Ovidio Carrideo Nominees Pty Ltd v The Dog Depot Pty Ltd

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 4083 of 2004

OVIDIO CARRIDEO NOMINEES PTY LTD
	Appellant
V
THE DOG DEPOT PTY LTD	Respondent

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JUDGES:	CHERNOV, NETTLE and ASHLEY, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	17 October 2005
DATE OF JUDGMENT:	8 February 2006
MEDIUM NEUTRAL CITATION:	[2006] VSCA 6	Second Revision, 8 February 2006

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LANDLORD AND TENANT – Retail lease – Obligation to provide disclosure statement –Provision that tenant is not liable to pay rent for the period until disclosure statement is given is not dependant on exercise of the right to withhold payment – Retail Tenancies Reform Act 1998, s.8(2).

RESTITUTION – Money paid under mistake – Claim for money had and received – Basis of claim – Unjust enrichment – Defences – Good consideration – Whether retention of payment unjust or unconscionable – Competing claim in restitution for use and occupation.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Dr C.L. Pannam, QC and	Monahan & Rowell
Mr J.P. Moore
For the Respondent	Mr D.F.R. Beach, SC and	Hall & Wilcox
Ms M.A. Tran

CHERNOV, J.A.

This is an appeal by Ovidio Carrideo Nominees Pty Ltd (“the landlord”) against the decision of a Supreme Court judge made on 15 October 2004 dismissing its appeal, brought pursuant to s.148 of the Victorian Civil and Administrative Tribunal Act 1996, against an order of the Victorian Civil and Administrative Tribunal (“the Tribunal”) made on 17 December 2003.[1] The Tribunal’s order required the landlord to pay its tenant, Dog Depot Pty Ltd (“the tenant”), by way of restitution, the sum of $64,953.56, being the amount that the tenant claimed was mistakenly paid by it as rent under a lease agreement between the parties commencing on 14 August 2000 in respect of Shop 4, 490 Whitehorse Road, Surrey Hills (“the premises”). In making its claim for restitution, the tenant relied on s.8(2) of the Retail Tenancies Reform Act 1998 (“the Act”), contending that, in the circumstances, it was not liable under the Act to pay the rent and that it did so in ignorance of its rights in that regard. Consequently, the tenant claimed, it was entitled to be repaid the money by way of restitution. Before considering the respective arguments of the parties to the appeal, it is necessary to set out the relevant legislation and to describe briefly the circumstances leading to the proceeding.
[1]Leave to appeal against his Honour’s decision was granted by this Court on 26 November 2004.

It was common ground that the premises were “retail premises” within the meaning of s.3(1) of the Act and that, in the circumstances, the provisions of the Act applied to it. So far as is relevant, s.8 of the Act provided:

“8. Disclosure
(1)At least 7 days before a prospective tenant of retail premises enters into a retail premises lease, the landlord must give to the prospective tenant –
(a)a disclosure statement in the form of the Schedule providing information about the matters set out in the Schedule…

(2)If a tenant has not been given a disclosure statement in accordance with sub-section (1) before entering into a retail premises lease –
(a) the tenant may withhold payment of rent until the end of 7 days after the landlord gives the tenant a copy of the disclosure statement; and
(b)the tenant is not liable to pay the rent attributable to the period before the landlord gave the tenant a copy of the disclosure statement; and
(c)the tenant may give the landlord written notice of termination at any time before the end of 7 days after the landlord gave the tenant a copy of the disclosure statement.”

It is plain enough that the provision imposed on a lessor of retail premises the obligation to give the prospective lessee a disclosure statement at least seven days before the lessee took possession. In the present case, however, due to an oversight, the landlord did not give the tenant the necessary document until 5 May 2003, which was some years after the tenant had taken possession. This meant, of course, that the tenant could have properly withheld payment of rent until 12 May 2003 but, because it was ignorant of its rights in that regard, it paid the rent reserved by the lease from the commencement of the tenancy until shortly after it received the disclosure statement. It then stopped paying rent, but did not terminate the lease, as it was entitled to do under s.8(2)(c) of the Act. On 9 September 2003, it brought a proceeding in the Tribunal to recover the sum of $64,953.56 that it had paid to the landlord in the mistaken belief that it was required so to do.

As I have noted, the tenant succeeded in its claim before the Tribunal and, again, on the landlord’s appeal to the Supreme Court. The landlord now appeals by leave against the latter decision.

The landlord advanced two principal arguments as to why the tenant was not entitled to recover the rent. First, it claimed that, on its proper construction, sub-s.8(2)(b) only operated where rent has been withheld by the tenant in the exercise of its rights under paragraph (a). It was said that paragraph (b) was cumulative and dependent on paragraph (a) and that Parliament included it in the section only to make it clear that, where the lessee had withheld the rent, the lessor was not entitled to recover it by way of action brought under the lease. The landlord went on to contend that, here, the tenant did not avail itself of its right to withhold the rent and, as a result, paragraph (b) had no operation. Consequently, said the landlord, the tenant could not rely on paragraph (b) to ground its right to recoup the money. Secondly, the landlord argued that, even if paragraph (b) operated independently of paragraph (a), it was nevertheless entitled to retain the money because it had given good consideration for the payment, consisting of the provision to the tenant of exclusive use and occupation of the premises. Moreover, it was said for the landlord, it had a good claim against the tenant for use and occupation of the premises in an amount equal to the rent and that, too, was a good defence to the tenant’s restitutionary claim.[2]
[2]This argument was adopted by Dr Pannam, for the appellant, late during the hearing of the appeal before us although, as I understand it, it had not been pressed before his Honour or the Tribunal. No objection was taken by the respondent to the appellant relying on this argument.

Construction of section 8(2)

For reasons that are given later, I consider that the landlord has a good defence to the tenant’s claim for restitution and, therefore, it is not necessary to deal at length with whether his Honour erred in his interpretation of the legislation. Be that as it may, in my view, the learned judge was correct in rejecting the appellant’s claim that paragraph (b) operates only where the lessee has withheld payment of rent under paragraph (a). The landlord’s essential case on this issue, below and before us, was that to construe the section as his Honour did would be to render paragraph (a) otiose and fail to recognise the different tenses in which the word “give” is used in paragraphs (a) and (b). I consider, however, principally for the reasons given by his Honour, that neither argument is well founded. There is no merit in the claim that paragraph (a) would be rendered unnecessary if paragraph (b) was construed to operate separately or independently of it. The scope of operation of paragraph (a) is plainly wider than that of paragraph (b). As his Honour explained, the tenant is given the right by paragraph (a) to withhold payment of rent for a period of seven days after the disclosure statement is served, while paragraph (b) relieves it from liability to pay the rent, but only up to the date when the statement is served on it. There is also force, I think, in the respondent’s submission that the appellant’s construction of the section would effectively require paragraph (b) to be read as if it commenced with the words “if the tenant has withheld rent in accordance with paragraph (a) of this sub-section.” Given that each paragraph has work to do, there is no necessity to read such words into the text, so that it would be inappropriate to do so.[3] It is true that, as the learned judge pointed out, the different tenses of the word “give” as used in the two paragraphs arguably suggests that they operate cumulatively. But, as his Honour said, such use of the word does not compel this conclusion. Parliament merely measured out the time for the purpose of paragraph (a) in prospective terms and that for paragraph (b) in retrospective terms. Moreover, in paragraph (c) the word “gave” is used, but it has not been contended that, by reason of that, it does not operate independently of paragraph (a).
[3]See, for example, Thompson v Goold & Co [1910] A.C. 409 at 420 per Lord Mersey and Director-General of Education v Suttling (1986) 162 C.L.R. 427 at 433 per Wilson and Dawson, JJ. with whom Mason, A.C.J. agreed.

