–2007.[25]  It follows that, in doing so, he treated ‘2 Ottawa Road’ as being a landholding of approximately 2,000 square metres (that is, as incorporating the landholding of ‘65 Albany Road’) while yet raising a separate assessment for ‘65 Albany Road’.  He inaccurately listed the landholdings held by ACN.  We consider that, considering the overall circumstances, the evidence here was overwhelming that the duplication error that the Commissioner expressly admitted making with respect to the 2008–2011 land tax years was also committed in the 1990–2002 land tax years.

   [25]The Commissioner is permitted to use valuations made by a municipal council pursuant to s 16 of the Act. See [56] below.

1. More particularly, we find that the Commissioner erroneously raised a land tax liability twice for Lot 1 Title Plan 598039 (‘65 Albany Road’) for each land tax year between 1990–2007, relevantly, the 1990–2002 land tax years, which ACN paid, and not only for the land tax years 2008–2011 which the Commissioner conceded.  We consider that we are as well placed as the judge below to arrive at a factual finding as there was no oral evidence given at trial, the evidence being given by affidavit alone and there being no cross-examination.[26]

   [26]As noted at n 14 above.  Warren v Coombes (1979) 142 CLR 531, 551; Fox v Percy (2003) 214 CLR 118, 127 [27]. We also reject the submission of the Commissioner that the question of whether the assessments are excessive cannot be agitated in these proceedings as ‘the matter is closed’. See [145]-[162] below. See also Reasons [188];  see [108] below.

1. On these matters we differ from the approach adopted by the judge.  With great respect to her Honour, we consider that she was wrong not to make a finding that the duplication error that had occurred in the 2008–2011 land tax years had also occurred throughout, relevantly, the 1990–2002 land tax years.[27]  We examine the judge’s reasons in detail below.

   [27]As we discuss at [35] and [43] respectively below, the Commissioner accepted objections and made refunds for the 2006 and 2007 land tax years with interest and issued an ex gratia payment with respect to the 2003–2005 land tax years. 

1. As we explain further below, we also consider that the Commissioner was correct to recognise, as he did in the 23 March 2012 email with respect to the land tax years 2008–2011, that a correction of the duplication error required that the assessments be ‘amended by the deletion of 65 Albany Rd’[28] and excess payments be repaid.  While the Commissioner initially confined his approach to the land tax years 2008–2011,[29] we consider that this approach was correct and should have been applied to all the land tax years in respect of which the duplication error was made.  Relevantly, we consider that the Commissioner’s approach to the correction of the duplication error by means of the issuing of an amended assessment should have been applied to the land tax years 1990–2002 and not only to the land tax years of 2008–2011.

   [28]See [11] above.

   [29]He later issued amended assessments deleting ’65 Albany Road’ for the 2006 and 2007 land tax years. See [36]–[40] below.

The taxpayer’s attempts to recover the excess payments

1. Ngo prepared a further table summarising the amount of ACN’s original land tax assessments for the 1990–2007 years, the estimated correct land tax assessment, and the estimated amount of land tax that had been overpaid as a result of the duplication error.  This was based on the land tax assessment notices for 2002–2007 and the SRO assessment reports for the 1990–2001 land tax years:

Table 4 – Estimated Overpaid Land Tax 1990–2007

1. On 18 May 2012 Ngo made a formal request to the Commissioner requesting a refund of the 2007 overpaid land tax.[30]  On 22 May 2012 he lodged with the Commissioner two Notices of Objection, the first against the 2006 and 2007 land tax assessments and the second against the 1990–2005 land tax assessments, claiming that an excessive amount of land tax had been assessed and paid in these years by reason of the duplication error.  The Commissioner allowed the objection against the 2006 and 2007 land tax years[31] and issued a refund of $110,635 with respect to the 2006 assessment and $103,800 with respect to the 2007 assessment.  These amounts correspond to the calculation of overpayments in Table 4 for those years, respectively.  The refunds were made initially without interest.  The Commissioner later accepted that interest would be allowed.  With respect to the 1990–2005 land tax years the Commissioner’s position was that he did not have the discretion to accept the out of time objection with respect to those years.

   [30]Ngo’s evidence was that he made the refund request in relation to the 2007 year only because he had been told by Pritchard that the Commissioner was only obliged to provide refunds within a five year period from the date the payment had been made and it was unlikely that refunds would be provided outside this period.

   [31]By letter dated 24 October 2012 to Ngo, the Commissioner indicated that he exercised his discretion pursuant to s 100 of the Taxation Administration Act 1997 to accept the out of time objections in relation to the 2006 and 2007 land tax assessments.

1. The Commissioner issued amended assessments for the 2006 and 2007 land tax years removing the landholding at Lot 1 Title Plan 598039 (‘65 Albany Road’) from those assessments.  He did this by first removing both ’65 Albany Road’ (then with the Land ID 995176) and ‘2 Ottawa Road’ (then with the Land ID 22429086)[32] and replacing both those landholdings with a single ‘2 Ottawa Road’ and giving it a new Land ID 039663162:

   [32]See [7] above.

Dear Sir/Madam

Amendment to Statement of Lands

Land ID	Property address	Amendment Reason
039663162	2 Ottawa Rd, Toorak, 3142	Property added

Properties removed since the last assessment was issued

000995176	2 Ottawa Rd, Toorak, 3142	Property 995176 removed
022429086	65 Albany Rd, Toorak, 3142	Property 22429086 removed

1. The amended assessment for the 2006 land tax year was relevantly in the following terms:

Re-Assessment – 2006 Land Tax Notice

65 Albany Road Pty Ltd

Issue date: 01 Feb 2013

PAY IN FULL
  Total tax payable: $0.00

…

2006 Calculation of Land Tax Payable

Total Taxable Value	$3,591,000
Tax Calculation	$67,515.00
Less payments received	$67,515.00
2006 Tax Payable	$0.00

…

Statement of lands owned as at midnight 31 December 2005 ...

Item No.	Street Address/ Municipality	Land Id/ References	Single Holding/ Tax	Proportional Tax	2005 Notional /Taxable Value	Taxable Value/ Ind. Factor	Taxable Value
1	2 Ottawa Rd Toorak 3142 Stonnington	039663162 1 T598039 1 L27424	$67,515.00	$67,515.00 SUR	$3,591,000	$3,591,000 1.00	$3,591, 000

1. We note that the taxable value of the landholding was $3,591,000 and this reflects the site value used by the Council for ‘2 Ottawa Road’ (reflecting the landholding of approximately 2,000 square metres) from 1 July 2004 (as recorded in Tables 2 and 3).  We also note that the tax was $67,515.00 which Table 4 records as the estimated land tax assessment for 2006 excluding the duplicated ‘65 Albany Rd’.  That sum having been paid, the amended assessment was nil and, as mentioned,[33] the overpayment of $110,635 (as also reflected in Table 4) was refunded.

   [33]See [35] above.

1. The amended assessment for the 2007 land tax year was relevantly as follows:

Re-Assessment — 2007 Land Tax Notice

65 Albany Road Pty Ltd
  Issue date:  01 Feb 2013
  PAY IN FULL
  Total tax payable:  $0.00
…

Notional 2007 Calculation of Land Tax Payable  

Notional 2006 Calculation		Notional 2007 Calculation
Total Taxable Value	$4,630,000		$4,630,000
Tax Calculation	$103,880.00		$87,500.00
Difference between 2006 and 2007 Notional Tax (–%)			15.77%
2007 Actual Tax (=2007 Notional Tax)		$87,500.00
Less payments received		$87,500.00
2007 Tax Payable		$0.00

…

Statement of lands owned as at midnight 31 December 2006 …

Item No.	Street Address/ Municipality	Land Id/ References	Single Holding/ Tax	Proportional Tax	2006 Notional /Unimproved Value	Taxable Value …
1	2 Ottawa Rd Toorak 3142 Stonnington	039663162 1T598039 1 L27424	$87,500.00	$87,500.00 SUR	$3,591,000	$4,630,000

1. We note that the taxable value was $4,630,000 and this reflects the site value used by the Council for ‘2 Ottawa Road’ from 1 July 2006 (as recorded in Tables 2 and 3).  We also note that the tax was $87,500.00 which Table 4 records as the estimated land tax assessment for 2007 excluding the duplicated ‘65 Albany Road’.  That sum having been paid, the amended assessment was nil and, as mentioned,[34] the overpayment of $103,800 was refunded.[35]

   [34]See [35] above.

   [35]When the Commissioner informed ACN, by letter dated 17 January 2013, that ACN was entitled to a refund of the amounts $110,635 in respect of the 2006 land tax year and $103,800 in respect of the 2007 land tax year, he also informed ACN that there had been a 2008 assessment notice issued for ‘65 Albany Road’ on 8 February 2008 and this had been fully settled by a payment of $157,230 on 20 June 2008.  The assessment was subsequently withdrawn when a Notice of Acquisition was lodged in October 2008 in respect of the transfer of ‘65 Albany Road’ to Streetriver in December 2007.  The Commissioner acknowledged there had therefore been a further overpayment of $157,230 which he refunded.  This 2008 assessment notice would appear to be distinct from the assessment notice for the 2008 land tax year issued to Streetriver on 28 November 2008 for $157,230 which referred to the two properties and in respect of which the Commissioner acknowledged an overpayment in the 23 March 2012 email.

1. By letter dated 3 December 2012 Ngo further requested of the Commissioner that he issue amended assessments for the 1990–2005 land tax years by exercising his discretion under s 19 of the Act.[36]  This was not done but the Commissioner suggested that an application be made to the Treasurer for ex gratia relief.

