Metal WA Pty Ltd v Neal-Williams Pty Ltd as trustee of the WILLIAMS Family Trust
[2020] WASC 293
•11 AUGUST 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: METAL WA PTY LTD -v- NEAL-WILLIAMS PTY LTD AS TRUSTEE OF THE WILLIAMS FAMILY TRUST [2020] WASC 293
CORAM: REGISTRAR WHITBY
HEARD: 27 JULY 2020
DELIVERED : 11 AUGUST 2020
FILE NO/S: CIV 1555 of 2020
BETWEEN: METAL WA PTY LTD
Plaintiff
AND
NEAL-WILLIAMS PTY LTD AS TRUSTEE OF THE WILLIAMS FAMILY TRUST
First Defendant
ABASSIA PTY LTD AS TRUSTEE FOR THE TRAVERS FAMILY TRUST
Second Defendant
Catchwords:
Application to strike out statement of claim - Order 20 r 19(1)(a) and (c) RSC - Plea of unjust enrichment - Common mistake - Claim for restitution - No mistake where valid and binding contract on foot
Legislation:
Nil
Result:
Plaintiff's statement of claim struck out pursuant to O 20 r 19(1)(a) RSC
Plaintiff granted leave to re‑plead
Category: B
Representation:
Counsel:
| Plaintiff | : | J C Yeldon |
| First Defendant | : | A Trichardt |
| Second Defendant | : | A Trichardt |
Solicitors:
| Plaintiff | : | Cooper Webb Lawyers |
| First Defendant | : | Altus Lawyers |
| Second Defendant | : | Altus Lawyers |
Case(s) referred to in decision(s):
ANZ Group Ltd v Westpac Banking Corporation Ltd [1988] HCA 17; (1987) 164 CLR 662
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14
Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers-Western Australian Branch v Bell-A-Bike Rottnest Pty Ltd [2005] WASCA 157
Banque Financier dela Cite v Parc (Battersea) Ltd (1991) 1 AC 221
Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd [1980] 1 QB 677
Brenner v First Artists Management Pty Ltd (1993) 2 VR 221
Bruce v Odhams Press Ltd [1936] 1 KB 697
David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48, (1992) 175 CLR 353
Deutsche Morgan Grenfell Group plc v Inland Revenue Commissioners [2006] UKHL 49, [2007] 1 AC 558
Dimskal Shipping Co SA v International Transport Workers Federation (The Evia Luck No 2) (1991) 4 All ER 871
Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2013] WASCA 36
Equus Corp Pty Ltd v Haxton (2012) 246 CLR 498
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] UKHL 4, [1943] AC 32
High Time Investments Pty Ltd v Adamus Resources Pty Ltd [2012] WASC 295
Hoh v Frost Hollow Pty Ltd [2014] VSC 77
Insurance Commissions of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Limited (in liq) [No 2] [2017] WASC 372
Mann v Patterson Constructions Pty Ltd (2019) 93 ALJR 1164
Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628
Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
Roxborough v Rothmans of Paul Mall Australia Ltd (2001) 208 CLR 516
Technip Oceania Pty Ltd v Cutmere Pty Ltd [2019] WASC 478
Trimus v Mina (1999) NSWCA 140
REGISTRAR WHITBY:
Summary
This is the defendants' application by summons filed 14 July 2020 to strike out the plaintiff's statement of claim dated 8 May 2020 pursuant to O 20 r 19(1)(a) and/or (c) of the Rules of the Supreme Court 1971 (WA) (RSC).
For the reasons that follow, I find that the plaintiff's statement of claim ought be struck out in its entirety on the basis that it discloses no reasonable cause of action and/or that it will embarrass the fair trial of the action.
