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Document Cited authorities 4 Cited in Related
Vincent
AuthorGreg Gordon,Jane Mair,Robin Evans-Jones,Robin M White,Kenneth McK Norrie,Fraser Davidson,D L Carey Miller,Jernej Letnar Černič,Malcolm M Combe,Robert Goddard,David Hayton,Kenneth G C Reid,Michael Plaxton,John Dickson
Date01 September 2008
DOI10.3366/E1364980908000784
Published date01 September 2008
Pages429-434
<p>The pursuers in <italic>Mackays Stores Ltd v Topward Ltd</italic><xref ref-type="fn" rid="fn1-1"><sup>1</sup></xref><fn id="fn1-1"><label>1</label><p><a href="https://vlex.co.uk/vid/mackays-stores-limited-v-878399741">[2008] CSOH 51</a>.</p></fn>were clothes retailers who, over a period of years, purchased merchandise from the defenders, a clothes supplier. Under their terms of business the pursuers had been entitled to a 10% discount on all sums owed to the defenders which they had deducted before each payment was made. Due to certain changes in the parties’ dealings and a mistake by the pursuers in respect of their own billing practice, the pursuers, for a period of nearly three and a half years, failed to deduct the 10% discount to which they had been accustomed. When they discovered their mistake the pursuers claimed back their over payments (due to the failure to make the appropriate deductions) amounting to £270,210.07. The cause of action was the <italic>condictio indebiti</italic>.</p> <p>After a detailed examination of the details of the parties’ billing practice Lord Drummond Young decided that the pursuers were not entitled to the 10% discount over the period of time that they had failed to claim it, so the full sums paid had been due. No ground of action was therefore seen to be provided by <italic>condictio indebiti</italic> which lies only in respect of benefits that are undue. As a result the decision conformed with the accepted requirements of the <italic>condictio indebiti</italic> and in that respect it is unremarkable.</p> <p>The interest of the decision lies in further statements by Lord Drummond Young concerning the basis of the <italic>condictio indebiti</italic>; (i) whether, as a matter of emphasis at least, it lies in unjustified enrichment or equity, and (ii) the role that equity plays in the application of the claim. As equity was understood it was seen to import a requirement that the result be fair. The conclusion expressed (<italic>obiter</italic>) was that if the terms of the <italic>condictio indebiti</italic> are met but the result is perceived to be unfair the cause of action will fail.<xref ref-type="fn" rid="fn1-2"><sup>2</sup></xref><fn id="fn1-2"><label>2</label><p>Para 28: “The <italic>condictio indebiti</italic> is an equitable remedy… Consequently [it] will be refused if it produces a result that is unfair. In the circumstances of their present case I am of opinion that, even if the requirements of the <italic>condictio indebiti</italic> were satisfied, the result would be unfair to the defenders.”</p></fn> In other words, considerations of fairness trump the law. That this is properly the case was identified by Lord Drummond Young in the Scottish jurisprudence on the <italic>condictio</italic> which he understood to give considerations of equity primacy over those of strict law (the actual requirements of the <italic>condictio</italic>).</p> <bold><italic>CONDICTIO INDEBITI</italic></bold>, UNJUSTIFIED ENRICHMENT AND EQUITY

Condictio indebiti is a claim of the law of unjustified enrichment in Scotland. So much is clear. But, that the recovery of an enrichment as a matter of law is secondary to considerations of equity was deduced by Lord Drummond Young from two decisions of the Inner House of the Court of Session. In Royal Bank of Scotland PLC v Watt Lord Justice-Clerk Ross stated:3

1991 SC 48 at 57.

The present case is one where money was paid in error, and in such a situation the equitable remedy of repetition is available. The emphasis is not upon the extent to which the party receiving the payment has been enriched, but upon whether that person has any good and equitable reason to...

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