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University of Melbourne Law School Research Series |
Last Updated: 28 September 2009
CASE NOTE
LUMBERS V W COOK BUILDERS PTY LTD (IN
LIQ)[*]
RESTITUTION FOR SERVICES AND THE
ALLOCATION OF CONTRACTUAL RISK
MICHAEL BRYAN[†]
[In Lumbers, the High Court held that a subcontractor could not obtain remuneration from the defendant (on whose land the subcontractor had performed building work) for services rendered pursuant to an arrangement between the subcontractor and head contractor. The Court adopted a retrograde approach to claims for a quantum meruit by focusing solely on whether there was a request by the defendant for the services. More soundly, the Court relied upon the principle that claims in restitution should not defeat a contractual allocation of risk. This case note argues that the Court’s reasoning is insensitive to the complexities that arise in determining quantum meruit claims in the context of services. The High Court’s reinterpretation of the law of unjust enrichment in service-based claims as requiring a request has directed Australian law down the path of legal fiction and — consistently with other recent decisions deploring ‘top-down’ unjust enrichment reasoning — ignores the analysis of substance.]
CONTENTS
I INTRODUCTION
The
decision of the High Court in Lumbers v W Cook
Builders Pty Ltd (in liq)
(‘Lumbers’)[1]
resembles the previous year’s decision of Farah
Constructions Pty Ltd v Say-Dee
Pty Ltd
(‘Farah’)[2]
in terms of its progression through the judicial hierarchy. In both cases, the
trial judge rejected the plaintiff’s claim by
reference to orthodox
equitable (Farah) or common law (Lumbers) principles, only for the
intermediate appellate court to overturn the decision on the ground that the
plaintiff’s claim met
the requirements of an unjust enrichment claim. In
both cases the High Court then allowed the appeal, taking the opportunity to
deplore
‘top-down’ unjust enrichment reasoning, which was said to be
neither soundly based in precedent nor sensitive to particular
features of the
cases to which it was applied.
Attitudes in Australia to unjust enrichment
scholarship, polarised before Farah and Lumbers were handed down,
have been hardened by these High Court decisions. Restitution sceptics consider
themselves vindicated by the decisions.
Restitution theorists, on the other
hand, will not have been convinced by the reasoning to alter their methods. The
decisions provide
ammunition for both camps. Just as Farah was never a
suitable vehicle for unjust enrichment analysis because the defendants had not
been enriched,[3] so in
Lumbers a successful unjust enrichment claim would have undermined a
valid allocation of contractual risk. In each case, however, the High
Court has
performed its negative role of extirpating error more successfully than its
positive role of expounding and developing
the law. In Lumbers,
disappointingly little guidance is provided on the criteria for the award of a
quantum meruit where there is no valid contract between the
provider of services and the recipient. This case note contends that the
arguments of
unjust enrichment writers, for example about the role of free
acceptance in the law, cannot be lightly disregarded. They identify
genuine
problems about the basis for awarding restitution for services. The decision in
Lumbers contributes little to the solution of these problems.
II THE FACTS
The
defendants, a father and son (‘the Lumbers’), engaged W Cook &
Sons Pty Ltd (‘Sons’) to build what
the trial judge described as a
‘quite distinctive’
house.[4] Most of the
work was in fact performed by another company in the group, W Cook Builders
Pty Ltd
(‘Builders’).[5]
The change of identity of the company performing the work was made without the
knowledge or approval of the Lumbers. Indeed, the
Lumbers would have objected to
the change had they known of it, since Builders, unlike Sons, was not a licensed
builder.[6] The contract
between the Lumbers and Sons was oral and the Lumbers paid amounts from time to
time in response to telephoned requests
from Mr McAdam, the secretary of
Sons.[7] Three years
after completion of the house, Builders went into
liquidation.[8] The
Lumbers subsequently received a letter from a director of Sons stating that no
further amounts were owing to
Sons.[9] The
liquidator claimed $261 715 from Sons and the Lumbers for work done on the
Lumbers house.[10]
Proceedings against Sons were stayed when Builders was unable to provide
security for Sons’
costs.[11] The claims
against the Lumbers were based on Sons’ alleged assignment of the benefit
of the contract or, alternatively, on
‘restitution/unjust
enrichment’.[12]
The
trial judge rejected the claim based on assignment because the Lumbers’
contract with Sons was too personal to be assigned.
