Case: David Securities Pty Limited v Commonwealth Bank of Australia [1992] HCA 48 ; (1992) 175 CLR 353
Outcome: discussed
Even if there were a mistake, if Keddies had adversely changed their position in reliance on the payment and honestly believed that they were entitled to receive and retain the moneys, they submit they have a defence to the claim ( David Securities Pty Limited v Commonwealth Bank of Australia [1992] HCA 48 ; (1992) 175 CLR 353). In the present case, it is not suggested that Keddies had other than an honest belief in their entitlement to payment. Keddies submit that, following David Securities , restitution at the hands of Mrs McGuiness, or her trustee, is unavailable. 34 Keddies rely on the payment made pursuant to the authority as follows: (1) They have changed their position between the verdict in the District Court and the allowance of the appeal. (2) That change in position was in reliance on the authority. (3) They acted in reliance on the authority and acted to their detriment in satisfying third party expenses without a right of recovery. They also acted in reliance on the authority in disbursing their own profit costs. (4) It would be inequitable in all the circumstances to require restitution. Those circumstances include the absence of any demand or assertion of obligation to repay by Mrs McGuiness or the estate prior to the demand by the trustee and the absence of any allegation of want of good faith on the part of Keddies. 35 In David Securities the High Court said that the fact that a payment has been caused by a mistake is sufficient to give rise to a prima facie obligation on the part of the recipient to make restitution (at 379). The recipient has a defence if he or she can show that an order for restitution is unjust. One example is a change of position by acting to the recipient's detriment on the faith of the receipt of the moneys (at 385). 39 It is conceded that Mrs McGuiness had a legal obligation to pay and Keddies a right to receive the moneys after the District Court verdict and before the appeal was filed. There is no direct evidence of her belief at the relevant time and the onus is on her trustee to establish the nature of her intent if he wishes to claim restitution. The mere fact that Keddies required payment to be made does not, of itself, warrant the drawing of the required inference ( David Securities at 368). Accordingly, category (1) does not apply. In light of the acknowledgment by Mrs McGuiness that an appeal was possible and that she might be ordered to repay the monies, absent further evidence, category (2) or (3) applies. For the reasons discussed in David Securities and as discussed by Mason and Carter at [415], the payment was voluntary and Mr Woodgate can not recover the moneys on behalf of the estate. 40 As I have noted, clause 5 of the costs agreement drew a distinction between certain types of disbursements. The effect of the clause was to provide that: &#8226; Mrs McGuiness was obliged in any event to pay expenses listed in clause 3(b). Those expenses were set out in clause 3(i) and (ii), the letter "(b)" having been omitted due to an apparent typographical error, and were medical report fees and court filing fees. &#8226; apart from the expenses in 3(b), ' all other charges and expenses which are payable only on the successful outcome of the Work will be given to you after completion of the Work '. 41 Mr Woodgate submits that despite clause 5, Keddies are liable to reimburse moneys paid out for clause 3(i) and 3(ii). It is fair to say, however, that this is not the mainstay of his submissions. 47 Even if that money was paid by Mrs McGuiness under a misapprehension as to her obligation to pay at that time or under the mistaken belief that the moneys would be returned if an appeal were successful and even though the verdict was set aside, Keddies are not obliged to refund the moneys to Mrs McGuiness' estate. They paid out the moneys in accordance with their client's direction and, accordingly, changed their position ( David Securities at 385). 48 Medical report and court filing fees were not subject to any contingency. Mrs McGuiness was liable to pay those costs in any event. 49 Mr Woodgate has not established any legal basis for the estate's entitlement to repayment. The application should be dismissed with costs. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. Associate: Dated: 13 December 2006 Counsel for the Applicant: M R Aldridge SC Solicitor for the Applicant: Crown Solicitor Counsel for the Respondent: P R Garling SC and J T Johnson Solicitor for the Respondent: Eakin McCaffery Cox Date of Hearing: 14 September 2006 Date of Judgment: 13 December 2006 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2006/1728.html