Plaintiff v Defendant

Stuart Lawrance SC with Christopher Tran and Jess Moir

1. This proceeding concerns the interoperability arrangements between the parties and, more specifically, overpayments by the plaintiff ('ConnectEast') to the defendant ('CML') under agreements providing for that interoperability. ConnectEast's claim is for restitution of monies had and received.
2. By way of background and in summary, s 93AB(1) of the Melbourne City Link Act 1995 (Vic) ('MCL Act') relevantly provides that the fee or charge that may be imposed by CML on ConnectEast under a Link roaming agreement for provision of a Link roaming service (ie, those arrangements which provide for interoperability between the toll road operators) "must not exceed the amount that represents the net incremental marginal cost [ie, the NIMC] to [CML] of providing that Link roaming service".
3. On 7 February 2025, I delivered my reasons for judgment in ConnectEast Pty Ltd v CityLink Melbourne Limited (No 2) ('Reasons').[1] Relevantly, I found that the roaming fee paid by ConnectEast to CML in each of the sample years (ending 30 June 2015, 30 June 2017, 30 June 2019 and 30 June 2020) exceeded the legislative cap imposed by s 93AB of the MCL Act.
4. I found that the difference between the sum of the roaming fee paid and the amount representing the NIMC was:[2]

(a) $7,610,133 in the financial year ending 30 June 2015;

(b) $8,909,146 in the financial year ending 30 June 2017;

(c) $10,042,160 in the financial year ending 30 June 2019; and

(d) $9,561,348 in the financial year ending 30 June 2020,

1. On 14 February 2025, I made the following orders giving effect to the Reasons ('14 February 2025 Order'):
   1. There be a declaration that the roaming fee paid by the Plaintiff to the Defendant exceeded the legislative cap imposed by s 93AB(1) of the Melbourne CityLink Act 1995 (Vic) ('MCL Act') in each of the years ending 30 June 2015, 30 June 2017, 30 June 2019 and 30 June 2020 (the Relevant Years).
   2. The Defendant pay $36,122,787 to the Plaintiff (being the difference between the sum of the roaming fee paid and the amount representing the net incremental marginal cost in the Relevant Years).
   3. Pursuant to s 60 of the Supreme Court Act 1986 (Vic), the Defendant pay $15,160,646.36, being penalty interest on the judgment sum from 23 November 2020 to 3 February 2025.
   4. The Defendant pay the Plaintiff's costs of, and incidental to, the hearing in relation to the Relevant Years, including reserved costs, on a standard basis, to be taxed in the absence of agreement.
   5. Pursuant to s 93AB(2) of the MCL Act, a declaration that, in each of the Relevant Years, each of clause 8.6 of the Tag Roaming Agreement and clause 9.6 of the Video Roaming Agreement is void to the extent the Discount Amount exceeded the legislative cap imposed by s 93AB(1) of the MCL Act.
   6. Costs reserved.
   7. Liberty to apply.
2. CML was ordered to pay and has paid to ConnectEast the sum of the Sample Years Enrichment Amount and the statutory interest on that sum pursuant to s 60 of the Supreme Court Act 1986 (Vic) for the period 24 November 2020 (when proceedings were commenced) to 3 February 2025.
3. ConnectEast's claim is one of unjust enrichment. ConnectEast contends that CML has been enriched by the Sample Years Enrichment Amount at the expense of ConnectEast and that the enrichment is unjust because CML had no legal entitlement to retain that amount.
4. ConnectEast now seeks restitutionary interest on the Sample Years Enrichment Amount. In simple terms, ConnectEast seeks interest to be calculated from (and including) the day on which the relevant daily enrichment amount was retained by CML to the date restitutionary interest is paid by CML to ConnectEast calculated as follows:

(a) accruing daily and using:

(i) the rate for each relevant day applied by the Commonwealth Bank of Australia for overdraft accommodation in excess of $100,000 made available by it on a selective basis to its prime commercial customers, plus 2%;

(ii) alternatively, the applicable Reserve Bank of Australia cash rate only;

(iii) alternatively, that cash rate plus 2%;

(b) compounded daily, alternatively, calculated on a simple basis.

1. CML opposes ConnectEast's application for restitutionary interest.
2. Having regard to the parties' written and oral submissions, the following issues arise for determination in this application:

(a) Issue 1: Is ConnectEast entitled to restitutionary interest at common law?

(b) Issue 2: Is ConnectEast entitled to restitutionary interest in equity?

(c) Issue 3: If the answer to Issue 1 or 2 is yes, then having claimed and been awarded statutory interest under s 60 of the Supreme Court Act 1986 (Vic), is ConnectEast precluded from claiming restitutionary interest for some or all of the period claimed?

(d) Issue 4: If the answer to Issue 1 or 2 is yes, then:

(i) At what rate should interest be calculated?

(ii) Over what period should interest be calculated?

(iii) Should the interest be calculated on a compound or a simple basis?

B Issue 1: Is ConnectEast entitled to restitutionary interest at common law?

1. The parties spent considerable time in writing and orally addressing the development of the doctrine of restitutionary interest at common law in the United Kingdom and in Australia. It was helpful. ConnectEast submits these authorities support a right to interest in circumstances involving unjust enrichment and specifically where a defendant has had the use of moneys which it is regarded as having had and received to the use of the plaintiff, as in this case. CML submits ConnectEast's common law claim is inconsistent with or unsupported by these authorities.

1. The two cases particularly relevant to the development of the doctrine of restitutionary interest at common law in the United Kingdom are:

(a) Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561 ('Sempra Metals'); and

(b) Prudential Assurance Company Ltd v Commissioners for Her Majesty's Revenue and Customs [2018] UKSC 39; [2019] AC 929 ('Prudential').

1. The cases particularly relevant to the development of the doctrine of restitutionary interest at common law in Australia and to my determination of this issue are, chronologically:

(a) the High Court in Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 ('Commonwealth v SCI Operations');

(b) the New South Wales Court of Appeal in Heydon v NRMA Ltd [2001] NSWCA 445; (2001) 53 NSWLR 600 ('Heydon v NRMA');

(c) the Supreme Court of South Australia Full Court in Chow v Yang [2010] SASC 96 ('Chow v Yang');

(d) the Victorian Supreme Court of Appeal in Peet Ltd v Richmond [2011] VSCA 343; (2011) 33 VR 465 ('Peet v Richmond');

(e) the High Court in Northern Territory v Griffiths [2019] HCA 7; (2019) 269 CLR 1 ('Northern Territory v Griffiths'); and

(f) the Victorian Supreme Court of Appeal in Stephens v Cameron (2021) 65 VR 117 ('Stephens v Cameron').

1. I will address each authority before turning to the parties' submissions and my consideration of them.

B.2.1 The English doctrine - restitutionary interest at common law

1. Sempra Metals claimed, amongst other things, an entitlement to restitution in respect of interest accruing on sums of tax prematurely paid. The trial judge held that Sempra Metals was entitled to a full remedy restoring it to the position it would have been in had it not been required to make premature payments. He ordered the award to be quantified on the basis of compound, not simple, interest at a rate derived from prevailing levels of interest rates in the market generally. Revenue's appeal to the Court of Appeal was dismissed. Revenue appealed to the House of Lords. The appeal was dismissed.
2. The House of Lords held that a claim would lie at common law for the use value of money by which a defendant had been unjustly enriched, even if the money itself had been repaid. Prior to Sempra Metals it had been held that in an action for money had and received, only the net sum could be recovered.[3]
3. Lord Hope focused on the question: "is the claimant who seeks a remedy on the ground of unjust enrichment entitled to an award for restitution of the value of money that is measured by compound interest?"[4]
4. He observed:

(a) the claim was not for more than what was had and received by the defendant, namely the enrichment. "It is the enrichment itself that is to be valued, not anything more than that."[5]

(b) it can be taken as settled that a cause of action at common law is available for money paid under a mistake of law. "I also think that the time has come to recognise that the court has jurisdiction at common law to award compound interest where the claimant seeks a restitutionary remedy for the time value of money paid under a mistake."[6]

(c) "recognition that restitution is a common law remedy raises questions about the limits that must be set to it which would not arise if it was available only in equity."[7] In that context he observed that the enrichment must, of course, have been unjust. In Sempra Metals, the fact the enrichment was unjust had been settled - "there was no legal ground for the retention of the enrichment".[8]

