Avel Pty Ltd v Multicoin Amusements Pty Ltd

Avel Pty Ltd (the appellant) appealed to the High Court of Australia against the decision of the Full Court of the Supreme Court of South Australia, which had affirmed a judgment in favour of Multicoin Amusements Pty Ltd (the respondent). The dispute concerned the interpretation of a lease agreement and the appellant's entitlement to recover certain payments made to the respondent.

The High Court was required to determine whether the appellant was entitled to recover payments made under a lease agreement for amusement machines, which had been declared illegal and void ab initio by a prior court decision. Specifically, the court had to consider the application of the principle of *ex turpi causa non oritur actio* (no action arises from a dishonourable cause) and whether the appellant's claim for restitution was barred by this principle, given its involvement in the illegal transaction.

The High Court held that the principle of *ex turpi causa* did not preclude the appellant from recovering the payments. The majority reasoned that the appellant's claim was not founded on the illegality of the lease but rather on the respondent's unjust enrichment. They distinguished the present case from situations where a party seeks to enforce an illegal contract or recover damages for breach of an illegal contract. The court applied principles of restitution and unjust enrichment, focusing on whether the respondent had received a benefit at the appellant's expense which it would be unconscionable to retain. The court found that the appellant's participation in the illegal transaction did not prevent it from seeking to recover money paid under a mistake of law or under circumstances where the respondent had been unjustly enriched.

The appeal was allowed, and the judgment of the Full Court of the Supreme Court of South Australia was set aside. The High Court ordered that the appellant was entitled to recover the payments made to the respondent.