This was due to the close
business relationship between the Lumbers and Mr McAdam and because there was no
evidence of an intention
to assign on the part of
Sons.[13] An appeal on
this point was dismissed by the Full Court of the Supreme Court of South
Australia[14] and was
not further
pursued.[15] The trial
judge rejected the claim in unjust enrichment on the ground that:
At all times there was extant an agreement between the Lumbers and Sons which covered the work said to have been undertaken by Builders. Insofar as a claim ought to have been made by Builders it ought to have been against Sons.[16]
An appeal to the Full Court was allowed by majority (Sulan and Layton JJ, Vanstone J dissenting). The majority held that the Lumbers had been incontrovertibly benefited by the work Builders had done since it had saved them expense that they would otherwise necessarily have incurred and, alternatively, since it constituted an improvement to their land.[17] In addition, relying on Pavey & Matthews Pty Ltd v Paul,[18] the majority held that the Lumbers had freely accepted the benefit of the work done by Builders since they knew that the work was being done and that it was not being done gratuitously.[19] Vanstone J dissented on the ground that any remedies available to Builders were to be found in its contract with Sons and not in an unjust enrichment claim against the Lumbers.[20]
III THE HIGH COURT DECISION
The
High Court unanimously allowed the Lumbers’ appeal. Gleeson CJ delivered a
separate judgment from the joint judgment of
Gummow, Hayne, Crennan and Kiefel
JJ. The judgments were in agreement on the crucial point that the legal
relationships between the
Lumbers, Sons and Builders were governed exclusively
by contract law and not by the law of unjust
enrichment.[21] They
differed, however, in their approaches to specific issues.
Gleeson CJ was
prepared to assume that services can enrich the recipient where they constitute
an incontrovertible benefit or where
the recipient has freely accepted the
benefit of their
performance.[22] He
held, however, that these grounds for identifying services as an enrichment
provided no basis for imposing liability on the facts
of Lumbers.
Although he accepted the assumption that the completed house constituted an
incontrovertible
benefit,[23]
it was nonetheless a benefit for which the Lumbers had contracted to pay Sons
and which Sons had contracted to confer on the
Lumbers.[24]
Similarly, the concept of free acceptance was inapplicable because the Lumbers
had never had an opportunity to reject the building
work undertaken by
Builders.[25]
The
joint judgment, on the other hand, avoided the language of incontrovertible
benefit and free acceptance. Instead, it reasserted
the requirement, traceable
to the pre-Common Law Procedure
Act[26]
formulations of pleading claims in assumpsit for a quantum meruit,
that a successful claim for restitution for services must be based on an express
or implied request for the performance of services.
The judgment disapproved the
earlier South Australian decision of
Angelopoulos v Sabatino[27]
— which had applied the concept of free acceptance — to the
extent that it held that restitution could be ordered even
if the services had
not been expressly or impliedly
requested.[28] The
joint judgment’s insistence on a request as a precondition to an award of
restitution in
most[29]
cases of extra-contractual service performance will be discussed below in
Part IV. Here it is sufficient to note that this aspect
of the joint
judgment’s reasoning throws into doubt the reasoning, if not the result,
of other decisions based on the defendant’s
free acceptance of the
performance of
services.[30]
The
second difference between the approaches taken by Gleeson CJ and the joint
judgment related to the impact of the contractual matrix
which governed the
legal rights and obligations of the Lumbers, Sons and Builders on
Builders’ unjust enrichment claim. The
matrix consisted of two contracts.
The first was the contract between the Lumbers and Sons for the construction of
the house. The
second was the contract between Sons and Builders, whereby
Builders undertook the performance of the greater part of the construction
work.[31] Both
judgments held that any claim for payment for building work must be determined
by contract law,[32]
but the emphasis that they placed on the two contracts was different. For
Gleeson CJ, the existence of the subcontract between Sons
and Builders precluded
any claim being brought by Builders against the Lumbers for work covered by the
terms of the subcontract:
‘If [the Lumbers] have been enriched, it is at
the expense of Sons. If any party has been enriched at the expense of Builders,
it is Sons.’[33]
The joint judgment, on the other hand, highlighted the contract between the
Lumbers and Sons:
These reasons will demonstrate that the legal relationship between Sons and the Lumbers cannot be dismissed from consideration, whether on the bases assigned by the majority in the Full Court or otherwise. When proper account is taken of the rights and obligations that existed between Sons and the Lumbers under their contract, the analysis made by the majority in the Full Court is shown to be flawed. The Lumbers are not shown to have received a ‘benefit’ at Builders’ ‘expense’ which they ‘accepted’, and which it would be unconscionable for them to retain without payment.[34]
On the joint judgment’s analysis, the existence of the Lumbers–Sons contract was critical because it negatived any finding that the Lumbers had requested Builders to undertake the construction work.