The application
By their application, the defendants seek the following orders:
(1)Pursuant to O 20 r 19(1)(a) RSC the plaintiff's statement of claim be wholly struck out on the basis that it discloses no reasonable cause of action, alternatively struck out as to pars 7, 9, 10, 11, 12, 13 and 14;
(2)Alternatively, pursuant to O 20 r 19(1)(c) RSC the statement of claim be wholly struck out on the basis that it may prejudice or embarrass the fair trial of the action, alternatively strike out as to pars 7, 9, 10, 11, 12, 13 and 14;
(3)Alternatively, the plaintiff shall file and serve on the defendants the answers to the requests for particulars of the statement of claim made by the defendants' solicitors' letter dated 25 June 2020 and relating to pars 4, 6, 8, 10, 11, 12, 13 and 14 of the statement of claim;
(4)The plaintiff shall pay forthwith the costs of and incidental to the application to be fixed.
The defendants' grounds for the application are that the statement of claim, insofar as it purports to plead a claim for unjust enrichment, alternatively a claim for money had and received by the defendants to the use of the plaintiff, does not disclose a reasonable cause of action and/or will embarrass the fair trial of the action.
The defendants rely upon the material following in support of their application:
(a)affidavit of Brendan Peter Swift sworn 3 July 2020 (Swift affidavit) in relation to the strike out application pursuant to O 20 r 19(1)(c) RSC;
(b)the defendants' outline of submissions filed 3 July 2020; and
(c)the defendants' reply to the plaintiff's submissions filed 23 July 2020.
The plaintiff relies upon the plaintiff's submissions in opposition to the defendants' strike out application filed 13 July 2020.
Application to strike out ‑ legal principles
Order 20 r 19(1) RSC provides:
1.The Court may at any stage of the proceedings, subject to subrule (3), order to be struck out or amended any pleading, or the indorsement of any writ in the action, or anything in any pleading or in the indorsement on the ground that ‑
(a)it discloses no reasonable cause of action or defence as the case may be; or
…
(c)it may prejudice, embarrass or delay the fair trial of the action
…
and may order the action to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
The principles and objects of case management set out in O 1 r 4B RSC are relevant and must be considered on applications to strike out a pleading. The court discourages unnecessary interlocutory applications and will take a robust attitude to the content of pleadings. In Barclay Mowlem Construction Ltd v Dampier Port Authority,[1] Martin CJ said:
… provided a pleading fulfils its basic functions of identifying the issues, disclosing an arguable cause of action or defence, as the case may be, and apprising the parties of the case that has to be met, the Court ought properly be reluctant to allow the time and resources of the parties and the limited resources of the Court to be spent extensively debating the application of technical pleadings rules that evolved in and derive from a very different case management environment.
[1] Barclay Mowlem Construction Ltd v Dampier Port Authority [2006] WASC 281; (2006) 33 WAR 82.
However, observance of the rules of pleadings is often required in order to achieve the objectives of O 1 r 4B RSC. As Allanson J observed in Technip Oceania Pty Ltd v Cutmere Pty Ltd:[2]
[16]But the observance of rules of pleading is not antithetical to case management. The issues defined in the pleadings provide the basis upon which evidence may be ruled admissible or inadmissible at trial upon the ground of relevance; and it is the pleadings which determine the matters in issue for the purposes of discovery. Properly defining the issues, and confining them to those that need to be resolved, assists in meeting the objectives of O 1 r 4A and 4B.
[17]To ensure a basic requirement of procedural fairness, a pleading must state the case sufficiently clearly to allow the other party a fair opportunity to meet it. A statement of claim must state the material facts to support the claim for relief, but not the evidence by which those facts are to be proved; and the pleadings must define with clarity and precision the issues or questions which are in dispute between the parties and fall to be determined by the court. (citations omitted)
[2] Technip Oceania Pty Ltd v Cutmere Pty Ltd [2019] WASC 478 [16] ‑ [17].
Where a defendant alleges that a statement of claim discloses no reasonable cause of action the question to be determined is whether it is open to the plaintiff, on the statement of claim, to prove facts at trial which give rise to a cause of action:[3]
[3] Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union of Workers-Western Australian Branch v Bell-A-Bike Rottnest Pty Ltd [2005] WASCA 157 [54]; Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405, 414; Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628, 631.
