Winslade Partners Pty Ltd v Steri-Flow Filtration Systems (Aust) Pty Ltd - [2012] SASCFC 65

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
WINSLADE PARTNERS PTY LTD v STERI-FLOW FILTRATION SYSTEMS (AUST) PTY LTD
[2012] SASCFC 65
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Vanstone and The Honourable Justice Peek)
6 June 2012
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - POINTS AND OBJECTIONS NOT TAKEN BELOW - WHEN NOT ALLOWED TO BE RAISED ON APPEAL - QUESTIONS NOT RAISED ON PLEADINGS OR IN ARGUMENT
RESTITUTION - RESTITUTION RESULTING FROM UNENFORCEABLE, INCOMPLETE, ILLEGAL OR VOID CONTRACTS - RECOMPENSE FOR SERVICES RENDERED - QUANTUM MERUIT - GENERAL PRINCIPLES
APPEAL AND NEW TRIAL - APPEAL - PRACTICE AND PROCEDURE - SOUTH AUSTRALIA - HEARING OF APPEAL - PROOF AND EVIDENCE
In 2004 the respondent entered into a contract with the appellant for the appellant to prepare an application to AusIndustry for a Commercial Ready grant in the name of the respondent – the work was to be carried out by the appellant on a ‘success fee basis only’, which was to be 10 per cent of the value of the grant if the application was successful – the application prepared by the appellant was rejected by AusIndustry – in 2005, the respondent contracted with another company to prepare another Commercial Ready grant application – the application was successful – the appellant became aware of this and claimed a payment of 10 per cent of the amount of the grant, relying on the agreement of 2004 – at trial, a Magistrate found in favour of the respondent – on appeal to this Court, a single Judge upheld the decision of the Magistrate, although on a slightly different basis.
The issues on appeal were: (1) whether a claim in copyright could be advanced on appeal to the Full Court when it had not been raised before the Magistrate at trial or on appeal before the single Judge of this Court; (2) whether the single Judge of this Court erred in allowing the appellant to advance a claim to a quantum meruit that had not been considered by the Magistrate – whether the evidence before the Magistrate established the benefit the respondent received from having before it the first application that had been prepared by the appellant, when the respondent was preparing the second application; (3) whether, assuming that the agreement of December 2004 did not entitle the appellant to payment, the appellant was nevertheless entitled to the payment claimed on the basis that the respondent had been unjustly enriched to the extent of an amount equal to the fee claimed; and (4) whether the single Judge of this Court erred in implying a term that ‘the work done in the form of the application became the property of the respondent’, when no implied term had been pleaded by the respondent, nor argued at trial or on appeal that such a term should be implied.
Held (Doyle CJ, Vanstone and Peek JJ): (1) it was too late to now assert that copyright in the first application vested in the appellant – if the appellant had based its claim on copyright, there would have been no need to consider a claim in restitution – the claim for breach of copyright was abandoned during the hearing of the appeal to the Full Court; (2) the claim to a quantum meruit was abandoned at trial – a claim in restitution has to be considered in the context of the contractual relationship of the parties – the contract was for a payment by the respondent to the appellant in the event that the first application succeeded – the possibility that the application would fail was foreseen by the parties – the contract had not failed or been frustrated – the case did not fall under the category identified in Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 – there was no evidence to identify the extent to which the respondent made use of the work done by the appellant, and benefitted from that work – a simple comparison of the documents was insufficient; (3) – the issue was not argued before the Magistrate, but was raised before the single Judge of this Court – it is well established that unjust enrichment is not an independent basis for recovery; and (4) it was not necessary to decide whether the single Judge of this Court erred in implying the term that he did because the context and the contractual arrangements were inconsistent with the grant of relief sought by the appellant.
Appeal dismissed.
Lumbers v W Cook Builders Pty Ltd (In Liquidation) (2008) 232 CLR 635; Roxborough v Rothmans of Pall Mall Australia Pty Ltd (2001) 208 CLR 516, discussed.
Farah Constructions v Say-Dee Pty Ltd (2007) 230 CLR 89, considered.

