E v Bob Pty Limited v Oakgrid Pty Limited

[2000] NSWSC 85

CITATION:	E V Bob Pty Limited v Oakgrid Pty Limited [2000] NSWSC 85
CURRENT JURISDICTION:	Supreme Court
FILE NUMBER(S):	SC 11626/99
HEARING DATE(S):	18/02/00
JUDGMENT DATE:	18 February 2000
PARTIES :	E V Bob Pty Limited v Oakgrid Pty Limited
JUDGMENT OF:	Brownie AJ at 1

LOWER COURT JURISDICTION :	Local Court
LOWER COURT FILE NUMBER(S) :
LOWER COURT JUDICIAL OFFICER :

COUNSEL :	Mr D Baran (for plaintiff) Mr M Christie (for defendant)
SOLICITORS:	M G Doselk (for plaintiff) Heidtman & C (for defendant)
CATCHWORDS:	Restitution - money paid in anticipation of a contract that was never concluded
DECISION:	Summons dismissed with costs

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

BROWNIE AJ
Friday 18 February 2000

11626/99: E V BOB PTY LIMITED v OAKGRID PTY LIMITED

JUDGMENT

1    HIS HONOUR: The present plaintiff was the defendant in an action in the local court. In the local court the present defendant sued the present plaintiff to recover the sum of $30,000.

2    The appeal, which predates the present legislation, was by way of stated case. According to the case, the facts were as follows:

"(i) The defendant made and marketed clothing.

(ii) It was the policy of the defendant to supply clothing to its own shops or franchises.

(iii) There was a written agreement not executed by the parties whereby there was to be a licence for a period of five years. That agreement contemplated payment of a licence fee of $30,000 by the plaintiff.

(iv) The plaintiff paid $30,000 to the defendant."

3    There were then findings as to various communications between the parties leading to the termination of the proposed licence agreement.

4    The learned magistrate then recorded the following additional findings of fact:

"Until such time as the written agreement was signed, the parties were indeed acting on the basis they anticipated an agreement would be signed. Whatever other agreement there may have been between the parties, such other agreement was not the subject of a payment of $30,000. If there was some agreement other than the proposed one, then it would be terminable at will, which is what the defendant claimed.

During the time that the plaintiff sold the defendant's goods the defendant made a profit, and having regard to the level of turnover, the licence fee payment would not have formed a large part of the payments due from the plaintiff to the defendant.

The plaintiff paid $30,000 in anticipation of a contract that never eventuated."

5    In section 3 of the case the learned magistrate set out the grounds for his determination. That part of the case is not expressed in the language of the modern case law of restitution, but in summary, his Worship posed the question "What was the $30,000 payment for?" He summarised the submissions of the parties below and then made the following findings:

"I concluded that the $30,000 was understood to be referable to the proposed written agreement.

I f there was another agreement already in existence between the parties, it would have been terminable at will, which was the very thing represented by the plaintiff. I concluded that such agreement would not have been the agreement in respect of which the $30,000 was paid because it was always intended only to be a temporary arrangement which would be overtaken by a full written agreement between the parties for a term of years.

I held that the sum of $30,000 was paid by the plaintiff to the defendant in anticipation of a particular contract which never eventuated, and that consequently the plaintiff is entitled to the $30,000 as a debt."

6    The first point now taken is that no claim in restitution was made. Technically speaking that is not a point that arises on the stated case, but I was told from the Bar table that the claim pleaded was one for money had and received. That seems to me to be no more than the old way of expressing what today is called a claim in restitution, or one of the claims that might be made under the general rubric of restitution.

7    As I read section 3 of the stated case, the magistrate's chain of logic may be summarised by saying that the plaintiff below paid $30,000 to the defendant below in anticipation that the parties would enter into a five year licence agreement. After some shorter period, perhaps two years or less, the parties terminated the proposal to enter into the licence agreement.

8    Putting the matter into the language of restitutionary law, the learned magistrate found the defendant below had been enriched at the expense of the plaintiff and that that enrichment was unjust.

9    It seems to me that the only real point that the appellant or present plaintiff has is an argument that the enrichment was not unjust, or that it was not unjust to the extent of $30,000. If the magistrate had made appropriate findings of fact, and if the magistrate had found that enrichment was unjust to some lesser extent, that is to say unjust as to a certain number of dollars being a number less than 30,000, then I am inclined to think that such a finding would have been unassailable on appeal. But his Worship made no such finding. To the contrary, he proceeded on the assumption that $30,000 was paid in anticipation that the parties would enter into one contract, which for brevity might be called the licence agreement or the proposed licence agreement, and that whilst that was going on the parties had other transactions the subject of no express finding. Perhaps there were other contracts, for example for the sale and delivery of individual items; perhaps there was anplied contract; perhaps there was some other course of dealing, it really does not matter.

10    It seems to may that on the finding of fact no error of law is shown to arise. The magistrate found that the sum of $30,000 was paid in anticipation of a contract which did not come into being and that the retention of the $30,000 was unjust in those circumstances.

11    In the course of argument I raised the question what would happen if the parties had terminated their negotiations a week after the $30,000 was paid. Mr Baran said in substance there was no rule of law orquity that covered the situation. I think that is correct. If and when such a question arises perhaps the appropriate legal methodology to solve the problem is to inquire to what extent the retention of $30,000 is unjust. Is it just that the payee retain some fragment of the whole? However, that question does not arise o the stated case.

12    I make an order granting leave to the plaintiff to proceed to prosecute this appeal nunc pro tunc.

13    I dismiss the summons with costs.

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Last Modified: 09/25/2000