IV INJUSTICE, ENRICHMENT AND THE ALLOCATION OF CONTRACTUAL RISK
The arguments in Lumbers — both in the Full Court and in the High Court — were principally directed to the question of whether the Lumbers had been enriched at the expense of Builders by the latter’s completion of the building work to the Lumbers’ specifications.[35] The focus on enrichment is understandable since determining whether services constitute an enrichment is rarely easy and often controversial. Whereas a recipient of money cannot be heard to deny that money is enriching,[36] the receipt of services cannot be assumed to be beneficial. Generally speaking, services need not be paid for if they have not been freely chosen. As Bowen LJ said in Falcke v Scottish Imperial Insurance Co (a dictum repeated in the joint judgment in Lumbers):
The general principle is, beyond all question, that work and labour done or money expended by one man to preserve or benefit the property of another do not according to English law create any lien upon the property saved or benefited, nor, even if standing alone, create any obligation to repay the expenditure. Liabilities are not to be forced upon people behind their backs any more than you can confer a benefit upon a man against his will.[37]
The
best evidence of the exercise of choice to receive services is entry into an
enforceable contract. But in the absence of a contract,
the law of unjust
enrichment identifies other circumstances in which the receipt of services will
be regarded as beneficial —
either because the services have been chosen
or because the recipient’s freedom of choice is overridden by compelling
policy
reasons.[38]
Two such circumstances were considered in Lumbers.
The first was that
the Lumbers had freely accepted the benefit of Builders’ work. Even if,
contrary to the opinion of the joint
judgment, free acceptance can
satisfactorily determine whether services are enriching, Lumbers was not
a case of free acceptance. As Gleeson CJ pointed out a service can only be
freely accepted if the recipient has had an opportunity
to reject it. The
Lumbers had never had an opportunity to accept or reject the work undertaken by
Builders since they were unaware
that it was being
done.[39]
The other
reason for treating the services as beneficial was that they constituted what
unjust enrichment law terms an ‘incontrovertible
benefit’. A
defendant will be incontrovertibly benefited where no reasonable person could be
heard to deny that the services
constitute an
enrichment.[40] An
example of an incontrovertible benefit is that of a builder who mistakenly
constructs a house on the defendant’s land, honestly
believing it to be
the land on which a client has requested the work to be done, which the
defendant later
sells.[41] Another is
the plaintiff’s discharge of the defendant’s
debt.[42] In both
examples, the benefit of the services is actually realised in money. Where the
end product of services has not been sold,
it is less certain that the benefit
to the recipient of the services is incontrovertible. Such a characterisation is
justifiable
provided that the services can readily be converted into money.
Indeed, it would be unfair not to recognise the services as enriching
if the
recipient later sold the end product but was not required to pay the service
provider. Gleeson CJ rejected the argument that
Builders’ work was an
incontrovertible benefit on the ground that the benefit ‘was that which
Sons had undertaken to
provide for the Lumbers and for which the Lumbers had
agreed to pay
Sons.’[43] But
this argument goes to the question of the justice of the enrichment, not to
whether the Lumbers had been enriched. Assuming that
the distinctive features of
the house did not make it hard to sell, the services were readily realisable in
money.[44] The house,
once completed in accordance with specifications, incontrovertibly benefited the
Lumbers.
In fact, the focus throughout the Lumbers litigation on
whether the Lumbers had been enriched was misplaced. The critical question,
barely touched upon in the judgments, was
whether the enrichment was unjust. The
terminology of ‘free acceptance’ and ‘request’, employed
by the Full
Court and the High Court respectively, is apt to conflate questions
of injustice and enrichment, but the issues need to be kept
distinct.[45]
On what ground might Builders have argued that it was unjust for the Lumbers not
to pay for the construction work performed under
the subcontract? We have seen
that free acceptance fails, as an unjust factor as well as a criterion of
enrichment, because the Lumbers
never had an opportunity to reject
Builders’ work. Similarly, if the injustice of not paying for services can
be shown by proving
that the services were requested (a question discussed in
the next Part) there was no injustice in Lumbers because the defendants
never requested Builders to undertake the work on the house. The only other
unjust factor on which Builders
might have relied is failure of consideration,
meaning that the basis on which the services were performed had failed.
Restitution
of money for failure of consideration is
well-established[46]
and the logical case for allowing restitution for services on the ground of
failure of consideration is convincing. If restitution
of money paid for
services which have not been performed can be ordered, why can restitution not
also be ordered where the services
have been performed but the agreed
remuneration has not been paid (always assuming that the services constitute an
enrichment)?[47]
The
unanswerable objection to applying failure of consideration to the facts of
Lumbers is not that the unjust factor is confined to money claims, but
that the basis on which Builders did its work was that it would be
paid by Sons,
not by the Lumbers. There was no failure of consideration caused by the
Lumbers’ failure to pay Builders since
that consideration (or basis) for
payment did not exist. Rather, the basis for undertaking the work was
Sons’ promise to pay
Builders. As the joint judgment pointed out, even if
Builders had no contractual claim against Sons it would have been entitled to
a
quantum meruit from Sons based on the fact that it was Sons that
had commissioned the work from Builders and from which Builders expected
payment.[48]
In the
High Court, both judgments cite the well-known passage of Lord Goff’s
judgment in Pan Ocean Shipping Co Ltd
v Creditcorp Ltd stating that ‘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.’[49]
In the final analysis, Builders’ restitutionary claim failed because it
ignored the commercial risk allocated both by the principal
construction
contract and by the subcontract. But arguments based on risk allocation belong
to the determination of whether an enrichment
is unjust and not, as the Full
Court and High Court
supposed,[50] to the
inquiry into whether the defendant was enriched.