Dr Pannam, for the appellant, also argued that if Parliament intended paragraph (b) to deal with the situation where the lessee had paid rent before receiving the disclosure statement and, thus, deny the lessor the right to the rent, it would have said so in terms as it did in s.11 of the Act in relation to “key money”.[4] Hence, the argument ran, it can be inferred that paragraph (b) operates only where the lessee has withheld rent under paragraph (a). But it seems to me that merely because Parliament did not say, in terms, in paragraph (b) that the lessor is not entitled to retain such rent does not mean that it intended to deny the lessee its common law rights to recover it or that paragraph (b) should be read as being dependent on paragraph (a). In any event, as the learned judge noted, s.11 deals with a completely different subject matter to s.8 and the policy considerations underlying the two sections are also quite different, so that the latter section does not assist in the interpretation of s.8.
[4]So far as is relevant, s.11 states:
“(1) Subject to sub-s.(2) –
(a)a landlord … must not request, receive or retain the payment of –
(i)any key-money …”
(b)a provision in a retail premises lease is void to the extent – (i) that it requires or has the effect of requiring the payment of any key-money …”

I mention for completeness two further matters. The first is Dr Pannam’s argument that the changes to the Act by the Retail Leases Act 2003, more particularly, s.17 of it, confirm that the Act operates as was contended for by the landlord. As with the position under s.8(2)(a) of the Act, s.17(3) of the 2003 legislation gives the tenant the right to withhold payment of rent if the disclosure statement has not been given to it as required and it relieves the tenant from liability to pay until the lessor rectifies the situation in that regard. The relevant difference between the two provisions is that the lessee acquires such rights under s.17(3) only after it has informed the lessor of the default within the time prescribed by s.17(2). In my view, however, the new section does not assist the landlord’s case as counsel would have it because it makes no relevant change to the earlier position, given that it preserves to the tenant the same rights as it had under s.8(2)(b) of the Act, namely, relief from liability to pay rent during the period identified by the provision. The second matter concerns the material that was forwarded to the Court by the tenant’s solicitors, after the hearing of the appeal, under cover of their letter dated 24 November 2005. The material consists essentially of extracts from the Retail Leases (Amendment) Act 2005, including s.46. The solicitors for the landlord opposed the Court having regard to that legislation for the purpose of resolving the appeal and asked to be heard if the Court took a contrary view. No doubt the new legislation was put forward on the statutory construction point. In view of my conclusion on that issue, however, it is not necessary to consider the new material.

Defence to restitutionary claim

I now turn to explain why I consider that the landlord has a good defence to the tenant’s claim for restitution. I have already mentioned that it was common ground that the tenant made the payments in question in ignorance of its right under sub-s.8(2)(a) to withhold them so that, prima facie, it was entitled to repayment of the money by way of restitution.[5] Thus, the real debate before us was whether the landlord could displace that prima facie entitlement. In order to determine this question it is necessary first to identify the nature and character of a restitutionary entitlement.
[5]The complexity and uncertainty surrounding the law of restitution is comprehensively examined by Ormiston, J.A. in Hookway v Racing Victoria Ltd [2005] VSCA 310 at [18]-[59]. That case, however, was essentially concerned with a restitutionary claim in respect of a voluntary payment where entitlement to restitution was in dispute. Here, as has been noted, it was accepted that, prima facie, there was entitlement to restitution and the critical question was whether the landlord had a good defence to it.

The tenant’s action was for money had and received, which is a restitutionary claim as distinct from one founded on contract or tort and from a claim for equitable relief.[6] Historically, restitutionary relief was provided by courts of common law, although equitable principles played an important part in moulding the action. [7] The basis of the claim for money had and received was articulated in the 18^th century by Lord Mansfield in Moses v. Macferlan[8]. I will deal later with what his Lordship relevantly said in that regard, but for present purposes it is sufficient to mention what is said in the third edition of Bullen & Leake’s Precedents of Pleadings[9] about the gist of the action, namely, that a claim for money had and received is “the most comprehensive of all common counts [and is] applicable wherever the defendant has received money which in justice and equity belongs to the plaintiff, under circumstances which render the receipt of it a receipt by the defendant to the use of the plaintiff.” This passage, said Gummow, J. in Roxborough[10], echoed what Lord Mansfield said in Moses v. Macferlan of “the indebitatus count for money had and received.” Importantly, this description of the restitutionary action is not inconsistent with how members of the High Court have viewed the matter in recent decisions.
[6]See, for example, Roxborough v. Rothmans of Pall Mall Australia Ltd. (2001) 208 C.L.R. 516 at 525 per Gleeson, C.J., Gaudron and Hayne, JJ., at 535 and 553 per Gummow, J. and at 590 per Callinan, J.
[7]See, for example, Roxborough at 548, 554 per Gummow, J.
[8](1760) 2 Burr 1005; 97 E.R. 676.
[9]At 44. I note that, although the description of the action in the above edition of Bullen & Leake is not relevantly different from that set out in subsequent editions up to the 13th edition (1990) at 654-665, in the 14th edition of the work – (2001) at 1543-1559 – there is no reference to that cause of action by that name. The corresponding part of the work, in terms of precedents and commentary, deals with the matter under the broad heading of “Restitution” and in the context of unjust enrichment.
[10]At 550.

It is appropriate to refer first to Pavey & Matthews Pty Ltd v. Paul[11], in which the High Court jettisoned the hitherto prevailing view that a common count, such as that for money had and received, rested on an implied contract, or quasi-contract. [12] The majority explained that the claim was one for restitutionary relief and was based on the concept of unjust enrichment. Deane, J., with whom Mason and Wilson, JJ. generally agreed,[13] relevantly said:[14]

“To identify the basis of such actions as restitution and not genuine agreement is not to assert a judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate. The circumstances in which the common law imposes an enforceable obligation to pay compensation for a benefit accepted under an unenforceable agreement … is preferably seen as lying in restitution rather than in the implication of a genuine agreement where in fact the unenforceable agreement left no room for one. That is not to deny the importance of the concept of unjust enrichment in the law of this country. It constitutes a unifying legal concept which explains why the law recognizes, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognize such an obligation in a new or developing category of case ...”.

It is important to note, however, that Deane, J. did not treat unjust enrichment as the legal requirement, or as the legal basis, for a restitutionary claim. Rather, his Honour put forward unjust enrichment as a conceptual framework which, in the particular circumstances, would explain the entitlement to relief.[15]

[11](1986) 162 C.L.R. 221.

[12]In Mason & Carter’s Restitution Law in Australia, the learned authors observe, at 5, that “the High Court’s break with implied contract theory in Pavey marked the birth of the law of restitution in this country.”

[13]At 227-229.

[14]At 256.

[15]See, in particular, at 254-256, 259 and 263.

Pavey was not concerned with a claim for money that had been paid under a mistake. Nor did it deal, in terms, with what may amount to a good defence to a claim for restitution. The relevance of the case, for present purposes, lies in the court’s recognition that recovery can be had on a restitutionary basis even where the contract in question is rendered unenforceable by legislation. In that case, a builder claimed money as on a quantum meruit in respect of work done under a building contract that had been rendered unenforceable by legislation. The majority recognised that, notwithstanding the legislative provision, the builder could recover fair and reasonable compensation for its work, not under the contract, but on the basis of restitution or unjust enrichment arising from the owner’s acceptance of the benefits accruing to it from the builder’s performance of the unenforceable contract.[16] Deane, J. observed[17] that, although the legislation rendered the obligation to pay unenforceable, on its proper construction, it did not manifest the intention to deny the builder payment for the work done in the performance of a contract.[18] For reasons given later, it is of importance to note that his Honour also said[19] that, although the builder’s entitlement to recover fair compensation for its work was not based on the unenforceable contract, its terms could nevertheless be treated as evidence on what was the appropriate amount of compensation that should be ordered.
[16]See Mason and Wilson, JJ. at 228 and Deane, J. at 262-264.
[17]At 262.
[18]In that respect, the legislation was different from that examined by the Queensland Court of Appeal in Marshall v. Marshall [1999] 1 Qd. R. 173, where it was held that, on its proper construction, the Act disentitled the builder to any monetary compensation for the work carried out by it under the contract that was struck down by the legislation. Accordingly, it was there held that, in light of the terms of the legislation, the owner was entitled to recover the money that it had paid voluntarily to the builder under the mistaken belief that the builder was entitled to it.
[19]At 257.

In ANZ Banking Group Ltd v. Westpac Banking Corporation[20], the High Court dealt with a restitutionary claim for money paid under a mistake and, in that context, further explained the jurisprudential basis of such a claim. Their Honours[21] confirmed that “[t]he basis of the common law action of money had and received for recovery of an amount paid under a fundamental mistake of fact should now be recognised as lying not in implied contract but in restitution or unjust enrichment.” In that case, the court held that an agent (the bank) which receives money on behalf of its principal (its customer), where that payment has been made under a mistake of fact, is not liable to the person who deposited that money if, before learning of the mistake, it has paid it to its customer (or has done something equivalent). Importantly, for present purposes, their Honours recognised that the provision of good consideration will ordinarily displace the prima facie liability in the payee to make restitution. Their Honours said:[22]

“Before the prima facie liability will be displaced there must be circumstances (e.g., that the payment was made for good consideration such as the discharge of an existing debt or, arguably, that there has been some adverse change of position by the recipient in good faith and in reliance on the payment) which the law recognises would make an order for restitution unjust.”

