Royal Bank of Scotland Plc v Watt
| Jurisdiction | Scotland |
| Judgment Date | 06 November 1990 |
| Docket Number | No. 6. |
| Date | 06 November 1990 |
| Court | Court of Session (Inner House - Second Division) |
SECOND DIVISION.
Lord Murray.
Unjust enrichmentRepetitionWhether essential for pursuers to establish that defender had been lucratusWhether different principles applied to claim for recompense and claim for repetitionMoney paid in errorWhether equitable that recipient return money paid under that errorDefender withdrawing proceeds of fraudulently altered cheque and passing them to anotherWhether inequitable for defender to have to repay money to pursuers.
On 19th October 1987 a cheque for 631.63 was drawn by a firm of solicitors on their account which they held with the pursuers. The cheque was made payable to the order of a company in London and was crossed and marked "not negotiable" and "a/c payee only". This cheque was fraudulently altered so that it bore to be payable in the sum of 18,631 to the order of the defender. On 21st October 1987 the cheque, now fraudulently altered, was presented for collection at a London branch of another bank and was negotiated by way of bank giro credit transfer to the defender's account with the Edinburgh branch of that bank. The pursuers accepted the cheque in good faith and on 26th October 1987 credited the defender's account with the sum of 18,631. On 27th October 1987 the defender's asked at his bank if a sum had been paid into his account. On being informed that his account had been credited with 18,631 he withdrew cash to the amount of 18,000. The pursuers thereafter refunded the amount of the cheque to the account of the firm of solicitors. In these circumstances the pursuers raised an action against the defender for repetition of the sum of 18,631 on the basis that they had wrongly credited that sum to the defender's account as a result of the cheque having been altered fraudulently. The evidence shewed that the defender had met a man (P.) in a bar and got into conversation with him. P. had given the defender the impression that he was a car dealer or agent purchasing specific models for clients. He had an English accent and indicated that he worked from the south of England, travelling throughout the country to purchase cars. The defender had understood that P. needed large sums of cash for business purposes when he was in Scotland to purchase cars. The defender had informed him that he was interested in a particular type of car and P. had said he would be able to help and would keep a look-out for the model of car. Thereafter the defender had given P. his name and telephone number. Some time later P. telephoned the defender, wanting to transfer money to the defender's account in Edinburgh in order to draw cash for the purchase of cars. The figure which was mentioned was 180,000. The defender refused to contemplate a transfer of such a large amount of money and that refusal was accepted by P. About a week or so later P. telephoned again, suggesting a transfer of about 18,000. The defender agreed to help on this occasion. P. said that he would telex the amount to the defender's account if he would give him the details of it. The defender did so. A few days later P. telephoned again to say that the money had been telexed and that the defender should check with his bank that it had been cleared. P. would telephone again later to arrange for the money to be handed over to him. The defender had gone to his bank and confirmed that the transfer had been made. When P. telephoned he had instructed the defender to withdraw the money and take it straight away to an hotel in Edinburgh where he would meet him. Accordingly, the defender had gone to the bank and succeeded in withdrawing the 18,000. The defender had demanded cash and on receiving the amount had driven to the hotel where he had seen P. in the lobby and handed over the money to him. The defender had never seen or heard from P. again. The Lord Ordinary (Murray) granted decree for the sum of 631 on the basis that the defender could not be held to have benefited in any material sense from the 18,000 which he had immediately withdrawn and handed over to P. The pursuers thereafter reclaimed to the Inner House.
Held (rev. judgment of Lord Murray), (1) that the present case was one where money was paid in error and, although in such a situation the equitable remedy of repetition was available, the emphasis was not upon the extent to which the party receiving the payment had been enriched but upon whether that person had any good and equitable reason to refrain from repaying the money to the person who paid it under a mistake; (2) that when the defender discovered the sum of 18,631 had been credited to his bank account he must have known that he himself had no right to the money because he had given no consideration for it and a reasonable man would have been put on suspicion that all was not in order; (3) that the defender had benefited from the 18,000 which was credited to his account for as soon as the 18,631 was transferred a benefit was conferred upon him for, whatever arrangement he might have had with P., so far as his bankers were concerned, he could do with the money as he pleased; (4) that the Lord Ordinary had confused the equitable remedy of recompense with that of repetition and this was clearly a case of repetition, so that money being paid under a mistake might be recovered by the pursuers unless the defender succeeded in showing that it would be equitable that he should retain the money and inequitable that he should repay the money to the pursuers; (5) that on the evidence the equities favoured the pursuers; and reclaiming motion allowed and decree for payment of 18,631 pronounced.
