Equuscorp Pty Ltd (Formerly Equus Financial Services Ltd) v Haxton

[2010] HCATrans 231

[2010] HCATrans 231

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne  No M13 of 2010

B e t w e e n -

EQUUSCORP PTY LTD (FORMERLY EQUUS FINANCIAL SERVICES LTD) (ACN 006 012 344)

Applicant

and

IAN ALEXANDER HAXTON

Respondent

Office of the Registry
  Melbourne  No M14 of 2010
  No M15 of 2010

B e t w e e n -

EQUUSCORP PTY LTD (FORMERLY EQUUS FINANCIAL SERVICES LTD) (ACN 006 012 344)

Applicant

and

ROBERT SAMUEL BASSAT

Respondent

Office of the Registry
  Melbourne  No M16 of 2010
  No M17 of 2010
  No M18 of 2010

B e t w e e n -

EQUUSCORP PTY LTD (FORMERLY EQUUS FINANCIAL SERVICES LTD) (ACN 006 012 344)

Applicant

and

CUNNINGHAM’S WAREHOUSE SALES PTY LTD

Respondent

Applications for special leave to appeal

FRENCH CJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

FROM MELBOURNE BY VIDEO LINK TO SYDNEY

ON FRIDAY, 3 SEPTEMBER 2010, AT 2.50 PM

Copyright in the High Court of Australia

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MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR R.M. PETERS, for the applicants in each of those cases.  (instructed by Lander & Rogers Lawyers)

MR M.R. PEARCE, SC:   If the Court pleases, I appear with my learned friend, MR M.J. CAMPBELL, for the respondent in each matter.  (instructed by Shand Taylor Lawyers)

FRENCH CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, these are a set of cases where, in our submission, on proper analysis, their fate in the Court of Appeal all turned on what was seen as an absence of a supposed prerequisite, doctrinally, for the claims described as being in restitution, the claims for money had and received.  That supposed doctrinal prerequisite is the total – I stress the word “total” – failure of consideration requirement to which I will come in one moment.  But at the heart of the holding against my client, at the heart of the finding of total failure of consideration, was a matter where, in our submission, on the interests of justice in the particular case, there was a signal error of a kind easy to see which needs to be corrected. 

May I take your Honours in the application book to page 130.  At paragraph 38 in the reasons of Justice Dodds‑Streeton one there finds at line 10 on the page, “Rural did not enforce its securities over the investors’ interests.”  That was correct.  It was based upon a concession which can be seen – I probably do not need to take your Honours to it – in the pleadings which are conveniently found in the respondent’s supplementary material in this case at pages 11 and 17, the paragraphs being respectively 56 and 44 of the pleadings, as to the manner by which there was an enforcement of securities.  It suffices to say that given paragraph 38 of the holding, in light of the matter made apparent by the pleadings, there had been no enforcement by my client of the securities against the interests of the investors. 

However, when one turns to page 173 of the application book, one finds, not the only place, but one finds in paragraph 186 an erroneous contradiction or departure from the correct observation at paragraph 38.  There, there is a reference to unenforceable securities.  That is a reference to the securities that came as part and parcel for the investors’ deal.  They were never enforced.  It is pursued as a most important matter; see for example paragraph 188.  There one sees that in the context, critically, of the important matter of failure, total or otherwise, of consideration, the reasoning of their Honours is that, first, “Rural in fact received substantial repayments” – I will deal with that separately – but, second, “dealt with the securities.”  It simply did not. 

In our submission, that pulls away a most material, probably critical, part of the reasoning for the holding against us in relation to the restitutionary cause of action.  It is one which, in our submission, justifies a grant of special leave in relation to the particular case.  However, in any event, the case clearly throws up the consideration by this Court of a matter which in the Court of Appeal was appropriately regarded as being on the outer boundaries of where the case law permitted one to be confident.  Can I take your Honours in particular to the passages found on pages 170 and 171 of the application book. 

