GRAY -v- LAVAN (A FIRM) [2024] WASCA 147 (28 November 2024)

A certificate under subsection (1) bears interest, and may be enforced by either party against the person liable to pay, as if it were a judgment of the Supreme Court for the payment of the amount mentioned in the certificate.

1. Further, under s 243 of the Legal Practice Act:

If a bill of costs is taxed under this Division and, as a result of that taxation, the amount which has been paid or deducted in respect of that bill is more than the amount authorised by the taxation, to the extent of the excess, the person charged has a claim for repayment which may be certified and enforced under section 240 as though allowed under that section.

1. By these means, a client who had paid more than the taxed costs, whether pursuant to a judgment or otherwise, could claim repayment and enforce the taxing officer's certificate as a judgment of the court. The taxing officer's certificate would not be inconsistent with a judgment obtained by the practitioner for recovery of fees under the retainer. The judgment would recognise an amount due by the client to the practitioner under the contractual terms of the retainer. The judgment would not deny the client's statutory right under pt 13 of the Legal Practice Act to claim repayment of amounts paid under the retainer. The taxing officer's certificate would identify the amount determined to be repayable under those statutory provisions.
2. In the way described above, pt 13 of the Legal Practice Act did not supplant the contractual provisions of the retainer for the payment of fees. Rather, pt 13 qualified the contractual rights by making them operate subject to the statutory regime for the taxation of costs. That statutory regime provided a mechanism for a client to obtain repayment of excessive charges even where the client had agreed to pay those charges as a matter of contract. However, the issue of a certificate of taxation did not falsify the proposition that an earlier payment was made under and pursuant to the contractual terms of the retainer.
3. Therefore, in the present case the absence of a written costs agreement did not mean that there could be no contractual right to invoice, or contractual obligation to pay invoices issued, under the non‑written retainers. That was certainly the case for the retainer in respect of the Federal Court proceedings, for which there was no applicable costs determination under the Legal Practice Act. Despite reservations expressed by Le Miere J in Walter v Buckeridge [No 5],[11] we are attracted to the view that this was also the case for the retainers in respect of the Supreme Court proceedings for which there was an applicable costs determination. However, we agree with Vandongen JA that it is unnecessary to resolve this latter question where amounts invoiced under the retainers in respect of the Supreme Court proceedings have not been shown to exceed the limits provided for in the applicable costs determinations.
4. Therefore, this appeal is to be resolved on the basis that the respondent had a contractual entitlement to issue the invoices which the appellant had a contractual obligation to pay. As contemplated by the retainers, the appellant also had a statutory right, under pt 13 of the Legal Practice Act, to have the respondent's bills taxed and to obtain an order for repayment of invoiced amounts above those allowed on taxation.
5. The fact that the invoiced amounts paid by the appellant were paid under the non-written retainers which obliged him to pay the invoiced amounts to the respondent means that the appellant did not have a restitutionary claim in respect of the Taxation Settlement Sum. Restitution may be available on the ground that there has been a failure of basis where a claimant has paid an amount which was more than the defendant was entitled to receive.[12] However, in the present case, the appellant accepts that the non-written retainers did oblige him to pay the invoiced amounts to the respondent and did entitle the respondent to receive and retain those amounts until required by a taxing officer's certificate to make a repayment to the appellant.
6. In our view, the objective basis on which the appellant paid the invoiced amounts to the respondent was that the respondent was entitled to issue the invoices in respect of legal services performed by the respondent, and the appellant was obliged to pay the invoiced amounts, under the terms of the non-written retainers. The appellant does not contend that the legal services were not performed. He does not contend that the provisions of the retainers which obliged him to pay the invoiced amounts were void or not enforceable, by reason of undue influence or otherwise. The appellant accepts that the non‑written retainers entitled the respondent to issue, and obliged him to pay, the invoices. The fact that the parties agreed under the 2018 Settlement Deed that the respondent would pay the Taxation Settlement Sum to the appellant (cl 2(a)) and that the Taxation Settlement Sum represented the amount that would have been ordered to be refunded to the appellant by the respondent if there had been a taxation of the bills of costs (cl 3.1(a)) does not falsify the basis on which the payments were made. The appellant's claim for restitution on the ground that the basis for payment of the invoices ceased to exist in relation to the Taxation Settlement Sum on the parties' entry into the 2018 Settlement Deed is not established.
7. We note that there was no call for the 'gap filling and auxiliary role of restitutionary remedies'[13] in relation to the statutory regime provided for in pt 13 of the Legal Practice Act. The regime contained its own provision, in s 240 and s 243, for requiring and enforcing the repayment of legal fees in excess of those allowed on taxation. It also contained provision, in s 240(3), for interest to be paid on the amount to be repaid from the date of the taxing officer's certificate. The absence of any provision for payment of interest in the period prior to the issue of the taxing officer's certificate was a matter of legislative choice, rather than a gap to be filled by the law of restitution.
8. The appellant's claim for interest in respect of the Taxation Settlement Sum was made pursuant to the 2018 Settlement Deed. Recital (C) recorded that the parties had agreed to settle all remaining disputes between them other than the interest dispute and had agreed how the interest dispute was to be litigated or resolved. The respondent's agreement in cl 2(a) to pay the Taxation Settlement Sum to the appellant was subject to the provisions of cl 3 with respect to interest, but the respondent otherwise did not make any admissions. The appellant's claim for interest was not based on any alleged breach by the respondent of any alleged implied term of the retainers in respect of the reasonableness of the respondent's charges or the reasonableness of the work undertaken. The appellant's claim for interest was confined to an alleged cause of action in restitution.
9. It follows that appeal ground 1 is not established. The trial judge correctly held that the claim for interest must be dismissed on the ground that the appellant did not establish any failure of basis for payment of any of the invoiced amounts. The appeal must be dismissed for that reason. It is therefore unnecessary to deal with grounds 2 and 3. We would attempt to resolve the difficult questions raised by those grounds only if they affected the outcome of the appeal. It is also unnecessary to deal with the notice of contention.

1. At all relevant times, the respondent was a partnership carrying on a business of providing legal services. From about 4 April 2006, the respondent provided legal services to the appellant in relation to proceedings commenced against him in the Federal Court of Australia in December 2004 (Federal Court proceedings). The respondent also provided legal services in relation to two sets of proceedings commenced by the appellant in the Supreme Court of Western Australia in September and November 2006 (Supreme Court proceedings).
2. The respondent rendered several invoices to the appellant for legal services provided in respect of the Federal Court proceedings and the Supreme Court proceedings (Invoices).[14] However, there was no written costs agreement between the appellant and the respondent in relation to the provision of any of those legal services.
3. According to the appellant, between 1 August 2006 and 29 June 2008, he paid $4,353,707.98 in fees to the respondent for the provision of legal services in respect of the Federal Court proceedings and a total of $123,360.35 in relation to the two Supreme Court proceedings.
4. Disputes arose between the appellant and the respondent about the provision of the legal services, including disputes about the Invoices. In an attempt to settle these disputes, the parties agreed that the respondent would file bills of costs for taxation in the Supreme Court in respect of each of the proceedings (Bills). The Bills related to all of the work that was carried out by the respondent for the appellant.
5. Sometime after the respondent filed the Bills, the parties entered into a settlement deed (2018 Settlement Deed). Under the terms of the 2018 Settlement Deed, the taxation did not proceed. Instead, the respondent agreed to pay to the appellant a total of $900,000 (Taxation Settlement Sum), in three tranches of $300,000. The parties expressly agreed that the Taxation Settlement Sum represented the amount that would have been ordered to be refunded to the appellant by the respondent if there had been a taxation of the respondent's Bills.
6. By the terms of the 2018 Settlement Deed, the parties acknowledged that the appellant claimed that he was entitled to, and had a claim to interest on, the Taxation Settlement Sum. The parties also agreed that the respondent disputed that claim.
7. The appellant commenced proceedings against the respondent in the Supreme Court of Western Australia to pursue a claim for interest on the Taxation Settlement Sum. The appellant contended that the respondent had been unjustly enriched by its retention of the Taxation Settlement Sum and, separately, by the opportunity to use the Taxation Settlement Sum from the dates the respondent made payments of the Invoices to the date the respondent paid the final tranche. As the appellant had been paid the Taxation Settlement Sum before the proceedings were commenced, his claim for restitution did not concern that sum. Instead, the appellant's claim in restitution sought compound interest, or alternatively simple interest, on the Taxation Settlement Sum. In broad summary, he claimed that:

(a) he made the payments referred to in [29] above on the basis that the respondent would provide legal services to the appellant, that the respondent was legally entitled to charge and retain that sum, and that the appellant was obliged to pay it to the respondent; and

(b) having regard to the 2018 Settlement Deed, this basis totally failed in relation to the Taxation Settlement Sum.

1. The trial judge dismissed the appellant's claim. The trial judge found that the appellant's claim for interest on the Taxation Settlement Sum failed because the respondent had not been unjustly enriched by its retention of the Taxation Settlement Sum. The trial judge also found, in effect, that even if the respondent had been unjustly enriched by its retention of the Taxation Settlement Sum, the appellant was not entitled to interest on that sum reflecting the respondent's opportunity to use it over time.
2. The appellant now appeals against the dismissal of his claim.
3. The grounds of appeal on which the appellant relies raise the following issues:

(1) Was the respondent unjustly enriched by its receipt and retention of the Taxation Settlement Sum?

(2) If the respondent was unjustly enriched by its retention of the Taxation Settlement Sum, was the appellant entitled to restitution in the form of interest, on a simple or compound basis, on the Taxation Settlement Sum?

1. For the reasons that follow, I would dismiss the appeal. The respondent was not unjustly enriched by its receipt and retention of the Taxation Settlement Sum. That is so for two reasons. Firstly, the appellant failed to establish any payment, or any severable part of a payment, the consideration or basis for which could be said to have totally failed. Secondly, the appellant failed to establish that his payments to the respondent were made on the basis he alleged. Further, even if the respondent was unjustly enriched by the Taxation Settlement Sum, the appellant was not entitled to restitution of interest on that sum. That is because such a claim would subvert the statutory scheme, elements of which were the foundation of the claim.
2. Before identifying the grounds on which the appellant contends that the trial judge erred in dismissing his claim for interest on the Taxation Settlement Sum, it is necessary to say something further about the factual context of the appellant's claim by reference to the facts found by, and the uncontested evidence before, the trial judge.

1. The proceedings before the primary judge were relatively straightforward. There were no factual disputes of any significance, and the trial proceeded on the basis of a small number of uncontentious documents,[15] one unchallenged affidavit[16] and a statement of agreed facts.
2. It was common ground between the parties that in December 2004 proceedings were commenced against the appellant in the Federal Court of Australia. It is not necessary to say anything further about the subject matter of those proceedings because it is not relevant to the determination of this appeal.
3. Shortly after the commencement of the Federal Court proceedings, the appellant retained a firm of lawyers, Bennett & Co, to act for him in those proceedings. Bennett & Co then acted for the appellant in the Federal Court proceedings for approximately one year.
4. Before proceeding to further describe the relevant factual context it is necessary to say something about the basis on which the appellant retained Bennett & Co.

1. On 5 January 2005, Bennett & Co wrote a letter to the appellant. In that letter, Bennett & Co confirmed that the appellant had provided it with instructions to act on his behalf in the Federal Court proceedings.
2. The letter contained information relating to the legal services that would be provided by Bennett & Co in connection with the Federal Court proceedings. Relevantly, the letter confirmed that Bennett & Co would act for the appellant pursuant to a written 'Client/Solicitor Costs Agreement'. The letter also explained that such an agreement set out the terms of engagement and defined the commercial basis on which that firm acted and rendered fees for its professional services.
3. The letter informed the appellant that Bennett & Co:

(a) calculated its fees on the basis of various hourly rates for the time a solicitor or articled clerk was engaged in working on the matter;

(b) were entitled to render interim accounts on a monthly basis; and

(c) would generally bill for their professional fees every 30 days or otherwise on conclusion of the matter.

1. The letter also informed the appellant that the 'Legal Practitioners Act'[17] gave him the right to have the costs agreement and the invoices rendered by Bennett & Co reviewed for their fairness and reasonableness.
2. Attached to the letter from Bennett & Co was a 'Client/Solicitor Costs Agreement'. This document was signed by the appellant on 6 January 2005. Relevantly, the costs agreement included terms that provided that:

(a) the appellant was required to pay for Bennett & Co's services in accordance with invoices sent to the appellant;

(b) invoices (or 'accounts') would be rendered on a regular basis, usually monthly;

(c) each account rendered entitled the appellant to exercise any of his 'statutory rights either to have the account itemised or taxed' provided this was done within 30 days of receipt of each account.

