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Category: Restitution

Mistaken payments and criminal liability – a cautionary tale from South Africa

4 April, 20224 April, 2022
| No Comments
| Mistaken payments, Restitution, Restitution

I have warned many times on this blog (especially here, here, here, here, here, here, here, and here – with examples from Ireland, the UK, Australia, New Zealand, and the US) that the recipient of a mistaken payment not only has a duty to make restitution of that unjust enrichment but also faces potential criminal liability for theft if the payment is kept (and, worse, spent) rather than returned. A recent cause célèbre from South Africa provides another cautionary tale:

Sibongile Mani sentenced to 5 years’ imprisonment for theft of NSFAS funds

Sibongile ManiWalter Sisulu University (WSU) student Sibongile Mani [left] has been sentenced to five years’ imprisonment for theft relating to R14 million [€870,000] accidentally credited to her account by the National Student Financial Aid Scheme (NSFAS) in 2017.

East London Regional Court Magistrate Twanette Olivier found Mani guilty of stealing R818,000 [€51,000] of the funds.

She was only entitled to a R1,400 [€87] food allowance and was accused of failing to report when R14 million [€870,000] was credited to her account erroneously. She instead embarked on a spending spree. …

A little more background:

Key events that led up to the sentencing and appeal of NSFAS ‘millionaire’ Sibongile Mani

…
June 2017
A technical glitch led to funding administrative company Intellimali erroneously transferring R14m into Mani’s account.

…

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Convenience as consideration? Payment for good consideration as a defence to a claim to restitution for unjust enrichment

22 February, 20224 March, 2022
| No Comments
| Restitution, Restitution

Red light sign in FloridaIn Barclays Bank Limited v Simms [1980] QB 679, 695, Goff J held that a claim for restitution on the grounds of mistake would fail, inter alia, if

the payment is made for good consideration, in particular if the money is paid to discharge and does discharge a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt … [emphasis added]

We have already seen an interesting US case of the particular example of the three party case. Now comes news of an interesting US case of the italicised general example of payment made for good consideration.

In Pincus v American Traffic Solutions, Inc, Pincus was photographed going through a red light (similar to the one in the photo, right), and he paid a penalty to American Traffic Solutions, Inc (ATS), made up of the statutory penalty and an additional fee for the convenience of paying online rather than by mail. He brought a putative class action (pdf) against ATS in Federal Court, alleging that several Florida statutes barred ATS from charging the convenience fee and that ATS was unjustly enriched by retaining it.…

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Taking the Santa out of Santander for £130m; putting the Santa into Citibank for $500m; and Fraiser’s Dad’s road to perdition – restitution of mistaken payments, again; and the defence of bona fide purchase

24 January, 202230 March, 2022
| No Comments
| Mistaken payments, Restitution

Santa-nder: Santa carrying a sack branded SantanderBanks are more often cast in the role of Scrooge than Santa; and, even when they start out in the latter role, they end up in the former.

For example, where over-active ATMs played Santa and permitted withdrawals of amounts greater than available funds or credit, the bank quickly became Scrooge, insisting that all money withdrawn by customers in excess of their balances will have to be repaid. Unlike in monopoly, you cannot retain the proceeds of a bank error in your favour. It’s not a gift either from God or from the bank. As I have explained many times on this blog, this is a mistaken payment, and the recipient must return it, unless there is a defence. And, if it is not returned, it could constitute theft.

Just before Christmas, Santander bank found itself first as Santa and then as Scrooge:

Bank accidentally deposits $176 million into people’s accounts on Christmas Day

Thousands of people received a surprise gift on Christmas Day this year when European bank Santander accidentally deposited £130 million ($176 million) across 75,000 transactions.

The mistake happened when payments from 2,000 business accounts in the U.K. were processed twice, meaning some employees saw their wages double, while suppliers also got more than they were expecting.