There, having seen some of the many references to David Securities and Roxborough in this Court, at paragraph 177 there is a statement, perhaps it might be thought a form of understatement, of the state of the case law including, with respect, in this Court, namely, a lack of establishment of “the precise ambit and prerequisites of total failure of consideration”.  Now, we insert, of course, another and important matter apt to make this an appropriate case for this Court to consider in a concrete case matters of very important doctrine that there is an antecedent question ‑ ‑ ‑

CRENNAN J:   May I just interrupt you for a moment, Mr Walker, and ask you about this.  As I understand the respondent’s position in relation to your total failure of consideration argument, it is said against you that that case was not made at trial and for that reason there is a want of evidence which would resolve critical issues in the context of a total failure of consideration allegation.  I am just concerned about that in terms of this being a suitable vehicle, even if you were to persuade us otherwise in relation to your application.

MR WALKER:   Your Honour, what is clear from trial is that there was a claim in restitution for money had and received notwithstanding that there had been partial repayment.

CRENNAN J:   Yes.

MR WALKER:   Now, that is enough, indeed, that makes it a paradigm case to test what it means – and I stress, if anything – if anything, to add the epithet “total” to the phrase “failure of consideration” which itself, of course, has a deal of uncertainty in relation to its, I might call it, legal linguistic history.  We are not talking, for example, simply about an Ansonian requirement of the late 19th century for contract.  Now, it is for those reasons, in our submission, that there is nothing in the supposed points that there is some omission of matters to be raised or proved to give substance, content in a concrete fashion to an argument about total failure of consideration. 

It is one of the reasons why it is of great significance to note the way in which, in the Court of Appeal, the failure of those claims on our part derive in relation to the failure of consideration argument from those two matters of having received substantial repayments and having dealt with the securities.  I have dealt, so to speak, with the second of those points by pointing out it is simply factually wrong.  That leaves, as Justice Crennan has raised for me to consider, the matter of substantial repayments and whether there is something missing which would render concrete of significance, both to the parties and to the law, of consideration of this doubtful area, and very important area, of total failure of consideration.

FRENCH CJ:   Can I just ask you for a moment to look at page 254 of the application book in your paragraph 37.  That is in M13, I think.

MR WALKER:   Yes.

FRENCH CJ:   You seem to be saying there that the issue of general principle is not being controverted but, rather, its application to particular circumstances.

MR WALKER:   No.  It is far more than that because, although there are statements of general principle to which I will draw particular attention in just one moment, there has been no decision in this Court by a majority – I stress “by a majority” – as to the position concerning the first of the two matters relied upon in the Court of Appeal, namely, repayments.  I need to point this out by way of a proper addition to my answer to the Chief Justice’s question.  Were we granted special leave, it is undoubtedly the case that we would call in aid things rather stronger than mere straws in the wind to be found in both David Securities and particularly in Roxborough in favour of an outcome in our favour. 

However, it is not the case that there has been a decision in this Court in relation to total failure of consideration, its place or its nature in this area of doctrine, which turns upon or, indeed, allows one to speak with confidence about what happens when there have been so‑called substantial repayments.  It is for those reasons that – I apologise if paragraph 37 suggests this is nothing but a ho‑hum application of general principle which has gone wrong.  It is certainly not that.  The statement of general principle at high levels of generality would not be challenged by anybody getting or suffering special leave in this case.  It is when one comes to apply that to questions of substantial repayment in particular that those statements of principle simply do not provide an answer.

It is for those reasons that the passage, as I say, on pages 170 and 171, most particularly paragraphs 177 and 178 in the Court of Appeal’s reasons, is a passage which correctly and, with respect, appropriately to the way in which the argument had fallen out and was concrete between these parties in these cases, points to what we would submit is an obvious role for this Court in this controversy.  There is a lack of “settled and coherent judicial analysis” of matters which are critical to this case, to use the phrase in paragraph 177, line 35.  There is an absence of “precise ambit and prerequisites” of the critical so‑called “vitiating factor”; paragraph 177, line 30, and there is a statement in paragraph 178 on page 171, line 10 and following, which, in our submission, is, shall I put it this way, highly questionable.  We certainly seek to question it by grant of special leave.

