Avon V. Howlett Notes

Avon v. Howlett

Facts

Before April 1, 1974, the defendant had been employed by the Bristol City Council as a teacher in charge of sports and physical education at the New Fosseway School, Bristol.

The defendant, however, was not then able to undertake any duties for the plaintiffs, because he had unfortunately been injured in an accident in one of the classrooms, which had occurred on January 8, 1974. In the event, he returned to work only for about six weeks between April 5 and May 18, 1976. Ill-health then once again prevented him from working until he reached the retirement age of 65 on October 6, 1976.

It is common ground that, following his accident on January 8, 1974, and consequent absence from work, the defendant, under his conditions of service, was entitled to be paid at full rates of pay for the first six months, at half rates for the next six months and to no pay thereafter, so long as he was not working.

In fact the plaintiffs continued to pay him at full rates for several months beyond the expiration of the first six months' period, that is to say until September 1974. They then continued to pay him at half rates long beyond the expiration of the second six months' period, that is to say until August 1975…. Some time after August 1975 the plaintiffs discovered that, up to and including January 1975, the defendant had been regularly overpaid and that after January 1975 he had been paid for seven months when he should not have been paid anything at all

The defendant relying, as he was entitled and instructed by the plaintiffs and their said predecessors to do, upon the said representations (a) made no claim to and was not paid additional social security benefits by way of increase of industrial disablement benefit (b) incurred expenditure which he would not have incurred had his income been as the plaintiffs now assert it should have been namely: (i) purchase of clothes to the amount of 53.50 from Montague Burton Ltd. on June 21, 1975, (instalment payment for which was completed in February 1976); (ii) hire purchase through United Dominion Trust of a motor car from Wrington Service Station, Bishopsworth Road, Bristol, in August 1975.

Holding

Slade LJ

Ingredients for estoppel are satisfied:

Goff and Jones, The Law of Restitution, 2nd ed. (1978), pp. 554–555

A plaintiff will be estopped from asserting his claim to restitution if the following conditions are satisfied: (a) the plaintiff must generally have made a representation of fact which led the defendant to believe that he was entitled to treat the money as his own: (b) the defendant must have, bona fide and without notice of the plaintiff's claim, consequently changed his position: (c) the payment must not have been primarily caused by the fault of the defendant.

In the present case it is common ground that the plaintiffs made representations to the defendant which led him to believe that he was entitled to treat the entirety of the overpaid moneys as his own. This was conceded by the plaintiffs at the trial.

It has not been suggested that the misrepresentations were so caused or that the overpayments were brought about by the defendant's own fault.

The judge found as a fact that the defendant had, bona fide and without notice of the plaintiffs' claim, changed his position in reliance on the representations, by losing the claim for 86.11 social security benefit and expending the sum of 460.50 which I have already mentioned.

Apportionment of the quantum

Argument: However, according to the defendant's case as specifically pleaded, the change of position which he has undergone in reliance on the plaintiffs' representations, has only deprived him of the opportunity to return 546.61 of the overpayment; it has not deprived him of the opportunity to return the outstanding balance of 460.39 which, so far as the pleading reveals, may be still in his possession.

The judge considered that the defence of estoppel was in effect capable of being applied pro tanto, in the sense that a payer who has overpaid a payee, even in circumstances where all of conditions (a), (b) and (c) above are satisfied, will be precluded from claiming restitution only to the extent that it would be inequitable to required the payee...

Buy the full version of these notes or essay plans and more in our Restitution of Unjust Enrichment BCL Notes.