Sims v Commonwealth of Australia - [2022] NSWCA 194

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Sims v Commonwealth of Australia [2022] NSWCA 194
Hearing dates: 11 August 2022
Date of orders: 04 October 2022
Decision date: 04 October 2022
Before: Bell CJ at [1];
Meagher JA at [112];
White JA at [153]
Decision:
1. Appeal allowed.
2. Direct the parties to formulate orders in accordance with these reasons, and to file written submissions as to costs of no more than three pages by 11 October 2022, with any submissions in reply of no more than three pages to be filed by 18 October 2022.

Catchwords:
CONSTITUTIONAL LAW – constitutional implications – whether ss 81 and 83 of the Constitution provide an implied basis for the recovery of ultra vires payments by the Commonwealth – where proceedings brought by Commonwealth to recover ultra vires payments mistakenly made to former Navy officer after his separation from Navy – whether s 14(1)(a) of Limitation Act 1969 (NSW) is rendered inoperative or invalid in its application to the Commonwealth’s claim by reason of ss 81 and 83 of the Constitution
RESTITUTION – bars and defences to restitutionary claims – limitation periods – where Commonwealth brought proceedings to recover ultra vires payments mistakenly made to former Navy officer after separation from Navy – application of principle in Auckland Harbour Board v The King [1924] AC 318 – whether recovery of some payments statute-barred by reason of limitation period – whether Auckland Harbour Board claim is a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW) – meaning and historical development of claims in “quasi contract” – whether limitation period should be postponed pursuant to s 56 of the Limitation Act
RESTITUTION – public authorities – claims by public authorities – where Commonwealth mistakenly continued to make payments to former Navy officer for six years following separation from the Navy – where mistaken payments were made ultra vires – application of principle in Auckland Harbour Board v The King [1924] AC 318 – historical development and juristic nature of claim pursuant to Auckland Harbour Board principle – whether recovery of some payments statute-barred by reason of limitation period – whether claim based on the Auckland Harbour Board is a claim in “quasi-contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW) – whether former Navy officer liable for payments made to third parties at his direction prior to separation from Navy
RESTITUTION – nature of restitutionary liability – common counts – money had and received to the use of the plaintiff – where Commonwealth mistakenly continued to make payments to former Navy officer for six years following separation from the Navy – where mistaken payments were made ultra vires – application of principle in Auckland Harbour Board v The King [1924] AC 318 – historical development and juristic nature of claim pursuant to Auckland Harbour Board principle – whether recovery of some payments statute-barred by reason of limitation period – whether claim based on the Auckland Harbour Board is a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW)
LIMITATION OF ACTIONS – quasi-contract and restitution – construction of “quasi contract” for the purposes of s 14(1)(a) of the Limitation Act 1969 (NSW) – where Commonwealth brought proceedings to recover ultra vires payments mistakenly made to former Navy officer after separation from Navy – application of principle in Auckland Harbour Board v The King [1924] AC 318 – whether recovery of some payments statute-barred by reason of limitation period – whether Auckland Harbour Board claim is a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW) – meaning and historical development of claims in “quasi contract” – whether limitation period should be postponed pursuant to s 56 of the Limitation Act

Legislation Cited:
Judiciary Act 1903 (NSW) ss 39(2), 64, 78B, 79(1)
Limitation Act 1969 (NSW) ss 14(1)(a), 55, 56, 63
Limitation Act 1623, 21 Ja 1, c 16, s 3(a)
Limitation Act 1939, 2 & 3 Geo 6, c 21, s 2
Limitation of Actions Act 1958 (Vic), s 5(1)(a)
Commonwealth Constitution ss 81, 83, 92
Common Law Procedure Act 1852 ss 3, 41, 49, 91, Sch B

Cases Cited:
Antill Ranger & Co Pty Ltd v Commissioner for Motor Transport (1955) 93 CLR 83; [1955] HCA 25
Arris & Arris v Stukeley (1677) 2 Mod 260; 86 ER 1060
Attorney General v Perry (1733) 2 Com 481; 92 ER 1169
Attorney-General v Gray [1977] 1 NSWLR 406
Auckland Harbour Board v The King [1924] AC 318
Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662; [1988] HCA 17
Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106; [1992] HCA 45
Australian Financial Services and Leasing Pty Limited v Hills Industries Limited (2014) 253 CLR 560; [2014] HCA 14
Ballard v Multiplex [2012] NSWSC 426
Baltic Shipping Company v Dillon (1993) 176 CLR 344; [1993] HCA 4
Bonnel v Foulke (1657) 2 Sid 4
Breckenridge Speedway Ltd v Her Majesty The Queen in Right of Alberta [1970] SCR 175
Brown v West (1990) 169 CLR 195; [1990] HCA 7
Charles Terence Estates Ltd v Cornwall Council [2011] EWHC 2542
Charles Terence Estates Ltd v Cornwall Council [2012] EWCA Civ 1439
Combet v Commonwealth (2005) 224 CLR 494; [2005] HCA 61
Commonwealth of Australia v Burns [1971] VR 825
Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567
Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 282 FLR 1
Coshott v Lenin [2007] NSWCA 153
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48
Dodington’s Case (1653) Cro Eliz 545; 78 ER 791
Earl of Devonshire’s Case (1606) 11 Co Rep 89; 77 ER 1266
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32; [1942] 2 All ER 122
Holt v Markham [1923] 1 KB 504
In re Diplock [1948] 1 Ch 465
In re Rhodes; Rhodes v Rhodes (1890) 44 Ch D 94
James v The Commonwealth (1939) 62 CLR 339; [1939] HCA 9
Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153
Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548
Maguire v Simpson (1977) 139 CLR 362; [1977] HCA 63
Martin v Sitwell (1690) 1 Show KB 156; 89 ER 509
Melbourne Corporation v Commonwealth (1947) 74 CLR 31; [1947] HCA 26
Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5
Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23
Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68
Sandvik Australia Pty Ltd v Commonwealth (1989) 89 ALR 213
Sinclair v Brougham [1914] AC 398
The Environment Centre NT Inc v Minister for Resources and Water (No 2) [2021] FCA 1635; (2021) 399 ALR 68
Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104; [1994] HCA 46
Victoria v Commonwealth (1975) 134 CLR 338; [1975] HCA 52
Westdeutsche Bank Girozentrale v Islington London Borough Council [1996] AC 669 Williams v Commonwealth (2012) 248 CLR 156; [2012] HCA 23
Westdeutsche Landesbank Girozentrale v Islington Borough Council [1994] 4 All ER 890
Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70

Texts Cited:
A Burrows, The Law of Restitution (1993, Butterworths)
AWB Simpson, A History of the Common Law of Contract (1975, Clarendon Press)
Bullen and Leake, Precedents of Pleadings in Personal Actions in the Superior Courts of Common Law (3rd ed, 1868, Stevens and Sons)
GH Newsom and L Abel-Smith, Preston & Newsom on Limitation of Actions (3rd ed, 1953, Solicitors’ Law Stationery Society)
GS Robertson, The Law and Practice of Civil Proceedings by and against The Crown (1908, Stevens and Sons)
IM Jackman, The Varieties of Restitution (2nd ed, 2017, Federation Press)
J Allsop, “Restitution: Some Historical Remarks” (2016) 90 ALJ 561
J Edelman and E Bant, Unjust Enrichment in Australia (2nd ed, 2016, Hart Publishing)
J Kirk, “Constitutional Implications (I): Nature, Legitimacy, Classification, Examples” (2000) 24(3) Melbourne University Law Review 645
J Unger, “Limitation Act 1939” (1940) 4(1) Modern Law Review 45
JB Ames, Lectures on Legal History (1913, Harvard University Press)
JH Baker, “The History of Quasi-Contract in English Law” in WR Cornish et al (eds), Restitution: Past, Present and Future (1998, Hart Publishing)
K Mason, “Money Claims by and against the State” in P Finn (ed), Essays on Law and Government, Volume 2: the Citizen and the State in the Courts (1996, Law Book Co)
K Mason, “Money Claims by and against the State” in P Finn (ed) Essays on Law and Government, Volume 2: the Citizen and the State in the Courts (1996, Law Book Co) 101
Law Commission of England and Wales, Restitution: Mistakes of Law and Ultra Vires Public Authority Receipts and Payments (1994)
M Franks, Limitation of Actions (1959, Sweet & Maxwell)
M Lobban, “Restitutionary Remedies” in The Oxford History of the Laws of England – 1820–1914: Private Law (2010, Oxford University Press)
N Manousaridis, “The Common Law Courts: Origins, Writs and Procedure” in JT Gleeson, JA Watson and RCA Higgins (eds), Historical Foundations of Australian Law (2013, Federation Press)
P Birks, An Introduction to the Law of Restitution (1985, Oxford University Press)
P Birks, Restitution: The Future (1992, Federation Press)
Parliament of New South Wales, Law Reform Commission, First Report on the Limitation of Actions (October 1967)
PH Winfield, The Law of Quasi-Contract (1952, Sweet & Maxwell)
R Goff and G Jones, Goff & Jones’ The Law of Unjust Enrichment, ed C Mitchell, P Mitchell and S Watterson (9th ed, 2016, Sweet & Maxwell)
R Goff and G Jones, The Law of Restitution (1966, Sweet & Maxwell)
R Goff and G Jones, The Law of Restitution (2nd ed, 1978, Sweet & Maxwell)
R Goff and G Jones, The Law of Restitution, ed G Jones (4th ed, 1993, Sweet & Maxwell)
RM Jackson, The History of Quasi-Contract in English Law (1936, Cambridge University Press)
Sir Owen Dixon, “The Common Law as an Ultimate Constitutional Foundation” (1957) 31 Australian Law Journal 240
SJ Stoljar, “The Transformations of Account” (1964) 80 Law Quarterly Review 203
SJ Stoljar, The Law of Quasi-Contract (1964, Law Book Company of Australasia)
SJ Stoljar, The Law of Quasi-Contract (2nd ed,1989, Law Book Company)
United Kingdom, Law Revision Committee, Fifth Interim Report (Statutes of Limitation) (December 1936)

Category: Principal judgment
Parties: Jeremy Mark Sims (Appellant)
Commonwealth of Australia (Respondent)
Representation:
Counsel:

S Duggan (Appellant)
J Hogan-Doran SC with D Robertson (Respondent)

Solicitors:
Blake Lawyers (Appellant)
Australian Government Solicitor (Respondent)

File Number(s): 2021/00358248
Decision under appeal

Court or tribunal:

District Court of New South Wales

Jurisdiction:

Civil

Citation:

[2021] NSWDC 690

Date of Decision:

19 November 2021

Before:

Weber SC DCJ

File Number(s):

2019/00142574

HEADNOTE

[This headnote is not to be read as part of the judgment]

Mr Sims (the Appellant) was an Able Seaman in the Royal Australian Navy (the Navy) between September 2000 and 21 September 2009. After his separation from the Navy, the Commonwealth mistakenly continued to pay his salary, superannuation and certain other payments on his behalf until 26 March 2015. The mistaken payments exceeded $300,000, and included:

payments made directly to the Appellant;
payments made to the Appellant’s spouse or former spouse, Ms Dalton, and to a law firm, Jones King Lawyers, on the basis of directions the Appellant had made prior to his separation from the Navy; and
payments withheld by the Department of Defence on account of “pay as you go” tax and credited on the Appellant’s running account with the Australian Taxation Office (the PAYG withholding amounts).

Various demands for repayment were made by the Commonwealth, which were not acceded to by the Appellant. The Commonwealth then commenced proceedings against the Appellant in May 2019, seeking judgment in the sum of $315,988.95. It sought a restitutionary remedy, on the basis that the payments made after 21 September 2009 were made under a mistake of fact and had led to the unjust enrichment of the Appellant at the Commonwealth’s expense. In the alternative, the Commonwealth pleaded that the mistaken payments were made without any legislative authority, and are ultra vires. It contended that the payments were therefore recoverable in accordance with the principle in Auckland Harbour Board v The King [1924] AC 318 (Auckland Harbour Board), which is to the effect that, where moneys are paid out of the Consolidated Revenue Fund without lawful authority, they may be recovered by the government.

At first instance, the Appellant pleaded as a defence that the payments made more than six years before the commencement of proceedings were not recoverable, relying upon s 14(1)(a) of the Limitation Act. That subsection provides that a limitation period of six years applies to causes of action “founded on contract (including quasi contract) not being a cause of action founded on a deed” (emphasis added). The Commonwealth contended that a claim pursuant to the Auckland Harbour Board principle was not subject to a limitation period, as it is a sui generis cause of action based on public policy, and not a claim in “quasi contract” for the purposes of s 14(1)(a). Alternatively, the Commonwealth pleaded that, if any limitation period applied, it should be postponed by operation of s 56 of the Limitation Act, such that it only commenced to run on 26 March 2015, when the Commonwealth first became aware of the mistaken payments.

The primary judge found that the Commonwealth’s claim was not subject to a limitation period, and gave judgment for the Commonwealth. His Honour considered that a claim pursuant to the Auckland Harbour Board principle was not a restitutionary claim but a “stand-alone common law cause of action”, and that even if the claim could be characterised as restitutionary, it was not a claim in “quasi contract”. In relation to the payments made to Ms Dalton and Jones King Lawyers, his Honour found that the payments were made at the Appellant’s direction and in order to discharge obligations owed by him. He therefore found that all the mistaken payments were recoverable by the Commonwealth. Given his Honour’s findings about the limitation period, it was not necessary to determine whether any applicable limitation period should be postponed, or whether the PAYG withholding amounts were time-barred.