CRENNAN J:   In a sense, you are effectively wanting to establish that a partial failure of consideration would give access to restitutionary agreements, is that not ‑ ‑ ‑

MR WALKER:   Your Honour, I certainly would not be so bold as to essay anything which was so general and perfunctory, or general and brief, and, in particular, we would seek to eschew the language of partial failure of consideration as being more appropriate to consideration only of certain contractual questions.  Rather, we would say, the failure of consideration – total, if one likes – that is in question, dating from an earlier era than the contractual use of that expression, is the removal of the basis upon which the advance, relevantly in this case, was made. 

Your Honours will have seen in paragraph 20 of our written submission that we have rung the changes by quoting the expressions in this Court of the way in which consideration ought to be understood for those purposes.  Those expressions “the matter considered in forming the decision to lend”, “the state of affairs contemplated as the basis of reason”, or “the benefit bargained for by the plaintiff rather than any benefit which might have been received in fact”, they are matters which quite plainly say of somebody who halfway through their payments schedule says “I do not have to pay any more, I rescind the contract for its incidental illegality”, we submit that on the authorities, the better view, not the one dictated, but the better view would be that that is a failure of consideration for the purposes of giving rise to (a) a claim in restitution, and (b) itself providing no reason to see it as not unjust to order return of the money. 

Now, an example of that, which means that I am not arguing simpliciter for partial failure being enough, but rather saying, one asks, what is it that has happened that brings about the claim, the promise to repay the sum lent wholly fails, if I may put it this way, upon someone refusing to perform it, and whether by chance they come to that epiphany before or after they have commenced paying instalments, instalments being themselves, of course, par excellence, severable, should be of no moment in a jurisdiction which depends upon notions of substance.

If I may take your Honours briefly to a passage in David Securities 175 CLR 353 at 383, just by way of example, in the course of their Honours’ discussion there of the so‑called insistence – see the previous page – that the failure of consideration be total, there is reference to the Rover International decision, and at the top of page 383 in the first full paragraph, it is quite plain by way of that example alone.  But having enjoyed some of the intended fruits of the unenforceable contract is no disqualification from having suffered a total failure of consideration for the purposes of the restitutionary claim.  It is, when one considers the way in which it is put in David Securities, extracted and selected in our paragraph 20 of our written submissions, that one would find the surer guide to the proper principle, but the cases at the moment do not say that with clarity in relation to part repayment.

FRENCH CJ:   Mr Walker, assuming that this is all correct, at least to the level necessary to expose questions of principle warranting the grant of special leave, is the construction of the deed of assignment adverse to you fatal to your argument if upheld?

MR WALKER:   Yes.  That is why it is in our application, your Honour.

FRENCH CJ:   Yes.

MR WALKER:   May I move to that directly?

FRENCH CJ:   I think that would be useful.

MR WALKER:   Yes.  Your Honours, a very important aspect concerning the assignment is simply to note the reflection of the statutory language in the assigning clauses.  This absolute assignment, including the debt, including legal remedy, all legal and other remedies, is one which, in our submission, is of surpassing importance commercially, particularly when one considers the ways in which, unappreciated at the outset of such relationships, contracts or other instruments may become in themselves unenforceable, giving rise to a remedial question, what can be done about the situation by which, for example, money has been advanced on a basis which has failed in circumstances which the cases say give rise to a claim for money had and received?  Is that to be understood as falling within the notion of other remedies, or all legal or other remedies?

One way in which we hope, so as to interest your Honours for a grant of special leave, one may pose some of the questions along the way is this.  Given the words, as I say, modelled on the statute in relation to common forms statute in relation to the absolute assignment of the depth, could it be supposed that anybody other than the assignee would be in a position in the eyes of the law, administering the jurisprudence of money had and received or restitutionary remedies, could there be anybody else who could come to court with a claim to remedy the situation where there is a problem of enforceability? 