   [36]Section 19 empowers the Commissioner to amend assessments from time to time. It is set out in full at [60] below.

1. Ngo wrote to the then Treasurer of the State of Victoria, the Honourable Kim Wells, requesting ex gratia relief for the overpayments made for the 1990–2005 land tax years.  He wrote separately to the Treasurer requesting that he, on behalf of the Governor in Council:  (1) extend time for ACN to object against the assessments;  and (2) extend time for ACN to apply for a refund of tax. 

1. The Treasurer responded by granting ex gratia relief for the 2003, 2004 and 2005 land tax years in the sums of $107,970, $129,250 and $114,774 respectively.  The refunds correspond exactly to the calculation of the overpayments in Table 4.  No interest was paid on the ex gratia payments.  No ex gratia refund was granted for the land tax years before 2003.

1. Ngo prepared a table of estimated overpayments made by ACN confined to the years 1990–2002,[37] as these remain the only claims in issue.  The total claimed is $363,680 (‘the excess amount’):

   [37]These sums reflect those in Table 4 for their respective land tax years.

Table 5 – Estimated Overpaid Land Tax 1990–2002

1. On 21 March 2013 ACN brought a proceeding in the Supreme Court against the Commissioner seeking relief in the nature of mandamus and a proceeding seeking restitutionary relief. The application for mandamus sought to enforce a duty to amend the assessments for the 1990–2002 land tax years and to refund the excess amount. The application for restitutionary relief was based upon a claim that the Commissioner, by its notices of assessment for the 1990–2002 land tax years, had demanded payment of amounts of land tax that were not authorised or payable under the Act, namely the excess amount. ACN had paid the excess amount in the mistaken belief that the land tax liability as assessed by the Commissioner was properly due and payable under the Act, and that ACN was legally obliged to make those payments.

1. The evidence of Davis further elaborated upon the nature of the mistake under which ACN alleged it paid the excess amount.  He said:

The plaintiff [ACN] paid the land tax assessments for the 1990 to 2002 land tax years inclusive in good faith and in the belief that each land tax assessment issued by the defendant [the Commissioner] constituted a proper and lawful demand for the payment of all the tax assessed.

1. He emphasised that, in paying the excess amount, ACN held the mistaken belief that the landholdings recorded in the assessments for the 1990–2002 land tax years were accurate.  Davis said:

The plaintiff [ACN] paid these land tax assessments in the belief that it was legally obliged to make these payments, and in the mistaken belief that the landholdings listed for the plaintiff in the assessments issued by the defendant [the Commissioner] for these years were accurate.[38]

[38]Emphasis added.

1. We have already concluded that the landholdings listed for ACN in the assessments issued by the Commissioner for the 1990–2002 land tax years were inaccurate and that during those years the Commissioner erroneously issued a land tax liability twice for Lot 1 Title Plan 598039 (’65 Albany Road’) for each of those years.[39]  ACN’s belief in the accuracy of the landholdings listed by the Commissioner was thus indeed mistaken.  We consider that in describing the nature of ACN’s belief when paying the excess amount it is necessary to take into account not only the belief that ACN was legally obliged to make the payment but also that ACN believed that the demand made by the Commissioner was based upon an accurate record of the landholdings ACN owned.  In our description of ACN’s belief we differ from the judge.  This issue assumes some importance in our reasoning below.[40] 

   [39]See [30]–[31] above.

   [40]See [185]–[189] below:  ‘(4) What was the character of the alleged mistake?’

1. By letter dated 15 August 2013 the Commissioner advised Ngo that he had decided to exercise the discretion to issue amended assessments under s 19 and would do so by not making any amendment. The reason he gave for the refusal to amend was because a limitation period under the Act would preclude ACN successfully recovering the excess amount; that is, he refused to amend because he considered that ACN would not be entitled to any consequential relief, regardless of the merits.[41]  He said: 

After careful consideration of all the issues involved, I advise that the Commissioner has decided to exercise the discretion conferred on him by section 19 of the Act. The decision of the Commissioner is not to make any amendment to the assessments.

The discretion conferred by section 19 must be exercised having regard to [the] subject matter, scope and purpose of the Act as a whole. The primary reason for the Commissioner’s decision is that, whether or not each of the assessments were now amended as requested, and even putting to one side the fact that no objection was lodged in accordance with section 24A, your client would not be entitled to the consequential relief sought; that is, pursuant to section 90AA of the Act, your client would still not be entitled to the refund it seeks.[42]

[41]We consider that the letter of 15 August 2013, in the circumstances of the case, amounts to an implied admission that the duplication error occurred in each of the 1990–2002 land tax years, that the assessments for the 1990–2002 land tax years were thereby inaccurate, and that he wrongly collected taxes that were not otherwise due. See [155]–[158] below.

[42]Emphasis added. Section 90AA provides for a limitation period of three years for the bringing of an application to the Commissioner for a refund. Further time constraints apply before proceedings can be brought. Section 90AA is set out in full at [71] below.

1. In the light of this response ACN amended its originating motion in the mandamus proceeding alleging that the Commissioner acted on the basis of a legally erroneous view that amended assessments that eliminated the duplication error could not result in any repayment to ACN.  This was developed below into the allegation of conscious maladministration.[43]  It is a serious and important allegation in the circumstances of the case.

   [43]Reasons [165].

1. The mandamus case is based upon the Commissioner’s constructive refusal to exercise his power to amend the assessments for the 1990–2002 land tax years in response to the request by ACN by letter dated 3 December 2012[44] and the Commissioner’s actual refusal to exercise his power to amend the assessments by his letter dated 15 August 2013.[45]  

   [44]See [41] above.

   [45]See [49] above.

The statutory framework

1. The Act confers a power on the Commissioner to charge, levy and collect land tax, in the case of each owner of land, for every dollar of the unimproved value of the land, pursuant to s 6. Section 8 provides that tax shall be assessed, charged, levied and collected on the total unimproved value of the land at midnight on the 31st of December immediately preceding the year for which the tax is assessed. This is reflected in the extracts of the 2006 and 2007 assessments referred to above.[46]  There are numerous exemptions provided for under s 9 (for example, land used by a charitable institution exclusively for charitable purposes[47] and land outside the metropolitan area used for primary production[48]) as well as a ‘principal place of residence’ exemption under s 13A.  

   [46]See [37] and [39] respectively.

   [47]Section 9(1)(d).

   [48]Section 9(1)(ga). 

1. Section 14 requires taxpayers to furnish returns containing statements of the land owned:

14.      Taxpayers to furnish returns

For the purposes of the assessment and levy of taxation every taxpayer shall as hereinafter provided furnish to the Commissioner returns setting forth a full and complete statement of his land with such other particulars as are prescribed. 

1. However, the Commissioner has the power to issue an assessment in the absence of a return from the taxpayer.[49]  There was no evidence before the judge that ACN had furnished returns or of any practice adopted by the Commissioner that ACN’s land tax assessments between 1990–2002 were based upon returns.

   [49]See ss 17 and 18. See [58] and [59] below.

1. Section 15(1) renders every taxpayer ‘liable for the making of returns of land and for the payment of the whole amount of tax (if any) assessed thereon respectively’.

1. Section 16 permits the Commissioner to use valuations from a rating authority or the Valuer-General for the purpose of an assessment:

16.      As to use of valuations by Commissioner

For the purpose of the assessment and levy of taxation the Commissioner may use —

(a) valuations made by a rating authority within the meaning of the Valuation of Land Act 1960;

(b)valuations made by the Valuer-General or a valuer nominated by the Valuer-General. 

1. A ‘rating authority’ under the Valuation of Land Act 1960 includes ‘any council in respect of its powers under any Act’.[50]  ‘Council’ has the same meaning as in the Local Government Act 1989,[51] namely, relevantly, ‘a municipal council’.[52]

   [50]Valuation of Land Act s 2. This was the definition of ‘rating authority’ included in the Valuation of Land Act between 1990–2002.

   [51]Ibid.

   [52]Local Government Act 1989 s 3. The definition of ‘council’ did not change between 1990 and 2002.

1. Section 17 permits the Commissioner to use, as the basis of his assessments, returns furnished by a taxpayer, or other information in his possession, or any one of those sources:

17.      Assessments to be made by Commissioner

The Commissioner shall from the returns and from any other information in his possession or from one of those sources and whether any return has been furnished or not cause an assessment to be made of the taxable value of the land owned by any taxpayer and of the land tax payable thereon.

1. Section 18 provides for default assessments to be made by the Commissioner in the absence of returns:

18.      Default assessments

If —

(a)       a taxpayer makes default in furnishing a return;

(b)the Commissioner is not satisfied with the return made by any taxpayer;  or

(c)the Commissioner has reason to believe that any person (though he may not have furnished a return) is a taxpayer —

the Commissioner may make an assessment of the amount which, in his judgment, is the taxable value of the land owned by the taxpayer and of the land tax payable thereon, and the land tax so assessed shall be the land tax payable by that taxpayer unless the assessment is varied in accordance with the provisions of this Act.

1. Section 19 confers a discretion on the Commissioner to amend assessments for the purposes of ensuring completeness and accuracy. This is the power that ACN seeks to enforce by mandamus:

19.      Amended assessments

The Commissioner may from time to time amend an assessment by making such alterations or additions to it as he thinks necessary to ensure its completeness and accuracy, and shall notify to the taxpayer affected every alteration or addition which has the effect of imposing any fresh liability or increasing any existing liability and unless made with the consent of the taxpayer every such alteration or addition shall be subject to objection in the same manner and to the same extent as the original assessment but the validity of an assessment shall not be affected by reason only that any of the provisions of this Act have not been complied with.

