Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-09T15:35:36.754Z Has data issue: false hasContentIssue false
  • English
  • Français

Mistaken Payments in Three-Party Situations: A German View of English Law

Published online by Cambridge University Press:  01 November 1999

Sonja Meier
Sonja Meier*
Affiliation:
University of Regensburg
Get access

Extract

According to the English law of restitution, a payment under a mistake of fact can usually be recovered from the recipient, at least if the mistake is a liability mistake or “fundamental”. In three-party situations the situation therefore seems to be straight-forward: independently of the relationship of each of the three parties to each other, the plaintiff is the payer and the defendant is the recipient. However, a closer look into the case law and literature reveals that there are problems.

Type
Articles
Information
The Cambridge Law Journal , Volume 58 , Issue 3 , November 1999 , pp. 567 - 603
Copyright
Copyright © The Cambridge Law Journal and Contributors, 1999

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Lord Goff of Chieveley, Jones, Gareth, The Law of Restitution, 5th ed. (London 1998), pp. 175 sqq.Google Scholar; Birks, Peter, An Introduction to the Law of Restitution (Oxford 1985/89), pp. 146 sqq.Google Scholar; Burrows, Andrew, The Law of Restitution (London 1993), pp. 94 sqq.Google Scholar; and the cases cited there. After Kleinwort Benson v. Lincoln CC [1998] 3 W.L.R. 1095 even a payment under a mistake of law can be recovered. Since the previous case law only allowed recovery for mistake of fact, this article usually refers to factual mistakes.

2 BGHZ 70, 389 (1978); 72, 246 (1978). On payment of another's debt see Reuter, D., Martinek, M., Ungerechtfertigte Bereicherung (Tübingen 1983), pp. 464Google Scholar sqq., 497 sqq.; C.W. Canaris, Der Bereicherungsausgleich im Dreipersonenverhältnis, Festschrift Karl Larenz zum 70. Geburtstag, 1973, pp. 799, 843 sqq.; Larenz, K., Canaris, C.W., Lehrbuch des Schuldrechts, II/2, 13th ed. (München 1994), pp. 242Google Scholar sqq.; Lorenz, W. in Staudinger Kommentar, 13th ed. (Berlin 1994)Google Scholar, § 812 nn. 42 sqq.; Lieb, M. in Münchener Kommentar, 2nd ed. (München 1986)Google Scholar, § 812 nn. 97, 101, 108, 131.

3 P may have a claim against X for discharging his debt, a problem not covered by this article.

4 RGZ 60, 284 (1905); BGHZ 113, 62, 69 sq. (1990) (English translation in Markesinis (n. 17), case 65).

5 BGH WM 1987, 663.

6 (1856) 1 H. & N. 210, 156 E.R. 1180.

7 Goff J. in Barclays Bank v. Simms [1980] Q.B. 677, 687 sq.; Burrows, Restitution, p. 96; P. Matthews (1980) 130 N.L.J. 587, 588; D. Friedmann (1983) 99 L.Q.R. 534, 547 sqq.; Barker, K., “After Change of Position: Good Faith Exchange in the Modern Law of Restitution”, in Birks, P. (ed.), Laundering and Tracing (Oxford 1995), 191Google Scholar.

8 See § 329 BGB and BGHZ 72, 246 (1978), a case similar to Aiken v. Short.

9 There is only a United States decision, discussed in Goff & Jones. In Lowe v. Wells Fargo Express 96 Pa 74 (1908), the plaintiff paid the defendant because both parties mistakenly believed that the plaintiff's son had, when working for the defendant, lost a money remittance in his care. The plaintiff recovered for mistake of fact. It seems that the son would have been liable to pay the amount to the defendant as damages, if the belief of the parties had been true. So the crucial point is not, as Goff and Jones say (p. 188), that the father felt morally obliged towards his son to pay, but that he wanted to discharge a liability of someone else which he mistakenly believed to exist. As there was no liability, restitution followed.

