Redland City Council v Kozik

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HIGH COURT OF AUSTRALIA

GAGELER CJ,
GORDON, EDELMAN, STEWARD AND JAGOT JJ

REDLAND CITY COUNCIL  APPELLANT

AND

JOHN MICHAEL KOZIK & ORS  RESPONDENTS

Redland City Council v Kozik

[2024] HCA 7

Date of Hearing: 13 & 14 September 2023

Date of Judgment: 13 March 2024

B17/2023

ORDER

1.Appeal dismissed with costs.

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

3. Cross-appeal dismissed with costs.

On appeal from the Supreme Court of Queensland

Representation

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

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

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

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

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

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

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

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

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

  4. After the Council had completed the works, it discovered that it had failed to comply with a condition of the prescribed process for the…

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Details
Case
[2024] HCA 7
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered an appeal by Redland City Council against respondents who had paid special charges levied by the Council. The dispute arose because the resolutions purporting to levy these special charges were found to be invalid. The respondents had paid these charges as part of their rate notices, and subsequently sought the return of the money paid.

The central legal issues before the Court were whether the regulations providing for the return of special charges applied when the resolution levying those charges was invalid, and whether the Council had a defence to a claim for restitution based on unjust enrichment, particularly given that the funds had been spent on works conducted on waterways adjacent to the respondents' land and that the Council was statutorily obliged to conduct these works. The Court also considered the applicability of an extended defence of change of position or fiscal chaos for taxing authorities.

The High Court reasoned that the regulations concerning the return of special charges were applicable even where the initial resolution was invalid, as the purpose of the regulations was to address situations where special charges did not apply to the land. Regarding the defence of unjust enrichment, the Court rejected the notion of an extended defence of change of position or fiscal chaos for taxing authorities, citing international jurisprudence and fundamental questions of fairness to taxpayers. The Court found that the Council had not established a defence to the respondents' claim for restitution.

Consequently, the High Court dismissed the Council's appeal with costs. Special leave was granted to the respondents to cross-appeal, but this cross-appeal was also dismissed with costs.

Orders

Orders of the court

1. Appeal dismissed with costs.

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

3. Cross-appeal dismissed with costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GAGELER CJ JAGOT J (dissent)
Secondly, it would be a very large step for this Court to recognise, especially without argument and without evidence, an extended defence of change of position and fiscal chaos that applies only to taxing authorities. The recognition of this extended defence in the United States was said to take "on a significant federal constitutional dimension".[311] In England, a defence based on fiscal chaos was abandoned by Her Majesty's Revenue and Customs Commissioners,[312] and was rejected by the Law Commission on the basis of "fundamental questions of fairness to taxpayers" and the "substantial investment of discretion in a tribunal or court to afford it power to deny [a right of recovery] on the basis of expediency".[313] In the Supreme Court of Canada it has been held that in relation to a rule permitting restitution of invalid taxes, "[c]oncerns about fiscal chaos and inefficiency should not be incorporated into the applicable rule".[314] If an extended change of position defence based on fiscal chaos were to be considered in Australia, then it would also be necessary to confront notions of constitutional equality between private parties and government that have underpinned much of the development of the common law.[315][311]Restatement (Third) of Restitution and Unjust Enrichment §19, comment b. [312]Prudential Assurance Co Ltd v Revenue and Customs Commissioners [2014] 2 CMLR 10 at 378 [166]. [313]Law Commission, Restitution: Mistakes of Law and Ultra Vires Public Authority Receipts and Payments (1994) at 126 [11.6]. See also Williams, Unjust Enrichment and Public Law (2010) at 157-159. [314]Kingstreet Investments Ltd v New Brunswick [2007] 1 SCR 3 at 21 [29].[315]Dicey, Lectures Introductory to the Study of the Law of the Constitution (1885) at 215. See Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at 530 [29].Conclusion The Council's appeal should be dismissed with costs. The respondents should be granted special leave to cross-appeal but the cross-appeal should be dismissed with costs.

Ratio Decidendi

Legal Principle Established

Established by: GAGELER CJ,

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