V RESTITUTION FOR BENEFITS CONFERRED ON THIRD PARTIES TO A TERMINATED CONTRACT?
One
of the fringe benefits of Lumbers is that the decision answers a question
canvassed by restitution writers about whether restitution can be obtained from
a third party
to a contract on whom a benefit is conferred in performance of the
contract. Can an unpaid subcontractor under a construction contract
sue the
owner for reasonable remuneration for work done as an alternative to suing the
(possibly insolvent) head
contractor?[51] The
answer given by the High Court, concurring on this point with academic
opinion,[52] is
‘no’.[53]
The identification of the basis on which the subcontractor did the work will
depend on the construction of the contract that the
subcontractor entered into
with the head contractor. This contract will almost certainly have provided that
it is to the head contractor,
not the owner, that the subcontractor must look
for payment. As Gleeson CJ observed, techniques of construction are reinforced
on
this point by policy considerations. If Builders could obtain payment from
the Lumbers, so also could the numerous subcontractors
employed by both Sons and
Builders on the construction of the
house.[54] Owners
should not be put at risk of having to pay remuneration to a potentially large
number of subcontractors whose involvement
in the construction of a house was
not agreed to and in many cases not known.
An argument that has been
tentatively advanced is that the subcontractor might be entitled to reasonable
remuneration from the owner
where either the head
contract[55] or both
contracts[56] have
been terminated.[57]
But termination of either contract, or both, would not overcome the force of
Gleeson CJ’s objection to allowing restitution.
It is trite law that
termination of a contract entitles the parties to restitution of benefits
conferred under a contract, where
the basis for conferring the benefits has
failed, but termination does not — without more — remove the
allocation of
risk between the parties. There is no good reason why the
termination of a contract between A and B should entitle C, a third party
to the contract, to claim restitution from A.
VI REQUEST AS THE BASIS OF RESTITUTION
The
most significant — if retrograde — contribution that Lumbers
makes to unjust enrichment doctrine is to reassert the proposition that, outside
contract law, an award of a quantum meruit
usually[58] depends
upon proof that the recipient of a service requested its performance. Indeed,
the leading ‘services’ case of
Pavey &
Matthews Pty Ltd v
Paul[59]
— for twenty years the foundation case of the Australian law of unjust
enrichment — was reinterpreted by the joint judgment
as a decision on the
application of statutory writing requirements to a request-based claim to a
quantum
meruit.[60]
According to the joint judgment, the builders’ claim in that case
succeeded, not because the respondent, Mrs Paul, had freely
accepted the benefit
of their work, or because the consideration (or basis) for undertaking the work
had failed, but because she
had requested the work to be done and
Builders Licensing Act 1971 (NSW) s 45 barred the
contractual, but not the request-based,
claim.[61] It followed
that Builders’ claim to a quantum meruit failed because the
work done had not been undertaken at the request of the
Lumbers.[62]
Cases
of necessitous intervention apart, the requirement that a quantum
meruit is only awarded where the defendant requests the performance of
the services has a long pedigree, extending back to the pleading
of the
quantum meruit count in the contractual and quasi-contractual
action of assumpsit. But the history also shows the difficulties that courts
experienced
in matching pleading form to substance in cases where the defendant
did not expressly request the performance of the
services[63] and
explains why writers have proposed alternative tests for the award of reasonable
remuneration for work
done.[64]
As Professor David Ibbetson observes, the history demonstrates ‘[t]he
capacity for assumpsit to slide almost imperceptibly
beyond its contractual
edges’.[65]
Under
the old forms of action a claim to a quantum meruit required the
plaintiff to plead that ‘the defendant, in consideration of some service
rendered [by] the plaintiff at [the defendant’s]
request, promised to pay
to the plaintiff the reasonable value of that
service.’[66] In
some cases, the services had been performed at the express request of the
defendant.[67] In
others, the request could reasonably be inferred from the surrounding
circumstances, as in Coke CJ’s example of the man
who took cloth to a
tailor to be made into a robe. Even if nothing had been said and no price had
been fixed, it could reasonably
be inferred that the man had requested the robe
to be made and had agreed to pay for the
work.[68] But in other
cases the plea of a request was a fiction. The plaintiff’s claim succeeded
— although the pleading of a
request was the only basis for awarding a
quantum meruit — even though on the facts no request had
been made and the making of a request could not be inferred. In
Keck’s
Case,[69] for
example, the plaintiff had undertaken, for an agreed sum, to build a house of
specific dimensions for the defendant. The building
was completed but the
plaintiff was unable to claim the contractual price because the house did not
fully conform to the contractual
specifications.[70]
The Court nonetheless awarded the plaintiff a quantum meruit,
