Andrew Shelton & Co Pty Ltd v Alpha Healthcare Ltd [2002] VSC 248

Andrew Shelton & Co Pty Ltd v Alpha Healthcare Ltd [2002] VSC 248 - VSC 2002 case summary — Zoe

[23]

On 23 November 1999 Shelton wrote to Bradeen confirming his terms of arrangement with Sun. In the letter of 23 November 1999 Shelton confirmed certain matters: the engagement of the Shelton Company to act as "financial adviser" with respect to the acquisition of interests in Alpha and the sale and lease-back of Alpha hospitals to Australian Unity. The letter confirmed the undertaking by the Shelton Company of specified services: the valuation of changes of ownership and strategies, advice on commercial considerations, liaison with legal, taxation and accounting advisers, negotiating and assisting upon financial aspects of a sale and lease-back transaction. Significantly, the letter of 23 November 1999 made no reference to the drawing of terms of the transaction or participation in that process. However, it was not plain sailing thereafter. On 16 December 1999 Bradeen requested that the Sun retainer of the Shelton company be put on hold because of financial uncertainties. Shelton renegotiated that he be paid a monthly fee by Sun of $10,000 effective from 1 December 1999 if the transaction or a similar transaction with Australian Unity eventuated. Bradeen agreed. Between December 1999 and March 2000 Shelton continued to work on the transaction with Australian Unity. However, by March 2000 Sun Inc was in such financial difficulties that its business and that of Sun were to be sold. Not deterred by events, on 17 March and 3 April 2000 Shelton recommended to Sun in writing that the sale and lease-back of the Alpha hospitals to Australian Unity should proceed. In early April 2000 Australian Unity confirmed that it wished to go ahead and continue with the transaction. By this stage Sun had resolved not to proceed. However, Sun as a major shareholder in Alpha, supported the prospect of the sale and lease-back of the Alpha hospitals. This opened the way for Australian Unity and Alpha to deal directly without the conduit of Sun. There followed some meetings that were critical to the plaintiff's claim.

[100]

"It is apparent that one of the difficulties that faced the respondent in this claim was that there seemed to be little by way of novelty about the art collection aspect of the idea, there being nothing unique in the concept of a corporate sponsored art collection. Moreover, the event which it was to celebrate, namely, the Australian bicentenary, was also a well known public event. It seems unlikely, for example, that an idea of sponsoring an art collection that reflected themes of the Sydney Olympic Games or the Centenary of Federation could, without more, be regarded as `novel'. But what was proposed by the respondent could not be equated with a mere art collection based on such themes. Counsel pointed out that the concept as developed by the respondent went well beyond a mere corporate sponsored collection of Australian art which depicted themes that were suitable for the bicentenary celebration. The idea was a composite one, as described earlier, involving the commissioning of particular categories of Australian artists to produce artwork that highlighted Australian life that would be historically connected with the bicentenary. Importantly, said Mr Porter, it was an essential part of the idea that specially designed calendars would be produced for sale to the public. Such calendars had unique features which had been developed by the respondent. Furthermore, the mere fact that some changes were made to the proposal at the behest of the Bank was not relevant because, as Mr Porter pointed out, the idea was capable of being implemented in its original form. In my view it was open to Finn, J. to conclude that, on the evidence before him, the idea was sufficiently developed and had sufficient uniqueness about it to be capable of being protected by equity in appropriate circumstances. Finn, J. did not err in concluding, in effect, that the Full Court would probably have been satisfied that it was reasonably arguable that the respondent's idea had sufficient uniqueness about it and was sufficiently developed and articulated to be capable of being protected by equity."

[130]

"It seems to me that the decision of the majority in Pavey's case makes two important points which are relevant to the present case. First, that a claim in restitution is not founded upon an implied agreement, and while facts which might support an implied agreement may be relevant to a claim in restitution, it is not necessary to search for something akin to an agreement or request from which a promise to pay might be applied. Secondly, there is a significant emphasis in the judgments of the majority upon the notion of acceptance of a benefit from the performance by the claimant of an action which confers a benefit or enrichment upon the other person. However, to my mind it is equally clear from the majority judgments that the existing case law in this area has not been overturned. As Deane J pointed out, unjust enrichment is a `unifying legal concept' which explains the result reached in a variety of situations and not in itself a cause of action or a basis for recovery. I am conscious of the fact that in Pavey's case the court was dealing with an express contract which could not be enforced in terms. In the present case we are dealing with an anticipated or hoped-for contract which did not come into being. However, the decision in Pavey's case suggests that acceptance of a benefit is relevant as a basis for recovery in restitution. However, it is clear that more is involved than the simple fact of acceptance. The consideration of the judgments in Pavey's case, and of other case law in this area, suggests that one must also consider the basis upon which the provider of the benefit acted, the choice which the recipient of the benefit had in deciding whether or not to accept the benefit and the conduct of the defendant, by which I mean the defendant's knowledge of what the plaintiffs were doing and the basis upon which they did it. Finally, I should add that I recognise that caution is required in applying Pavey's case. Too sweeping an application of the notion of acceptance as a basis for a claim in restitution might unsettle aspects of the law of contract, the law of landlord and tenant (for example, relating to fixtures and fittings) and principles underlying the law of salvage, to mention just a few examples. In making this point I am conscious of significant academic writing in this area which writing, to my mind, demonstrates quite amply the need to integrate the decision in Pavey's case into the existing case law while at the same time giving proper force to the emphasis placed upon the notion of acceptance."

At a glance

Court

Decision date

Before

Source

Judgment (166 paragraphs)

Parties

Cases Cited (14)