1. Section 20 is a ‘conclusive evidence’ provision that entitles the Commissioner to rely on assessments as conclusive evidence of the assessment’s accuracy. Section 20 could not be relied upon here with respect to the 1990–2002 land tax years as the Commissioner was unable to produce assessments for those years. It provides:

20.      Evidentiary provisions

(1) The production of an assessment or of a document under the hand of the Commissioner purporting to be a copy of an assessment shall —

(a)be conclusive evidence of the due making of the assessment;  and

(b)be conclusive evidence that the amount and all the particulars of the assessment are correct, except in proceedings on review or appeal against the assessment, when it shall be prima facie evidence only.

(2) The production of any document under the hand of the Commissioner purporting to be an extract from any return or assessment shall in relation to any matter other than a matter referred to in sub-section (1) be prima facie evidence of the matter therein set forth. 

1. A person dissatisfied with an assessment has a right to make an objection under s 24A within 60 days after service of the notice of assessment: 

24A.    Objections

(1)Any person who is dissatisfied with the assessment of the Commissioner relating to a duty of land tax charged, levied and collected under this Act other than Part IIB,^[[53]^] may give to the Commissioner within 60 days after service of the notice of the assessment an objection in writing against the assessment stating fully and in detail the grounds on which he relies but the Commissioner must not entertain any objection relating to the unimproved value of land where the assessment is based on a valuation made under the Valuation of Land Act 1960.

[53]Part IIB concerns the taxation of transmission easements.

…

(2)The Commissioner shall consider every written objection made by a taxpayer and may make such inquiries thereon or relating thereto as he thinks fit.

(3)If the Commissioner considers that any objection should be allowed either wholly or in part he may alter or amend the assessment accordingly.

…

(4)The Commissioner shall give the taxpayer written notice of his decision on the objection.

1. Section 25 permits taxpayers who are dissatisfied with the decision of the Commissioner on an objection to request the Commissioner (within 60 days) to refer the decision to the Victorian Civil and Administrative Tribunal (‘the Tribunal’) for review or to treat the objection as an appeal to be heard in the Trial Division of the Supreme Court:

25.      Reviews

(1)If the taxpayer is dissatisfied with the decision of the Commissioner on the objection he may within 60 days after notice of the Commissioner’s  decision has been given to him …

(a)in writing request the Commissioner to refer the decision to the Victorian Civil and Administrative Tribunal for review;  or

(b)in writing request the Commissioner to treat his objection as an appeal and to cause it to be set down for hearing at the next sittings of the Supreme Court.

…

1. Section 26 imposes on the taxpayer the burden of proving that the assessment is excessive and limits the taxpayer to the grounds stated in the objection unless the Court or Tribunal allows otherwise:

26.      Proceedings on references and appeals

(1)       Upon any review or appeal under this Act —

(a)unless the Court or the Tribunal otherwise orders, the taxpayer shall be limited to the grounds stated in his objection and the Commissioner shall be limited to the grounds upon which he has disallowed the objection;  and

(b)the burden of proving that the assessment is excessive shall lie upon the taxpayer.

(2)If the assessment has been reduced by the Commissioner after considering the objection, the reduced assessment shall be the assessment to be dealt with on the review or appeal.

1. Section 38(1) provides that a pending objection or appeal or case stated does not affect the assessment and ‘tax may be made, levied and recovered on the assessment in like manner as if no objection had been received and no appeal or case stated were pending’.

1. Section 39 provides for sums payable for tax to be debts due to the Crown:

39.      Land tax a debt due to Her Majesty

Every sum payable for tax shall when the same falls due be deemed a debt due to Her Majesty by the owner of any land who shall forthwith pay the same to the Commissioner.

1. ACN emphasises that s 39 does not refer to assessments as giving rise to a statutory debt; rather, there must be a ‘sum payable for tax’ before the debt is generated.[54] 

   [54]ACN contends that the payment of the excess amount was not a ‘sum payable for tax’. This was relied upon to criticise the judge’s view that ACN received good consideration when it paid the excess amount because its statutory debt was discharged. See [197]–[198] below.

1. Section 57 provides that land tax is due and payable on the date stipulated in the assessment:

57.      Dates for payment of tax to be stated in notice of assessment

Subject to this Act, land tax for each year shall be due and payable on a date stated in the notice of assessment to be the due date which date shall not be less than fourteen days after the service of such notice.

1. Section 59 provides for the Commissioner to recover tax (and any additional tax arising from an amended assessment) on behalf of the Crown by issuing proceedings in his own name in the County Court or the Magistrates’ Court.

1. Section 67 stipulates that no statute of limitations ‘shall bar or affect any action or remedy for recovery of tax’.

1. If a person claims to be entitled to a refund of tax he or she has three years from the date of payment to lodge with the Commission an application for a refund. The Commissioner relies upon s 90AA to preclude any recovery for ACN in the mandamus proceeding or the proceeding for restitution, more than three years having elapsed since any of the payments were made with respect to the 1990–2002 land tax years and no relevant application under s 90AA having been made to the Commissioner:

90AA. Refund of tax

(1)Proceedings for the refund or recovery of tax paid under, or purportedly paid under, this Act, whether before or after the commencement of section 22 of the State Taxation (Further Amendment) Act 1993, must not be brought, whether against the Commissioner or otherwise, except as provided in this section.

(2)If a person claims to be entitled to receive a refund of or to recover tax paid under, or purportedly paid under, this Act, the person must lodge with the Commissioner within 3 years after the payment was made an application in the prescribed form for the refund of the payment.

(3)       If —

(a)a person has lodged an application for the refund of an amount in accordance with sub-section (2);  and

(b)the Commissioner has not, within the period of 3 months after the application was lodged —

(i)        refunded the amount;  or

(ii)applied the amount in accordance with sub-section (6)(d);  or

(iii)refunded part of the amount and applied the remainder in accordance with sub-section (6)(d) —

or has, in writing given to the person within that period, refused to make a refund, the person may, within 3 months after the end of that period or after that refusal, whichever first occurs, bring proceedings for the recovery of the amount, or, if the Commissioner has refunded or applied part, the remainder of the amount.

(4)Sub-section (3) applies whether or not the period for bringing proceedings for the refund or recovery of the amount prescribed by section 20A(1) of the Limitation of Actions Act 1958 has expired.

(5)Sub-sections (1) and (2) do not apply to a person if the person claims to be entitled to receive a refund or to recover tax paid under, or purportedly paid under, this Act by reason of the invalidity of a provision of this Act.

(6)       If —

(a)an application for a refund is lodged with the Commissioner in accordance with sub-section (2);  and

(b)the Commissioner finds that an amount has been overpaid by the applicant —

the Commissioner —

(c)       must refund the overpaid amount;  or

(d)      must —

(i)apply the overpaid amount against any liability of the applicant to the State, being a liability arising under, or by reason of, an Act of which the Commissioner has the general administration;  and

(ii)refund any part of the overpayment that is not so applied.

(7)If, under this section, the Commissioner determines to refund an amount, the amount is payable from the Consolidated Fund which is to the necessary extent appropriated accordingly.

(8)       In this section, ‘proceedings’ includes —

(a)seeking the grant of any relief or remedy in the nature of certiorari, prohibition, mandamus or quo warranto, or the grant of a declaration of right or an injunction;  or

(b)       seeking any order under the Administrative Law Act 1978.

1. The Commissioner also emphasises the express power of appropriation found in s 90AA(7) which is absent from s 19.

1. The limitation period of three years for an application to be made under s 90AA was relied upon by the Commissioner in his letter of 15 August 2013 to Ngo referred to above[55] as disentitling ACN to any refund regardless of the merits of otherwise exercising the power under s 19 to amend the assessments for the 1990‑2002 land tax years.

   [55]See [49] above.

1. Section 92A of the Act makes it clear that s 90AA is intended to restrict the jurisdiction of the Supreme Court to order relief:

92A.    Supreme Court — limitation of jurisdiction

It is the intention of this section to alter or vary section 85 of the Constitution Act 1975 to the extent necessary to prevent the Supreme Court entertaining proceedings of a kind to which section 90AA(1) applies, except as provided in that section.

1. There are other potentially relevant limitation periods prescribed under the Limitation of Actions Act 1958 (‘the Limitations Act’). These include the period of six years from the date on which a cause of action accrued founded on simple contract, including contracts implied by law (s 5(1)(a)), and in respect of a proceeding to recover any sum recoverable by virtue of an enactment (s 5(1)(d)):[56]

   [56]The Commissioner contended before the judge that if s 5(1) of the Limitations Act is relevant, it is s 5(1)(a) because when the Limitations Act commenced, in 1958, common law restitutionary actions for mistake were regarded as founded on a ‘contract implied by law’ or ‘quasi contract’: see Reasons [154], [156]. He also said ACN should not have the benefit of any postponement under s 27. ACN contended that if s 5(1) is relevant, it is s 5(1)(d) together with the benefit of a postponement under s 27.

5         Contracts and torts

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

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

(b)       Actions to enforce a recognizance;

(c) Actions to enforce an award, where the submission is not by an instrument under seal;

(d) Actions to recover any sum recoverable by virtue of enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.