[20](1987) 164 C.L.R. 662.

[21]Mason, C.J., Wilson, Deane, Toohey and Gaudron, JJ. at 673.

[22]At 673.

That valuable consideration may amount to a defence to a claim for money paid under a mistake of law was also recognised in David Securities Pty. Ltd. v. Commonwealth Bank of Australia[23], in which the well-known formulation of defences to restitutional claims by Goff, J. in Barclays Bank Ltd v. W.J. Simms Son & Cooke (Southern) Ltd[24] was adopted:

“(1) If a person pays money to another under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact. (2) His claim may however fail if (a) the payer intends that the payee shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; or (b) the payment is made for good consideration, in particular if the money is paid to discharge, and does discharge, a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; or (c) the payee has changed his position in good faith, or is deemed in law to have done so.”

The court in David Securities, however, concluded that the respondent had failed to provide good consideration for money that was paid to it by the appellants under a mistake of law and, consequently, was not entitled to keep it.

[23](1992) 175 C.L.R. 353.

[24][1980] Q.B. 677 at 695.

In that case, the appellant borrowed money from the respondent bank. The loan was in foreign currency, and repayments were to be made at the bank’s branch in Singapore. The Income Tax Assessment Act 1936 (Cth) provided that tax at the rate of 10 per cent was payable by the lender on the interest that it received from an Australian resident borrower where the loan was repayable overseas. Under that Act, the borrower was required to deduct or withhold 10 per cent of the interest payment and remit it to the Commissioner of Taxation. The bank sought to pass on the effect of the tax to David Securities pursuant to clause 8(b) of the agreement between the parties, which essentially provided that if the borrower was required by law to deduct taxes from any payment to be made by the borrower, it would nevertheless pay the full amount of interest to the bank. This effectively required David Securities to pay the bank the amount of the withholding tax, and thereby bear the burden of that tax. Such an agreement, however, was rendered void by s.261(1) of that Act. The borrower sought to recover the payments in question on the ground, amongst others, that they were made under the mistaken belief (engendered by the bank) that it was required to pay the withholding tax.

The majority[25] considered that the circumstances in which the money was paid gave rise to a prima facie obligation in the bank to make restitution on the basis of unjust enrichment and that the payer was not disentitled to relief merely because the mistake was one of law. Their Honours said:[26]

“… the payer will be entitled prima facie to recover monies paid under a mistake if it appears that the monies were paid by the payer in the mistaken belief that he or she was under a legal obligation to pay the monies or that the payee was legally entitled to payment of the monies. Such a mistake would be causative of the payment.”

Notably, the majority emphasised that such a claimant, in order to succeed, does not have to establish “unjustness” over and above such a mistake. Their Honours said:[27]
“The respondent’s submission that the appellants must independently prove ‘unjustness’ over and above the mistake cannot therefore be sustained. The fact that the payment has been caused by a mistake is sufficient to give rise to a prima facie obligation on the part of the respondent to make restitution. Before that prima facie liability is displaced, the respondent must point to circumstances which the law recognises would make an order for it for restitution unjust. There can be no restitution in such circumstances because the law will not provide for recovery except when the enrichment is unjust.”

[25]Mason, C.J., Wilson, Deane, Toohey and Gaudron, JJ.

[26]At 378.

[27]At 379.

Importantly, their Honours recognised[28] that any matter or circumstance that showed that the receipt or retention of the payment was not unjust would ordinarily afford a good defence to such a restitutionary claim. The bank raised two defences to the borrower’s claim for repayment. For our purposes, it is only necessary to consider the defence of good consideration which, it was claimed, rendered not “unjust” the receipt and retention by it of the money in question. It was the bank’s case that, by not charging the borrower the higher interest (which would have been charged if the borrower had not agreed to make payments equivalent to the withholding tax), the bank provided the borrower with due consideration for the payments in question. This argument was rejected because, the court said,[29] since there was no obligation on David Securities to pay the withholding tax, it did not receive the consideration for its payments which it expected, namely, the discharge of its obligation to pay the withholding tax. The obligation to pay the tax was imposed by the legislation on the bank, not on the customer. Thus, the question whether consideration was received by the payer was analysed by the majority from the point of view of the payer. Their Honours concluded, as I have said, that the borrower paid the money in the belief that it was thereby discharging its tax liability whereas, in truth, it was under no such obligation.
[28]At 379, 384.
[29]At 381-382.

The question what might amount to a good defence of consideration to a restitutionary claim was more recently considered in Roxborough v. Rothmans of Pall Mall Australia Ltd.[30] In that case the retailers of tobacco products were held to be entitled to recover the money paid by them for the goods supplied by the respondent that reflected a tobacco licence fee that was subsequently held to be invalid by the High Court.[31] The respondent’s defence that it had provided good consideration in the form of provision of tobacco products, or an agreement to do so, was rejected by the majority of the court. In their joint judgment, Gleeson, C.J., Gaudron and Hayne, JJ. held in the appellants’ favour, principally on the basis that there was a failure of consideration for the money that was paid by the retailers to the respondent so that, in the result, the appellants had the superior claim to the money. Their Honours explained that, in the context of a claim for money had and received, although failure of consideration is not limited to non-performance of the contractual obligation, it does “embrace” failure of the purpose for which the money has been paid. Their Honours concluded[32] that in the case before them no relevant consideration moved from the payee given that, because “the state of affairs, which was within the contemplation of the parties as a basis for their dealings, concerning tax liability [had] altered”,[33] the purpose for which the money was paid had failed.[34]
[30](2001) 208 C.L.R. 516.
[31]Ha v. State of New South Wales (1997) 189 C.L.R. 465.
[32]At 525-527.
[33]At 526.
[34]The licence fee in respect of which the money was paid was no longer payable.

The jurisprudential, or doctrinal, basis of restitutionary claims, particularly those brought in the form of an action for money had and received, was analysed comprehensively and explained by Gummow, J. in Roxborough. In the course of this analysis, his Honour examined a considerable number of authorities – from this jurisdiction and other common law countries – as well as extra judicial writings on matters concerning restitutionary rights. It is not necessary, for present purposes, to deal with the whole of his Honour’s detailed analysis of this area of the law. It is sufficient to highlight only the following aspects of his Honour’s decision. First, his Honour cautioned[35] against judicial acceptance of “any all-embracing theory” of restitutionary rights and remedies founded on the notion of unjust enrichment. Secondly, his Honour emphasised the various judicial pronouncements that linked the remedy of restitution with the notion that retention of the money in question by the respondent would, in the circumstances, be unjust and unconscionable. Thus, for example, in recognising that Lord Mansfield’s speech in Moses v. Macferlan was the foundation of the right to such restitutionary relief, Gummow, J.[36] highlighted his Lordship’s reference[37] to the action for money had and received being founded in the equity of the plaintiff’s case and on the fact that, ultimately, the question whether restitution is available depends on whether the defendant may retain the money “with a safe conscience”. I note that Lord Mansfield concluded his speech on this point by saying: “In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money”.[38] Gummow, J. also accepted[39] that the following passage in the speech of Viscount Haldane LC in Royal Bank of Canada v. The King[40] derived from what Lord Mansfield said in Moses v. Macferlan:

“It is a well-established principle of English common law that when money has been received by one person which in justice and equity belongs to another, under circumstances which render the receipt by the defendant to the use of the plaintiff, the latter may recover as for money had and received to his use. The principle extends to cases where the money has been paid for a consideration that has failed.”

Next, his Honour pointed out[41] that Dixon, C.J., McTiernan, Williams, Webb and Taylor, JJ. emphasised in South Australian Cold Stores Ltd v. Electricity Trust Of South Australia[42] that “the reason of the rule under which an action of money had and received lies in cases of payment by mistake” rests on the unconscionability of the retention by the defendant of the money claimed by the plaintiff.

[35]At 544.

[36]At 548.

[37]At 1009; 679 and 1012; 681.

