Russell Gould Pty Ltd v Ramangkura

Russell Gould Pty Ltd (the company) brought an action against Ramangkura to recover money paid by the company to Ramangkura. The company alleged that the director who authorised the payment lacked the authority to do so. The company did not allege any breach of fiduciary duty or dishonesty on the part of the director, and the recovery action was brought solely against the third-party recipient, Ramangkura. The case was heard in the Court of Appeal of New South Wales, with Bathurst CJ, Barrett and Ward JJA presiding.

The central legal issues before the Court of Appeal were whether the company could recover the money paid to Ramangkura in an action for money had and received at common law, and whether the proceeds of the payment were identifiable in Ramangkura's hands. Specifically, the court had to determine if the money could be followed or traced into Ramangkura's overdrawn bank account, and whether the director should be presumed to have sought payment of a debt owed to him by the company when he authorised the transfer.

The Court of Appeal reasoned that for the company to succeed in an action for money had and received, it was necessary for the money to be identifiable in the recipient's hands. As the money was transferred from the company's account to Ramangkura's overdrawn account at the same bank, and no credit balance resulted, the court found that the money could not be followed or traced into the overdrawn account. The court also considered whether the director's authorisation of the payment should be presumed to be for the purpose of discharging a debt owed to him by the company, but ultimately found no basis for equitable relief.

The appeal was dismissed with costs.