1. Section 20A of the Limitations Act specifically addresses proceedings for the recovery of money paid by way of tax, or purported tax, or attributable to tax or purported tax, paid under a mistake of law or of fact:

20A     Limitation on proceeding for recovery of tax

(1)Subject to subsection (2), a proceeding for the recovery of money paid by way of tax or purported tax or by way of an amount that is attributable to tax or purported tax under a mistake (either of law or of fact) or under colour of authority must be commenced —

(a)       within 12 months after the date of payment;  or

(b)in the case of a proceeding in accordance with another Act that provides for the refund or recovery of the money within a longer period, within that longer period.

(2)Despite anything to the contrary in any other Act, if money paid by way of tax or purported tax or by way of an amount that is attributable to tax or purported tax is recoverable because of the invalidity of a law or provision of a law, a proceeding for the recovery of that money must (whether the payment was made voluntarily or under compulsion) be commenced within 12 months after the date of payment.

1. Section 27 allows for the postponement of an otherwise applicable limitation period, relevantly, where the proceeding is for relief from the consequences of a mistake, from the date when the taxpayer discovered the mistake or could with reasonable diligence have discovered it:

27       Postponement of limitation periods in case of fraud or mistake

Where, in the case of any action for which a period of limitation is prescribed by this Act —

(a) the action is based upon the fraud of the defendant or his agent or of any person through whom he claims or his agent;  or

(b) the right of action is concealed by the fraud of any such person as aforesaid;  or

(c)       the action is for relief from the consequences of a mistake — 

the period of limitation shall not begin to run until the plaintiff has discovered the fraud or the mistake, as the case may be, or could with reasonable diligence have discovered it:

Provided that nothing in this section shall enable any action to be brought to recover or enforce any charge against or set aside any transaction affecting any property which —

(i) in the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know or have reason to believe that any fraud had been committed;  or

(ii) in the case of mistake, has been purchased for valuable consideration, subsequently to the transaction in which the mistake was made by a person who did not know or have reason to believe that the mistake had been made.

1. To foreshadow the submissions made on the appeals, the Commissioner’s primary position is that both the mandamus proceeding and the restitution proceeding are precluded by s 90AA of the Act and that the Limitations Act provisions (ss 5(1), 20A) do not apply. However, if either s 5(1) or s 20A do apply, the Commissioner claims that the time periods they prescribe have been exhausted and ACN cannot take the benefit of postponement under s 27 as it could with reasonable diligence have discovered the duplication error for the 1990–2002 land tax years many years ago.

1. By contrast ACN’s primary position is that no limitation period governs the exercise of the power of the Commissioner under s 19 to amend assessments. The power may be exercised ‘from time to time’, that is, at any time. If any limitation period does apply it is s 20A(1), which is the more specific, and later enacted,[57] provision addressing the circumstances here, rather than s 90AA of the Act. If not s 20A(1), then s 5(1)(d) would apply. ACN submits that it can take the benefit of the postponement period under s 27 as it could not with reasonable diligence have discovered the duplication error for the 1990–2002 land tax years until alerted by the 23 March 2012 email that the Commissioner’s duplication error had occurred for the 2008–2011 land tax years.

   [57]Section 20A was amended to its current form by the Limitation of Actions (Amendment) Act 2004 (No 8/2004) which commenced on 4 March 2004 while s 90AA was inserted by the State Taxation (Further Amendment) Act 1993 (No 104/1993).  An earlier s 20A had been introduced in 1961 by the Limitation of Actions (Recovery of Imposts) Act 1961 for the recovery of taxes ‘paid under the authority or purported authority of any Act’.  It made no mention of payments made under a mistake.  It was replaced by a new s 20A introduced by the Limitation of Actions (Amendment) Act 1993 (No 102/1993) which from 15 October 1993 applied to proceedings for the recovery of money ‘paid by way of tax or purported tax under a mistake (either of law or fact)’.  It was enlarged in 2004 to include the recovery of money paid ‘by way of an amount that is attributable to tax or purported tax … or under colour of authority’.  See Reasons [49]–[51].

The judge’s reasons

1. The judge identified five principal issues as arising for determination,[58] namely:

   [58]Reasons [61]. The formulation of the issues identified by the judge has been modified to reflect the definitions we have already adopted.

(1) Where a taxpayer contends it has ‘overpaid’ land tax assessed under the Act, is it open for the taxpayer not to avail itself of the objection process and instead sue at common law to recover the alleged ‘overpayment’ amount as money had and received?

(2) Is ACN’s action in restitution for relief from the consequences of a mistake barred by a limitation provision — be it one or more of s 90AA of the Act, s 20A or s 5(1) of the Limitations Act, as extended by s 27 as the case may be?

(3) Is an order for mandamus (or other order on judicial review) available to direct the Commissioner to exercise the discretion conferred by s 19 of the Act and issue amended assessments to ACN for each of the 1990–2002 land tax years?

(4)       Is ACN’s action for mandamus (or other order on judicial review) barred by any limitation provision?

(5) If ACN establishes that it is entitled to a refund of, or to recover, the alleged excess amount, is compound interest recoverable as part of the restitutionary relief or is ACN limited to recovering simple interest, in the Court’s equitable jurisdiction or alternatively pursuant to ss 58 or 60 of the Supreme Court Act 1986?

Issue 1 —Are the objection and refund regimes exclusive?

1. With respect to Issue 1, the judge concluded that the statutory scheme under the Act provided for an exclusive and exhaustive regime for the recovery of tax, or purported tax, under the Act, namely the objection regime[59] and the refund regime.[60] That being so, there was no scope for a taxpayer to commence a proceeding at common law to recover alleged overpayments on a claim for restitution. After a careful consideration of the statutory provisions in the Act governing the making of objections, and the processes of reviews and appeals from decisions with respect to those objections, the judge concluded that the objection regime, together with the process for claiming a refund under s 90AA, functioned to exclude any other mechanism for recovery.

   [59]That is, the regime under ss 24A–38 of the Act.

   [60]That is, the regime under ss 90AA of the Act.

1. Her Honour said:

In the present case, if the plaintiff were permitted to pursue its restitutionary claim at common law, it would circumvent the statutory regime and the time frames and processes limited for challenging the land tax so assessed.  In my view, the statutory regime of objections and appeals established under the LTA 1958,^[[61]^] together with the process for claiming a refund under s 90AA, provides the only means for a taxpayer to establish that there is an overpayment, and thereby any entitlement or remedy for the recovery of any overpaid tax. In other words, the position is that unless and until the original assessment is set aside or varied or shown to have been excessive, and the amount of tax so assessed never to have been exigible, no common law claim for restitutionary relief could be pursued. Indeed, when the provisions of s 90AA are examined (as to which, see Issue 2 below), it appears that the legislature intended that, save in the case where invalidity of a provision is alleged, there would only be scope for a person who claims to be entitled to receive a refund of or to recover tax paid under the LTA 1958 to bring proceedings for the recovery of the amount of the overpayment in the limited circumstances set out in s 90AA(3). Further, the express limitation of the jurisdiction of the Court serves to confirm that legislative intention. By effectively barring any other recovery action by a taxpayer, and limiting the Court’s jurisdiction to entertain proceedings, ss 90AA and 92A serve to enhance the operation of that scheme.[62]

[61]The judge defined the Act as the ‘LTA 1958’.

[62]Reasons [106].

1. The judge based her conclusion that the objection and refund regimes are the only means by which a taxpayer can establish that an assessment made under the Act is excessive by reference to the statutory text.[63] Her Honour noted that the regime established under the Act ‘operates on the basis that the making of the assessment gives rise to a liability to pay the whole of the amount assessed’[64] and that, applying Commissioner of State Revenue v Gas Ban Pty Ltd (in liq),[65] (where assessments were made with respect to payroll tax) as a consequence of an assessment, a fixed and certain amount becomes due and payable, an assessment being neither tentative nor provisional. The judge went on to say that once an assessment is made, it gives rise to a statutory debt to pay the amount assessed regardless of whether an objection is later successfully made. Moreover, the Act specifically allows for refunds to be sought through application to the Commissioner and for proceedings to be commenced after refusal through the s 90AA process and in accordance with its stipulated time limits. The judge said:

In my view, as a matter of construction, the scheme of the LTA 1958 is such that once the assessment has been made, the amount so specified will become due and owing as the proper tax on the date specified for payment.  That remains the position even if the assessment is challenged and later found to be incorrect.  A person who is dissatisfied with an assessment may serve an objection on the Commissioner, seeking to establish that the assessment is excessive and that an overpayment has resulted, but the fact that an objection is pending does not interfere with or affect the assessment and the tax may be recovered on the assessment as if no objection had been received.  Unless and until that assessment is set aside, or altered or varied, or an amended assessment issues, the taxpayer remains liable for the amount of land tax assessed.

Further, in circumstances where a person claims to be entitled to a refund or recovery of land tax, it is also open to the person to make application under s 90AA for a refund of the payment but such application must be lodged with the Commissioner within three years after the payment was made. If an application is lodged, the question of whether or not an amount has been overpaid is one for the Commissioner to determine. In the event that the Commissioner finds that an amount has been overpaid, he must refund it or apply it in the manner directed under s 90AA(6). If the Commissioner determines to refund an amount, that amount is payable from the Consolidated Fund, which is appropriated to the extent necessary. Proceedings, including proceedings brought by way of judicial review, seeking a refund or recovery of an amount of tax paid under, or purportedly paid under, the LTA 1958 may be brought but only in the limited circumstances identified in s 90AA(3), save in the case where the claim is made by reason of the invalidity of a provision of the Act. The limitation of the Court’s jurisdiction to prevent it entertaining proceedings of a kind to which s 90AA(1) applies, except as provided in that section, further confirms the limited scope for bringing any collateral challenge or recovery action.[66]

[63]Applying Thiess v Collector of Customs (2014) 250 CLR 664, 671 [22].