[38]See also R. v. Brown (1913) 14 C.L.R. 17 at 25 per Griffith, C.J., Campbell v. Kitchen & Sons Ltd. (1910) 12 C.L.R. 515 at 531 per Barton, J., Sargood Brothers v. The Commonwealth (1910) 11 C.L.R. 258 at 303 per Isaacs, J. and British American Tobacco Australia Ltd v The State of Western Australia (2003) 217 C.L.R. 30 at 52 at per McHugh, Gummow and Hayne, JJ.

[39]At 539.

[40][1913] A.C. 283 at 296.

[41]At 551.

[42](1957) 98 C.L.R. 65.

Finally, Gummow, J. addressed the matter before the court by posing the question:[43] would it be unconscionable for the respondent to retain the money that was paid in respect of the licence fee where it was not intended that it have that money? His Honour’s answer was in the affirmative, but it was given in the context of his conclusion that there was a failure of consideration by the payee, inasmuch as there was “the failure to sustain itself of the state of affairs contemplated as a basis for the payments that the appellants seek to recover.” The “state of affairs” to which his Honour referred was the obligation to pay the licence fee so that, when the requirement ceased to exist, from its point of view, the payer received no consideration for its payment – its money was not made applicable to the payment of the licence fee.
[43]At 557.

Although it may be said that the principles of restitutionary relief have not yet been exhaustively or definitely stated by the High Court (which is unsurprising given the nature of the remedy) there is, nevertheless, guidance that is apparent in the authorities to which I have referred as to when such relief is available and, in particular, what may constitute a good defence to a claim for money paid under a mistake. As I understand the cases, once a prima facie entitlement to restitution is made out by the payer, it is for the payee to show that it would not be unjust or unconscionable for it to retain the money if the payer is to be denied restitutionary relief. Thus, in those circumstances, it is for the respondent to demonstrate, for example, that it has given good consideration for the payment. Whether it had done so is to be judged from the perspective of the payer, in this case, the tenant. Moreover, in a context such as the present, it would also be relevant, I think, to consider whether the respondent has a “counter restitutionary” claim against the payer for use and occupation of the premises.

As I have said, I consider that the landlord has a good defence to the tenant’s restitutionary claim and that is because, broadly, it seems to me, it would not be unjust or unconscionable for it to retain the money in question notwithstanding that it was paid under a genuine mistake. I say this for the following reasons. First, I think that, unlike the position of the payers in David Securities and Roxborough, the tenant here has received good consideration for the money it paid, namely, exclusive possession of the premises that were obviously of use and benefit to it, as is demonstrated not only by the fact that it occupied them since entry for its business purposes, but also by its continued possession of them after it became entitled to terminate the lease pursuant to s.8(2)(c) of the Act. And it is irrelevant that the landlord might have been under an obligation to provide the premises under the lease. The question is not whether the landlord was under such an obligation, but rather whether the tenant gained or accepted a benefit in the form of exclusive use of the premises (as a quid pro quo for the payments in question). As I have said, on the evidence, it is apparent that the tenant received such a benefit and, thus, from its point of view, it received good consideration for its payments. Moreover, it has not been suggested that the contents of the disclosure statement had any relevant bearing on the benefit that the tenant secured under the lease. For instance, there was no suggestion that the statement revealed that the premises, or any matter relating to them, have been misdescribed in the lease, or during the negotiations leading to its execution, such that it would now be unconscionable for the landlord to retain the money.

The second, and additional, reason for my conclusion that it would not be unjust for the landlord to retain the money notwithstanding that it was paid under mistake is that I consider that the landlord has a sound claim against the tenant for use and occupation of the premises for the relevant period, in an amount broadly equal to the rent reserved under the lease. As is explained in Woodfall’s Laws of Landlord and Tenant[44], a restitutionary claim based on use and occupation arises where the respondent has been given permission by the claimant to occupy its land without there being any binding term as to payment. The essential elements of this cause of action were described in Australia Provincial Assurance Association Ltd v. Rogers[45] and Zegir v. Woop[46], in slightly different terms, namely, the existence of an agreement between the parties – express or implied – to the effect that the occupant/respondent will be the tenant of the claimant and shall pay for the occupation. In my view, there is no difference of substance between those tests. In any event, I think that each is made out in the present case, given the existence of the lease and lack of any suggestion by the tenant that there was an agreement that it was to occupy the premises rent free. And, in my view, there is no statutory prohibition against such a claim. It seems to me that, on its proper construction, s.8 of the Act is of a like character to that considered in Pavey[47], in that it merely renders the rent covenant void for the period in question. The section says nothing of the landlord’s rights at common law to compensation for use and occupation of the premises, and a prohibition depriving the landlord of such compensation cannot be implied into it. If Parliament intended to achieve that result it would have said so in

terms in that section as it did, for example, in s.11 in relation to “key-money” which specifically prohibits a lessor from, amongst other matters, retaining key-money that has been paid to it. And, as has been recognised in Pavey, the landlord could establish the amount of compensation to which it was entitled for use and occupation by relying on the rental provisions in the lease as evidence of what was fair and reasonable in that regard. It is true that, ordinarily, proof by the defendant of a demise under seal will provide a good defence to a claim for use and occupation,
but as Sholl, J. explained in Specktorv. Lees[48], the rule is predicated on the claimant being able to sue for rent on the covenant in the deed. In this case, although the lease was made under seal, as the tenant contended, the covenant to pay rent was void for the relevant period and, consequently, the ordinary rule of a deed being a good defence to a claim for use and occupation would not have operated.

[44]Release 51, Vol.1 at 10.001. See also Australian Provincial Assurance Co. Ltd v. Rogers (1943) 43 S.R.(NSW) 202; Zegir v. Woop [1955] V.L.R. 394.

[45](1943) 43 S.R.(NSW) 202.

[46][1955] V.L.R. 394.

[47]See also Upjay Pty Ltd v. MJK Pty Ltd (2001) 79 S.A.S.R. 32, where the claimant succeeded on a quantum meruit claim based on unjust enrichment for services provided by it to the respondent in respect of real estate transactions notwithstanding that the relevant legislation said that a person, not registered as an agent, is not entitled to a commission or other consideration for services as an agent and that any commission paid to a person not entitled to receive it may be recovered from that person as a debt.

[48][1964] V.R. 10 at 18-19.

I should say for completeness, although it should be obvious enough, that it does not follow from what I have said that a lessor can, in all cases, sit on its hands in disregard of the requirements of s.8 of the Act and retain moneys paid to it by a tenant which is ignorant of its rights under the provision. This would be particularly so where the contents of the disclosure statement have a material bearing on the subject of the lease and its terms, which does not appear to have been the case here.

Thus, for the above reasons, I would allow the appeal, set aside the orders below and, in lieu of them, order that the order of the Tribunal be set aside and that in its place it be ordered that the respondent’s application be dismissed.

NETTLE, J.A.:

I have had the advantage of reading in draft the reasons for judgment of Chernov, J.A. and with respect I agree with his Honour upon the interpretation of s.8(2)(b) of the Retail Tenancies Reform Act 1998. To the extent that there might otherwise be any doubt about the meaning of the section it appears to me to be

resolved by the extrinsic materials in favour of that construction. The Act was enacted following recommendations of the Working Party into the Retail Tenancies Act 1986. Under the heading “Disclosure” they included:
“In a fair and equitable system prospective lessees must have all relevant facts, financial and planning information which is likely to impact on the viability of the proposed business… To achieve this, it is recommended there be an effective remedy where disclosure statements are not provided. Given the evident high level of non compliance in Victoria with the disclosures provisions, it is recommended that the lessor should have no entitlement to recover rent or outgoings from the lessee until an adequate disclosure statement is provided.”

Clause 8 of the Explanatory Memorandum stated to similar effect that:
“Clause 8 [of the Bill] provides that a landlord must give a tenant-
·A disclosure statement in the form of and containing matters set out in the Schedule to the Bill;
·A copy of the proposed lease or terms (if written); and
·A copy of the information booklet.

at least 7 days before entering into a retail premises lease. If no disclosure statement is given, the tenant may withhold payment for rent until the end of 7 days after the disclosure statement is given and is not liable to pay rent attributable to the period during which the disclosure statement has not been given. Further, the lease is voidable at the option of the tenant within 7 days after the disclosure statement is given.”

