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THREATS TO SECURE THE PERFORMANCE OF A STATUTORY DUTY

A final ground of restitution which is founded on the principle of compulsion is of limited importance but it does have an independent existence, namely where the defendant demands payment to secure the performance of a statutory duty.321 In the usual case in which a defendant receives payment from the claimant to perform a statutory duty where that payment has not itself been authorized by statute, restitution of the unauthorized payment will cause little difficulty, because the vast majority of such cases involve payments made to public authorities. The decision of the House of Lords in Woolwich Equitable Building Society v IRC322 recognizes a right to restitution in such circumstances.3 3 But this ground of restitution is confined to restitution from public authorities. In certain exceptional cases the defendant may be a private body which has received payments in excess of that which has been authorized by statute. This situation is most likely to arise where the defendant is in a monopolistic position,324 such as a recently privatized company which imposes charges for the provision of essential services in excess of that which is authorized by statute or a regulator. In such circumstances it appears that the ground of restitution cannot be the fact that the company has received money which is not authorized by statute, which would be sufficient to ground the claim if the defendant was a public authority. Rather, restitution is triggered by the implied threats which might accompany the defendant’s demand for payment. Since these threats accompany demands for a payment which is not due to the defendant, the threats should be considered to be illegitimate and restitution should follow if the threats caused the claimant to pay the defendant.

The leading case on this ground of restitution is Great Western Railway v Sutton325 where the defendant was a railway company which had charged the claimant more for carrying goods than it was charging other customers. This was in contravention of a statute which required all similar customers to be charged on the same basis. The claimant was able to recover the excess payment in an action for money had and received on the ground that he had been compelled to make the payment, for if the claimant had not paid the excess amount he would not have been able to procure the defendant to perform its duty of carrying the claimant’s goods.

This is in fact a highly artificial ground of restitution, primarily because, whilst the emphasis is placed upon the assumed compulsion derived from the defendant refusing to perform a statutory duty unless it is paid more than it can legitimately receive, the real reason for restitution is that the excess money received by the defendant was not due to it. The better approach is that adopted by the House of Lords in Woolwich, namely to justify [1] [2] [3]

restitution by virtue of the ultra vires receipt of the defendant.[4] This principle should be developed to cover even private bodies where they receive more than is authorized by statute. Restitution would still lie in cases such as Great Western Railway v Sutton, but not because of artificially constructed compulsion, deduced from implied threats, but rather because of the defendant’s unauthorized receipt. Alternatively, this type of case may be analysed with reference to the ground of absence of basis, at least where there was no liability for the claimant to pay anything to the defendant327 or on the ground of a mistaken belief that the money was due, it now being irrelevant that the mistake was one of law.328

  • [1] See Burrows, The Law of Restitution (3rd edn), 266. This was recognized as a distinct ground of
  • [2] restitution founded on the principle of compulsion by Lord Goff in Woolwich Equitable Building Society vIRC [1993] AC 170, 165 . 322 [1993] AC 70.
  • [3] See Chapter 15 . 324 Goff and Jones:The Law of Unjust Enrichment (8th edn), 314. 325 (1869) LR 4 HL 226. See also South of Scotland Electricity Board v British Oxygen Co Ltd (No 2) [1959] 1WLR 587.
  • [4] See Chapter 15. 327 See Chapter 13. 328 SeeChapter9.
 
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