The Appellant appealed from the decision of the primary judge. He contended that, firstly, the primary judge erred in finding that s 14(1)(a) of the Limitation Act did not apply to any part of the Commonwealth’s claim, and secondly, that the primary judge erred in finding that the Appellant was liable for payments made to Ms Dalton and Jones King Lawyers. The Commonwealth filed a notice of contention, in which it contends that, firstly, ss 81 and 83 of the Constitution provide an implied basis for the Commonwealth’s right to recover ultra vires payments, which cannot be limited or extinguished by state legislation such as s 14(1)(a) of the Limitation Act, and secondly, that if the limitation period does apply, it should be postponed to commence on 26 March 2015.

The principal issues on appeal were:

whether the Commonwealth’s claim pursuant to the Auckland Harbour Board principle was a claim in “quasi contract” for the purposes of s 14(1)(a) of the Limitation Act;
whether the limitation period, if applicable, should be postponed pursuant to s 56 of the Limitation Act;
whether ss 81 and 83 of the Constitution provided an implied basis for the recovery of ultra vires payments by the Commonwealth, rendering s 14(1)(a) of the Limitation Act inoperative or invalid in its application to the present claim;
whether the Appellant was liable to make restitution to the Commonwealth for the payments made to Ms Dalton within six years before the institution of proceedings; and
whether the claim for recovery of the PAYG withholding amounts was time-barred.

The Court held (Bell CJ, Meagher and White JJA agreeing), allowing the appeal:

As to the first issue, per Bell CJ (White JA agreeing)

Having regard to the drafting history of the Limitation Act, and to common understandings of the term “quasi contract” around the time of the Act’s passage in 1969, the term “quasi contract” in s 14(1)(a) of the Limitation Act should be understood to encompass a range of claims including the action for moneys had and received: [56]–[68], [79] (Bell CJ); [153] (White JA).

Coshott v Lenin [2007] NSWCA 153; In re Diplock [1948] 1 Ch 465; In re Rhodes; Rhodes v Rhodes (1890) 44 Ch D 94; Sinclair v Brougham [1914] AC 398; Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676; Bonnel v Foulke (1657) 2 Sid 4; Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32; [1942] 2 All ER 122, considered.

The principle derived from Auckland Harbour Board was not created in 1924, but had been a feature of the British common law since at least the 17^th century. In modern Australian jurisprudence, the action to recover moneys paid ultra vires has been recognised as an action for moneys had and received, a form of claim which formed part of the law of quasi contract. The present claim based on the Auckland Harbour Board principle was therefore one in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act: [78], [80] (Bell CJ); [153] (White JA).

Auckland Harbour Board v The King [1924] AC 318; Dodington’s Case (1653) Cro Eliz 545; 78 ER 791; Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70; Commonwealth of Australia v Burns [1971] VR 825; Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662; [1988] HCA 17; Maguire v Simpson (1977) 139 CLR 362; Attorney-General v Gray [1977] 1 NSWLR 406; Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567; Sandvik Australia Pty Ltd v Commonwealth (1989) 89 ALR 213; Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 282 FLR 1; The Environment Centre NT Inc v Minister for Resources and Water (No 2) [2021] FCA 1635; 399 ALR 68; Attorney General v Perry (1733) 2 Com 481; 92 ER 1169; Earl of Devonshire’s Case (1606) 11 Co Rep 89; 77 ER 1266, considered.

As to the first issue, per Meagher JA (White JA agreeing)

The claims answering the description of actions founded in “quasi contract”, as the term is used in the Limitation Act 1969 (NSW), are identified by the forms of action by which they were originally made – principally the action in indebitatus assumpsit for money had and received – and the non-contractual and remedial nature of the payment obligation which the common law imposed: [127] (Meagher JA); [153] (White JA).

Coshott v Lenin [2007] NSWCA 153; Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676; Sinclair v Brougham [1914] AC 398, considered.

In the present case, the obligation imposed by the common law upon the appellant does not arise in contract or in tort or by virtue of any statute, but out of the circumstances in which the money was paid and received to the use of the appellant. In the language of the common money counts, the Commonwealth’s claim would have been formulated as being for money had and received; and in a taxonomy which adhered to a rigid dichotomy between personal actions founded in contract and tort, the claim would have been treated as founded in quasi contract as that term is used in s 14(1)(a) of the Limitation Act: [151] (Meagher JA); [153] (White JA).

Auckland Harbour Board v The King [1924] AC 318; Commonwealth of Australia v Burns [1971] VR 825; Attorney-General v Gray [1977] 1 NSWLR 406; Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567; Sandvik Australia Pty Ltd v Commonwealth of Australia (1989) 89 ALR 213; Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70; Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68, considered.

As to the second issue

The Commonwealth did not establish any basis for postponing the limitation period. The mistaken payments could, with reasonable diligence, have been detected at any time following the Appellant’s separation from the Navy: [86]–[87] (Bell CJ); [152] (Meagher JA); [153] (White JA).

Ballard v Multiplex [2012] NSWSC 426, considered.

As to the third issue

To the extent that necessity forms part of any test of or for constitutional implication, no such necessity existed which would justify the drawing of a constitutionally sourced and entrenched implied right of recovery in respect of ultra vires payments, as contended for by the Commonwealth. There is no constitutional obstacle standing in the way of either s 14 and/or s 63 of the Limitation Act applying, albeit as picked up in federal jurisdiction, in an action by the Commonwealth based on the Auckland Harbour Board principle: [94]–[95] (Bell CJ); [118] (Meagher JA); [153] (White JA).

Commonwealth of Australia v Burns [1971] VR 825; Victoria v Commonwealth (1975) 134 CLR 338; Brown v West (1990) 169 CLR 195; [1990] HCA 7; James v The Commonwealth (1939) 62 CLR 339; [1939] HCA 9; Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106, [1992] HCA 45, considered.

As to the fourth issue

The primary judge erred in finding that the payments to Ms Dalton after the Appellant left the Navy were made at the Appellant’s direction. There was also no evidence as to whether the payments were made in order to discharge a legal obligation owed by the Appellant. Ms Dalton was the beneficiary of those payments and any action for restitution lay against her: [100]–[103] (Bell CJ); [152] (Meagher JA); [153] (White JA).

As to the fifth issue

Any benefit conferred on the Appellant by reason of the PAYG withholding amounts did not flow to him until he filed an income tax assessment entitling him to a tax refund in 2018. Accordingly, the Commonwealth’s claim for these amounts was well within the limitation period: [107]–[109] (Bell CJ); [152] (Meagher JA); [153] (White JA).

Judgment

BELL CJ: This appeal concerns the juristic nature of a claim for recovery by the Commonwealth for moneys paid ultra vires to or in favour of the Appellant after he had separated from the Royal Australian Navy in which he served as an Able Seaman. That such a cause of action exists is not in doubt. It was confirmed by the Privy Council in Auckland Harbour Board v The King (Auckland Harbour Board). [1] What is in question is whether it is a cause of action founded on “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW). This is because proceedings for the recovery of the ultra vires payments were commenced by the Commonwealth more than six years after several hundred thousand dollars had been paid out.
1. [1924] AC 318.
A question has also been raised by the Commonwealth as to whether its right to recovery of ultra vires payments is implied by ss 81 and 83 of the Constitution and, if so, whether such a constitutionalised right of restitution (if one exists) is inconsistent with s 14(1)(a) of the Limitation Act.
The facts of the case are largely straightforward. The Appellant was an Able Seaman in the Royal Australian Navy (the Navy) between September 2000 and 21 September 2009 however the Respondent (the Commonwealth) mistakenly continued to pay his salary, superannuation and certain other payments on his behalf until 26 March 2015.
Those mistaken payments exceeded $300,000 (the Commonwealth’s calculation of the total amount has varied over time) although individual amounts making up this total were paid on a periodic basis (as they had been prior to the Appellant separating from the service of the Navy).
Of the total amount of overpayments, periodic payments in instalments amounting to $100,800 were made to the Appellant’s spouse or former spouse, Ms Dalton, presumably on the basis of a direction the Appellant had made prior to his separation from the Navy. Ms Dalton was not a party to the proceedings and the amounts paid to her were sought to be recovered from the Appellant.
An amount of $554.11 was also paid to Jones King Lawyers, with the final component of this payment being made on 4 February 2010. The primary judge noted that the Appellant had nominated that firm to receive those amounts from his salary. Recovery of this amount was sought from the Appellant and not Jones King Lawyers which, like Ms Dalton, was not a party to the proceedings.
A further component of the claimed overpayments comprised amounts withheld by the Department of Defence on account of “pay as you go” (PAYG) tax and credited on the Appellant’s running account with the Australian Taxation Office. The primary judge relevantly summarised these amounts as follows: [2]
2. Commonwealth of Australia (Royal Australian Navy) v Sims [2021] NSWDC 690 (PJ) at [9].

amounts totalling $8,400 for the 2010 tax year (being the approximate amount paid on the Appellant’s behalf for the period 22 September 2009 to 30 June 2010);

amounts totalling $11,396 for the 2011 tax year;

amounts totalling $12,076 for the 2012 tax year;

amounts totalling $12,332 for the 2013 tax year; and

amounts totalling $12,892 for the 2014 tax year.

Although these credits were made from 2009, they did not translate to an actual benefit to the Appellant until 2018 when the Appellant filed an income tax assessment and obtained a tax refund in respect of amounts of tax previously withheld. Of course, those withheld amounts were in respect of a salary to which the Appellant was not entitled.
Various demands by the Commonwealth for repayment of amounts varying as between $318,810.38 and $349,038.00 were made between June 2015 and February 2018. These were not acceded to by the Appellant.
Proceedings were commenced by the Commonwealth against the Appellant on 7 May 2019 with the Statement of Claim being amended on 2 September 2020. The Amended Statement of Claim (ASOC) contained a detailed Annexure setting out dates and amounts of payments and particular payees from 1 October 2009 until 26 February 2015.
The Commonwealth pleaded that the payments subsequent to 21 September 2009 were made under a mistake of fact and had led to the unjust enrichment of the Appellant at the Commonwealth’s expense. The Commonwealth sought an order that the Appellant pay the Commonwealth $315,988.95 or alternatively “restitution in an amount of $315,988.95.”
The Commonwealth also pleaded in the alternative that what were correctly characterised as the “Mistaken Payments” were made “without any legislative authority and are ultra vires”. The Commonwealth contended that these payments were repayable in accordance with the decision of Privy Council in Auckland Harbour Board. That principle is discussed further below but, in short, is to the effect that “where moneys are paid out of Consolidated Revenue without authority they may be recovered in an action by the Government”: Commonwealth v Crothall Hospital Services (Aust) Ltd (Crothall). [3] As will be seen, it has been held that no defence of change of position or estoppel against the Crown lies in answer to any such recovery action.
3. (1981) 36 ALR 567 at 580.
The Commonwealth also contended that the Limitation Act did not present any bar to recovery. It will already be apparent from the facts set out above that a very large number of the periodic payments were made more than six years prior the commencement of the proceedings on 7 May 2019. Unsurprisingly in these circumstances, the Appellant pleaded by way of defence that the causes of action in respect of the individual payments said to comprise the ultra vires and mistaken overpayments were not maintainable in respect of each payment made more than six years prior to the commencement of proceedings. In this context, the Appellant relied upon s 14(1)(a) of the Limitation Act, which relevantly provides:

“(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues to the plaintiff or to a person through whom the plaintiff claims—
(a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed.” (emphasis added)

As Meagher JA has explained, the underlying proceeding involved, and this appeal involves, the exercise of federal jurisdiction conferred by s 39(2) of the Judiciary Act 1903 (Cth) given that the Commonwealth is a party. The Limitation Act, as a law relating to procedure, is a law which is “picked up” and applied in that exercise of jurisdiction pursuant to s 79(1) of the Judiciary Act. [4]
4. See Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23.
At first instance, the Commonwealth contended that a claim for repayment of moneys pursuant to the so-called Auckland HarbourBoard principle was a sui generis cause of action based on public policy and was not restitutionary. Even if it were restitutionary in nature, the Commonwealth contended that its claim was not a cause of action “founded on quasi contract” for the purposes of s 14(1)(a) of the Limitation Act.
The Commonwealth also pleaded further or alternatively that, if any limitation period applied to any of the claims pleaded in the ASOC, the limitation period should be postponed by reason of s 56 of the Limitation Act and should only commence to run “on or about 26 March 2015 when the plaintiff first discovered that the Mistaken Overpayments had been paid to the Defendant”.