The Royal Bank of Scotland plc brought an action in the Court of Session against Matthew Watt for repetition of the sum of 18,631. The cause came to proof before answer before the Lord Ordinary (Murray). On 23rd November 1989 his Lordship pronounced decree for payment by the defender to the pursuers of the sum of 631. The material facts and circumstances of the cause are as found in the Lord Ordinary's opinion.
At advising on 6th November 1990,
LORD JUSTICE-CLERK (Ross).In this action the pursuers are seeking payment from the defenders of the sum of 18,631. Their claim is quasi-contractual being based upon the principle of repetition. A proof before answer took place at which it was agreed that the defender should lead, the burden of proof being upon him in respect that he admitted receiving payment of the sum sued for which the pursuers claimed had been paid in error and in ignorance of the fact that it was not due. Many of the material facts were admitted in a joint minute. At the proof evidence was given by the defender, his bank manager, a police officer and one other witness. At the end of the day the Lord Ordinary pronounced decree for payment by the defender to the pursuers of the sum of 631 with interest. Against that interlocutor the pursuers have now reclaimed.
The Lord Ordinary has dealt fully with the facts, and it is unnecessary to go into these now in great detail. He has described the circumstances under which a cheque for 631.63 drawn by a firm of solicitors on their account with the pursuers in favour of a limited company was fraudulently altered so that it bore to be payable in the sum of 18,631 to the order of the defender. That cheque was presented for collection in London and was negotiated by way of bank giro credit transfer to the defender's account with a branch of the Trustee Savings Bank in Edinburgh. The cheque was accepted by the pursuers in good faith and was credited to the defender's said account. On the day following its being so credited the defender asked at his bank if a sum had been paid into his account, and on being informed that his account had been credited with 18,631, the defender withdrew 18,000 in cash from his account.
In his opinion the Lord Ordinary has summarised the evidence of the defender. He described how he had in the latter half of 1987 met a man called Pratt at the Bianco bar and how he had got into conversation with Pratt who led him to believe that he was a car dealer or agent for Rolls Royce. Apparently in the course of the discussion Pratt indicated that he required large sums of cash for business purposes when he was in Scotland purchasing cars. According to the defender he gave Pratt his name and telephone number as Pratt was to keep a look-out for a particular type of Volkswagen car which the defender wanted. Some time later Pratt telephoned the defender and wanted to transfer money to the defender's bank account in Edinburgh to draw cash for the purchase of cars. The figure mentioned was 180,000 and the defender refused to contemplate a transfer of such a large sum. About a week later Pratt again telephoned suggesting this time a transfer of about 18,000. The defender proceeded to give Pratt the details of his bank account, namely the code number and the account number. Pratt informed the defender that he would telex the amount to the defender's account. A few days later Pratt again telephoned to say that the money had been telexed and that the defender should check with his bank that it had been cleared. The defender did go to his bank and confirmed that the transfer had been made. When Pratt telephoned again the transfer had been made. When Pratt telephoned again he instructed the defender to withdraw the money in cash and to take it straight away to the Sheraton hotel in Edinburgh where he would meet him. This is what the defender did and after receiving the 18,000 in bundles of bank notes from his bank he put them into a carrier bag and drove straight to the Sheraton hotel where he saw Pratt in the lobby and handed over the bag of money to him. He never saw or heard from Pratt again. The Lord Ordinary considered certain other evidence which he heard and stated that he accepted that on a balance of probability the defender had proved a transaction of the kind which he had averred in his defences and to which he...
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