leaving it to the jury to take into account the failure to comply with the
specifications in assessing the amount of a reasonable
payment.[71]
The
concept of free acceptance was developed by Robert Goff and Gareth Jones as an
alternative to the requirement of ‘request’
in order to explain
cases where the defendant chose to accept a benefit but where the implication of
a request would have been a
fiction.[72] Like the
concept of request, free acceptance has been employed to explain why services
are enriching and why the defendant’s
failure to pay for the services is
unjust. Examples of free acceptance include builders being induced by property
owners to do preparatory
work before a contract is signed where the property
owner later changes their mind and decides not to sign the
contract,[73] and a
contracting party taking advantage of some of the work done by the defendant
under a contract that can otherwise be terminated
for
breach.[74] These
examples, like free acceptance itself, are controversial, either because the
work done may not really be enriching or because
it would not necessarily be
unjust for the recipient of the services to refuse payment. Some of the cases on
free acceptance might
be more convincingly decided on other grounds, while
others should perhaps not attract liability at
all.[75] Moreover,
free acceptance, applied as a test of enrichment, assumes that services can be
passively accepted and that in some circumstances
a recipient of services comes
under a duty to reject their performance if he is not to be held liable to pay
for them.[76] Both
assumptions are, without
more,[77]
doubtful.
In any case, in arguing about the role of free acceptance in the
law of unjust enrichment it is important not to lose sight of the
primary reason
why this concept was put forward as a test of liability to make restitution for
services in the first place, whether
as an unjust factor or as a criterion for
determining if services are beneficial. The reason was that the concept of
request could
not, without distortion, explain those cases in which the
defendant had exercised a choice to take the benefit of services but had
not
asked for them to be performed. Even writers who reject the concept of free
acceptance recognise that restitutionary awards are
not limited to cases of
requested benefits and have proposed other tests — including
‘reprehensible
seeking-out’,[78]
‘[r]etention of readily returnable benefit after
demand’,[79] and
‘[w]rongful
conduct’[80]
— to identify the circumstances in which, in the absence of an
incontrovertible benefit, services will be held to be enriching.
The concept of
a request can no more explain all the cases in which defendants have chosen to
take the benefit of services than the
notion of the implied contract could
explain the cases in which restitution was awarded before the law of unjust
enrichment was recognised
as a discrete category of legal obligation.
VII CONCLUSION
In
Roxborough v Rothmans of Pall Mall
(Australia)
Ltd,[81]
Farah and Lumbers, the High Court has acted out its own version of
Hamlet without the Prince of Denmark. The play has been performed in three acts
with the entire cast of supporting characters — action for money had and
received, quantum meruit for work done, quantum
valebat, request assumpsit, and liability as a constructive trustee for
having knowingly received property in breach of fiduciary
obligation
— but without the central character of restitution
for unjust enrichment to give shape to the
production.[82] The
decisions reached in all three cases were ultimately sensible and right, just as
perfectly intelligible, if dramatically different,
versions of Hamlet can be
staged without the
Prince.[83] That the
law of unjust enrichment can be explained without reference to the concept of
unjust enrichment should not occasion surprise.
The traditional concepts have,
after all, been tried, tested, modified and reinforced over centuries of common
law and equity litigation.
But the history of the common law also shows how
easily its ideas yield to fiction under the pressure of litigation. A genuine
implied
contract can all too easily lapse into an invented and unreal implied
contract in circumstances in which an agreement could never
have been freely
made. Similarly, it does not require much judicial ingenuity to discover the
existence of a request where services
were not actively invited (or not invited
in the precise way in which they were performed), but where the recipient
nonetheless later
chose to take the benefit of their performance.
Unjust
enrichment theorists have been accused of applying ‘top-down
reasoning’,[84]
building empires[85]
and other sins against legal method. But the aim of the scholars who, beginning
with the Restatement of the Law of
Restitution,[86]
introduced the law of unjust enrichment to common lawyers in the twentieth
century was actually quite modest: it was to reveal the
substance of the law of
benefit-based liabilities that lay behind the language of implied contracts and
constructive trusts. By insisting
that service-based claims must, in general, be
requested, the High Court in Lumbers has shown that it is prepared to
tolerate fiction and to shun the analysis of substance.
[*] [2008] HCA 27; (2008) 232 CLR 635.
[†] BCL, MA (Oxon), PhD (Lond); Professor, Melbourne Law School, The University of Melbourne. I am grateful to Elise Bant and the anonymous referees for their comments. The usual disclaimers apply.
[1] [2008] HCA 27; (2008) 232 CLR 635.