The primary judgment

It was common ground at first instance and on appeal that the moneys paid to the Appellant, Ms Dalton and Jones King Lawyers were paid without parliamentary authority, and thus, were ultra vires.
The primary judge first considered whether a claim for repayment of moneys under the Auckland Harbour Board principle was restitutionary in nature or sui generis, as contended by the Commonwealth. The ultimate question for his Honour was whether the claim for repayment could be characterised as a claim in quasi contract within the meaning of s 14(1)(a) of the Limitation Act. In this context, it was also common ground that there was no authority which assisted in determining whether a claim based upon the Auckland Harbour Board principle was subject to any form of limitation defence.
The primary judge concluded that the claim under the Auckland Harbour Board principle was “not a mainstream restitutionary claim, as it does not arise from any form of unjust enrichment”. [5] That conclusion depends, in part, upon one’s understanding of unjust enrichment but his Honour was certainly correct in proceeding upon the basis that the Auckland Harbour Board principle did not depend upon establishing a mistake (whether of fact or law) bearing in mind that, in 1924 when the Privy Council gave its decision, mistakenly made payments were only recoverable if those payments were made on the basis of a mistake of fact and not a mistake of law: see, generally, David SecuritiesPty Ltd v Commonwealth Bank of Australia (David Securities). [6]
5. PJ at [19].
6. (1992) 175 CLR 353; [1992] HCA 48.
The primary judge also differentiated the Auckland Harbour Board principle on the basis that orthodox defences to restitutionary claims such as change of position and estoppel have been held not to be available in answer to claims brought under that principle. There is undoubtedly authority to this effect, most notably in the decision of Newton J in Commonwealth of Australia v Burns (Burns) [7] and this Court’s decision in Attorney-General v Gray (Gray), [8] both of which are discussed further below.
7. [1971] VR 825.
8. [1977] 1 NSWLR 406.
The primary judge held that the cause of action was one “based in public policy, and … not in restitution.” [9] His Honour relied upon the decision of the Full Court of the Federal Court in Crothall for the proposition that the Auckland Harbour Board principle was “a stand-alone common law cause of action, and not a mere precursor to a restitutionary claim”. [10]
9. PJ at [20].
10. PJ at [22].
The primary judge further held that, if a claim based upon the Auckland HarbourBoard principle could be characterised as restitutionary, it was nevertheless not a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act. He rejected the Appellant’s submission that the section should be given “ambulatory effect” in the sense that the expression “quasi contract” employed by the legislature at the time of enactment of the Limitation Act, namely 1969, should now bear the meaning of the legal expression “restitution”, as explained by the High Court in Pavey & Matthews Pty Ltd v Paul (Pavey). [11]
11. (1987) 162 CLR 221; [1987] HCA 5.
His Honour preferred the Commonwealth’s contention that the expression “quasi contract” in the Limitation Act was inapt to describe all restitutionary claims, and appeared to rely upon this Court’s decision in Coshott v Lenin (Coshott) [12] as authority for the proposition that, in the context of its use in the Limitation Act, “quasi contract” was confined to claims based on the common money count for work done, namely quantum meruit. In Coshott,[13] Mason P, with whom Spigelman CJ and Campbell JA agreed, held that:

“Quasi contract was the legal category of reference in 1969 for claims to remuneration litigated at common law that were not based on contract. Pleaders used the common money count for work done, known by the Latin tag of quantum meruit. In Pavey, the High Court held that the quasi-contractual right to recover on a quantum meruit did not depend on the existence of an implied contract but on a claim to restitution or one based on unjust enrichment. The Court was at pains, however, to stress that (in Deane J's words at 256-7) unjust enrichment is a ‘unifying legal concept which explains why the law recognises, in a variety of distinct categories of case, an obligation on the part of a defendant to make a fair and just restitution for a benefit derived at the expense of a plaintiff’.
This explanation of the principles underpinning quantum meruit and other recognised causes of action in restitution did not mean that ‘quasi-contract’ ceased to exist as a legal category in the context of the Limitation Act. That Act continues to speak according to its plain intent to claims, however labelled or packaged, and whatever general principles may be perceived to underpin them, which depend on the well established common law cause of action stemming from quantum meruit. Whether or not it is now passe to use the old language of quasi-contract and whether or not there now exist causes of action ‘in’ unjust enrichment has no bearing on the matter because ‘a sovereign legislature is not bound to respect legal orthodoxy’(Sharpe v Goodhew (1990) 33 IR 238 at 243 per Pincus J).”
12. [2007] NSWCA 153.
13. Ibid at [15]-[16].

In relation to the payments made by the Commonwealth to Ms Dalton, the primary judge inferred that Ms Dawson was at all material times the Appellant’s estranged wife or ex-wife, and went on to hold that: [14]

“It seems to me that the most natural inference to be drawn is that the payment to Ms Dalton was made by the Department of Defence at the direction of the defendant. It also seems highly likely, on the balance of probabilities, that the marital relationship between the defendant and Ms Dalton was in difficulties at the time of the defendant’s separation from the Navy, as there is evidence that sometime thereafter they had different addresses on bank records. Finally, the inference that the payments were made to discharge an obligation of one form or another from the defendant to Ms Dalton seems an irresistible one. Whether that obligation was one which had its foundation in a Family Court order, or whether it was by agreement made privately without the formalisation of the Family Court is, to my mind, irrelevant.
The defendant’s contention is that it is Ms Dalton who has the obligation to repay the Commonwealth moneys paid to her, and not the defendant. If that submission was correct, it would, to my mind, result in an unacceptable triumph of form over substance. If the fortnightly payments had been hypothetically made by the defendant to Ms Dalton after his salary was received by him, then there could be no question other than that the Commonwealth could recover the total amount paid to him. The fact that the defendant chose to avail himself of the convenience of having the Commonwealth make the payments to Ms Dalton, on his behalf, cannot affect the obligations of the defendant to repay those moneys to the Commonwealth.”
14. PJ at [43]–[44].

Similarly, in relation to the payment to Jones King Lawyers, the primary judge found that the payment was made at the Appellant’s direction and in order to discharge the Appellant’s liability to Jones King Lawyers for services rendered to him. [15]
15. PJ at [45].

The Notices of Appeal and Contention

The Appellant appealed from the decision of the primary judge on the following grounds:

“1 The Court below erred in finding that s 14(1)(a) of the Limitation Act 1969 (NSW) (Limitation Act) did not apply to any part of the Respondent's claim in that:
a.   The Court should have found the mistaken payments claimed    by the Respondent were based on causes of action founded on    quasi-contract within the meaning of the Limitation Act.
b.   The Court should have found that the mistaken payments made prior to 9 May 2013 and sued for by the Respondent were statute barred.
c.   The Court should have found that, to the extent 'Pay as you go' payments were made by the Respondent to the Australian Tax Office (ATO) on the Appellant's behalf prior to 9 May 2013, the Appellant received a benefit for those payments at the time they were made to the ATO and the Respondent was statute barred from suing the Appellant for repayment of those monies.

2   The Court below erred in finding that the Appellant was liable for    payments made by the Respondent to third parties in that:
a.   The Court should not have found that payments made by the    Respondent to Natalie Dalton and Jones King Lawyers were    made at the direction of the Appellant.
b.   The Court should not have found that the payments referred to in 2(a) above were made to discharge obligations owed by the Appellant to the third-party payees.
c.   There was no evidence that any of the payments referred to in    2(a) were made at the direction of the Appellant or were made    to discharge any legal obligation owed by him.

3 The Court below erred in awarding interest on the judgment sum prior to 5 February 2018 in circumstances in which no such interest was claimed by the Respondent.”

The orders sought by the Appellant include judgment for the Commonwealth in the sum of $75,104.36 being entered. This reflects the fact that, in respect of the amounts paid directly to the Appellant within six years of the commencement of the proceedings, the Appellant raises no defence and accepts that restitution must be made in that amount.
The Commonwealth filed a Notice of Contention which is in the following terms:

“1 Sections 14 and 63 of the Limitation Act 1969 (NSW) did not apply to the respondent's claim against the appellant to recover the moneys mistakenly paid to him by the respondent (Claim) because:
a.   the Claim was based on the cause of action available to the Commonwealth to recover moneys which were paid out of the Consolidated Revenue Fund otherwise than under appropriation by law and therefore were ultra vires and in breach of ss 81 and 83 of the Commonwealth Constitution;
b. neither s 81 nor s 83 of the Commonwealth Constitution:
i.   imposes any limitation of time upon the maintenance of such a cause of action by the Commonwealth; or
ii.   extinguishes any right or title of the Commonwealth to any debt, damages or other money recoverable on such a cause of action;

c.   the Court was exercising federal jurisdiction in determining the Claim;
d.   either:
i. section 79 of the Judiciary Act does not operate to apply the provisions of the Limitation Act to the Claim, because the Commonwealth Constitution ‘otherwise provides’ within the meaning of s 79 of Judiciary Act; and/or
ii.   the provisions of the Limitation Act purporting to limit the bringing or maintenance of any such claim or to extinguish any such right or title to recover under such claim cannot apply directly because they are repugnant to, or inconsistent with, ss 81 and 83 of the Constitution; and

e. section 64 of the Judiciary Act 1903 (Cth) does not operate to apply s 14 or s 63 of the Limitation Act to the Claim.

2. In the event that s 14(1)(a) of the Limitation Act did apply to the Claim. the limitation period did not commence to run until about 26 March 2015 as:
a. the respondent first discovered on that date that it had been mistakenly making the payments to the appellant in the period between about 22 September 2009 and 26 March 2015; and
b. using reasonable diligence. it would not have discovered the mistake before that date, within the meaning of s 56(1) of the Limitation Act.

3 In the event that s 14(1)(a) of the Limitation Act did apply to the Claim, in respect of payments of provisional tax by the respondent to the Australian Taxation Office in the period between about 22 September 2009 and 26 March 2015, time did not commence to run for the purposes of that section until such amounts were paid to or received by the appellant from the Commissioner for Taxation in about October 2018 as the payments were not received by the appellant until that date for the purposes of the application of s 14(1)(a) to the claim brought by the respondent.”

Leave was given in the course of the hearing of the appeal to amend the Notice of Contention so as to contend that, in the event that the Auckland Harbour Board principle did not sustain the primary judge’s finding with regard to the payments to Ms Dalton, the judgment in that respect should nevertheless be upheld on the basis that the payments to her were mistaken and reversible in accordance with David Securities.

Section 78B notice

The Commonwealth also issued a notice under s 78B of the Judiciary Act, describing the constitutional matter:

“… arising under the Constitution or involving its interpretation within the meaning of s 78B of the Judiciary Act [as one which] concerns the operation and effect of ss 81 and 83 of the Constitution, and gives rise to the following constitutional issues:
a. Do ss 81 and 83 of the Constitution provide the basis for the Respondent's entitlement to recover in this proceeding?
b. Do ss 14 and/or 63 of the Limitation Act 1969 (NSW) apply of their own force in an action by the Commonwealth based on the principle in Auckland Harbour Board v R [1924] AC 318 to recover an amount paid in breach of ss 81 and 83 of the Constitution?
i. If so, are ss 14 and/or 63 of the Limitation Act 1969 (NSW) repugnant to, or inconsistent with, ss 81 and 83 of the Constitution?
ii. If not, do ss 14 and/or 63 of the Limitation Act 1969 (NSW) apply by operation of ss 64 or 79(1) of the Judiciary Act 1903 (Cth), or does the Constitution 'otherwise provide'?”

It should be noted that these constitutional arguments were not raised at first instance, however Mr Duggan, who appeared for the Appellant, did not object to their introduction as they involved pure questions of law and were not productive of any incurable prejudice to the Appellant.
Before turning to the arguments raised on appeal and by the Notice of Contention, it is first desirable to consider in a little more detail the Auckland Harbour Board principle and the cases which have followed and applied it.

The Auckland Harbour Board principle and its sequelae

The statement of principle which is recognised as the Auckland HarbourBoard principle is that by Viscount Haldane: [16]

“For it has been a principle of the British Constitution now for more than two centuries, a principle which their Lordships understand to have been inherited in the Constitution of New Zealand with the same stringency, that no money can be taken out of the consolidated Fund into which the revenues of the State have been paid, excepting under a distinct authorization from Parliament itself. Any payment out of the consolidated fund made without Parliamentary authority is simply illegal and ultra vires, and may be recovered by the Government if it can, as here, be traced.”
16. [1924] AC 318 at 326–7.

No authority was referred to by Viscount Haldane for this statement of principle although the authorised report of the Privy Council’s decision makes reference to Dodington’s Case [17] as having been referred to in argument on the appeal to the Privy Council. The report of Dodington’s Case is illuminating and warrants full reproduction:

“Information in the Exchequer, in nature of an account, was brought against Dodington, executor of Sir Walter Mildmay, supposing that Sir Walter Mildmay had received money of the Queen's amounting to 1500l. Upon a special verdict the case was, that Sir Walter Mildmay had received annually, out of the Exchequer 50l. as a fee for his diet, for thirty years together, which was paid him by the command of the Lord Treasurer, who had authority by Privy Seal to make allowance and payment of all fees and dues. But, in truth, these were not any due fees: and, whether his executor shall be charged with these sums so received was the question. After argument it was adjudged, that he should be charged: for it was held, that this payment of the money, by the appointment of the Lord Treasurer, was not allowable: for the Privy Seal is not sufficient authority to dispose of the Queen's treasure where it is due; and he disposing of it otherwise, it is out of his authority.
Secondly, it was held, that this money delivered by the authority of the Lord Treasurer, who is quasi a judicial officer, and it was quasi a judicial act by him, yet it shall not bind the Queen; for it was without his authority, and without warrant, to make allowance thereof, not being due; and it is at his peril who receives it, or demands allowance thereof. It was also objected, that money could not be known whether it were the Queen’s money; and it would be hard to charge him with the receipt thereof: as if one sells lands, or any other thing bona fide, to one of the Queen’s officers, who pays unto him the Queen’s money, it would be hard to make him accountable for that money so received; for he cannot know it to be the Queen’s money. But it was held here, that in regard he received it out of the Exchequer by colour of a fee where it was not due, and by colour of a warrant where it was not sufficient, he could not be misconusant that they were the Queen’s money, and shall be charged with them. So in every other case where he receives the Queen’s money, knowing it to be the Queen’s money, he is chargeable: but if he received it in payment, not knowing it was her money, and whereof by intendment he had not any conusance, it is otherwise. Arid for these reasons it was adjudged for the Queen against the defendant. And although he were executor, he should answer for it as a debt from the testator.” (emphasis added)
17. (1653) Cro Eliz 545; 78 ER 791.

