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RECOVERING MONEY PAID BY MISTAKE (Lagos)

Recovering money paid by mistake is a claim in restitution for unjust enrichment because of mistake.

If you have accidently made a payment to the wrong person – paid into the wrong bank account, overpaid an invoice, etc. then you may have a claim.

Overall, there are three Protected content for an unjust enrichment case, they are:
1.The enrichment; and
2.The enrichment being obtained at the plaintiff’s expense; and
3.The enrichment being unjust.

If a payer makes a mistaken payment to a payee, there are some defences to a restitutionary claim for unjust enrichment.

If you are a payer of money by mistake, then this article will explain the causes of action and any possible defences.

RECOVERING MONEY PAID BY MISTAKE
The Courts have decided that monies paid by mistake give rise to a prima facie obligation to make restitution to the payer.

The basic elements for a restitutionary claim for unjust enrichment because of money paid by mistake are as follows:
1.There must have been a payment to the payee (enrichment); and
2.The payment must have been at the detriment of the payer; and
3.The payment must be unjust.

I will explain these in more detail below.

1.There must have been a Payment to the Payee
Obviously, for an action in restitution for a mistaken payment, there must have been a payment from the payer which enriches the payee.
The payment must also be at the detriment of the payer.

2.The Payment must have been at the Detriment of the Payer
When recovering money paid by mistake, another basis of the unjust enrichment is that the payee has suffered a detriment. This means that the money paid must be from the payer’s own funds.
If the payer makes a payment to the payee from his/her/its own funds, which enriches the payee at the detriment of the payer, then the enrichment must also be unjust.
The unjust factor is the third element when recovering money paid by mistake.

3. The Payment must be Unjust
This article is not going to deal with all unjust factors in law. This article will simply focus on the unjust factors in relation to recovering money paid by mistake.
The unjust factor when recovering money paid by mistake is “mistake”.
In Citibank Limited v Department of Public Works and Services , the Court held that:
''… once a payment has been made to another by mistake there is a prima facie obligation on the part of the person receiving that payment to make restitution''.

So, the prima facie obligation rests on the fact that the payer’s payment due to a mistake, in itself makes the payee’s enrichment unjust.

The mistake can be either in fact or in law. The Courts have held that:
''When a defendant receives a payment which he has no right to receive and which the plaintiff has paid to him by mistake, the injustice of the defendant’s enrichment does not depend on the nature of the mistake that caused the payment to be made. Whether the plaintiff made a mistake of law or a mistake of fact, the defendant, having no right to receive the payment, is unjustly enriched by its receipt''.
So, just the receipt of money from a payer to the payee that the payee has no right to, paid by mistake or law or of fact, unjustly enriches the payee.

Examples of Money Paid by Mistake
The types of things which allow recovering money paid by mistake can include:
1.Money paid into the incorrect bank account; or
2.Money paid pursuant to a contract that was not due and payable; or
3.Mistaken overpayments – money had and received.

If these things have happened by mistake, at the detriment of the payer, which enriches the payee, then the payer can make a claim in restitution against the payee, subject to any defences.

Recovering money by mistake in restitution for unjust enrichment is complicated and thus seeking qualified legal advice is paramount.

If you are a payer of money by mistake, then write me in relation to the causes of action and possible steps in recovering your money.

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