In Insurance Commissions of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Limited (In Liq) [No 2] (Bell),[4] Pritchard J summarised the rules governing a strike out application:
(1)The rule is intended to apply only to cases which are really not arguable and not to cases where under the previous practice demurrer would have been the proper course.
(2)On the application, not only must all the facts alleged in the statement of claim be accepted as true, but it must be taken for granted that on all other points the pleading is unassailable.
(3)Great care must be exercised to ensure that a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal.
(4)But the rule should not be reserved for those cases where argument is unnecessary to show the futility of the plaintiff's claim. Argument, even extensive argument, may be necessary to demonstrate that the plaintiff's case is so clearly untenable that it cannot possibly succeed.
(5)As a general rule, a plaintiff is 'entitled … as of right to have his case heard, to have the facts found and then to argue the question of law as it arises before the trial Judge upon the facts as found. It is only in cases in which it can be seen from the outset that, however the facts be found, there is no basis for the legal conclusion contended for by the plaintiff that the pleading should be struck out.
(6)A court at first instance should be careful not to risk stifling the development of the law by summarily rejecting a claim where there is a reasonable possibility that, as the law develops, it will be found that a cause of action will lie.
[4] Insurance Commissions of Western Australia v Antony Leslie John Woodings as Liquidator of the Bell Group Limited (in liq) [No 2] [2017] WASC 372 [31].
In Bruce v Odhams Press Ltd,[5] Scott LJ said of the English equivalent to O 20 r 8 RSC[6]:
The cardinal provision in r 4 is that the statement of claim must state the material facts. The word 'material' means necessary for the purpose of formulating a complete cause of action; and if any one 'material' fact is omitted, the statement of claim is bad; it is 'demurrable' in the old phraseology, and in the new is liable to be 'struck out'…
[5] Bruce v Odhams Press Ltd [1936] 1 KB 697, 712.
[6] Order 20 r 8(1) RSC provides ' … every pleading must contain, and contain only, a statement in a summary form of the material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which those facts are to be proved …'
In Hoh v Frost Hollow Pty Ltd,[7] Derham AsJ made the following comments regarding striking out a pleading on the basis that it disclosed no reasonable cause of action or that it was embarrassing:
[7] Hoh v Frost Hollow Pty Ltd [2014] VSC 77 [13].
(b)The cardinal rule is that a pleading must state all the material facts to establish a cause of action … The expression 'material facts' is not synonymous with providing all the circumstances. Material facts are only those relied on to establish the essential elements of the cause of action …
…
(c)As a corollary, the pleading must be presented in an intelligible form – it must not be vague or ambiguous or inconsistent. Thus a pleading is 'embarrassing' … when it places the opposition party in the position of not knowing what is alleged …
…
(g)It is not sufficient to simply plead a conclusion from unstated facts. In this instance, the pleading is embarrassing …
…
(j)Particulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement – namely, to fill in the picture of the plaintiff's cause of action … with information sufficiently detailed to put the party on guard as to the case that must be met. An object and function of particulars is to limit the generality of a pleading and thereby limit and define the issues to be tried …
…
(o)If the objectionable part of the pleading is so intertwined with the rest of the pleading so as to make separation difficult, the appropriate course is to strike out the whole of the pleading.
The defendants are not seeking to summarily dismiss the plaintiff's claim by their application. The application is made on the basis that all of the necessary elements of a cause of action are not pleaded in the statement of claim and/or that the defendants are not able to ascertain the purported case pleaded against them. The objections to the statement of claim are fundamental, not technical or pedantic. It is important to bear this in mind in determining the application.
The plaintiff's statement of claim
For the purposes of the defendants' application, the following paragraphs of the statement of claim are relevant;
7.In or about August 2018, after an exchange of correspondence between the parties, they varied the deed in writing so as to agree on a figure for the remaining 50% of the plaintiff's shares.
