1995 PLP 26 (PTD)

The next case is Campbell v. Hall (1774) 1 Cowp 204, (1558-1774) All ER Rep. 252 in which duty unlawfully exacted on the export of sugar from Grenada was held to be recoverable. The basis of the action for money had and received was that the money was paid to the defendant without any consideration, the duty having been unlawfully imposed. Mr. Gardiner relied on this case as demonstrating that it was considered self-evident that the right to recovery arose directly from the unlawful exaction irrespective of whether any element of compulsion existed. I think that this is to take too much from the decision. In the first place, almost the entire judgment was devoted to a consideration of whether or not the letters under the Great Seal were good and valid to impose the duty whereas the right to recover was dealt with in ten words as a necessary consequence of invalidity. In the second place, Mr. Glick QC for the Crown pointed out that in the State Trials report (see 2U State Tr 239) it appeared that the Crown did not suggest that if the duty was not payable in law it nevertheless could not be recovered. The Crown's failure to present such an argument may not have been unconnected with the tension existing between the King and the North American colonies consequent on the recent Boston Tea Party. I do not therefore think that support for the Woolwich principle can be derived from this case. In Dew v. Parsons (1819) 2 B & Aid 562, 106 Er 471 a sheriff demanded a fee for the issue of a warrant which was larger than that to which he was in law entitled, and received payment from an attorney who was in ignorance of the law. It was held that .the sheriff was not entitled to retain the surplus. Abbott, CJ and Holroyd, J. decided the case on the simple-ground that the sheriff could not retain what he was not entitled to demand without any suggestion of a demand colore officii or an involuntary payment. Best, J. appeared to consider that the payment was involuntary inasmuch as the attorney being in ignorance of the true situation, both parties were not in an equal position. Mr. Gardiner submitted that this case supported the Woolwich principle because it showed that a sum unlawfully demanded as of right by a person in authority could be recovered. Mr. Glick maintained that this was a colore officii case. The description of the facts is somewhat exiguous and I cannot help feeling that if they had been fully stated the case would fall to be treated as involving a demand colore oficii rather than as supporting the Woolwich principle. Morgan v. Palmer (1824) 2 B & C 729, 107 ER 554 concerned the recovery of fees unlawfully demanded for the grant of a publican's licence. It was held that the payment was not voluntary so as to preclude recovery. Abbott, CJ said (2 B & C 734-735, 107 ER 554 at 556). Then as to the last point. It has been well argued that the payment having been voluntary, it cannot be recovered back in an action for money had and received. I agree that such a consequence would have followed had the parties been on equal terms. But if one party has the power of saying to the other, "That which you require shall not be done except upon the conditions which I choose to impose," no person can contend that they stand upon anything like an equal footing. Such was the situation of the parties to this action. Abbott, CJ's reference to the lack of an equal footing was, in my view, to the fact that the defendant was in a position to force the plaintiff to comply with the lawful demand if he wished to obtain the necessary licence to continue to trade, and not simply to the fact that the defendant held an official position whereas the plaintiff did not. Bayley, Holroyd and Littledale, JJ. all agreed that the payment was not voluntary, the latter remarking (2 B & C 729 at 739, 107 ER 554 at 558) that the plaintiff had `submitted to pay the sum claimed, as he could not otherwise procure his licence'. This was a clear case where the defendant was in a position to and did in fact exert duress to require payment of the sum unlawfully claimed. In Steele v. Williams (1853) 8 Exch. 625, 155 ER 1502 the plaintiff's clerk was unlawfully charged for taking extracts from a parish register the larger fee which was chargeable in respect of certificates. The plaintiff was held entitled to recover the unlawfully demanded excess. Although the conclusion of the Court was unanimous the reasoning of the three Judges differed. Parke B concluded that the payment `was not voluntary, because, in effect, the defendant told the plaintiff's clerk, that if he did not pay for certificates when he wanted to make extracts, he should not be permitted to search'. However, he later went on to countenance the possibility that the defendant might have been guilty of extortion in insisting on payment `even without that species of duress, viz. the refusal to allow the party to exercise his legal right, but colore officii (see 8 Exch. 625 at 630-631, 155 ER 1502 at 1504-1505). It appears that Parke B was there using the words colore officii merely to denote an official demand and not in the more limited, and in my view, correct