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THE GROUNDS OF RESTITUTION

There are a variety of grounds of restitution which are available to recover ultra vires receipts from public authorities. Following the decision of the House of Lords in Deutsche Morgan Grenfell v IRC31 none of these grounds of restitution are exclusive, so the claimant can choose to base his or her claim on the most relevant ground.

(A) MISTAKE

With the abolition of the mistake of law bar by the House of Lords in Kleinwort Benson Ltd v Lincoln CC,32 there is much greater scope for the claimant who has made an ultra vires payment to a public authority to obtain restitution by reference to mistake. This is because many cases involving ultra vires payments, but certainly not all,33 arise because the claimant was mistaken as to the law, since typically the claimant incorrectly believed that he or she was liable to pay the money to the public authority.34

The key advantage of founding a claim on mistake is that this will extend the limitation period. Section 32(1)(c) of the Limitation Act 198035 states that, where an action involves relief from the consequences of a mistake, time does not begin to run until the claimant discovered the mistake or could with reasonable diligence have discovered it. Although the application of this extended limitation period has been significantly curtailed by legisla- tion,36 where it applies it constitutes a very strong reason for a claimant to frame the claim as grounded on mistake, although this does leave the defendant with the option to plead the defence of change of position.37

 
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