The plaintiffs were ratepayers who sued the Council to get refunds for invalid rates and charges levied over 6 years. The Council refunded some but not all of the amounts, arguing it had spent some of the money on works benefitting the plaintiffs’ land. The charges were levied under resolutions that did not comply with regulations requiring an overall plan with cost and time estimates. The resolutions were invalid.
The plaintiffs claimed refunds under the regulations or restitution for money paid by mistake. The Council argued the regulations did not require full refunds where the money benefited the plaintiffs.
The majority judges held the regulations did not apply as there were no valid charges levied in the first place, but the plaintiffs were entitled to claim in restitution for payments made under a mistaken belief they were obliged to pay. The fact the plaintiffs benefited from the Council’s expenditure of the funds was not a defence. The payments were made under a mistake of law, giving rise to a prima facie right to restitution unless it would be unjust. The Council had not established it would be unjust for it to repay the amounts. Therefore, subject to the Council’s defence, the plaintiffs’ restitution claims succeeded.
Summary
The plaintiffs were entitled to claim refunds as payments made under a mistaken belief in a legal obligation to pay, even though they benefited from the Council’s invalid expenditure of the funds. The regulations did not apply because there were no valid levies.