(d) "the unjust enrichment principle supports the free-standing cause of action to recover interest, which is the measure of the enrichment. It has not been suggested that a restitutionary award by way of interest would give rise to injustice, so long as it was appropriately calculated."[9]

(e) "recognition that the court has jurisdiction to award compound interest at common law is a short, but logical, step in the further development of the restitutionary remedy. It follows from the fact that the right to recover money paid under a mistake is available at common law."[10]

1. In relation to how the restitutionary award should be calculated, Lord Hope held that for restitution to be given for the time value of the money which was paid prematurely, the sum to be awarded should be calculated on the basis of compound interest.[11] In his view, "simple interest is an artificial construct which has no relation to the way money is obtained or turned to account in the real world".[12]
2. Lord Nicholls identified Sempra Metals' claim as being for interest losses as damages for breach of a statutory duty.[13] Therefore, Lord Nicholls concluded that Sempra Metals' damages claim was subject to the same rules as apply generally to damages claims in tort and, subject to satisfying those rules, Sempra Metals was entitled to recover damages in respect of the losses of interest it suffered by reason of the wrongful levying of the Advance Corporation Tax ('ACT').[14] While this conclusion was sufficient to dispose of the damages issue in the case, Lord Nicholls, having regard to the wide ranging arguments presented, went further.
3. In relation to Sempra Metals' claim that its payments made under a mistake of law comprised unjust enrichment at the expense of Sempra Metals he said:[15]

In principle this claim is unanswerable. The benefits transferred by Sempra to the Inland Revenue comprised, in short, (1) the amounts of tax paid to the Inland Revenue and, consequentially, (2) the opportunity for the Inland Revenue, or the Government of which the Inland Revenue is a department, to use this money for the period of prematurity. The Inland Revenue was enriched by the latter head in addition to the former. The payment of ACT was the equivalent of a massive interest free loan. Restitution, if it is to be complete, must encompass both heads. Restitution by the Revenue requires (1) payment of the amounts of tax paid prematurely (this claim became spent once set off occurred) and (2) payment for having the use of the money for the period of prematurity.

(a) "In the ordinary course the value of having the use of money, sometimes called the 'use value' or 'time value' of money, is best measured in this restitutionary context by the reasonable cost the defendant would have incurred in borrowing the amount in question for the relevant period. That is the market value of the benefit the defendant acquired by having the use of the money."[16]

(b) The present state of English law did not accord with this analysis which he considered a divergence from reality.[17] He observed it stemmed from the historical origin in this area of law when the law implied a debt and gave a cause of action as if from a contract. He explained that the law as settled in London, Chatham and Dover Railway Co v South Eastern Railway Co [1893] UKLawRpAC 41; [1893] AC 429 ('London, Chatham') was that at common law a court had no jurisdiction to award interest on the late payment of a debt. In the Privy Council Decision in Johnson v The King [1904] UKLawRpAC 46; [1904] AC 817 on a claim for repayment of money paid by mistake the Board considered an order for payment of interest would be inconsistent with the law as settled in London, Chatham. That is, the position was regarded as the same because a claim for repayment of money paid by mistake was founded on an implied contract.[18]

(c) The fiction of an implied contract, which Lord Nicholls considered a fetter on the principled development of the law of restitution, lingered in the law for some time until removed by the decision of the House of Lords in Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548. It is now accepted law that a claim for restitutionary relief is not founded on a fictitious implied contract or quasi contract.[19]

1. After considering the development of the law since that time, Lord Nicholls considered it was open to re-examine whether interest may be awarded by the courts in exercise of their common law jurisdiction to grant personal restitutionary relief. He went further stating: "I consider your Lordships should undertake this task. Having only recently been released from the shackles of implied contract and, hence, the restraints of the London, Chatham and Dover Railway case [1893] UKLawRpAC 41; [1893] AC 429, the law of restitution should now have the opportunity to develop as a coherent body of principled law".[20]
2. Lord Nicholls held that in the exercise of its common law restitutionary jurisdiction, the court has power to make an award of compound interest noting that an award of compound interest is necessary to achieve full restitution and hence a just result. He continued at [113]:[21]

If this approach is adopted [that the court has the power to make an award of interest in the exercise of its common law restitutionary jurisdiction] the unfortunate decision in the London, Chatham and Dover Railway case [1893] UKLawRpAC 41; [1893] AC 429 will be effectually buried in relation to the payment of interest for non-payment of a debt and in relation to the payment of interest for having the use of money in personal restitution cases. The law will achieve a principled measure of consistency between contractual obligations and restitutionary obligations. The common law in Australia has developed this way. The common law in England should do likewise.

3. Lord Walker was essentially in agreement with Lord Nicholls and Lord Hope.[22] He noted:[23]

The crucial insight in the speeches of Lord Nicholls and Lord Hope is, if I may respectfully say so, the recognition that what Lord Nicholls calls income benefits are more accurately characterised as an integral part of the overall benefit obtained by a defendant who is unjustly enriched. Full restitution requires the whole benefit to be recouped by the enriched party: otherwise "the unravelling would be partial only" (Lord Nicholls in Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (formerly Edward Erdman (an unlimited company)) (No 2) [1997] UKHL 53; [1997] 1 WLR 1627, 1637).

4. Lord Walker noted some "apprehension about the suggested conclusion that compound interest should be available as of right"[24] and considered that the discretionary nature of an equitable award of interest would provide the necessary flexibility.[25] Regardless, Lord Walker concluded that on the facts in Sempra Metals, the common law route or the equitable route led to the same conclusion insofar as the appropriate exercise of discretion would be to order compound interest.[26]
5. The difference in the position taken by the minority in Sempra Metals (Lord Scott and Lord Mance) is that they would have allowed the restitutionary claim for interest only if interest had in fact been earned by the recipient of the mistaken payment, in that case, Revenue.[27] Lord Scott held that a claim to interest as part of a restitutionary remedy for money paid by mistake "can and, subject to change of position defences should be, accepted if the interest has actually been earned, but not otherwise".[28]

1. The 2018 judgment of the United Kingdom Supreme Court in Prudential considered a claim by Prudential Assurance Company ('PAC') for compound interest in respect of a tax which was levied in breach of European Union law, on the basis that Revenue was unjustly enriched by the opportunity to use the money in question.[29]
2. The categories of claim on which PAC sought compound interest were as follows:[30]

(a) unlawfully levied Advanced Corporation Tax (ACT) which was subsequently set-off against lawfully levied mainstream corporation tax (MCT), from the date of payment by PAC to the date of set-off;

(b) all other unlawfully levied tax (including unlawfully levied ACT which had not been set-off against lawful MCT or which had been set-off against unlawfully levied MCT), from the date of payment by PAC to the date of repayment by Revenue; and

(c) the time value of utilised ACT (resulting from (a) above), from the date of set-off to the date of payment by Revenue.

1. Revenue had accepted that compound interest was payable in respect of the utilised ACT coming within category (a) above, which was consistent with the judgment in Sempra Metals.[31] PAC argued that the principles in Sempra Metals require that the same approach should apply to the amounts coming within categories (b) and (c).[32] Revenue's position on categories (b) and (c) was that only simple interest should be awarded pursuant to the Senior Courts Act 1981 (UK).[33]
2. The Court (Lord Mance, Lord Reed and Lord Hodge (with whom Lord Sumption and Lord Carnwath agreed)) overruled Sempra Metals in respect of claims for unjust enrichment. As a consequence, the law in England and Wales has returned to what it was, that compound interest will not be awarded for unjust enrichment at common law.
3. There were a number of reasons given by the Court for overturning Sempra Metals but three are of relevance to my consideration of this issue.
4. First, the Court considered that the authority of the majority's approach in Sempra Metals was diminished by their failure to have regard to provisions such as s 78 of the Value Added Tax Act 1994 (UK) which provided for the payment of simple interest on overpaid tax, including ACT and MCT.[34] The Court reasoned:

(a) Long before the Sempra Metals case was decided, Parliament had created a scheme for the repayment of overpaid value added tax, currently in s 80 of the Value Added Tax Act 1994 (UK), with provision for the payment of simple interest in section 78. "That section requires [Revenue] to pay interest on the repaid tax 'if and to the extent that they would not be liable to do so apart from this section'. Entitlement to interest under section 78 is subject to limitations which would be defeated if it were possible for taxpayers to bring a common law claim for interest on mistaken payments."[35]

(b) Until Sempra Metals it had been settled law for about 200 years that no such claim could be brought and in enacting s 78, Parliament legislated on that basis.[36]

(c) As Lord Hoffmann observed in Johnson v Unisys Ltd [2003] 1 AC 518 "judges, in developing the law, must have regard to the policies expressed by Parliament in legislation ... The development of the common law by the judges plays a subsidiary role. Their traditional function is to adapt and modernise the common law. But such developments must be consistent with legislative policy as expressed in statutes. The courts may proceed in harmony with Parliament but there should be no discord".[37]

(a) the law of unjust enrichment is designed to correct normatively defective transfers of value, usually by restoring the parties to their pre-transfer positions.[38]

(b) When money is paid by mistake, the claimant normally provides a benefit directly to the defendant: he pays him money. He normally does so at his own expense: he is less wealthy by virtue of the payment. The transaction is normatively defective: the benefit is provided as the result of a mistake. In those circumstances, an obligation arises immediately under the law of unjust enrichment to reverse the enrichment by repaying the money (or an equivalent amount). The cause of action accrues when the money is mistakenly paid.[39]

(c) The majority in Sempra Metals considered that there was also an additional and simultaneous transfer of value, comprising the opportunity to use the money, which also gave rise to a cause of action based on unjust enrichment. That enrichment had to be reversed by the payment of compound interest.[40]

(d) The opportunity to use the money mistakenly paid can arise as a consequence of that transfer but a causal link is not sufficient to constitute a further, independent transfer of value. The recipients' possession of the money mistakenly paid to him and his consequent opportunity to use it, is not a distinct and additional transfer of value.[41]

(e) The court illustrated its reasoning as follows:[42]

The majority in the Sempra Metals case [2007] UKHL 34; [2008] AC 561 considered that there was also an additional and simultaneous transfer of value, comprising the opportunity to use the money, which also gave rise to a cause of action based on unjust enrichment. That enrichment had to be reversed by the payment of compound interest.

This analysis has a number of questionable features, which can be illustrated by an example. If on 1 April the claimant mistakenly pays the defendant £1,000, with the result that the defendant is on that date obliged to repay the claimant £1,000, the defendant's repayment of £1,000 on that date will effect complete restitution. Restitution of the amount mistakenly paid in itself restores to the claimant the opportunity to use the money: there is no additional amount due in restitution. That is because there has been only one direct transfer of value, namely the payment of the £1,000. The opportunity to use the money mistakenly paid can arise as a consequence of that transfer, but a causal link is not sufficient to constitute a further, independent, transfer of value. Contrary to the analysis of Lord Nicholls in the Sempra Metals case [2007] UKHL 34; [2008] AC 561, para 102, the recipient's possession of the money mistakenly paid to him, and his consequent opportunity to use it, is not a distinct and additional transfer of value.

The position is essentially the same if the £1,000 is repaid not on 1 April but on 1 May. There has been no transfer of value subsequent to 1 April, when the mistaken payment was made. The only transfer of value needing to be reversed remains the payment of the £1,000. The claimant can however be awarded, in addition to the £1,000, simple interest on that amount under section 35A of the 1981 Act. That is because the obligation which arose under the law of unjust enrichment on 1 April, upon the making of the mistaken payment, created a debt. Interest can normally be awarded on a debt under section 35A of the 1981 Act.

That interest is intended to compensate the claimant for the loss of the use of the money to which he became entitled to restitution on 1 April. There is no right to interest on the basis of unjust enrichment: failure to pay a sum which is legally due is not a transfer of value, and does not give rise to an additional cause of action based on unjust enrichment. If there was no distinct cause of action for restitution of the opportunity to use the money on the date of the mistaken payment (as explained above), a cause of action based on unjust enrichment cannot have subsequently accrued, since no further defective transfer of value has taken place.

The point can also be illustrated by an example used by the revenue. If D owes C £1,000 under a contract, a claim also lies against D for interest under section 35A, from the date when the contractual payment became due. There is no claim against D for interest on the ground of unjust enrichment (even if an unjust factor is present). That is because any benefit obtained by D from his failure to pay the debt on time is not obtained at the expense of C in the relevant sense. There has been no transfer of value from C to D. The latter's opportunity to use the money which remains in his possession is the result of his failure to pay the contractual debt. The same analysis applies where the debt is imposed by the law of unjust enrichment, for example as the result of a mistaken payment of £1,000. Any benefit obtained by D as a consequence of his possession of the £1,000 is derived from his failure to pay that debt. It cannot be said to have been transferred from C to D.

All this is consistent with a long-established understanding of, first, the nature of the cause of action based on a mistaken payment, and secondly, the basis on which interest is payable. As to the first of these, Lord Mansfield stated in the classic case Moses v Macferlan [1760] EngR 713; (1760) 2 Burr 1005, 1010, that the defendant in an action for money had and received "can be liable no further than the money he has received". That approach was followed in many later authorities, until Sempra Metals: see, to give only a few examples, Walker v Constable [1798] EngR 165; (1798) 1 Bos & P 306, 307 ("The court were of opinion, on the authority of Moses v Macferlan [1760] EngR 713; 2 Burr 1005, that in an action for money had and received the plaintiff could recover nothing but the net sum received without interest"), Depcke v Munn (1828) 3C&P112 per Lord Tenterden CJ ("the courts have held again and again that interest cannot be recovered in an action for money had and received . . . This has been decided so often, that I cannot now venture to allow the question to be agitated"), Johnson v The King [1904] UKLawRpAC 46; [1904] AC 817 and Westdeutsche Landesbank [1996] AC669.

(f) The Court considered this analysis consistent with a long established understanding that the defendant in an action for money had and received can be liable no further than the money he has received.[43]

1. Third, as to the basis on which interest is payable, the Court concluded the claim to interest is not truly based on unjust enrichment but on the failure to pay a debt on the due date.[44] The Court cited the explanation of Lord Wright in Riches v Westminster Bank Ltd [1947] AC 390, 400:[45]

The essence of interest is that it is a payment which becomes due because the creditor has not had his money at the due date. It may be regarded either as representing the profit he might have made if he had had the use of the money, or conversely the loss he suffered because he had not that use. The general idea is that he is entitled to compensation for the deprivation.

B.2.2 The Australian doctrine - restitutionary interest at common law

1. This case concerned a Commercial Tariff Concession Order ('CTCO') that applied a lower rate of customs duty to particular goods for one period, made them duty free for another, and which was deemed to come into effect from a date several years earlier. The Customs Regulations provided that a refund for overpaid duty should not be made unless an application for the refund was delivered in accordance with the regulations.
2. The respondents, SCI Operations Pty Ltd ('SCI') and ACI Operations Pty Ltd ('ACI') brought proceedings against the Commonwealth seeking refunds of the duty paid plus interest from the date on which the CTCO was stated to have effect. The application for refunds was not made in accordance with the Customs Regulations. SCI and ACI commenced proceedings in the High Court against the Commonwealth as moneys had and received. SCI and ACI also claimed interest under s 51A of the Federal Court of Australia Act 1976 (Cth) ('FCA Act') or, in the alternative, on restitutionary principles.
3. On the same day as SCI and ACI commenced proceedings, the Commonwealth paid amounts as refunds plus interest for part of the period during which duty had been paid.
4. In connection with the respondents' primary claim for interest pursuant to 51A of the FCA Act:

(a) Brennan CJ held that there was no entitlement to interest because there was no period during which SCI or ACI was kept out of money which it was entitled to have.[46]

(b) Gaudron J held that the refund provisions confer a right to payment of a refund subject to satisfaction of the conditions specified in the Customs Regulations. As no claim had been made in accordance with the Customs Regulations, no cause of action had arisen under the refund provisions and there was no foundation for judgment in a sum in respect of which the section could operate to include interest.[47]

(c) McHugh and Gummow JJ held that there was no sum for which judgment was or could have been given because the refunds had been paid on the day the cause of action arose.[48]