1. The costs agreement also contained an acknowledgement by Bennett & Co that the appellant had the 'right to require [it] to itemise each account for taxation even if [he] decided to exercise [his] statutory rights only on receipt of the final account issued by [Bennett & Co]'.
2. It was an agreed fact that for the legal services provided to the appellant in relation to the Federal Court proceedings, Bennett & Co calculated its fees and rendered itemised invoices to the appellant in accordance with this costs agreement.[18]

1. In March 2006, Bennett & Co ceased carrying on a business of providing legal services.
2. In the following month, in April 2006, the respondent employed the former principals and employees of Bennett & Co. From that time onwards, the appellant then instructed the respondent to provide him with legal services in relation to the Federal Court proceedings.
3. For reasons that do not emerge from the materials before this court, the appellant and the respondent never entered into a written retainer or costs agreement in relation to the Federal Court proceedings.
4. In 2006, the appellant commenced two separate proceedings in the Supreme Court of Western Australia (CIV 2022 and CIV 2275). The subject matter of those proceedings is also not relevant to the outcome of this appeal.
5. Although the appellant also instructed the respondent to provide legal services in relation to the Supreme Court proceedings, once again, there was no written retainer or written costs agreement.
6. Over an undefined period, the respondent rendered the Invoices to the appellant for legal services it had provided to the appellant in relation to all three proceedings. None of the Invoices were tendered in evidence at the trial.
7. From around September 2006 to 29 June 2008, the appellant made several payments to the respondent in relation to the Invoices.
8. On the appellant's case, across 14 separate payments between 1 August 2006 and 29 June 2008, he paid a total of $4,353,707.98 to the respondent for legal services provided in relation to the Federal Court proceedings. The appellant's case was that he also made several payments amounting to $42,722.79 and $80,637.56 in relation to the two Supreme Court proceedings, respectively, totalling $123,360.35.
9. It is not clear from the primary judge's findings, from the evidence, or from the admitted facts whether all of the appellant's payments corresponded exactly with the amounts sought in specific invoices. However, it was common ground at trial that at the time the appellant made those payments, the respondent was entitled to charge, and the appellant was required to pay, the fees the subject of the Invoices in accordance with the terms of three separate retainers.
10. The parties proceeded on the basis that there was one retainer that related to the Federal Court proceedings, and that there were two other separate retainers, each relating to one of the two Supreme Court proceedings (Retainers).
11. Although none of the Retainers were in writing, there was no dispute that they existed and that they were evidenced by the parties' conduct and/or they were oral. It was also common ground that each of the Retainers included terms that the respondent would provide legal services to the appellant, that the respondent would charge the appellant on the same basis he had been charged by Bennett & Co, and that the appellant would pay the respondent in accordance with invoices rendered by the respondent.
12. That this was common ground is reflected in the submissions made on the appellant's behalf at first instance:[19]

[T]he oral retainer agreements between [the appellant] and [the respondent] - although not costs agreements within the meaning of s 221 [of the Legal Practice Act 2003 (WA) (repealed)] - entitled [the respondent] to charge, and obliged [the appellant] to pay, all of the fees set out in the Invoices. The oral retainer agreements provided a legal justification for these payments. That is precisely what [the respondent] pleads, and [the appellant] agrees. (footnotes omitted)

1. The reference in those submissions to the respondent's pleadings was a reference to specific paragraphs in the Second Further Amended Defence, which pleaded the terms of the Retainers in a manner consistent with what is set out at [60] of these reasons.
2. Various disputes arose between the appellant, Martin Bennett (a former principal of Bennett & Co) and the respondent, including disputes about invoices rendered by the respondent. The terms on which those disputes were settled is central to the appellant's claim in restitution.

1. Some of the disputes were settled in March 2015, when the appellant, the respondent, and Mr Bennett entered into a settlement deed (2015 Settlement Deed). According to its terms, the purpose of the 2015 Settlement Deed was to resolve all disputes except for one dispute relating to some specifically identified bills of costs. It was anticipated that the dispute about the bills would be resolved on the basis that the respondent would file with the Supreme Court, bills of costs in relation to all three of the proceedings, which would then be taxed.
2. Ultimately, the respondent filed three bills of costs for taxation; one for each of the proceedings in the Supreme Court of Western Australia.[20] These bills were referred to in the 2015 Settlement Deed as the 'Bills'.
3. However, none of the Bills were ever taxed. Instead, on or about 13 July 2018, the parties entered into the 2018 Settlement Deed.
4. The Bills were tendered in evidence at the trial. However, only part of the bill relating to the Federal Court proceedings was in evidence. This is because two schedules to that bill, one referred to as 'Schedule A' (relating to a 'Claim for Professional Fees $3,744,173.40') and another referred to as 'Schedule B' (relating to a 'Claim for Professional Disbursements in the Amount of $217,953.56'), were not in evidence. Accordingly, there was little or no detail before the trial judge about the work that was undertaken by the respondent, or the fees and disbursements that were charged for that work, as might otherwise be expected in a bill of costs lodged for taxation.

1. The parties expressly intended that the 2018 Settlement Deed be construed in the context of the 2015 Settlement Deed. In that regard, cl 1.2 of the 2018 Settlement Deed provided that words and expressions defined in the 2015 Settlement Deed, which were used but not defined in the 2018 Settlement Deed had the same meaning as in the 2015 Settlement Deed.
2. Clause 2 of the 2018 Settlement Deed provided that, subject to cl 3 and without making any admissions, the parties agreed that the respondent would pay the appellant the sum of $900,000 in three instalments of $300,000, which were payable on three nominated dates.
3. Clause 2 also provided that the parties would file consent orders to dismiss proceedings commenced by the respondent against the appellant for unpaid fees and disbursements, and to dismiss proceedings commenced by the appellant seeking an extension of time within which to have the Bills taxed.
4. Clause 3 of the 2018 Settlement Deed was in the following terms:
   1. INTEREST ON THE BILLS

(a) the Taxation Settlement Sum represents the amount that would have been ordered to be refunded to Gray by Lavan if there had been a taxation of the Bills;[21]

(b) the Taxation Settlement Sum does not include interest;

(c) Gray claims that he is entitled to and therefore has a claim to interest on the Taxation Settlement Sum;

(d) Lavan disputes that it has any liability to pay interest to Gray on the Taxation Settlement Sum; and

(e) the issue whether Gray has a claim to interest on the Taxation Settlement Sum remains in dispute between the Parties.

(a) at any time prior to the Sunset Date[22] Gray may commence the Interest Dispute Action;[23]

(b) Lavan Legal will not take any steps to prevent Gray from commencing the Interest Dispute Action, provided that it is commenced prior to the Sunset Date;

(c) if Gray does not commence the Interest Dispute Action prior to the Sunset Date then from the Sunset Date:

(i) Lavan has no liability to Gray for the Interest Claim;

(ii) Gray releases and discharges Lavan from, and shall be deemed to have accepted the terms of this Deed in full and final satisfaction and discharge of the Interest Claim;

(iii) Gray agrees not to bring, or pursue, or procure the Interest Claim against Lavan;

(iv) Lavan may plead this Deed in bar to any Interest Claim made by Gray against Lavan.

It is agreed that if Gray commences an Interest Dispute Action as permitted by and provided for in this Deed (but not otherwise):

(a) then the net amount in legal fees which Lavan would have been obliged to refund to Gray had there been a taxation is the Taxation Settlement Sum;

(b) the Taxation Settlement Sum is the amount on which Gray claims that interest is to be calculated for the purposes of the Interest Dispute Action;

(c) for the purposes of the Interest Dispute Action it is agreed that the date of the taxation at which the Taxation Settlement Sum would have been ordered to be refunded to Gray by Lavan is the date the final tranche of the Taxation Settlement Sum is paid.

1. The term 'Taxation Settlement Sum' was defined to mean the sum of $900,000 inclusive of costs and disbursements.
2. The term 'Interest Claim' was defined in the 2018 Settlement Deed to mean

any allegation, debt, cause of action, liability, claim, contribution, indemnity, proceedings, suit or demand of any nature, whether present or future, fixed or unascertained, actual or contingent, and whether at law, in equity, under statute or otherwise that Gray has against Lavan to recover interest on fees paid by Gray to Lavan that has been agreed are refundable by Lavan to Gray.

1. Further, 'Interest Dispute' was defined as the dispute between the parties referred to in cl 3.1, and 'Interest Dispute Claim' meant 'an action in the Court to litigate the Interest Dispute'. Accordingly, the appellant's claim before the primary judge was an 'Interest Dispute Claim', for the purposes of the 2018 Settlement Deed.
2. Other terms of the 2018 Settlement Deed provided for certain releases and discharges.
3. The respondent paid the appellant the Taxation Settlement Sum in three tranches of $300,000 on 13 July 2018, 8 October 2018 and 13 January 2019, respectively. Accordingly, the Bills were never taxed.

1. The appellant's claim at first instance was for restitution based on unjust enrichment. The appellant's case was that the respondent had been unjustly enriched at the appellant's expense because there had been a total failure of consideration in relation to the appellant's payment of the Taxation Settlement Sum.
2. To better understand the appellant's case, it is necessary to first say something about the legal principles that apply in the context of a claim for restitution based on unjust enrichment brought about by a failure of consideration.

1. In Equuscorp Pty Ltd v Haxton, French CJ, Crennan and Kiefel JJ observed that unjust enrichment 'has a taxonomical function referring to categories of cases in which the law allows recovery by one person of a benefit retained by another'.[24] The recognised categories of cases involve a qualifying or vitiating factor such as mistake, duress, or illegality, by reason of which the enrichment of another is treated by the law as unjust. As has long been accepted, and as was noted in Equuscorp, failure of consideration 'is one of the factors that make retention of a benefit prima facie unjust'.[25]
2. In the context of the law of unjust enrichment, the word 'consideration' has a meaning that differs from its accepted meaning in the law of contract. In Equuscorp, the plurality observed that on more than one occasion the High Court has adopted the following description of failure of consideration given by Professor Birks in An Introduction to the Law of Restitution:[26]

Failure of the consideration for a payment ... means that the state of affairs contemplated as the basis or reason for the payment has failed to materialise or, if it did exist, has failed to sustain itself.

1. It has been said that in cases in which there is a contractual relationship, the 'basis' upon which a performance is rendered (including a payment of money) is usually the receipt of the promised counter-performance.[27] However, as the majority in Roxborough v Rothmans of Pall Mall Australia Ltd said, failure of consideration is not limited to non‑performance of a contractual obligation; the concept 'embraces payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared'.[28]
2. More recently, in Redland City Council v Kozik, Gordon, Edelman and Steward JJ said the following:[29]

The language of failure of consideration is difficult. As Gummow J has observed, 'consideration' is a word with different meanings in different contexts. In the law of contract, consideration is generally any act (including a promise), advantage conferred, or detriment suffered that is 'a quid pro quo' for another's act, advantage conferred or detriment suffered. In the law of trusts, family relationships were described as 'good consideration'. In the law of unjust enrichment, where 'consideration' is concerned with a reason for a transaction, the concept has another, quite different, meaning. It means a 'basis', 'purpose', or 'condition' for a transaction by which one party confers a benefit upon another. That basis, purpose, or condition for the transaction might be a factual or legal state of affairs.

The basis of a transaction might fail immediately at the time of the payment or conferral of the benefit, such as in cases of payments described as being made for an 'absence of consideration', 'no consideration', or 'without' consideration if a basis for the payment was the enforceability of promissory obligations, some or all of which were void. Or the basis might fail subsequent to the time of payment, such as where a basis for a payment is later performance of an obligation but that obligation will not be performed.

