Newman v Beta Maritime Ltd 2018 BCSC 1442 discussed the situation where money “had and received” is a cause of action which is available where money was paid by mistake, acquired by way of fraud or paid under duress.
The issue of the law relating to where money was paid by mistake was discussed in International longshore and Warehouse Union local 502 v Ford 2016 BCCA 226 at paragraphs 23-26 which stated:
“ as a cause of action, money had and received resembles and is related to the right of recovery for money paid under mistake”
At its most basic, money had and received is an action for the return of money which the defendant is received, but which the law says it would be unjust for him or her to keep. In Storthoaks v. Canada Ltd Oil Mobil 1976) 2SCR 147 , the Supreme Court of Canada discussed the rationale underlying the right to recover money had and received as a result of mistake. In explaining the rationale behind the right of recovery, the court relied on Kelly v Solari (1841) 152 E.R. 24 which stated in part:
“ I think that where money is paid to another under the influence of mistake, that is, upon the supposition that a specific fact is true, which would entitle the other to the money, but which fact is untrue, and the money would not have been paid if it had been known to the payer that the fact was untrue, an action will lie to recover it back, as it is against conscience to retain it; though demand may be necessary in those cases in which the party receiving may have been ignorant of the mistake. “
The court went on to clarify what is meant by circumstances were would be against conscience for the payee to retain money:
“ the court did not purport to limit the right to recover money paid under a mistake of fact to cases in which would be against conscience for the recipient of the money to retain it. What the judge said was that where money is paid on the supposition that a specific fact is true which would entitle the other to receive it, which fact is untrue and the money would not have been paid if the fact of been known to be untrue, it can be recovered and it is against conscience to retain it. In other words given the circumstances the court outlined, is against conscience for the recipient to keep the money paid.”
The claim for monies had and received is very similar to that of unjust enrichment, however the BC Court of Appeal has stated on several occasions that money had and received shall continue to be treated as a distinct cause of action, as was stated in the longshore case at paragraph 24.
The Supreme Court of Canada has held that banks were entitled to recover the funds from the plaintiff where money was paid under mistake of fact. The mistake was that the cheque was genuine. This is not a mistake relating to the plaintiff’s right to receive the funds; by all accounts the plaintiffs were entitled to receive funds would have received a forged cheque. The court concluded that it is not necessary for the mistake to relate to the recipient’s entitlement to receive the funds.