WINSLADE PARTNERS PTY LTD v STERI-FLOW FILTRATION SYSTEMS (AUST) PTY LTD
[2012] SASCFC 65
Full Court: Doyle CJ, Vanstone and Peek JJ

DOYLE CJ: In December 2004 Steri-Flow Filtration Systems (Aust) Pty Ltd (Steri-Flow) agreed with Winslade Partners Pty Ltd (Winslade) that Winslade would prepare an application to AusIndustry (a Commonwealth entity) in the name of Steri-Flow, for a grant called a “Commercial Ready grant” (the grant). The application was to be based on a proposal by Steri-Flow, and on information to be provided by Steri-Flow to Winslade. Steri-Flow proposed to apply for a grant of more than $1,000,000.
The agreement arose from a letter and quotation by Winslade dated 5 December 2004. The work was to be carried out by Winslade “on a success fee basis only”. If Steri-Flow was offered, and accepted, a grant, Winslade was to be paid “a fee of 10 per cent of the value of the grant”.
The application was to be lodged with AusIndustry in December 2004. That was done. The application process was a competitive one. By letter dated 9 March 2005, AusIndustry informed Steri-Flow that its application had not succeeded.
Unknown to Winslade, during 2005 Steri-Flow prepared a new application to AusIndustry for a grant. In September 2005 Steri-Flow arranged for another company to prepare the new grant application, which was lodged in March 2006. Steri-Flow paid this company a fee of about $30,000. This application was successful. Steri-Flow received a grant of slightly more than $1,000,000.
Later Winslade learned of this, and claimed a payment of 10 per cent of the amount of the grant, relying on the agreement of December 2004.
After a trial in the Magistrates Court a Magistrate found in favour of Steri‑Flow. On appeal to this Court, a single Judge upheld the decision by the Magistrate, although on grounds that differed somewhat. Winslade now appeals to the Full Court, permission to appeal having been granted.
The appeal raises an issue that was not argued before the Magistrate, but was raised before the Judge. It is whether, assuming that the agreement of December 2004 did not entitle Winslade to payment, Winslade was nevertheless entitled to the payment claimed on the basis that Steri-Flow had been unjustly enriched to the extent of an amount equal to the fee claimed. The unjust enrichment was said to lie in the circumstance that in making the second application Steri-Flow had taken the benefit of Winslade’s work, had gained a profit from that work, and so would be unjustly enriched if it did not pay Winslade the 10 per cent fee. The single Judge referred to this claim, no doubt reflecting the submission to him, as “a restitutionary quantum meruit”: Winslade Partners Pty Ltd v Steri-Flow Filtration Systems (Aust) Pty Ltd [2011] SASC 157 at [93].
Facts
Steri-Flow was “a manufacturing company specialising in stainless steel fabrication for the food and beverage industry:” Magistrate’s reasons at [10]. Winslade provided “consultancy services”. It provided such services to Steri‑Flow from about 2001. There was, then, a background of a business relationship between the two companies relating to projects or matters other than the one that gave rise to this litigation.
The application form provided by AusIndustry describes a “Commercial Ready grant” as:
... a competitive merit-based grant program which supports innovation and its commercialisation by supporting research and development, proof-of-concept activities and/or early-stage commercialisation activities.
There was some urgency about the matter. The application apparently had to be lodged by 20 December 2004. On 5 December 2004 Winslade (writing under another name, but nothing turns on that) wrote to Steri-Flow enclosing “our quotation to prepare a Commercial Ready grant application”. In the letter Winslade stated: (AB 79)
Given the extensive business planning work previously conducted for Steri-flow we confirm there is no requirement for Winslade to charge an up-front fee for performing this work. We are therefore offering to do the application on a success fee basis only. The quote below also includes work associated with the deed of agreement, reporting throughout the life of the project and assisting with managing the grant relationship. This fee structure assumes the grant achieved will be more than $1,000,000.