…

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A short note on the quantification of enrichment in HKR Middle East Architects Engineering LC v English

28 July, 20213 September, 2021
| 1 Comment
| Restitution

HMRC, 100 Parliament Square, via WikipediaIn two previous posts (here and here), I have looked at issues arising out of McDonald J’s judgments in HKR Middle East Architects Engineering LC v English (No 1) [2019] IEHC 306 (10 May 2019); (No 2) [2021] IEHC 142 (3 March 2021); (No 3) [2021] IEHC 376 (31 May 2021). In HKR v English (No 1) McDonald J held that English had been unjustly enriched at the expense of HKRME. However, he valued that enrichment, not as the full US$8,094,873 ultimately paid to English, but as limited to the (probably substantially smaller) amount of HKRME’s unpaid and lawful liabilities. And he directed that an account should be taken of those liabilities. In both HKR v English (No 2) and HKR v English (No 2), McDonald J affirmed this conclusion.

In my first post, I pointed out that a cause of action for restitution of unjust enrichment is complete when the payment is made by the plaintiff and received by the defendant, so that the defendant’s enrichment is the amount paid by the plaintiff. This is because, where the enrichment is the payment of money, complex questions seldom arise (Dublin Corporation v Building and Allied Trade Union (the Bricklayers’ Hall case) [1996] 2 IR 468, 483; [1996] 2 ILRM 547, 558 (html) (Keane J; Hamilton CJ, O’Flaherty, Blayney and Barrington JJ concurring); Test Claimants in the Franked Investment Income Group Litigation v Revenue and Customs (No 3) [2021] UKSC 31 (23 July 2021) [FII (No 3)] [170] (Lords Reed and Hodge (in a joint judgment; Lords Briggs, Sales and Hamblen concurring)).…

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Was there an automatic resulting trust HKR Middle East Architects Engineering LC v English?

21 June, 202121 June, 2021
| 2 Comments
| Restitution, Trusts

VandervellIn my previous post, I discussed the unjust enrichment claim that was at least partially successful in in HKR Middle East Architects Engineering LC v English (No 1) [2019] IEHC 306 (10 May 2019); (No 2) [2021] IEHC 142 (3 March 2021); (No 3) [2021] IEHC 376 (31 May 2021). In this post, I want briefly to discuss a trust point that was not taken in the case that may have availed HKRME. In HKR v English (No 3) [2}, McDonald J recorded that, in the first stage of the case, HKRME claimed

… that the monies transferred from HKRME to the BVI entity [Sunvit] were held on trust for the children of Mr Ryan under a trust known as the Ryan Children’s Trust (“the RCT”). For reasons which are explained in the principal judgment, I came to the conclusion that, at least insofar as it purported to relate to the monies transferred to the BVI entity, the alleged trust was a sham and that the intended beneficiary of the transfers (subject to the unpaid liabilities of HKRME) was not any such trust but was instead Mr Ryan himself who had put the relevant arrangements in place with a view to concealing assets from his creditors.

…

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Unjust enrichment by failure of consideration: HKR Middle East Architects Engineering LC v English

17 June, 202127 July, 2021
| 3 Comments
| Restitution

The Abu Dhabi Plaza (pictured left), in Nur-Sultan (formerly Astana), the capital city of Kazakhstan, is the highest building in Kazakhstan and Central Asia. It was designed by HKR Middle East (HKRME) Architects in the United Arab Emirates, whose principal was Dublin architect Jeremiah Ryan. To keep his UAE receipts beyond the reach of his Dublin creditors, between April 2012 and March 2013, Ryan directed HKRME to pay US$8,094,873 to Sunvit, an entity in the British Virgin Islands controlled by the defendant, Barry English, a Director of one of Ireland’s leading engineering companies. While the monies were notionally received by Sunvit, McDonald J held that English was in fact the real beneficiary, and that Sunvit was no more than a vehicle to receive funds on his behalf. HKRME sued English for the return of the monies. In a series of judgments, in HKR Middle East Architects Engineering LC v English (No 1) [2019] IEHC 306 (10 May 2019); (No 2) [2021] IEHC 142 (3 March 2021); (No 3) [2021] IEHC 376 (31 May 2021), HKRME’s claims in trust, contract, and breach of UEA law, failed. However, McDonald J held that the consideration for the payments to Sunvit had failed, such that the defendant had been unjustly enriched at the plaintiff’s expense.…