Surely the answer has to be to that, that unless the law is playing some kind of cruel game in relation to what the words of an assignment mean, that all legal and other remedies will include the right to claim anything that will fix a situation up or cause salvage to be made of the wreckage of a transaction, and that is what we seek here.

FRENCH CJ:   Presumably future financiers of failed plantation schemes would ensure that the language of any assignment was explicit in that regard.

MR WALKER:   Your Honour, may I urge this against that.  Perish the thought that there ought to be either a return to or any further encouragement of the drafting habit of creating and incrementally adding to, and sometimes slightly altering, a long list of matters, each of which could be footnoted to a case, as being things that need to be the subject of specific reference for fear of not otherwise being included.  Rather, the law that one sees reflected in the statutes concerning assignments and their incidents, the common sense of commerce that one sees in the way in which people negotiate and bargain should reward rather than disappoint the use of overtly plain, brief and compendious expressions such as “all legal and other remedies”. 

It is for those reasons, in our submission, that there is a matter here ideal in relation to the assignment for a grant of special leave precisely because one here has a Y junction.  Should a number of sectors of industry, as it were, go down the route of having these long, almost medieval lists of single items of natures of claims and interests which will always at the end, as your Honours know, end up with “and other” remedies, or whether one should simply understand that if the law provides a remedy for a situation in relation to a debt, with respect to a debt that relates to a debt, then that surely must, as a matter of commercial English and the common sense of the position, be within the phrase “all legal and other remedies”.

FRENCH CJ:   Thank you, Mr Walker.

CRENNAN J:   Mr Walker, just one brief point.  I know this does not affect every application, but what about the limitation defences?  Why would not the limitation statutes apply in relation to claims for money had and received?

MR WALKER:   Page 60 of the application book, paragraph 150, it is not an issue between these parties in these proceedings.  That is the first answer, that is clear:

Limitations Act defences were not pleaded to the restitution claims and were not the subject of argument –

Now, that is enough for this case, but there is another answer in principle for cases of such kind.  The claim in restitution comes into existence, is first

capable of being sued on when there ceases to be a set of contractual entitlements.  That did not happen, of course, at the inception of illegality, but only when there was not avoidance.  May it please the Court.

CRENNAN J:   So time runs from the contract being unenforceable?

MR WALKER:   Quite so, your Honour, yes.

FRENCH CJ:   Thank you, Mr Walker.

MR WALKER:   May it please the Court.

FRENCH CJ:   Yes, Mr Pearce.

MR PEARCE:   Your Honours, might I make some specific submissions about matter M15 first.  That is one of the two matters in which Mr Bassat was the respondent and it is the one matter in which the non‑recourse defence to the contractual claim was upheld at trial and again on appeal.  There is no challenge to those findings in this application for special leave.  This application therefore depends on the surprising proposition that though the applicant could not enforce its contract against Mr Bassat for repayment of principle and interest, because the contract is unenforceable because of the applicant’s own illegal conduct, nevertheless he gets a remedy in restitution.

FRENCH CJ:   What is the other matter in which the non‑recourse defence succeeded?

MR PEARCE:   Only this one.

FRENCH CJ:   Only this one, yes.

MR PEARCE:   There are two limitations, one ‑ ‑ ‑

FRENCH CJ:   There are two where, I think, they invoked non‑recourse but they had failed to comply with the conditions which gave rise to it.

MR PEARCE:   Correct.  This is the only one.  There are two limitation ones that I will deal with specifically.

CRENNAN J:   This is the one where payments were made on time.

MR PEARCE:   On time, held at trial, upheld on appeal, not now challenged.  So we have the surprising cases made that though I cannot enforce my contract against you to repay these moneys because of my own illegal conduct, nevertheless, because of that illegal conduct, I get a go at you in restitution.  Intuitively, that has to be wrong and, indeed, it is wrong because it is directly contradicted by what this Court decided in Lumbers. 