The attached quotation outlined the work to be done by Winslade. The quotation stated: (AB 80)
[Winslade] will prepare ready for lodgement a full Commercial Ready Programme application to Steri-flow’s satisfaction. This will include the development of an R&D Plan (written document and MS Project Plan) and a reworking of Steri-flow’s existing business and market plans to fit the style of Commercial Ready application.
The application will be finalised in consultation with Steri-flow and upon agreement that it is ready to submit, [Winslade] will produce:
·    Three application packs (two colour and one black and white)
·    One CD ROM (containing all documents in the application pack) and
·    A draft cover letter to the programme administrators ready for Steri-flow’s signature.
Although the Magistrate made no findings to this effect, I gather (as one would expect) that Winslade was to use information about Steri-Flow and its business and about the proposal the subject of the grant, to develop a detailed application in a form acceptable to AusIndustry. The quotation went on to state:
Should Steri-flow be formally offered grant assistance, a fee of 10% of the value of the grant will be payable to [Winslade]. The offer of grant assistance will mean that 75% of the fee will be payable to [Winslade] irrespective of whether Steri-flow takes up the grant. The remaining 25% of the additional fee will only be payable to [Winslade] when grant payments are received by Steri-flow.
There is no doubt that a substantial amount of work by Winslade was required to prepare the application. I assume that Steri-Flow also had to expend time and effort identifying and compiling information for use by Winslade in formulating the application.
The grant application was duly prepared and lodged. No criticism of Winslade’s work and effort has been made.
By letter dated 9 March 2005 AusIndustry advised Steri-Flow that its application had not succeeded. AusIndustry gave brief reasons for this in the letter.
About the middle of 2005 the relationship between Steri-Flow and Winslade was terminated, in circumstances of some disagreement. Steri-Flow paid Winslade a sizeable amount. However, the single Judge found (and this is not challenged on appeal) that the settling up between Steri-Flow and Winslade did not dispose of any claim that Winslade might have under the agreement of December 2004.
It appears that Steri-Flow intended to make a further application, once it had received further financial backing from an investor. Minutes of a board meeting of 13 April 2005 refer to Steri-Flow’s intention to revisit the project: Magistrate’s reasons at [260]. It was only later in the year that Steri-Flow was in a position to proceed. I gather that it was in about September 2005 that significant work began on the new application. The new application involved a substantial amount of work. The application was given to AusIndustry in December 2005 as a draft, and was finalised in March 2006: Magistrate’s reasons at [189]-[201]. The application was successful and Steri-Flow received a grant of $1,480,039.90.
Each of the applications was in a form provided by AusIndustry. The first application described the project for which the grant was sought as follows:
The Steri-flow product is a crossflow microfiltration system using a stainless steel sintered filter membrane.
The application identified innovative features of the project.
The application form comprised about 40 pages. It was supported by attachments comprising about 170 pages, described in the application as “Business and Market Plans for 2005/2006”; “R&D Plan”, and a “Market Analysis for Steri-Flow Filtration Systems (Aust) Pty Ltd”.
The second application comprised about 440 pages in all. The project for which the grant was sought was summarised as follows:
The project aims to develop a commercially sustainable method of producing stainless steel microfiltration membranes ranging in porosity sizes of 0.2-10 microns for use in filtration applications across a broad range of processes and industries. This offers partial import replacement of 180 Mp/a and significant export potential.
We were not referred to any evidence explaining whether or not the project the subject of the second application was significantly different from the project the subject of the first application. However, at the least the second application involved bringing up-to-date information that was contained in the first application. The second application itself comprised some 36 pages, accompanied by “Business Plan for 2006”, “Market Analysis for Steri-Flow Filtration Systems”, “R&D Plan” and a number of other supporting documents. It is apparent that each application would have required many hours of work.