The report made reference to s 6 of 8 & 9 Will 3, c 28, to the effect that none of the monies in the receipt of the Exchequer shall be deemed to be lawfully issued or paid but by or in pursuance of some grant or authority from the King under the Great Seal, or by virtue of some sufficient authority under the Privy Seal, or pursuant to some Act of Parliament.
Importantly for present purposes, Dodington, as executor of Sir Walter Mildmay, was ordered to account for (“answer for”) the unauthorised moneys paid to Sir Walter “as a debt”. Later in these reasons, it will be seen how the action to account came to be treated as one in indebitatus assumpsit and thus as part of that body of law that came to be known as the law of quasi-contract.
The unelaborated proviso by Viscount Haldane in the passage from Auckland HarbourBoard set out above – “and may be recovered by the Government if it can, as here, be traced” – is somewhat problematic. It led Lord Goff, albeit in obiter and again without elaboration in WoolwichEquitable Building Society v Inland Revenue Commissioners,[18] to describe an Auckland HarbourBoard claim as being “proprietary in nature”.
18. [1993] AC 70 at 177.
In the 4^th edition of Goff and Jones’ The Law of Restitution (Goff & Jones) published in 1993 and under the sole editorship of Professor Jones, it was said that the statement in Auckland Harbour Board in relation to tracing of the moneys was “puzzling”. [19] Although Professor Jones made reference to Woolwich, he also drew attention to the decision of Newton J in Burns who concluded that Lord Haldane in Auckland Harbour Board was referring to tracing the identity of the recipient of the moneys (rather than the moneys themselves).
19. R Goff and G Jones, The Law of Restitution, ed G Jones (4th ed, 1993, Sweet & Maxwell) at 160, fn 36.
What Newton J said in Burns [20] was as follows:

“By the words ‘if it can, as here, be traced’ Viscount Haldane was, in my opinion, not referring to tracing in the equitable or proprietary sense, but to tracing the identity of the recipient of the money. The principle stated by his Lordship in the passage which I have set out was applied in the Auckland Harbour Board Case itself, notwithstanding that there was no evidence that the sum of 7500 pounds there in question was at any relevant time still identifiable in the hands of the recipient, the Auckland Harbour Board. And that case was stronger than the present case, because the sum of 7500 pounds had not been paid by mistake of fact. Reference may also be made to the report of counsel's argument ([1924] AC 318 at p. 320), where distinguished counsel for the Crown submitted that ‘when a subject receives public money without authority he becomes a debtor to the Crown to that extent’. See also the report of the Auckland Harbour Board Case in the Court of Appeal of New Zealand in [1919] NZLR 419, especially at pp. 437, 438 per Hosking, J, and at pp. 424, 425 per Sir John Salmond arguendo.
The principle set out in the passage which I have cited from Viscount Haldane's judgment in the Auckland Harbour Board Case has never since been questioned, so far as I have discovered. On the contrary it has been referred to in later cases without disapproval and has on occasion been applied. The principle was applied in R v Toronto Terminals Railway Co, [1948] Can LR Exch 563, and in Commonwealth of Australia v Thomson (1962) 1 CCR 37. The principle was referred to in Attorney-General v Great Southern and Western Railway Co of Ireland [1925] AC 754, at p. 772 per Viscount Haldane (where his Lordship makes no reference to ‘tracing’), and also in New South Wales v Bardolph (1934) 52 CLR 455, at 470, 471 per Evatt, J, and at 522 per McTiernan J. See also Re KL Tractors Ltd (1961) 106 CLR 318 at 328 (arguendo) and at 335; Halsbury, 3rd ed. vol. 28, p. 443, para. 857, and vol. 33, 12, para 13 note (m): cf Attorney-General v Perry (1734) 2 Comyns 481; 92 ER 1169.
Since the conclusion of the hearing in the present case I have discovered that a similar principle is well recognized in the United States of America: see, for example, Wisconsin Central Railroad Co v United States (1896) 164 US 190, especially at 208-12; United States v Wurts (1938) 303 US 414, especially at 415, 416; Dunne v City of Fall River (1952) 328 Mass R 332, especially at 336; Corbin on Contracts (1960), vol. 3, p. 758, s 617 and note 65; and American Law Reports Annotated (1929), 63 ALR pp. 1346-56.”
20. [1971] VR 825 at 828.

Newton J’s reading of Viscount Haldane’s apparent tracing requirement has been supported by Professor Birks [21] and by then Professor now Lord Burrows. [22] It is also supported as “the better view” in the 9^th edition of Goff & Jones [23] and is consistent with what was said by the High Court in Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation [24] as to the non-proprietary nature of restitutionary claims.
21. “He appears to mean that it must be apparent who received the money”: P Birks, Restitution: The Future (1992, Federation Press) at 63.
22. A Burrows, The Law of Restitution (1993, Butterworths) at 331.
23. R Goff and G Jones, Goff & Jones’ The Law of Unjust Enrichment, ed C Mitchell, P Mitchell and S Watterson (9th ed, 2016, Sweet & Maxwell) at [23-30].
24. (1988) 164 CLR 662 at 673; [1988] HCA 17.
The Auckland Harbour Board principle has firmly taken root in Australian jurisprudence. Apart from the decision in Burns, it was referred to in passing but without question by Gibbs J (as he then was) in Maguire v Simpson. [25] In the same year, in Gray,[26] the principle was applied by this Court which also held that estoppel would not lie as a defence to any claim for the recovery of moneys paid without authority by the Crown:

“Having regard to the multifarious activities of government, and the impossibility in many cases of citizens dealing with the State knowing of the limitations upon powers of officials the doctrine may appear harsh: cf. article ‘Crown Proceedings: Some Recent Developments’ published in (1957) Public Law , p. 321, at p. 337. It is firmly rooted in authority binding on this Court: Attorney-General for Ceylon v. Silva [[1953] AC 461]. The Supreme Court of Victoria has applied it: Commonwealth v. Burns. The judgment appealed from cannot stand with it. Public moneys disbursed contrary to statute can be recovered, despite representations made by those who disbursed them.”
25. (1977) 139 CLR 362 at 388; [1977] HCA 63.
26. [1977] 1 NSWLR 406 at 410 per Hutley JA.

To similar effect was the observation of Glass JA who observed that “the general principle is that an estoppel cannot avail to release the plaintiff from an obligation to obey a statute enacted for the benefit of a section of the public”. [27]
27. Ibid at 413.
In Crothall,[28] Ellicott J summarised the Auckland Harbour Board line of authority in the following manner:

“... where the moneys are paid out of Consolidated Revenue without authority they may be recovered in an action by the Government. This could occur if a condition on which money was appropriated by statute had not been met at the time it was paid out or if the money was paid out by mistake even though not recoverable under ordinary principles. The basis of the action is that there has been a payment out of the revenue fund without authority.”

It is not necessary for there to be a mistake to engage the Auckland HarbourBoard principle although claims against public authorities have sometimes been advanced on the basis of mistake. [29]

28. (1981) 36 ALR 567 at 580.

29. Holt v Markham [1923] 1 KB 504.

In Sandvik Australia Pty Ltd v Commonwealth,[30] French J, when a judge of the Federal Court, acknowledged the existence of the Auckland Harbour Board principle and that it could be used to circumvent the then common law bar which precluded recovery of money paid under mistake of law in settlement of an honest claim. His Honour described the general principle referred to by Viscount Haldane as supported by ss 81 to 83 of the Constitution but did not otherwise explore the jurisprudential underpinnings or character of the claim to which the principle gave effect.
30. (1989) 89 ALR 213 at 229–230.
A claim for moneys had and received was the form of action which Gummow and Bell JJ in Williams v Commonwealth [31] contemplated would be the appropriate cause of action if the Commonwealth were to seek recovery of payments made without authority to the Scripture Union of Queensland.
31. (2012) 248 CLR 156; [2012] HCA 23 at [116].
In Commonwealth v Davis Samuel Pty Ltd (No 7),[32] the Commonwealth invoked the Auckland Harbour Board principle successfully to sustain a claim which had been pleaded as one for moneys had and received. So, too, in The Environment Centre NT Inc v Minister for Resources and Water (No 2),[33] Griffiths J considered that a claim for recovery of money paid by the executive without statutory authority would be a claim for moneys had and received.
32. [2013] ACTSC 146; (2013) 282 FLR 1 at [250], [1728]-[1763].
33. [2021] FCA 1635; (2021) 399 ALR 68 at [77].
The Auckland Harbour Board principle may thus be said to be well recognised and established in Australian law, and so much was not gainsaid on the current appeal.
To the extent that judges have sought to identify the principle’s juristic basis, it is not founded on mistake (whether of fact or law) but on quasi-constitutional notions of ultra vires. This provides the basis for repayment but, to the extent that the form of recovery has been touched upon in the Australian authorities, it has been as an action for moneys had and received. The recipient of moneys paid ultra vires is treated as falling under an obligation to repay those moneys and that obligation is not one which, at least in Australia, may be resisted by pleas of change of position or estoppel or even misleading conduct.
In England, the Auckland Harbour Board principle has been characterised as restitutionary in nature although, unlike the position in Australia, a change of position defence has been held to be available. [34]
34. Charles Terence Estates Ltd v Cornwall Council [2011] EWHC 2542 at [97]. Although this decision was reversed on appeal (Charles Terence Estates Ltd v Cornwall Council [2012] EWCA Civ 1439), the primary judge’s conclusion about the change of position defence was not challenged.
In Canada, although not referring to Auckland Harbour Board, the decision of the Supreme Court in Breckenridge Speedway Ltd v Her Majesty The Queen in Right of Alberta [35] should be noted. Although there was a split in the ultimate decision, all judges were agreed that an action to recover moneys lent ultra vires by the Crown would lie on the basis of the action for moneys had and received. Thus, Martland J, speaking for the plurality, observed that: [36]

“The plea of ultra vires, in relation to the circumstances of this case, amounts to this, that the Act being unconstitutional, as relating to the matter of banking, the Provincial Treasurer had no legal authority to lend to the plaintiffs the funds which, in fact, were advanced to them. Even if this contention were valid, the authorities cited by my brother Hall, and in the reasons of Smith C.J.A. and Johnson J.A., make it clear that, there being nothing illegal about the transaction, but at most, lack of authority in the Provincial Treasurer to make the advance, the plaintiffs would have no answer to an action for money had and received.”

Hall J said: [37]

“The moneys in the hands of the appellants, the borrowers, as a result of the ultra vires loans are in reality moneys belonging to the respondent and are recoverable by the respondent not as in an action in contract or tort but in an action for restitution for moneys had and received: Brooks & Co. v. Blackburn Benefit Society (1884) 9 App Cas 857.”
35. [1970] SCR 175.
36. Ibid at 181.
37. Ibid at 201.

Attention is now turned to the central question raised on appeal, namely whether a claim based upon the Auckland Harbour Board principle is a claim in “quasi contract” for the purposes of s 14(1)(a) of the Limitation Act.

Consideration

Twentieth century scholars including Jackson, [38] Winfield [39] and Stoljar [40] have wrestled with the rather amorphous body of case law that was once gathered under the heading of the law of quasi-contract.
38. RM Jackson, The History of Quasi-Contract in English Law (1936, Cambridge University Press).
39. PH Winfield, The Law of Quasi-Contract (1952, Sweet & Maxwell).
40. SJ Stoljar, The Law of Quasi-Contract (1964, Law Book Company of Australasia) (Stoljar).

A feature of Anglo-Australian jurisprudence and academic scholarship over the last 50 years has been vigorous debate between academics, both inter se as well as with jurists (writing both judicially and extra-judicially), as to whether this vast body of case law can be collectively and coherently analysed under a general organising or overarching theory known variously as the law of restitution or the law of unjust enrichment. The literature is vast and the dialectic has been, at times, robust with Professor Birks [41] in particular contending for a unified account. Some of the history is traced by French CJ in Australian Financial Services and Leasing Pty Limited v Hills Industries Limited [42] and the observation of the plurality that “the concept of unjust enrichment is not the basis of restitutionary relief in Australian law” [43] has been the subject of swingeing criticism by the leading Australian text on the subject. [44]
41. P Birks, An Introduction to the Law of Restitution (1985, Oxford University Press) (Birks). See also R Goff and G Jones, The Law of Restitution (1966, Sweet & Maxwell). This text changed its title to The Law of Unjust Enrichment in its 8th edition in 2014.
42. (2014) 253 CLR 560; [2014] HCA 14 at [14]–[16].
43. Ibid at [78].
44. K Mason, JW Carter and GJ Tolhurst, Mason & Carter’s Restitution Law in Australia (4th ed, 2021, LexisNexis) at [123].
It is not surprising that the Auckland Harbour Board principle and the line of cases which has followed it has been appropriated by the authors of many modern texts treating the topic of restitution or unjust enrichment as falling within its bailiwick. [45] This is because, at least in the most general of senses, a claim by the Crown to recover public moneys paid out without authority is a claim for the restoration of those moneys to the public purse. As has been said, ultra vires has a “special sting” when it involves money because it strikes at Parliament’s hard won control of the fisc. [46] The recovery of such moneys also has the consequence that the recipient of those funds does not benefit by their retention in circumstances where he, she or it never had any entitlement to such payment.
45. See, for example, IM Jackman, The Varieties of Restitution (2nd ed, 2017, Federation Press) at 98; K Mason, JW Carter and GJ Tolhurst, Mason & Carter’s Restitution Law in Australia (4th ed, 2021, LexisNexis) at [2103]-[2108]; J Edelman and E Bant, Unjust Enrichment in Australia (2nd ed, 2016, Hart Publishing) at 313.
46. K Mason, “Money Claims by and against the State” in P Finn (ed), Essays on Law and Government, Volume 2: the Citizen and the State in the Courts (1996, Law Book Co) 101 at 104.
But it is important to emphasise that the issue in the present case is not how the Auckland Harbour Board principle is now characterised or classified, but whether the Commonwealth’s claim in the present case was one which fell within the description of a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act. Ultimately, this involves a question of statutory construction with the precise question being whether an Auckland Harbour Board claim was one that, at the time of the passage of the Limitation Act in 1969, would have been so characterised.
The Limitation Act was introduced following an October 1967 report of what was then known as the New South Wales Law Reform Committee chaired by Justice Manning of the Supreme Court. [47] In relation to s 14(1)(a), the Law Reform Committee’s report said that “the words about quasi contract stem from section 5(1)(a) of the Victorian Limitation of Actions Act 1958.” [48] The report continued:

“The Victorian Act largely follows the Imperial Act of 1939 but, in the relevant passage, speaks of ‘actions founded on simple contact (including contract implied in law)’. In Franks on the Limitation of Actions (1959), at pp. 166, 167, the author says –
‘although quasi-contract is today well recognised, its scope and the basis on which it rests have still to be precisely defined. For present purposes it may be accepted that in certain cases the common law implied an obligation (not a contract, for that is misleading) to pay or repay money, which is based on the broad requirements of justice. For limitation purposes actions based on quasi-contractual obligations must be treated as actions founded upon simple contract, though the relevant wording of the 1939 Act cannot be regarded as felicitous: In re Diplock [1948] 1 Ch 465 at 514. The limitation period will therefore be six years from the accrual of the cause of action.’