[3] Ibid 143 (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ). See also Rob Chambers, ‘Knowing Receipt: Frozen in Australia’ (2007) 2 Journal of Equity 40, 45–7.
[4] W Cook Builders Pty Ltd v Lumbers [2005] SADC 153 (Unreported, Judge Beazley, 15 November 2005) [1]; see also at [4], [43].
[5] See ibid [53], [56], [67]–[68]. See also Lumbers [2008] HCA 27; (2008) 232 CLR 635, 641 (Gleeson CJ).
[6] W Cook Builders Pty Ltd v Lumbers [2005] SADC 153 (Unreported, Judge Beazley, 15 November 2005) [5], [40].
[7] Ibid [41]; see also at [58].
[8] Ibid [23].
[9] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 646–7 (Gleeson CJ). See also ibid [16], [60].
[10] W Cook Builders Pty Ltd v Lumbers [2005] SADC 153 (Unreported, Judge Beazley, 15 November 2005) [65].
[11] Ibid [12]–[13].
[12] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 642 (Gleeson CJ). See also ibid [18]–[19].
[13] W Cook Builders Pty Ltd v Lumbers [2005] SADC 153 (Unreported, Judge Beazley, 15 November 2005) [89]–[92].
[14] W Cook Builders Pty Ltd (in liq) v Lumbers [2007] SASC 20; (2007) 96 SASR 406, 413–14 (Sulan and Layton JJ), 428–9 (Vanstone J).
[15] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 642 (Gleeson CJ).
[16] W Cook Builders Pty Ltd v Lumbers [2005] SADC 153 (Unreported, Judge Beazley, 15 November 2005) [103] (citations omitted).
[17] W Cook Builders Pty Ltd (in liq) v Lumbers [2007] SASC 20; (2007) 96 SASR 406, 422 (Sulan and Layton JJ).
[18] [1987] HCA 5; (1987) 162 CLR 221.
[19] W Cook Builders Pty Ltd (in liq) v Lumbers [2007] SASC 20; (2007) 96 SASR 406, 423 (Sulan and Layton JJ).
[20] Ibid 430–1.
[21] See Lumbers [2008] HCA 27; (2008) 232 CLR 635, 654, 656–7 (Gleeson CJ), 671–2 (Gummow, Hayne, Crennan and Kiefel JJ).
[22] See ibid 655.
[23] Gleeson CJ assumed that the end product of a service that is realisable in money constitutes a benefit: see ibid 657. For analysis of whether the end product must have been realised in money or whether it is sufficient that it is realisable, see Andrew Burrows, The Law of Restitution (2nd ed, 2002) 18–19; James Edelman and Elise Bant, Unjust Enrichment in Australia (2006) 109–10.
[24] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 656–7.
[25] Ibid.
[26] See Common Law Procedure Act 1852, 15 & 16 Vict, c 76, s 3.
[27] [1995] SASC 5230; (1995) 65 SASR 1.
[28] Lumbers
[2008] HCA 27; (2008) 232 CLR 635, 665–8, 674 (Gummow, Hayne, Crennan and Kiefel JJ). See
ibid
12–13 (Doyle CJ).
[29] Exceptions for maritime salvage and necessitous intervention were recognised: Lumbers [2008] HCA 27; (2008) 232 CLR 635, 663–4 (Gummow, Hayne, Crennan and Kiefel JJ). Maritime salvage awards incorporate an element of reward and are not wholly restitutionary: Burrows, The Law of Restitution, above n 23, 320–1; Graham Virgo, The Principles of the Law of Restitution (2nd ed, 2006) 302–3.
[30] See, eg, Brenner v First Artists’ Management Pty Ltd [1993] VicRp 71; [1993] 2 VR 221; Andrew Shelton & Co Pty Ltd v Alpha Healthcare Ltd [2002] VSC 248; (2002) 5 VR 577.
[31] This contract (between Sons and Builders) was held by Gleeson CJ to be a subcontract: Lumbers [2008] HCA 27; (2008) 232 CLR 635, 650. Builders’ application to argue that the arrangement between Sons and Builders was too uncertain to constitute a contract was rejected, the joint judgment noting that even if the contract was uncertain Builders might nonetheless have a claim for work done or money paid at Sons’ request: at 671 (Gummow, Hayne, Crennan and Kiefel JJ).
[32] Ibid 656–7 (Gleeson CJ), 671–2 (Gummow, Hayne, Crennan and Kiefel JJ).
[33] Ibid 657.
[34] Ibid 662 (Gummow, Hayne, Crennan and Kiefel JJ).
[35] See ibid 636–8 (D F Jackson QC), 639–40 (G O’L Reynolds SC).