10 § 267 BGB.

11 On legal compulsion see Exall v. Partridge (1799) 8 TR 308, 101 E.R. 1405; Moule v. Garrett (1872) L.R. 7 Ex. 101; Gebhardt v. Saunders [1892] 2 Q.B. 452; Brook's Wharf v. Goodman Brothers [1937] 1 K.B. 534.

12 Goff & Jones, pp. 17 sq., 128sq., 186, 446; Lord Goff in Esso Petroleum v. Hall Russell [1993] A.C. 643, 663; P. Birks & J. Beatson (1976) 92 L.Q.R. 188; Birks, Introduction, pp. 189 sqq., 311 sq.

13 Cf. Owen v. Tate [1976] 1 Q.B. 402.

14 Friedmann, (1983) 99 L.Q.R. 534.

15 Restitution, pp. 222 sqq. See also Stoljar, S., The Law of Quasi-Contracts, 2d ed. (Sydney 1989), p. 166Google Scholar.

16 §§ 362 (2), 185 BGB.

17 The principal German accounts can be found in Canaris (n. 2); Larenz-Canaris, pp. 201 sqq., 221 sqq.; Lieb, § 812 nn. 30 sqq.; Reuter & Martinek, pp. 394 sqq.; Lorenz, § 812 nn. 49 sqq. Accounts in English can be found in R. Zimmermann, J. du Plessis [1994] R.L.R. 14, 31 sqq.; Markesinis, B., Lorenz, W. & Dannemann, G.: The German Law of Obligations, Vol. 1, The Law of Contracts and Restitution, (Oxford 1997), pp. 374Google Scholar sq., 731–735.

18 He is in any case protected by the defence of change of position (§ 818 (3) BGB) insofar as he acts to his detriment in reliance on the receipt.

19 (1885) 9 App. Cas. 84 (P.C.).

20 (1988) 78 A.L.R. 157 (High Court of Australia).

21 (1907) 97 L.T. 263.

22 William Brandt's Sons & Co v. Dunlop Rubber Co [1905] A.C. 454.

23 See, e.g., BGHZ 113, 62, 70 (1990); Larenz-Canaris (n. 2), p. 239.

24 [1975] Q.B. 656.

25 [1981] Ch. 105.

26 (1925) 133 L.T. 512.

27 See Goff J. in Barclays Bank v. Simms [1980] Q.B. 694 sq.; Stoljar, Quasi-Contracts, p. 27; Matthews (1980) 130 N.L.J. 589. However, today a similar result might be possible because of the change of position defence.

28 BGHZ 61, 289 (1973).

29 BGHZ 87, 393 (1983). The same rules apply to other cases of countermanded orders, see BGHZ 87, 246 (1983); 89, 376 (1984) (English translation in Markesinis (n. 17), case 135); NJW 1984, 2205.

30 Lieb (n. 2), § 812 n. 73; Lorenz, § 812 n. 51. Other writers suggest to protect the recipient even in case he was notified of the countermand: Larenz-Canaris, pp. 231 sq.; Reuter & Martinek, p. 450. In other cases of a countermanded order it is agreed that (only) the recipient in good faith is protected, by applying the rules on apparent authority: Reuter & Martinek, pp. 432 sqq.; Larenz-Canaris, pp. 299 sqq.; Lorenz, § 812 n. 51.

31 [1980] Q.B. 677.

32 [1980] Q.B. 695.

33 [1980] Q.B. 699 sq.

34 [1967] V.R. 790.

35 (1964) 80 W.N. 1499. The same result was achieved in Commercial Bank of Australia v. Younis [1979] 1 N.S.W.L.R. 444, where, however, the recipient knew of the countermandate.

36 [1974] 1 N.Z.L.R. 118.

