Hilliard v Westpac Banking Corporation - [2009] VSCA 211

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 2127 of 2000

ROY CHARLES HILLIARD
	Appellant
v
WESTPAC BANKING CORPORATION (ARBN 007 457 141)	Respondent

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JUDGES:	MAXWELL P, DODDS-STREETON JA and OSBORN AJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	12 May 2008
DATE OF JUDGMENT:	18 September 2009
MEDIUM NEUTRAL CITATION:	[2009] VSCA 211
JUDGMENTS APPEALED FROM:	Westpac Banking Corporation v Hilliard [2006] VSC 470 (Hansen J) Westpac Banking Corporation v Hilliard(No 2) [2006] VSC 489 (Hansen J) Westpac Banking Corporation v Hilliard (No 3) [2007] VSC 58 (Hansen J)

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RESTITUTION – Moneys paid under mistake – Bank paid cheques in ignorance of fact that proceeds not for benefit of account-holders – Proceeds received by account-holders’ bookkeeper – Whether mistake was causative – Whether bank ought to have enquired as to purpose – Whether bank voluntarily assumed risk of improper purpose – Whether enrichment of bookkeeper ‘at the expense of’ bank – Appeal dismissed.

PRACTICE AND PROCEDURE – Stay – Witness refused to answer questions on ground of self-incrimination – Whether curtailment of cross-examination rendered trial unfair – Trial judge refused stay application – No discretionary error – Stay application not renewed – Whether appeal court should intervene – No unfairness shown.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr D Masel	Rudstein Kron Lawyers
For the Respondent	Mr C M Scerri QC Mr R D Strong	Mallesons Stephen Jaques

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MAXWELL P

OSBORN AJA:

Introduction[1]

[1]Paragraphs 1–5 are adapted from the trial judge’s reasons [1]–[4]. See Westpac Banking Corporation v Hilliard [2006] VSCA 470.

Westpac Banking Corporation (‘Westpac’) had two customers in its Private Bank section, Stephen Vizard and his wife and their companies (collectively referred to as the ‘PAS Group’), and Roy Hilliard (‘Hilliard’). Mr Hilliard worked as a bookkeeper for Mr Vizard and his companies between 29 July 1991 and about 12 October 2000. Following the cessation of his employment, apparent financial irregularities were discovered in PAS Group companies. Ultimately, Westpac accepted a claim by Mr Vizard and the PAS Group that it had met PAS Group cheques drawn by Mr Hilliard for amounts in excess of its relevant customer mandate and which were for the benefit of Mr Hilliard rather than for the benefit of the relevant PAS Group customer.

On 19 December 2000 Westpac entered into a settlement agreement with the PAS Group pursuant to which, following investigation, it compensated the PAS Group amounts which (including interest) totalled $3,067,274.92. Westpac claimed that sum from Mr Hilliard on the basis of money had and received, unjust enrichment, or damages. Mr Hilliard denied liability.

Initially there was a second defendant, Information Age Travel Pty Ltd (‘IAT’). Mr Hilliard and Christopher Graham Wood were the directors and shareholders of IAT, which conducted a specialised travel agency business. In 1991, due to declining fortunes of the business as the result of the first Gulf War, it was necessary for Mr Hilliard to find other employment, which he did with Mr Vizard and the PAS Group.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] VSCA 211
Decision Date: 18 September 2009

CaseChat Overview and Summary

The case of Hilliard v Westpac Banking Corporation involved the bank's payment of cheques that were later discovered to be fraudulent. The cheques were drawn on accounts held by two companies, which were part of a larger group, and were paid out in ignorance of the fact that the proceeds were not intended for the benefit of the account holders. Instead, the proceeds were received by the bookkeeper of the account holders, who was acting on behalf of the larger group. The dispute arose when the bank sought to recover the moneys paid out under this mistake.

The primary legal issues the court had to decide were whether the bank's mistake was causative of the payment, whether the bank should have investigated the purpose of the cheques, and whether the bank voluntarily assumed the risk of an improper purpose. Additionally, the court had to determine whether the bookkeeper's enrichment occurred at the expense of the bank, potentially giving rise to a claim for restitution.

The court found that the bank's mistake was indeed causative of the payment, and there was no obligation on the bank to investigate the purpose of the cheques. The bank had not voluntarily assumed the risk of an improper purpose, and the bookkeeper's enrichment did occur at the expense of the bank. Consequently, the bank was entitled to restitution for the moneys paid out. The court also found that the trial judge's refusal to grant a stay of proceedings due to a witness refusing to answer questions on grounds of self-incrimination did not result in an unfair trial. As such, the appeal was dismissed, and no further orders were made.

Orders