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Re 2a: I'm afraid that I disagree with Jason and Robert that the only source of difficulty here is the artificiality of saying that the payor was mistaken. Problems also flow from the fact that the content of law is an objective social fact that can be determined at any given moment. The question whether the law requires X to pay Y in a given situation may sometimes be difficult to answer because the law is uncertain, but suppose that we know the answer because a judicial decision gives us a clear 'yes'. If X pays Y pursuant to the rule and then seeks to recover his payment, then Y can say that the rule established by the case constitutes a legal ground for the transfer. If X pays Y, and then in a different case the rule is overturned, it is fictional to say that X can now recover from Y because there never was a legal ground for X's payment because there never was a rule requiring the payment. To say that there is no fiction 'because the law can be changed with retrospective effect' (Rob) is mere assertion, and to say that 'the judges are for the most part stating what they think the law always demanded' (Jason) does not really meet the point. I don't deny that the courts (and Parliament) have the power to deem there never to have been a legal ground for X's payment if they want to - but I want them to tell me explicitly why they think this is a good idea, and I don't think it's wise to let them off the hook by telling them that repayment just follows 'automatically'.

Best wishes
Charles

At 16:36 30/10/2006 +0000, Robert Stevens wrote:

Charles wrote

I'm not sure I think that absence of basis reasoning would allow us to avoid either of the difficulties I describe under headings 2a and 2b. So far as 2a is concerned, where C pays correctly believing that a rule of law requires him to do so, and the rule is subsequently overturned by judicial decision, would we not still be faced with the question whether the basis for C's payment should be deemed by application of a legal fiction not to have existed at the time when the payment was made?

I don't think so. We don't need any fiction on the absence of basis model. There is no doubt that the law can be changed with retrospective effect, indeed this can be done by legislation. (A nice example is Commissioner of State Revenue v Royal Insurance (1994) 182 CLR 51.) If that change means that there is no legal ground, there is recovery. We don't have to worry about the fact that at the time of the payment there was a legal ground. We only need to worry about this if we feel compelled to squeeze the claim into a mistake analysis.

And so far as 2b is concerned, would we not still be faced with the problem that the payment made by DMG was due under a valid statutory section?

Absolutely, indeed the problem is even more obvious.