Money paid under a mistake of fact

Money paid under a mistake of fact may be recovered if the mistake is as to a fact which, if true, would have legally or morally obliged the payer to pay.108 There are three circumstances in which recovery is not possible under this head: (a) where the payer intends or is deemed by law to have intended that the

payee should have the money in any event; (b) where the payment is made for good consideration, for example, the

discharge of a debt from payer to payee; or (c) where the payee has or is deemed to have changed his or her position in

A regional case example is Australia and New Zealand Banking Corp Ltd v Ale.110 In that case, Linda Ale purchased a bank draft for AUS $800 from one of the plaintiff’s Australian branches in favour of her father, the defendant. The amount of the draft should have been WST $1,496, but in fact it was made out for WST $17,506. The defendant presented the draft to the Bank of Western Samoan and received WST $17,506, which he spent. In an action by the plaintiff for money had and received, the court dismissed as ‘esoteric’ the debate as to whether civil claims should be categorised in contract or in tort. Instead, the court preferred to concentrate on the simple issue of whether the defendant had been unjustly enriched.111 Ryan CJ had no doubt that the facts fulfilled the three conditions required for a finding of unjust enrichment and judgment was entered for the plaintiff for the difference between the amount that the draft should have been made out for and the amount paid to the defendant.