Alexiadis v Zirpiadis

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SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

ALEXIADIS v ZIRPIADIS

[2013] SASCFC 64

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Gray and The Honourable Justice White)

28 June 2013

ADMINISTRATIVE LAW - JUDICIAL REVIEW - GROUNDS OF REVIEW - PROCEDURAL FAIRNESS - HEARING

EQUITY - GENERAL PRINCIPLES - UNJUST ENRICHMENT - GENERAL PRINCIPLES

The respondent advanced a total of $105,251.99 to the appellant - the appellant has repaid only $15,000 - a District Court Judge held, despite the absence of any such pleading, that the respondent was entitled to restitution on the basis of a claim for money had and received - the appellant appeals against that judgment.

Held (per Kourakis CJ, allowing the appeal):  The restitutionary claim was not available as a matter of law – appeal allowed - judgment set aside - respondent's claim dismissed.

Held (per Gray J, allowing the appeal):  Appeal allowed – respondent's claim dismissed – inference drawn that there was an illegal purpose to the transactions and that both parties were knowingly involved in that illegality – evidence inadequate to reach any conclusion regarding the true nature of the underlying transaction – no particularity to support claim of unjust enrichment – evidence inadequate to allow any conclusion to be reached as to qualifying or vitiating factors.

Held (by White J) (dismissing the appeal): (1) The Judge did not deny the appellant procedural fairness by finding that the respondent was entitled to a restitutionary remedy. The respondent had sufficient notice at the trial that the claim may be determined on that basis.

(2) Although the Judge could not make a positive finding as to the purpose for which the monies were advanced, he did make some negative findings, which enabled some conclusions about purpose to be reached. He also found that the monies had been advanced in circumstances giving rise to an obligation to repay, and that repayment had not occurred. In these circumstances, it was open to the Judge to make a finding of unjust enrichment as the basis of the order of restitution.

(3) It is inappropriate in the present circumstances for this Court to conclude that the Judge erred by failing to find that the plaintiff advanced the monies for an illegal purpose or that he had knowledge that the defendant may use the monies for an illegal purpose, thereby precluding a restitutionary remedy.

Summary Offences Act 1953 (SA) s 41; Criminal Assets Confiscation Act 1993 (SA) s 91; Companies Act 1882 (Eng) s 131; Keith Mason, John W Carter & Gregory J Tolhurst Restitution Law in Australia Lexis Nexis Butterworth, 2008; Carter J Contract Law in Australia LexisNexis (6th Edition) 2012, referred to.
Coshott v Sakic (1998) 44 NSWLR 667; Gray v Gray (2004) 12 BPR 22; Fox v Percy (2003) 214 CLR 188, applied.
Hire Purchase Furnishings Co v Richens (1887) 20 QBD 387; Heydon v Perpetual Executors Trustees and Agency Co (WA) Ltd (1931) 45 CLR 111; Aubert…

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Details
Case
[2013] SASCFC 64
Decision Date

CaseChat Overview and Summary

This case concerned an appeal to the Full Court of the Supreme Court of South Australia by Nick Alexiadis against a judgment entered in favour of Carolos Zirpiadis in the District Court. Mr Zirpiadis had claimed $90,251.99 from Mr Alexiadis, alleging it was a debt due, advanced under a partnership agreement, or as a result of default in repayment. Mr Alexiadis admitted receiving advances totalling $105,251.99 but asserted full repayment and denied the nature of the transaction as a loan or partnership. Crucially, Mr Zirpiadis did not plead a claim for money had and received, yet the District Court Judge found in his favour on this basis.

The legal issues before the Full Court included whether the restitutionary claim for money had and received was available to Mr Zirpiadis as a matter of law, given it was not pleaded. The court also considered whether, in the absence of a successful restitutionary claim, judgment could be entered for Mr Zirpiadis on an alternative basis, such as contract or trust, or whether the evidence supported a claim for unjust enrichment. Furthermore, the court had to determine the nature of the underlying transactions between the parties and whether any illegality affected the enforceability of any purported agreement.

