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Dear All,

There are a series of points that are probably quite worth making in reply to Steve Hedley. Firstly it is true, as he says that the judgements are vague in what they say. The only express statement that I can find as to which mistakes count comes in the speech of Lord Hope of Craighead where he says that where there is claim for restitution for mistake there are three questions to be answered. Firstly was there a mistake? Secondly Did that mistake cause the payment and thirdly was the payee entitled to the money anyway?

While I can accept that there is a great deal of vacuity in the speeches it would seem to me that it is almost certainly this test that the judges are going to take and use. It is after all also the one that the High Court of Australia in David Securities v Commonwealth Bank of Australia proposed. Given though that willpower has no voltage, as Peter Birks is wont to say, how this test will fall to be interpreted is somewhat uncertain. Will it be any mistake that is a necessary condition of the payment? Or a mistake so fundamental, whatever that means that any reasonable person would be affected? I don't know the answer.

Secondly in relation to the point that he makes about the reopening of transactions concluded 200 years ago we know that for the most part transactions concluded decades ago or years ago are not going to be reopened on the basis of this decision. The payee is almost certainly going to have changed his position in good faith in reliance on the payment so that the plaintiff payor cannot recover. I myself am uncertain that any more protection needs to be given to defendants than the defence of change of position is capable of providing.

The problem with not allowing recovery on the basis of mistake of law where a Court of Appeal decision of 1930, say, is overruled by a House of Lords decision of 1998, simply this and is ably expounded by Lord Hoffmann. A businessman, for instance, pays out money to another on the basis of the Court of Appeal decision, believing this to be a valid transaction. The House of Lords decides that type of transaction is in fact void. It is, I think, indisputable that the plaintiff in the actual case deciding the transactions are void can recover. To that extent the decision has to be retrospective. It is a bit odd then to deny everybody else restitution, who relied on the validity of the transaction, essentially on the basis of an accident of who litigated first. It seems that a lawyer advising his client would have to say that although the transaction was void and always had been void that those who relied on the Court of Appeal decision, now declared to be incorrect, and moreover incorrect at the time it was made were not mistaken, even though the transaction they believed to be valid was in fact void and had they tried to enforce it they ought to have failed to do so. I cannot in fact, if truth be known, see how logically you can get round that. If anybody can enlighten me I'd be most grateful..

Duncan Sheehan