Allowing, however, that the effect of the statute is that a tenant may withhold rent until after the disclosure statement is given, it is a separate question as to whether the lessor is precluded from receiving or retaining any consideration paid by the lessee for use and occupation of the demised premises. In terms, s.8(2) provides only that where a lessor does not comply with s.8(1) the lessee is not liable to pay rent. In effect it vitiates the tenant’s contractual obligation to pay rent as such in accordance with the covenant for rent. But in contradistinction to s.11 of the Act, which prohibits a lessor from requesting, receiving or retaining the payment of any key-money or any consideration for the goodwill of a business carried on at the demised premises, s.8(2) does not in terms prohibit a lessor from receiving or retaining the payment of an amount for use and occupation of the demised premises.

In Davids Securities v CBA,[49] the High Court held that a recipient of a payment made under a mistake of fact or law is prima facie liable to make restitution but that the liability may be displaced by pointing to circumstances recognised in law as rendering an order for restitution unjust. Traditionally, those circumstances have included cases in which a claimant receives some part of the “benefit” provided for in the bargain, be the bargain contractual or of another kind.[50] In that sense, a claim for money had and received lies only as upon a total failure of consideration.
[49](1992) 175 C.L.R. 353.
[50]Ibid. at 382.

“Total failure of consideration” is, however, a complex conception, since the idea of consideration is used in the law in more than one sense. Where a plaintiff’s cause of action is for the recovery of money paid under a mistake of fact or law, the relevant conception of “consideration” is in effect limited to the matter considered in forming the decision to make the payment; the state of affairs contemplated as the basis or reason for payment. Therefore, as Gummow, J. explained in Roxborough v Rothmans of Pall Mall,[51] in the present context “total failure of consideration” looks to the benefit bargained for by the payer rather than any benefit which might have been received in fact. [52]
[51](2001) 208 C.L.R. 516.
[52]Ibid. at 555[102]; see also David Securities v Commonwealth Bank (1992) 175 C.L.R. 353 at 382.

In seeking to recover the money which the respondent paid as rent pursuant to the lease, the respondent in effect invokes the reasoning in Davids Securities and Roxborough v Rothmans of Pall Mall. It claims that it paid rent under the lease in the mistaken belief that it was bound in law to pay it, and therefore, because of the mistake, it is entitled now to recover it. But, as has been seen, in order to succeed in that claim the respondent must establish that it paid the rent as upon a total failure of consideration. And, in effect, that necessitates acceptance of the proposition that, whatever benefit the respondent might have received from the use and occupation of the demised premises, the respondent did not receive the benefit for which it bargained. In my view the respondent has not succeeded in establishing that it did not receive the benefit for which it bargained.

Admittedly, there is a sense in which the state of affairs contemplated as the basis or reason for payment did not exist at the time of payment. Presumably, the respondent paid the rent because it considered that it was legally bound to pay it. As it now appears, it was not legally bound to pay it. But to reason from there to the conclusion that the rent is recoverable is I think to ignore a significant difference between cases like Davids Securities and Roxborough v Rothmans of PallMall and cases with facts like this case.

In Davids Securities the bank argued against recovery on the basis that despite the customer’s mistake as to the legality of the withholding tax covenant, the customer received the benefit for which it bargained, or at least received part of the benefit, namely, the provision of a loan. Therefore, according to the bank, there was not a total failure of consideration. But that argument failed because the parties had impliedly acknowledged that the consideration could be broken up or apportioned as between principal and interest, on the one hand, and a grossing-up amount to cover withholding tax, on the other hand. The state of affairs contemplated as the basis or reason for payment of the grossing-up amount could thus be seen as the customer’s belief that it was legally bound to meet the bank’s withholding tax liability. The benefit for which the customer bargained was the benefit of being discharged from what it supposed was its legal liability to pay the grossing-up amount. But, in the events which occurred, Section 261 of the Income Tax Assessment Act 1936 rendered void the bank’s attempt to pass on the withholding tax liability to the customer. Therefore, the state of affairs or reason for the customer’s payment of the grossing-up amount did not exist and the customer did not receive the benefit for which it bargained.

Similarly in Roxborough v Rothmans of Pall Mall, the tobacco company argued against recovery on the basis that, despite the customer’s mistake as to the legality of the tobacco licence fees which it paid, the tobacco licence fees were part of the total price of the tobacco products sold and delivered to the tobacco retailer, and therefore that the retailer received the benefit for which it bargained: namely, the provision of the tobacco products. It was held, however, that it accorded with the basis of dealing and contractual arrangements between the tobacco company and the retailer to regard the licence fee component of the net wholesale cost of the cigarettes as a distinct and separate element of the consideration. It followed, as it was held, that the retailer had not received any of the benefit for which it bargained when agreeing to pay that component of the price, and hence that component of the total net wholesale cost was recoverable as money had and received.

The position in this case is different. Whereas in Davids Securities the borrower got nothing in return for its payment of the grossing-up amount, and in Roxborough v Rothmans of Pall Mall the tobacco retailer got nothing in return for its payment of the tobacco licence fees, in this case the respondent got the benefit of the use and occupation of the demised premises in return for the rent which it paid. As I see it, that is the benefit which it had in view - the benefit for which it bargained - when it agreed to pay the rent. It is true that the respondent was not under a legal duty to pay the rent and, therefore, it is true that the payment of what it perceived to be rent did not discharge it from an obligation to pay rent. But as I have said, I do not consider that s.8(2) prohibits the lessor receiving or recovering any consideration in respect of the lessee’s use and occupation of the demised premises. There does not seem to be any statutory imperative for concluding that the tenant was intended to have the benefit of free use and occupation. And it is to be noted that no other basis has been suggested. It follows, in terms of a conventional analysis, there has not been a total failure of consideration.

An alternative way of looking at the matter is in terms of the lessor’s right to recover or retain a reasonable satisfaction for the tenant’s use and occupation of the premises and, correspondingly, the lessor’s right to retain so much of the rent paid as does not exceed the amount of a reasonable satisfaction. For the reasons already given, I do not consider that s.8(2) prohibits a lessor from receiving or retaining a reasonable satisfaction for use and occupation dehors the lessee’s express contractual obligation to pay rent. Accordingly, in my view, this is the sort of situation in which the restitutionary principles essayed in Pavey & Matthews Pty Ltd v Paul[53] may apply.
[53](1987) 162 C.L.R. 221 at 262.

In Pavey & Matthews v Paul the High Court held that there was no apparent reason in justice why an unlicensed builder (who was precluded by s.45 of the Builders Licensing Act 1971 (NSW) from enforcing a building agreement) should not bring proceedings on a common indebitatus assumpsit count to recover fair and reasonable remuneration[54] for work which was actually done and which the owner had accepted. Parity of reasoning implies that there is no reason why a lessor who is precluded by s.8(2) of the Retail Tenancies Reform Act 1998 from bringing proceedings for the recovery of rent should not bring proceedings to recover or retain out of the rent paid a reasonable satisfaction for the use and occupation of demised premises.
[54]Albeit never more than the contract sum.

There are of course textual differences between the legislation in issue in each case. Section 45 of the Builders Licensing Act provided simply that the building contract was unenforceable. That may be contrasted with the express statement in s.8(2) of the Retail Tenancies Reform Act that, if a disclosure statement is not given, rent is not payable for the period for which the statement remains unfurnished. But I do not think that the textual differences are significant. The substantive effect of each provision is to render the express contractual obligation for payment unenforceable. The point is made in the decision of the South Australian Full Court in Upjay Pty Ltd v MJK Pty Ltd, [55] in relation to ss.6(2) and (3) of the Land Agents Act 1994 (SA). Section 6(2) provided that an estate agent was not entitled to commission unless registered under the Act and s.6(3) went even further than s.8(2) of the Retail Tenancies Reform Act, by providing that any commission or other consideration paid or given to such a person could be recovered from that person as a debt. But the Full Court held that an unregistered estate agent was still entitled to recover reasonable remuneration for his services as upon a quantum meruit. As Doyle, C.J., with whom Williams, J. agreed, said:

“As the contractual obligation for the payment of commission is unenforceable there is no agreement or request from a promise to pay might be expressed or implied. Without a contractual obligation, the way is clear for the proceeding on a quantum meruit to apply and for the Court to determine fair and just remuneration to be recoverable having regard to the nature, value and extent of the services provided.” [56]

[55](2001) 79 S.A.S.R. 32.

[56]Ibid. at 47 [72], my emphasis.