(d) Kirby J held that the statutory scheme under the Customs Act 1901 (Cth) excluded the possibility of the payment of interest under s 51A(1) of the FCA Act.[49]

1. In relation to the alternative claim to interest on restitutionary grounds, SCI and ACI argued that a non-statutory principle for the award of interest, such as the law of restitution, could co-exist with the express provisions of s 51A of the FCA Act. SCI and ACI submitted that the Commonwealth should not be able to "pocket the benefit of having had the capacity to use the money over time".[50]
2. Gaudron J observed that the only right with respect to moneys paid when goods were imported is the right given by the refund provisions, and those provisions only confer a right to a refund and not a right to interest on the amount refunded.[51] On this basis, Gaudron J held that the right, being one based wholly in statute, could "neither be cut down nor enlarged by resort to the general law or to restitutionary principles. More precisely, those principles cannot convert a statutory right to obtain a refund of money into a right to obtain a refund with interest".[52] She therefore dismissed the claims for interest based on restitutionary principles.
3. Significantly in relation to this proceeding before me, McHugh and Gummow JJ considered that the then existing state of authority did not favour acceptance of a "free-standing" right to the recovery of interest where a defendant has had the use of the plaintiff's money in circumstances which indicate an unjust enrichment at the expense of the plaintiff.[53]
4. McHugh and Gummow JJ concluded that "even if it be accepted, despite the present state of authority, that there be a principle of the width advanced by SCI and ACI" it had no application on the facts.[54] This is because the collection of the duty before the making of the CTCO was required by statute and the repayment of the duty was also a product of the statute. McHugh and Gummow JJ held that restitutionary considerations could not override what had been expressly provided for by statute.
5. Similarly, Kirby J observed that the respondent's reliance on the law of restitution in claiming interest "depended upon the entitlement of the respondents to have the Commonwealth divested of what the Commonwealth was not entitled to retain".[55] However, the respondents had not been kept out of their money because, until the CTCO was made, the money had been properly received and retained and in those circumstances there was no injustice in the use of the money.

1. In Heydon v NRMA, the NSW Court of Appeal (Mason P, Beazley JA and Ipp A-JA) considered a party's right to restitution with interest of moneys paid under a judgment later set aside. Mason P (with whom Beazley JA and Ipp AJA agreed) directed his attention to a party's right to interest in that context. However, he did make a number of observations relevant to the issue before me.
2. Mason P referred to his judgment in National Australia Bank Ltd v Budget Stationery Supplies Pty Ltd (Court of Appeal, 23 April 1997, unreported) and set out passages from it. Relevantly it recorded his view that:[56]

(a) London, Chatham is "frequently cited as authority for the proposition that damages are not payable for late payment of a debt",[57] noting that for present purposes he included both contractual and restitutionary obligations to pay a money sum as falling within the concept of debt.

(b) But "there have always been streams of cases of undoubted authority which walked around any such general principle".[58] He identified a number of exceptions where interest at common law has been awarded including, for example:

(i) "for money had and received, where the facts would have supported an equitable claim for account";[59] and

(ii) "where restitution follows the reversal on appeal of a previously satisfied judgment";[60]

One might be pardoned for thinking that this litany of 'exceptions' to the London, Chatham principle goes a long way towards eating up the general rule. In all of these cases, interest was awarded at common law and computed from the date of receipt of moneys ordered to be repaid, even where (in cases unlike the present) the restitutionary cause of action leading to the obligation to repay the 'principal' may have arisen later...

Passing London, Chatham like ships in the night, these cases proceeded upon the obvious principle that, when A retains money owned by or owing to B over a period of time, A derives a benefit (at B's expense) usually measurable by what A would have had to pay in the market to borrow that sum for that period. Since this benefit is derived without justification and at the expense of the person to whom the principal sum was due, we should now recognise it as an unjust enrichment. It stands independently of, but appurtenant upon the obligation to pay, the 'principal' sum. The independent nature of the restitutionary entitlement to interest is evidenced by historical recognition of a distinct indebitatus count for interest.

(c) Mason P considered that the categories of cases involving awards by reference to interest to which he referred strongly support the development of the common law to allow claims for interest. He noted that the justice of the claim to interest was recognised in London, Chatham itself, where Lord Herschell LC acknowledged that "the party who is wrongfully withholding the money from the other ought not in justice to benefit by having the money in his possession and enjoying the use of it".[62]

(d) He rejected the idea that a limited statutory remedy to award interest should restrain the incremental and principled development of the common law in this area.[63]

1. Mason P acknowledged the statements of McHugh and Gummow JJ in Commonwealth v SCI Operations that the then existing state of authority did not favour acceptance of a "free-standing" right to the recovery of interest in a common law restitutionary claim. However, he considered that it was unclear whether this portion of their judgment formed part of the essential reasoning and whether their Honours would reject every claim for interest auxiliary to a restitutionary claim. Mason P concluded that as these particular observations of McHugh and Gummow JJ did not form part of the reasoning of the other members of the High Court, he considered himself at liberty to maintain his position that in ordering a payment of money by way of restitution, a court has the power to include interest where necessary to do justice between the parties.[64] Beazley JA and Ipp A-JA agreed.

1. In Chow v Yang, the Full Court of the Supreme Court of South Australia dealt with an appeal from a judgment of a District Court judge. The trial judge declined to award interest where Mr Yang had use of moneys paid by Mr Chow.
2. Mr Chow and Mr Yang had reached an agreement for the sale of Mr Yang's supermarket business to Mr Chow. Mr Chow took possession of the business and commenced operating the business. However, the parties fell out and the business was not transferred. At trial the parties agreed there had been a failure of consideration and that the contractual agreement was at an end. It was also agreed that restitution should be made to Mr Chow for the moneys paid, with a set off for benefits received. The dispute at trial and on appeal related to the value of the benefits received by Mr Chow.
3. The trial judge concluded that there was a balance payable to Mr Chow of around $91,000. The trial judge declined to award interest on that amount. The trial judge considered that it would be unfair to award interest on the judgment sum in circumstances where Mr Yang, on resuming the business after Mr Chow had exited, had incurred interest in respect of borrowings to replenish stock that Mr Chow had run down and to pay suppliers who were owed money from the period during which Mr Chow was running the business.
4. The Full Court concluded that the trial judge was in error in not awarding interest.[65] Nyland and Gray JJ (Vanstone J agreeing) held that in the exercise of his discretion as to interest the trial judge had overlooked the important fact that Mr Chow had paid to Mr Yang the purchase price of around $473,000 prior to 11 June 2004 and that Mr Yang had the use of that money since then. The amount paid by Mr Yang to increase stock levels and pay suppliers was substantially less than that amount. As Mr Yang had the benefit and use of the moneys that should have been repaid, the Full Court held that interest should be paid on that amount from the date of payment of the moneys until the date of judgment - "otherwise Mr Yang will have received a windfall, an unjustified betterment".[66]

1. In Peet v Richmond, the Victorian Supreme Court of Appeal (Nettle and Neave JJA and Judd AJA) considered an appeal involving a quantum meruit claim brought by a developer ('Peet') against the landowner ('Mrs Richmond') for work done in having the relevant land included in the urban growth boundary.
2. At first instance, Mrs Richmond admitted that Peet was entitled to remuneration upon a quantum meruit and that was the only claim pressed by Peet.
3. Peet contended, amongst other things, that Mrs Richmond had received the benefit of not having to pay for the services at the time they were provided, and had been able to use the money in the meantime. It followed, Peet submitted, that, unless Mrs Richmond was compelled to pay interest, Mrs Richmond would be unjustly enriched.
4. The trial judge rejected Peet's claim for pre-litigation interest. Relevantly her Honour reasoned as follows:[67]

