Case: McKay v National Australia Bank Ltd [1998] 4 VR 677
Outcome: discussed
The second case the applicant relies upon in relation to compulsion is McKay v National Australia Bank Ltd [1998] 4 VR 677. The appellant in that case claimed he had made an "involuntary payment ... under unlawful compulsion within the principles enunciated in Mason v New South Wales ". Mason v New South Wales [1959] HCA 5 ; (1959) 102 CLR 108 is a case involving a claim for money had and received on the basis of compulsion. 66 In McKay , Winneke P stated as follows (at 686): "I venture to suggest that the legal doctrine of involuntary payments made under compulsion or coercion has no application to the facts of this case. That doctrine, in my view, is limited to circumstances where a party has been wrongfully compelled to make a payment demanded of him by an authority which, ex necessitate, he cannot resist. Compulsion leading to involuntary payment within the meaning of this doctrine, as I understand it, can only occur where the demand for payment is made under threat of immediate and empowered distress or seizure of the party's property or person so that the party is coerced into making the payment as a matter of necessity." (emphasis added) 67 The applicant submits Mr Allen's threats to evict come within the test for compulsion articulated by Winneke P. 68 The applicant also drew attention to the statement of Tadgell JA in McKay (at 689): "To act in response to pressure exerted by another will not be to act involuntarily and so to act under duress unless the pressure is fairly to be regarded by the law as unacceptable. A means of pressure or influence that the law will regard as unacceptable are various and indefinite and the categories are not closed." 69 During oral submissions, I raised the issue of whether compulsion can be found to have occurred where there was nothing to stop an applicant seeking injunctive relief. The applicant submits that the availability of injunctive relief to the party the subject of compulsion is irrelevant. It contends that this has to be so, as whenever a party has time to make a payment it also has time to seek an ex parte injunction. Any party the subject of a wrongful threat could always seek an injunction rather than pay the money over, and, accordingly, an action for money had a received by way of compulsion, at least in respect of threats to property, could never be made out. 83 In support of this submission, the first respondent relies upon the observation in McKay that the threat to issue legal proceedings or to pursue another legal remedy could "seldom be a wrong in itself". The Court in McKay said (at 690) that the "proper use of legal process does not constitute duress" and that "the threat to institute a civil action in good faith cannot constitute duress". It held, by analogy, that a "bona fide threat by a secured creditor to exercise rights conferred by the security can scarcely be relevantly different from a bona fide threat to sue". The first respondent contends that a bona fide threat by a landlord must fall into the same category. 84 Before turning to my specific findings, I wish to make some brief comments about the current position in Australia law with respect to restitutionary claims and "unjust enrichment". 85 Historically, what were described as the "common", "indebitatus" or "money" counts were generally seen as an appendage to the law of contract. The common counts included the action for money had and received, and other actions, such as for quantum meruit. The common counts were traditionally regarded as being based upon an implied contract theory. That is, they were based upon the implication of a contract which required the defendant to repay the plaintiff. Accordingly, the claims were described as "quasi-contractual". See Goff and Jones, The Law of Restitution (6 th ed, 2002) at [1-002]-[1-004] ("Goff and Jones") and K Mason and JW Carter, Restitution Law in Australia (1995) ("Mason and Carter") at [101]-[109]. Goff and Jones describe quasi-contract as "the most ancient and significant part of restitution" (at [1-001]). 89 The recognition of a "unifying legal concept" does not, however, render the traditional categories of restitutionary claims, such as the action for money had and received, null and void. On the contrary, in recent years the High Court, and superior State courts, have chosen to frame claims in restitution within the bounds of these established categories. See Roxborough v Rothmans of Pall Mall Australia Limited [2001] HCA 68 ; (2001) 208 CLR 516, Baltic Shipping Company v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, David Securities , Pavey &amp; Matthews , Ovidio , McKay (referring to Mason v New South Wales ), and Vickery v JJP Custodians Pty Ltd (2002) 11 BPR 20,333.