The plaintiff had owned a public house. On selling the leasehold to the defendants brewers, they had overpaid him by andpound;1,000. He deposited a sum at interest with the defendants. When he came to withdraw the last of the deposit (by coincidence andpound;1,000) the defendants discovered their earlier mistake and refused to return the money. When sued they pleaded set-off and made a counterclaim, both of which the plaintiff opposed as statute-barred.
Held: A claim in restitution for a payment made under a mistake of law arises at the date of the payment. There was no requirement for a demand where the claim is for repayment of moneys paid under a mistake common to both parties (as opposed to a unilateral mistake).
Hamilton J discussed the judgments of Barons Martin and Bramwell saying: ‘in that case at the time the first instalment of the money was paid neither the plaintiff nor the defendant made any mistake. The mistake was made by the two valuers who were subsequently employed to value the farm which was the subject- matter of the sale. It was not until the plaintiff afterwards consulted a third valuer on his negotiating for the resale of the property that he discovered that the former valuers had included in their valuation certain items which they ought not to have included, and after this he paid over the balance of the money to the defendant at a time when he knew of the valuers’ mistake but the defendant did not. It was under those circumstances that Martin and Bramwell BB held that there was no duty on the defendant to repay the excess valuation until after notice of the mistake, which was not his mistake and of which he was unaware. I think it is clear that they so decided without reference to a case in which not only the party paying paid under a mistake, but also the party receiving the money was under a mistake at the time when he received it. In my opinion, therefore, the case of Freeman v Jefferies does not support the contention of the defendants.’
Hamilton J
[1910] 1 KB 56
England and Wales
Citing:
Distinguished – Freeman v Jeffries CExC 1868
(Court of Exchequer) The incoming tenant plaintiff had agreed to buy the outgoing tenant’s interest in a farm at a price determined by two valuers. He paid pounds 2,000 on account; the valuation took place; the plaintiff gave to the outgoing tenant . .
Cited by:
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – Fuller v Happy Shopper Markets Ltd and Another ChD 6-Mar-2001
A tenant complained to the landlord about his failure to repair. He ceased paying rent, and the landlord eventually distrained for rent by direct action.
Held: The tenant was unable to claim a legal set-off because there was no context of . .
Cited – Test Claimants In The Franked Investment Income Group Litigation v Inland Revenue SC 23-May-2012
The European Court had found the UK to have unlawfully treated differently payment of franked dividends between subsidiaries of UK companies according to whether all the UK subsidiaries were themselves UK based, thus prejudicing European . .
Lists of cited by and citing cases may be incomplete.
Equity
Updated: 18 December 2021; Ref: scu.236525