37 Bank of NSW v. Murphett [1983] V.R. 489.

38 R. Goode (1981) 97 L.Q.R. 254; A. Tettenborn (1980) 130 N.L.J. 273; Friedmann, (1983) 99 L.Q.R. 534; Burrows, Restitution, pp. 103, 226.

39 (1862) 13 C.B. (N.S.) 125, 143 E.R. 50.

40 (1871) L.R. 6 Q.B. 623.

41 See Kerr J. in National Westminster Bank v. Barclays Bank [1975] Q.B. 656, 662; Goff J. in Barclays Bank v. Simms [1980] Q.B. 677, 700. The mistake may also concern the overlooking of the fact that the bank is, for other reasons than a lack of funds, not obliged to follow the instruction by the customer. Cf. Griffiths v. Commonwealth Bank of Australia (1994) 123 A.L.R. 111, where restitution by the bank failed because it, in spite of its mistake, discharged its debt under the banking contract towards the customer.

42 [1976] 1 W.L.R. 964.

43 In German law, the “mistaken payment” would consist of the credit entry itself, which is regarded as a legal act not freely revocable by the bank. So the bank would have an action in unjust enrichment to reverse the credit entry.

44 Re National Permanent Benefit Building Society (1869) L.R. 5 Ch. App. 309; Sinclair v. Brougham [1914] A.C. 398; but cf. now Westdeutsche Landesbank v. Islington BC [1996] A.C. 669, 688, 710.

45 Blackburn Building Society v. Cuncliffe, Brooks & Co (1882) 22 Ch. D. 61; Baroness Wenlock v. River Dee Co (1887) 19 Q.B.D. 155.

46 See Re Cork and Yougal Ry (1869) L.R. 4 Ch. App. 748, 759; Re Wrexham [1899] 1 Ch. 440.

47 Reid v. Rigby & Co [1894] 2 Q.B. 40; Bannatyne v. MacIver [1906] 1 K.B. 103; Reversion Fund v. Maison Cosway [1913] 1 K.B. 364.

48 [1902] 1 Ch. 1 (CA), [1903] A.C. 6 (HL).

49 Under the Infants Relief Act 1874 then in force.

50 [1928] 1 K.B. 48.

51 Re Cleadon Trust [1939] Ch. 286, 318, 327. Burrows, Restitution, pp. 229 sq., regards Ligett as an example of a third party discharging a debt without consent of the debtor (cf. above, II B). The discharge in Ligett could, however, as well be explained by an apparent authority of Ligett in favour of the company's creditors, see [1928] 1 K.B. 59.

52 In this case the debt discharged was not the liability under the (invalid) cheques but under the contracts with the creditors.

53 [1903] A.C. 49.

54 RGZ 60, 24 (1904).

55 Reuter & Martinek (n. 2), pp. 453 sq.; Larenz-Canaris, p. 224; Lorenz, § 812 n. 50; Lieb, § 812 n. 75.

56 See below, III G.

57 It could further be argued that a certification, under Canadian law, led to a liability by the bank towards the bearer, so that there was a classical case of a two-party liability mistake. But if the bearer is furnished with an own right against the bank, this is intended to improve his situation, which would be undermined by exposing him to the risk of being sued by the bank. According to German law, the fact that not only X but also R had an (apparent) claim against P cannot change the risk allocation: Canaris (n. 2), pp. 808 sqq.; Larenz-Canaris, pp. 234 sq.; Reuter & Martinek, p. 486; Lorenz, § 812 n. 56; Lieb, § 812 n. 44.

58 BGHZ 36, 30 (1961); 40, 272 (1963) (English translation in Markesinis (n. 17), case 134); BGH WM 1974, 564.

59 Reuter & Martinek (n. 2), pp. 454 sqq.

60 Canaris (n. 2), pp. 826 sq.; Larenz-Canaris, p. 219; Lorenz, § 812 n. 61, see also Lieb, § 812 nn. 90 sqq. Meanwhile, the Federal Court allowed rescission of the representation, BGHZ 106, 163 (1988).

