mistake Flashcards
Kelly v Solari
life insurance co paid out life insurance policy although it had in fact lapsed.
trial court directed that the claimant could recover from the widow unless claimant would have paid the money regardless of lapse
contractual test of mistake
fundamental mistake e.g. Bell v Lever Bros - mistake must go to the heart of the contract, relate to existence, identity, quantity of the subject matter etc
test for mistake
Barclays Bank v Simms: if a person pays money to another under a mistake of fact which causes him to make the payment, he is prima facie entitled to recover it as money paid under a mistake of fact. Claim may fail if intended payee to have it in all events.
as Kleinwort Benson got rid of the mistake of law bar, the test is the same for mistakes of law. Nurdin & Peacock confirmed that mistakes of fact and law should be treated the same.
causative mistakes
mistake must be a but for cause of the payment
examples: Marine Trade Ritz Hotel Leslie v Farrar Deutsche Morgan Dextra Bank Nurdin
marine trade
not a causative mistake, would have paid anyway to prevent PF terminating the contract
Ritz Hotel Casino
paid money to casino and then sought to recover, arguing that as gambling contracts dont create legally binding obligations to pay, she was mistaken as to her legal liability. failed because gambling contracts legal under new act, but no causative mistake because would have paid anyway out of a sense of honour
Leslie v Farrar
made payments on basis of budgeted costs rather than actual costs. There was a mistake, but it was not a causative mistake. knew the payments might be overpayments but chose not to ascertain the correct amount due. took risk of paying too much by making conscious decision to pay sums without investigating.
Deutsche Morgan Grenfell causation
maj said mistake was causative. Lord Hope said the stage when he made his mistake does not matter, so long as it can be said that if he had known the true state of affairs at the time of the payment he would not have made it. a wrong turning halfway along the journey is just as capable of being treated as a relevant mistake as one made on doorstep at point of arrival.
cf Scott - ACT was paid because there was a legal obligation to pay it. the mistake waw that the parties did not realise they could challenge the failure of the regime to allow them to make a group election.
Bant’s argument for test of mistake
the test is that the mistake must be a but for cause of the payment, unless the D induced the mistake in which case the claimant can recover if it was a contributory cause.
Bant argues that the contributory cause approach should apply to all cases, whether spontaneous or induced. But Goff and Jones explain why this shouldnt be adopted.
mispredictions are not mistakes
arguably no impairment of intention so no recovery
Pitt v Holt: a misprediction relate to a future event whereas a legally significant mistake relates to some past or present matter of fact or law
Birks and Sheehan: misprediction not mistake because cannot be falsified at time when it was made cf Seah who does not require a mistake to be capable of proof at the time it is made, but would still not allow recovery for misprediction because a misprediction involves no causative impairment. The most that can be said is that money was paid under a belief which was uncertain and later shown to be wrong.
misprediction cases
Dextra Bank
Griffiths (although under equitable jurisdiction to unwind gift)
Dextra Bank
Dextra drew a cheque in favour of BOJ, intending it to be secured by a loan agreement with BOJ. Loan never put in place. Claimed mistake was that Dextra had intended to make a loan but no loan had been put into place.
Held D had made a mistake by believing that BOJ had agreed to take a loan, but that was not what had CAUSED the payment. Payment was caused by misprediction that D’s agent would carry out instruction to not hand over cheque unless got evidence of loan.
Griffiths
transfers of property into trusts in order to mitigate effect of inheritance tax on death.
argued that G had made a mistake about his health. By the time of the third transfer, he had lung cancer and did not know. Had he known, he would have known that his chance of surviving was remote and would not hace acted as he did.
Could say this was a mistake by way of tacit assumption about his health, or this was a misprediction as to his chance of surviving.
Pitt v Holt said this was close to causative ignorance
line between mistake and misprediction open to judicial manipulation
Griffiths Dextra Bank (misprediction) vs Re Jones (mistake, on similar facts)
ignorance approach in Pitt v Holt
causative ignorance is not a mistake: Pitt v Holt
but in carrying out fact finding task, the court should not shrink from drawing the inference of conscious belief or tacit assumption where there is evidence to support an inference.
criticisms of approach to ignorance
Goff and Jones - question is finely balanced
Against ignorance sufficing is fact that a person who holds no belief is not mistaken and that ignorance cannot be translated into a positive belief that a fact does not exist (Sheehan). Causal connection is weak when acting in ignroance. Concern about floodgates and worry about claims being brought by those who merely change their minds.
Arguments for ignorance sufficing:
not obvious why a person who confers a benefit and would not have done so but for ignorance is not deserving of relief. floodgates unlikley to be a reality, and produces a boundary line which may be difficult to draw and in practice may be suspectible to judicial manipulation.
