The Rise and Fall of the Mistake of Law Rule
| Author | Erik Gannon |
| Position | Senior Sophister Law student, Trinity College, Dublin |
| Pages | 73-94 |
THE RISE
AND
FALL
OF
THE
MISTAKE
OF
LAW
RULE
ERIK
GANNON*
Introduction
The general
rule
that
money
paid under
a
mistake
of
law
is
irrecoverable
has often been criticised
for
its
lack
of
clarity.
1
In
order
to understand
this
complex
area
of
the
law
of
restitution,
it
is
necessary
to
chart
the
origins
of
the
rule
from
its
geneses in
early
nineteenth
century
common
law,
proceed
to
highlight
academic
criticisms
of
the
rule
and
the
forms
of
mistake for
which
restitution
will
lie,
before
discussing
the
ensuing
demise
of
the
rule
in the final decades
of
this
millennium.
In
conclusion,
the author
shall
comment
upon
the
problems that arise
from
a
departure
from
this
much
vilified
rule
and
the
steps
which
may
be taken
in
order
to
mitigate
the
effect
of
such
problems.
It
should
be
noted
that
Irish courts
have
yet
to
make
a
clear
and
unambiguous
statement
regarding
their
departure
from
this
rule.
The
Origin
of
the Rule
Circumstances
in
which
an
individual
can make
a
payment
to
another
due
to
his
mistaken
belief
as
to
what
the
law
is
or
permits
can arise
in
various
different
ways.
For
example,
a
person
or
corporation
may
pay
taxes
to
the
government
in
the
belief
that
tax
legislation
obliges them
to
do
so
when
in
fact
no
such
obligation
exists.
Similarly
payments
may
be
made
on
foot
of
a
contract
that
has been
improperly
construed.
Such payments
have been
generally
accepted in
law
to
be
irrecoverable.
The
decision
generally
regarded
as
establishing
the
rule
is
Bilbie
v.
Lumley,
2
heard
first
at
the
York
Assizes
and
ultimately
before
Ellenborough
L.J.
in
the
Court
of Kings
Bench.
Here
the
plaintiff
had
underwritten
a
policy
in
favour
of
the
Senior
Sophister
Law
student, Trinity College,
Dublin.
Goff
and Jones,
The
Law
of
Restitution
(5"'
Ed.,
Sweet
and
Maxwell,
1998),
at
213:
"few
subjects
are
more
confused
than
recovery
of
money
paid
under
a
mistake
of
law."
2
469;
448.
© 2000
Erik Gannon and
Dublin University
Law
Society
Trinity
College
Law Review
defendants
who failed to
disclose certain material
facts
to
him
and,
although
entitled
to
repudiate
liability
on
grounds
of
non-disclosure,
the
plaintiff
settled
a
subsequent claim
brought
by
the
defendants.
Upon
learning
of
his
mistake
the
plaintiff
sought
to
have
his
money
returned
to
him.
In
denying
the
plaintiff
restitution,
Ellenborough
L.J. stated
that:
Every
man
must
be
taken
to be
cognisant
of
the
law;
otherwise
there
is
no
saying
to
what
extent
the
excuse
of
ignorance
might
not
be
3
carried.
It
would
be
urged
in
almost every case.
Similarly
in
Brisbane
v.
Dacres
4
a
navy
captain who
erroneously
believed
he
was
obliged
to .pay
the
admiral
of
the
fleet
a
percentage
of
an
unauthorised
business
profit
was
refused
restitution
in
the
Court
of
Common
Pleas
on
the
ground that
money
paid under
a
mistake
of
law
was
irrecoverable.
While
most textbooks hold
Kelly
v.
Solari
5
out
as the next
case
in the
chronology
of
legal
progression,
McKendrick
correctly
points
out
that
it
is
Dixon
v.
Monkland
Canal
Co.
6
This
was
the
first
occasion
in
which
the
House
of
Lords
addressed
the
issue.
The defendants
increased a
toll
charge
for
use
of
their
canal
and
the
plaintiffs,
who
used
the
canal
frequently,
protested,
but later acquiesced
to
the
increase.
It
subsequently
transpired
that
the
defendant
had
not
been
entitled
to
increase
the
toll
charge
and
the
plaintiff
sought
to
recover
his
outlay.
In
the
House
of
Lords
Brougham
L.C.J.
affirmed
the
decision
in
Bilbie
that
a
mistake
of
law
does
not
give rise
to
a
right
of
recovery.
The
Lord
Chancellor
stated:
I
cannot
conceive how,
in
any
country where
many
transactions
and
dealings
are
carried
on
between
man
and
man,
and
where
many
lawsuits
arise,
any
system
of
law
can
exist or
can
be
conveniently
7
administered
if
it
is
not
to
be
maintained
in
this
way.
This
trilogy
of
decisions
has
formed
a
strong
foundation
of
precedent
and
has
proven
ultimately
binding
until
the
recent
decision
of Kleinwort
Benson
v.
Lincoln
City
Council.
8
'
Ibid.,
at
470.
4
(1813)
5
Taunt
143;
14
RR
718.
'
54;
24;
MU.J
Echq
10.
6
(1831)
5
W
&
S
445.
Also
see:
Wilson
&
McLellan
v.
Sinclair
(1830)
4
W
&
S
398;
McKendrick
"The
Limits
of
Restitutionary
Claims:
A
Comparative
Analysis"
(1997)
17
UK
Comparative
Law
Series
214.
7
(1831)
5
W
&
S
445,
at 452.
' [1998]
3
WLR
1905.
[Vol.
3
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