61 [1925] 2 K.B. 612, 628 sq., 637 sq., 640.

62 [1926] A.C. 670. Today, a different result might have been reached because of the change of position defence.

63 [1969] N.Z.L.R. 151.

64 Recovery was, however, only allowed in part because of the New Zealand change of position defence.

65 See also State Bank of NSW v. Swiss Bank Corp (1995) 39 N.S.W.L.R. 350, which can also be regarded as a divergence case where recovery was allowed.

66 (1964) 111 C.L.R. 177 (High Court of Australia).

67 111 C.L.R. 189.

68 P. 568 above.

69 111 C.L.R. 190 sq. (Kitto J.), 204 (Windeyer J.).

70 Ibid., at pp. 185 sqq.

71 Ibid., at pp. 192, 194 sq. (Kitto J.), 201 sqq. (Windeyer J.).

72 Ibid., at pp. 185 sq. (Barwick C.J.), 198 (Taylor J.), 208 sq. (Owen J.).

73 Goff & Jones, p. 208.

74 See also Citibank v. Brown Shipley [1991] 2 All E.R. 690, which can also be regarded as an impersonator case. Here, Waller J. remarked, albeit obiter, that a restitutionary action by P against R would lie, p. 702. However, in this case there was, at the time of payment, no liability of the fraudster (X) towards R that the payment could discharge.

75 § 812 (1) BGB. See Reuter & Martinek (n. 2), pp. 84 sqq., 106 sqq.; Larenz-Canaris, pp. 136 sqq.; Lieb, § 812 nn. 137 sqq.; English accounts: Markesinis (n. 17), pp. 725 sqq.; Zimmermann & du Plessis, [1994] R.L.R. 14.

76 Aiken v. Short (1856) 1 H. & N. 210, 215, 156 E.R. 1180. Cf. also Commonwealth Trading Bank v. Reno Auto Sales [1967] V.R. 790, 797.

77 Goff & Jones, pp. 177 sqq.; Stoljar, Quasi-Contracts, p. 23; Birks, Introduction, p. 153; Burrows, Restitution, pp. 100, 104 sq.; Morgan v. Ashcroft [1938] 1 K.B. 49, 73 sq. (Scott L.J.); Larner v. LCC [1949] 2 K.B. 683 (Denning L.J.); Barclays Bank v. Simms [1980] Q.B. 677, 696 sq. (Goff J.); David Securities v. Commonwealth Bank (1992) 175 C.L.R. 353 (High Court of Australia).

78 So expressly Goff J. in Barclays Bank v. Simms [1980] Q.B. 696; Budd J. in National Bank v. O’Connor (1963) 103 I.L.T. 73, 94; Barwick C.J. and Kitto J. in Porter v. Latec (1964) 111 C.L.R. 187, 190; ANZ v. Westpac (1988) 78 A.L.R. 157, 161.

79 This requirement seems to have been introduced by Erle C.J. in Chambers v. Miller (1862) 13 C.B. (N.S.) 125, 133 sq., 143 E.R. 50; see p. 575 above, III D.

80 See, e.g., Bank of NSW v. Deri (1964) 80 W.N. 1499; Southland Savings Bank v. Anderson [1974] 1 N.Z.L.R. 118.

81 Above, III F.

82 Goff J. in Barclays Bank v. Simms [1980] Q.B. 689, 696; and the Australian High Court in ANZ v. Westpac (1988) 78 A.L.R. 161.

83 See Barclay v. Malcolm (1925) 133 L.T. 512, 513, and Commonwealth Trading Bank v. Reno Auto Sales [1967] V.R. 790, 797 sqq., where restitution in cases of no valid order or a stopped cheque was denied because there was no mistake between plaintiff and defendant; both results, however, are regarded as incorrect today, see text to nn. 27 and 37.