Particulars of correspondence
(a)Email from Alan Travers to Andrew mentis dated 3 August 2018
(b)Email from Alan Travers to Andrew mentis on 22 August 2018
(c)Email from Andrew Mentis to Alan Travers and Ken Williams dated 27 August 2018
(d)Email from Alan Tarvers to Andrew Mentis, Ken Williams and Matthew Flaherty dated 27 August 2018
Particulars of variation
(e)the parties signed 'amendments to the deed of sale of share dated 8 August 2016' on or around 27 August 2018 after agreeing to:
(i)an amendment to the definition of the Third Transfer Price in cl 1.1 of the deed to mean $2,741,098
(ii)an amendment to substitute cl 3.1 of the deed, with the following orders;
(iii)the purchase price paid by [Metals WA] for 50% of the shares is $2,000,000 payable on the settlement date.
8.By on or about 8 September 2018 Metals WA had paid the sum of $2,741,098.40 AUD to NW and AT under the amended cl 1.1 of the deed.
9.Metals WA says when it and NW and AT entered the variation Deed dated 27 August 2018 they did so upon a common mistake, namely that when the definition of the Third Transfer Price was agreed by the parties, they had been informed by NW and AT (in the correspondence pleaded in par 7 herein) that 50% of the Company based on the Formula (8 x NPAT) less $2,000,000 was $2,741,098.40, when by reason of the matters set out in the following paragraphs that was not so.
10.Before the plaintiff agreed to the variation of the Deed, it had been mistakenly told by the defendants, in the correspondence referred to in paragraph 7 herein, and who themselves relied on their accountants to determine that the NPAT for the 2017/2018 financial year was $639,129.00 before adjustments, when in fact the plaintiff says the NPAT for the 2017/2018 financial year was $277,081 before adjustments and when computed, according to the Formula and adjustments (8 x $313,799 is $2,510,392). That sum, apportioned for percentage shareholding, less 2016 CCP/Rhino Tax adjustment and less $2,000,000) the Third Transfer Price was $132,352.80.
11.By reason of the matter pleaded in paragraph 10 herein the plaintiff paid the sum of $2,606,745.20 (the 'Overpayment') ($2,741,098.40 [pleaded in paragraph 8 herein] less $134,352.80) more than it should have paid under the Deed for the Third Transfer Price.
12.The plaintiff says by reason of the matters pleaded in paragraph 10 and in paragraph 11 herein, the defendants were unjustly enriched by the Overpayment, and must give restitution in the sum of the Overpayment to the plaintiff.
13.Alternatively, the plaintiff says the sum of the Overpayment is money had and received by the defendants to the use of the plaintiff.
AND THE PLAINTIFF CLAIMS AGAINST THE DEFENDANTS:
A.Restitution of the sum of $2,606,745.60 to the plaintiff.
…
Unjust Enrichment
In order to plead a cause of action in unjust enrichment and claim the remedy of restitution, the plaintiff must plead material facts which establish the following elements:
(a)the defendants have been enriched;
(b)the enrichment comes at the expense of the plaintiff;
(c)the enrichment was unjust; and
(d)no defences apply.[8]
[8] Banque Financier dela Cite v Parc (Battersea) Ltd (1991) 1 AC 221, 227; Roxborough v Rothmans of Paul Mall Australia Ltd (2001) 208 CLR 516, 139; Equus Corp Pty Ltd v Haxton (2012) 246 CLR 498; Mann v Patterson Constructions Pty Ltd (2019) 93 ALJR 1164, 213.
In Equus Corp Pty Ltd v Haxton (Equus),[9] the High Court (French CJ, Crennan and Kiefel JJ) summarised the approach to be taken in determining the part played by unjust enrichment in a claim for restitution:
•Recovery depends upon enrichment of the defendant by reason of one or more recognised classes of “qualifying or vitiating” factors;
•The category of case must involve a qualifying or vitiating factor such as mistake, duress, illegality or failure of consideration, by reason of which the enrichment of the defendant is treated by the law as unjust;
•Unjust enrichment so identified gives rise to a prima facie obligation to make restitution;
•The prima facie liability can be displaced by circumstances which the law recognises would make an order for restitution unjust.
[9] Equus, 30.
