ABSTRACT
In Kleinwort Benson Ltd v Lincoln City Council (1998), the House of Lords held that in certain circumstances money paid under a mistake of law could also be recovered, if it would be unjust to allow the recipient to retain the money. (See, also, Nurdin and Peacock plc v DB Ramsden & Co Ltd (1999).)
Money paid under a void contract, for example:
In Westdeutsche Landesbank v Islington LBC (1994), the council had entered into a rate swapping arrangement with the bank, under which the bank had paid £2,500,000 to the council in advance. The council had paid approximately £1,200,000 to the bank by instalment, and argued that since there was not a total failure of consideration, it should not have to pay the bank the remaining £1,300,000. The Court of Appeal held that the principle upon which money must be repaid under a void contract is different from that on a total failure of consideration. Recovery of money under a void contract is allowed if there is no legal basis for such a payment.
