Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd; Australian Financial Services and Leasing Pty Ltd v Bosch Security Systems Pty Ltd [2012] NSWCA 380

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd; Australian Financial Services and Leasing Pty Ltd v Bosch Security Systems Pty Ltd [2012] NSWCA 380 Hearing dates: 10 and 11 May 2012 Decision date: 04 December 2012 Before: Bathurst CJ at [1] Allsop P at [4] Meagher JA at [173] Decision: 1. As to the appeal of Australian Financial Services and Leasing Pty Ltd (AFSL) against Bosch Security Systems Pty Ltd (Bosch), appeal dismissed with costs. 2. As to the appeal of Hills Industries Ltd (Hills) against AFSL: (a) appeal allowed; (b) set aside orders (1)(a) and (b) made by the Supreme Court on 23 June 2011 and in lieu thereof order judgment for the first defendant against the plaintiff, the plaintiff to pay the first defendant's costs. (c) AFSL pay Hills' costs of the appeal. (d) Cross-appeal of AFSL dismissed. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: RESTITUTION - recovery of money paid under mistake - general principles - defences - change of position - discharge of debt - fraudster concocted false invoices for purchase of equipment - financier paid seller of non-existent goods and entered leaseback arrangement with fraudster - seller applied funds received in discharge of pre-existing debts owed by fraudster's companies - unjust to require restitution Cases Cited: Aiken v Short (1856) 1 H & N 210; 156 ER 1180 Alpha Wealth Financial Services Pty Ltd v Frankland River Olive Co Ltd [2008] WASCA 119; 66 ACSR 594 Atlantic Coast Line Railroad Co v Florida 295 US 301 (1935) Australia & New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; 164 CLR 662 Baltic Shipping Company v Dillon [1993] HCA 4; 176 CLR 344 Banque Worms v BankAmerica International 77 NY 2d 362; 570 NE 2d 189 (1991) Barclays Bank Ltd v W J Simms Son & Cooke (Southern) Ltd [1980] QB 677 Barnes v Addy (1874) LR 9 Ch App 244 Baylis v Bishop of London [1913] 1 Ch 127 BMP Global Distribution Inc v Bank of Nova Scotia [2009] SCC 15; [2009] 1 SCR 504 Buller v Harrison (1777) 2 Cowp 565; 98 ER 1243 Clarke v Abou-Samra [2010] SASC 205 Cocks v Masterman (1829) 9 B & C 902; 109 ER 335 Commerzbank AG v Price-Jones [2003] EWCA Civ 1663 Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; 182 CLR 51 Continental Caoutchouc and Gutta Percha Co v Kleinwort, Sons & Co (1904) 9 Com Cas 240 Cook v Cook [1986] HCA 73; 162 CLR 376 Cox v Prentice (1815) 3 M & S 344; 105 ER 641 David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; 175 CLR 353 Delaforce v Simpson-Cook [2010] NSWCA 84; 78 NSWLR 483 Dextra Bank & Trust Co Ltd v Bank of Jamaica [2002] 1 All ER (Comm) 193 (PC) Durrant v Ecclesiastical Commissioners for England and Wales (1880) 6 QBD 234 Equuscorp Pty Ltd v Haxton [2012] HCA 7; 286 ALR 12; 86 ALJR 296 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89 Gaffner v American Finance Co 120 Wash 76; 206 P 916 (1922) Goss v Chilcott [1996] AC 788 (PC) Gowers v Lloyds and National Provincial Foreign Bank Ltd [1938] 1 All ER 766 Grand Lodge of the Ancient Order of United Workmen of the State of Minnesota v Towne 136 Minn 72; 161 NW 403 (1917) Grundt v Great Boulder Pty Gold Mines Ltd [1937] HCA 58; 59 CLR 641 Haugesund Kommune v Depfa ACS Bank [2010] EWCA Civ 579 Holland v Russell (1861) 1 B & S 424; 121 ER 773 Imperial Bank of Canada v Bank of Hamilton [1903] AC 49 K & S Corp Ltd v Sportingbet Australia Pty Ltd [2003] SASC 96; 86 SASR 312 Kerrison v Glyn, Mills, Currie & Co (1912) 81 LJKB 465 Kingstreet Investments Ltd v New Brunswick (Dept of Finance) [2007] 1 SCR 3 Kleinwort Benson Ltd v Birmingham CC [1997] QB 380 Kleinwort Benson Ltd v Lincoln CC [1999] 2 AC 349 Kleinwort, Sons & Co v Dunlop Rubber Co (1907) 97 LT 263 Lipkin Gorman (a firm) v Karpnale [1991] 2 AC 548 Lloyds Bank Plc v Independent Insurance Co Ltd [2000] QB 110 London and River Plate Bank Ltd v Bank of Liverpool Ltd [1896] 1 QB 7 Lumbers v W Cook Builders Pty Ltd (In Liq) [2008] HCA 27; 232 CLR 635 Merchants Insurance Co v Abbott 131 Mass 397 (1881) Moore v National Mutual Life Association [2011] NSWSC 416 Morison v London County and Westminster Bank Ltd [1914] 3 KB 356 National Commercial Banking Corporation of Australia Ltd v Batty [1986] HCA 21; 160 CLR 251 National Shawmut Bank of Boston v Fidelity Mutual Life Insurance Co 318 Mass 142; 61 NE 2d 18 (1945) Newall v Tomlinson (1871) LR 6 CP 405 Niru Battery Manufacturing Co v Milestone Trading Ltd [2004] QB 985 Palmer v Blue Circle Southern Cement Ltd [1999] NSWSC 697; 48 NSWLR 318 Pan Ocean Shipping Co Ltd v Creditcorp Ltd [1994] 1 WLR 161 Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; 162 CLR 221 Perpetual Trustees Australia Ltd v Heperu Pty Ltd [2009] NSWCA 84; 76 NSWLR 195 Port of Brisbane Corporation v ANZ Securities Ltd (No 2) [2002] QCA 158; [2003] 2 Qd R 661 Porter v Latec Finance (Qld) Pty Ltd [1964] HCA 49; 111 CLR 177 Prasad v Sangha [2012] NSWCA 92 R E Jones Ltd v Waring and Gillow Ltd [1926] AC 670 R E Jones Ltd v Waring and Gillow Ltd [1925] 2 KB 612 Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; 208 CLR 516 Scottish Equitable plc v Derby [2001] 3 All ER 818 Smith v Knapp 297 Mass 466; 9 NE 2d 399 (1937) South Australian Cold Stores Ltd v Electricity Trust of South Australia [1957] HCA 69; 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