In considering the 'unjust factor' in High Time Investments Pty Ltd v Adamus Resources Pty Ltd,[10] Edelman J stated:
[The unjust element of the enrichment] is not merely a semantic point. The presence of an unjust factor is an indispensable requirement to demonstrate the facts upon which a plaintiff relies for a claim that the defendant had no 'right to retain' the benefit and was unjustly enriched. The unjust factor may also affect the availability or scope of defences, such as change of position, which rely upon pleading facts which fall within established and developing rules concerning circumstances which reduce or extinguish a defendant's duty to make restitution by 'any matter or circumstances which shows that his or her receipt (or retention) of the payment is not unjust'. In the absence of a properly pleaded claim for unjust enrichment, counsel for the defendant understandably protested that his ability to cross‑examine effectively was impaired without an understanding of the basis of the plaintiff's claim for unjust enrichment.
[10] High Time Investments Pty Ltd v Adamus Resources Pty Ltd [2012] WASC 295 [185].
It is well established that mistake is an 'unjust factor' for the purposes of a claim in unjust enrichment.[11] The unjust factor of mistake comprises the following elements:
(a)a mistake of fact or law; and
(b)the mistake is the cause of (or contributing factor in) the plaintiff's decision to enter into the transaction that enriched the defendant.[12]
[11] Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] UKHL 4, [1943] AC 32, 61 [17]; David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48, (1992) 175 CLR 353 (David Securities).
[12] Justice James Edelman and Elise Bant, Unjust Enrichment (Hart Publishing, 2nd ed, 2016) at 172 citing David Securities, Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd [1980] 1 QB 677 (Barclays Bank) and Deutsche Morgan Grenfell Group plc v Inland Revenue Commissioners [2006] UKHL 49, [2007] 1 AC 558.
The plaintiff makes an alternative claim for money had and received by the defendants to the use of the plaintiff. The law provides that a party who makes a payment under a mistake, in the sense that the mistake caused the payment to be made, may recover it from the recipient in a common law action for money had and received.[13]
[13] David Securities, 379; Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14 [1], [6], [67] and [106].
Does the statement of claim disclose a reasonable cause of action?
In essence, the plaintiff pleads that:
(a)the parties entered into the variation Deed dated 27 August 2018 upon a common mistake: statement of claim par 9;
(b)before the plaintiff agreed to the variation Deed, it had been mistakenly told by the defendants that the NPAT for the 2017/2018 financial year was higher than it actually was: statement of claim par 10;
(c)the plaintiff paid the sum of $2,606,745.20 (the 'Overpayment') more than it should have paid under the Deed for the Third Transfer Price: statement of claim par 11; and
(d)the defendants were unjustly enriched by the Overpayment: statement of claim par 12.
The defendants submit that the statement of claim does not plead material facts that give rise to a cause of action for mistake in unjust enrichment because the alleged Overpayment was made pursuant to a valid and enforceable agreement (that is the variation Deed).
The defendants submit that, if the plaintiff is to rely upon mistake as the unjust factor, the plaintiff is required to plead material facts which demonstrate that the variation Deed is invalid or is void or voidable by reason of mistake.
As long as the variation Deed is valid, the defendants say, the alleged Overpayment could not have been made as a result of a mistake. Therefore, there is no unjust factor and the necessary elements of the cause of action have not been pleaded so as to give rise to the remedy of restitution.
The defendants refer to a number of cases in support of their submission that a claim in unjust enrichment is not available where there is a valid agreement pursuant to which a payment is made. Those cases are:
(a)Barclays Bank,[14] Goff J said:
[14] Barclays Bank, 695.
[I]f the money was due under a contract between the payer and the payee, there can be no recovery on this ground unless the contract itself is held void from mistake … or is rescinded by the plaintiff (cited in Workpac Pty Ltd v Rossati (2020) 378 ALR 585 at 780).