[36] Or only rarely: see, eg, Perpetual Trustees Victoria Ltd v Ford [2008] NSWSC 29; (2008) 70 NSWLR 611, 640–2 (Harrison J), revd [2009] NSWCA 186 (Unreported, Allsop P, Young JA and Sackville AJA, 8 July 2009). For a discussion of this case, see Elise Bant, ‘Incapacity, Non Est Factum and Unjust Enrichment’ (2009) 33 Melbourne University Law Review (forthcoming).
[37] (1886) 34 Ch D 234, 248, cited in Lumbers [2008] HCA 27; (2008) 232 CLR 635, 663 (Gummow, Hayne, Crennan and Kiefel JJ).
[38] Edelman and Bant, above n 23, 100–1, 107–15.
[39] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 656.
[40] See ibid 653 (Gleeson CJ), quoting W Cook Builders Pty Ltd (in liq) v Lumbers [2007] SASC 20; (2007) 96 SASR 406, 422 (Sulan and Layton JJ).
[41] Cf Brand v Chris Building Pty Ltd [1957] VicRp 91; [1957] VR 625.
[42] The discharge must not be officious, in the sense that the plaintiff must not have assumed the defendant’s debt without prior request from the latter. Officiousness is relevant to determining whether the enrichment was unjust: Owen v Tate [1976] QB 402.
[43] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 656.
[44] For a discussion of this issue, see Burrows, The Law of Restitution, above n 23, 18–19; Edelman and Bant, above n 23, 109–10.
[45] Birks originally argued that free acceptance operated both as an unjust factor and as a test of whether services constitute an enrichment: Peter Birks, An Introduction to the Law of Restitution (1st revised ed, 1989) 114–16. His later view was that free acceptance was not an unjust factor (except possibly in some cases in which the recipient of services had never intended to pay for them), but that it was a test of enrichment: Peter Birks, ‘In Defence of Free Acceptance’ in Andrew Burrows (ed), Essays on the Law of Restitution (1991) 105.
[46] See, eg, Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344; Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 (‘Roxborough’).
[47] For recent recognition of the availability of failure of consideration as a ground of restitution for services, see Yeoman’s Row Management Ltd v Cobbe [2008] UKHL 55; [2008] 4 All ER 713, 736–7 (Lord Scott); see also at 718 (Lord Hoffmann), 751 (Lord Brown), 751 (Lord Mance).
[48] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 671 (Gummow, Hayne, Crennan and Kiefel JJ).
[49] [1994] 1 All ER 470, 475, cited in ibid 655 (Gleeson CJ), 663 (Gummow, Hayne, Crennan and Kiefel JJ).
[50] See W Cook Builders Pty Ltd (in liq) v Lumbers [2007] SASC 20; (2007) 96 SASR 406, 420–4 (Sulan and Layton JJ), 429–31 (Vanstone J); Lumbers [2008] HCA 27; (2008) 232 CLR 635, 654–7 (Gleeson CJ), 663–8 (Gummow, Hayne, Crennan and Kiefel JJ).
[51] See Burrows, The Law of Restitution, above n 23, 347–9; Virgo, above n 29, 327–8.
[52] Cf Philip Davenport and Christina Harris, Unjust Enrichment (1997) 111–13; Philip Davenport, Construction Claims (2nd ed, 2006) 161–5. See also Amy Goymour, ‘Too Many Cooks: Three Parties, Contracts and Unjust Enrichment’ (2008) 67 Cambridge Law Journal 469, 470–1.
[53] See Lumbers [2008] HCA 27; (2008) 232 CLR 635, 656–7 (Gleeson CJ), 671 (Gummow, Hayne, Crennan and Kiefel JJ).
[54] Ibid 656–7 (Gleeson CJ).
[55] Burrows, The Law of Restitution, above n 23, 348.
[57] Alternatively, the head contract might be unenforceable for want of writing. The High Court declined to consider whether the defence that the Lumbers–Sons oral contract was unenforceable under Builders Licensing Act 1986 (SA) s 39 was available to the Lumbers, because no restitutionary claim against the Lumbers was established: Lumbers [2008] HCA 27; (2008) 232 CLR 635, 657 (Gleeson CJ), 674 (Gummow, Hayne, Crennan and Kiefel JJ). On the question of statutory interpretation, compare Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221, 228–30 (Mason CJ and Wilson J), 260–4 (Deane J), 269–70 (Dawson J), where the lack of writing did not bar a claim under Builders Licensing Act 1971 (NSW) s 45 (which provided that a contract for building work was ‘not enforceable’ unless it was, inter alia, in writing), with Sevastopoulos v Spanos [1991] VicRp 59; [1991] 2 VR 194, 204–5 (Beach J), where the lack of writing barred a claim on the construction of House Contracts Guarantee Act 1987 (Vic) s 19(1) (which was substantially identical to Builders Licensing Act 1986 (SA) s 39, the latter specifying that the builder ‘shall not be entitled to recover any fee or other consideration in respect of the building work’ where the builder was not licensed).
