Contractual Mistakes and the Law of Restitution

Abstract

The pertinence in the New Zealand context of Lord Goff's interesting observations is illustrated by the recent case ofEngland v G & D Ritchie Holdings Ltd (HC Wellington, CP 912/88, 28 February 1989). This case raised, according to McGechan J in his reserved judgment, "a short but difficult point on which there does not appear to be direct authority."

The point concerned the impact of the Contractual Mistakes Act 1977 on the common law restitutionary remedy for recovery of money paid under mistake of fact. The reasoning of McGechan J throws up basic questions concerning the relationship between the law of contract and the law of restitution.

In this paper we shall address these questions in a somewhat unusual format. First, we outline the facts of England and summarise the main points of the judge's reasoning.

Secondly, since the case will not be reported (no doubt because the judge eventually declined to resolve his difficult point) we set out in full the material parts of the judgment.

Thirdly, we submit for consideration a different view of the case in the form of an alternative judgment.

Keywords: law of restitution, law of contract, contractual mistakes