(b)Dimskal Shipping Co SA v International Transport Workers Federation (The Evia Luck No 2).[15] The UK House of Lords said that, until a contract under which money was paid was avoided:
[15] Dimskal Shipping Co SA v International Transport Workers Federation (The Evia Luck No 2) (1991) 4 All ER 871, 878.
the money in question was paid under a binding contract and so was irrecoverable in restitution
(c)Brenner v First Artists Management Pty Ltd,[16] Byrne J said that restitution will not arise:
[16] Brenner v First Artists Management Pty Ltd (1993) 2 VR 221, 257.
where there is a subsisting enforceable contract between the parties
(d)Trimus v Mina,[17] Mason P said:
[17] Trimus v Mina (1999) NSWCA 140 [54].
No action can be brought for restitution while an inconsistent contractual promise subsists between the parties in relation to the subject matter of the claim … [based] on the fact that the benefit provided by the plaintiff to the defendant was rendered in the performance of a valid legal duty (cited with authority in Workpac Pty Ltd v Rossati (2020) 378 ALR 585, 779).
(e)Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd[18] Murphy JA said:
[18] Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2013] WASCA 36[201].
A claim in restitution in respect of money paid pursuant to a binding agreement resulting from such duress requires rescission of the agreement. This accords with the principle that generally restitution does not operate in respect of an effective contract. (citations omitted)
(f)Mann v Patterson Constructions Pty Ltd (Mann),[19] Kiefel CJ, Bell and Keane JJ said:
[19] Mann v Patterson Constructions Pty Ltd (2019) 93 ALJR 1164 [14] ‑ [18].
(i)Restitutionary claims must respect contractual regimes and the allocation of risk under those regimes (cited with authority in Workpac at 778)
(ii)(quoting Pan Ocean Shipping Co Ltd v Credit Corp Ltd (1994) 1 WLR 161 at 164) as a general rule, the law of restitution has no part to play in the matter, the existence of the agreed regime renders the imposition by the law of a remedy in restitution both unnecessary and inappropriate.
(g)Mann [64], Gageler J quoted Trimus:
The more general point is that no action can be brought for restitution while an inconsistent contractual promise subsist between the parties in relation to the subject matter of the claim.
(h)Mann [169], Nettle, Gordon and Edelman JJ stated that:
It is for that reason that no such obligation can arise while the obligation under which the benefit was conferred and accepted remains enforceable, open and capable of performance.
The defendants say that this is a clear case where the cause of action purported to be pleaded by the plaintiff does not accord with the rules of pleading, in that there can be no claim for restitution based upon a mistake where there is a valid and enforceable contract in place.
The plaintiff submits that the statement of claim fulfils its function of identifying the issues, discloses an arguable cause of action in unjust enrichment and/or for money had and received and informs the defendants what is alleged against them.
The plaintiff does not dispute that the moneys were paid by the plaintiff to the defendants under an agreement.[20] The plaintiff says the precise amount of the Third Transfer Price was determined based upon a formula provided for in the original deed and that both parties relied on a third party accountant to inform them of the figure to be inserted into the formula. The plaintiff submits that the statement of claim is sufficient to plead a common mistake, in that both parties were operating under a mistake as to the figure to be inserted into the formula. Therefore, the plaintiff paid more than it should have under the variation Deed, the result being that the defendants have been unjustly enriched and the plaintiff is entitled to restitution.
[20] Plaintiff's outline of submissions, par 7(a).
The plaintiff relies upon the case of ANZ Group Ltd v Westpac Banking Corporation Ltd (ANZ v Westpac)[21] as authority for the proposition that where a party has paid monies as the result of a mistake, that party has a cause of action in unjust enrichment to recover those monies from the party to whom the funds were paid.
[21] ANZ Group Ltd v Westpac Banking Corporation Ltd [1988] HCA 17; (1987) 164 CLR 662.
Determination
Restitutionary claims must respect contractual regimes and the allocations of risk made under those regimes. This proposition is best articulated by Deane J in Pavey & Matthews Pty Ltd v Paul:[22]
The quasi-contractual obligation to pay fair and just compensation for a benefit which has been accepted will only arise in a case where there is no applicable genuine agreement or where such an agreement is frustrated, avoided or unenforceable. In such a case, it is the very fact that there is no genuine agreement or that the genuine agreement is frustrated, avoided or unenforceable that provides the occasion for (and part of the circumstances giving rise to) the imposition by the law of the obligation to make restitution.
