The commander of a naval vessel, HMS Arethusa, had paid to the Admiral in command a proportion of freight received for the carriage of publicly owned bullion on board the Arethusa in the belief that this was due to the Admiral as a matter of usage. On later discovering that the money was not due because the usage had been discontinued, he sought to recover it from the Admiral’s widow and executrix. He challenged the decision in Bilbie v Limley.
Held: The court had no role to play in the recovery of money paid by mistake. Chief Justice, Sir James Mansfield said it was not an affront to conscience to allow the money to be retained, because the admiral acted (as all admirals then did) in accordance with what was generally believed to be his accustomed right, and in particular because he might have changed his position on the faith of the payment.
Chambre J (dissenting said the maxim ‘ignorantia juris non excusat’ applied only in cases of ‘delinquency’.
Gibbs J described the universal opinion among the practitioners in the Court of King’s Bench that where money was paid with knowledge of the facts it could not be recovered on the ground of mistake: ‘We must take this payment to have been made under a demand of right, and I think that where a man demands money of another as a matter of right, and that other, with a full knowledge of the facts upon which the demand is founded, has paid a sum, he never can recover back the sum he has so voluntarily paid. It may be, that upon a further view he may form a different opinion of the law, and it may be, his subsequent opinion may be the correct one. If we were to hold otherwise, I think that many inconveniences may arise; there are many doubtful questions of law: when they arise, the Defendant has an option, either to litigate the question, or to submit to the demand, and pay the money. I think, that by submitting to the demand, he that pays the money gives it to the person to whom he pays it, and makes it his, and closes the transaction between them.’
Judges:
Gibbs J, Heath J, Chief Justice, Sir James Mansfield, Chambre J dissenting
Citations:
(1813) 5 Taunt 143
Jurisdiction:
England and Wales
Citing:
Applied – Bilbie v Lumley and Others 28-Jun-1802
Contract Not Set Aside for Mistake as to Law
An underwriter paid a claim under a policy which he was entitled in law to repudiate for non-disclosure. Although he knew the relevant facts, he was not aware of their legal significance. He claimed back the money he had paid.
Held: A contract . .
Cited by:
Cited – Wilson and M’Lellan v Sinclair 1830
Lord Brougham LC said that since Brisbane v. Dacres it had been considered an established point that a mistake must be ‘in the fact’ to allow recovery of money paid in error. . .
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 . .
Lists of cited by and citing cases may be incomplete.
Contract, Equity
Updated: 05 December 2022; Ref: scu.236534