Kozik & Ors v Redland City Council

This significant decision arose as part of a representative proceeding brought by certain ratepayers to recover special charges levied by the Redland City Council under invalid resolutions. The Supreme Court held that the Council was required by the relevant legislation to refund the invalidly imposed special charges. The ratepayers had a cause of action for debt against the Council, but not for monies had and received. A defence of unjust enrichment was not available to the Council to resist refunding the special charges to ratepayers who had benefited from services funded by the special charges.

Bradley J

13 September 2021

Facts

The plaintiffs (“ratepayers”) brought a representative action against the Redland City Council (“Council”) seeking to recover amounts paid as rates to the Council. [1].

The Council passed resolutions to levy special charges on land adjacent to reserves on certain canals, lakes and marinas. [2]−[4]. However, the resolutions did not comply with mandatory provisions in the relevant regulations. [5]. The Council, therefore, refunded each ratepayer an amount calculated by reference to the percentage of the amount the Council had not already spent on services for the reserves. It did not refund the proportion of the amount that had already been spent. [6]−[8].

The ratepayers sought to recover the amount of the special charges that the Council refused to refund because it had already been spent. [7].

The group members sought answers to common questions arising in the proceedings. [10].

Decision

The Supreme Court (Bradley J) answered the common questions largely in favour of the ratepayers.

His Honour held that, even though the ratepayers had benefited from the services funded by the special charges, the effect of ss 29 to 32 of the Local Government (Finance, Plans and Reporting) Regulation 2010 and ss 94(14) and 98 of the Local Government Regulation 2012 (as enacted and as amended) was that the Council was required to refund the special charges that were invalidly imposed. [51], [60], [73].

Further, Bradley J held that the Council was liable to each of the ratepayers under a cause of action for debt. [82]−[83]. The ratepayers did not have a cause of action for money had and received, because such claims were based on an incorrect premise that the ratepayers had paid the special charges under a mistake. [107], [112].

The Court found it unnecessary to consider whether the principle that a revenue authority must repay a tax or levy imposed beyond power from the House of Lords decision in Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 applied. [111].

The Council could not avoid or diminish its statutory obligation to refund the special charges by a defence that the ratepayers would be unjustly enriched by the refund. [99], [111].

S Spottiswood of Counsel