The Magistrate rejected a submission that the second application was “a substantial replication” of the first application: Magistrate’s reasons at [266]. He accepted a submission for Steri-Flow that the second application “was a new application, significantly different in content and scope from the December 2004 application”: Magistrate’s reasons at [267]. The Magistrate reached this conclusion on the basis of evidence given by witnesses for Steri-Flow. He rejected evidence to the contrary given by Dr Winslade, a Director of Winslade, describing that evidence as “particularly unconvincing”: Magistrate’s reasons at [268]. The Judge said that this approach was flawed, because the issue could not be determined by an assessment of the credit of the relevant witnesses: Judge’s reasons at [90]. What was required was a comparison of the applications, and “an objective assessment of their similarities”: Judge’s reasons at [90]. The Judge said:
[91]I have considered the two applications which were admitted into evidence. There are significant similarities. It is plain that the resubmitted application of March 2006 relies in a substantial way on the work that had been undertaken in the preparation of the December 2004 application by the appellant. Nonetheless, there was material additional work performed in the preparation of the March 2006 resubmitted application. It was a different application. This is unsurprising, otherwise the December 2004 application would have been successful, just as was the March 2006 application.
Mr Manetta (for Winslade) and Mr Geyer (for Steri-Flow) each submitted that this Court should make its own assessment of the extent to which the second application drew on the work done by Winslade on the first application.
I consider that this Court should not attempt that task. It would require a careful analysis of each page of two substantial documents. The Full Court would have to go to the evidence before the Magistrate to see whether it contained any and what assistance in relation to this task. It is one thing to consider, as the Judge did, a different question, namely, whether the second application was “substantially the same” as the first application. That might be done by a comparison of the two documents. The Judge had done that, and had reached a conclusion (see above). It seems to have been common ground that the second application drew to some extent on material assembled for the first application. Equally, it was common ground that the second application involved many hours of work, and differed in some respects from the first application. As the Judge said, the second application was a different application, but relied “in a substantial way” on work that had been undertaken on the first application. But the nature of that reliance is not clear. With all respect to the Judge, it was probably inevitable that the second application would replicate “in a substantial way” work already undertaken. This was so because material provided by Steri-Flow for the first application was, presumably, relevant to the second application.
The real issue, in my opinion, is whether Steri-Flow made use of the work done by Winslade when Steri-Flow had the second application prepared and if so to what extent, and whether and to what extent that was a benefit to Steri-Flow. That cannot be decided by a comparison of the two applications.
It is relevant in this context to note that before the Magistrate Winslade abandoned a claim to a quantum meruit: Judge’s reasons at [48]. Before the Judge it maintained that what it had abandoned was a “non-contractual quantum meruit claim”, and that it could still maintain a “contractual quantum meruit”: Judge’s reasons at [48]. Had such a claim been pursued before the Magistrate it might have provided a factual basis for a finding as to the extent and value of the work carried out by Winslade, and as to the nature and extent of the use made of that work in the second application. This did not happen. But, as I have said, a comparison would not answer the question of what use was made by Steri-Flow of Winslade’s work, and what benefit that gave Steri-Flow. For those reasons I do not accept the submission that the court can or should embark on a comparison of the two applications as a means of answering the vital question of the nature and extent of the benefit gained by Steri-Flow (if any) from Winslade’s work.
The litigation
It is common ground that the agreement arising from Winslade’s letter and quotation of 5 December 2004 did not expressly provide for a payment to Winslade in the circumstances that eventuated.
Reflecting this, Winslade at first relied on an implied term of the contract. In its Particulars of Claim, Winslade pleaded:
16It was an implied term of the Commercial Ready Grant Agreement, necessarily implied to give business efficacy to the Commercial Ready Grant Agreement, that the plaintiff was entitled to do all that it considered necessary or desirable to obtain the said grant (including the submission of an amended application after any initial rejection) and that the defendant would not prevent the plaintiff from doing so.
…

18In breach of the Commercial Ready Grant Agreement, the defendant declined to permit the plaintiff to contact the Board and resubmit the application in a manner which addressed the Board’s concerns, but instead engaged another consultant to do so, using the work that the plaintiff defendant had already performed.
…

20By reason of the said breach of the Commercial Ready Grant Agreement the plaintiff has suffered loss and damage in the sum of $104,803.90, being the amount of fees that the plaintiff would have earned if the defendant had permitted it to resubmit the said application.