In summary, when it was becoming apparent to Mrs Richmond that she and Peet were unlikely to be able to reach any agreement beyond the inclusion of the Richmond land in the UGB, Mrs Richmond offered to pay Peet's actual costs for the work done in relation to UGB inclusion. Over a period of several years, she repeatedly sought details of the amount of those costs. > > Peet steadfastly refused to provide those details, arguing instead that there was a binding joint venture agreement for the development of the land. Peet said it did not want to be paid for its actual costs, because it was a joint venturer and should be entitled to proceed on that basis. Indeed, it was not until the first day of the trial that Peet finally abandoned its primary contention that there was such a binding contract. Importantly, Peet never demanded payment of any sum prior to the commencement of this proceeding, despite all the correspondence between the parties about costs. > > In submissions, Peet argued that it was not clear from Mrs Richmond's letters whether she was offering to pay Peet's internal costs or only third party expenses, therefore I should not be satisfied that Mrs Richmond's offer went far enough. I reject that argument. On its face, the offers in the correspondence seem to be wide enough to cover both internal and external costs. Furthermore, Peet's argument might have had some validity had Peet shown the slightest interest in accepting payment, and (unsuccessfully) sought clarification as to the extent of Mrs Richmond's offer. > > In these rather unusual circumstances, I am not persuaded that it would be fair and reasonable to award Peet interest (at any rate or on any basis) in respect of money that it was not claiming - indeed, was rejecting offers of payment of - prior to the commencement of the proceeding. In so far as Mrs Richmond has received the benefit of having the use of the money, between the times when the work was done and the commencement of the proceeding, there is no unjust enrichment in her retaining that benefit. She made reasonable offers, and took reasonable steps to obtain sufficient information to enable her, to pay Peet for what it had done for her benefit, even though she was under no contractual obligation to do so.

5. On appeal, Peet submitted that the trial judge was wrong. In relation to its entitlement to pre litigation interest, it argued that:[68]

...the award of pre-litigation interest is not discretionary, in the sense that it is not something which the court may refuse in order to signal disapproval of a litigant's conduct.

6. Nettle JA (with whom Neave JA and Judd AJA agreed) rejected this argument. His Honour observed:[69]

As Peet would have it, a litigant is not to be deprived of its rights to recover under restitutionary causes of action by reason of conduct (in the course of a dispute) which may be regarded as rude or unco-operative. Rather, it says, recovery in restitution reflects an obligation on the part of a defendant to make fair and just restitution for a benefit derived; idiosyncratic notions of what is fair and just having no role to play.

7. Nettle JA further stated that Peet's position "faces difficulties at several levels".[70] As his Honour went on to state:[71]

...First, the claim to pre-litigation interest was based on the decision of the House of Lords in Sempra Metals Ltd v Inland Revenue Commissioners that the court had jurisdiction to award compound interest, where a claimant was seeking restitution of money paid under a mistake, in order to take account of the value of the use of the money over the time during which it had been retained by the defendant. It is not clear that the High Court would follow that decision. It represented a departure from the earlier decision of the House of Lords in Westdeutsche Landesbank Girozentrale v Islington London Borough Council that, where statutory provisions like s 60 of the Supreme Court Act 1986 provide for orders for the payment of simple interest, not compound interest, upon common law claims, equity will not supplement the statute by providing for an award of compound interest. In Commonwealth v SCI Operations Pty Ltd , Gummow and McHugh JJ referred to Westdeutsche in terms which appear to me to cast doubt on the existence of a "free-standing" right to recovery of interest where a defendant has had the use of a plaintiff's money in circumstances which indicate an unjust enrichment at the expense of the plaintiff. > > Secondly, although the so-called free-standing right to recovery of interest has been recognised in New South Wales and in South Australia and, until and unless the High Court says to the contrary, it may be that this court is bound to follow those decisions, they were concerned with restitutionary claims for moneys had and received. It is not clear that the same reasoning applies to restitutionary claims for work and labour done. For as was explained in Roxborough v Rothmans of Pall Mall the action for money had and received, although a common count, is based in equitable principles. The raison d'être of the action for work and labour done is different. > > Thirdly, interest under the "free-standing right" to interest on a plaintiff's claim for money had and received does not begin to run until and unless retention by the defendant of the plaintiff's money becomes unjust and, even assuming there is a free-standing right to interest on a plaintiff's claim for work and labour done, there is no reason to think that interest would begin to accrue until and unless the defendant's failure to pay the quantum meruit became unjust.

8. On the particular facts of the case, Nettle JA held that it was not unjust for Mrs Richmond not to pay a quantum meruit until her obligations had been established in the proceedings.[72]
9. Nettle JA then considered Peet's submission that, whatever the position may be in relation to its restitutionary claim for interest, Peet was entitled to interest under s 60 of the Supreme Court Act 1986 (Vic) from the date of the issue of the writ, unless there were good reasons to the contrary, and that there was no good reason to the contrary. This argument was also rejected. By way of analogy, Nettle JA stated:[73]

... If a tradesman or a professional person failed to get around to working out his or her bill until the best part of a year after instituting proceedings to recover the amount of it from a customer or client, there would be very good reason to refuse a claim for interest on the bill in respect of the period up to the date on which the customer or client was informed of the amount of it. A fortiori in circumstances where the customer or client had repeatedly requested a bill so that it could be paid. Why should not the same rules apply to property developers?

1. The High Court considered a claim pursuant to s 51 of the Native Title Act 1993 (Cth) which provided for compensation to native title holders on just terms for any loss, diminution, impairment or other effect of a relevant act on their native title rights and interests.
2. The Court held that the Claim Group were entitled to some compensation assessed at 50% of the full value of the freehold title to the relevant land.
3. It was common ground that interest should be awarded on the economic value of the extinguished native title rights and interests in order to reflect the time between when the entitlement to compensation arose and the date of judgment and that the function of such an award is to compensate a party for the loss suffered by being kept out of their money during that period.[74] The issue between the parties was whether the interest should be calculated on a simple basis or compound basis.
4. The Court held that interest was payable on the compensation for economic loss, and in the circumstances of this case, on a simple interest basis.[75]
5. The majority recorded that the Claim Group had submitted, on the basis of three groups of authorities, that "it would be consonant with equitable principle and just to award compound interest in the circumstances of this case".[76] It is the majority's consideration of the third group of cases that is relevant to the issue before me. Those were identified as "cases where a defendant has had and received moneys to the use of a plaintiff and restitution has been awarded in an amount that includes a sum for what are conjectured to be the costs that the defendant would have incurred if the defendant had had to borrow the subject moneys".[77]
6. At paragraph 134 the majority stated that the contention that there is authority in support of a free-standing entitlement to compound interest faces difficulties at three levels and should be rejected. The majority then identified the three levels of difficulty in paragraphs 135 to 137 as follows:

(a) Firstly, McHugh and Gummow JJ in Commonwealth v SCI Operations had doubted that there was a free-standing right to interest where a defendant had been unjustly enriched by the use of a plaintiff's money at the plaintiff's expense. The majority then quoted a large section of the reasons of McHugh and Gummow JJ.[78]

(b) Secondly, the majority stated:[79]

... properly analysed, such authority as there now is in favour of a free-standing right of the kind contended for goes no further than recognising a restitutionary entitlement at law calculated to redress a defendant's unlawful enrichment through use of moneys which the defendant is regarded as having had and received to the use of the plaintiff. The Claim Group's claim is not a claim for restitution of benefits unjustly obtained by the Northern Territory at the expense of the Claim Group. It is a claim for just compensation for the loss caused to the Claim Group by the extinguishment of native title.