Where the transaction is a contract, a basis that fails need not be an express or implied promise in the contract; it can be 'an event or a state of affairs that was not promised'. Of course, the transaction might not be a contract between the parties at all. And the benefit conferred might take different forms. The benefit conferred on another by a transaction upon a basis that fails might be the payment of money. It might be the performance of a service. Or it might be the provision of goods. In each case, the basis, purpose, or condition upon which the benefit is conferred is determined objectively, not according to some subjective uncommunicated belief of either party. The objective basis is therefore independent of mistakes of fact or law as the reason for recovery of those benefits conferred upon another party which the other has no right to retain. (emphasis added) (footnotes omitted)

1. In referring to the need to make an objective determination of the basis, purpose, or condition upon which a benefit is conferred, the majority in Redland City Council cited Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd,[30] with evident approval. In Fostif, Mason P (with whom Sheller & Hodgson JJA agreed) said:[31]

The failure is judged from the perspective of the payer. That person is the party to the contract who is seeking restitution. But, for present purposes, the critical point is that it is the benefit bargained for as distinct from that subjectively contemplated by the plaintiff/payer that is critical. In other words, one must determine, in a contractual situation, what was 'the state of affairs, which was within the contemplation of the parties as the basis of their dealings'; or 'the state of affairs contemplated as a basis for the payments [sought to be recovered]'. (citations omitted)

1. Accordingly, in determining the relevant basis, purpose, or condition of a transaction, the focus is on the common, objectively discernible, basis of the transaction.
2. The failure of consideration must be 'total' for it to qualify as an unjust factor. In other words, the basis of the transaction with the defendant must completely fail.[32] In this regard, it is sufficient if the consideration for a severable part of the payment totally fails.[33] In Edelman and Bant, Unjust Enrichment, this is referred to as the 'so‑called "apportionment" exception of failure of consideration cases'.[34] I will deal in more detail with this exception later in these reasons.
3. Having regard to the way in which the appellant put his case at first instance and on appeal, it is important to observe that the vitiating factor of failure of consideration focuses on the basis, purpose or condition of a transaction by which one party confers a benefit upon another, including a transaction that involves or is constituted by the payment of money. This can be clearly seen from the way in which failure of consideration was explained by the majority in Redland City Council in the passage quoted earlier in these reasons. It also emerges from Professor Birks' description of failure of consideration that was referred to with approval by the plurality in Equuscorp.
4. However, the use of the word 'transaction' should not be understood as limiting the circumstances in which there may be a failure of consideration to those involving effective agreements reached between parties. So much is clear from what was said by the majority in Redland City Council:[35]

Where the transaction is a contract, a basis that fails need not be an express or implied promise in the contract; it can be 'an event or a state of affairs that was not promised'. Of course, the transaction might not be a contract between the parties at all. And the benefit conferred might take different forms. The benefit conferred on another by a transaction upon a basis that fails might be the payment of money. It might be the performance of a service. Or it might be the provision of goods. (footnotes omitted)

The appellant's case that there had been a failure of consideration

1. Against this background, and expressed at a high level of generality, the appellant's case was that:

(a) the respondent had been enriched at the expense of the appellant by its receipt of the Taxation Settlement Sum;

(b) the respondent had also been enriched by the opportunity to use the Taxation Settlement Sum;

(c) the respondent's enrichment in both respects was at the appellant's expense; and

(d) the respondent's enrichment was unjust because there had been a total failure of consideration in relation to (the payment of) the Taxation Settlement Sum.

1. A critical issue before the primary judge was whether the appellant had established that the respondent had been unjustly enriched because there had been a total failure of consideration in relation to the appellant's payment of the Taxation Settlement Sum. At trial, the appellant's contention that there had been a failure of consideration depended upon the effect of the 2018 Settlement Deed.
2. The appellant pleaded that the effect of the 2018 Settlement Deed was that the parties agreed to proceed:

(a) as if there had been a taxation of the Bills; and

(b) on the basis that a taxing officer had certified that the appellant had overpaid the Taxation Settlement Sum to the respondent.

1. The appellant also pleaded that because of the effect of the 2018 Settlement Deed, the respondent's entitlement to charge and retain the Taxation Settlement Sum ceased on the parties' entry into that deed.
2. Critically, the appellant contended that this cessation of the respondent's entitlement to charge and retain the Taxation Settlement Sum meant that there had been a failure of consideration (or basis) in relation to that sum. The relevant failure of consideration (or basis) was pleaded in this way:

(a) each of the payments the appellant made to the respondent in relation to the Invoices were made on the basis that the respondent 'was entitled to charge [the appellant] those costs, and that those costs were payable by [the appellant to the respondent]; and

(b) 'that basis ceased to exist in relation to the Taxation Settlement Sum on the parties' entry into the 2018 Settlement Deed'.[36]

1. The appellant's case at first instance, as more fully explained in the appellant's substituted outline of submissions dated 23 May 2022, involved the following steps:

(1) The Retainers provided a 'legal justification' for the respondent's right to charge, and the appellant's obligation to pay, all of the fees set out in the Invoices.

(2) The common, objectively discernible basis for the appellant's payment of the Taxation Settlement Sum was that the respondent would provide legal services to the appellant, that the respondent was legally entitled to charge and retain that sum, and that the appellant was obliged to pay it to the respondent.

(3) Although the respondent did provide legal services to the appellant pursuant to the Retainers, there was a total failure of consideration with respect to the appellant's payment of the Taxation Settlement Sum because the 'legal basis' of the respondent's entitlement to charge and retain that sum failed or ceased upon the parties' entry into the 2018 Settlement Deed. In that sense, there was a total failure of consideration.

(4) By its retention of the Taxation Settlement Sum, the respondent was unjustly enriched.

(5) The proper measure of the respondent's unjust enrichment was the Taxation Settlement Sum together with the value of the respondent's opportunity to use that sum from the dates the appellant paid the amounts referred to in the Invoices until the date the final tranche of the Taxation Settlement Sum was paid.

(6) As the Taxation Settlement Sum was repaid to the appellant, the appellant was entitled to restitution of the value of the respondent's opportunity to use the Taxation Settlement Sum, in the form of compound interest, or alternatively simple interest, on the Taxation Settlement Sum, from the dates the payments were made in respect of the Invoices.[37]

The appellant's claim for restitution of interest on the Taxation Settlement Sum

1. It was common ground that the respondent had paid the Taxation Settlement Sum to the appellant in accordance with the terms of the 2018 Settlement Deed. The appellant's claim in restitution was limited to a claim for interest on the Taxation Settlement Sum. As I have already explained, the appellant's case was that the respondent had not only been unjustly enriched by its retention of the Taxation Settlement Sum, but that it had also been unjustly enriched by having had the opportunity to use that money over the period it was retained.
2. The appellant's case was that the appropriate measure of the value of the respondent's opportunity to use the Taxation Settlement Sum was an award of compound, or alternatively simple, interest on that sum.
3. The appellant's claim in restitution for interest on the Taxation Settlement Sum depended upon the trial judge accepting the anterior contention, namely that the respondent had been unjustly enriched by its retention of that sum because there had been a relevant failure of consideration. In that regard, the appellant's claim for interest might be regarded as being independent of (or 'free‑standing'[38]), but 'appurtenant'[39] upon, the appellant's claim that there was a failure of consideration in relation to the Taxation Settlement Sum.
4. The appellant accepted that the High Court has not directly considered the question of whether there exists a free-standing restitutionary claim to interest when a defendant has been unjustly enriched by the use of a plaintiff's money at the plaintiff's expense. However, by reference to what the High Court has said about that topic in Commonwealth v SCI Operations[40] and in Northern Territory v Griffiths,[41] the appellant argued that such a restitutionary claim does exist as part of Australian law.
5. The appellant sought to support his argument by relying on a decision of the House of Lords in Sempra Metals Ltd v Inland Revenue Commissioners,[42] a decision of the New South Wales Court of Appeal in Heydon v NRMA Ltd (No 2),[43] as well as various other decisions of intermediate courts of appeal, first instance decisions, and academic opinions.

1. Relevantly, the respondent argued that there had been no failure of consideration. It contended that it was entitled to charge and retain the amounts that were paid by the appellant pursuant to each of the three retainers 'unless and until there was a taxation of the relevant bills under [the Legal Practitioners Act 2003 (WA)], or the parties to the retainers agreed otherwise'.[44]
2. The respondent's case was that:

(a) the appellant's contractual obligation to pay was not contingent or conditional on the outcome of a taxation of the Bills under div 3, pt 13 of the Legal Practitioners Act;

(b) the basis or reason for the appellant's contractual obligation to pay was that the respondent had undertaken work and rendered invoices; and

(c) further or alternatively, the basis on which the respondent performed the legal services would fail if restitution is ordered.[45]

1. The respondent also contended, in the alternative, that if the appellant had been unjustly enriched, then the respondent's liability arose when the appellant paid the fees in respect of the Invoices rendered. On that basis the respondent argued that the cause of action was statute barred as it accrued more than six years before the commencement of the proceedings.
2. The respondent also disputed the appellant's claim for interest on the Taxation Settlement Sum on the basis that there was no recognised free‑standing restitutionary claim for interest. In that regard, the respondent referred to the fact that in SCI Operations, McHugh and Gummow JJ had expressed doubts about whether there is a free‑standing right to interest where a defendant had been unjustly enriched. The respondent also argued further that in the subsequent case of Griffiths, several judges of the High Court had endorsed what had been said by McHugh and Gummow JJ.
3. In relation to the decision of the House of Lords in Sempra Metals, the respondent contended that this decision had been overruled by the UK Supreme Court in Prudential Assurance v Commissions for Her Majesty's Revenue and Customs,[46] and that it should therefore not be followed.

1. I have already set out the relevant factual context, which reflects the essential findings made by the trial judge based on the Statement of Agreed Facts and the uncontentious documents in Exhibit A.
2. The trial judge found that the respondent was not unjustly enriched on the parties' entry into the 2018 Settlement Deed.
3. His Honour concluded that the appellant had paid fees to the respondent pursuant to the Retainers and that, later, the parties entered into a separate compromise agreement for the payment of the Taxation Settlement Sum. The appellant then paid the Taxation Settlement Sum in accordance with the terms of the 2018 Settlement Deed. In that regard, the trial judge said:[47]

Dr Gray asserts that by the Settlement Deed, Lavan was not entitled to retain the Taxation Settlement Sum. It was not a matter of Lavan retaining the Taxation Settlement Sum. The Settlement Deed created a debt which Lavan was contractually bound to pay and which it did pay. It is artificial to suggest that Lavan lost its right to retain the Taxation Settlement Sum.

Dr Gray's assertion that when the Settlement Deed was executed, the legal justification for Lavan to 'retain' the Taxation Settlement Sum was removed, is not sustainable.

Dr Gray's right to a taxation of the invoices arising from retainers merged in the Settlement Deed. Further, Dr Gray's right to the Taxation Settlement Sum arose from the Settlement Deed.

There was no failure of basis. Lavan paid a debt ‑ the Taxation Settlement Sum ‑ created by the Settlement Deed.

1. Despite reaching this conclusion and determining that the appellant's claim failed at the outset, the trial judge proceeded to give consideration to the question of whether the appellant had a restitutionary right to interest on the assumption that there had been a total failure of consideration, as the appellant had claimed.
2. After reviewing the various authorities to which he was referred, including SCI Operations, Griffiths, Sempra Metals and Heydon v NRMA Ltd (No 2), the trial judge decided to follow Prudential Assurance. His Honour concluded that the appellant did not have any free-standing right to a restitutionary award of interest on the Taxation Settlement Sum.
3. The appellant's claim was dismissed, and an order was made that the appellant pay the respondent's costs of the action.
4. The appellant now appeals against the dismissal of his claim.

1. The appellant relies on the following grounds of appeal:

1. The trial judge erred in law in holding that the respondent was not unjustly enriched as there was no failure of basis. In particular, the trial judge erred in law in holding:

(a) at [38] ‑ [46] and [48] ‑ [55] [of the original decision], that there was no failure of basis as the parties' entry into the 13 July 2018 deed of settlement (Settlement Deed) did not have the effect of removing the legal justification for the respondent to retain the Taxation Settlement Sum (as defined in the Settlement Deed);
>
> (b) at [43], that if the appellant's claim was accepted, every settlement could potentially lead to a claim of unjust enrichment;
>
> (c) at [47], that no unjust enrichment or failure of basis arises even if the Settlement Deed is equivalent to a taxation, since a taxation by a registrar does not give rise to a statutory right to backdate the order for the repayment of the amount taxed off the bill; and
>
> (d) at [101], that the fact that the Settlement Deed, unlike the terms of settlement in Lahoud v Lahoud [2010] NSWSC 1297, expressly carved out the Appellant's claim for interest did not distinguish Lahoud v Lahoud.