The Magistrate rejected this claim. He did not deal directly with the pleading of the implied term, but by implication rejected the argument that a term should be implied. In his reasons the Magistrate said:
[257]The quotation made no reference to any continuing contractual relationship in the event that the application was not successful.
[258]In my view, on its proper construction the December 2004 contract was exhausted when the defendant received the letter from AusIndustry dated 9 March 2005 advising that the application had not been successful.
As already noted, the Magistrate decided that the second application was significantly different from the first application. It is not clear whether that was an independent ground for rejecting a claim based on an implied term. The Magistrate also found that the settlement between Winslade and Steri-Flow in mid 2005 disposed of any claim in respect of the success fee. The Judge reversed the Magistrate on this point. Steri-Flow has not challenged that aspect of the Judge’s decision.
On appeal, the single Judge also rejected the pleaded implied term. He addressed the issue directly. The Judge said:
[83]The contract is effective without the implication of such a term. The contract is for the performance of the work necessary to lodge a full Commercial Ready program application. Once that work is performed, the contract is complete. It is not necessary for the performance of the contract that there be implied an entitlement on the part of the appellant to undertake further work by way of resubmission. There might not be any resubmission. In any event, the respondent may not wish the resubmission work to be performed by the appellant in circumstances where the initial application failed. There might be a breakdown in the commercial relationship between the parties in the meantime for reasons unrelated to the performance of this work. The difficulties with performing such a term are demonstrated by the very events which unfolded in this matter.
[84]In my opinion the learned magistrate was correct in concluding that the contract, on its face, and having regard to its commercial purpose, is to be construed as expiring in accordance with its terms once the initial application was lodged by no later than 20 December 2004.
[85]True it is that the work required by the appellants was extensive, but it was an express term of the contract that payment for this work would be on a contingency basis. The appellant assumed the risk that this work might go unrewarded. It was open to the parties to address what would happen in the event that the initial application was unsuccessful, but this did not occur.
This aspect of the Judge’s decision was not challenged by Mr Manetta. The result is that there is no longer a claim in contract being advanced.
Before the Judge, Winslade put its case on a new basis. The Judge held that Winslade should be permitted to do so, apparently on the basis that any relevant facts were before the Court and that Steri-Flow was not unfairly prejudiced as a result of this claim being advanced only on appeal: Judge’s reasons at [94]. Steri-Flow did not cross-appeal against this aspect of the Judge’s decisions, nor did it file a notice of contention in relation to it. Nevertheless, Mr Geyer submitted that because a quantum meruit claim was not advanced before the Magistrate, there had been no proper investigation before the Magistrate of the nature of the work performed by Winslade, nor of the extent to which that work had assisted the second application and benefitted Steri-Flow. I agree with that submission.
The Judge dismissed the claim based on “restitutionary quantum meruit”. The Judge said:
[97]The appellant submits it has an entitlement to restitutionary quantum meruit on the basis that the respondent, in making further use of the appellant’s work pursuant to the December 2004 contract, when it resubmitted the Commercial Ready grant application in March 2006, is obliged to pay the appellant a reasonable remuneration by way of restitution. I do not consider this to be correct.
The Judge rejected the claim by finding an implied term of the contract to the effect that “… the work in the form of the application became the property of the respondent”: Judge’s reasons at [99]. Winslade challenges the Judge’s finding that such a term was to be implied. It submits that if the term that the Judge implied is rejected, the claim of restitution can and should succeed. I add that before this Court Mr Manetta submitted that if the claim of restitution succeeded, Winslade should be awarded an amount equal to ten per cent of the amount of the grant, less the amount paid by Steri-Flow for the work done on the second application, an amount of about $30,000: Judge’s reasons at [58].
Consideration of appeal
Winslade complains that the Judge implied the term referred to above although Steri-Flow had not pleaded any such term, nor argued at trial or on appeal that such a term should be implied. That may be so. Mr Geyer did not submit to the contrary. But it is not apparent that Winslade has been unfairly treated in the circumstances. However, I pass by that point for the moment.