(c) Thirdly, the statutory validation of the compensable acts meant that any benefit the Northern Territory derived from the extinguishment of the Claim Group's native title was not unjust.[80]

1. In Stephens v Cameron, the applicant, a registered builder, was engaged by the respondents under a construction management contract.
2. Section 40 of the Domestic Building Contacts Act 1995 (Vic) ('Building Act') places limits on the amount a builder could demand, recover or retain.
3. The trial judge found that there was an obligation on a builder under s 40(2) of the Building Act to repay moneys retained contrary to its terms. Further, that because s 40(2) was absolute in its terms, there was no defence available to the builder. The trial judge also characterised the successful claim under s 40 of the Act as a restitutionary claim for monies had and received arising from the operation of that provision. So characterised, he considered the claim enlivened a free-standing right to the recovery of interest in respect of the restitutionary claim.
4. However, the Court of Appeal concluded that there was no statutory entitlement in an owner to recover amounts retained by a builder contrary to s 40(2).[81] The Court of Appeal noted that "a distinction must be drawn between a statutory right of recovery and an action for recovery under the general law which relies upon the fact of illegality to found the necessary cause of action".[82]
5. The Court of Appeal held that s 40(2) of the Building Act did not, by implication, displace the general law governing recovery of moneys unlawfully retained, replacing it with a statutory right of recovery.[83]
6. The Court of Appeal ordered that the matter be remitted for further hearing. The applicant had also disputed the existence of a general right to interest on a restitutionary claim. The issue of interest did not need to be decided as the order for interest was to be set aside. However, the Court of Appeal noted that "since the issue may well arise again on the remitted hearing, it is desirable that we address the main issues raised, albeit briefly".[84]
7. In relation to the alleged entitlement to interest based on unjust enrichment the Court of Appeal stated, in summary:

(a) Such a right, in the context of moneys had and received, has to some degree been recognised by intermediate appellate courts in Heydon v NRMA and Chow v Yang.[85]

(b) At the same time, in Commonwealth v SCI Operations, McHugh and Gummow JJ held that the existing state of authority did not support the proposition that there was a free-standing right to interest where a defendant had the use of the plaintiff's money in circumstances indicating an unjust enrichment at the expense of the plaintiff.[86]

(c) None of these authorities can be regarded as settling the question whether there is a general or free-standing right to interest in an action for moneys had and received. Heydon v NRMA was the narrower one of interest upon repayment of a judgment subsequently set aside on appeal, as to which the entitlement to interest is well established. The decision in Chow v Yang appears to have depended on the Court's view of the justice of the case, on the unstated assumption that interest was payable to prevent a windfall or unjustified betterment. The correctness of that assumption appears not to have been the subject of argument in Commonwealth v SCI Operations, the remaining members of the court did not address the point. Moreover, the case involved the application of a statutory compensation regime which left no room for interest in any event.[87]

(d) While Nettle JA mentioned it may be that this court is bound to follow Heydon v NRMA and Chow v Yang, he did not decide whether that was so because the case did not involve a claim for moneys had and received. Nettle JA was doing no more than stating one possible way of understanding the case law to which he referred.

1. The Court of Appeal considered that the view of the trial judge that he was "obliged" to follow the decisions referred to by Nettle JA in Peet v Richmond was in error.[88]

1. The parties' submissions were lengthy, detailed and of a high standard. My summary of them does not do them justice but is sufficient for the purpose of my decision on this issue.
2. ConnectEast submits, in summary:

(a) CML has been enriched by the Sample Years Enrichment Amount at the expense of ConnectEast. The enrichment of the Sample Years Enrichment Amount is unjust and comprises money had and received.

(b) CML did not raise any circumstances that would make an order for restitution unjust.

(c) Payments made under either a mistake of law or a mistake of fact are prima facie recoverable.[89]

(d) The availability of restitutionary interest at common law in Australia has developed in a different way to that of England. In Australia, the Court of Appeal of NSW (Heydon v NRMA) and, in particular, the Supreme Court of South Australia Full Court (Chow v Yang) have recognised, at least in connection with claims for moneys had and received, a right to recover restitutionary interest. Those decisions are likely binding on this Court in proceedings involving (specifically) such a claim for money had and received.[90] In any event, in a claim for money had and received, in the coherent development in this area of the law, the trial division of a Supreme Court would not depart from the appellate approach adopted in other states' intermediate appellate Courts.

(e) The Court in Peet v Richmond (a claim for quantum meruit - a restitutionary claim for work and labour done) did not have to consider the issue of whether it was bound to follow the decisions in Heydon v NRMA and Chow v Yang. The matter was not fully argued before the Court of Appeal in Stephens v Cameron and the Court in that case did not undertake a full analysis of the issue.

(f) In all of the circumstances, ConnectEast invited this Court to follow the decisions, for a money had and received claim, in Heydon v NRMA and in Chow v Yang.

(g) In Northern Territory v Griffiths the High Court did not doubt the correctness of the authorities it cited as supporting a right to interest in circumstances involving unjust enrichment and (specifically) where a defendant has had the use of moneys which it is regarded as having had and received to the use of the plaintiff. That is, the High Court has not said that there is no such free-standing right in those circumstances.[91]

1. CML disputes that ConnectEast is entitled to an award of restitutionary interest. It says that ConnectEast's claim to restitutionary interest is not supported by the authorities.
2. CML submits, in summary:

(a) This Court should give no weight to Sempra Metals, given it was unanimously overturned in respect of claims for unjust enrichment by the Supreme Court of the United Kingdom in the case of Prudential. In doing so, the Supreme Court returned the law in England and Wales to what it had been "for about 200 years",[92] namely that compound interest could not be awarded for unjust enrichment at common law. The common law action for money had and received, as stated by Lord Mansfield in Moses v Macfarlan, can result in a defendant being "liable no further than the money he has received".[93] That has long been understood to mean that interest was not awardable.

(b) The English position therefore offers ConnectEast no assistance.

(c) Insofar as ConnectEast's common law claim is concerned, CML says it is:

(i) inconsistent with obiter dicta in the High Court judgments of Commonwealth v SCI Operations and Northern Territory v Griffiths;

(ii) unsupported by any Victorian Supreme Court of Appeal authorities;

(iii) consistent with intermediate appellate court authorities in New South Wales and South Australia, which are, however, (a) distinguishable; and (b) not binding having regard to what they decided on their own terms and what the Victorian Supreme Court of Appeal has said about them; and

(iv) inconsistent with the current law in England and Wales.

(d) When one reads Chow v Yang, both at first instance and in the Full Court, those courts are dealing with the question of interest under s 39 of the District Court Act 1991 (SA). It is clear Chow v Yang is not dealing with restitutionary interest, which is why there's no reference to any of the 200 years of case law or the decision of Heydon v NRMA. Accordingly, this Court should place no weight on Chow v Yang.

(e) While some comfort may be provided for ConnectEast's position by Heydon v NRMA - the seriously considered dicta of the High Court is stacked against ConnectEast.

(f) This Court would also be correct to conclude that interest is not available at common law for several principled reasons summarised below.

(g) First, Australian legislatures have provided for pre-judgment interest. Insofar as statute directly governs the situation, it would be inappropriate to develop a common law right that cuts across the statute. Insofar as statutory provisions do not fully govern the position or a particular time period, that in itself reflects a legislative choice that courts should not be empowered to award damages. Again, to develop a common law right that cuts across that position would be incompatible with statute.

(h) Second, the common law traditionally rejected the availability of interest on debts and damages. That position was usefully summarised by Mason P (by reference to an earlier judgment) in Heydon v NRMA. As Mason P catalogued in that case, that rejection was subject to exceptions; but rather than treating those exceptions as reinforcing the rule, his Honour treated them as having eaten up and reversed the rule. Given the antiquity of the general rule, his Honour was wrong in principle to have reasoned in that fashion. Such a change in course would be of such magnitude as to properly be within the purview of the legislature to effect.

