Building bridges to get over broken contracts: Restitution in Ironbridge v O'Grady

A recent decision by the Supreme Court of Victoria ordered restitution of instalment payments made by a defaulting party pursuant to a complex contract for the sale of land, holding that there was a total failure of the basis for the payments in unjust enrichment. Following the High Court’s decision in Mann v Paterson Constructions Pty Ltd, the case illustrates the care which courts must give when contract and unjust enrichment intersect. In particular, in heeding the contractual allocation of risk in applying the unjust factor of total failure of basis and the change of position defence. The case also charts new territory in the remedial orders made in order to restore the parties to their former positions. However, the judge’s creative use of counter-restitution warrants closer consideration for its potential utility beyond the traditional domain of rescission, and its relationship with the change of position defence.