In his outline of submissions Mr Manetta submitted:
The contract is silent as to who was to have the “ownership” of the appellant’s work. What the appellant produced was an original piece of creative writing. It was a literary work for copyright purposes and, according to the normal rule, the intellectual property remains with the creator unless it is sold or given away. The work was not sold and, in the context of an arms’ length commercial agreement, it is not to be supposed, in the absence of clear indication, that work embodying hundreds of hours of the labour of one party and having a substantial commercial value is intended to be freely given away for the commercial exploitation of another.
This submission was put as part of the argument against the implication of the term that the Judge implied. I consider that it is now too late to assert that copyright in the first application vested in Winslade. If Winslade had based its claim on copyright, there would have been no need to consider a claim in restitution. A claim could then have been advanced for infringement of Winslade’s copyright. The Magistrate would have had to consider whether the first application was the subject of copyright, and whether Winslade was the owner of that copyright, either alone or jointly with Steri-Flow. The Magistrate would no doubt have heard evidence about the work done on the application by each of the parties, evidence of a kind not presented to the Magistrate, as Mr Manetta accepted. Had the quantum meruit claim been pursued before the Magistrate, evidence necessary to decide the copyright issue might have emerged, but such a claim was not pursued before the Magistrate. In my opinion Winslade cannot now assert that it owns the copyright in the first application, and that any later use of that material infringes its copyright. There is no evidence before the Court to provide an appropriate basis for a decision on the issue of infringement, even if copyright vested in Winslade.
When these points were raised, Mr Manetta disavowed a claim for breach of copyright. He submitted that Winslade’s claim could be supported on the basis that Steri-Flow took the benefit of Winslade’s work in compiling the first application.
That submission faces a factual difficulty on which I have already touched. I accept that the work done on the first application was of some benefit to Steri‑Flow in relation to the second application. But just how Steri-Flow benefitted, and to what extent, as a result of Winslade’s work, is uncertain. A simple comparison of the documents cannot answer that question. Steri-Flow was the source of information in support of each of the applications. It was in this context that Mr Manetta submitted that the Court should compare the applications, and should find that 90 per cent of the second application was the work of Winslade. That submission was apparently based on the evidence given by Dr Winslade to the Magistrate, evidence which the Magistrate said he rejected because it was “particularly unconvincing”: Magistrate’s reasons at [268]. How does this Court decide whether work done by Winslade on the first application materially assisted Steri-Flow in relation to the second application, and to what extent? The need for care in this respect is illustrated by the point already made, that as the information in the applications would have been derived substantially from Steri-Flow, the circumstance that the same material is to be found in each application does not necessarily point to a conclusion that work performed by Winslade has benefitted Steri-Flow.
Thus, the first obstacle to the acceptance of the submissions by Mr Manetta is that the Court has no basis for identifying the extent to which Steri-Flow made use of the work done by Winslade, and benefitted from that work. It is not sufficient for Mr Manetta’s submission to succeed that the Court accepts, as I do, that it was of some advantage to Steri-Flow to have the use of the first application in preparing the second application. The success of Mr Manetta’s submission depends on findings of fact which were not made, and which should not now be made.