84 See Lord Hobhouse in Colonial Bank v. Exchange Bank (1885), according to whom the payment by the plaintiff to the defendant alone establishes “the most direct privity”, 9 App. Cas. 84, 90.

85 Thomas v. Houston [1969] N.Z.L.R. 151, 155, 161 sqq., 166 sq., 172 sqq.

86 This had been, in Jones v. Waring, the opinion of Pollock M.R. in the Court of Appeal, [1925] 2 K.B. 612, 632.

87 Goff J. in Barclays Bank v. Simms [1980] Q.B. 696; Goff & Jones, pp. 184 sqq.; Stoljar, Quasi-Contracts, pp. 24 sq.; C. Needham (1978) 12 U.B.C.L.Rev. 159, 161 sq.; Friedmann (1983) 99 L.Q.R. 549; Budd J. in National Bank v. O’Connor (1963) 103 I.L.T. 73, 94.

88 (1964) 111 C.L.R. 177, see p. 580 above, III G.

89 Ibid., at p.204.

90 Ibid., at pp. 189 sqq.

91 Ibid., at p.187.

92 Ibid., at p.191.

93 Commonwealth Trading Bank v. Reno Auto Sales [1967] V.R. 790, 796; Commercial Bank of Australia v. Younis [1979] 1 N.S.W.L.R. 444, 450; Bank of NSW v. Murphett [1983] V.R. 489, 493.

94 Cf. Goff & Jones, p. 192; Birks, Introduction, pp. 155 sq.; Burrows, Restitution, p. 106; David Securities v. Commonwealth Bank (1992) 175 C.L.R. 353, 377 sq.

95 See also Friedmann, (1983) 99 L.Q.R. 549.

96 [1980] Q.B. 677.

97 [1980] 130 N.L.J. 587; see also [1982] J.B.L. 281.

98 [1982] J.B.L. 282 sqq.

99 Goode [1982] J.B.L. 288, 289.

100 “Mistaken Payments”, in Finn, P. (ed.), Essays in Restitution (Sydney 1990), 87Google Scholar.

101 Ibid., at pp.116 sq.

102 Pp. 583 sqq. above, IV C.

103 The judgments of Kitto and Windeyer JJ. in Porter v. Latec showed a certain ambiguity towards this problem, as it was not clear whether the fact that P could not acquire the mortgage was alone sufficient to establish that there was a fundamental mistake or a failure of consideration, independently of the discharge. P's “mistake in thinking that (Y) owed (R) a debt for money lent and that the debt was secured by the documents which (R) held was so clearly fundamental that because it was a mistake the consideration of the payment failed completely”, 111 C.L.R. 190 (Kitto J.).

104 Butler (n. 100), pp. 117 sqq.

105 In case of cheque payments Butler regards as consideration the assumption of the parties that there is a valid instruction by the customer: ibid., at p. 121.

106 (1856) 1 H. & N. 210, 156 E.R. 1180, above, II A.

107 See n. 7.

108 In their third edition, Goff and Jones explained the result by “bona fide purchase”, pp. 108 sqq., 716. However, bona fide purchase is traditionally a defence against claims based on title. Further, it is designed to protect a recipient who acquired something under a contract with a third party from claims by the defendant, not from claims by the transferor himself. See Barker (n. 7), pp. 192 sq., 199 sqq.

109 Burrows, Restitution, pp. 96, 224; Barker (n. 7), pp. 200 sq.

110 Goff & Jones, 5th ed., pp. 204 sq.

111 See, e.g., Platt v. Bromage [1854] L.J. Ex. 63, 64 sq. (Pollock C.B.); Steam Saw Mills v. Baring Brothers [1922] 1 Ch. 244; Brennan J. in David Securities v. Commonwealth Bank (1992) 175 C.L.R. 353, 392; Friedmann, D., “Valid, Voidable, Qualified and Non-existing Obligations”, in Burrows, A., Essays on the Law of Restitution (London 1991)Google Scholar, 247 sqq.; Goff & Jones, p. 48; Birks, Introduction, p. 160; Burrows, Restitution, p. 101.