[64]Reasons [76].

[65](2011) 31 VR 397, 408 [48] (‘Gas Ban’).

[66]Reasons [78]–[79].

1. The judge placed particular emphasis upon the legislative history and extrinsic materials in relation to the insertion of s 90AA in 1993[67] which imposed a clear temporal limit upon a taxpayer’s ability to make claims and bring proceedings seeking refunds, as the relevant Minister said, to ‘provide certainty and finality to Victoria’s revenue collections’.[68] Her Honour emphasised the express limitation of the Court’s jurisdiction under s 92A of the Act[69] and the interpretation given by this Court in Gas Ban to s 96(2) of the Taxation Administration Act 1997, a similar provision to s 90AA, to the effect that it was intended to exclude the possibility of judicial review.[70]

   [67]As mentioned at n 57, s 90AA was inserted by s 22 of the State Taxation (Further Amendment) Act 1993.

   [68]Reasons [80] quoting from Victoria, Parliamentary Debates, Legislative Assembly, 21 October 1993, 1254 (Alan Stockdale, Treasurer).

   [69]See [74] above.

   [70]Reasons [81], Gas Ban (2011) 31 VR 397, 409 [53].

1. The judge also emphasised the closing words of s 19, namely ‘the validity of an assessment shall not be affected by reason only that any of the provisions of this Act have not been complied with’. These words reflect those relied upon in Futuris as generally protecting an assessment from a challenge based on judicial review;  this is discussed below.[71]

   [71]See [150]–[153] below.

1. The judge further emphasised s 20 of the Act, in the context of the statutory scheme, as indicating the conclusiveness of assessments made by the Commissioner.[72] Seen as part of the evidence of legislative intention, she considered that s 20 demonstrates that a taxpayer’s liability for the whole of the amount assessed arises from the assessment and remains so unless altered or varied. She said:

Where an assessment under the hand of the Commissioner is produced, s 20 of the LTA 1958 provides that the assessment is conclusive evidence of the due making of the assessment and that the amount and all of the particulars of the assessment are correct. That is so, even though there may be other material available that casts doubt upon the correctness of the assessment. But until that assessment is altered or varied or set aside, or an amended assessment is made, the scheme of the Act is that the assessment prevails and the taxpayer remains liable for the whole of the amount assessed. This approach is confirmed by s 19, which specifically provides that the ‘validity of an assessment shall not be affected by reason only that any of the provisions of the Act have not been complied with’.

If a taxpayer were permitted to challenge the amount of land tax assessed under the LTA 1958 for the 2002 year, outside of the objection regime, and to recover the amount of the alleged overpayment by a separate proceeding for money had and received, the integrity of the statutory scheme would be distorted. Perhaps most importantly, if the taxpayer were successful, the assessment issued by the Commissioner would no longer reflect the amount of tax actually payable.

In the present case, the plaintiff seeks to take the matter outside of the statutory scheme. It argues that the amounts it overpaid ‘by mistake’ to the Commissioner are not relevantly to be characterised as ‘dut[ies] of land tax’ under s 6 or ‘tax on land’ under s 8 of the LTA 1958. Further, it says that the ‘conclusive evidence’ provision in s 20 operates only where there has been something which answers the statutory process of an ‘assessment’ and, as the plurality of the High Court noted in Futuris, ‘conscious maladministration of the assessment process may be said also not to produce an “assessment” to which s 175 applies.’ In this regard, the plaintiff now contends in its proceeding brought by way of Originating Motion, that as a result of the matters set out in the Commissioner’s August 2013 correspondence, there has been maladministration by the Commissioner. But no contention is made to the effect that at the time the various assessments of land tax were made in each year between 1990 and 2002 there was any ‘bad faith’ or ‘lack of good faith’ in the process of the making of the assessments such as would found jurisdictional error.[73]

[72]This was despite there being no assessments for the years 1990–2002 produced by the Commissioner. ACN submits that the judge erroneously emphasised s 20 in circumstances where the Commissioner was unable to rely upon it. However, the judge noted that in some of the cases concerned with similar legislative regimes which have held an objection regime to be exclusive, the Commissioner placed no reliance on a conclusive evidence provision: Reasons [87] with respect to Hoare Bros Pty Ltd v FederalCommissioner of Taxation (1996) 62 FCR 302 (‘Hoare Bros’), approved by the High Court in Deputy Commissioner of Taxation v Broadbeach Properties Pty Ltd (2008) 237 CLR 473. See also Futuris (2008) 237 CLR 146, 166 [62]. We consider that the judge focused upon s 20 as part of the statutory scheme, which she was entitled to do, and did not impermissibly rely upon s 20 as though it rendered conclusive assessments which the Commissioner could not produce.

[73]Reasons [83]–[85] (emphasis added) (citation omitted).

1. These remarks were made by the judge in the context of her consideration of the common law proceedings for restitution. However, to foreshadow what is discussed below, ACN relies on the omission of any detailed examination of the scope and purpose of s 19 from the judge’s initial presentation of the statutory scheme, and the judge’s observations that if ACN were permitted to raise a challenge outside of the objection regime ‘the integrity of the statutory scheme would be distorted’ and that ACN sought to ‘take the matter outside of the statutory scheme’, as indicating that her Honour failed to treat the power to amend assessments under s 19 as integrated within the statutory scheme. Alternatively, ACN submits that these remarks indicate that the judge approached the submissions it made on the amendment power under s 19 after having already determined that the statutory scheme for the recovery of overpayments lay solely in the objection and refund regimes before taking into account the scope and purpose of s 19. This is said to be apparent in the structure of her Honour’s reasons. As noted above,[74] the judge identified the issue of whether the power under s 19 could be enforced by mandamus as Issue 3 after having considered, via Issue 1, whether the objection and refund regimes were the only means by which recovery of overpayments could be pursued.

   [74]See [80(3)] above.

1. The judge went on to conclude that under the statutory scheme an assessment creates a debt due to the Crown and payments made to the Commissioner to relieve that indebtedness are properly made, including those made by ACN during the 1990–2002 land tax years.  She later used these observations to deny that ACN made any payment under any operative mistake.[75]  She said:

In my view, each of the arguments advanced by the plaintiff to the effect that the amounts it paid were not tax because there was no valid assessment runs contrary to the statutory scheme established.  For any of them to gain traction, the plaintiff must first establish that the assessment is excessive.  Here, the amounts that were assessed and paid are common ground.  Under the statutory scheme, once an assessment is made and the date for payment falls due, there is a debt due to the Crown.  In each of the relevant land tax years when payments were made by the plaintiff, it did so because it was indebted to the Commissioner in the amount of land tax so assessed and the payment so made discharged that indebtedness.[76]

[75]Reasons [113]. See [90] below.

[76]Reasons [86].

1. The judge also considered other forms of taxation legislation where the objection regime has been held to be exclusive and exhaustive.[77] On Issue 1 she concluded that there was no scope for ACN to pursue its claim for restitution given the exclusivity of the objection and refund regimes under the Act.[78] 

   [77]Ibid [65], [87]–[105]. She referred, for example, to the federal regime under Part IVC of the Taxation Administration Act 1953 (Cth) (see Futuris (2008) 237 CLR 146; Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 183 CLR 168; Hoare Bros (1996) 62 FCR 302); stamp duty (Stamp Act 1921 (WA); Stamp Act 1894–1982 (Qld), Stamp Duties Act 1923 (SA) and Commissioner of State Taxation (WA) v Bayswater Hire Cars Pty Ltd (1989) 20 ATR 1606; O’Sullivan v Commissioner of Stamp Duties [1984] 1 Qd R 212, and Corfu Clothing Co Pty Ltd v Commissioner of Stamps (1988) 48 SASR 105, respectively) and payroll tax (Phibbs v Dale (unreported, Supreme Court of Victoria, Menhennitt J, 8 June 1978)).

   [78]Reasons [106].

1. For these reasons, we consider that the Commissioner’s claim to have a ‘defence’ to ACN’s claim in restitution based upon the good consideration he gave by way of the discharge of a statutory debt should be rejected.

1. We consider that, in the circumstances of the case, the common law would  impose a legal obligation to provide restitutionary relief (subject to the application of any relevant limitation period).

1. This establishes a separate and antecedent liability at common law against the Commissioner for restitution were it necessary for there to be such an antecedent liability.  (Our primary position is that there may be no such need.)[245] The separate liability provides an alternative ground by which to convert the word ‘may’ in s 19 from that of an empowering or facilitative word to a word which, in the circumstances of the case, has mandatory force, in accordance with the observations of Brennan J in Royal Insurance.  The duty is enforceable by mandamus, most especially because here, as we emphasised above,[246] the Commissioner has refused to perform his duty without good reason or justification.  In accordance with the ratio of Royal Insurance, the statutory power in s 19 ‘transformed the cause of action [in restitution] into a right to performance by the Commissioner of [his] duty to exercise [his] power’[247] relevantly to amend the assessments for the 1990–2002 land tax years and to give effect to the amended assessments by refunding the excess amount.

   [245]We consider the question to be open. See [183] above.

   [246]See [155]–[159] above.

   [247]Royal Insurance (1994) 182 CLR 51, 92.