1. The trial judge erred in law in [56] ‑ [88] and [92] in failing to hold that Australian law recognises a claim in restitution to interest. 2. The trial judge erred in law in [69] ‑ [73], [89] ‑ [91], [92] and [103] in holding that the appellant was not entitled to an award of compound interest.
2. Those grounds of appeal raise the following issues:

(1) Was the respondent unjustly enriched by its receipt and retention of the Taxation Settlement Sum (ground 1)?

(2) If the respondent was unjustly enriched by its retention of the Taxation Settlement Sum, was the appellant entitled to restitution in the form of interest on the Taxation Settlement Sum (ground 2)?

(3) If the appellant was entitled to restitution in the form of interest, was he entitled to compound interest (ground 3)?

1. These issues highlight the fact that for the appellant to succeed on the appeal, he must establish that the trial judge was wrong when his Honour concluded that the respondent had not been unjustly enriched by its receipt and retention of the Taxation Settlement Sum because the appellant had not established that there had been any failure of consideration in relation to the appellant's payment of that sum. If the first issue is answered unfavourably to the appellant, the remaining two issues, and therefore grounds 2 and 3, must also be resolved in the respondent's favour.

1. The respondent relies on a notice of contention. The respondent contends:

(1) The trial judge was correct to dismiss the appellant's case below as the appellant's payments on the Invoices were made pursuant to a valid and enforceable contract and for good consideration.

(2) The trial judge was correct to dismiss the appellant's case so far as it sought interest from any date prior to the entry into the 2018 Settlement Deed as any award from an earlier date would have been statute barred pursuant to the Limitation Act 2005 (WA).

Ground 1(a) - was the respondent unjustly enriched by its receipt and retention of the Taxation Settlement Sum?

1. Before dealing with this ground of appeal there is a preliminary issue that must first be addressed. The issue concerns the legal basis on which the respondent was entitled to charge the appellant the fees set out in the Invoices.

1. As has already been noted, it was common ground at trial that at the time the appellant made the various payments to the respondent, the respondent was entitled to charge, and the appellant was required under the terms of the Retainers to pay, the fees the subject of the Invoices.
2. The respondent pleaded that the Retainers included terms that it would provide legal services to the appellant. The respondent also pleaded that it would charge the appellant on the same basis he had been charged by Bennett & Co, according to the 'Bennett & Co Retainer' (including the same hourly rates and an entitlement to render monthly accounts), and that the appellant would pay the respondent in accordance with invoices rendered by the respondent.
3. In his reply, the appellant did not plead to the respondent's contentions about the Retainers. However, although there was therefore an implied joinder of issue on the pleadings,[48] that is not the way in which the trial was ultimately conducted. As the primary judge observed:[49]

[The appellant] accepted that the oral retainer agreement between [the appellant and the respondent] entitled [the respondent] to charge and obliged [the appellant] to pay the fees set out in the Invoices.

1. This reflected the submissions made on the appellant's behalf at first instance, to which the trial judge made specific reference, and to which I have also already referred earlier in these reasons:[50]

[T]he oral retainer agreements between [the appellant and the respondent] ‑ although not costs agreements within the meaning of s 221 of the [Legal Practice Act 2003 (WA) (repealed)] ‑ entitled [the respondent] to charge, and obliged [the appellant] to pay, all of the fees set out in the Invoices. The oral retainer agreements provided a legal justification for these payments. That is precisely what [the respondent] pleads, and [the appellant] agrees. (emphasis added)

1. At the hearing of the appeal, the court raised with counsel a question about the correctness of the premise on which parties had proceeded at trial. That premise was that the Retainers entitled the respondent to charge the appellant, and obliged the appellant to pay to the respondent, the fees the subject of the Invoices. More specifically, counsel were asked whether the respondent was lawfully entitled to charge the appellant for legal services in circumstances in which there was no written costs agreement and, further, where the appellant may not have been charged in accordance with any applicable legal costs determination made and in force under pt 13 of the Legal Practice Act 2003 (WA) (repealed).[51]
2. If the respondent was not lawfully entitled to charge the appellant for legal services at the time the appellant paid the fees the subject of the Invoices, then this would raise issues about the correct approach to be taken in the appeal. One possible approach identified by the court was that if the true legal position was that the respondent had been unjustly enriched because the appellant paid the fees under a mistake of law, or on a basis that totally failed because the respondent was never entitled to charge those fees, the appeal should be dismissed because the proceedings at first instance were conducted by the parties on an incorrect legal foundation.
3. In order to deal with this preliminary issue, it is necessary to consider the relevant provisions of the Legal Practice Act.
4. Part 13 of the Legal Practice Act contained various provisions relating to the charging, taxation and recovery of costs incurred for the supply of legal services by legal practitioners, including provisions concerned with the making and effect of legal costs determinations.
5. Section 210 of the Legal Practice Act dealt with legal costs determinations, the relevant parts of which read as follows:
   1. Legal costs determinations

remuneration includes the reimbursement of expenses properly incurred in the course of, or in connection with, business carried out by a legal practitioner for a client, whether incurred -

(a) by the practitioner on behalf of the client; or

(b) by the client.

(2) The Legal Costs Committee may make legal costs determinations regulating the remuneration of legal practitioners in respect of -

(a) non-contentious business[52] carried out by practitioners;

(b) contentious business[53] carried out by practitioners in or for the purposes of proceedings before -

(i) the Supreme Court;

(ii) the District Court;

(iii) the Magistrates Court;

(iv) a court of summary jurisdiction;

(vi) any other court declared by the Attorney General under subsection (5) to be a court to which this section applies.

...

(5) For the purposes of subsection (2)(b)(vi), the Attorney General may, by order published in the Gazette, declare any court to be a court in respect of which the Legal Costs Committee may make a legal costs determination under this section and may, by subsequent order so published, vary or revoke that order.

...

1. The effect of a legal costs determination was dealt with in s 215 of the Legal Practice Act. In that regard, s 215 provided that, subject to s 221 and s 241 of the Legal Practice Act and to s 14 of the Legal Aid Commission Act 1976 (WA):[54]

(a) the taxation of bills of costs of legal practitioners, as between legal practitioner and client or party and party; and

(b) any other aspect of the remuneration of legal practitioners the subject of a determination,

is regulated by a legal costs determination in force under section 210.

1. Section 221 of the Legal Practice Act provided that a legal practitioner may make a written costs agreement with any client of the legal practitioner in respect of the amount and manner of payment for the whole or any part or parts of any past or future services, fees, charges or disbursements in respect of business done or to be done by the legal practitioner, either by a gross sum or otherwise.
2. Division 3 of pt 13 of the Legal Practice Act contained various provisions relating to the taxation and recovery of costs. Many of those provisions are not directly relevant to the present issue. However, they will be discussed in more detail later in these reasons. It is sufficient for present purposes to note that where a legal practitioner made a written costs agreement with a client, a taxing officer was required to give effect to that agreement when taxing an itemised bill of costs (s 235(1)). Otherwise, and as has already been seen, s 215(1)(a) provided that the taxation of costs of legal practitioners as between legal practitioner and client was regulated by a legal costs determination 'in force under s 210'.
3. It was common ground at the trial, and the trial judge found, that the parties never entered into a written costs agreement for the purposes of s 221 of the Legal Practice Act.[55]
4. There was also no legal costs determination in force under s 210 of the Legal Practice Act for the purposes of the provision of legal services in connection with the Federal Court proceedings. That is unsurprising. Section 210(2)(b) of the Legal Practice Act did not empower the Legal Costs Committee to make legal costs declarations regulating the remuneration of legal practitioners in respect of contentious business carried out by practitioners in or for the purposes of proceedings before the Federal Court, and no relevant declaration was made under s 210(5).
5. However, the absence of any written costs agreement or any legal costs determination in force under s 210 of the Legal Practice Act did not mean that the respondent had no legal entitlement to charge the appellant fees for legal services carried out by it in relation to the Federal Court proceedings, or that the appellant had no obligation to pay those fees.
6. As noted in Dal Pont's Law of Costs (5th ed) at [2.1], a lawyer‑client relationship is constituted through a contract, called a 'retainer', and a lawyer's entitlement to recover costs from a person rests in contract.[56] This reflects what was said by Martin CJ in Huntingdale Village Pty Ltd v Corrs Chambers Westgarth:[57]

[I]t is not correct to say that the entitlement to charge and be paid costs is determined by the legislation which governs a legal practitioner's conduct. The entitlement to charge and be paid costs arises from the agreement of retainer between practitioner and client. Statutory regulation of the rights arising from such agreements does not alter their fundamental source.

1. Further, in the absence of proof of an agreement to the contrary, a solicitor who acts on instructions for a party on the record is taken to be entitled to look to that party for costs,[58] and the existence of a retainer gives rise to an implied undertaking on the part of the client to pay costs.[59]
2. Quite apart from any implication arising from the existence of those retainers (or from the fact that the respondents acted for the appellant on the record), there was no issue at the trial about the existence of the Retainers. There was also no issue that they contained express terms that entitled the respondent to charge, and obliged the respondent to pay, all of the fees referred to in the Invoices.
3. In my view, it follows that the respondent was lawfully entitled to charge the appellant the fees in the Invoices that related to legal services carried out in connection with the Federal Court proceedings.
4. This is not to say that the appellant was not entitled to have the Invoices taxed insofar as they related to legal services carried out in connection with the Federal Court proceedings. As this court observed in Stevenson v Zafra Pty Ltd,[60] while the Federal Court has the power to make orders for the taxation of bills of costs between a solicitor and client in proceedings in the Federal Court, ordinarily, the taxation of such costs as between solicitor and own client in respect of work performed under a retainer entered into in a State will be left to be determined under the relevant State statute.
5. Accordingly, had the appellant sought to have the Invoices relating to the Federal Court proceedings taxed in the Supreme Court, the taxing officer would not have been required to give effect to a costs agreement as to the costs specified in a bill of costs lodged for taxation because there was no such costs agreement. As there was no relevant legal costs determination in force, the taxing officer would have been required to determine whether the respondent had made reasonable charges for work reasonably undertaken,[61] including by referring to any legal costs determination that was in force relating to work of a substantially similar nature as a guide.[62]
6. The situation was different in the context of the Supreme Court proceedings. At the time of the Supreme Court proceedings, there was a legal costs determination in force under s 210 of the Legal Practice Act. The Legal Practitioners (Supreme Court) (Contentious Business) Determination 2006 (Costs Determination) regulated the remuneration of legal practitioners in respect of contentious business carried out in the Supreme Court.
7. There is then a question about whether, on the proper construction of the relevant provisions of the Legal Practice Act, and the Costs Determination, the appellant was lawfully entitled to charge fees for legal services it provided to the respondent in connection with the two Supreme Court proceedings.
8. Section 215(1)(b) of the Legal Practice Act, when read with s 221, provides that at the relevant time, the remuneration of legal practitioners was regulated by the terms of any written costs agreement in force. However, in the absence of any such agreement, and where the remuneration was the subject of a legal costs determination, the remuneration was regulated by that costs determination.
9. Relevantly, the Costs Determination provided that subject to any written agreement as to costs with a client, the costs of or in relation to a party 'payable by a party to that party's own practitioner, shall not exceed the amounts set out [in a table that formed part of the determination]'.[63]
10. While this legislative environment strongly suggests that it would not have been lawful for the respondent to charge the appellant fees for legal services in connection with the Supreme Court proceedings which exceeded the amounts provided for in the Costs Determination, it is unnecessary to decide that issue. This is because there was no evidence, and the trial judge did not make any findings, about whether any of the fees charged by the appellant in connection with the Supreme Court proceedings exceeded any of the amounts set out in the Costs Determination. There is also nothing to indicate the extent to which, if any, the Taxation Settlement Sum was comprised of amounts the appellant had paid in excess of any limits set by the Costs Determination, or which Invoices those amounts related to.
11. It follows that the appeal must be determined on the basis contended for by both parties, namely, that at the time the respondent rendered the Invoices, the respondent was lawfully entitled to charge the appellant the fees in those Invoices, and the appellant was obliged to pay those fees, under the terms of the Retainers.
12. Having dealt with that preliminary issue, it is then necessary to consider the merits of the appellant's central contention that the respondent was unjustly enriched by its receipt and retention of the Taxation Settlement Sum.

Was the respondent unjustly enriched by its receipt and retention of the Taxation Settlement Sum?