112 Goff J. in Barclays Bank v. Simms [1980] Q.B. 695; Turner J. in Thomas v. Houston [1969] N.Z.L.R. 167; Crockett J. in Bank of NSW v. Murphett [1983] V.R. 494; the Australian High Court in ANZ v. Westpac (1988) 78 A.L.R. 161, and in David Securities v. Commonwealth Bank (1992) 175 C.L.R. 378; Goff & Jones, p. 180; Burrows, Restitution, pp. 100, 104 sq.; Needham, (1978) 12 U.B.C.L. Rev. 220 sq.; Tettenborn, (1980) 130 N.L.J. 273 sq.

113 [1980] Q.B. 695; also the Australian High Court in David Securities v. Commonwealth Bank (1992) 175 C.L.R. 381.

114 For critics of the causal mistake approach see Matthews, (1980) 130 N.L.J. 587; Butler (n. 100), pp. 99 sq.; P. Watts, Mistaken Payments and the Law of Restitution, [1993] L.M.C.L.Q. 145, 147 sq.; cf. also Stoljar, Quasi-Contracts, pp. 20 sqq.

115 It is not obvious why this proposition should be “overcomplicated”, as Barker (n. 7), p. 200, argues.

116 Goode, (1981) 97 L.Q.R. 254; Friedmann, (1983) 99 L.Q.R. 552; Burrows, Restitution, p. 103.

117 [1980] Q.B. 699 sq.

118 Cf. above, n. 112.

119 Cf. Friedmann, Obligations (n. 111), pp. 273 sq.; Budd J. in National Bank v. O’Connor (1963) 103 I.L.T. 73, 94.

120 Goode, (1981) 97 L.Q.R. 254, [1982] J.B.L. 289, see also Tettenborn, (1980) 130 N.L.J. 273 sq.; Friedmann, (1983) 99 L.Q.R. 552.

121 A similar defence, depending on the value relation X-R, has been suggested in cases of payments to an assignee: recovery for failure of consideration (vis-à-vis the assignor X) by P cannot be directed against the assignee (R) if he has given value to the assignor (X): A. Burrows, Restitution from Assignees, [1994] R.L.R. 52, 55; Neill L.J. in The Trident Beauty [1993] 1 Lloyd's L.R. 443, 448 sq.; similarly Beldam L.J., 453 sq.; see also Lord Goff in the House of Lords, [1994] 1 W.L.R. 161, 166. In German law, all restitutionary claims by P based on the relation P-X (assignor) have to be directed, not against the recipient-assignee R, but against X: BGHZ 105, 365 (1988); Canaris (n. 2), pp. 834 sq.; Larenz-Canaris, pp. 237 sqq.; Lorenz, § 812 n. 41; Lieb, § 812 n. 122; contra Reuter & Martinek, pp. 489 sqq.

122 Matthews, [1982] J.B.L. 281; Stoljar, Quasi-Contracts, p. 30 n. 46, 33 sq. A similar argument is advanced by Tettenborn in the context of recovery for failure of consideration against the assignee (Trident Beauty): (1993) 52 C.L.J. 220.

123 Cf. Moses v. Macferlan (1760) 2 Burr. 1005, 1012, 97 E.R. 676; Farmer v. Arundel (1772) 2 Black W. 824, 825 sq., 96 E.R. 485; Bize v. Dickason (1786) 1 T.R. 285, 286 sq., 99 E.R. 1097.

124 Cf. Stoljar, Quasi-Contracts, pp. 28 sqq.; Birks [1991] L.M.C.L.Q. 473, 494 nn. 89, 91.

125 S. Arrowsmith, “Mistake and the Role of ‘Submission to an Honest Claim’”, in Essays on the Law of Restitution (n. 111), 17; N.H. Andrews [1989] L.M.C.L.Q. 431; Goff & Jones, pp. 54 sq., 214 sq.; Butler (n. 100), pp. 102 sqq.; David Securities v. Commonwealth Bank (1992) 175 C.L.R. 353, 372 sqq.

