An important decision was handed down today by the High Court:

Australian Financial Services and Leasing Pty Limited v Hills Industries Limited [2014] HCA 14

The decision can be read here: http://www.austlii.edu.au/au/cases/cth/HCA/2014/14.html
Or the Court's summary here: http://www.hcourt.gov.au/assets/publications/judgment-summaries/2014/hca-14-2014-05-07.pdf

The primary question was whether the respondents were entitled to rely on a defence of change of position in response to a claim for restitution of monies paid to them by a mistake induced by the fraud of another.

The Court held that change of position was a complete defence in the instant case.

The plurality judgment (Hayne, Crennan, Kiefel, Bell and Keane JJ) stated that the defence is established when two conditions are established: (1) the defendant has acted or refrained from acting in good faith on the receipt of the payment; (2) by reason of having so acted or refrained from acting, the defendant would be placed in a worse position if ordered to make restitution than if the defendant had not received the payment at all. They went on to say that "detriment" need not, in every case, be financial or pecuniary. And if financial or pecuniary, it need not be established with precision. It may also include an opportunity forgone. See paragraphs 157 and 158.

The plurality also referred to the question of assimilating change of position and estoppel (as the NSW Court of Appeal had done too). They only went as far as to say that the question did not need to be determined on the appeal but that it should be recognised that " the coherence of the law is enhanced if commonality of concept results, so far as possible, in commonality of principle".

Finally, there is commentary about the role of "unjust enrichment" in relation to the Australian law of restitution. See, for example, this statement: "The principle of disenrichment, like that of unjust enrichment, is inconsistent with the law of restitution as it has developed in Australia."

Of course, the meaning of the expression "principle of unjust enrichment" has to be read in the context of the broader judgment, and what was said in earlier cases such as Pavey, Westpace and David Securities. See the discussion at [135], etc.

Michael


Michael Rush | Barrister
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