1. The appellant's case that he was entitled to an award of interest reflecting the respondent's opportunity to use the Taxation Settlement Sum over time depended on acceptance of a contention that the respondent had been unjustly enriched because there had been a total failure of consideration in relation to the appellant's payment of the Taxation Settlement Sum.
2. Reflecting, in part, the explanation given by the majority in Redland City Council of the meaning of 'consideration' in the context of the law of unjust enrichment (that it includes the 'basis' for a transaction by which one party confers a benefit on another, which basis may be a factual or legal state of affairs) the appellant's case that the respondent had been unjustly enriched was pleaded in the following terms:[64]

PAYMENTS MADE WHERE ENTITLEMENT SUBSEQUENTLY CEASED

Unjust enrichment

18.1 Lavan has been enriched by receipt of the Taxation Settlement Sum and, separately, the opportunity to use that money, from the dates of payment to Lavan by Dr Gray to the date Lavan pays the final tranche of the Taxation Settlement Sum to Dr Gray;

18.2 Lavan's enrichment referred to at paragraph 18.1 herein was at the expense of Dr Gray; and

18.3 Lavan's enrichment was unjust because:

(a) each of the payments made by Dr Gray to Lavan referred to at paragraph 5[65] herein was made on the basis that Lavan was entitled to charge Dr Gray those costs, and that those costs were payable by Dr Gray to Lavan; and

(b) by reason of the matters referred to at paragraphs 2, 4, 8, 9, 10, 11, 13 and 14.1[66] herein, that basis ceased to exist in relation to the Taxation Settlement Sum on the parties' entry into the 2018 Settlement Deed.

1. By reason of the matters referred to at paragraph 18 herein, Lavan has been unjustly enriched at the expense of Dr Gray.

1. There is a conceptual disconnect inherent in those pleadings between the material facts that were pleaded in [18.3(a)] and those pleaded in [18.3(b)] of the statement of claim. On the one hand, the appellant pleaded that all of the individual payments he made to the respondent in relation to the Invoices were made on the basis that the respondent was entitled to charge the appellant certain costs, and that those costs were payable by the appellant. However, the appellant contended, on the other hand, that this basis failed in relation to a different sum of money, namely the Taxation Settlement Sum.
2. This disconnect was also apparent in the appellant's written submissions that were before the trial judge. In those submissions, the appellant's case that there had been a failure of consideration slipped between focusing on the purported basis on which the appellant made payments to the respondent in respect of the Invoices, to concentrating on a case that there had been a failure of a basis on which the appellant 'paid' the Taxation Settlement Sum. In that regard, the appellant variously argued that there was a 'failure of basis for the payment of the Taxation Settlement Sum'.[67] The appellant also contended that an objective, 'legal' basis for the appellant's payment of the Taxation Settlement Sum was that the respondent had a 'legal entitlement to charge and retain the Taxation Settlement Sum, and [the appellant had an] obligation to pay it'.[68] Further, the appellant submitted that:[69]

The legal basis for [the appellant's] payment of the Taxation Settlement Sum failed on the parties' entry into the 2018 Settlement Deed. On that date, [the respondent's] entitlement to charge and retain the Taxation Settlement Sum ceased. Before then, the oral retainer agreements between [the appellant and the respondent] ... entitled the [respondent] to charge, and obliged [the appellant] to pay, all of the fees set out in the Invoices. The oral retainer agreements provided a legal justification for these payments. (emphasis added, footnote omitted)

1. The appellant's senior counsel effectively repeated these submissions in the appeal.[70]
2. These conceptual difficulties inherent in the appellant's case are of considerable significance in determining whether the trial judge was correct to dismiss the appellant's claim.
3. It is clear from the summary of the law relating to restitutionary recovery for unjust enrichment set out in the reasons of the majority in Redland City Council, which I have reproduced earlier in these reasons, and from their Honours' elucidation of the vitiating factor of total failure of consideration, that a claim that the retention of a benefit is unjust because of a failure of consideration is a claim that there was a total failure of a basis, purpose or condition of the transaction by which that benefit was conferred. As explained by the majority in Redland City Council, a 'transaction' may be a contract, or it may take the form of a payment of money, the provision of goods, or the performance of services.
4. In their book Unjust Enrichment,[71] Edelman and Bant point out that in cases in which a payment is made pursuant to a contract, as here, the basis on which performance is rendered under that contract is usually receipt of the promised counter‑performance. In support of that observation, the authors referred to the following passage in the judgment of Lord Wright in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd:[72]

The payment was originally conditional. The condition of retaining it is eventual performance. Accordingly, when that condition fails, the right to retain the money must simultaneously fail.

1. However, the appellant's case was not that an express or implied promise in any of the Retainers failed due to any relevant non‑performance. In fact, properly understood, the various payments that were made by the appellant in respect of the Invoices constituted the appellant's promised counter‑performance under the Retainers after the respondent had provided him with legal services. Instead, the appellant's case relied on certain observations made by the majority in Roxborough.
2. In Roxborough, Gleeson CJ, Gaudron and Hayne JJ said that in the case of money paid pursuant to a contract, the concept of failure of consideration is not limited to non‑performance of a contractual obligation.[73] Their Honours said that failure of consideration may also embrace payments for a purpose that has failed, including where a contemplated state of affairs has disappeared. In that regard, the appellant's case was that there was a failure of consideration (or a failure of basis) in relation to the appellant's payment of the Taxation Settlement Sum, because a legal state of affairs (that the respondent was entitled to charge and retain the Taxation Settlement Sum) disappeared as a consequence of the 2018 Settlement Deed.
3. At a high level of generality, it may be accepted that the appellant paid the respondent, and the respondent was relevantly enriched by, the Taxation Settlement Sum. It may also be accepted, at a similarly high level of generality, that this sum was paid pursuant to the Retainers. However, and critically, the respondent was never enriched by a 'transaction' constituted by a payment of the Taxation Settlement Sum. In other words, there was no transaction by which the appellant paid the Taxation Settlement Sum to the respondent or by which the benefit of that sum was otherwise conferred by the appellant on the respondent.
4. Under cl 3.1(a) of the 2018 Settlement Deed, the Taxation Settlement Sum represented an amount the parties agreed the respondent would have been ordered to repay to the appellant if there had been a taxation of the Bills. In that respect, it amounted to an undivided portion of the total of all the individual payments that the appellant had made to the respondent in relation to the Invoices over a specific period. As the respondent submitted on the appeal, the Taxation Settlement Sum was 'a compromise sum in respect of non‑distinguished and non‑distinguishable payments made by the Appellant'.[74] More correctly, it was a compromise sum representing a portion of the total of an undefined and unknown number of individual payments, or parts of such payments, made by the appellant in respect of the Invoices.
5. The only evidence of any payments made by the appellant to the respondent pursuant to the Retainers, and therefore the only evidence of any relevant 'transactions' by which a benefit was conferred on the respondent, was evidence of the payments referred to earlier in these reasons at [57]. In that regard, and as the trial judge found, from around September 2006 to 29 June 2008, the respondent carried out legal services for the appellant in respect of the Federal Court proceedings and in respect of the Supreme Court proceedings. After performing the relevant legal services for the appellant, the respondent rendered the Invoices to the appellant for that work. The appellant then made several payments to the respondent in relation to those Invoices.[75]
6. Against that background, it makes little sense to claim, as the appellant did, that the appellant paid the Taxation Settlement Sum on a particular basis, or that this basis failed. This is because there was no relevant payment or transaction by which the Taxation Settlement Sum was ever conferred on the respondent. As has been noted, the Taxation Settlement Sum represented an indivisible portion of the total of all the payments the appellant had made to the respondent over the relevant period. When this is appreciated, it becomes clear that the appellant's case, as formulated, could not have succeeded.
7. This conclusion is itself fatal to the appellant's claims.
8. Further, if contrary to this conclusion, the appellant's case is analysed on the hypothesis that it amounted to a claim that there had been a total failure of consideration in relation to some or all of the payments made in relation to the Invoices (or in relation to severable parts of some or all of those payments), then such a claim would also have failed. In short, that is because I do not accept that the appellant's payments to the respondent were made on the basis he claims.
9. In my view, the trial judge could only have properly concluded that the respondent had been unjustly enriched to the extent of the Taxation Settlement Sum if he found both:

(a) that there had been a total failure of the claimed basis in respect of the appellant's payments relating to the Invoices (or that there was a total failure of that basis for severable parts of those payments);[76] and

(b) that the Taxation Settlement Sum was a sum comprising a total of those payments (or the total of all of the severable parts of those payments) in respect of which there had been a total failure of basis.

1. As I have already noted, the common basis, purpose, or condition on which a benefit is conferred by a transaction is to be determined objectively and not according to some subjective uncommunicated belief of either party.[77]
2. It might well be concluded that the common, objective basis on which all of the payments were made was relatively straightforward. That basis was that the respondent had actually provided the legal services for the fees charged in the Invoices. In that sense, the various payments that were made by the appellant in relation to the Invoices represented the appellant's counter‑performance for the respondent having already provided him with relevant legal services.
3. However, the appellant argued that there was a further, 'legal', basis for the payments. In that regard, the appellant's pleaded case was that the payments the respondent made to the appellant in respect of the Invoices were made on the basis that the respondent was entitled to charge the appellant those costs, and that those costs were payable by the appellant. To objectively discern whether this was a common basis on which those payments were made, the precise ambit of that putative basis must first be understood.
4. The appellant's case was that the claimed basis failed because of the operation of the 2018 Settlement Deed.
5. In their written submissions in the appeal, counsel for the appellant explained how the parties' entry into the 2018 Settlement Deed meant that there had been a total failure of consideration in the following way:[78]

(a) By the Settlement Deed, the parties agreed that the Taxation Settlement Sum represented the amount that would have been ordered to be refunded to Dr Gray had there been a taxation. So, the deed had the same effect as a taxation. It gave effect to a deemed taxation.

(b) The Settlement Deed settled the parties' dispute, except as to interest, as if there had been a taxation, and on the basis that a taxing officer had certified that Dr Gray had overpaid the Taxation Settlement Sum to Lavan ‑ or in other words, that the taxing officer had found that Lavan was not entitled to retain the Taxation Settlement Sum.

(c) Accordingly, from the date of the deed, the basis for the payment of the Taxation Settlement Sum by Dr Gray - that Lavan was legally entitled to charge and retain, and Dr Gray was obliged to pay, that amount ‑ failed. (emphasis added)

1. Accordingly, the idea that the 2018 Settlement Deed had the same effect as if there had been a taxation of the Bills carried out by a taxing officer in accordance with the relevant provisions of the Legal Practice Act, and as if a taxing officer had issued a taxation certificate under s 240, was central to the appellant's case that there had been a total failure of consideration. Indeed, as can be seen from these submissions, it was the appellant's case that the 2018 Settlement Deed gave effect to a 'deemed taxation'.
2. It is therefore also central to understanding what was meant by the appellant's claim that the basis on which each of those payments were made was that the respondent was 'legally' entitled to charge and retain those costs, and that the appellant was obliged to pay them.
3. It should be noted at this point that senior counsel for the appellant informed the court at the hearing of the appeal that the appellant's case was not that there had been a total failure of consideration at the time the parties entered into the 2018 Settlement Deed, as it had been put in the pleadings and in the appellant's submissions, including those filed in the appeal. Senior counsel submitted that, on reflection, those were mistaken contentions. He advised that the appellant's case was now that the legal basis ceased to exist at the time the respondent paid the final tranche in accordance with the terms of the 2018 Settlement Deed.[79]
4. Counsel made this adjustment to the appellant's case because a conclusion that the 2018 Settlement Deed was a 'deemed taxation' is a critical component of the appellant's case. However, on the original version of the appellant's case, a 'deemed taxation' could not have occurred at the time the parties entered into the 2018 Settlement Deed. This is because cl 3.3(c) of the 2018 Settlement Deed provided that

the date of the taxation at which the Taxation Settlement Sum would have been ordered to be refunded to [the appellant by the respondent] is the date the final tranche of the Taxation Settlement Sum is paid. (emphasis added)

1. The appellant was therefore forced to submit that the 2018 Settlement Deed operated in the same way as if a taxing officer had (on the date the final tranche of the Taxation Settlement Sum was paid) certified, pursuant to s 243 of the Legal Practice Act, that the appellant had a claim for repayment from the respondent for the Taxation Settlement Sum because the total amount paid by the appellant was more than the amount authorised by the taxation.
2. The various provisions in div 3 of pt 13 of the Legal Practice Act set out a statutory scheme under which a client could have any bills of costs issued by their own legal practitioner taxed by a taxing officer of the Supreme Court. Section 238(1) provided that upon a bill of costs being lodged for taxation, a taxing officer could appoint a day, time, and place for the taxation of the bill.
3. Relevantly, for the purposes of this matter, s 240 and s 243 of the Legal Practice Act provided as follows:
   1. Certification, interest, amount, how recovered

(1) The taxing officer must certify in writing the amount at which a bill of costs, and the costs of and incidental to the taxation of the bill of costs, are respectively allowed by the taxing officer.

