Lionel, yes, I should have been clearer in the original post. Centrelink is an Australian Federal government agency which primarily deals with payment of social security (unemployment benefits, disability pensions etc). And "but for" the mistaken payment, Ms Kebakoska would have been entitled to government unemployment benefits from Centrelink such as to pay her daily expenses. Instead, she had to use her redundancy payment to pay for daily expenses during the period in which she was unemployed.

Perhaps a claim could have been made out in negligence against Centrelink. However, I suspect that Centrelink may not have had enough information to be held liable for failing to pick up the mistake in the redundancy payment. It would have had to known of the precise Federal Award under which the employer had paid the redundancy payment, the terms of the Federal Award, and the circumstances which rendered Ms K ineligible for the payment. I am not sure, but I think the information that it would have received would simply be that she did receive a redundancy payment and what its amount was. If anyone else knows more of these matters than I, any correction gratefully accepted.

I should note, too, that the writings of our RDG colleagues, James Edelman and Elise Bant, get a large guernsey in the discussion on the position of estoppel with regard to the change of position defence, and the judge essentially adopts their position.

Kind regards, Katy
________________________________________
From: Lionel Smith, Prof. [lionel.smith@mcgill.ca]
Sent: Monday, October 10, 2011 4:41 AM
To: Katy Eloise Barnett; RDG
Subject: Re: [RDG] Victorian case on restitution and change of position defence

An interesting case. Should the plaintiff have a claim against Centrelink? I assume it is some kind of government agency that would, but for the mistaken payment, have been obliged to hand some money over to Ms K?
Lionel


From: Katy Eloise Barnett <k.barnett@UNIMELB.EDU.AU<mailto:k.barnett@UNIMELB.EDU.AU>>
Reply-To: Katy Eloise Barnett <k.barnett@UNIMELB.EDU.AU<mailto:k.barnett@UNIMELB.EDU.AU>>
Date: Sat, 8 Oct 2011 01:59:52 +0000
To: RDG <ENRICHMENT@LISTS.MCGILL.CA<mailto:ENRICHMENT@LISTS.MCGILL.CA>>
Subject: [RDG] Victorian case on restitution and change of position defence

Osborn J of the Victorian Supreme Court recently made a decision concerning the change of position defence in TRA Global Pty Ltd v Kebakoska [2011] VSC 480 (http://www.austlii.edu.au/au/cases/vic/VSC/2011/480.html)

The case arose when Ms Kebakoska was made redundant by her employer, TRA Global. The company advised her that she was entitled to a redundancy payment equivalent to 12 weeks’ pay under the Federal Award, and paid her $27,318.48. However, it later became evident that she was not entitled to that money (meaning that it was paid by mistake).

Ms Kebakoska tried to argue that it was a voluntary submission of an honest claim pursuant to David Securities, but she failed in that regard because there was no evidence that there was a conscious choice on the part of the company to pay the money regardless of what might be a mistake of law.

However, she succeeded in her claim for good faith change of position. Essentially, Ms Kebakoska had attempted to get unemployment benefits when she did not get a new job soon after being redundant, but Centrelink advised her that she was not entitled to unemployment benefits because she had the 12 week redundancy payment. She then spent the redundancy payments on living expenses. At [31] - [32], Osborn J said:

"In my view, the evidence clearly established a change of position on the part of the employee. That change was relevantly comprised of three interrelated elements:

(a) the disclosure of the redundancy payments to Centrelink;

(b) the consequential denial of unemployment benefits to the employee; and

(c) the expenditure of redundancy payments on living expenses in these circumstances.


The appellant submits that this is a case where no relevant change of position occurred because the money received was spent on living expenses. In my view, this is not a case where the employee ‘simply spent the money received on ordinary living expenses.’ The employee disclosed receipt of the redundancy payment when she applied for unemployment benefits and suffered a refusal of her application as a result. The employee changed her position as a result of the mistaken redundancy payment and thereby suffered a direct financial loss. Each of grounds 1 to 3 contained in the notice of appeal fails on the facts..."


Osborn J also considered whether estoppel had been displaced in this area by COP. The judge found that potentially, estoppel still persisted as a separate defence to a claim in unjust enrichment. Thus the magistrate at first instance had been entitled to find in the alternative that the employer was estopped from recovering the mistaken payment because Ms Kebakoska had relied to her detriment on the representation that she was entitled to the money.

Kind regards,

Katy Barnett
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This message was delivered through the Restitution Discussion Group,
an international internet LISTSERV devoted to all aspects of the law
of unjust enrichment. To subscribe, send "subscribe enrichment" in
the body of a message to <listserv@lists.mcgill.ca>. To unsubscribe,
send "signoff enrichment" to the same address. To make a posting to
all group members, send to <enrichment@lists.mcgill.ca>. The list is
run by Lionel Smith of McGill University, <lionel.smith@mcgill.ca>.