The fact that this case is concerned with the use of land may also be seen as a point of distinction. At common law an action for use and occupation of land did not lie unless the plaintiff were able to prove the existence of an agreement, express or implied, between him and the defendant to the effect that the latter be at least the tenant at will of the former of the lands or premises occupied and shall pay for that occupation. While, therefore, use and occupation of land by itself was enough to suggest an obligation to pay compensation, no action lay for the recovery of compensation where a defendant had entered into possession under a contract which provided expressly or impliedly that he was to occupy without compensation. Lord Atkinson stated the principle in Attorney-General v De Keyser’s Royal Hotel,[57] as follows:

“…These authorities establish, I think, this proposition, that, in order to recover in the ordinary action for use and occupation, the plaintiff must prove the existence of an agreement, express or implied, between him and the defendant, to the effect that the latter shall at least be the tenant at will of the former of the lands or premises occupied, and shall pay for that occupation. In Phillips v Homfray Bowen L.J., as he then was, said:-
‘Actions for use and occupation, according to the better opinion, have been confined to the class of cases where [the] defendant is not a trespasser setting up an adverse title, and where there are no circumstances that negative the implication of a contract: see Churchward v Ford, per Pollock C.B.; Birch v Wright. No doubt the mere enjoyment by one man of another man’s property, real or personal, may be had under such circumstances as leave still open, as a reasonable inference, the presumption that it is taken on the terms of payment, just as a man who takes a bun from the refreshment counter at a railway station, takes it on the implied promise to pay for it.’

A familiar example of the class of cases in which the circumstances negative the implication of such a contract is where a purchaser enters with the owner’s permission into possession of property sold under a contract of sale, the purchase of which subsequently goes off.”

[57][1920] A.C. 508 at 533. (citation omitted)

It follows that a possible argument against the appellant’s right to retain a reasonable satisfaction for use and occupation of the demised premises is that, because the respondent went into occupation of the leased premises under an express agreement to pay rent, and the contractual obligation to pay rent has been rendered unenforceable, it is not open to imply an agreement to pay for use and occupation of the demised premises. I do not accept that argument, however, for, in terms of principle, there is no more reason why an action for use and occupation should fail in those circumstances than there was reason for an action for work and labour done to fail in the circumstances encountered in Pavey & Matthew v Paul and Upjay v MJK; and, in point of fact, nothing has been suggested which would make the position here any different.

In Pavey & Matthew v Paul the majority of the High Court overcame the problem of negative implication[58] by eschewing the implied contract theory of the indebitatus assumpsit counts and holding instead that the builder’s action on a quantum meruit rested on unjust enrichment arising from the building owner’s acceptance of the benefits accruing from the builder’s performance of the unenforceable building contract. Mason and Wilson, JJ. said that:

“…We are therefore now justified in recognizing, as Deane J has done, that the true foundation of the right to recover on a quantum meruit does not depend on the existence of an implied contract.
Once the true basis of the action on a quantum meruit is established, namely execution of work for which the unenforceable contract provided, and its acceptance by the defendant, it is difficult to regard the action as one by which the plaintiff seeks to enforce the oral contract. True it is that proof of the oral contract may be an indispensable element in the plaintiff's success but that is in order to show that (a) the benefits were not intended as a gift, and (b) that the defendant has not rendered the promised exchange value: Fuller and Perdue, loc cit, p 387 n 125. The purpose of proving the contract is not to enforce it but to make out another cause of action having a different foundation in law.[59]

[58]And, in following Pavey, the South Australian Supreme Court in Upjay did the same.

[59] (1986) 162 C.L.R. 221 at 227.

Deane, J. said:

“…the tendency of common lawyers to speak in terms of implied contract rather than in terms of an obligation imposed by law (see, eg, per Salter J, Scott v Pattison[60] ) should be recognized as but a reflection of the influence of discarded fictions, buried forms of action and the conventional conviction that, if a common law claim could not properly be framed in tort, it must necessarily be dressed in the language of contract. That tendency should not be allowed to conceal the fact that, in that category of case, the action was not based upon a genuine agreement at all. Indeed, if there was a valid and enforceable agreement governing the claimant's right to compensation, there would be neither occasion nor legal justification for the law to superimpose or impute an obligation or promise to pay a reasonable remuneration. 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.[61]

[60] [1923] 2 K.B. 723 at 727-728.

[61] (1986) 162 C.L.R. 221 at 256.

Logic implies that similar considerations should govern a lessor’s claim to recover restitution arising from a tenant's acceptance of the benefits of occupation of demised premises under an unenforceable lease. The lease shows that the benefits of occupation were not intended as a gift, and the claim to recover reasonable compensation for use and occupation is to be characterised as a claim dehors the contract.

There is a further complication as a result of Lane, J’s decision in Morris v Tarrant[62] that restitution was not available as a remedy for the recovery of reasonable compensation for the use and occupation of land:

“ In my judgment there is no sufficient precedent for holding that the plaintiff should recover from the defendant in this case under the doctrine of unjust enrichment simpliciter, albeit, as Mr. Goodenday pointed out, the defendant was enriched by his free occupation of the property, both as a dwelling-house and as an office inasmuch as he enjoyed the capital or the interest thereon which he would otherwise have required to use for the provision of alternative accommodation. It seems to me that it would be undesirable and would lead to uncertainty of the law if the doctrine of unjust enrichment were arbitrarily extended, at any rate where an alternative remedy was available to the plaintiff, as it is in this case [mesne profits for trespass to land].”[63]

[62][1971] 2 Q.B. 143.

[63]Ibid. at 162.

To some extent those reservations resonate with Deane, J.’s caveat in Pavey & Matthew v Paul as to the need to avoid idiosyncratic notions of what is fair and just, and that unjust enrichment is not properly to be seen as a free standing basis of recovery. It will be remembered that his Honour stressed that the circumstances in which the common law imposes an enforceable obligation to pay compensation for a benefit accepted under an unenforceable agreement are to be gleaned from the decided cases and, consequently, that, although unjust enrichment can be seen as a unifying legal concept which explains why the law recognizes an obligation to make fair and just restitution in a variety of distinct categories of cases, the circumstances in which the law will recognise that sort of obligation are unlikely greatly to be to be affected by the perception that the basis of the obligation is preferably seen as lying in restitution.

In David Securities Pty Ltd v Commonwealth of Australia.[64] the majority of the High Court spoke in similar terms and, more recently, in Roxborough v Rothmans of Pall Mall,[65] Gummow, J. regarded with considerable scepticism any “all-embracing theory” of restitution that seeks to treat “the disparate as no more than species of the one newly discovered genus.”[66]
[64](1992) 175 C.L.R. 353 at 379.
[65](2001) 208 C.L.R. 516 at 544[74].
[66]Ibid.

As against that, however, since Morris v Tarrant some judges in England have held that there are circumstances in which a landlord may sue for restitution for use and occupation of demised premises[67] and, consistently with developments in England, Gummow, J.’s analysis in Roxborough v Rothmans of Pall Mall shows that in this country the categories of restitutionary remedies are not closed:

“… the action to recover the moneys sought by the appellants after the failure of the purpose of funding Rothmans to renew its licence may be illustrative of the gap-filling and auxiliary role of restitutionary remedies [68] . These remedies do not let matters lie where they would fall if the carriage of risk between the parties were left entirely within the limits of their contract. Hence there is some force in the statement by Laycock [69] :
‘The rules of restitution developed much like the rules of equity. Restitution arose to avoid unjust results in specific cases - as a series of innovations to fill gaps in the rest of the law.’”

[67]See Ministry of Defence v Ashman [1993] 2 E.G.L.R. 102 at 105, per Hoffman, L.J.; Ministry of Defence v Thompson [1993] 2 E.G.L.R. 107; but cf. Inverugie Investments Ltd v Hackett [1995] 1 W.L.R. 713 at 716-7; Attorney-General v Blake [2001] 1 A.C. 268 at 279, per Lord Nicholls.

[68]Dietrich, Restitution: A New Perspective (1998), pp 29-35; Grantham and Rickett, “On the Subsidiarity of Unjust Enrichment” (2001) 117 L.Q.R. 273 at 289-293.

[69]“The Scope and Significance of Restitution”: (1989) 67 Texas Law Review, 1277 at 1278.