Although ‘quasi contract’ is an unhappy name, we think that it has a clearer meaning than ‘contract implied in law’ and we have therefore adopted ‘quasi contract’.” (emphasis added)
47. Parliament of New South Wales, Law Reform Commission, First Report on the Limitation of Actions (October 1967).
48. Ibid at [103].

Section 5(1)(a) of the Limitation of Actions Act 1958 (Vic) relevantly referred (and still refers) to “actions founded on simple contract (including contract implied in law)”. The Limitation Act 1939 [49] referred to in the Law Reform Commission report as the Imperial Act came into operation on 1 July 1940 and was founded upon the Fifth Interim Report of the Law Revision Committee of 1936. [50] It was noted in that report that the reference in s 3(a) of the Limitation Act 1623 [51] which continued to apply in England at that time provided a six year limitation period “for actions founded on simple contract” and that “the six year period of the Act has been applied by the courts to certain quasi-contractual actions”. [52] In its summary of recommendations, the report recommended a six year limitation period for “all actions founded in tort or simple contract (including quasi-contract)”. [53]
49. 2 & 3 Geo 6, c 21.
50. Westdeutsche Landesbank Girozentrale v Islington Borough Council [1994] 4 All ER 890 at 943.
51. 21 Ja 1, c 16.
52. United Kingdom, Law Revision Committee, Fifth Interim Report (Statutes of Limitation) (December 1936) at 7.
53. Ibid at 42.
Section 2 of the Limitation Act 1939 did not specify in terms any limitation period in respect of causes of action in or founded on quasi-contract but, like its 1623 predecessor, imposed such a limitation period for “actions founded on simple contract or on tort”. This section was the subject of commentary by Mr Franks in his 1959 text Limitation of Actions (Sweet & Maxwell), cited by the New South Wales Law Reform Commission. A commentary note by Mr Unger in the 1940 Modern Law Review in relation to the 1939 Act noted that: [54]

“Adherence to the system of the forms of action rather than a more scientific arrangement is shown by the omission of quasi-contract from section 2(1)(a) which divides common law actions into simple contract and tort. This failure to give statutory recognition to quasi-contract as a source of obligation conflicts not only with scientific arrangement but also with modern trends of judicial opinion which have undermined the belief that quasi-contractual claims are founded on implied contract.”
54. J Unger, “Limitation Act 1939” (1940) 4(1) Modern Law Review 45 at 46.

Eight years later, the Court of Appeal in In re Diplock [55] said that:

“We assume in Mr Upjohn’s favour that the words ‘action founded on simple contract’ must be taken to cover actions for money had and received, formerly actions on the case, and, as such, covered in express terms by the Statute of James I [the 1623 Act]. The assumption must we think be made though the words used cannot be regarded as felicitous.” (emphasis added)

It was this passage that was relied upon by Mr Franks in the passage from his text cited by the New South Wales Law Reform Commission noted at [56] above.

55. [1948] 1 Ch 465 at 514.

This passage from In re Diplock was also referred to in the 3^rd edition of Preston & Newsom on Limitation of Actions. [56] Those authors expressly discussed whether the 1939 Limitation Act which relevantly only referred to a six year limitation period for matters of “simple contract” applied to cases of quasi-contract. Thus, they observed that: [57]

“A difficult question arises in regard to certain obligations not strictly contractual. Every system of law admits the existence of some personal actions which are based neither on a true consensus nor on wrongdoing. Thus, in English law there is no difficulty, for instance, in suing to recover money paid by mistake, or on a quantum meruit for work done, or in recovering from an infant or a lunatic the price of necessaries supplied to him (see In re Rhodes (1890), 44 Ch. D. 94), or in waiving a tort in order to sue for recovery of the proceeds of the wrong if that is a more convenient remedy to pursue … Until the nineteenth century there was no necessity for any classification of causes of action of these sorts; indeed, English law possessed no classification of personal actions, being content with the enumeration provided by the forms of action. All the peculiar claims in question were in assumpsit, and this fact determined all the incidents of the action in which they were made. In particular, they fell, as assumpsits, within the enumeration of the causes of action in the Limitation Act 1623, s 3, and were subject to the six-year period provided for by that section (see Baker v Courage & Co. [1910] 1 K.B. 56; In re Robinson [1911] 1 Ch. 502; Anglo-Scottish Beet Sugar Corporation v Spalding U.D.C. [1937] 2 K.B. 607). Though all these claims were brought in assumpsit, none of them was based on contract in the strict sense, and some of them could only with difficulty be considered as based on implied contract.”
56. GH Newsom and L Abel-Smith (3rd ed, 1953, Solicitors’ Law Stationery Society) (Preston & Newsom).
57. Ibid at 33-34.

In the case of In re Rhodes; Rhodes v Rhodes,[58] referred to in the passage extracted in the previous paragraph, Cotton LJ considered whether there can be an implied contract on the part of a “lunatic” to repay out of her property sums expended for necessaries supplied to her. His Honour observed that: [59]

“…the term ‘implied contract’ is a most unfortunate expression, because there cannot be a contract by a lunatic. But whenever necessaries are supplied to a person who by reason of disability cannot himself contract, the law implies an obligation on the part of such person to pay for such necessaries out of his own property. It is asked, can there be an implied contract by a person who cannot himself contract in express terms? The answer is, that what the law implies on the part of such a person is an obligation, which has been improperly termed a contract, to repay money spent in supplying necessaries. I think that the expression ‘implied contract’ is erroneous and very unfortunate.”
58. (1890) 44 Ch D 94.
59. Ibid at 105.

In the same case and to the same effect, Lindley LJ said: [60]

“The question whether an implied obligation arises in favour of a person who supplies a lunatic with necessaries is a question of law, and in In re Weaver a doubt was expressed whether there is any obligation on the part of the lunatic to repay. I confess I cannot participate in that doubt. I think that that doubt has arisen from the unfortunate terminology of our law, owing to which the expression ‘implied contract’ has been used to denote not only a genuine contract established by inference, but also an obligation which does not arise from any real contract, but which can be enforced as if it had a contractual origin. Obligations of this class are called by civilians obligationes quasi ex contractu.”
60. Ibid at 107.

The authors of Preston & Newsom proceeded to observe that “[a]fter the forms of action were abolished, English law might have accepted the logical, but alien, classification of the civilians, and treated these cases as forming a kind or class neither ex contractu nor ex delicto but quasi ex contractu”, but pointed out that the English courts ultimately did not take this step. [61] They referred to the observation of Lord Haldane in Sinclair v Brougham [62] that:

“The common law of England really recognises (unlike the Roman law) only actions of two classes, those founded on contract, and those founded on tort. When it speaks of actions arising quasi ex contractu it refers merely to a class of action in theory based on a contract which is imputed to the defendant by a fiction of law.”
61. Preston & Newsom at 34. The step was not taken in English law until Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548; see also Westdeutsche Bank Girozentrale v Islington London Borough Council [1996] AC 669 at 710E; Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153.
62. [1914] AC 398 at 415.

Lord Haldane went on to detail the history of the action in assumpsit, ultimately derived from Moses v Macferlan, [63] and noted that “[t]he promise to pay which created the right of action might have been a pure fiction of law” and that “[i]n many cases, no such promise could possibly have been established”. [64] Viscount Haldane concluded that it was “just the fiction of attributing a promise in a multitude of cases where in reality there was none which finally gave the action its comprehensive range, and made it available even where no fact importing or implying privity of contract could be proved”. [65]
63. (1760) 2 Burr 1005; 97 ER 676.
64. Sinclair v Brougham [1914] AC 398 at 416.
65. Ibid at 416-417.
As seen in [56] above, the New South Wales Law Reform Commission Report of 1967 concluded its discussion on what was to become s 14(1)(a) of the Limitation Act and the reference to quasi contract in that section by stating that “[a]lthough ‘quasi contract’ is an unhappy name, we think that it has a clearer meaning than ‘contract implied in law’ and we have therefore adopted ‘quasi contract.’”
The Law Reform Commission did not make any reference in its 1967 report to the then recently published first edition of Stoljar. It may, however, be that the Commission had that work in mind when it described the term “quasi-contract” as an “unhappy name”, for the learned author had commenced his text with the following paragraph: [66]

“What we shall call Quasi-Contract is also known by other names. Implied Contract is an old and familiar title, though one too involved with ordinary contract law. Unjust Enrichment and Restitution are the more current denominations, but they too are not completely satisfactory. Unjust enrichment may sometimes go without legal redress, while restitution carries mainly remedial overtones: we immediately think of another remedy like damages or specific performance rather than of a subject on its own. Moreover, restitution and unjust enrichment now include the recovery of all kinds of property; and even if this brings together scattered material, the fact remains that the recovery of money has its own problems and particularities. For not only can the manner or occasion of paying money differ greatly from that of transferring land or goods, but the recovery of money, unlike that of other tangible things, can never operate in specie or in rem. In any case, as it is the recovery of money we here wish to discuss, to speak of quasi-contract will help to stress this concern, since this is also the title that has long been associated with the classical money counts.”
66. Stoljar (1964, Law Book Company of Australasia) at 1.

A little later in his text, Professor Stoljar wrote, in terms which perhaps echo the words of Lord Haldane in Sinclair v Brougham: [67]

“English quasi-contract has long been in a confused state. The word ‘quasi’ was, in the past, sufficiently flexible to make the subject a sort of renvoi-category for things not strictly referable to contract or tort as well as things not easily referable to chancery. Nevertheless when quasi-contract was being given further thought, it became very clear that it had nothing to do with such things as the recovery of judgment debts, or the recovery of statutory or customary fines, or with the enforcement of other obligations (like warranty of authority or innkeeper's liability) that are ‘quasi-assumptual’ rather than quasi-contractual in character. Yet even without these things, quasi-contract has remained much too disorderly, with far too little attention being paid to a proper ordering of the rules according to their systematic weight and priorities.”
67. Ibid at 17.

Two years after the publication of Stoljar’s first edition and the year prior to the Law Reform Commission’s Report, the first edition of Goff & Jones was published. In the first edition, the authors’ thesis was that the law of restitution included quasi-contractual claims and that quasi-contractual claims were those which fell within the scope of actions for moneys had and received or for money paid, or of quantum meruit or quantum valebat claims “and which are founded on the principle of unjust enrichment”. [68]
68. Goff & Jones (1966, Sweet & Maxwell) at 3–4.
Neither of the first editions of Stoljar nor Goff & Jones, the two leading texts at the time, made any reference to Auckland Harbour Board in their discussion of quasi-contract and restitution respectively, although references were made to this case and the principle for which it stood in the second edition of both texts. [69] It did not follow, however, from the failure to include any reference to that case in the respective first editions that a cause of action engaging the Auckland Harbour Board principle was not founded on the law of quasi-contract.
69. Stoljar (2nd ed,1989, Law Book Company) at 28; Goff & Jones, (2nd ed, 1978, Sweet & Maxwell) at 103.
Dodington’s Case has already been noted as a forerunner to the Auckland Harbour Board principle. As also noted earlier in these reasons, Dodington, as executor of Sir Walter Mildmay, was ordered to account for the unauthorised moneys paid to Sir Walter “as a debt”. As AWB Simpson has explained, citing what he describes as the “very obscure decision” of Bonnel v Foulke, [70] the action in debt became concurrent with account “and therefore indebitatus assumpsit lies”. [71] What is of interest for present purposes is the temporal proximity of Bonnel v Foulke in 1657 and Dodington’s Case, decided four years earlier.
70. (1657) 2 Sid 4.
71. AWB Simpson, A History of the Common Law of Contract (1975, Clarendon Press) (Simpson) at 495.
Simpson explains the role played by the implied promise in relation to actions against debtors: [72]

“… in seventeenth-century law, actions of assumpsit against debtors tended to be viewed as based upon promises implied in law, that is on fictional promises, even though debts would normally result from genuine consensual transactions.”
72. Ibid at 493.