In Lumbers, this Court held that where the contractual regime exhaustively defines the party’s rights and liabilities, there is no recourse to any restitutionary relief.  That was the clear ratio of the decision in Lumbers.  I think it will be instructive if I take your Honours to a couple of passages in that judgment.  Could I begin first in the judgment of the Chief Justice at page 654, paragraph 46.  His Honour says, on the fourth line of that paragraph, towards the bottom of the page:

The contractual arrangements that were made effected a certain allocation of risk; and there is no occasion to disturb or interfere with that allocation.  On the contrary, there is every reason to respect it.

Over the page, the Chief Justice refers to the speech of Lord Goff in the Pan Ocean Shipping Case in paragraph 47 and cites a passage, and the last three lines of that passage are worth repeating:

it is always recognised that serious difficulties arise if the law seeks to expand the law of restitution to redistribute risks for which provision has been made under an applicable contract.

His Honour then goes on to refer to legislation to protect the interests of building subcontractors:

The fact that such legislation exists should discourage, rather than encourage, attempts to extend the scope of restitutionary claims beyond the bounds set by legal principle, especially where to do so would be to cut across or disturb contractual relationships and established allocation of risk.

To like effect, in the joint judgment at paragraph 79, page 663, and also there is a reference there to the draft third restatement on restitution, and I might read that:

Even if restitution is the claimant’s only recourse, a claim under this Section will be denied where the imposition of a liability in restitution would overturn an existing allocation of risk or limitation of liability previously established by contract.

Another way perhaps of analysing this same issue is to pick up on what his Honour Justice Gummow said in Roxborough, I think at paragraph 75 in Roxborough, where his Honour echoed some of the academic writings in referring to restitutionary relief as having a gap‑filling role in the law of obligations where the law of contract, tort law or trusts leave a gap that needs filling, that is the role of restitutionary relief.

CRENNAN J:   This was relied on in the Court of Appeal.

MR PEARCE:   Yes.  In this case, however, restitutionary relief would not be filling a gap in the law of contract, it would be riding rough shod over it, the parties by contract having agreed that in these circumstances the investor or borrower would be under no further liability to the lender.  Finally, to analyse this situation perhaps in terms of unjust enrichment, I think it is common ground, it has been so far in this proceeding, that any right to restitution arose when the investors avoided, or at least purported to avoid, the loan agreements by the filing of their defences. 

That is the point at which it is relevant to inquire whether there has been an unjust enrichment of any of the investors.  At that point, in the case of Mr Bassat in this proceeding, he was under no further liability under this contract, therefore, it is impossible to say he has been enriched by the avoidance of the contract.  Before the avoidance he had no liability.  After the avoidance he had no liability.  There is therefore no enrichment, unjust or otherwise.

In my submission, like principles apply to the two limitations cases.  Those are matters M13 where the respondent is Mr Haxton and matter M16, this is one of the three Cunningham’s Warehouse Sales, or CWS, cases.  In each of those cases, at trial it was held that there was a limitation defence to the claim in contract.  In the Haxton Case, we now think by oversight, judgment was entered in favour of the applicant Equus.  We think the finding of a valid limitations defence should have been sufficient for judgment to be entered in Mr Haxton’s favour and we did not pick that up at trial.  Judgment was entered in the Cunningham’s Warehouse Case for the borrower in that case. 

The reason it was not entered in Mr Haxton’s favour is because his Honour held that in that case there was a right of restitution.  We would say that properly should have been regarded as an obiter dicta holding.  We corrected this on appeal, and there are references or extracts from the transcript in the Court of Appeal in our supplementary application book which make that clear.  We had picked up the mistake and made the submissions to the Court of Appeal that in every case where there is a limitations defence that should be sufficient to found a judgment in favour of the investor.

CRENNAN J:   What do you say about Mr Walker’s point that the time does not run in relation to a restitutionary claim?