(2) A certificate under subsection (1) is binding and conclusive on both parties.

(3) A certificate under subsection (1) bears interest, and may be enforced by either party against the person liable to pay, as if it were a judgment of the Supreme Court for the payment of the amount mentioned in the certificate.

...

If a bill of costs is taxed under this Division and, as a result of that taxation, the amount which has been paid or deducted in respect of that bill is more than the amount authorised by the taxation, to the extent of the excess, the person charged has a claim for repayment which may be certified and enforced under section 240 as though allowed under that section.

1. Other than provisions that required that a taxation be 'regulated by a legal costs determination in force' (s 215(1)) and required taxing officers to give effect to any written costs agreement, if one was in existence (s 235(1)), the Legal Practice Act was silent about what a taxing officer was required to determine when taxing a solicitor and own client bill of costs. However, the whole object of taxations tends to suggest that a taxing officer was to either confirm a bill of costs or, if satisfied that the disputed costs were unfair or unreasonable, to substitute an amount as assessed as being fair and reasonable.[80]
2. As Parker J explained in Pryles & Defteros (a firm), on a taxation, costs would have been allowed which, in the view of the taxing officer, constituted reasonable charges in respect of all work reasonably undertaken, including costs actually authorised by the client even though it might not have been necessary or proper for the attainment of justice for the client.[81] Further, where there was no costs agreement or applicable costs determination, a taxing officer would have been able to proceed by way of analogy, using costs determinations relating to substantially similar work that applied in the jurisdiction.
3. Accordingly, the appellant's case that a basis on which each of the payments were made was that the respondent was 'legally' entitled to charge and retain those costs, must be understood as amounting to a contention that those payments were made on the basis that the work was reasonably undertaken and that the costs charged for that work were fair and reasonable.
4. In my view, there are at least two reasons why this was not a common, objectively discernible basis of those payments.
5. Firstly, the respondent was a legal partnership carrying on a business of providing legal services under the Legal Practice Act. Based on the agreed facts and having regard to the 'matter description' that appeared in the respondent's bill of costs for the Federal Court proceedings, the respondent provided legal services to the appellant (through a partner, a general counsel and several employed solicitors) over a period of approximately two years in relation to what must have been relatively complex litigation.
6. In those circumstances, it may be readily inferred that the respondent well appreciated that the appellant had a right conferred by the relevant provisions of the Legal Practice Act, to have the reasonableness and fairness of the costs charged in any invoice rendered reviewed by way of a taxation.
7. It may also be inferred that the appellant knew that he had this right. The Bennett & Co Retainer, signed by the appellant, expressly referred to the appellant's statutory rights to have invoices itemised and taxed.[82] The appellant must therefore have appreciated that those same statutory rights were available to him in the context of his subsequent dealings with the respondent.
8. Further, although the Invoices were not adduced in evidence at the trial, s 231(1)[83] and s 232(1)[84] of the Legal Practice Act required that any bills of costs include a notice that, amongst other matters, drew the recipient client's attention to his or her right to have those costs taxed.
9. In these circumstances it is not reasonable to conclude that the common basis on which the appellant made payments was that the respondent was legally entitled to charge and retain those costs, and that the appellant was obliged to pay them, in the sense that the work was reasonably undertaken, and the costs charged for that work were fair and reasonable. Objectively, it would have made little sense for any of the payments in respect of the Invoices to have been made on such a basis when the parties could be taken to have known that the appellant had an existing statutory right to have the respondent's costs taxed on that very same basis. To conclude that the payments were made on this basis in such circumstances would seem an artificial construct with no apparent utility.
10. Secondly, if a basis on which the payments were made was that the respondent was legally entitled to charge and retain those costs, and that the appellant was obliged to pay them, then if that basis failed it would necessarily follow that the appellant would be entitled to restitution of all of those costs. This would be so even though the respondent would have provided all the legal services to the appellant to which the payments related at the time the payments were made. Objectively, while this would certainly have favoured the appellant, it could not sensibly be said that this was a common basis on which the payments were made.
11. It follows that a claim that the respondent had been unjustly enriched by the payments, to the extent of the Taxation Settlement Sum, would also have failed. It was not open to conclude that the appellant's payments to the respondent were made on the common, objectively discerned basis that the respondent was legally entitled to charge and retain those costs, and that the appellant was obliged to pay them.
12. Even if, contrary to this conclusion, all of the appellant's payments to the respondent were made on the particular basis relied on by the appellant, I am of the view that there was no total failure of consideration in relation to any of those payments.
13. As I have explained, the appellant's case was that there had been a total failure of consideration because of the way in which the 2018 Settlement Deed operated. According to the appellant, it was because the 2018 Settlement Deed gave effect to a 'deemed taxation' that there was a total failure of consideration.
14. To test this aspect of the appellant's case, it is useful to have regard to what would have in fact occurred had there been a taxation of the Bills.
15. The Bills for the Supreme Court proceedings, which formed part of Exhibit A, set out in table form all of the work carried out by the respondent during the relevant period. That work was summarised and cross-referenced to a corresponding item in the relevant costs determination. There was also an amount claimed by the respondent for having carried out each item of work, and there were separate amounts claimed for disbursements.
16. It is not clear from the Bill relating to the Federal Court proceedings which was tendered at trial whether the same format was utilised. However, I infer that the schedules to that Bill, which did not form part of the evidence before the primary judge, also set out the individual items of work carried out by the respondent and the costs it claimed for having undertaken that work.
17. Had the Bills been taxed, the taxing officer would have undertaken the taxation in a manner consistent with the approach endorsed in Pryles & Defteros (a firm).[85]
18. In carrying out an assessment of the reasonableness of the respondent's charges, a taxing officer would, by reference to each item of work set out in the Bills, have either allowed the amount claimed or reduced it by 'taxing off' an amount. The taxing officer would then have been required, under s 240(1) of the Legal Practice Act to certify in writing the total amount at which the Bills, and the costs of and incidental to the taxation, were allowed by the taxing officer. If the total amount paid to the respondent by the appellant at the time of taxation was more than the amount authorised by the taxing officer, the appellant would then have had a claim for repayment to the extent of the excess under s 243 of the Legal Practice Act, which could then be certified and enforced under s 240.
19. Importantly, in undertaking an assessment of the reasonableness of the respondent's costs, a taxing officer would not have been at all concerned with examining or making any assessments about the payments made by the appellant to the respondent. The taxation would only have been concerned with the reasonableness of the items of work carried out by the respondent, and with the costs incurred in respect of that work, as they were itemised in the Bills.
20. It follows that even if all of the appellant's payments to the respondent were made on the common, objectively discerned basis that the respondent was legally entitled to charge and retain those payments, and that the appellant was obliged to pay them, that basis could not be said to have failed even if the 2018 Settlement Deed was the functional equivalent of a 'deemed taxation'. Any certificate issued by a taxing officer for an amount, including any amount relating to a claim for repayment under s 243 of the Legal Practice Act, would not have falsified the basis on which the appellant had made any specific or individual payment.
21. The appellant also submitted in the alternative, both at first instance and on appeal, that as the 2018 Settlement Deed operated as a 'deemed taxation', it had the effect of 'apportioning' the fees paid by the appellant as between the amounts the respondent was entitled to retain and those which it was not. In that regard, the appellant argued, in effect, that the 2018 Settlement Deed somehow retrospectively created or identified severable parts of the payments the appellant had made to the respondent in relation to the Invoices, while at the same time arguing that the deed falsified the basis on which those severable parts had been paid.
22. It has long been recognised that where it is possible to apportion a transaction into severable parts, restitution may be possible where the basis for a severable part fails. In often quoted obiter, Lord Porter said in Fibrosa that:[86]

If a divisible part of the contract has wholly failed and part of the consideration can be attributed to that part, that portion of the money so paid can be recovered.

1. Similarly, in David Securities Pty Ltd v Commonwealth Bank of Australia, the majority said:[87]

In circumstances where both parties have impliedly acknowledged that the consideration can be 'broken up' or apportioned in this way, any rationale for adhering to the traditional rule requiring total failure of consideration disappears. (original emphasis)

1. It is true that if a taxation had been conducted under the Legal Practice Act it may have resulted in a form of 'apportionment' of the legal costs received by the respondent. In particular, those costs may well have been 'apportioned' by a taxing officer by identifying those costs that he or she considered had been properly charged by the respondent for legal services provided to the appellant, and those that were not. However, this process by which costs may be said to be 'apportioned' is entirely unrelated to the concept of apportionment that operates as an 'exception' to the requirement of total failure of consideration.
2. As explained in Mason, Carter and Tolhurst, Restitution Law in Australia (4th ed), the agreed return for a payment is identified by construing the contract, and the concept of severability (or apportionment) relates to the performance that was agreed to be provided.[88] Further, in David Securities the majority explained that apportionment is available 'where both parties have impliedly acknowledged that the consideration can be "broken up" or apportioned'.[89]
3. In Roxborough, the majority did not analyse the question of whether the consideration in that case could be 'broken up', 'apportioned' or 'severed' by reference to the existence of any relevant implied acknowledgement by the parties. Instead, conclusions were reached by the majority about whether an alteration in circumstances or state of affairs resulted in a failure of a 'severable part of the consideration' after undertaking a close and detailed analysis of the context in which the relevant payments had been made.
4. In Roxborough, the retailers were retailers of tobacco products and the holders of a retailer's license granted pursuant to a New South Wales statute. The wholesalers were a wholesaler of tobacco products and the holder of a wholesaler's license issued under the same statute. The wholesalers supplied tobacco products to the retailers. The New South Wales statute imposed a tax on the retail and wholesale sale of tobacco. The wholesalers included the tax in their charges to the retailers, who then passed the cost on to consumers.
5. In Ha v New South Wales,[90] the High Court held that the New South Wales statute was invalid, with the result that the tax was unlawful. When Ha was decided, the retailers in Roxborough had already paid amounts to the wholesalers in respect of tobacco products supplied by the wholesalers and in respect of which invoices had been issued to the retailers. In each of those invoices, an amount was separately identified as a 'tobacco licence fee'. Had the New South Wales statute not been declared invalid, the wholesalers would have been required to pay those amounts identified in its invoices to the revenue authorities. Because of the decision in Ha, the wholesalers did not have to make any such payments.
6. The retailers had paid amounts identified in the wholesalers' invoices as relating to the tobacco licence fee over a period of time. The wholesalers retained those amounts once judgment in Ha was pronounced, and the retailers sued the wholesalers seeking to recover the retained amounts. The retailers sought repayment of an amount representing the total of the tax identified in the relevant invoices the wholesalers would otherwise have paid to the revenue authorities.
7. The retailers based its case, in part, on a contention that there had been a failure of consideration in relation to the net amount of the total wholesale cost it had paid to the wholesalers that was referrable to the tax.
8. Importantly, the plurality in Roxborough carried out a detailed analysis of the circumstances in which, and the basis upon which, the parties had dealt with one another in connection with the sale of and payment for tobacco products. The plurality first noted that the tax was calculated by reference to the value of tobacco sold during a relevant period by a wholesaler. It had relevantly been determined that this value was to be ascertained by reference to a manufacturer's published wholesale list price from time to time, excluding any amount in the selling price that was referrable to the tax. This was done to ensure that there would be no tax upon a tax. According to the plurality, this was significant because it demonstrated that separating the value of the tobacco from the tax was important both to the fiscal regime and to the commercial response to that regime.
9. The plurality then noted that the wholesalers published wholesale price lists which reflected the fact that the tax was imposed by reference to the wholesale value, but that it was to be passed on to the retailers so as to form part of the retailers' costs. The plurality also concluded that in the documents that formed part of the ordinary dealings between the retailers and the wholesalers, including a form for requesting a trading account and the wholesaler's invoices, the parties distinguished between the wholesale price, the tax, and the net total cost to the retailers. On this basis, the plurality reached the conclusion that the individual amounts paid by the retailers to the wholesalers in respect of the tax represented a distinct part of the consideration for the tobacco products purchased by the retailers.[91]
10. An important issue before the High Court was whether it could be concluded that there had been a total failure of consideration in relation to the payments that had been made, representing the tax payable by the wholesalers, in circumstances in which both parties had performed their obligations under the relevant contract. A majority of the High Court concluded that failure of consideration is not limited to non‑performance of a contractual obligation. In that regard, the plurality (Gleeson, Gaudron & Hayne JJ) said that the concept 'embraces payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared'.[92] Against that background, and having regard to the particular circumstances in which the parties had dealt with one another in connection with the sale of tobacco products, the plurality held as follows:[93]

