Mulgrave Shire v Commissioners of the State Savings Bank of Victoria

The parties to this appeal were the Shire of Mulgrave (the appellant) and the Commissioners of the State Savings Bank of Victoria (the respondent). The dispute concerned whether unpaid charges for excess water supplied by the Shire to a property were a charge on the land, and whether the Shire was entitled to cut off the water supply due to non-payment of these charges. The matter came before the High Court of Australia on appeal from a decision of the Supreme Court of Victoria.

The legal issues before the High Court were twofold: first, whether moneys owing for excess water supplied by measure, as distinct from water rates, constituted a charge on the land under section 385(1) of the Local Government Act 1928 (Vict.); and second, whether the municipality had a duty to supply water to connected properties, and consequently, whether it was entitled to discontinue the supply due to non-payment of excess water charges.

The High Court, in its judgment, considered the provisions of the Local Government Act 1928, particularly sections 197(1)(iv), 385(1), 651, 652, and 653. The Court determined that charges for excess water supplied by measure were not "due in respect of any property" within the meaning of section 385(1) of the Act, and therefore did not constitute a charge upon the land. The Court reasoned that while the Shire had the power to make by-laws for the supply and distribution of water and to levy water rates, the specific charges for excess water, being a form of goods sold and delivered, were not automatically secured as a charge on the land by the general provisions of section 385(1). Furthermore, the Court held that the Shire was not under a statutory duty to maintain the supply of water to properties. Consequently, while the excess water charges were not a charge on the land, the Shire retained the power to discontinue the supply of water until such charges were paid.