Westpac Banking Corporation v Hilliard

In the matter of Westpac Banking Corporation v Hilliard, the respondent, a bookkeeper, was sued by the appellant, a bank, seeking to recover funds paid to the account holders. The bank had paid cheques drawn on the account holders' accounts without knowledge that the proceeds were not for the benefit of the account holders but rather for the respondent's personal benefit. Following a deed of settlement, the bank compensated the account holders. The respondent, having received the benefit of the moneys, was subsequently sued by the bank for unjust enrichment.

The central legal issue before the court was whether the bank could recover the funds from the respondent, who had received the benefit of the moneys paid under a mistake. The court had to consider the principles of unjust enrichment and whether the respondent's retention of the funds would constitute unjust enrichment in the circumstances. Additionally, the court needed to determine if the respondent had a defence available under the doctrine of change of position.

The court concluded that the respondent's retention of the funds did constitute unjust enrichment. The respondent had no defence available under the doctrine of change of position, as the bank had not relied on the respondent's retention of the funds to its detriment. The court found that the respondent's actions in causing the bank to pay the funds to the account holders, knowing that they were not for the account holders' benefit, were wrongful. Consequently, the respondent was liable to the bank for the amount paid to the account holders under the deed of settlement.

The court ordered the respondent to pay the appellant the sum of $695,000, representing the amount paid to the account holders under the deed of settlement, plus interest and costs. The court held that the respondent's retention of the funds was unjust, and the bank was entitled to recover the moneys paid to the account holders.