Restitution Discussion Group Archives
| Sender: |
Robert Stevens |
| Date: |
Wed, 25 Oct 2006 17:30:48 +0100 |
| Re: |
DMG |
A first response to DMG.
(1) Unsurprisingly, I think Lord Scott, a judge I have
always held in the highest esteem, gets it right.
That said, I think counsel for the Revenue dropped the
ball. Badly. It seems to have been conceded by counsel that a claim for
restitution was available but only under Woolwich (see Lord Hoffmann
at [7], Lord Walker at [117], [135]). Lord Scott seems to have taken the
view he did without the assistance of argument on the point.
Normally, it is a good tactic when seeking to resist
an appeal to the House of Lords to simply maintain that the Court of Appeal
were right for the reasons they gave. However, in this case the arguments
for an 'exclusive regime' in relation to ultra vires tax demands were
so hopeless, and dependent upon a strained reading of the speeches of
Lord Goff which the House of Lords were not bound by, that to seek to
defend the result in the Court of Appeal based upon the reasons they gave
was a serious mistake. Unsurprisingly, the Revenue went down 5-0 on this
point.
Only Lord Hoffmann in the majority in what he describes
as a footnote, briefly alludes to the point that the money was still payable,
although the UK had behaved unlawfully as a matter of Community law. He
agrees with the Court of Appeal, rejecting Park J's view, that there was
no liability to pay, but gives no substantive reasons [32]. The Scot in
the court, Lord Hope, very disappointingly agrees with Park J's interpretation
of the legislation at [62], concluding that there was liability to pay
but that this didn't matter as there was a causative mistake. The latter
view cannot be right.
(2) Lord Walker seems to think that neither the correct
interpretation of section 32(1)(c) nor the question of whether the claim
was based upon mistake or absence of legal ground arose for resolution.
However if we accept, as he seems to do at [146]-[147] that a mistake
must be an essential element of the cause of action under section 32(1)(c),
it is hard to see how the second question does not arise. In DMG
the absence of legal ground, if there was one, was not triggered by the
mistake but by the contravention of European Union law. If restitution
follows where there is an absence of legal ground, the mistake made was
not an essential element of the cause of action and section 32(1)(c) is
not triggered.
Whilst Lord Walker's toying with Peter's 'Pyramid' at
[158] is interesting, I wonder whether it is consistent with the result
he reaches. Only if the mistake, at the base of the pyramid, triggers
the absence of legal ground higher up is it an essential part of the cause
of action (eg a contract of sale where the price has been paid but the
subject matter does not exist.)
Lord Hoffmann sees the point, I think, but I am puzzling
over his answer, at [22]
That does not seem to me inconsistent with the existence
of the mistake not being essential to the cause of action but merely one
example of a case which falls within a more general principle, just as
one could have (say, for the purposes of limitation) a category called
"clinical negligence" without implying that it is a cause of
action different in nature from other kinds of negligence. He is saying, I think, that mistake need not be an essential
part of the cause of action for the purposes of section 32(1)(c), but
I am not sure I follow his reasoning as to why not. If anyone can help
me out I'd be grateful.
(3) On whether there was a mistake the differences between
Lords Hoffmann and Hope are those which where ascertainable from KB
v Lincoln. Hoffmann is quite explicit in deeming there to be
a mistake where the law has changed because of judicial decision ([23])
as he admits, this can be read as supporting the Birks view ([28]) that
it is better not to try and square this with the orthodox approach that
the transfer is vitiated by any mistake present in the claimant's mind,
but rather to accept that the true basis of recovery is absence of legal
ground. Lords Hope and Walker seem to me to place more emphasis on finding
a real mistake.
(4) Lord Brown's point will have to be paid for by some
litigant in the future.
(5) The shame is that a lot of time and effort has been
spent rebutting the argument from 'exclusivity' which deservedly went
down 5-0, when counsel's time, and their Lordships lengthy speeches, would
more profitably have been spent focusing on other issues.
Robert Stevens
Charles Mitchell writes: Judgment
has been released. There is much of interest. Perhaps unsurprisingly
the HL rejects the CA's view that you cannot rely on mistake where Woolwich
is available on facts - though it's a pity that Rebecca Williams' arguments
supporting the CA did not get more of an airing: (2005) 16 KCLJ 194.
The limitation rule for mistaken payors applies whether or not mistake
is the cause of action (obiter in light of previous finding, I think).
Lord Scott dissents on basis that even if DMG made a mistake the money
was still due, drawing on Rob Stevens (2005) 5 OUCLJ 141. And the answer
to the big question is ...
at any rate for the moment ... that
unlike civilian systems, English law has no general principle that
to retain money paid without any legal basis (such as debt, gift,
compromise, etc) is unjust enrichment. per Lord Hoffmann at [21].
He and Lord Walker both acknowledge
that it is an open question whether English law might develop in this
direction the future, and at [158] Lord Walker expresses enthusiasm
for PB's pyramid. But no decision on the point necessary to resolve
this case - which perhaps raises the question of what a set of facts
would look like where a decision on the point is going to be necessary.
PB would have replied 'read Sandwell and Guinness
Mahon'!
Barrister
Fellow and Tutor in Law
Lady Margaret Hall
University of Oxford
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