Just as importantly, as Gummow, J also observed in Roxborough v Rothmans of Pall Mall, because of Pavey & Matthews v Paul the doctrinal basis of the action for money had and received has now been removed from the “pikestaff” of implied contract and the notions of equity which Lord Mansfield in Moses v Macferlan worked into the common law action for money had and received are now free to take effect.[70] For present purposes, the most significant of those notions is that a plaintiff will be precluded from asserting a legal right in circumstances where its assertion would constitute unconscionable conduct.[71]
[70](2001) 208 C.L.R. 516 at 551[90].
[71]Ibid. at 554[100].

The action for money had and received is by nature one of the most comprehensive of all common law counts and as such it represents the translation of equitable principles doctrines and proceedings into the trial of an action at law. Consistently with equitable principle, it affords a right to recover back at law money which ought not in conscience be kept. But for the same reason it affords no right to recover back moneys which in conscience the payee ought to keep.[72] A defendant is therefore entitled to raise by way of answer any matter or circumstance which shows that his or her receipt or retention of the payment or some part of it is not unjust.[73] As Gummow, J. put it:

“…By referring to the action as one in the nature of a bill in equity, Lord Mansfield was inviting attention to what would be required in the plaintiff's declaration. In Moses v Macferlan his Lordship emphasised:
‘One great benefit, which arises to suitors from the nature of this action, is, that the plaintiff needs not state the special circumstances from which he concludes `that, ex aequo & bono, the money received by the defendant, ought to be deemed as belonging to him:' he may declare generally, `that the money was received to his use;' and make out his case, at the trial.’
On the general issue, the defendant at trial was, as it later was put by this Court in David Securities : ‘entitled to raise by way of answer any matter or circumstance which [showed] that his or her receipt (or retention) of the payment [was] not unjust.’” [74]

[72]National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 C.L.R. 251 at 268, per Gibbs, C.J.

[73]Davids Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 C.L.R. 353 at 379.

[74](2001) 208 C.L.R. 516 at 551[91], citations omitted.

Those observations must be read in conjunction with the warning that it is a mistake to treat restitution as a modern synonym for a refusal “against conscience” to pay the money in question. It is clear enough that an action for money had and received may lie against a defendant who fails to account but who on any sensible understanding of the term has not been enriched and, equally, it is not a condition of an action for restitution on the basis of unjust enrichment that a plaintiff have been impoverished by or to the extent of the defendant’s enrichment. Furthermore, and despite the breadth of equitable principle, it remains that the scope of restitutionary remedies is informed, and to a large extent limited, by the categories of the decided cases.

But subject to those limitations, it is in accordance with principle, and it has been recognised in at least some of the authorities, that an entitlement to sue for “counter restitution” is pro tanto an answer to a claim for restitution. It follows, at least to that extent, the appellant’s retention of the moneys paid as rent would not be unjust.[75] I conclude that the appellant is entitled to raise by way of answer to the tenant’s claim that the tenant has had the use and occupation of the demised premises and that in formulating his claim the tenant must allow for a reasonable satisfaction for the benefit of that use and occupation.
[75]Baltic Shipping Co v Dillon (1993) 176 C.L.R. 344 at 351; citing Davids Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 C.L.R. 353 at 383.

Since the only evidence of the amount of a reasonable satisfaction for the use and occupation of the demised premises is the lease itself, I see no reasons why the amount to be allowed for use and occupation should not be equal to the rent. It has not been suggested that it is more than a reasonable amount. It follows in my judgment that the tenant’s claim to recover the rent it paid should have been held to fail.

Conclusion and orders

In the result, I would allow the appeal. The judgment the subject of appeal should be set aside and in lieu thereof it should be ordered that the appeal from the decision of the Victorian Civil and Administrative Tribunal be allowed and the order of the Tribunal the subject of appeal be set aside. In lieu of the order of the Tribunal it should be ordered that the respondent’s application for recovery of the amount paid by way of rent be dismissed.

ASHLEY, J.A.:

I have had the advantage of reading the reasons in draft of Chernov and Nettle, JJ.A. The main circumstances of the matter are set out in the reasons of Chernov, J.A. at [1]-[2].

The Meaning of Section 8 of the Retail Tenancies Reform Act 1998 (‘the Act’)

I agree with the construction placed upon the section by the learned judge in the Trial Division, for the reasons which his Honour gave, and for the further reasons given by Chernov and Nettle, JJ.A. But that does not conclude the appeal.

The Critical Issue

As the matter was argued in this Court, there were two limbs to the appellant’s submission critical to the disposition of the appeal. Acceptance of either limb of the argument was enough, it was contended, to ensure the success of the appeal. The limbs were as follows:

·First, that the tenant’s claim for restitution, being for an amount equal to the rent which it had paid under a mistake[76] was defeated by a defence of good consideration – the consideration being exclusive use and occupation of the premises given in return for the payments made.
·Second, that the landlord in any event had an available counter-claim in respect of the tenant’s use and occupation of the premises; this being, in the particular instance, for an amount equal to the amount of the tenant’s claim.

[76]That is, an amount which it paid because it was unaware that it was not liable to pay the same by operation of s.8(2)(b) of the Act.

There is a question whether the subject matter of the critical submissions was properly before the Court. I will address that question in a moment. But upon an assumption that the Court was properly seised of the matter , I agree, for the reasons given by Chernov and Nettle J.J.A., that the issue should be resolved as they propose.

That outcome, on one view, might be thought anomalous. For it means, in the simple language of money outlaid and money received, that the landlord will retain an amount paid as rent which the tenant was not liable to pay as rent. But that is far from being the whole story. The principles which their Honours have applied mean, on the one hand, that a landlord whose position was unmeritorious would not be able to raise a claim for an amount equivalent to unpaid rent, or retain such an amount if the same had been paid, when once a disclosure statement was supplied; or, on the other hand, that a tenant whose position was unmeritorious would have no liability to the landlord for an amount equivalent to unpaid rent after provision to it of a disclosure statement, or be able to recoup such an amount if it had been paid. By “unmeritorious” I do not refer to some idiosyncratic notion of what would be fair; but rather focus upon the question whether the tenant, in the period in respect of which there was no liability to pay rent, got what it had bargained to pay for, as reflected by the lease.

In the present case, the tenant evidently did get what it bargained to pay for under the lease. It got the use of occupation and the premises. There was no suggestion that the premises were other than as described. No allegation was made of any misrepresentation inducing entry into the lease. When the tenant was eventually given a disclosure statement, it did not suggest that its decision to enter into the lease on the terms that it had done would have been any different had the statement been earlier provided. Neither did it exercise its right under s. 8(2)(c) of the Act. To add emphasis to the last of those matters, Ms McLellan, principal of the tenant, agreed in cross-examination that she did not want to terminate the lease. In the event, this was a case in which the tenant’s position was not relevantly meritorious.

An Antecedent Issue

I have thus far assumed that the critical issue was properly the subject of appeal to the Supreme Court, and was in fact the subject of appeal. Whether that was the case is a question logically antecedent to resolution of the issue. It is not to be confused with the question whether the issue was argued in the Trial Division or in this Court. Nor is it to be confused with the question whether the respondent, either in the Trial Division or in this Court, pressed a submission that the key issue was not properly the subject of appeal.

The dispute between landlord and tenant began its legal journey in the Victorian Civil and Administrative Tribunal. A party may appeal, by leave, from the Tribunal to the Supreme Court.[77] The right of appeal is confined by s. 148(1) of the Victorian Civil and Administrative Act 1998 to a “question of law”. It must be a question of law which arose in the proceeding.[78] It is beside the point that the parties might agree before the Supreme Court to argue a question of law which was not sufficiently raised before the Tribunal. Section 148(1) does not confer a general appellate function upon either the Trial Division or the Court of Appeal.
[77]As to the nature of which, see Roy Morgan Research Centre Pty Ltd v Commissioner of State Revenue (2001) 207 C.L.R. 72 at 79-80, [15]. See also Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 V.R. at 335 [9], bearing upon grant of leave to appeal.
[78]Transport Accident Commission v Hoffman [1989] V.R. 197 at 199.

That takes me to the Points of Claim and Points of Defence. At the heart of the former was the allegation that –
“14.The Respondent has failed, neglected or refused to repay the rental paid by the applicant under the lease in the sum of $64,953.36 which pursuant to section 8 of the Reform Act the applicant was not liable to pay.”
The Points of Defence met the allegation as follows:
“14.Save that it admits that it has not repaid the applicant any rental paid by it pursuant to the lease, it denies that the Reform Act enables the applicant to recover the rental paid by it . . . “
That response could have meant, in the context of my present enquiry, almost anything.