126 See references in n. 17.

127 This configuration occurred in the case of The Trident Beauty, above n. 121. The case did not concern a mistaken payment on an instruction but a restitutionary claim for failure of consideration against the assignee; the problem is, however, similar. Arguments like those advanced here can be found in the speeches of Beldam L.J. in the Court of Appeal, [1993] 1 Lloyd's L.R. 453, and of Lord Woolf in the House of Lords, [1994] 1 W.L.R. 171 sq.

128 [1980] Q.B. 703.

129 Solutions that protect the recipient have to differentiate according to whether there was a debt under the value relation: for English law, see Goode, (1981) 97 L.Q.R. 259 sqq. In German law, the bank P can never recover from R, but has to sue its customer X. As X has countermanded his instruction to pay (the cheque), the bank can only recover the amount of his actual enrichment, and this depends on whether there was a discharge of a debt. Cf. p. 574 above, text after n. 30.

130 If one focused on the debt under the underlying value relation, as the court did in Ligett and as Goode has suggested, the model of a third party discharge would clearly be a fiction.

131 Above, III B.

132 See II B above.

133 Friedmann, (1983) 99 L.Q.R. 545 sq., 552; Burrows, p. 103, 226.

134 Cf. J. Dawson (1981) 61 Bos. U.L. Rev. 563, 566; and Friedmann (1983) 99 L.Q.R. 548 n. 62.

135 III F above.

136 III E above.

137 See Birks, Introduction, pp. 23, 132 sq.; Burrows, Restitution, pp. 16 sq.

138 See Burrows, Restitution, pp. 45 sqq., 139 sqq., Birks, Introduction, pp. 439 sq., 445 sq., 445 sq.; Goff & Jones, pp. 38 sqq.

139 [1981] Ch. 105, 119.

140 [1996] A.C. 669, 703 sqq.

141 The degree of fault is controversial. See Birks [1993] L.M.C.L.Q. 218, and the cases cited there; Burrows, Restitution, pp. 143, 150 sqq.

142 Lipkin Gorman v. Karpnale [1991] 2 A.C. 548.

143 See Birks, Introduction, pp. 442 sq., 445 sqq., 477 sq., [1991] L.M.C.L.Q. 485 sq.; Barker (n. 7) pp. 193, 209.

144 This has been controversial. Compare, on the one hand, Sir P. Millett (1991) 107 L.Q.R. 71, 82; Birks, [1991] L.M.C.L.Q. 490 sqq., P. Key [1994] L.M.C.L.Q. 421; on the other hand Lord Goff in Lipkin Gorman v. Karpnale [1991] 2 A.C. 548, 574 sqq.; Burrows, Restitution, pp. 140, 472 sq.; Barker (n. 7), pp. 192 sqq., 211 sqq.; Birks, “Overview: Tracing, Claiming and Defences”, in Laundering and Tracing (n. 7), pp. 289 sqq., 330.

145 Parker v. Patrick (1793) 5 T.R. 175, 101 E.R. 99; White v. Garden (1851) 10 C.B. 919, 138 E.R. 364.

146 Stocks v. Wilson [1913] 2 K.B. 235, 264 sq.; Ayers v. South Australian Banking Co (1871) L.R. 3 P.C. 548, 559; Singh v. Ali [1960] A.C. 167, 177; Lipkin Gorman v. Karpnale [1991] 2 A.C. 548, 562, 574 sqq.; Tinsley v. Milligan [1994] 1 A.C. 340, 369.