[T]here are cases, of which the present is an example, where it is possible, both to identify that part of the final agreed sum which is attributable to a cost component, and to conclude that an alteration in circumstances, perhaps involving a failure to incur an expense, has resulted in a failure of a severable part of the consideration. Here, the buyers, the retailers, were required to bear, as a component of the total cost to them of the tobacco products, a part of the licence fees which the seller, the wholesaler, was expected to incur at a future time, and which was referable to the products being sold. It was in the common interests of the parties that the fees, when so incurred, would be paid to the revenue authorities by the seller, and it was the common intention of the parties (and the revenue authorities) that the cost of the goods would include the fees. In the events that happened, the anticipated licence fees were not incurred by the seller. The state of affairs, which was within the contemplation of the parties as the basis of their dealings, concerning tax liability, altered. And it did so in circumstances which permitted, and required, severance of part of the total amount paid for the goods. (emphasis added)

The circumstance that it is necessary for the appellants to pay the total of the invoiced amounts in order to obtain delivery and passing of title to the tobacco products supplied by [the wholesalers] does not inevitably point to the conclusion that the sum designated in respect of 'tobacco licence fee' was referable solely to the delivery and transfer of property in the tobacco products sold by [the wholesalers]. The parties contracted not only for the supply of the tobacco products but also, in the light of the provisions of s 41 of the Act, with respect to the renewal of the wholesaler's licence and the funding for that to take place. Whilst that is understood, the very form of the transactions indicates that the payments made by the appellants can be 'broken up'. (emphasis added)

1. Callinan J was also of the view that the appellants in Roxborough

made out a case for the recovery of the money paid on the basis that relevantly there has been a total failure of consideration, that is to say, a failure in respect of a discrete, clearly identified component of the consideration.[95] (emphasis added)

1. In the present case, in contrast to the circumstances in Roxborough, there was nothing about the transactions comprising the appellant's payments to the respondent in respect of the Invoices, or anything about the parties' dealings with each other, that was capable of establishing the existence of any severable parts of those payments. The 2018 Settlement Deed may have, in one sense, like a taxation, resulted in an 'apportionment' of the respondent's fees. However, it is the context in which the relevant payments were made that is important.
2. The appellant's submission that a severable part of the payments he made for legal services that were actually provided conflates the apportionment of legal costs after a taxation with the apportionment of an agreed return for a transaction. The 2018 Settlement Deed did not result in an ex post facto creation of severable parts of the payments that were made by the appellant to the respondent in relation to the Invoices.
3. There is a significant air of unreality about the appellant's claim that the respondent had been unjustly enriched by its receipt and retention of the Taxation Settlement Sum on the ground that the 2018 Settlement Deed brought about a failure of consideration. The appellant entered into enforceable Retainers, pursuant to which he was to, and did, receive legal services from the respondent. Having received those legal services, and upon Invoices being rendered in accordance with the Retainers, he paid the respondent.
4. After the Retainers were terminated, the 2018 Settlement Deed created new rights, imposed new obligations, and conferred new benefits on the parties in settling certain disputes between the parties. In that regard, the parties agreed that certain proceedings commenced by the respondent against the appellant, and by the appellant against the respondent, would be dismissed by consent upon the respondent's payment of the Taxation Settlement Sum in three equal tranches. The parties also agreed to provide each other with limited releases and discharges from certain claims identified in the deed.
5. Importantly, the parties agreed in cl 3.1(a) that the Taxation Settlement Sum 'represented' the amount that would have been ordered to be refunded to the appellant if there had been a taxation of the Bills. Further, in cl 3.3(a), it was agreed that if the appellant commenced proceedings against the respondent seeking interest on the Taxation Settlement Sum, the net amount in legal fees the respondent would have been obliged to refund to the appellant had there been a taxation was the Taxation Settlement Sum.
6. In those circumstances it is highly artificial to claim that, many years after the legal services were provided and the payments were made, that the 2018 Settlement Deed falsified the basis on which the appellant conferred benefits on the respondent by making payments in relation to the Invoices.
7. In my view, the trial judge was correct to conclude, in effect, that the appellant's claim that the respondent had been unjustly enriched because of a failure of consideration relating to the payment of the Taxation Settlement Sum was misconceived. Accordingly, irrespective of the merits of the appellant's argument that there exists a free-standing (or appurtenant) restitutionary right to interest, the trial judge was also correct to dismiss the appellant's claim for interest on the Taxation Settlement Sum.
8. Ground 1 must be dismissed.

1. It is unnecessary to consider any of these grounds in detail.
2. In relation to ground 1(b), the trial judge's statement did not amount to a 'holding'. In any event, even if the trial judge's observation was erroneous it plainly did not form any material part of his reasoning towards a conclusion that the appellant's claim should be dismissed. I would reach the same conclusion in relation to ground 1(d).
3. I have dealt with the contention in ground 1(c) in the context of ground 1(a). For the reasons I have already expressed, even if the 2018 Settlement Deed did operate as if there had been a taxation, and as if a certificate had been issued under s 240 in respect of a claim by the appellant for repayment under s 243 of the Legal Practice Act, the trial judge was correct to dismiss the appellant's free-standing restitutionary claim for interest.

1. Ground 2 is unhappily drawn. It contends that the trial judge erred in law in 'failing to hold' that Australian law recognises a claim in restitution to interest. However, it is well established that appeals are against orders, not against reasons for judgment.[96] In that regard, even if the trial judge did err in concluding that Australian law did not recognise the existence of a free‑standing restitutionary claim for interest on money where a defendant has been unjustly enriched by the opportunity to use that money, that would not of itself result in the appeal being allowed and the orders of the trial judge being set aside.
2. Having regard to the submissions in support of grounds 2 and 3, the real issue raised by these grounds is whether the trial judge erred in concluding that the appellant had not established that he was entitled to restitution in the form of interest on the Taxation Settlement Sum, including interest calculated on a compounding basis.
3. Grounds 2 and 3 proceed on the assumption that the respondent was unjustly enriched by its receipt and retention of the Taxation Settlement Sum because there had been a relevant failure of consideration in relation to the appellant's payment of that sum. I have concluded that this critical aspect of the appellant's case has not been made out.
4. Further and in any event, even if the appellant had been successful on ground 1, and even if the current state of the law supports the existence of a free-standing restitutionary right to claim interest in the context of a claim for money had and received, the appellant's claim could not have succeeded.
5. As I have explained, a critical step in the appellant's case was that the 2018 Settlement Deed operated as if there had been a taxation of the Bills, in accordance with the relevant provisions of the Legal Practice Act. As the appellant repeatedly put it, both at first instance and on appeal, the 2018 Settlement Deed 'gave effect to a deemed taxation', and that this 'deemed taxation' brought about, or constituted, a total failure of consideration in relation to the Taxation Settlement Sum.
6. On the questionable assumption that the 2018 Settlement Deed operated in this manner, the appellant in effect sought to take advantage of some aspects of the taxation regime in the Legal Practice Act, but to concurrently contend that other aspects, which may not be to his advantage, were not applicable. In that regard, the appellant argued that a taxation would have destroyed, and therefore the 2018 Settlement Deed did destroy, the respondent's legal entitlement to charge and retain fees. However, and at the same time, the appellant wished to sidestep a feature of the regime on which his case depended: namely that upon a taxation of a solicitor own client bill of costs conducted under the Legal Practice Act, the entitlement to interest on any amount certified as payable and enforceable under s 240, bears interests from the date of the certificate.
7. Although the legislature created a statutory claim for repayment of professional costs and disbursements where, after a taxation, the amount paid to a legal practitioner exceeds the amount ultimately allowed under a taxation, a legislative choice was also made about the extent to which any such over-payment would bear interest. Specifically, s 240(3) of the Legal Practice Act provided that it was the amount certified by a taxing officer under s 240(1) that bore interest.
8. In that regard, in Golden West Resources Ltd v Maxim Litigation Consultants,[97] Le Miere J rejected an argument that where, after a taxation, it is determined that there has been an overpayment of professional costs and disbursements, a certificate of taxation can be backdated to account for the fact that a client was out of their money since the payments were first made. That decision was plainly correct for the reasons given by his Honour. In any event, it was not challenged by the appellant in these proceedings, and it was the state of the law at the time the 'deemed taxation' took place.
9. It follows that at the relevant time, where a client proceeded to a taxation of solicitor‑own client costs, there was a limit on the extent to which the client was to be repaid. To the extent that a legal practitioner may have had the opportunity to use overpayments between when it was paid and when any taxation certificate was issued, the practitioner was only required to pay interest for that opportunity from the date of the certificate.
10. If the respondent's payment of the final tranche under the terms of the 2018 Settlement Deed did operate as a 'deemed taxation', and if it had effect as if the appellant had enforced a claim for repayment that had been certified under s 240, read with s 243, of the Legal Practice Act, then any benefits the respondent may have derived from its retention of the Taxation Settlement Sum up until the payment of the final tranche would also, by analogy, be a product of the way in which the relevant provisions of the Legal Practice Act would have operated.
11. In Redland City Council, the majority observed that if there is a statutory right of recovery then that right will usually apply to the exclusion of any common law claim for restitution.[98] In that regard, the majority referred, with approval, to what was said by Gaudron J in SCI Operations that the particular statutory right being considered in that case could 'neither be cut down nor enlarged by resort to the general law or to restitutionary principles'.[99] The majority also referred to similar views that were expressed by McHugh and Gummow JJ in the same case that '[t]he restitutionary considerations which are present in various areas of the law cannot "purport to override statute by claiming a superior sense of justice to Parliament's"'.[100]
12. Both parties in this case relied heavily on the reasons of Keifel CJ, Bell, Keane, Nettle and Gordon JJ in Griffiths. Each party sought to persuade the court that various obiter statements made by their Honours supported their respective cases that, in the case of the appellant, there is a free-standing entitlement to compound interest in the context of a restitutionary claim based on a failure of consideration and, in the case of the respondent, that such an entitlement did not exist in Australian law.
13. In Griffiths, the appellants sought compensation from the Northern Territory of Australia pursuant to the Native Title Act 1993 (Cth), for loss, diminution, impairment or other effect of certain acts on certain native title rights and interests over land. The case concerned difficult questions about the objective economic value of the relevant native title rights. However, there was also a question about whether, and on what basis, interest was payable on or as part of the compensation claimed.
14. The appellants in Griffiths argued, by reference to various lines of authority, that it would be consonant with equitable principles and just to award compound interest in all of the circumstances. Among the lines of authority referred to were cases that were said to support a free‑standing entitlement to compound interest as a means of redressing the alleged injustice of the Northen Territory having derived rents and profits from some of the relevant land.
15. The plurality concluded that the appellant's claim for compound interest had been rightly rejected in the courts below. In reaching that conclusion, their Honours said that the appellant's contention that there existed a free-standing entitlement to interest in the circumstances of that case faced difficulties at three different levels.[101] It is unnecessary, for present purposes, to identify or discuss the first two levels of difficulty that were referred to. It is the third level, which the plurality described as the most important level, that is of relevance in the present context. In that regard, their Honours said:[102]

Thirdly, and most importantly, even if benefits derived by the Crown were a relevant consideration in the assessment of compensation for extinguishment of native title, the statutory validation of the compensable acts means that any benefit the Northern Territory derived from the extinguishment of the Claim Group's native title was not unjust. To adopt and adapt the language of McHugh and Gummow JJ in SCI Operations, such benefits as the Northern Territory might have derived from the extinguishment of native title, or from the delay in payment of compensation, are the product of statute, and the restitutionary considerations which are present in various areas of the law cannot purport to override statute by claiming a superior sense of justice to Parliament's. (emphasis added, footnotes omitted)

1. In my view, the same reasoning applies in the circumstances of this case. If, as the appellant argued, the 2018 Settlement Deed did operate as if a certificate had been issued under s 240 of the Legal Practice Act, in respect of a claim by the appellant for repayment under s 243, the appellant would have had no entitlement to interest, 'free‑standing' or otherwise, even if there had thereby been a relevant failure of consideration in relation to the Taxation Settlement Sum.
2. The existence of any such entitlement would, given the way in which the appellant framed his case, purport to override the Legal Practice Act by claiming a superior sense of justice in relation to the question of interest to the one provided for by the legislature. As I have said, Parliament decided that interest is payable on the amount certified on a taxation from the date of the certificate and not on overpaid amounts calculated by reference to the date on which any such overpayments were made.
3. Thus, even if the current state of the law supports the existence of a free‑standing restitutionary right to claim interest in the context of a claim for money had and received, for the reasons already given such a claim could not have succeeded in this case.
4. In those circumstances, I am of the view that it would be undesirable to attempt to resolve the difficult questions addressed by both parties about whether there is a principled basis on which a free‑standing award of interest can be made in the context of a claim of unjust enrichment. To do so in the circumstances of this case would be to decide those questions on the basis of a claim that could not have succeeded.
5. I would dismiss grounds 2 and 3.
6. Equity's auxiliary jurisdiction to grant interest does not arise.