Next, the evidence led at the Tribunal hearing, save in glancing fashion, was silent upon the issue whether the tenant in fact got what it bargained for in the period before the disclosure statement was provided. In that connection, and as I have already noted, Ms McLellan agreed that, having ultimately received the disclosure statement, she did not want to terminate the lease – which was for a 6 year-term commencing on 14 August 2000, with provision for two further terms, each of three years.

I turn to the Tribunal’s reasons. In substantial part they show that it was concerned to resolve the question whether the rent had been paid under a mistake. In that connection, the Tribunal contrasted an earlier case in which there had been no evidence that the tenant would not have paid the rent had it known there was no obligation to do so. It accepted the uncontradicted, though improbable, evidence of Ms McLellan to the contrary. It was of opinion that David Securities Pty Ltd v Commonwealth Bank of Australia[79] meant that the tenant could recover rent paid under a mistake.
[79](1992) 175 C.L.R. 353.

To that point, the Tribunal’s reasons were unremarkable. Then it said:
“It was submitted by [counsel for the landlord] that a correct interpretation of David Securities means that restitution can only be ordered if there has been a total failure of consideration. I reject this.”
I should refer to one other aspect of the Tribunal’s reasons. Thus:
“Further, it was suggested that the landlord would have a right to recovery of rent, if restitution were ordered, pursuant to the provisions of s.8 of the Landlord and Tenant Act 1958. However, I note that the landlord has not lodged a counterclaim and therefore does not have a claim before the Tribunal . . .”
The passages in the reasons to which I have just referred suggest that –

·The landlord had relied upon David Securities; but had not submitted that it had a defence of good consideration based upon the tenant having got what it had bargained and paid for – that is, use and occupation of the premises.
·The landlord had raised the prospect of a counter-restitutionary cross-claim, described by the Tribunal as a “right to recovery of rent” under a particular statutory provision; but had not submitted that it did not matter that a counterclaim was not then on foot.

If that was all there was, I would doubt that the questions of law which this Court has considered critical arose before the Tribunal. That takes me to the Notice of Appeal.

By R. 4.11(1)(b)(v) of Chapter II of the Rules, the Notice must concisely set out the grounds of appeal. Here, as is as ordinarily the case, the grounds mirrored the questions of law which were said to have arisen. Ground 2 was as follows:

“The Tribunal erred in failing to hold that the provision by the Appellant to the Respondent of good consideration for the payments of rent by the Respondent – namely, the exclusive use and occupation of the leased premises – was a defence to the Respondent’s claim in unjust enrichment to recover the payments of rent.”

Ground 3 is also of some relevance. It is somewhat opaque. I shall not set it out. It is enough to say that the gist of the two paragraphs appears to be, first, that the landlord was asserting that it had raised an argument before the Tribunal that good consideration had been provided by way of use and occupation of the premises; and second, that it was complaining, inter alia, that the substance of its counterclaim argument had not been addressed by the Tribunal.

The combination of grounds 2 and 3 plainly suggests, notwithstanding the Tribunal’s reasons, that submissions resembling the submissions which were pursued in this Court were agitated before the Tribunal. That is not to say that the submissions advanced before the Tribunal, the learned judge in the Trial Division, and in this Court, were the same. But it is to say that, probably, the substance of the questions of law stated in the Notice of Appeal had arisen in the tribunal proceeding, and were properly the subject of appeal under s.148(1) of the VCAT Act.

It is of significance, I should add, that, so far as appears, counsel for the tenant did not submit to the learned judge in the Trial Division that ground 2 of the Notice of Appeal raised some new matter. The situation is not the same as would have obtained if the Tribunal’s reasons should be taken to have fully addressed the landlord’s arguments, if there had been no ground 2, and if the landlord in those circumstances had raised what might be called a ground 2 argument without objection being taken by the tenant’s counsel.

Different Arguments

What I have so far concluded is enough to establish the jurisdiction of the Supreme Court to consider the critical submissions. On the other hand, I consider it clear that the arguments advanced before the Tribunal, the learned judge in the Trial Division, and before this Court, were not the same. So, for instance, the contention that the landlord had an available cross-claim, for an amount equal to the tenant’s restitutionary claim, was advanced – though in substantially different form – before the Tribunal; but not, so far as I can see, before the learned Trial Division judge.

Again, the “good consideration” submission appears to have altered complexion over time. Accepting that the Tribunal’s reasons may not have fully captured what was there submitted, it seems at least clear that the pertinent submission before the learned judge in the Trial Division and before this Court was not the same.

In that connection, his Honour noted the landlord’s submission that it had provided consideration by way of “the provision by [it] to the tenant of the use and quiet enjoyment of the demised premises”. He noted also the countervailing submission. Thus:

“[Counsel for the tenant] contended that the consideration provided by the landlord to the tenant – quiet possession of the premises – was in exchange for the valid and operative obligations of the tenant which did not, pursuant to s.8(2)(b), include an obligation to pay rental before the date upon which the disclosure statement was provided.”

Having next noted the landlord’s response to that submission, his Honour rejected the landlord’s submission that s8(2)(b), if it operated in this case, only rendered the underlying obligation to pay rent unenforceable; in which circumstance the promise to pay rent, and its payment, was in consideration of provision by the landlord of quiet possession of the premises. Section 8(2)(b), his Honour held, on its plain terms negated the liability to pay the rent of which the tenant sought recovery.

It was in this context that his Honour considered authorities upon which counsel for the landlord relied. Having described Pavey and Matthews Pty Ltd v Paul[80] as a case in which a builder claimed on a quantum meruit, based on the concept of unjust enrichment, and not in a contract, he said this:

“By contrast, in the present case, the landlord is not seeking to assert any claim, other than for rent, in respect of the provision by it of the use and occupation, of the demised premises. The landlord asserts that pursuant to the lease itself it provided good consideration to the tenant. A fortiori the landlord relies on the terms of the bargain – the lease – between itself and the tenant to identify whether consideration was provided by it in exchange for the rental mistakenly paid to it by the tenant. Thus the argument made on behalf of the landlord returns to the same point which I have discussed above, namely, that the lease between the paries still exists, with all of its obligations intact, minus any obligation by the tenant to pay rent for the period during which the disclosure statement was not provided. That analysis of the ‘consideration’, on which the landlord relies, takes this case outside the province of cases as Pavey and Matthews.”

[80](1986) 162 C.L.R. 221.

Referring to other authorities relied upon by the landlord, including Upjay Pty Ltd v MJK Pty Ltd,[81] his Honour said this:

“Each of those cases deal with the same issue under consideration in Pavey and Matthews and in particular whether the terms of the statute in question, on its proper construction, prevents recovery on a quantum meruit, or, conversely, prevents a party such as a builder from resisting a claim for payment under mistake. They do not in my view assist the landlord in this case where the payment by the tenant was made in respect of an obligation which, by the terms of the statute, did not exist, and where the consideration relied upon by the landlord was provided in respect of a contract where all other mutual rights and obligations remained intact.”

[81](2001) 79 S.A.S.R. 32.

It is certainly the case that the authorities relied upon by the landlord before the learned judge and in this Court were the same. But his Honour approached the matter on the footing that the landlord’s contention was that it was entitled to retain the rent paid, qua rent, for having given use and occupation of the premises to the tenant; the defence having as its foundation reliance on the lease itself. In this Court, however, it was not submitted that the defence to the tenant’s claim for restitution lay in an entitlement to the rent paid, qua rent. That was not the only variation in the argument which was advanced. In the event, it appears to me that the analysis made by the learned Trial Division judge depended upon the particular way in which the matter was advanced before him.

It is often enough the case that arguments of a purely legal character, though founded on the same bedrock, are shaped in different ways as a matter progresses from trial through appeal. Provided, in an appeal comprehended by s.148(1) of the VCAT Act, that the question of law arose before the Tribunal, the variant argument must be addressed on the appeal. That said, it should be acknowledged that it must be cold comfort to the Tribunal, and to the judge of the Trial Division, let alone to the party which ultimately fails, that an appeal should succeed in this Court upon an argument which varies from that which was earlier advanced; whilst the multiplication of cost is surely undesirable.

Conclusion

The appeal should be resolved in the manner proposed by Chernov J.A. and agreed in by Nettle J.A.

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8 February 2006