1. Having regard to the decision of the Victorian Supreme Court of Appeal in Stephens v Cameron, I am not bound by the decisions of Heydon v NRMA or Chow v Yang.
2. However, in my view, my decision on this issue is constrained by the seriously considered dicta of the High Court.[94] Namely, that the existing state of authority does not favour acceptance of a free-standing right to interest where a defendant has been unjustly enriched by the use of the plaintiff's money at the plaintiff's expense. It was first uttered by McHugh and Gummow JJ in Commonwealth v SCI Operations and repeated by Keifel CJ, Bell, Keane, Nettle and Gordon JJ in Northern Territory v Griffiths.
3. At paragraph 134 of Northern Territory v Griffiths, the majority stated that the contention that there is authority in support of a free-standing entitlement to compound interest faces difficulties at three levels and should be rejected.[95]
4. The very first difficulty identified is the dicta of McHugh and Gummow JJ in Commonwealth v SCI Operations. It is referred to without criticism. It is advanced as a reason for rejecting the claim for restitutionary interest. The majority included a large extract of the reasons of McHugh and Gummow JJ. In that context it can only be read as confirming the view expressed by McHugh and Gummow JJ. Further, in that context I infer the reference to, and reliance on, that dicta followed the serious consideration of it by the majority in relation to the point in issue.
5. The second reason the majority gave for rejecting the claim for interest is that "such authority as there now is in favour of a free-standing right of the kind contended for goes no further than recognising a restitutionary entitlement at law calculated to redress a defendant's unlawful enrichment through use of moneys which the defendant is regarded as having had and received to the use of the plaintiff".[96] This was not a claim pursued by the Claim Group in Northern Territory v Griffiths. The relevant authorities are footnoted to that paragraph of the reasons and include a reference to Sempra Metals and Heydon v NRMA.
6. On one reading of that paragraph, it might be said that the High Court does not doubt the correctness of the authorities that it cites as supporting a right to interest in cases of the type now before me.
7. However, in my view and as submitted by CML, read fairly, what the joint judgment was saying was this: even if those authorities were correct ("such authority as there now is ..."), still the respondent would fail because that argument did not fall within those authorities. The majority cannot be understood to be endorsing those authorities in light of their extensive quotation with evident approval from Commonwealth v SCI Operations. To put it another way, I do not read paragraph 136 as saying that the cases cited reflect the existing state of the authorities because that would contradict paragraph 135. It would be a mistake, I think, to read the majority as contradicting themselves in the immediately subsequent paragraph.
8. I therefore reject the claim for restitutionary interest at common law. To decide otherwise - to recognise an entitlement to restitutionary interest - would be to fly in the face of seriously considered dicta of a majority of the High Court. That is not a step a trial judge should take.[97]
9. However, if I were not so constrained, I would have found in favour of ConnectEast. I am persuaded by the reasoning of the House of Lords in Sempra Metals and Mason P in Heydon v NRMA that the time has come to recognise that, in relation to claims of money had and received, the enrichment includes the use value of the money received. In my view the opportunity to use that money is an integral element of the benefit that ought to be valued and accounted for in any restitutionary award.
10. I am not persuaded by the contrary reasoning of the UK Supreme Court in Prudential. The reasoning that there was no separate transfer of value is difficult to follow. I am not alone in that view. My attention was drawn to Mason & Carter's Restitution Law in Australia (4th edition) which describes the decision in Prudential in the following terms:[98]

In 2018, in Prudential Assurance Co Ltd v Revenue and Customs Commissioners, obiter dicta in the Supreme Court of the United Kingdom rejected Sempra as regards apparently all interest claims in restitution in the category of unjust enrichment, including mistake. In doing so, the court espoused an essentially novel doctrine that transfers of value had to be 'direct' and 'independent' before they were even capable of attracting a remedy based on unjust enrichment. The Supreme Court of the United Kingdom also held that only statutory simple interest may be awarded with regard to mistaken payments, in the same breath as it correctly recognised some of the limitations of statutory interest apart from the preclusion of compound interest. We strongly disagree with several aspects of this reasoning in Prudential, and not just because it treats the unjust enrichment concept as one of direct application, contrary to the trend of recent High Court of Australia jurisprudence. In Prudential, the Supreme Court appears to have been influenced by the views of Professor Robert Stevens who rejected the proposition that the Revenue in Sempra Metals had the use of the mistakenly paid money over time 'at the expense of the plaintiff'. We suggest that the court was too willing to re-conceptualise 'transfer of value' narrowly, in order to fit the law within an academic's schema. Such a modification ignored the common sense observation, central to much commercial activity, that the opportunity to use money over time has value. And in the rush to reject claims for compound interest at common law, Prudential Assurance also ignored the substantial body of old case law recognised in Sempra Metals that supported at least a simple interest award at common law on many bases.

11. I note that if ConnectEast's claim had been based on a breach of contract, not a claim in restitution for monies wrongfully withheld, there would be no argument about the availability of an award in the nature of interest, independent of statutory interest, focusing on the plaintiff's loss - that is, a Hungerfords' award.[99] It seems at odds with commonsense that the common law recognises an obligation to compensate a plaintiff for the loss of use of money but does not require the disgorgement of a benefit to the defendant of having had the use of money had and received.
12. In my view, so long as an award of restitutionary interest calculated to redress a defendant's unlawful enrichment through use of money remains unavailable at common law, there will not be full restitution and that is unjust.

C Issue 2: Is ConnectEast entitled to restitutionary interest in equity?

1. By its written submissions ConnectEast submitted, in summary:

(a) The courts of equity have a broad jurisdiction to award compound interest in various categories of cases, including money obtained and retained by fraud and money wrongfully withheld by a trustee or fiduciary. These categories are given as examples by the courts and there is no reason why these categories should not be extended to encompass cases of money had and received.

(b) In the present case, the facts support an equitable claim for account and on that basis the Court's power to award interest at equity is enlivened in respect of the judgment sum from the date that the relevant amounts were withheld from the plaintiff by the defendant.

(a) Bayne v Stephens [1908] HCA 76; (1908) 8 CLR 1 demonstrates that interest can be awarded in equity if, on the facts of the case, the plaintiff also had an equitable claim against the defendant.

(b) ConnectEast has identified no such claim. CML was not its fiduciary. No fraud was found or alleged.

(c) ConnectEast did not develop at all its bare assertion that equity would respond to the facts in this case.

1. ConnectEast did not develop its written submission at the hearing. Rather at the hearing counsel for ConnectEast, acknowledged the force of CML's submissions and noted that while ConnectEast did not want to abandon the claim in equity it would not press that claim further in oral submissions. Instead counsel clarified that "our submission and guidance to you as a trial judge in this area, is that you should conclude in our favour on this issue at common law".[100]
2. I was not satisfied on the material before me that the facts supported an equitable claim for account or any other claim that would support the award of interest in equity.

D Issue 3: Having claimed and been awarded statutory interest under s 60 of the Supreme Court Act 1986 (Vic), is ConnectEast precluded from claiming restitutionary interest as of right for some or all of the period claimed?

1. Having determined that ConnectEast is not entitled to restitutionary interest at common law or in equity, it is unnecessary for me to determine this issue.

E Issue 4: If restitutionary interest is to be awarded - what type, at what rate, over what period?

1. Having determined that ConnectEast is not entitled to restitutionary interest at common law or in equity, it is unnecessary for me to determine this issue.

1. I propose to order that ConnectEast's application for restitutionary interest be dismissed.
2. I will hear from the parties in relation to the appropriate form of order.

[1] [2024] VSC 788 ('Reasons').

[2] ConnectEast Pty Ltd v CityLink Melbourne Limited (No 2) [2024] VSC 788, [615] (Stynes J).

[3] Johnson v The King [1904] UKLawRpAC 46; [1904] AC 817, applying London, Chatham and Dover Railways Co v South Eastern Railway Co [1893] UKLawRpAC 41; [1893] AC 429 ('London, Chatham'), cited in Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561, 578[7] (Lord Hope) ('Sempra Metals').

[4] Sempra Metals, 577 [2] (Lord Hope).

[5] Sempra Metals, 578 [7] (Lord Hope).

[6] Sempra Metals, 583 [22] (Lord Hope).

[7] Sempra Metals, 583 [23] (Lord Hope).

[8] Sempra Metals, 584 [25] (Lord Hope).

[9] Sempra Metals, 584 [25] (Lord Hope).

[10] Sempra Metals, 584 [26] (Lord Hope).

[11] Sempra Metals, 587 [34] (Lord Hope).

[12] Sempra Metals, 587 [33] (Lord Hope).

[13] Sempra Metals, 600 [90] (Lord Nicholls).

[14] Sempra Metals, 600 [90] (Lord Nicholls).

[15] Sempra Metals, 602 [102] (Lord Nicholls).

[16] Sempra Metals, 602 [103] (Lord Nicholls).

[17] Sempra Metals, 603 [105] (Lord Nicholls).

[18] Sempra Metals, 603 [106] (Lord Nicholls).

[19] Sempra Metals, 604 [107] (Lord Nicholls).

[20] Sempra Metals, 604 [111] (Lord Nicholls).

[21] Sempra Metals, 605 [113] (Lord Nicholls).

[22] Sempra Metals, 618 [154] (Lord Walker).

[23] Sempra Metals, 627 [178] (Lord Walker).

[24] Sempra Metals, 630 [187] (Lord Walker).

[25] Sempra Metals, 630 [187] (Lord Walker).

[26] Sempra Metals, 630 [188] (Lord Walker).