1. However, as the judge noted,[248] Lehane J in Chippendale Printing Co Pty Ltd v Commissioner of Taxation[249] took the view that the effect of Brennan J’s judgment in Royal Insurance was that the transformation of a common law action in restitution into a statutory right to the performance by the Commissioner of a statutory duty leaves the taxpayer with only one recourse, namely, the proceeding for mandamus.  He said, referring to Royal Insurance:

In the proceedings orders were sought compelling the Commissioner to exercise her discretion in favour of Royal Insurance, which had overpaid duty.  Common law relief was not sought.  The effect of the judgment of Brennan J, with whom Toohey and McHugh JJ agreed and whose judgment therefore represents the views of the majority of the Court, is that the Commissioner could be compelled to exercise her power under the section in circumstances where the general law would create a duty to refund the overpaid amount (at 88) but that (at 92) the section had ‘transformed the cause of action into a right to performance by the Commissioner of her duty to exercise her power to refund’.  In other words, though the circumstances (and the only circumstances) in which the Commissioner might (and should) exercise her discretion under the section were those where the common law would impose a legal obligation to make a refund, the claimant's only recourse was an action to compel the appropriate exercise of the discretion, not an action against the Commissioner (or the Crown) to recover the overpaid duty at common law.[250]   

[248]Reasons [99].

[249](1996) 62 FCR 347 (‘Chippendale Printing’).

[250]Ibid 368–9 (emphasis added).

1. This is supported also by the observation of Brennan J, quoted above,[251] that ‘an exercise of the power [to refund] is the means by which the Commissioner’s [antecedent] legal liability is discharged’.[252]

   [251]See [177] above.

   [252]Royal Insurance (1994) 182 CLR 51, 88.

1. As we explained above,[253] the significance of the claim in restitution in RoyalInsurance was that it satisfied the requirement identified by Brennan J in that case that there be a separate and antecedent liability on the Commissioner to refund the overpayments, namely, with respect to the bulk of the payments,[254] a liability that the common law would impose to provide restitution.  As Lehane J observed in Chippendale Printing, common law relief was not sought in Royal Insurance.  Nor was it ordered.  The relief in Royal Insurance consisted in an order in the form of mandamus directing the Commissioner to refund the amount in question.  The orders were made by the Full Court of the Supreme Court[255] and the High Court dismissed the appeal.[256]  

   [253]See [178]–[182] above.

   [254]That is, the payments other than those affected by the 1987 Act. See [163], [178], [179] above. While the judge aligned the payment of the excess amount with payments made under the 1987 Act we consider her Honour was wrong to do so. See [180] above.

   [255]Royal Insurance Australia Ltd v Comptroller of Stamps (Vic) (1992) 23 ATR 528, 530, 535, 549.

   [256]Royal Insurance (1994) 182 CLR 51, 103.

1. ACN relies on Royal Insurance as its principal authority in its restitution proceeding for the proposition that a claim for money had and received lies against the Commissioner from which restitutionary relief will flow.  However, the High Court in Royal Insurance upheld the taxpayer’s claim in restitution only insofar as it demonstrated that the requirement for an antecedent liability was satisfied. It did not uphold a claim in restitution as a distinct cause of action for which it granted relief. Indeed, as mentioned, the claim in restitution was not relied upon as a distinct cause of action and nor was restitutionary relief sought. ACN did not point to any other Australian authority where restitutionary relief had been sought and granted against the Commissioner or equivalent statutory office-holder within the context of a statutory scheme similar to the Act.

1. We consider that ACN has successfully demonstrated that here, if necessary, the claim in restitution is made out in the sense that the requirement for an antecedent liability on behalf of the Commissioner has been established.  In other words, we consider that the circumstances are ones where, in the words of Lehane J in Chippendale Printing, ‘the common law would impose a legal obligation to make a refund’[257] by reason of the excess amount having been paid under a mistake. We consider that this would be sufficient, if necessary, to transform the power under s 19 into a statutory duty on the Commissioner to amend ACN’s assessments for the 1990–2002 land tax years and to give effect to the amendments by repaying the excess amount.

   [257](1996) 62 FCR 347, 368–9 (emphasis added).

1. In the circumstances we consider it unnecessary to resolve the Chippendale Printing question as to whether the only recourse available to ACN was to bring a proceeding for mandamus to compel the appropriate exercise of discretion and that the action to recover in restitution was not independently available to it.[258]  Here, ACN did bring proceedings for mandamus and that proceeding has transformed its common law cause of action for restitution into a statutory right to the performance of a duty on the Commissioner.  We consider that reliance on Royal Insurance can support no greater proposition.

   [258]In effect ACN’s proceeding for restitution served to establish the requirement that there was here an antecedent liability, if such a requirement is necessary.  

1. We turn then to the issue of limitation periods.

(6)       Which limitation period applies — s 90AA, s 20A or s 5(1)?

1. The primary submission of ACN is that the duty of the Commissioner, in the circumstances of the case, to make amended assessments for the 1990–2002 land tax years and to act on those amendments by refunding the wrongly demanded sum, is not governed by any limitation period.[259] It submits that a proceeding for mandamus, or for restitution, may be brought without the need for compliance with any limitation period. It emphasises that the terms of s 19 expressly provide for the power to be exercised ‘from time to time’ and thus at any time.

   [259]See [79] above.

1. We noted above[260] that s 19 is cast in terms of an ‘own motion’ power and that relief is not dependent on any further step being taken by the taxpayer. When exercised by the Commissioner as an own motion power we consider there would appear to be no temporal restriction on its exercise. However, ACN relies on its right to enforce the performance of the Commissioner’s duty to amend the 1990–2002 assessments, and to refund, arising under s 19 in the circumstances of the case. That is, it relies not on the own motion aspect of s 19 but on its capacity to enforce the performance of the power under s 19 by mandamus.

   [260]See [157] above.

1. The question arises whether any limitation period under the Act, or under the Limitations Act, applies to govern such a proceeding.

1. The Commissioner primarily relies on s 90AA(1) of the Act as a bar to the proceeding and, alternatively, relies on s 20A(1) and/or s 5(1) of the Limitations Act.

1. It is clear that a proceeding for mandamus is included within the proceedings sought to be governed by the limitation period under s 90AA.[261] ACN submits that, nevertheless, s 90AA does not apply because the proceedings are not ‘for the refund or recovery of tax paid under, or purportedly paid under, this Act’. In short, the submission is that because the operative mistake ultimately deprived the Commissioner of authority to take, and retain, the excess amount, the excess amount could not be aptly described as a payment made ‘under, or purportedly paid under’ the Act. ACN relies on observations made in Royal Insurance to the effect that payments made under a mistake of law as to the authority of the Commissioner to demand payments were not amounts either paid under the Act or under the purported authority of the Act. These observations were made in the context of the then s 20A[262] but ACN focuses on what is substantially similar language in s 90AA. In particular, Mason CJ noted that it ‘is not possible to read the words “under the authority or purported authority” as denoting “under a mistaken belief as to authority”‘.[263]

   [261]Section 90AA(8). See [71] above.

   [262]Section 20A then did not include the words ‘under a mistake (either of law or of fact)’.  See n 57 above.

   [263]Royal Insurance (1994) 182 CLR 51, 80.

1. We agree that s 90AA is not applicable here.

1. If we are correct in concluding that the proceeding for mandamus does not require for its success that ACN establish an antecedent liability at common law in restitution then we consider that the relevant limitation period is the six years under s 5(1)(d) applicable to ‘[a]ctions to recover any sum recoverable by virtue of an enactment’.[264]  The proceeding for mandamus, being a proceeding to compel the performance of a statutory duty, is a proceeding to recover a sum recoverable by virtue of an enactment.

   [264]See [75] above.

1. If we are wrong, however, and there is a need for ACN to establish an underlying claim for restitutionary relief, then we consider that s 20A(1) applies.

1. Section 20A(1) of the Limitations Act[265] exactly addresses the claim that the proceedings are for ‘the recovery of money paid … under a mistake (either of law or fact)’ and that the payments were ‘by way of an amount that is attributable to … purported tax’.  Section 20A(1) is clearly intended to apply to mistake-based restitutionary claims.  This is reinforced by its legislative history, being introduced to extend to payments made under a mistake after the Full Court of the Supreme Court in Royal Insurance Australia Ltd v Comptroller of Stamps (Vic)[266] gave a confined meaning to the then s 20A.[267]  As mentioned,[268] Mason CJ observed in Royal Insurance that mistake-based restitutionary claims did not meet the description of proceedings for the recovery of ‘tax … paid under the authority or purported authority of any Act’, the relevant terms in which s 20A had been cast,[269] and substantially similar to the terms of s 90AA.[270] 

   [265]See [76] above.

   [266](1992) 23 ATR 528.

   [267]Ibid 530, 534–5, 547–8.

   [268]See [212] above.

   [269]See n 57 above.  

   [270]As her Honour noted (Reasons n 25) the decision of the High Court in Royal Insurance was delivered on 7 December 1994, after s 90AA had been inserted into the Act by the State Taxation (Further Amendment) Act 1993 and after the new s 20A had been inserted into the Limitations Act by the Limitation of Actions (Amendment) Act 1993.  It thus cannot be inferred that the Victorian Parliament, in enacting those provisions, had the benefit of the reasoning of the High Court.