While liability generally arose consensually, in an important passage in his scholarly work, Simpson continues: [73]

“… but there was no reason in principle why indebitatus counts could not be evolved to enforce liability which did not originate in a consensual transaction between the parties. So long as the situation was one in which a debt fell due, an action could be maintained upon an implied promise to pay it, and debts could perfectly well arise by operation of law, or in consequence upon some transaction to which the plaintiff was not a party. In this way quasi-contractual liability could be remedied by action of assumpsit. The development of the law here led to the evolution of indebitatus assumpsit for money had and received to the plaintiff's use, for money paid to the defendant's use at the request of the plaintiff, and to the employment of indebitatus assumpsit to recover a variety of debts, such as customary dues, which fell due by operation of law quite independently of any consensual transaction, implied trust, or principle of unjust enrichment. It also gave rise to the action for a quantum meruit and quantum valebant …”

To the extent that the primary judge also held that the payments to Ms Dalton operated to discharge a legal obligation owed by the Appellant to her, I would also accept the Appellant’s complaint that the primary judge’s conclusion on this point was speculative. There was no evidence either way as to whether or not the payments the subject of the original direction were made to Ms Dalton pursuant to any legal obligation whatsoever.
It was not established on the facts that the Appellant benefited from those payments by reason of the discharge of a legal obligation the Appellant was otherwise under to Ms Dalton. He may or may not have been under a relevant obligation at the time the original direction was made and he may or may not have been under the same obligation following his separation from the Navy. Whether he was or was not was utterly speculative, and the onus lay on the Commonwealth to establish that the payments to Ms Dalton discharged an obligation owed by the Appellant to her, and thus constituted a benefit by which he was unjustly enriched.
In these circumstances and for the above reasons, ground 2 of the notice of appeal must succeed.

Payments credited to Appellant’s account with Australian Tax Office

As noted at [7] above, a further component of the claimed overpayments comprised amounts withheld by the Department of Defence on account of PAYG tax and credited on the Appellant’s running account with the Australian Taxation Office. Because of the primary judge’s finding that there was no applicable time bar, it was not necessary for him to deal with the dispute insofar as it applied to amounts withheld by the Commonwealth from the Appellant’s fortnightly salary for income tax purposes in the years prior to 2013. These amounts totalled $42,148.67.
Any benefit conferred on the Appellant by the mistaken crediting of his running account with the ATO was contingent in the sense that no actual benefit flowed to him until he filed a tax return entitling him to a refund of amounts withheld. As also noted at [8] above, this did not occur until 2018, which meant that the Commonwealth’s claim was well within the limitation period, even for amounts which were credited to the ATO account more than six years prior to the commencement of proceedings in 2019.
I accept the Commonwealth’s submission that:

“The payments made to the ATO were not in discharge of an obligation, but were payments of amounts provisionally due to the Commonwealth in accordance with PAYG legislation requiring the employer to withhold those sums and remit them to the ATO. Unless and until a notice of assessment is issued, the amount due to or from the taxpayer by the Commonwealth (by the Commissioner) is not final, and it is only then that amounts provisionally withheld by the employer (and paid to the ATO) are applied to the assessed debt or refund. The employer is relieved of liability for paying such amounts to the ATO (unless paid in error). It is not a payment of salary in accordance with any direction of the taxpayer to meet a debt.”

It follows that the Appellant was obliged to make restitution to the Commonwealth of the amounts of money mistakenly withheld and credited to the ATO for which he received the benefit in his income tax refund in 2018.

Conclusion and Orders

It follows that the appeal succeeds in part.
The parties should formulate orders in accordance with these reasons and, due to their mixed success, file and serve submissions as to costs in writing of no more than three pages by 11 October 2022 with any submissions in reply of no more than three pages to be filed by 18 October 2022.
MEAGHER JA: The principal question in this appeal is whether the Commonwealth’s claim to recover from the appellant salary payments made out of consolidated revenue without lawful appropriation, and on the mistaken basis that he was a member of the Royal Australian Navy, is subject to a 6-year limitation period by the application of Limitation Act 1969 (NSW), s 14(1)(a). Those payments were made between 21 September 2009 and 26 March 2015, and the proceedings to recover them commenced on 7 May 2019.

Background

Subsection 14(1)(a) provides:

14 General
(1) An action on any of the following causes of action is not maintainable if brought after the expiration of a limitation period of six years running from the date on which the cause of action first accrues … —
(a) a cause of action founded on contract (including quasi contract) not being a cause of action founded on a deed,
(b) a cause of action founded on tort, including a cause of action for damages for breach of statutory duty,
…
(d) a cause of action to recover money recoverable by virtue of an enactment, other than a penalty or forfeiture or sum by way of penalty or forfeiture.
…
(emphasis added)

The answer to this question turns on the meaning of the expression “founded on… quasi contract” and whether the Commonwealth’s claim answers that description.
There are two subsidiary questions. Some of the moneys believed to be due to the appellant were paid directly to his wife or estranged wife, Ms Dalton. A very small amount was also paid to his lawyers, Jones King Lawyers. In addition, some moneys were ‘paid’ by the Department of Defence to the Australian Taxation Office as PAYG withholding tax. As to the former, the issue is whether those payments to Ms Dalton and the lawyers are recoverable from the appellant as made at his direction and for his benefit. In relation to the latter, there is an issue as to when those withholding tax moneys are to be treated as having been paid to the appellant so as to cause the limitation period to commence to run.
Section 83 of the Constitution provides that “No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law”; and the payments to the appellant were not the subject of any valid appropriation. The Commonwealth’s amended statement of claim pleaded two bases for recovery. The first was as moneys paid from consolidated revenue illegally and without lawful authority; and the second as moneys paid under a mistake.
The Limitation Act binds the Crown in right of the Commonwealth so far as the “legislative power of Parliament permits”. Certain actions are excepted, but not an action for recovery of moneys paid out of consolidated revenue without lawful appropriation (Limitation Act, ss 10, 11(1)).
Because the Commonwealth is a party, the underlying proceeding involved, and this appeal involves, the exercise of federal jurisdiction conferred by s 39(2) of the Judiciary Act 1903 (Cth). The Limitation Act, as a law relating to procedure, is a law which is “picked up” and applied in that exercise of jurisdiction pursuant to Judiciary Act, s 79(1) (Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23). That application of s 79(1) is subject to an exception, namely where “the Constitution or the laws of the Commonwealth” provide otherwise. Whilst s 83 prohibits the payment of moneys from consolidated revenue without lawful appropriation, it contains no bar or limit on the time for recovery of moneys paid contrary to that prohibition and does not state that there should be no such bar or limit. That being the position, the exception has no application and the Limitation Act applies to the Commonwealth’s proceeding. (This last question is the subject of the Commonwealth’s s 78B notice, which seeks to contend otherwise.)
The long-standing general principle relied on as giving rise to the appellant’s common law obligation to repay those moneys is as stated by Viscount Haldane LC in Auckland Harbour Board v R [1924] AC 318 at 327: “Any payment out of the consolidated fund made without Parliamentary authority is simply illegal and ultra vires, and may be recovered by the Government if it can, as here, be traced.”
That principle has been applied to money claims for the recovery of such payments in Commonwealth of Australia v Burns [1971] VR 825 (Newton J); and, on appeal from the District Court, in Attorney-General v Gray [1977] 1 NSWLR 406 (Hutley, Glass and Samuels JJA). Whilst acknowledged as providing a cause of action for recovery of money where there has been a payment out of the revenue fund without authority, the principle was held not to be engaged in the circumstances in Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 at 580 (Ellicott J, Blackburn and Deane JJ relevantly agreeing). Finally, see the obiter statements of French J (as his Honour then was) as to the application of this principle in Sandvik Australia Pty Ltd v Commonwealth of Australia (1989) 89 ALR 213 at 229-230; [1989] FCA 551.
Before considering the primary judge’s reasoning, it is important to note two matters. First, neither party contended that the claim based on the Auckland Harbour principle was “proprietary in nature”: cf Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 at 177 (per Lord Goff); and see Law Commission of England and Wales, Restitution: Mistakes of Law and Ultra Vires Public Authority Receipts and Payments (1994), at [17.12]. The parties proceeded on the correctness of the view expressed by Newton J in Commonwealth of Australia v Burns at 828 that Viscount Haldane’s reference to “tracing” in this context was not to tracing “in the equitable or proprietary sense, but to tracing the identity of the recipient of the money”. Accordingly, the Commonwealth’s claim is a personal one for money.
Secondly, it is not controversial that the appellant’s obligation to repay the moneys arose at common law, and was not founded on any contract or actionable wrong.

The primary judgment

The primary judge (Weber SC DCJ) upheld the Commonwealth’s claim in reliance on the Auckland Harbour principle. As a result it was unnecessary to consider the factual circumstances underlying the alternative claim for the recovery of moneys paid under a mistake: Commonwealth of Australia (Royal Australian Navy) v Sims [2021] NSWDC 690 at [10].
With respect to the limitation question, the Commonwealth contended that an action brought pursuant to the Auckland Harbour principle “was not a restitutionary claim in the strict sense, but rather was a stand-alone common law cause of action”. It was said that if that contention “was correct, then there was no applicable statute of limitations” (J[16]). Considering that contention, his Honour described the claim founded on that principle as not being a “mainstream restitutionary claim” because it did not arise from “any form of unjust enrichment” (J[19]). Nor was it subject to “defences such as estoppel” or “change of position”, they being “orthodox defences to restitutionary claims”. The primary judge also observed that the absence of the availability of those defences was consistent with the cause of action being “based in public policy, and… not in restitution” (J[20]); cf the discussion of the Auckland Harbour principle in J Edelman and E Bant, Unjust Enrichment in Australia (2006, Oxford University Press) at 301.
At J[24], his Honour concluded that the recovery of moneys pursuant to the Auckland Harbour principle “should not be considered to be restitutionary”. Having done so, the primary judge nevertheless considered what the position would be if it was treated as a “restitutionary” remedy (J[28]). His Honour accepted the Commonwealth’s contention that the expression “quasi contract” was inapt to describe all restitutionary claims (J[30], [32]); and considered the reasoning of Mason P (Spigelman CJ and Campbell JA agreeing) in Coshott v Lenin [2007] NSWCA 153 to confirm the correctness of that contention (J[31]-[32]). It followed in his Honour’s view that the Commonwealth’s claim for recovery of illegal and ultra vires salary payments was not subject to any limitation period (J[33]).
The first premise of this reasoning is that the expression quasi contract refers only to claims or remedies characterised as “restitutionary”. His Honour concluded that a claim based on the Auckland Harbour principle did not answer that description. The second premise upon which his Honour’s reasoning depends is that quasi contract describes some restitutionary claims or remedies, but does not describe all of the claims that might be so characterised. His Honour concluded that the restitutionary claims within that description do not include a claim based on the Auckland Harbour principle.
Neither of these propositions addresses the defining characteristics of the money claims which in 1760 were described by Lord Mansfield as “founded in the equity of the plaintiff’s case, as it were upon a contract”; and in 1914 by Viscount Haldane (adopting some of Lord Mansfield’s language) as based on a fictitious promise to pay where the law is “ready to imply a debt in such cases arising quasi ex contractu”: Moses v Macferlan (1760) 2 Burr 1005 at 1008; 97 ER 676 at 678; and Sinclair v Brougham [1914] AC 398 at 416. Instead, each of these propositions assumes that the broad terms “restitutionary” and “unjust enrichment” inform the character of those money claims as founded in “quasi contract”. They do not. As Mason P emphasised in Coshott v Lenin, the adoption of that expression to describe those claims preceded modern restitutionary principles and analysis. The claims answering that description as it is used in the Limitation Act 1969 (NSW) are identified by the forms of action by which they were originally made – principally the action in indebitatus assumpsit for money had and received – and the non-contractual and remedial nature of the payment obligation which the common law imposed.

Coshott v Lenin

Coshott v Lenin concerned a solicitor’s claim for remuneration founded either on a contract to perform services which did not stipulate the remuneration to be paid, or an obligation to pay imposed in circumstances where the respondent had freely accepted the services. This Court concluded that Limitation Act s 14(1)(a) applied, its language being satisfied either way the solicitor’s quantum meruit claim was put. As Brennan J had observed in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 234; [1987] HCA 5: “… quantum meruit is sometimes used to describe an action to recover a reasonable sum which is due under a contract and sometimes to describe an action to recover a reasonable sum when the obligation to pay it is imposed by law independently of actual contract” (emphasis added). In the former case the action would be founded on contract, and in the latter on quasi contract.
At [14]-[16], Mason P (Spigelman CJ and Campbell JA agreeing) said:

[14] However packaged, the appellant's belated claim for remuneration is within the statutory time bar. It is either contract or quasi-contract within the meaning of the Limitation Act.
[15] Quasi contract was the legal category of reference in 1969 for claims to remuneration litigated at common law that were not based on contract. Pleaders used the common money count for work done, known by the Latin tag of quantum meruit. In Pavey, the High Court held that the quasi-contractual right to recover on a quantum meruit did not depend on the existence of an implied contract but on a claim to restitution or one based on unjust enrichment. The Court was at pains, however, to stress that (in Deane J's words at 256-7) unjust enrichment is a "unifying legal concept which explains why the law recognises, in a variety of distinct categories of case, an obligation on the part of a defendant to make a fair and just restitution for a benefit derived at the expense of a plaintiff".
[16] This explanation of the principles underpinning quantum meruit and other recognised causes of action in restitution did not mean that "quasi-contract" ceased to exist as a legal category in the context of the Limitation Act. That Act continues to speak according to its plain intent to claims, however labelled or packaged, and whatever general principles may be perceived to underpin them, which depend on the well-established common law cause of action stemming from quantum meruit. Whether or not it is now passe to use the old language of quasi-contract and whether or not there now exist causes of action "in" unjust enrichment has no bearing on the matter because "a sovereign legislature is not bound to respect legal orthodoxy" (Sharpe v Goodhew (1990) 33 IR 238 at 243 per Pincus J).