[27] Sempra Metals, 617 [151] (Lord Scott) and 649 [231] (Lord Mance). At 649 [231], Lord Mance held that "if any claim to restitution is to be recognised in relation to the use of money had and received, at common law or in equity, it must refer to any actual benefit obtained by the recipient".

[28] Sempra Metals, 617 [151] (Lord Scott).

[29] Prudential Assurance Company Ltd v Commissioners for Her Majesty's Revenue and Customs [2018] UKSC 39; [2019] AC 929, 944 [2] (Lord Mance, Lord Reed and Lord Hodge JJSC) ('Prudential').

[30] Prudential, 955 [34] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[31] Prudential, 956 [35] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[32] Prudential, 956 [35] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[33] Prudential, 956 [35] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[34] Prudential, 962 [59] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[35] Prudential, 962 [57] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[36] Prudential, 962 [58] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[37] Prudential, 962-963 [59] (Lord Mance, Lord Reed and Lord Hodge JJSC) quoting from Johnson v Unisys Ltd [2003] 1 AC 518, [37].

[38] Prudential, 965 [68] (Lord Mance, Lord Reed and Lord Hodge JJSC) citing Investment Trust Companies v Revenue and Customs Comrs [2017] UKSC 29; [2018] AC 275, [42] (Lord Reed JSC).

[39] Prudential, 965 [69] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[40] Prudential, 965 [70] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[41] Prudential, 966 [71] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[42] Prudential, [70] - [75] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[43] Prudential, 966 [75] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[44] Prudential, 967 [76] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[45] Riches v Westminster Bank Ltd [1947] AC 390, 400.

[46] Commonwealth v SCI Operations Pty Ltd (1998) 192 CLR 285 ('Commonwealth v SCI Operations'), 296 [11] (Brennan CJ).

[47] Commonwealth v SCI Operations, 305 [42] (Gaudron J).

[48] Commonwealth v SCI Operations, 315 [69] (McHugh and Gummow JJ).

[49] Commonwealth v SCI Operations, 319 [84],[85] (Kirby J).

[50] Commonwealth v SCI Operations, 319 [82] (Kirby J).

[51] Commonwealth v SCI Operations, 306 [43] (Gaudron J).

[52] Commonwealth v SCI Operations, 306 [44] (Gaudron J).

[53] Commonwealth v SCI Operations, 316 [72] (McHugh and Gummow JJ).

[54] Commonwealth v SCI Operations, 317 [76] (McHugh and Gummow JJ).

[55] Commonwealth v SCI Operations, 328 [99] (Kirby J).

[56] Heydon v NRMA Ltd [2001] NSWCA 445; (2001) 53 NSWLR 600 ('Heydon v NRMA'), 604 [15] (Mason P).

[57] Heydon v NRMA, 604 [15] (Mason P).

[58] Heydon v NRMA, 604 [15] (Mason P).

[59] Heydon v NRMA, 604 [15] (Mason P) citing Bayne v Stephens [1908] HCA 76; (1908) 8 CLR 1.

[60] Heydon v NRMA, 604 [15] (Mason P) citing Rodger v Comptoir d'Escompte de Paris (1871) LR 3 PC 465; Commonwealth v McCormack [1984] HCA 57; (1984) 155 CLR 273; National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] VicRp 31; [1991] 1 VR 386.

[61] Heydon v NRMA, 605 [15] (Mason P).

[62] Heydon v NRMA, 605 [15] (Mason P), quoting London, Chatham, 437 (Lord Herschell LC).

[63] Heydon v NRMA, 606 [15] (Mason P), citing Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125, 147-148.

[64] Heydon v NRMA, 606 [16] (Mason P).

[65] Chow v Yang [2010] SASC 96 ('Chow v Yang').

[66] Chow v Yang, 10 [35] (Nyland and Gray JJ).

[67] Peet Ltd v Richmond [2011] VSCA 343; (2011) 33 VR 465, 489 [121] (Nettle JA with Neave JA and Judd AJA agreeing) ('Peet v Richmond'), citing the primary judge's reasons in Peet Ltd v Richmond (No 2) [2009] VSC 585; (2009) 76 ATR 644 at 646, [30]-[33].

[68] Peet v Richmond, 490 [124] (Nettle JA with Neave JA and Judd AJA agreeing).

[69] Peet v Richmond, 489 [123] (Nettle JA with Neave JA and Judd AJA agreeing) (citations omitted).

[70] Peet v Richmond, 490 [125] (Nettle JA with Neave JA and Judd AJA agreeing).

[71] Peet v Richmond, 490-491 [125]-[127] (Nettle JA with Neave JA and Judd AJA agreeing) (citations omitted).

[72] Peet v Richmond, 491 [129] (Nettle JA with Neave JA and Judd AJA agreeing) (citations omitted).

[73] Peet v Richmond, 492 [133] (Nettle JA with Neave JA and Judd AJA agreeing).

[74] Northern Territory v Griffiths [2019] HCA 7; (2019) 269 CLR 1 ('Northern Territory v Griffiths'), 66 [108] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[75] Northern Territory v Griffiths, 29 [3], 66 [109] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[76] Northern Territory v Griffiths, 72 [121] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[77] Northern Territory v Griffiths, 72 [122] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[78] Northern Territory v Griffiths, 77 [135] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[79] Northern Territory v Griffiths, 78-79 [136] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[80] Northern Territory v Griffiths, 79 [137] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[81] Stephens v Cameron (2021) 65 VR 117 ('Stephens v Cameron'), 139 [94] (Kyrou, McLeish and Niall JJA).

[82] Stephens v Cameron, 139 [94] (Kyrou, McLeish and Niall JJA).

[83] Stephens v Cameron, 140 [96] (Kyrou, McLeish and Niall JJA).

[84] Stephens v Cameron, 142 [109] (Kyrou, McLeish and Niall JJA).

[85] Stephens v Cameron, 143 [110] (Kyrou, McLeish and Niall JJA).

[86] Stephens v Cameron, 143 [110] (Kyrou, McLeish and Niall JJA).

[87] Stephens v Cameron, 143 [111] (Kyrou, McLeish and Niall JJA).

[88] Stephens v Cameron, 144 [115] (Kyrou, McLeish and Niall JJA).

[89] David Securities v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353, 376 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ); See also Commissioner of State Revenue v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51, 67-68 (Mason CJ), 89 and 100 (Brennan J); Equuscorp v Haxton (2012) 246 CLR 498, 516 [30] (French CJ, Crennan and Kiefel JJ); Southage Pty Ltd v Vescovi [2015] VSCA 117, [2] (Warren CJ, Santamaria JA, Ginnane AJA). Cited with approval in Hookway v Racing Victoria [2005] VSCA 310; (2005) 13 VR 444, 451 [20] (Ormiston JA) (Warren CJ agreeing at [1]).

[90] Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 151 [135] (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).

[91] Northern Territory v Griffiths, 78 [136] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[92] Prudential, 962 [58] (Lord Mance, Lord Reed and Lord Hodge JJSC).

[93] Moses v Macfarlan [1760] EngR 713; (1760) 2 Burr 1005 at 1008, 1012 [1760] EngR 713; [97 ER 676 at 678, 681]. See also Redland City Council v Kozik [2024] HCA 7; (2024) 98 ALJR 544 at [62] (Gageler CJ and Jagot J); Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560 at [110] (Gageler J).

[94] See Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89, 151 [134], 159 [158], cited in Hill v Zuda Pty Ltd & Ors [2022] HCA 21; (2022) 275 CLR 24, 34 [25] (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ).

[95] Northern Territory v Griffiths, 77 [134] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[96] Northern Territory v Griffiths, 78 [136] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

[97] Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 150 [134], cited in Hill v Zuda Pty Ltd & Ors [2022] HCA 21; (2022) 275 CLR 24, [25] (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward and Gleeson JJ).

[98] Keith Mason, John Carter and Greg Tolhurst, Mason & Carter's Restitution Law in Australia (LexisNexis, 4th edition, 2021) 1089-1090 (footnotes omitted).

[99] Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125.

[100] Transcript of Proceedings, ConnectEast Pty Ltd v Citylink Melbourne Limited (Supreme Court of Victoria, Stynes J, 14 May 2025), 43.