Australian Financial Services and Leasing Pty Limited v Hills Industries Limited [2014] HCA 14

HIGH COURT OF AUSTRALIA

FRENCH CJ, HAYNE, CRENNAN, KIEFEL, BELL, GAGELER AND KEANE JJ

AUSTRALIAN FINANCIAL SERVICES AND LEASING PTY LIMITED APPELLANT AND HILLS INDUSTRIES LIMITED & ANOR RESPONDENTS

Australian Financial Services and Leasing Pty Limited v Hills Industries Limited [2014] HCA 14 7 May 2014 S163/2013

ORDER

Appeal dismissed with costs.

On appeal from the Supreme Court of New South Wales

Representation

C J Birch SC with M P Cleary and R L Gall for the appellant (instructed by Hilliard & Berry Solicitors)

I M Jackman SC with T M Thawley SC for the first respondent (instructed by King & Wood Mallesons)

B W Walker SC with L Gor for the second respondent (instructed by HWL Ebsworth Lawyers)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Australian Financial Services and Leasing Pty Limited v Hills Industries Limited

Restitution – Payments made under mistake of fact – Defence of change of position – Where appellant made mistaken payments to respondents as result of fraud committed by third party – Where respondents applied payments to discharge third party's debts, ceased pursuing recovery of debts and continued to trade with third party – Whether retention of monies inequitable in all the circumstances.

Words and phrases – "change of position", "detriment", "detrimental reliance", "disenrichment", "unjust enrichment".

FRENCH CJ. Introduction 1 When money is paid under a mistake of fact, the person paying the money may recover it from the recipient in a common law action for money had and received. Recovery depends upon whether it would be inequitable for the recipient to retain the benefit. Retention may not be inequitable if the recipient has changed its position on the faith of the receipt and thereby suffered a detriment. The circumstances under which the "change of position" defence may be invoked as a complete defence are in question in this appeal from the Court of Appeal of the Supreme Court of New South Wales.