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Samsoondar v Capital Insurance and Surrey Co Co v NHS Lincolnshire CCG – Part 7 – Defences: Change of Position, and Enrichment Pursuant to Obligation

26 March, 202115 June, 2021
| 5 Comments
| Restitution, Restitution

Thornton and BurrowsThis is the seventh and final post (see also parts I, II, III, IV, V and VI) discussing the opinion of Lord Burrows (pictured left, via here) giving the advice of the Privy Council in Samsoondar v Capital Insurance Company Ltd (Trinidad and Tobago) [2020] UKPC 33 (14 December 2020) (Samsoondar) and the decision of Thornton J (pictured far left, via here) in the Queen’s Bench Division in Surrey County Council v NHS Lincolnshire Clinical Commissioning Group [2020] EWHC 3550 (QB) (21 December 2020) (Surrey).

In my first post, I introduced the cases and issues. In my second post, I examined whether the defendants were enriched at the expense of the plaintiffs. In my third post, I considered whether compulsory discharge of the debt of another could have provided a cause of action in Samsoondar and Surrey, and whether Surrey could rely upon a policy-motivated cause of action, consisting in the unlawful obtaining or conferral of a benefit by a public authority. In my fourth post, I considered whether the mistaken discharge of the debt of another might have been available on the facts of both cases.…

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Samsoondar v Capital Insurance and Surrey Co Co v NHS Lincolnshire CCG – Part 6 – Defences: Voluntariness, and Assumption of Risk

23 March, 202120 January, 2022
| 8 Comments
| Restitution, Restitution

At your own riskThis is the sixth post (in a series of seven; see also parts I, II, III, IV, V and VII) discussing Samsoondar v Capital Insurance Company Ltd (Trinidad and Tobago) [2020] UKPC 33 (14 December 2020) (Samsoondar) and Surrey County Council v NHS Lincolnshire Clinical Commissioning Group [2020] EWHC 3550 (QB) (21 December 2020) (Surrey). In my first post, I introduced the cases and issues. In my second post, I examined whether the defendants were enriched at the expense of the plaintiffs. In my third post, I considered whether compulsory discharge of the debt of another could have provided a cause of action in Samsoondar and Surrey, and whether Surrey could rely upon a policy-motivated cause of action, consisting in the unlawful obtaining or conferral of a benefit by a public authority. In my fourth post, I considered whether the mistaken discharge of the debt of another might have been available on the facts of both cases. In my previous post, I considered some of the effects of voluntariness in the discharge cases. In this post, I want to put this issue of voluntariness in a larger context.…

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Hi there! Thanks for dropping by. I’m Eoin O’Dell, and this is my blog: Cearta.ie – the Irish for rights.


“Cearta” really is the Irish word for rights, so the title provides a good sense of the scope of this blog.

In general, I write here about private law, free speech, and cyber law; and, in particular, I write about Irish law and education policy.


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  • Dystopia and dysaguria on the fourth birthday of the GDPR’s application
  • Mistaken payments and criminal liability – a cautionary tale from South Africa
  • Frances Haugen, Facebook whistle-blower, in conversation with Jess Kelly, tech correspondent with Newstalk fm, in the Long Room Hub, Trinity College Dublin, at 5pm on Monday 21 March 2022
  • Convenience as consideration? Payment for good consideration as a defence to a claim to restitution for unjust enrichment
  • Defamation reform will go to Cabinet tomorrow – and it will include anti-SLAPP provisions! — Updated: it’s been postponed by a week
  • Will we see Cabinet approve the drafting of a Defamation (Amendment) Bill before the end of the month?
  • Taking the Santa out of Santander for £130m; putting the Santa into Citibank for $500m; and Fraiser’s Dad’s road to perdition – restitution of mistaken payments, again; and the defence of bona fide purchase

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