1. We consider that the payment of the excess amount for the 1990–2002 land tax years, being paid in response to assessments issued by the Commissioner under the Act, in respect of ACN’s landholdings for each land tax year, albeit inaccurately identified, is aptly described by the current language of s 20A(1). In our view, the excess amount was paid ‘by way of an amount that is attributable to … purported tax under a mistake (either of law or fact)’.[271]  While in truth the excess amount was not lawfully demanded as land tax, it nevertheless had the character of an amount that is ‘attributable to … [a] purported tax’ payment.  Even if a payment made under a mistake of law is not ‘tax … paid under the authority or purported authority of any Act’, as Mason CJ observed, we consider it may nevertheless be ‘an amount … attributable to … purported tax’.  

   [271]See [76] above.

1. We consider, with respect, that the judge was wrong to conclude that s 20A of the Limitations Act was excluded by s 90AA of the Act, or not enlivened here, because the proceeding was not brought after an application had been made for a refund under s 90AA(2).[272]  We have already concluded that, in the circumstances, it was not necessary for ACN to have made an application for a refund given that we consider its mandamus proceeding to be properly founded on its allegation of conscious maladministration.  We consider that s 20A(1) applies because it is the later[273] and more specific statutory provision; it impliedly repeals s 90AA or restricts its scope of operation in certain limited circumstances, relevantly, where the proceedings are for the recovery of money paid under a mistake of law or fact.[274]  We consider that the same limitation provision that applies to a proceeding for restitutionary relief, s 20A(1), applies by analogy to the mandamus proceeding.[275]  

   [272]See [93] above.

   [273]In particular the expansion of s 20A to amounts that are ‘attributable to … purported tax’, the language we consider applies here, occurred in 2004.  See n 57 above.

   [274]As s 20A is also specifically addressed to the recovery of tax or purported tax we also consider that it impliedly repeals or restrictions the operation of s 67 of the Act. See [70] above.

   [275]Royal Insurance (1994) 182 CLR 51. Brennan J said (at 92): ‘The relevance of the limitation periods is that they mark the periods during which a legal liability to refund would have been enforceable by action, if s 111(1) had not transformed the cause of action into a right to performance by the Commissioner of her duty to exercise her power to refund’.

1. Moreover, we consider that if s 20A applies, the applicable limitation period is s 20A(1)(a), namely, a period within 12 months after the date of payment.

1. We do not consider that s 20A(1)(b) applies. On this alternative, s 90AA continues to have a role to play because the proceeding is brought ‘in accordance with another Act that provides for the refund or recovery of the money’, and the longer period of three years and six months prescribed under s 90AA would apply. ACN urged the application of s 20A(1)(b) on the basis that the two provisions, s 90AA and s 20A(1), should be accommodated by construing them harmoniously in accordance with the principle that where ‘two statutes … share a field of operation’ they ‘should be construed in a way which best achieves a harmonious result’.[276] This is not to suggest that s 20A(1)(b) is specifically aimed at s 90AA; rather, s 20A(1)(b), where it applies, picks up various limitation provisions in State legislation concerned with the recovery of tax and thereby permits the beneficial operation of the extension provisions such as s 27 to enlarge those limitation periods.

   [276]Commissioner of Police (NSW) v Eaton (2013) 252 CLR 1, 28 [78] (Crennan, Kiefel and Bell JJ). See also Gageler J at 33 [98]. It should be noted that both the Act and the Limitations Act are statutes enacted by the Victorian Parliament and no potential inconsistency between a State Act and a Commonwealth Act arises.

1. However, with respect to s 90AA, the difficulty in suggesting that s 20A(1)(b) indirectly picks up the limitation period in s 90AA lies in s 90AA(4). For convenience we set it out again:

(4)Sub-section (3) applies whether or not the period for bringing proceedings for the refund or recovery of the amount prescribed by section 20A(1) of the Limitation of Actions Act 1958 has expired.

1. Section 90AA(3) is premised upon a person having lodged an application for a refund within three years after the payment was made, in accordance with s 90AA(2). The person is then entitled to bring proceedings for the recovery of the amount if the Commissioner has, within three months after the application was lodged, refused to make a refund or failed to refund the amount.[277] The proceedings are to be brought within a further three months from the date of the refusal, or after the expiration of the three month period during which the Commissioner has failed to refund or apply the amount, whichever first occurs. While sub-s (2) of s 90AA dictates the manner of the application for a refund and the timing of the application, it is sub-s (3) of s 90AA which governs the bringing of proceedings and the timing of the commencement of proceedings.

   [277]Or failed to apply it in effect as credit against another liability the applicant owes to the State under an Act of which the Commissioner has the general administration: s 90AA(3)(b) and s 90AA(6)(d). Partial refunds are also taken into account.

1. Section 90AA(4) expressly regulates the relationship between s 20A and s 90AA so that a person who applied for a refund within three years[278] is permitted to being proceedings within the six month period provided for under s 90AA(3), whether or not the period under s 20A(1) of the Limitations Act has expired. In our view, the ‘period for bringing proceedings for the refund or recovery of the amount prescribed by section 20A(1)’, referred to in s 90AA(4), must be referring to the 12‑month period in s 20A(1)(a). In other words, s 90AA(4) expressly permits proceedings to be brought for the refund or recovery of tax paid under, or purportedly under, the Act whether or not the 12-month period prescribed under s 20A(1) of the Limitations Act has expired. If s 90AA(4) referred to the longer period allowed for under s 20A(1)(b), that longer period would be the three years and six months permitted by s 90AA(3). This would mean that in effect s 90AA(4) would be saying that proceedings are permitted to be brought under s 90AA(3) (namely, a period of three years and six months) whether or not the period for bringing proceedings prescribed by s 20A(1)(b) of the Limitations Act (namely, a period of three years and six months) has expired. But this would make little sense.

   [278]That is, a person who has lodged an application for the refund of an amount in accordance with sub-s (2) of s 90AA.

1. A more sensible construction of s 90AA(4) would suggest that its role is to reinforce the permissibility of proceedings being brought against the Commissioner for refunds or recovery beyond the short 12-month period allowed for under the Limitations Act, provided that the proceedings are brought in accordance with the requirements of s 90AA.

1. In any event, for the reasons we have given, we do not consider that the circumstances here amount to ‘a proceeding in accordance with another Act’, within the terms of s 20A(1)(b), because we do not consider that the proceedings meet the description under s 90AA of being ‘proceedings for the refund or recovery of tax paid under, or purportedly paid under, this Act’.[279]

   [279]See [216] above.

1. It is unnecessary to resolve this issue. It was common ground that neither of ACN’s proceedings was brought within time, either within the six year limitation period prescribed by s 5(1)(d), the 12 month period prescribed by s 20A(1)(a), or the extended period prescribed by s 90AA if applicable under s 20A(1)(b).

(7)       Is the limitation period postponed under s 27?

1. ACN submits that s 27 applies to postpone the limitation period and that its effect would be that the limitation period did not commence to run until 23 March 2012 when ACN became informed of the Commissioner’s duplication error for the 2008-2011 land tax years.[280]  The proceedings were brought within 12 months following the commencement of the postponed limitation period.[281] This would satisfy the six year limitation period under s 5(1)(d) and the 12 month limitation period under s 20A(1)(a).

   [280]See [10]–[11] above.

   [281]On 21 March 2013 ACN filed the Writ in the restitution proceeding and an Originating Motion seeking relief in the nature of mandamus. Reasons [21]. See [45] above.

1. Section 27 applies only in respect of ‘any action for which a period of limitation is prescribed by this Act’.[282] It is clear that the limitation period of six years under s 5(1)(d) and that of 12 months under s 20A(1)(a) are limitation periods ‘prescribed by this Act’.

   [282]See [77] above.

1. In response, the Commissioner submits that s 90AA(1) applies and extinguishes any action; it does not merely bar a remedy. We have already concluded that we do not accept that s 90AA(1) applies here.

1. The Commissioner further relies on his contention that there was in truth no mistaken payment and therefore no limitation period prescribed by s 20A, for s 27 to extend. He also relies on this contention to submit that the requirement under s 27(c), namely, that the ‘action is for relief from the consequences of a mistake’ is not made out.[283]  We have already rejected the contention that there was no mistake under which the payments were made. 

   [283]The other two alternatives under s 27 (being an action based on (a) fraud or (b) being concealed by fraud) are clearly not satisfied.

1. The Commissioner submits that, even assuming s 27 could otherwise apply, the judge did not err in finding that ACN had not proven that it ‘could [not] with reasonable diligence have discovered’ the error in the 1990–2002 assessments before 2012. He emphasises that ACN carries the onus of proof in demonstrating that the limitation period should be postponed. He also submits that the judge was correct in identifying that there was no evidence as to what took place when ACN became the owner of the two properties in 1988; no evidence as to what information was forwarded to the Commissioner; and no evidence as to relevant rate notices from the City of Stonnington. The Commissioner takes by way of example, the 2002 land tax year. He submits that if ACN had paid local rates on $2,010,000 worth of land (as would be indicated by Table 2)[284] and then received a land tax assessment assessing both land of that value ($2,010,000) and supposed additional land of $1,830,000,[285] then it ought to have suspected that something was amiss;  at the least it ‘could with reasonable diligence have discovered’ the alleged duplication error.

   [284]See [20] above.

   [285]See Table 1 at [18] and [97] above.