The Full Court, allowing the appeal, held that the restitutionary claim was not available as a matter of law because it had not been pleaded. Kourakis CJ concluded that the restitutionary claim was not proved. Gray J inferred that the transactions likely had an illegal purpose, with both parties knowingly involved, rendering any agreement unenforceable. Gray J also found the evidence inadequate to support a claim for unjust enrichment or to determine the true nature of the underlying transactions, noting the lack of particularity in the claims made.

Consequently, the appeal was allowed, and the judgment in favour of Mr Zirpiadis was set aside. Mr Zirpiadis's claim was dismissed.

Orders

Orders of the court

Held (per Kourakis CJ, allowing the appeal): The restitutionary claim was not available as a matter of law – appeal allowed - judgment set aside - respondent's claim dismissed.

Held (per Gray J, allowing the appeal): Appeal allowed – respondent's claim dismissed – inference drawn that there was an illegal purpose to the transactions and that both parties were knowingly involved in that illegality – evidence inadequate to reach any conclusion regarding the true nature of the underlying transaction – no particularity to support claim of unjust enrichment – evidence inadequate to allow any conclusion to be reached as to qualifying or vitiating factors.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

If it is accepted that the Judge’s reliance on a restitutionary cause of action was misplaced, the question arises whether there could be judgment for the plaintiff on a contract that the money was advanced for purposes to be agreed but repayable on reasonable notice when the terms of the contract are otherwise unknown. There are several insurmountable objections to that course. First, the Judge was unable to make a finding differentiating between contract or trust, and I am not prepared to do so. Secondly, for the reasons given earlier, I am not persuaded on the balance of probabilities that there was a contract or trust. The only contract between the parties which I would be prepared to find is a joint enterprise to commit a crime or crimes, which the parties would not have intended to be legally enforceable. Thirdly, as White J has observed, that was not the way Zirpiadis put his case. That is not surprising. A claim based on an agreement to lend money for unspecified purposes immediately raises for enquiry what the contemplated purposes were. That enquiry returns us to the second difficulty because a claim so made, given my view of the evidence, is one in which Zirpiadis would prove the illegality by proving his claim. Conclusion Zirpiadis failed to satisfy the persuasive onus on his pleaded case, or on the alternative case he presented through his testimony. I would hold that the restitutionary claim on which judgment was given in favour of Zirpiadis was not proved. It follows that any claim in contract, trust or by way of restitution, must fail. I would allow the appeal and set aside the judgment below. I would order instead that Zirpiadis’ claim be dismissed. This is an appeal against a judgment entered in favour of a plaintiff for money had and received.Introduction The plaintiff and respondent, Carolos Zirpiadis, claimed by his statement of claim the sum of $90,251.99 as debts due and owing by the defendant and appellant, Nick Alexiadis. In the alternative, Mr Zirpiadis claimed that this sum was advanced pursuant to a partnership agreement between the parties. In the further alternative, Mr Zirpiadis claimed that he had suffered loss and damage as a result of Mr Alexiadis’ default in repayment.No claim was made for money had and received. By his defence, Mr Alexiadis admitted that he had received advances totalling $90,251.99,[41] but asserted that full repayment had been made. Mr Alexiadis denied that the monies had been a loan and denied the alternative claims advanced by Mr Zirpiadis. Mr Alexiadis claimed that the monies had been advanced to him at the request of Mr Zirpiadis to be held until repaid.[41] The advances which were admitted totalled $105,251.99. The sum of $90,251.99 was claimed by Mr Zirpiadis because an amount had been repaid. Mr Zirpiadis was represented until the commencement of the trial. However, he appeared unrepresented throughout the trial and on this appeal. Mr Alexiadis was represented by counsel throughout.

Ratio Decidendi

Legal Principle Established

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