So in relation to the moneys paid to the third party the question is, well, in relation to the benefit derived or received on the unjust enrichment, the recoupment, it wasn't to our benefit. We didn't get the benefit. I think the point is, I think they really, truly do need to be looked at completely separately. It is not a matter of one invites attention to the other. I think one is a defence, what's the effect. One is a cause of action, what's the effect, because if it is the case, for argument's sake, that we weren't seeking by way of defence restitution, perhaps that is another way of looking at it because what we have under unjust enrichment, have we been unjustly enriched as a matter of fact. We say absolutely no. The facts and circumstances of this case we say negate the circumstances where the plaintiff ought be entitled in any event to restitution."
119 In Understanding Unjust Enrichment edited by Jason W Neyers and others, Oxford and Portland Oregon, 2004, Mitchell McInnes, in a chapter entitled "Enrichment Revisited", makes the following comments at pages 219-220:
"Despite the trend toward increasing complexity in restitutionary scholarship, it is necessary to revisit the basic concept of enrichment. Courts and commentators must more clearly recognize that the core issue is freedom of choice. It is not enough for the plaintiff to prove that she conferred an objective benefit upon the defendant. She must also overcome his right to subjective devaluation by showing that he either assumed the risk of financial responsibility or had no choice to make. Appreciation of that point will help to resolve a number of long-standing debates regarding the precise scope of enrichment. It will also affect several other aspects of the action in unjust enrichment. It will clarify the nature of the defence of change of position. It will better ensure the proper calculation of restitutionary relief. And perhaps most significantly, it will reveal the harmful redundancy that typically occurs when a reason for restitution is formulated with a view to protecting the defendant's freedom of choice."
120 In Australian Restitution Law, 2nd Ed by Sharon Erbacher, the learned author says at page 368:
"As with claims for restitution brought under unenforceable contracts, the claim will fail where the recognition of the claim would frustrate the policy of the legislation or common law rule rendering the contract void."
121 In Mason and Carter, Restitution Law in Australia, dealing with the topic of void contracts, the learned authors indicate at [1010], uncontroversially, that they include "contracts made without authority, certain cases in which contracts are affected by statute, and some cases of lack of capacity". On the topic of contracts unenforceable at common law, the learned authors note at [1012] that "[t]he category of contracts unenforceable 'at common law' includes contracts the performance of which have been postponed by the agreement of the parties, and some cases of lack of contractual capacity". They go on to indicate at [1028] that "[v]oidness under statute implies an important question of policy" and that it "must therefore be considered whether a statute, in rendering a contract void and prohibiting contractual relief, also bars the restitutionary claim". Later in the same paragraph they indicate that "[p]ublic policy may also be relevant to claims arising out of benefits conferred under void contracts" and go on to note that "[w]here a transaction is both void and illegal, claims for reasonable remuneration are almost invariably refused, on the basis that neither the contractual concept of discharge nor the restitutionary concept of acceptance apply".
122 Portion of what the learned authors have to say at [1030] on the topic of fully performed unenforceable contracts is as follows:
"A person suffering from a lack of contractual capacity, whether by minority, mental disability or intoxication, will be liable to pay for 'necessary' services, that is, services which although not necessarily essential to life, are suitable to the condition in life of the incompetent person. However, it is unclear whether under the general law the liability to pay for necessary services work is restitutionary or contractual. For example, to the extent that a minor may be bound by executory contracts of employment and analogous contracts, a genuine or implied contractual liability is suggested. On the other hand, the possibility of a restitutionary claim against a mentally incompetent person, in relation to acceptance of benefit after recovery from the disability, was recognized by Griffith CJ in City Bank of Sydney v McLaughlin. " (Citations omitted).
123 I was not referred to, and I have been unable to discover, a case dealing with a claim for restitution, in the context of a benefit delivered prior to the establishment of a successful defence of non est factum, in which any question of public policy has been raised in response to the restitutionary claim. The issue did not arise in Child (supra), although the facts were relevantly analogous to the present case.
124 It seems clear, as I indicated during the course of submissions, that there is considerable tension between the notion of an incapacitated defendant being able to establish a defence which avoids a contract on the one hand, and his nonetheless remaining liable for "benefits" arguably passing to him or given in discharge of his liabilities, which by definition he neither agreed to nor (in the context of the present case) desired or understood, on the other hand. Nor is this a case of a restitutionary claim against the defendant as a mentally incompetent person in relation to acceptance of benefits after recovery from the disability: the defendant's condition is chronic and permanent.
125 In one sense the issue distils into one of whether or not the defendant was truly enriched. Viewed simply as the arithmetical predicate of the plaintiff's loss, it may be that he was. In the case of the funds directly credited to his account, it is not possible to demonstrate otherwise. As a matter of substance and policy, it seems to me arguably to be wholly inconsistent with the underlying basis upon which the defendant has been able to avoid the contract - that is to say, congenital intellectual impairment - that he has been enriched at all or that he should be required to make restitution to the plaintiff in the particular circumstances of the present case of those funds which were not applied directly for his benefit. The same could not be said of the sum of $24,857, which the defendant clearly received.
126 However, this is not the law. It is not possible to elevate concerns about inconsistency to the level of policy applying, for example, as in the case of an illegal contract. The defendant has been unjustly enriched at the expense of the plaintiff and restitution should be ordered.
Conclusion
127 In the net result, the plaintiff would ordinarily be entitled to restitution of the sum of $200,000 together with interest from the date of payment, less an adjustment to take into account payments of principal or interest that may have been made since then that may affect that calculation. Alternatively, having regard to the agreement between the parties concerning the amount outstanding and unpaid, it may be that the plaintiff is simply entitled to judgment for the sum of $268,629.33 together with interest from 11 December 2007. The amended statement of claim should otherwise be dismissed. It is unnecessary to make orders sought in the amended cross claim. However, I will hear the parties in relation to the final form of any orders that should be made, including costs, at some convenient time by arrangement with my Associate.