MR PEARCE:   Let us understand this.  We do not plead the statute in answer to the claim in restitution.  We say, because there was no claim in contract at the point when the restitutionary claim arose, there is no unjust enrichment.  It is another way of applying the principles from Lumbers and Roxborough to say the contractual regime supplemented in these two cases by the statute of limitations exhaustively defines the rights and liabilities of these parties.  There is no work for restitution to do.  There is no gap to fill because the statute applied to the contractual facts of this case relieves the debtors of any obligation.

FRENCH CJ:   Does a relevant limitations provision operate simply as a procedural bar and does that make a difference?

MR PEARCE:   We do not think so, because we do not say the restitutionary claim is barred by the statute.

FRENCH CJ:   No, I am talking about in relation to the contract.

MR PEARCE:   We have tried to avoid that.  I think there is some learning in this Court in recent years about that.  My memory is that it is a substantive bar, but I am not sure that that really matters, because if you look at the practical effect, which is what we are to do in restitution, before the contract was avoided there was no liability under it because of the application of the statute.  After the contract was avoided, nothing changed.  There could not have been an enrichment.  Indeed, so much was decided by Lord Mansfield in 1760 in Moses v Macferlan, obiter dicta admittedly, but I would like to take your Honours to that. 

It was notified by us as a case we would rely on. It is the Burrow report which is in 97 ER 676, not the other, I think, Blackwell report, which appears elsewhere in the English Reports. It is part of a quite famous passage by Lord Mansfield which begins at 680 of the English Reports and at 1012 of the Burrow report. It is the last paragraph on that page. This is a very influential passage in the law of restitution:

This kind of equitable action, to recover back money, which ought not in justice to be kept, is very beneficial, and therefore much encouraged.  It lies only for money which, ex aequo et bono, the defendant ought to refund:  it does not lie for money paid by the plaintiff, which is claimed of him as payable in point of honor and honesty, although it could not have been recovered from him by any course of law –

here is the critical passage –

as in payment of a debt barred by the Statute of Limitations, or contracted during his infancy . . . because in all these cases, the defendant may retain with a safe conscience, though by positive law he was barred from recovering.

Now, it is obiter dicta, but dicta that commands very great respect because of his Lordship’s influence in the law of restitution.  Those are those three cases; the two limitations cases and the Bassat Case where the non‑recourse defence succeeded in the claim under contract.  Three cases then remain and these are the cases of Bassat, number M14, and the two CWS Cases, M17 and M18.  In each of these cases there are three questions.  The first question is, did Rural Finance possess any rights of restitution against the investor?  Secondly, if so, were such rights capable of assignment?  If yes to both one and two, were those rights actually assigned? 

A negative answer to any one of those three questions is fatal to the applicant’s case and I think, as your Honour the Chief Justice pointed out, if there was in fact no assignment under the deed of assignment, that is fatal to the claim.  The interesting questions that might otherwise have arisen would not therefore arise and on this we submit that the Court of Appeal was correct in so construing the deed of assignment as not to cover the claims in restitution.  That part of the judgment of her Honour Justice Dodds‑Streeton appears at pages 203 to 210 of the court book, paragraphs 311 to 329, especially at paragraph 325 which appears at page 208 of the application book.  There her Honour summarises the analysis by saying:

The language of the deed of assignment, construed according to its ordinary meaning and in its total context (including the Asset Sales Agreement) indicates that the assignment was limited to the loan contracts, debts, guarantees and securities.  No basis for the implication of a term extending the assignment to alternative restitutionary rights or remedies was identified. 

CRENNAN J:   Does she specifically deal with the phrase upon which Mr Walker relies “all legal and other remedies” in (b)?

MR PEARCE:   Yes, quite exhaustively.  The analysis is quite exhaustive, in my submission.  I will find the passage if I can.

FRENCH CJ:   Paragraph 312, I suppose, is the overview of it, is it not?

