Sims v Commonwealth of Australia

The Commonwealth of Australia sought to recover payments mistakenly made to a former Navy officer after his separation from the Navy. The proceedings were brought in the Supreme Court of New South Wales.

The central legal issues before the Court of Appeal were whether sections 81 and 83 of the Australian Constitution provided an implied basis for the recovery of ultra vires payments by the Commonwealth, and whether section 14(1)(a) of the *Limitation Act 1969* (NSW) was rendered inoperative or invalid in its application to the Commonwealth's claim by reason of those constitutional provisions. Relatedly, the court considered whether the Commonwealth's claim, based on the principle established in *Auckland Harbour Board v The King* [1924] AC 318, constituted a claim in "quasi-contract" for the purposes of the *Limitation Act*, and whether the limitation period should be postponed under section 56 of that Act.

The Court of Appeal allowed the appeal, finding that the claim brought by the Commonwealth was indeed a claim in "quasi-contract" within the meaning of section 14(1)(a) of the *Limitation Act 1969* (NSW). The court reasoned that the historical development and juristic nature of claims based on the *Auckland Harbour Board* principle aligned with the concept of quasi-contract, which encompasses obligations imposed by law to prevent unjust enrichment. Consequently, the limitation period applied to the recovery of the mistaken payments. The court directed the parties to formulate orders in accordance with its reasons and make submissions regarding costs.