[58] Some exceptions were noted in Lumbers [2008] HCA 27; (2008) 232 CLR 635, 663–4 (Gummow, Hayne, Crennan and Kiefel JJ).
[59] [1987] HCA 5; (1987) 162 CLR 221.
[60] Lumbers [2008] HCA 27; (2008) 232 CLR 635, 664–5 (Gummow, Hayne, Crennan and Kiefel JJ).
[61] Ibid 665.
[62] Ibid 664.
[63] See J H Baker, ‘The Use of Assumpsit for Restitutionary Money Claims: 1600–1800’ in Eltjo J H Schrage (ed), Unjust Enrichment: The Comparative Legal History of the Law of Restitution (1995) 31, 35–41.
[64] See, eg, ibid 39–41; D J Ibbetson, A Historical Introduction to the Law of Obligations (1999) 269–72.
[65] Ibbetson, above n 64, 269.
[66] Ibid.
[67] See generally Samuel Stoljar, ‘Consideration of Request’ [1966] MelbULawRw 15; (1967) 5 Melbourne University Law Review 314, 316–19.
[68] The
Six Carpenters’ Case [1572] EngR 452; (1610) 8 Co Rep 146, 147; [1572] EngR 452; 77 ER
695, 697–8, cited in Ibbetson,
above n 64, 269 fn 30.
[69] (1744) in Sir Francis Buller, Introduction to the Law Relative to Trials at Nisi Prius (1768) 196, 196.
[70] Ibid, cited in Ibbetson, above n 64, 269 fn 31.
[71] Keck’s Case (1744) in Sir Francis Buller, Introduction to the Law Relative to Trials at Nisi Prius (1768) 196, 196.
[72] Robert Goff and Gareth Jones, The Law of Restitution (1st ed, 1966) 30. The impetus for attacks on the role of free acceptance in the law of unjust enrichment was Birks’s adoption of free acceptance, both as an unjust factor and as a criterion of enrichment, in Birks, An Introduction to the Law of Restitution, above n 45, 114–16, 265–93. For Birks’s later views, see Birks, ‘In Defence of Free Acceptance’, above n 45.
[73] See, eg, William Lacey (Hounslow) Ltd v Davis [1957] 2 All ER 712.
[74] See, eg, Keck’s Case (1744) in Sir Francis Buller, Introduction to the Law Relative to Trials at Nisi Prius (1768) 196. Cf Sumpter v Hedges [1898] 1 QB 673, where the property owner was liable to pay for materials brought by the builder to the site to complete a building that the builder had left unfinished. Acceptance was proposed by counsel as the test of liability to pay for uncompleted work under a building contract in Munro v Butt [1858] EngR 216; (1858) 8 El & Bl 738, 750–1; [1858] EngR 216; 120 ER 275, 279–80 (Raymond).
[75] Kenneth Hayne, ‘Anticipated Contracts That Fail to Materialise’ in Simone Degeling and James Edelman (eds), Unjust Enrichment in Commercial Law (2008) 237.
[76] Peter Birks, Unjust Enrichment (2nd ed, 2005) 56–8. Cf Burrows, The Law of Restitution, above n 23, 20–3.
[77] Such as the specific requirements of estoppel by acquiescence, as to which see Willmot v Barber (1880) 15 Ch D 96, 105–6 (Fry J).
[78] Burrows, The Law of Restitution, above n 23, 24–5.
[79] Edelman and Bant, above n 23, 115–16.
[80] Ibid 117.
[81] [2001] HCA 68; (2001) 208 CLR 516.
[82] Most recently, see Friend v Brooker [2009] HCA 21 (Unreported, French CJ, Gummow, Hayne, Heydon and Bell JJ, 28 May 2009) [7] (French CJ, Gummow, Hayne and Bell JJ): ‘the concept of unjust enrichment itself is not a principle which can be taken as a sufficient premise for direct application in a particular case’. Another example waiting in the wings is equitable subrogation. Contrast the methodologies adopted in Banque Financière de la Cité v Parc (Battersea) Ltd [1998] UKHL 7; [1999] 1 AC 221 and Bofinger v Kingsway Group Pty Ltd (2008) 14 BPR 26 167, special leave to appeal granted [2009] HCATrans 144 (19 June 2009).
[83] Cf Tom Stoppard, Rosencrantz and Guildenstern Are Dead (1968).
[84] Roxborough [2001] HCA 68; (2001) 208 CLR 516, 544–5 (Gummow J), citing McGinty v Western Australia [1996] HCA 48; (1996) 186 CLR 140, 232 (McHugh J); Lumbers [2008] HCA 27; (2008) 232 CLR 635, 662 (Gummow, Hayne, Crennan and Kiefel JJ).
[85] Roxborough [2001] HCA 68; (2001) 208 CLR 516, 579 (Kirby J).
[86] Restatement of the Law of Restitution (1937).
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