(Eastern Africa) A premium had been paid in consideration of the grant of a sub-lease of property contrary to the provisions of an ordinance. Restitution was ordered because payment had been made pursuant to a contractual obligation rendered void by statute. The action was ‘for restitution of money which the defendant has received but which the law says he ought to return to the plaintiff.’ He further said that ‘all the particular heads of money had and received, such as money paid under a mistake of fact, paid under a consideration that has wholly failed, money paid by one who is not in pari delicto with the defendant, are only instances where the law says the money ought to be returned.’ Lord Denning set out the exception to the rule regarding restitution of money paid under a mistake where there is ‘something more’ in addition to the mistake of law such as something in the defendant’s conduct which shows that he was the one who was primarily responsible for the mistake.
As an exception to the general rule of law, the fact that a transaction is illegal does not disbar a person whom the legislation is intended to protect from recovering money paid over in pursuance of the transaction.
It does not lie in the mouth of a party to an illegal contract to claim that he was unaware of the law relating to the illegality to which he is particeps criminis. However, the maxim does not mean that everybody is presumed to know the law. The true proposition means that no man can excuse himself from doing his duty by saying he did not know the law on the matter.
Lord Denning
[1960] AC 192, [1959] UKPC 27, [1960] 2 WLR 127, [1960] 1 All ER 177
Bailii
Commonwealth
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 . .
These lists may be incomplete.
Updated: 12 July 2021; Ref: scu.236544
