Home | © 2019 GA Publishing Mosman Sydney


Glad Cleaning Service PL & GIO v Vukelic [2010] NSWSC 422. Slattery J.

The second plaintiff fund agent proved it was mistaken in failing to deduct Centrelink recovery from an agreed arrears of weekly payments.

Notices about the recovery were delivered to the defendant worker, her then solicitor, and the insurer before the payment.

Slattery J said [27]: “The common law and statutory principles applicable to GIO’s claim are not controversial. There is a common law right to restitution for unjust enrichment: Pavey & Matthews PL v Paul (1987) 162 CLR 221. A payment by mistake is sufficient to give rise to a prima facie obligation on the part of the payee to make restitution for unjust enrichment: David Securities PL v Commonwealth Bank(1992) 175 CLR 353 at 379 and ANZ Banking Group v Westpac (1988) 164 CLR 662 at 673.”

Then [29]: “The mistake made here may be able to be characterised as a mistake of fact or a mistake of law. On the available material what the GIO claims officer did may be characterised as a mistake of fact if that officer made an error as to whether the Commonwealth had demanded the sum of $63,603.12 from GIO. This could occur for example if the file had temporarily become unavailable to the claims officer and that officer then made the payment without actual knowledge of the demand.

“The non-payment may also perhaps be explained by the GIO claims officer being aware of the Commonwealth’s demand but erroneously not believing that there was a proper legal basis for satisfying that demand. This would be a mistake of law.

“On the available materials the former appears to be more likely. There is no evidence of GIO contemporaneously considering GIO's legal liability to satisfy the Commonwealth's demand. Even if the circumstances are characterised as a mistake of law, recovery is still possible: David Securities L v Commonwealth Bank (1992) 175 CLR 353.”

His Honour detailed the Social Security Act (Cth) Pt 3.14 ss 1178 through 1184, and rejected defences based on alleged failure to negotiate, encouragement of maladministration, lack of demand, and telephone communications with Centrelink officers.

Slattery J [51]: “The defence of change of position is relevant to the enrichment of the defendant precisely because its central element is that the defendant has acted to his or her detriment on the faith of the receipt: David Securities PL v The Commonwealth Bank (1992) 175 CLR 353 at 385. To establish the defence of change of position the defendant must have acted to her detriment upon receiving the payment from the plaintiff. The NSW Court of Appeal has recently analysed the defence in Perpetual Trustees Aust Ltd v Heparu PL (2009) NSWSC 84.

“The elements of the defence are conveniently identified in K Mason, J W Carter & G J Tolhurst, Restitution Law in Australia (2nd ed 2008 LexisNexis Butterworths) to be the following at [2407], p860:

a) The onus of establishing the change of position defence, including the necessary reliance, lies upon the defendant; 
b) The defence may be applied pro tanto; 
c) Mere expenditure does not constitute a change of position; 
d) The defence is not available where the defendant has simply spent the money received on ordinary living expenses; 
e) Money spent solely in reliance on the payment, from which the defendant no longer retains a benefit, constitutes a good defence; 
f) The defence is available only to those who act in good faith;
g) The expenditure made in reliance must be irreversible.”

His Honour said [52]: “Ms Vukelic’s change of position defence fails on several grounds. There is no evidence that Ms Vukelic undertook any expenditure of any kind after the receipt of the settlement monies on 27 July 2004. Her affidavit does not identify or elaborate upon any such expenditure. Even if such expenditure were proved it would be impossible for Ms Vukelic to prove that it had occurred in good faith, in the sense that it was done without awareness of Centrelink’s expectation that she repay the demanded sum of $63,603.12. She had that awareness no later than 10 May 2004, well before she received the settlement monies on 27 July 2004. Accordingly, any defence of change of position fails.”

Judgment $63,603.12 plus interest $34,473.36 by s 100 Civil Procedure Act 2005, and costs, subject to further argument.

P1&2: A. Combe, inst Rankin Nathan. D: Self.


Break Fast Investments Pty Ltd v Perikles Giannopoulos (also known as Perry Giannopoulos) & Anor (No 6) [2012] NSWSC 286. Black J.

8 The relevant principles are summarised in Mason & Carter's Restitution Law in Australia at 124 [305], in a passage approved by Allsop P (with whom Campbell JA and Handley AJA agreed) in Heperu Pty Ltd v Belle [2009] NSWCA 252; (2009) 76 NSWLR 230 at 260 [127], as follows:

"A personal cause of action, deriving from the count of money had and received, is available to the owner of money ... that can be traced to someone who did not take the money as or from a bona fide purchaser for value without notice of defect of title ... The independent restitutionary claim is one means whereby the plaintiff's property right is vindicated. Merely because the defendant has paid over the money to a third party provides no defence to the personal claim, but defences including change of position are available."

9 The learned authors also express the view, which was the subject of further comment in Heperu v Belle to which I will refer below, that:

"The common law personal remedy does not require proof that the defendant 'retains' the plaintiff's money. As with receipt by mistake or in consequence of improper pressure, the enrichment component stems from the receipt, although later dealings such as change of position may mean that it is no longer just to award restitution. The defendant from the outset lacked title vis-à-vis the plaintiff to retain the monies received. We therefore disagree with the recent obiter remarks to the contrary of the Queensland Court of Appeal. The recipient who pays away in circumstances that do not attract the defence of change of position or any other defence is liable."

10 I addressed the nature and quantum of the unjust enrichment in this case in paragraphs [74]ff of my earlier judgment. I there referred to the decision of the High Court of Australia in Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; (1988) 164 CLR 662 at 672-673, where the High Court observed that:

"The fact that specific money or property received can no longer be identified in the hands of the recipient or traced into other specific property which he holds does not of itself constitute an answer in a category of case in which the law imposes a prima facie liability to make restitution. Before that prima facie liability will be displaced, there must be circumstances (eg payment was made for good consideration such as the discharge of an existing debt) or, arguably, that there has been some adverse change of position by the recipient in good faith in reliance on the payment."

Previous page: Res judicata     Next page: Restraint of trade

© 2019 GA Publishing Mosman Sydney | piets/wcms | Account

Wills Estates Monthly

12 editions - $385 incl GST

Subscribe Sample

Personal Injury Monthly

12 editions $385 incl GST

Subscribe Sample