MR PEARCE:   Yes.  Her Honour then sets out the deed.  I will see if we can find the passage where she deals ‑ ‑ ‑

FRENCH CJ:   She is saying “restitutionary rights differed fundamentally”.

CRENNAN J:   Paragraph 324, perhaps.

MR PEARCE:   Yes, there it is, “while broad on its face, was, in context, merely an element of a composite phrase”.  The fallacy of the contrary interpretation is exposed by the decision of the learned trial judge who adopted the alternative interpretation and, with respect to his Honour, we can see that at application book page 52, paragraph 127 of his Honour’s judgment at first instance:

I am satisfied that Rural Finance expressed in the deed of assignment its intention to pass to Equus all of its rights and remedies under –

and here are the critical words –

and in connection with the loan agreements –

Now, his Honour inserts those words and those words “and in connection with” are found nowhere in the deed.  The real problem, the problematic word, if we go back to the deed at page 205 of the application book, and even assuming that paragraph 2 expands on the assignment in clause 1, and even assuming that 2(b) is not just an explanatory provision and takes the assignment further than what clause 1 does, the critical word in 2(b) is the word “for”, “all legal and other remedies for these matters”, that is to say, for the debts and for the loan contracts. 

That does not mean instead of the loan agreements, it does not even mean in connection with or in relation to, but that is how it must be construed.  The only reason put forward for construing it in that fashion is because otherwise it denies the applicants their relief.  It is critical for this reason, that this Court laid down in Pavey & Matthews that a claim in restitution is not a claim in contract, it is not even a claim in quasi contract.  It is a separate claim that arises not under the contract but instead of the contract.  It arises when the contract does not give you relief.  I can take your Honours to the passages.

CRENNAN J:   I think Justice Deane made that very clear ‑ ‑ ‑

MR PEARCE:   Yes, on two occasions.

CRENNAN J:    ‑ ‑ ‑and it is a very familiar passage.

MR PEARCE:   Yes, and Justice Dawson as well made it very clear, this, while it might be characterised as a claim for debt, is not a claim for a debt under the contract and it is not a claim under the contract.  One might have some sympathy for the draftsman in the mid and late 1980s confronted by

this reformulation of the law of restitution, but this deed was entered into in 1997, 10 years after Pavey & Matthews.  There is really no excuse for being up to date with the way that claims in restitution are understood. 

If your Honours accept what I say about the deed, that is the end of these applications because there would be no point in granting leave to discuss what might be thought to be interesting questions about whether a claim in restitution is capable of assignment and possibly some of the issues around restitution that might have some interest to the Court.  I will just say briefly that we say, even if the restitutionary claim is alive, there are two reasons why there is no warrant for a grant of special leave. 

First of all, because upon analysis, her Honour Justice Dodds‑Streeton simply analysed the claim in restitution, as it was put to her, as a claim for total failure of consideration, that being the category of case, and in accordance with what this Court said in David Securities at 379 and in ANZ v Westpac which is to ascertain in the first place whether there is a prima facie claim for restitution and if there is, whether there are other factors that militate either for or against awarding restitution. 

On the question that my learned friend initially agitated about a wrong factual finding about the securities, we say it would not have made any difference.  We say what the Court of Appeal should have said was it is impossible to make a conclusion that there was a total failure of consideration in its place because there was no evidence about whether the securities were or were not enforced.  That is the true position at trial and the reason for that, as your Honour Justice Crennan pointed out early on, was because these issues were not ventilated at trial.  No claim for total failure of consideration was made at trial.  The claim in restitution was perfunctory.  It was barely opened.  It was a two‑line pleading.  Unless there is anything else I can assist your Honours with, those are my submissions, if your Honours please.

FRENCH CJ:   Thank you, Mr Pearce.  Yes, Mr Walker.

MR WALKER:   Your Honours, one man’s perfunctory may be another man’s concise.  It was either made or it was not.  It was made and it has been properly considered in the Court of Appeal.  Next, in relation to there has been enough time passed presumably from some locus classicus in relation to restitution in this country for conveyances and those who draw deeds of assignment to catch up.  With great respect, it could not be regarded as careful, that is, professionally careful drafting to use the language of “restitution” or “unjust enrichment” to describe causes of action in the law of Australia. 