1. ACN submits that the mistake was not discovered until 23 March 2012, and was not capable of being discovered with reasonable diligence before the making of the admission by the Commissioner on that date.  The error is not discernible from the assessments issued by the Commissioner; they refer to the two properties with separate land ID references and they neither explained the landholdings in issue, nor how land tax was calculated by reference to those landholdings.  The differential between the site values of the landholdings roughly equated to the difference in size of the two properties and the ratio remained constant.[286]  The relativities between the site value of the landholdings was as would be expected if the site values had been generated on the basis of the actual landholdings.  The assessments did not on their face disclose the duplication error.  ACN submits that the judge should have held that it was not required to second-guess calculations made by the Commissioner that were not explained on the face of the assessments and when no indication had been given to it that any such inquiry was warranted or necessary.  In particular, ACN submits the judge was entitled to, and should, have had regard to the fact that the duplication error was not identified by the Commissioner for 22 years.  Moreover, it was significant that as soon as ACN was put on notice of the duplication error, it immediately took steps to investigate and claim the excess amount.

   [286]See [18]–[19] above.

1. We accept that there was no evidence before the judge as to any information, by returns or otherwise, that had been supplied by ACN to the Commissioner. We also accept that the Commissioner has multiple avenues by which he can obtain valuation information under the Act. A taxpayer is not to be taken to know how in any instance the Commissioner obtains the information he relies upon. In particular, ACN had no knowledge at the relevant time that the Commissioner was basing his information upon Council valuations as opposed to, for example, valuations by the Valuer-General, which he is also permitted to draw upon.[287]  Nor is a taxpayer to be taken to know what calculations are performed within the State Revenue Office on the basis of which the Commissioner issues assessments.

   [287]The Act s 16. See [56] above.

1. Moreover, it is apparent from the observations made by the New South Wales Court of Appeal in Sze Tu v Lowe[288] that, in some circumstances, before it can be said that a person has failed to exercise reasonable diligence in the context of the postponement of a limitation period, the person needs to be alerted to the utility of uncovering information, especially where to do so would be onerous and costly.

   [288][2014] NSWCA 462 (‘Tu’) (Meagher, Barrett and Gleeson JJA).

1. Tu concerned an alleged partnership between family members.  The partnership engaged in the business of operating a grocery store and a butchery business.  The businesses were operated by the father (Kut Sze Tu (‘KST’)) as family businesses and were eventually sold.  KST purchased three properties and registered them in his name and the names of some of his children.  The properties were purchased without finance.  It was alleged that KST stole money from the partnership to purchase the properties.  KST died intestate. 

1. Proceedings were commenced for, amongst other things, a declaration that a partnership existed;  an order winding up the partnership;  a declaration that the properties were held on trust for the partnership;  and an order for accounting to be undertaken in respect of the profits of the partnership.  The defendants contended that there was no partnership or that the alleged partnership had been a ‘sham’, and that some claims were time barred by reason of the Limitation Act 1969 (NSW) (directly or by analogy).[289]  At the trial on liability Smart AJ held that the claims were not defeated by any of the defences pleaded.[290]  On appeal, Gleeson JA (with whom Meagher and Barrett JJA agreed) relevantly upheld the finding of Smart AJ that the claim to recover trust property was not statute-barred because the limitation period of 12 years would only run from the discovery of facts giving rise to the cause of action (November 2001).[291]  Smart AJ had held that the cause of action to recover trust property was suspended until at least November 2001 because the relevant parties could not with reasonable diligence have discovered the facts giving rise to the relevant cause of action before that date.[292]  The proceeding was commenced on 7 November 2005[293] and therefore within time. 

   [289]The relevant section was s 47 of the New South Wales Limitation Act which relevantly provided:  ‘(1) An action on a cause of action:  … (c) to recover trust property, or property into which trust property can be traced, against a trustee or against any other person … is not maintainable by a trustee of the trust or by a beneficiary under the trust or by a person claiming through a beneficiary under the trust if brought after the expiration of the only or later to expire of such of the following limitation periods as are applicable:  (e) a limitation period of twelve years running from the date on which a plaintiff or a person through whom the plaintiff claims first discovers or may with reasonable diligence discover the facts giving rise to the cause of action and that the cause of action has accrued’.

   [290]The trial was limited to eight issues of liability.  After some further documents were discovered, there was a ‘fresh trial’ by Gzell J limited to three issues which had not been determined by Smart AJ and which did not revisit the defences.

   [291]Tu [2014] NSWCA 462, [389].

   [292]Ibid [325].

   [293]Ibid [322].

1. Significantly, Smart AJ held that in determining whether reasonable diligence could have been exercised to uncover information about the purchase of the properties or whether they had been purchased with partnership funds, it was relevant to take into account that the cost of pursuing earlier suspicions would have been significant as a full audit would have been expensive;  likely to have caused upheaval in the family;  and the outcome was unknown.  He also held that ‘[c]ollating and analysing all the information and evaluating it and the conclusions which should be drawn would take some time.  To begin such an onerous and detailed exercise the plaintiffs needed to be alerted that it was likely to be useful’.[294] This finding was challenged on the basis that it reflected a wrong approach and took into account irrelevant considerations.  Gleeson JA rejected the contention.  He said:

The cost of pursuing suspicions is undoubtedly relevant to whether Geoffrey exercised reasonable diligence to discover the facts at that time.  Further, in the context of a partnership between family members, the likelihood of a family upheaval, where the outcome of a full audit was unknown, was also relevant to whether Geoffrey had exercised reasonable diligence to discover the facts in December 1978.  Finally, there was no error in Smart AJ finding that, before undertaking the onerous task of collecting and analysing information, Geoffrey and Mary needed to be alerted that it was likely to be useful.[295]

[294]Lowe v Pascoe [2010] NSWSC 388, [507(f)].

[295]Tu [2014] NSWCA 462, [411].

1. In our view, it is similarly relevant here that there was nothing to alert ACN, or to put it on inquiry, that an onerous and time-consuming task of collecting and analysing information would have any utility. The duplication error was hidden on the assessments. The error continued over the entire period of ACN’s ownership. ACN responded to the assessments in the manner in which the Commissioner would no doubt expect; namely, by making the payments demanded with respect to the two properties without querying the site value recorded on the assessments. We consider that without anything to alert ACN to the likely inaccuracy of the assessments, ACN could not with reasonable diligence have discovered the duplication error or the mistake under which it paid the excess amount. With respect to her Honour, we consider that in these circumstances she ought not to have concluded that ACN could, with reasonable diligence, have discovered the mistake. We consider that ACN is entitled to the benefit of the extension provided by s 27 of the Limitations Act.

(8)       Is ACN entitled to compound interest?

1. ACN clarified on the hearing of the appeals that, in respect of the mandamus proceeding, it sought compound interest, not from the date on which the payments that made up the excess amount were made but from the date when the Commissioner appreciated the existence of the duplication error and determined to retain the excess amount nonetheless.  ACN submits that the relevant date is the date of the constructive refusal to amend, on or about 3 December 2012.[296] It seeks simple interest pursuant to s 58 of the Supreme Court Act from the date the payments were made.

   [296]This is the date of the letter from ACN requesting amendments to the assessments for the 1990–2002 land tax years. See [41] above.

1. We consider that simple interest should be awarded pursuant to s 58 of the Supreme Court Act from the date the payments were made that constituted the excess amount.  We consider that, while strictly speaking the mandamus proceeding is a proceeding for the enforcement of a statutory duty, in the particular circumstances the proceeding is tantamount or analogous to a proceeding for the recovery of money and that a sum certain has been recovered, namely, $363,680.

1. We also consider that it is appropriate to award compound interest in the mandamus proceeding from 15 August 2013, the date of the Commissioner’s actual refusal to amend the assessments, which we have concluded amounted to an act of conscious maladministration.  We regard the circumstances surrounding the actual refusal to amend as exceptional and such as to support an order for compound interest.  

1. ACN’s claim for restitution has had a limited role in the appeals.[297]  The claim has only served to establish in the mandamus proceeding the requirement of an antecedent liability, which we consider may not be necessary in any event.  Given that limited role, it is unnecessary to determine whether ACN would be entitled to compound interest on the restitution claim.[298]

   [297]See [182]–[183], [203]–[206] above.

   [298]This issue was not fully argued by the parties. We note that while ACN made submissions on the issue, the Commissioner made it clear that he did not wish to be heard in respect of interest on the restitution claim. Rather, Senior Counsel for the Commissioner indicated that he reserved the right to argue at another level that compound interest was not available in Australia for a restitution claim. He did the same at trial: see Reasons n 207. The absence of properly contested submissions on the issue reinforces our view, given our analysis of Royal Insurance, and given that the judge drew no conclusions on the issue, that it is unnecessary for us to determine what has become a hypothetical issue.

Conclusion on the mandamus application/appeal

1. For the reasons we have given, on the mandamus appeal, we would grant leave to appeal and allow the appeal.

1. The orders made below should be set aside and in lieu thereof the Court should make an order in the nature of mandamus directing the Commissioner to exercise his power under s 19 of the Act to issue amended assessments for the 1990‑2002 land tax years (inclusive) and to give effect to those amendments by refunding the excess amount to ACN.

1. With respect to the question of interest, we consider that simple interest should be awarded on each overpayment that made up the excess amount from the date each payment was made, pursuant to s 58 of the Supreme CourtAct, with compound interest being awarded from 15 August 2013.  

Conclusion on the restitution application/appeal

1. On the restitution appeal, for the reasons we have given, we would grant leave to appeal, allow the appeal, and set side the orders below.  Given the orders that will be made on the mandamus appeal, any further relief is unnecessary.[299]

   [299]Save for the question of the costs of the restitution appeal on which the parties will be heard at the time of delivery of judgment.

---