There is another difficulty. The claim for restitution has to be considered in the context of the contractual relationship between Steri-Flow and Winslade. In Lumbers v W Cook Builders Pty Ltd (In Liquidation) [2008] HCA 27; (2008) 232 CLR 635, Gummow, Hayne, Crennan and Kiefel JJ said at [79]:
The doing of work, or payment of money, for and at the request of another, are archetypal cases in which it may be said that a person receives a “benefit” at the “expense” of another which the recipient “accepts” and which it would be unconscionable for the recipient to retain without payment. And as is well apparent from this Court's decision in Steele v Tardiani, an essential step in considering a claim in quantum meruit (or money paid) is to ask whether and how that claim fits with any particular contract the parties have made. It is essential to consider how the claim fits with contracts the parties have made because, as Lord Goff of Chieveley rightly warned in Pan Ocean Shipping Co Ltd v Creditcorp Ltd, “serious difficulties arise if the law seeks to expand the law of restitution to redistribute risks for which provision has been made under an applicable contract”. …
Citations omitted
The contract was for a payment by Steri-Flow to Winslade in the event that the first application succeeded. The possibility that the application would not succeed was foreseen by the parties. It is not a case in which the agreement has failed, nor has it been frustrated. The case does not fall under the category identified in Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516. That is a case involving “... payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared”: Gleeson CJ, Gaudron and Hayne JJ at [16]. I do not accept Mr Manetta’s submission that the contract between Winslade and Steri-Flow has failed. An event that the parties contemplated has occurred, and the contract makes no specific provision for what is to occur in that event. But the concept of a “success fee” used by the parties strongly suggests that a fee was to be payable by Steri-Flow to Winslade only in the event that the application prepared by Winslade was successful as it stood, or successful with minor adjustments of a kind that must have been contemplated by the parties. To my mind, the circumstances strongly suggest that the risk of Winslade not receiving a payment was allocated by the parties because the parties had agreed upon the circumstances in which Winslade was entitled to payment, using language that suggested an entitlement to payment only in one event.
Nor do I accept the basis upon which Mr Manetta put his claim in his outline. There he submits:
9.The facts answer all the elements of a claim for unjust enrichment: - the respondent has taken the benefit of work from the appellant – the work was not intended as a gift – the work was requested by and freely accepted by the respondent – knowing that it was not intended as a gift and the respondent, having derived a profit from the appellant’s work, would be unjustly enriched at the appellant’s expense if it did not pay for the work.
This submission appears to ignore the contractual context, and to be based on the premise (referred to in the preceding paragraph of the outline) that “intellectual property” in the application was vested in Winslade. Moreover, this submission appears to rely upon unjust enrichment as an independent basis for recovery, as distinct from using it as a concept which may explain the basis of recognised causes of action or claims. In Roxborough, Gummow J said at [72]:
Considerations such as these, together with practical experience, suggest caution in judicial acceptance of any all-embracing theory of restitutionary rights and remedies founded upon a notion of “unjust enrichment”. To the lawyer whose mind has been moulded by civilian influences, the theory may come first, and the source of the theory may be the writing of jurists not the decisions of judges. However, that is not the way in which a system based on case law develops; over time, general principle is derived from judicial decisions upon particular instances, not the other way around.
In Farah Constructions v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89, Gleeson CJ, Gummow, Callinan, Hayne and Crennan JJ said at [151]:
Unjust enrichment is not a “definitive legal principle according to its own terms” ...
approving in this passage the reasons of Gummow J just referred to. I am unable to fit the claim now advanced into any of the recognised categories for a grant of relief in a case like this. This is of itself not decisive, but it indicates that caution is required.
It is not necessary to decide whether the Judge was incorrect in implying the term that he did imply. It is not necessary because I conclude that the context, and the contractual arrangements, are inconsistent with the grant of relief on the basis upon which Mr Manetta submits it should be granted. The relevant context includes the circumstance that Winslade must have realised that Steri‑Flow might well apply again for a grant, if the application prepared by Winslade were unsuccessful. A second application might contain elements of the first, either in the concept or project put forward or in the detail supporting the grant application.
The circumstance that the contract between Steri-Flow and Winslade was silent as to any entitlement of Winslade to payment in the event of a successful second application supports a conclusion that Winslade had an entitlement to payment only in the event that the first application succeeded.
The circumstance that elements of the first application, indeed substantial elements, might appear in the second application establishes no basis for inferring that in preparing the second application Steri-Flow benefitted from the work of Winslade. The factual basis for a finding in favour of Winslade is not made out. It is not enough to say, as Mr Manetta argued, that Winslade’s work was valued at ten per cent of the anticipated grant, and that significant similarities between the first application and the second application establish that Steri-Flow had benefitted by using or taking advantage of work performed by Winslade to the value of ten per cent of the original grant.
Conclusion
For those reasons I would dismiss the appeal.
VANSTONE J: I agree that the appeal should be dismissed, and with the reasons given by the Chief Justice.
PEEK J: I agree with the orders proposed by the Chief Justice and with his reasons.