It need only be said that use of that nomenclature will serve to conceal or obscure rather than advance understanding of the legal or other remedies which are in question.  By contrast, an expression such as “other remedies”, particularly followed by the preposition which is clearly intended to link the remedy and the matter, is entirely apt without descending into the doctrinal squabbles between restitution scholars in relation to the use of other, perhaps more fashionable, language.  I stress that that fashion may not be Australian at all. 

The next point to make in that regard is that, as my friend correctly points out, there is a difference to be observed which goes to the heart of the juristic nature of the common money counts for money had and received between contract and debt and the word “debt” in this case, in our submission, is entirely appropriate in the deed to convey what was necessary in this case.

Your Honours, the next point we would wish to make concerns the question of the non‑recourse situation for one of Mr Bassat’s case, No M15 in this Court.  It can be said immediately that the difference between that case and all the others may well be a criterion of different outcome in accordance with a principle which has yet to be definitively pronounced by this Court.  In our submission, numbers cannot be pressed into service here.  It does not directly raise the question other than by reference to a common founding in general principle.  It is for those reasons, in our submission, that though that case plainly, and for all the reasons our learned friends have stressed, presents as a possibly or arguably different category, it is nonetheless an appropriate object of a grant of special leave precisely in order that if there be a decisive line, it can be drawn.

Finally, in relation to limitations, it is now to be understood that is not as a pleading to a restitutionary claim, but rather as a component in the relation to the contract claim that cannot be had, that is, the unenforceable or non‑existent contract claim, that what would have happened had there been a contract claim as informing the decision as to whether it would be not unjust to order return.  It is not at all clear that that has been hitherto articulated quite so clearly as it has been this afternoon, but that is of no moment. 

In our submission, that is of surpassing importance to this area of law and, in particular, to the way in which we have the overt law of limitations operating with response to the restitution claim, that is, not until that cause of action becomes available, and this phantom or embedded way in which it may play a part as a component of the not unjust decision.  That is something which does not find any reflection in anything that could be regarded as a binding decision of this Court or, indeed, of other courts that would make the law for this country.  For those reasons, in our submission,

the point is a point which adds interest and presses the merits of this case for special leave.  May it please the Court.

FRENCH CJ:   Yes.  Mr Pearce, you wanted to take a little bit of time on from Mr Walker.

MR PEARCE:   The point about whether this limitations issue has been argued this way before, it is exactly how we argued it in the Court of Appeal.  There are three passages from that transcript extracted in our supplementary application book.  It is only necessary to go to one, which is the very last page, page 47 of the supplementary application book.  I can read briefly from it.  This is me submitting to the Court of Appeal:

I don’t think we need to get into the difficult question about whether the Statute of Limitations is a substantive or procedural bar.  Whichever way you look at it, at that point, at the point when a right of restitution may have arisen, there was no claim that could be enforced in contract and, in those circumstances, in my submission, it is extremely difficult to argue that there has been an unjust enrichment.

That is exactly how we put it in the Court of Appeal.

FRENCH CJ:   Thank you, Mr Pearce.

So far as M15 is concerned, we are of the view that the application is not attended with sufficient prospects of success to warrant the grant of special leave.  Special leave will be refused with costs.

In relation to the other matters, there will be a grant of special leave.

Mr Walker, your estimate of time, a day to a day and a half or just a day?

MR WALKER:   It will be more than a day, I think, your Honour.

FRENCH CJ:   Yes, all right.

MR PEARCE:   Yes, I am inclined to agree with that, your Honour.

FRENCH CJ:   Yes, all right.  Thank you.  We will now adjourn until 10.15 am on Tuesday, 21 September 2010, in Canberra.

AT 3.39 PM THE MATTER WAS CONCLUDED