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Dear Hal

1/ The case you want is Phil Collins Ltd v Davis, although personally I think it plays fast and loose with the burden of proof on D to establish that he has incurred extraordinary expenditure.

http://www.ucc.ie/law/restitution/archive/englcases/collins.htm

approved by Robert Walker LJ in Scottish Equitable v Derby at para 33:

http://www.ucc.ie/law/restitution/archive/englcases/scotseq2.htm

2/ If the money was paid into your joint account then you are both enriched by the mistaken payment and so you are both liable to repay. It is an interesting question whether a change of position by one of you would serve as a defence to a claim against the other, but on your version of events this question may not arise as you say you spent the money together. Further discussion: 'Joint and Several Restitutionary Liabilities' [2002] RLR 87.

Yours
Charles Mitchell

At 07:41 02/11/2003 -0900, you wrote:

Here is a current, real, situation involving "Change of Position";

• A car insurance policy, in my wife's name, was paid by Direct Debit.
• The policy was cancelled when my wife obtained a better deal.
• For some reason the insurance company then erroneously refunded £860 in premiums plus a further mysterious extra £560, making a total of £1420.
• The refund was paid directly into the joint bank account for which the Insurance company had Direct Debit details.
• The insurance company did not notify my wife that it was making a refund.
• We did not notice the unexpected payment.
• One year later the insurance company notified us of the error.
• They are now seeking repayment, from my wife, and are threatening legal action and debt recovery agencies.

If our bank balance is low we simply tighten our belts and avoid making unnecessary expenditures. Over the last year we had a false impression of how much money was in our account and so we spent money that we would otherwise simply have avoided spending.

The insurance company has been asked for the legal basis on which they are claiming repayment. No doubt they will claim "Unjustified Enrichment". I would agree if they had contacted us immediately, but the delay of a year puts things in a quite different light. Will "Change of Position" act as a good defence?

Any other angles on defence, especially in English or Scottish Law, would be welcome. The problem has caused distress, annoyance, and inconvenience. Once thing that has made us unhappy is that the insurance company was given the bank account details solely for the purpose of obtaining Direct Debit payments, not for making deposits into the account. Is there any claim against the insurance company for breaching the trust placed in them when they were given the account details? Also my wife was the insurance company's customer and it is her that they are pursuing, but the account into which they paid the money is a joint one, can this help frustrate the insurance company?