147 See G. Williams (1977) 36 C.L.J. 62, 67 n. 14, 68; Goff J. in Barclays v. Simms [1980] Q.B. 689; Ilich v. R (1987) 162 C.L.R. 110 (High Court of Australia); D. Fox [1996] R.L.R. 60, 64 sq., with further references.

148 [1996] A.C. 689 sq. See also W. Swadling [1994] R.L.R. 73, 80 sqq. Goff & Jones, p. 90 Even if we assume Chase Manhattan to be still correct because in that case the mistake was more fundamental than in other cases of mistaken payments (the plaintiff paying without any order only because of a clerical mistake; cf. A. Tettenborn [1980] C.L.J. 272; Goode (1987) 103 L.Q.R. 433, 436 sqq.), this does not cover our case where P pays on a real instruction by X, his mistake merely relating to his relationship with X.

149 Birks, , “Restitution and Resulting Trusts”, in Goldstein, S. (ed.), Equity and Contemporary Legal Developments (Jerusalem 1992), 335Google Scholar; also [1996] R.L.R. 3, 24. See also S. Worthington, suggesting that every transfer without consideration triggers an equitable title of the transferor: (1995) 9 Trust Law Int. 113.

150 See Birks, Introduction, pp. 140 sqq.; Burrows, Restitution, pp. 139 sqq.

151 For the relationship between modern German law and the (rejection of the) actio de in rem verso see Canaris (n. 2), p. 804; Lorenz, § 812 n. 54.

152 See also Tettenborn [1997] R.L.R. 1.

153 Similarly Burrows [1995] R.L.R. 15, 25 sqq.; Restitution, pp. 40 sqq.; A.J. Oakley [1995] C.L.J. 377, 397 sqq.: Swadling [1996] L.S. 110.

154 Restitution, pp. 472 sq.

155 Cf. the argument in Barclays Bank v. Simms [1980] Q.B. 679 sqq; and Porter v. Latec (1964) 111 C.L.R. 184 sqq., 198, 209.

156 Goff & Jones, pp. 16 sq.

157 Jackson, R.M., The History of Quasi-Contract in English Law (Cambridge 1936), p. 54Google Scholar; see also Birks, “In Defence of Free Acceptance”, in Essays on the Law of Restitution (n. 111), pp. 105 sqq., 141.

158 Goff & Jones, pp. 18 sqq., 26; Birks, Introduction, pp. 114 sqq., Free Acceptance (n. 157), pp. 127 sqq.

159 Burrows, Restitution, pp. 8 sqq.

160 (1987) 40 C.L.P. 71.

161 The same result was achieved by MacKenna J. in United Overseas Bank v. Jiwani [1976] 1 W.L.R. 964, 967. In German law, the enrichment of X when P paid R under X's instruction was originally seen, either, in case of a debt under the value relation X-R, in the discharge of the debt, or, where there was no debt under the value relation, in X's restitutionary claim against R, which X then had to assign to P. However, the modern German view is that in all cases X's enrichment is the amount P paid to R, if the payment was covered by X's valid instruction: Canaris (n. 2), pp. 809 sqq., 814 sqq.; Larenz-Canaris, pp. 205 sq.; Reuter & Martinek, pp. 407 sqq., 413 sqq.; Lorenz, § 812 n. 55; Lieb, § 812 nn. 34 sqq., 40 sqq.

162 Accordingly, Goff, Jones and Birks speak of a free acceptance, which is, for instance, lacking if the acceptence is made by an agent without authority, as it was the case in Craven-Ellis v. Canons [1936] 2 K.B. 403; see Goff & Jones, pp. 24, 588 sq.; Birks (1971) 24 C.L.P. 110, 121 sq.; similarly Burrows, Restitution, p. 307.

163 Goode, (1981) 97 L.Q.R. 259; see also Lord Goff in The Trident Beauty [1994] 1 W.L.R. 161, 166.

164 Re Diplock [1948] Ch. 465, 503; see Burrows, Restitution, pp. 157 sq.