[22] Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 256.
In my view, a claim for restitution in unjust enrichment (and/or for money had and received) where the alleged unjust factor is 'mistake' is not available to the plaintiff on the material facts pleaded in the statement of claim for the following reasons:
(a)the plaintiff pleads that the Third Transfer Price was defined in the variation Deed: statement of claim par 7(i) (I note that this plea forms part of the particulars);
(b)the plaintiff pleads that the parties entered into the variation Deed on the basis of common mistake as to the basis on which the Third Transfer Price was calculated: statement of claim par 9;
(c)the plaintiff pleads that by reason of that common mistake, the plaintiff paid more than it should have under the Deed (note the plaintiff does not plead the 'variation' Deed) for the Third Transfer Price: statement of claim par 11;
(d)the plaintiff does not plead that the variation Deed is void or should be set aside by reason of the mistake;
(e)where the alleged Overpayment was made pursuant to a valid variation Deed, there can be no mistake as to the amount to be paid; and
(f)there is no unjust factor of mistake pleaded ‑ this is a necessary element of a claim in unjust enrichment and for money had and received.
I note that ANZ v Westpac does not assist the plaintiff - in that case the payment was not made pursuant to any valid and binding agreement between the parties.
In my view, the plaintiff has not pleaded a cause of action in unjust enrichment or for money had and received. The statement of claim does not convey a clear conception of the plaintiff's cause of action. As currently pleaded, the plaintiff made a payment pursuant to the variation Deed ‑ a binding and valid agreement. There is, and can be, no 'mistake' as to the amount to be paid under the variation Deed.
I find that the statement of claim ought be struck out in its entirety pursuant to O 20 r 19(1)(a) RSC. While it is not necessary for me to consider the defendants' application for individual paragraphs to be struck out, I make the following observations for the sake of completeness:
(1)Paragraph 7 of the statement of claim is embarrassing:
(a)the relevance of the plea 'after an exchange of correspondence' is not clear, ie does the correspondence form part of the variation Deed?
(b)it pleads material facts of the terms of variation Deed as particulars; and
(c)the terms of cl 1.1 of the Deed, a material fact, are not pleaded,
(2)Paragraph 9 of the statement of claim is embarrassing:
(a)it fails to identify the common mistake as it pleads beliefs formed by the parties at different times; and
(b)it is confusing in that it refers to two events relevant to the common mistake ‑ the date of the signing of the variation Deed and the date of agreement for the definition of the Third Transfer Price,
(3)Paragraph 10 of the statement of claim is embarrassing:
(a)the term 'CCP/Rhino Tax adjustment' is not defined or particularised;
(b)it does not plead the 'mistake' of the defendants;
(c)it does not plead the material facts relevant to the calculation of the Formula;
(d)it is not clear what the words 'That sum' refer to; and
(e)it does not plead the material facts giving rise to the plea of reliance on the defendants’ accountants,
(4)Paragraph 11 of the statement of claim is embarrassing:
(a)the Deed as opposed to the variation Deed is pleaded; and
(b)it fails to plead the material facts in support of the plea that the defendants paid more than they should have,
(5)Paragraphs 12 and 13 of the statement of claim are embarrassing:
(a)they plead conclusions of law in circumstances where material facts have not been pleaded which comprise the elements of each of those causes of action,
(6)Paragraph 14 of the statement of claim is embarrassing:
(a)there are no material facts pleaded to support the conclusion that the plaintiff would have earned interest.
This is not a case where the plaintiff has no foreseeable cause of action, rather a case where all of the elements of a cause of action have not been pleaded. It is therefore, appropriate that the plaintiff be given leave to replead.
The defendants have foreshadowed an application for indemnity costs in the event that their application to strike out the statement of claim is successful. The parties are required to confer as to the form of orders to be made, including any directions in relation to any application for costs and whether such application may be determined on the papers. In the event that the parties cannot reach agreement, alternative minutes of proposed orders are to be filed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
TG
Court Officer11 AUGUST 2020
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