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MISTAKE

GENERAL PRINCIPLES

(A) THE SIGNIFICANCE OF MISTAKE AS A GROUND OF RESTITUTION

A claim to recover money mistakenly paid by the claimant to the defendant is often regarded as the paradigm example of a restitutionary claim founded on the unjust enrichment principle.[1] In such a case there is clearly an enrichment at the claimant’s expense and, at least where the reason for the claimant making the payment arose from a mistaken belief that he or she was liable to pay the money to the defendant, there is a clear justification for restoring the value of the money to the claimant, since the claimant’s intention to make the payment can readily be treated as vitiated by the mistake. It is, however, unfortunate that mistake is regarded as the paradigm ground of restitution, because there is a consequent tendency to underestimate the complex policy issues which arise in determining whether the defendant’s enrichment really can be considered to be unjust.

The complexity of mistake as a ground of restitution arises for two reasons. First, despite certain significant recent decisions, the law remains unclear about what is the appropriate test for determining what is a mistake and when it should operate to vitiate the claimant’s intention to benefit the defendant. Secondly, even where it is possible to show that the claimant’s intention was vitiated by the mistake, it does not necessarily follow that restitutionary relief should be available. This is because the circumstances of the defendant’s receipt of a benefit and subsequent conduct may be such that it would not be just to require the defendant to make restitution. As Birks said, ‘in seeking to do justice to mistaken payers the action [for money had and received] often seems to tremble on the brink of doing injustice to the recipient of the payment’.[2] Consequently, the respective interests of the parties need to be balanced carefully when determining whether restitutionary relief is appropriate, and this requires careful consideration of issues of policy.

  • [1] See PBH Birks, Unjust Enrichment (2nd edn, Oxford: Oxford University Press, 2005), 3, specifically asregards the mistaken payment of a non-existent debt.
  • [2] PBH Birks, ‘The Recovery of Carelessly Mistaken Payments’ (1972) CLP 179.
 
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