1. As I would dismiss the appeal it is unnecessary to determine either ground in the respondent's notice of contention. However, I will briefly state my reasons for dismissing the respondent's contentions.
2. By its first ground the respondent contends that the trial judge was correct to dismiss the appellant's case because the appellant's payments on the Invoices were made pursuant to a valid and enforceable contract and for good consideration. However, the appellant's case was not inconsistent with that contention. As I have endeavoured to explain, the appellant's case was that there was a failure of a 'legal' basis on which the Taxation Settlement Sum was paid. In that regard, the appellant relied, by analogy, on the reasoning in Roxborough, where it was concluded that there had been a failure of basis notwithstanding the existence of a subsisting valid and enforceable contract.
3. Accordingly, if the appellant had been successful with his first ground of appeal, the first ground of the notice of contention would necessarily have failed.
4. I would dismiss ground 1 of the notice of contention.
5. Ground 2 of the notice of contention proceeds on the assumption that the appellant was successful in a claim that I have concluded could not have succeeded, and on the further assumption that appeal grounds 2 and 3 were decided in his favour.
6. I would also dismiss ground 2 of the notice of contention.

1. I would make the following order:
   1. The appeal is dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

Research Associate to the Honourable Justice Vandongen

[1] See Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 [16] (Gleeson CJ, Gaudron & Hayne JJ), [104] (Gummow J) and cases there cited.

[2] Appellant's Further Submissions filed on 1 March 2024, pars 21 - 26.

[3] Paragraph 18.3 of the Further Amended Statement of Claim (Blue AB 28 - 29).

[4] It was common ground in the appeal that the provisions of pt 13 of the Legal Practice Act would govern a taxation of the costs on 13 January 2019 (when the Legal Practice Act had been repealed), pursuant to the transitional provision in s 616(2) of the Legal Profession Act 2008 (WA) (repealed).

[5] Huntingdale Village Pty Ltd v Corrs Chambers Westgarth [2018] WASCA 90; (2018) 128 ACSR 168.

[7] See the current provision in s 180(2) and s 185(4) of the Legal Profession Uniform Law (WA) and the former provisions of s 282(2) and s 287(1) of the Legal Profession Act.

[8] Pryles & Defteros (a firm) v Green [1999] WASC 34; (1999) 20 WAR 541 [24].

[11] Walter v Buckeridge [No 5] [2012] WASC 495 [34].

[12] As to which, see the recent discussion in Redland City Council v Kozik [2024] HCA 7; (2024) 98 ALJR 544 [236] - [240].

[14] The Invoices were not in evidence at the trial.

[15] Exhibit A, which comprised a book of nine documents.

[16] The appellant relied on an affidavit sworn by a law clerk employed by the appellant's solicitors. In that affidavit, which became exhibit B, the law clerk gave evidence of internet searches he had conducted on the website for the Reserve Bank of Australia. An extract of the results of those searches, which were attached to the affidavit, was used by the law clerk to calculate interest on the sum of $900,000 on a monthly compound basis from 1 July 2008 to 12 January 2019.

[17] The reference to the 'Legal Practitioners Act' was incorrect. When the appellant first retained Bennett & Co to act for him, the Legal Practice Act 2003 (WA) (repealed) applied. That Act continued to apply when the appellant retained the respondent. It is not clear when the appellant terminated his retainer with the respondent. However, when the Legal Profession Act 2008 (WA) (repealed) commenced, pt 13 of the Legal Practice Act 2003 (WA) continued to apply in relation to that retainer: Legal Profession Act 2008 (WA) (repealed), s 616(1).

[19] Plaintiff's Substituted Outline of Submissions, par 93.

[21] The word 'Bills' was defined in the 2015 Settlement Deed by reference to paragraphs in an affidavit that was not in evidence before the primary judge.

[22] A date six months from the date of the 2018 Settlement Deed.

[23] The term 'Interest Dispute Action' was defined as an action in the court to litigate the dispute referred to in cl 3.1.

[24] Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498 [30].

[26] Equuscorp [31]. Birks P, An Introduction to the Law of Restitution rev ed (1989) 233.

[27] Edelman J and Bant E, Unjust Enrichment (2nd ed, 2016) 262.

[28] Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 [16].

[29] Redland City Council v Kozik [2024] HCA 7; (2024) 98 ALJR 544 [183] ‑ [185].

[30] Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203.

[32] Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344.

[33] Roxborough [17], [19], [21] (Gleeson CJ, Gaudron & Hayne JJ), [109] (Gummow J).

[34] Edelman J and Bant E, Unjust Enrichment, (2nd ed, 2016) 269.

[35] Redland City Council [185] (Gordon, Edelman & Steward JJ).

[36] Further Amended Statement of Claim (6 May 2022) par 18.3.

[37] Presumably because the appellant made several payments to the respondent in relation to the Invoices, it was an agreed 'fact' at trial that 'for the purposes of the calculation of any interest the parties are content to proceed on the basis that all of these payments were made on 30 June 2008': Statement of Agreed Facts (28 August 2020) par 13.

[38] See Commonwealth v SCI Operations Pty Ltd [1998] HCA 20; (1998) 192 CLR 285, 316 ‑ 317 (McHugh & Gummow JJ). See also Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; (2001) 53 NSWLR 600, 606 (Mason P) and Northern Territory v Griffiths [2019] HCA 7; (2019) 269 CLR 1 [135] (Kiefel CJ, Bell, Keane, Nettle & Gordon JJ), [339] (Edelman J).

[39] Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; (2001) 53 NSWLR 600, 605 (Mason P).

[40] Commonwealth v SCI Operations Pty Ltd [1998] HCA 20; (1998) 192 CLR 285.

[41] Northern Territory v Griffiths [2019] HCA 7; (2019) 269 CLR 1.

[42] Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561.

[43] Heydon v NRMA Ltd (No 2) [2001] NSWCA 445; (2001) 53 NSWLR 600.

[44] Second Further Defence, par 31(c).

[45] Second Further Defence, par 31(d) ‑ (f).

[46] Prudential Assurance v Commissions for Her Majesty's Revenue and Customs [2018] UKSC 39; [2019] AC 929.

[47] Gray v Lavan (a firm) [2022] WASC 417 [48] ‑ [51].

[48] Rules of the Supreme Court 1971 (WA), O 20 r 15.

[49] Gray v Lavan (a firm) [2022] WASC 417 [21].

[50] Gray v Lavan (a firm) [2022] WASC 417 [33].

[51] Part 13 of the Legal Practice Act, which contains provisions relating to legal costs, applied because the appellant first instructed the respondent before the commencement day of the Legal Profession Act 2008 (WA) (repealed) on 1 March 2009 (Legal Profession Act 2008 (WA), s 616(1)).

[52] The phrase 'non‑contentious business' is defined in s 206 of the Legal Practice Act as 'any business carried out in the capacity of a legal practitioner which is not contentious business'.

[53] The phrase 'contentious business' is defined in s 206 of the Legal Practice Act as 'business carried out as a legal practitioner in or for the purposes of any action, suit or proceedings before a court, but does not include the administration of estates and trusts'.

[54] It is unnecessary to refer to s 241 in any detail as it only applied in relation to the taxation of bills of costs in which the Legal Aid Commission is charged for services by way of legal assistance. For similar reasons, it is also unnecessary to refer to s 14 of the Legal Aid Commission Act.

[55] Gray v Lavan (a firm) [2022] WASC 417 [19]; Statement of Agreed Facts, par 11.

[56] Reference is made in Dal Pont's Law of Costs to Director of the Fair Work Building Industry Inspectorate v Abbott (No 7) [2015] FCA 969, in which Gilmour J found that the absence of a retainer between a successful party to litigation and legal practitioners meant that the party was unable to claim costs from the unsuccessful party.

[57] Huntingdale Village Pty Ltd v Corrs Chambers Westgarth [2018] WASCA 90 [143].

[58] Marsh v Baxter (No 2) [2016] WASCA 51 [37] ‑ [38] (McLure P, Newnes & Murphy JJA).

[59] Pryles & Defteros (a firm) [30]; Olympic Holdings Pty Ltd & Anor v Lochel & Anor [2004] WASC 61 [172] (McLure J); Oil Basins Limited v Watson [2017] FCAFC 103; (2017) 252 FCR 420 [75] (Dowsett J). See also, Kellar & Anor v Williams [2004] UKPC 30 [18].

[60] Stevenson v Zafra Pty Ltd [2021] WASCA 181 [284] ‑ [285].

[61] Pryles & Defteros (a firm) [30].

[62] Pryles & Defteros (a firm) [27].

[63] Costs Determination, cl 9(1) (emphasis added).

[65] Paragraph 5 included three schedules in which the various payments made by the appellant were identified.

[66] In these paragraphs the appellant pleaded material facts concerning the Retainers, the rendering of the Invoices, the Bills, as well as the relevant terms of the 2018 Settlement Deed and their effect.

[67] Plaintiff's Substituted Outline of Submissions, par 91 (emphasis added).

[68] Plaintiff's Substituted Outline of Submissions, par 92.

[69] Plaintiff's Substituted Outline of Submissions, par 93.

[70] White appeal book 8 - 12; appeal ts 7, 12 - 13, 22.

[71] Edelman and Bant, Unjust Enrichment (2nd ed, 2016) 262.

[72] Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] UKHL 4; [1943] AC 32, 65.

[75] Gray v Lavan (a firm) [2022] WASC 417 [20]; Statement of Agreed Facts, pars 12, 13. However, it is not clear from the evidence whether the appellant paid all of the Invoices, or whether all of the payments corresponded with the amounts charged in those Invoices.

[76] Mann v Paterson Constructions Pty Ltd [2019] HCA 32; (2019) 267 CLR 560 [168] (Nettle, Gordon & Edelman JJ).

[80] See Dal Pont's Law of Costs (3rd ed) [5.15].

[81] Pryles & Defteros (a firm) [26] ‑ [27].

[82] Bennett & Co Client/Solicitor Costs Agreement, cl 5 (exhibit A, tab 2).

[83] For a bill of costs for a lump sum.

[84] For a bill of costs contained detailed items.

[85] Pryles & Defteros (a firm) [26] ‑ [27].

[87] David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353, 383.

[88] Mason, Carter and Tolhurst, Restitution Law in Australia (4th ed, 2021) [1221].

[90] Ha v New South Wales [1997] HCA 34; (1997) 189 CLR 465.

[92] Roxborough [16]. See also Redland City Council [86] (Gageler CJ & Jagot J), [185] (Gordon, Edelman & Steward JJ).

[93] Roxborough [17] (Gleeson CJ, Gaudron & Hayne JJ).

[96] Driclad Pty Ltd v Federal Commissioner of Taxation [1968] HCA 91; (1968) 121 CLR 45, 64 (Barwick CJ & Kitto J); Bank of New South Wales v Commonwealth [1948] HCA 7; (1948) 76 CLR 1 (Bank Nationalisation Case).

[97] Golden West Resources Ltd v Maxim Litigation Consultants [2016] WASC 384.

[100] SCI Operations [76], quoting National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd (1997) 217 ALR 365, 371.