There is nothing in this reasoning which supports a conclusion that the Commonwealth’s claim in the present case was other than quasi-contractual. It was founded on an obligation to pay or repay because, from the perspective of the payer, the payments sought to be recovered were made illegally and without authority. Those payments were also made under a mistake of fact and for no consideration.
Under the approach advocated by Lord Mansfield in Moses v Macferlan (at 1012; 681), in such circumstances the law imposed an obligation to pay or refund money, that obligation arising “by the ties of natural justice and equity”. Whereas under the implied contract theory subscribed to by Viscount Haldane, that remedial obligation arose from a fictitious promise to pay imposed other than where the substantive law made “the defendant incapable of undertaking contractual liability” (Sinclair v Brougham at 417). In other words, under that theory the fictitious promise to pay was only imposed if a contract containing that term “would be valid if it really existed” (at 415).

The common law of quasi contract

In the introduction to the second edition of their work (The Law of Restitution (2nd ed, 1978, Sweet & Maxwell) at 3-4), Goff and Jones wrote that quasi contract stems from the common indebitatus assumpsit counts for money had and received and for money paid, and from quantum meruit and quantum valebat claims. To similar effect, Mason and Carter in their work Restitution Law in Australia (4th ed, 2021, LexisNexis) at [112] emphasise that the law of quasi contract emerged during the development and growth of the action in assumpsit.
The early forms of personal action at law were either actions upon contracts (ex contractu) or actions for wrongs (ex delicto). The action in assumpsit commenced its life as an action of trespass on the case. As the use of assumpsit evolved, the indebitatus assumpsit counts supported not only actions to recover debts which were founded in contract, but also actions to recover money where the originating debt did not arise from any contractual transaction. In these actions the plaintiff stated that the defendant was “indebted to the plaintiff for money had and received to his use, and being so indebted promised to pay”. Unlike the other common counts, the originating obligation was not described in contractual terms: cf the quantum meruit and quantum valebat claims and claims for money paid, where the obligation was described as contractual even where no express promise had been made (M Lobban, “Restitutionary Remedies” in The Oxford History of the Laws of England – 1820-1914: Private Law (2010, Oxford University Press) at 563-565).
However, this development of the writs and forms of action was not informed by any “coherent theory of money claims”. As Professor Baker points out in his essay “The History of Quasi-Contract in English Law” (in WR Cornish et al (eds), Restitution: Past, Present and Future (1998, Hart Publishing) at 39, the early common lawyers “did not need one. The formulary system required that a plaintiff find an original writ with wording to suit his facts rather than a conceptual pigeonhole in which to put them. And the original writs, even if they reflected the elementary concepts of the time in which they were first devised, had developed piecemeal without much recourse to abstract theorising.”
In his Lectures on Legal History (1913, Harvard University Press) at 166, Professor Ames (in a passage cited by Viscount Haldane in Sinclair v Brougham at 417) summarised the development of the writ of assumpsit in its various forms:

In its origin an action of tort, it was soon transformed into an action of contract, becoming afterwards a remedy where there was neither tort nor contract. Based at first only upon an express promise, it was afterwards supported upon an implied promise, and even upon a fictitious promise. Introduced as a special manifestation of the action on the case, it soon acquired the dignity of a distinct form of action, which superseded debt, became concurrent with account, with case upon a bailment, a warranty, and bills of exchange, and competed with equity in the case of the essentially equitable quasi-contracts growing out of the principle of unjust enrichment.

The manner in which the use of the fictitious promise allowed the development of the principal forms of assumpsit to the position as it was in the early 19^th century is summarised by Professor Baker at 41-42:

The three principal forms of assumpsit which lent themselves to development through fiction were quantum meruit (or more strictly quantum mereret), quantum valebant and indebitatus assumpsit. The first two were used where services were performed, or goods sold, and no certain remuneration or price was agreed upon at the time. The plaintiff alleged a promise to pay what he deserved for the services, or what the goods were worth, and added an averment as to what the appropriate sum was. There is no reason why a person should not make an explicit promise in these terms, but the formula obviously lent itself to fiction, or at least implication, where no promise had been made at all. Indebitatus assumpsit, on the other hand, was used as an alternative to the writ of debt, and rested on the assertion that the defendant, being indebted to the plaintiff in a certain sum, and in consideration of that indebtedness, promised to make payment. In this form of assumpsit, the promise to pay was no doubt almost always fictitious, for it was generally accepted that this was essentially a claim in debt forced into the assumpsit formula by the addition of an imaginary promise. However, it was necessary for the plaintiff to indicate in his count, in general terms, why the defendant was indebted to him: for instance, for “goods sold”, for “work done”, for “money laid out”, or for “money had and received” to his use. These subsidiary formulae were known as the common money-counts. The count for money had and received proved to be the most expansive for restitutionary purposes, since it represented on its face a claim by a beneficiary to enforce a trust of money. It would be extended to cover various cases where money was not expressly or ostensibly received to the plaintiff’s use, but a use was implied by law from the circumstances. (footnotes omitted)

In Moses v Macferlan (1760), in response to an argument that no claim in indebitatus assumpsit for money had and received to the plaintiff’s use lay “except upon an express or implied contract”, Lord Mansfield proposed his theory as to the principles underpinning that claim. His answer to that objection was that if “the defendant be under an obligation, from the ties of natural justice, to refund; the law implies a debt, and gives this action, founded in the equity of the plaintiff’s case, as it were upon a contract (‘quasi ex contractu’, as the Roman law expresses it)” (at 1008, 678).
Before the Common Law Procedure Act 1852 (UK) it was necessary to specify in the writ the particular form of action relied on. When framed in indebitatus assumpsit the declaration in the writ pleaded the alleged basis for the money claim (indebitatus), and the breach of the promise (assumpsit) to pay it. In a claim in quasi-contract that promise was implied and fictitious, and was not required to be proved as a fact. The 1852 Act removed the requirement to specify any form of action (s 3); permitted different causes of action to be joined in the same suit (s 41); abolished the need for the pleading of promises that were not required to be proved, such as those in indebitatus counts (s 49); and provided that the common indebitatus counts could be sufficiently pleaded by adopting shortened forms including for goods sold and delivered, work done, money had and received, and money paid (ss 91 and Schedule B).
These shortened forms of action continued to be referred to as the indebitatus counts, money counts or common counts. The 3^rd edition of Bullen and Leake (Precedents of Pleadings in Personal Actions in the Superior Courts of Common Law (1868, Stevens and Sons) at 35) noted that although the quantum meruit and quantum valebat counts had been adopted where there was no fixed price for work done or goods sold, ultimately they had been superseded by the general application of the indebitatus counts.
Thus as early as the mid-18^th century a cause of action founded on quasi contract described a claim to enforce an obligation to pay money imposed by law which arose “upon the circumstances of the plaintiff’s case” and was founded on “the ties of natural justice and equity”; and independently of any actual contract (Moses v Macferlan at 1012, 681; see also Pavey & Matthews at 234 per Brennan J). Those circumstances included a qualifying or vitiating factor such as mistake, duress or illegality (David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 379; [1992] HCA 48). In Moses v Macferlan (at 1012, 681), Lord Mansfield had described those underlying circumstances as including “money paid by mistake; or upon a consideration which happens to fail; or for money got through imposition, (express, or implied); or extortion; or oppression; or undue advantage taken of the plaintiff’s situation, contrary to laws made for the protection of persons under those circumstances”.
That is a sufficient description of the defining characteristics of a cause of action founded on quasi contract for the purposes of applying s 14(1)(a) in this case. That description does not adopt any reference to restitutionary principles. The fact that the basis for those causes of action might now be described by reference to notions of unjust enrichment is not to the point.
The controversy as to the principled basis which explains the development of the quasi-contractual money counts no longer rages. In 1978, Goff and Jones said of that debate in their introductory summary “The Legacy of History: The Implied Contract Theory” (at 8):

… the fictitious promise which lay [at the root of indebitatus assumpsit] has left a legacy of confusion which has seriously hindered the development of a law of restitution. Lord Mansfield, at least, had no doubts about the status of this so-called promise. …
While the forms of action continued in existence, it is not surprising that lip-service should have continued to be paid to the notion of “implied contract”, for it was only through that fiction that quasi-contractual claims were enforceable at all in indebitatus assumpsit.

Mason CJ later noted in Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 356-357; [1993] HCA 4:

The abolition of the forms of action inspired an analysis of the sources of obligation in the common law in terms of a rigid dichotomy between contract and tort. In that context, there was little room for restitutionary obligation imposed by law except as a "quasi-contractual" appendix to the law of contract. As a result, until recently, restitutionary claims were disallowed when a promise could not be implied in fact.

The ultimate rejection of the implied contract theory in favour of restitutionary principles is considered in some detail in Allsop CJ’s extra-judicial writing “Restitution: Some Historical Remarks” (2016) 90 ALJ 561 at 570-575. As his Honour observes, the speech of Viscount Haldane in Sinclair v Brougham (at 416-417) contains a clear statement of the implied contract theory.
In Pavey & Matthews, the High Court rejected that theory as explaining quasi-contractual claims. In doing so the Court concluded, in relation to the action on a quantum meruit with which that case was concerned, that it “rests, not on implied contract, but on a claim to restitution or one based on unjust enrichment, arising from the respondent’s acceptance of the benefits accruing to the respondent from the appellant’s performance of the unenforceable oral contract” (at 227 per Mason and Wilson JJ).
Subsequently, in David Securities the Court expressly affirmed the statement of Deane J in Pavey & Matthews (at 256-257) that to identify the basis of actions such as for money paid under a mistake of fact or law “as restitution and not genuine agreement is not to assert a judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate”. Instead, as the Court had emphasised in David Securities (at 379), “recovery depends upon the existence of a qualifying or vitiating factor such as mistake, duress or illegality”.

Quasi contract and the Limitation Act 1969 (NSW)

That the foregoing analysis describes the sense in which the expression “quasi contract” is used in s 14(1)(a) is made clear by the Report on the Limitation of Actions of the New South Wales Law Reform Commission, (October 1967) at [103]:

103. In section 14 (1) (a), the words about quasi contract stem from section 5 (1) (a) of the Victorian Limitation of Actions Act 1958. The Victorian Act largely follows the Imperial Act of 1939 but, in the relevant passage, speaks of "actions founded on simple contract (including contract implied in law)". In Franks on the Limitation of Actions (1959). at pp. 166, 167, the author says –
“although quasi-contract is today well recognized, its scope and the basis on which it rests have still to be precisely defined. For present purposes it may be accepted that in certain cases the common law implies an obligation (not a contract, for that is misleading) to pay or repay money, which is based on the broad requirements of justice. For limitation purposes actions based on quasi-contractual obligations must be treated as actions founded upon simple contract, though the relevant wording of the 1939 Act cannot be regarded as felicitous. The limitation period will therefore be six years from the accrual of the cause of action.”

Although “quasi contract” is an unhappy name, we think that it has a clearer meaning than “contract implied in law" and we have therefore adopted "quasi contract".

It is convenient at this point to pursue the reference to the Limitation Act 1939, 2&3 Geo 6, c 21, which provided by s 2(1) that the limitation period for “actions founded on simple contract or on tort” was 6 years from the date on which the cause of action accrued. Although not obvious from that language, the obligations treated as founded upon simple contract for limitation purposes included liabilities in quasi contract (M Franks, Limitation of Actions (1959, Sweet & Maxwell) at 87-88, and 166-167, the latter passage extracted in the Law Reform Commission Report at [103]). In support of that proposition, Franks cites the decision in In re Diplock; Diplock v Wintle [1948] Ch 465 at 514, where the Court of Appeal (Lord Greene MR, Wrottesley and Evershed LJJ) said:

We assume in Mr. Upjohn's favour that the words “action founded on simple contract” must be taken to cover actions for money had and received, formerly actions on the case, and, as such, covered in express terms by the Statute of James I. The assumption must we think be made though the words used cannot be regarded as felicitous.

The reference to the Statute of James I is to the Limitation Act 1623, 21 Ja 1, c 16. Section 3 of that Act imposed a six-year limitation period for actions on the case, sometimes called trespass on the case, which included assumpsit.
Observations to the same effect are made by GH Newsom and L Abel-Smith in Preston and Newsom on Limitation of Actions (3rd ed, 1953, Solicitors’ Law Stationery Society). The expression ‘simple contract’ “also seems to embrace those actions which are based upon an obligation arising neither from agreement nor from wrong-doing, sometimes referred to as quasi-contract; they were formerly actions of assumpsit” (at 25). Having noted of the claims brought in assumpsit that “none of them was based on contract in the strict sense, and some of them could only with difficulty be considered as based on implied contract” (at 34), the authors conclude (at 35):

… it seems that the miscellaneous actions here discussed, all of which were formerly actions of assumpsit, must be subject to that period of limitation.

Application of s 14(1)(a)

The Commonwealth’s claim is to recover from the appellant moneys drawn from Treasury by the Department of Defence without lawful appropriation. In those circumstances the common law imposes a remedial obligation which operates to restore to the Commonwealth what was illegally and without authority transferred from it to the appellant (Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68 at [26]). That obligation does not arise in contract or in tort or by virtue of any statute. It arises out of the circumstances in which the money was paid and received to the use of the appellant. In the language of the common money counts, the Commonwealth’s claim would have been formulated as being for money had and received; and in a taxonomy which adhered to a rigid dichotomy between personal actions founded in contract and tort, the claim would have been treated as founded in quasi contract as that term is used in s 14(1)(a) of the Limitation Act. It follows that grounds 1(a) and (b) should be upheld.

Remaining issues in the appeal

I have had the benefit of reading the judgment of the Chief Justice in draft. I agree with his Honour’s reasons for rejecting the Commonwealth’s contention that if the Limitation Act otherwise applied the applicable six-year period should be postponed pursuant to s 56. I also agree for the reasons his Honour gives that the two subsidiary questions to which I have referred above should be resolved as his Honour proposes.
WHITE JA: I agree with the reasons of Bell CJ and Meagher JA.
I would add the following observations on the main issue in the appeal, namely, whether a claim by the government to recover moneys paid without statutory authority based on Auckland Harbour Board v The King [1924] AC 318 was a cause of action in quasi-contract within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW).
The Commonwealth submitted that at the time of the enactment of s 14(1)(a) in 1969 an Auckland Harbour type claim had never been recognised “taxonomically speaking” as lying within the territory of quasi-contract. Reliance was placed on the absence of any mention of the claim in the first edition of Professor Stoljar’s The Law of Quasi-Contract (1964) or in Bullen and Leake’s Precedents of Pleadings, 3^rd ed (1868) or any subsequent edition.
As the reasons of the Chief Justice and Meagher JA show, an Auckland Harbour Board claim falls squarely within the principles on which a claim for money had and received could be brought. It has subsequently been treated as a restitutionary claim. The report of the NSW Law Reform Committee quoted by the Chief Justice at [56] stated that actions in quasi-contract encompassed cases where the common law implied an obligation (not a contract in fact) to pay or repay money. (See also Holdsworth’s History of English Law Vol 8 p 96).
The likely reason such claims are not addressed in Bullen and Leake’s Precedents of Pleadings is that the claims would have been brought in the Court of Exchequer and not the Courts of King’s Bench or Common Pleas. (The Earl of Devonshire’s Case was referred to the judges of the Court of King’s Bench by the King and the report contains no reference to a writ containing a form of action).
In the Court of Exchequer the Crown had many procedural advantages. The most common remedy sought by the Crown was for the recovery of a debt due to the Crown, which claim was brought by information (Holdsworth, op cit Vol 10, p 344; Vol 13 p 588). Dodington’s Case (1653) Cro Eliz 545; 78 ER 791 was brought by information in the Court of Exchequer.
Under s 64 of the Judiciary Act 1903 (Cth) in a suit to which the Commonwealth is a party, the rights of the parties shall, as nearly as possible, be the same as in a suit between subject and subject.
Considered as a claim between subject and subject the Commonwealth’s claim based on the AucklandHarbour Board principle falls squarely within a claim for money had and received, but to which a defence of change of position is not available. It is therefore a claim in quasi-contract to which s 14(1)(a) applies.
I agree with the orders proposed by the Chief Justice.

**********

Endnotes

Decision last updated: 04 October 2022

Medium Neutral Citation:	Sims v Commonwealth of Australia [2022] NSWCA 194
Hearing dates:	11 August 2022
Date of orders:	04 October 2022
Decision date:	04 October 2022
Before:	Bell CJ at [1]; Meagher JA at [112]; White JA at [153]
Decision:	1. Appeal allowed. 2. Direct the parties to formulate orders in accordance with these reasons, and to file written submissions as to costs of no more than three pages by 11 October 2022, with any submissions in reply of no more than three pages to be filed by 18 October 2022.
Catchwords:	CONSTITUTIONAL LAW – constitutional implications – whether ss 81 and 83 of the Constitution provide an implied basis for the recovery of ultra vires payments by the Commonwealth – where proceedings brought by Commonwealth to recover ultra vires payments mistakenly made to former Navy officer after his separation from Navy – whether s 14(1)(a) of Limitation Act 1969 (NSW) is rendered inoperative or invalid in its application to the Commonwealth’s claim by reason of ss 81 and 83 of the Constitution RESTITUTION – bars and defences to restitutionary claims – limitation periods – where Commonwealth brought proceedings to recover ultra vires payments mistakenly made to former Navy officer after separation from Navy – application of principle in Auckland Harbour Board v The King [1924] AC 318 – whether recovery of some payments statute-barred by reason of limitation period – whether Auckland Harbour Board claim is a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW) – meaning and historical development of claims in “quasi contract” – whether limitation period should be postponed pursuant to s 56 of the Limitation Act RESTITUTION – public authorities – claims by public authorities – where Commonwealth mistakenly continued to make payments to former Navy officer for six years following separation from the Navy – where mistaken payments were made ultra vires – application of principle in Auckland Harbour Board v The King [1924] AC 318 – historical development and juristic nature of claim pursuant to Auckland Harbour Board principle – whether recovery of some payments statute-barred by reason of limitation period – whether claim based on the Auckland Harbour Board is a claim in “quasi-contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW) – whether former Navy officer liable for payments made to third parties at his direction prior to separation from Navy RESTITUTION – nature of restitutionary liability – common counts – money had and received to the use of the plaintiff – where Commonwealth mistakenly continued to make payments to former Navy officer for six years following separation from the Navy – where mistaken payments were made ultra vires – application of principle in Auckland Harbour Board v The King [1924] AC 318 – historical development and juristic nature of claim pursuant to Auckland Harbour Board principle – whether recovery of some payments statute-barred by reason of limitation period – whether claim based on the Auckland Harbour Board is a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW) LIMITATION OF ACTIONS – quasi-contract and restitution – construction of “quasi contract” for the purposes of s 14(1)(a) of the Limitation Act 1969 (NSW) – where Commonwealth brought proceedings to recover ultra vires payments mistakenly made to former Navy officer after separation from Navy – application of principle in Auckland Harbour Board v The King [1924] AC 318 – whether recovery of some payments statute-barred by reason of limitation period – whether Auckland Harbour Board claim is a claim in “quasi contract” within the meaning of s 14(1)(a) of the Limitation Act 1969 (NSW) – meaning and historical development of claims in “quasi contract” – whether limitation period should be postponed pursuant to s 56 of the Limitation Act
Legislation Cited:	Judiciary Act 1903 (NSW) ss 39(2), 64, 78B, 79(1) Limitation Act 1969 (NSW) ss 14(1)(a), 55, 56, 63 Limitation Act 1623, 21 Ja 1, c 16, s 3(a) Limitation Act 1939, 2 & 3 Geo 6, c 21, s 2 Limitation of Actions Act 1958 (Vic), s 5(1)(a) Commonwealth Constitution ss 81, 83, 92 Common Law Procedure Act 1852 ss 3, 41, 49, 91, Sch B
Cases Cited:	Antill Ranger & Co Pty Ltd v Commissioner for Motor Transport (1955) 93 CLR 83; [1955] HCA 25 Arris & Arris v Stukeley (1677) 2 Mod 260; 86 ER 1060 Attorney General v Perry (1733) 2 Com 481; 92 ER 1169 Attorney-General v Gray [1977] 1 NSWLR 406 Auckland Harbour Board v The King [1924] AC 318 Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662; [1988] HCA 17 Australian Capital Television Pty Ltd v Commonwealth (1992) 177 CLR 106; [1992] HCA 45 Australian Financial Services and Leasing Pty Limited v Hills Industries Limited (2014) 253 CLR 560; [2014] HCA 14 Ballard v Multiplex [2012] NSWSC 426 Baltic Shipping Company v Dillon (1993) 176 CLR 344; [1993] HCA 4 Bonnel v Foulke (1657) 2 Sid 4 Breckenridge Speedway Ltd v Her Majesty The Queen in Right of Alberta [1970] SCR 175 Brown v West (1990) 169 CLR 195; [1990] HCA 7 Charles Terence Estates Ltd v Cornwall Council [2011] EWHC 2542 Charles Terence Estates Ltd v Cornwall Council [2012] EWCA Civ 1439 Combet v Commonwealth (2005) 224 CLR 494; [2005] HCA 61 Commonwealth of Australia v Burns [1971] VR 825 Commonwealth v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146; (2013) 282 FLR 1 Coshott v Lenin [2007] NSWCA 153 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48 Dodington’s Case (1653) Cro Eliz 545; 78 ER 791 Earl of Devonshire’s Case (1606) 11 Co Rep 89; 77 ER 1266 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32; [1942] 2 All ER 122 Holt v Markham [1923] 1 KB 504 In re Diplock [1948] 1 Ch 465 In re Rhodes; Rhodes v Rhodes (1890) 44 Ch D 94 James v The Commonwealth (1939) 62 CLR 339; [1939] HCA 9 Kleinwort Benson Ltd v Glasgow City Council [1999] 1 AC 153 Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 Maguire v Simpson (1977) 139 CLR 362; [1977] HCA 63 Martin v Sitwell (1690) 1 Show KB 156; 89 ER 509 Melbourne Corporation v Commonwealth (1947) 74 CLR 31; [1947] HCA 26 Moses v Macferlan (1760) 2 Burr 1005; 97 ER 676 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; [1987] HCA 5 Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68 Sandvik Australia Pty Ltd v Commonwealth (1989) 89 ALR 213 Sinclair v Brougham [1914] AC 398 The Environment Centre NT Inc v Minister for Resources and Water (No 2) [2021] FCA 1635; (2021) 399 ALR 68 Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104; [1994] HCA 46 Victoria v Commonwealth (1975) 134 CLR 338; [1975] HCA 52 Westdeutsche Bank Girozentrale v Islington London Borough Council [1996] AC 669 Williams v Commonwealth (2012) 248 CLR 156; [2012] HCA 23 Westdeutsche Landesbank Girozentrale v Islington Borough Council [1994] 4 All ER 890 Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70
Texts Cited:	A Burrows, The Law of Restitution (1993, Butterworths) AWB Simpson, A History of the Common Law of Contract (1975, Clarendon Press) Bullen and Leake, Precedents of Pleadings in Personal Actions in the Superior Courts of Common Law (3rd ed, 1868, Stevens and Sons) GH Newsom and L Abel-Smith, Preston & Newsom on Limitation of Actions (3rd ed, 1953, Solicitors’ Law Stationery Society) GS Robertson, The Law and Practice of Civil Proceedings by and against The Crown (1908, Stevens and Sons) IM Jackman, The Varieties of Restitution (2nd ed, 2017, Federation Press) J Allsop, “Restitution: Some Historical Remarks” (2016) 90 ALJ 561 J Edelman and E Bant, Unjust Enrichment in Australia (2nd ed, 2016, Hart Publishing) J Kirk, “Constitutional Implications (I): Nature, Legitimacy, Classification, Examples” (2000) 24(3) Melbourne University Law Review 645 J Unger, “Limitation Act 1939” (1940) 4(1) Modern Law Review 45 JB Ames, Lectures on Legal History (1913, Harvard University Press) JH Baker, “The History of Quasi-Contract in English Law” in WR Cornish et al (eds), Restitution: Past, Present and Future (1998, Hart Publishing) K Mason, “Money Claims by and against the State” in P Finn (ed), Essays on Law and Government, Volume 2: the Citizen and the State in the Courts (1996, Law Book Co) K Mason, “Money Claims by and against the State” in P Finn (ed) Essays on Law and Government, Volume 2: the Citizen and the State in the Courts (1996, Law Book Co) 101 Law Commission of England and Wales, Restitution: Mistakes of Law and Ultra Vires Public Authority Receipts and Payments (1994) M Franks, Limitation of Actions (1959, Sweet & Maxwell) M Lobban, “Restitutionary Remedies” in The Oxford History of the Laws of England – 1820–1914: Private Law (2010, Oxford University Press) N Manousaridis, “The Common Law Courts: Origins, Writs and Procedure” in JT Gleeson, JA Watson and RCA Higgins (eds), Historical Foundations of Australian Law (2013, Federation Press) P Birks, An Introduction to the Law of Restitution (1985, Oxford University Press) P Birks, Restitution: The Future (1992, Federation Press) Parliament of New South Wales, Law Reform Commission, First Report on the Limitation of Actions (October 1967) PH Winfield, The Law of Quasi-Contract (1952, Sweet & Maxwell) R Goff and G Jones, Goff & Jones’ The Law of Unjust Enrichment, ed C Mitchell, P Mitchell and S Watterson (9th ed, 2016, Sweet & Maxwell) R Goff and G Jones, The Law of Restitution (1966, Sweet & Maxwell) R Goff and G Jones, The Law of Restitution (2nd ed, 1978, Sweet & Maxwell) R Goff and G Jones, The Law of Restitution, ed G Jones (4th ed, 1993, Sweet & Maxwell) RM Jackson, The History of Quasi-Contract in English Law (1936, Cambridge University Press) Sir Owen Dixon, “The Common Law as an Ultimate Constitutional Foundation” (1957) 31 Australian Law Journal 240 SJ Stoljar, “The Transformations of Account” (1964) 80 Law Quarterly Review 203 SJ Stoljar, The Law of Quasi-Contract (1964, Law Book Company of Australasia) SJ Stoljar, The Law of Quasi-Contract (2nd ed,1989, Law Book Company) United Kingdom, Law Revision Committee, Fifth Interim Report (Statutes of Limitation) (December 1936)
Category:	Principal judgment
Parties:	Jeremy Mark Sims (Appellant) Commonwealth of Australia (Respondent)
Representation:	Counsel: S Duggan (Appellant) J Hogan-Doran SC with D Robertson (Respondent) Solicitors: Blake Lawyers (Appellant) Australian Government Solicitor (Respondent)
File Number(s):	2021/00358248
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: [2021] NSWDC 690 Date of Decision: 19 November 2021 Before: Weber SC DCJ File Number(s): 2019/00142574