sense referred to by Isaacs and Windeyer, JJ. in the cases to which I have already referred (Sargood Bros. v. Commonwealth (1910) 11 CLR 258 at 301 and Mason v. New South Wales (1959) 102 CLR 108 at 140). Platt B said (8 Exch. 625 at 631, 155 ER 1502 at 1505): `But, inasmuch as before the search began the defendant told the plaintiff's clerk that the charge would be the same whether he made extracts or had certified copies, and under that pressure the extracts were obtained, and it would have been most dishonorable for the party, after having got the extracts, to refuse to pay, the money so obtained may be recovered back.' This is an interesting passage because Platt B is effectively saying that an undertaking to pay this excessive charge had been extracted from the clerk before he commenced his search and that he could not honestly have gone back on that undertaking. Martin B said (8 Exch. 625 at 632-633, 155 ER 1502 and 1505): As to whether the payment was voluntary, that has in truth nothing to do with the case. It is the duty of a person to whom an Act of Parliament gives fees, to receive what is allowed, and nothing more. This is more like the case of money paid without consideration

to call it a vountary payment is an abuse of language. If a person who was occupied a considerable time in a search gave an additional fee to the parish clerk, saying, "I wish to make you some compensation for your time," that would be a voluntary payment. But where a party says, "I charge you such a sum by virtue of an Act of Parliament," it matters not whether the money is paid before or after the service rendered; if he is not entitled to claim it, the money may be recovered back. Although the last sentence in that passage could be read as covering any demand for payment in purported reliance on a statute Martin B does relate it F to a service rendered' and the following interjection by him (8 Exch. 625 at 629,155 ER 1502 at 1504) during argument suggests that he was thinking of a demand colore officii in the sense referred to by Isaacs and Windeyer, JJ. `The case of Morgan v. Palmer shows, that if a person illegally claims a fee colore officii, the payment is not voluntary so as to preclude the party from recovering it back.' This sentence should also be read in the light of the sentence in the judgment of Plott B to which I have referred. It is, therefore, in my view taking too much out of this case to read it as supporting the broad proposition that payment in response to an unlawful demand by an official is ipso facto recoverable. In Hooper v. Exeter Corp (1887) 56 LJQB 457 the plaintiff paid harbor dues on all limestone which he landed, being unaware that such dues were not payable in respect of limestone to be burnt. Having discovered the true position he successfully claimed recovery of all dues paid in respect of exempted limestone. The judgments were very short and appeared to have been extempore. Lord Coleridge, CJ said (at 457-458): `I feel sure that if the corporation of Exeter had had the facts of the present case brought before them they would never have insisted upon the payment of a toll which they clearly would have had no right to insist on if the plaintiff had but claimed exemption upon landing the limestone From the case cited in the course of the argument (Morgan v. Palmer) it is shown that the principle has been laid down that, where one exacts money from another and it turns out that although acquiesced in for years such exaction is illegal, the money may be recovered as money had and received, since such payment could not be considered as voluntary so as to preclude its recovery.' Smith, J. agreed referring to the authority of Morgan v. Palmer and Steele v. Williams. Mr. Gardiner argued that this case supported the Woolwich principle inasmuch as recovery depended solely, on the fact that the corporation had been placed by statute is a position of authority. Morgan v. Palmer was, as I have already said, a case in which the defendant used his authority to exert pressure on the plaintiff to pay the sum demanded. I do not doubt that Lord Coleridge, CJ fully understood the ratio of that case and he must therefore have considered that there were facts in the case before him which were comparable to those obtaining in Morgan v. Palmer, although the report does not suggest the existence of any such facts. Indeed whereas in Morgan v. Palmer the defendant had no statutory authority to demand a fee and the plaintiff had no option but to pay it in order to obtain the licence, in this case the corporation were fully entitled to levy a toll on the landing of limestone which they were not informed was to be burnt. The exaction in this case was accordingly unlawful not because of what the corporation did but because of what the plaintiff did not do. I find this a difficult case to understand but I do not think that it can be said to support the Woolwich principle. The next case is Slater v. Burnley Corp (1888) 59 LT 636, where the plaintiff without objection paid water rates which were wrongly charged on the basis of a gross rental instead of a rateable value. Although the defendants had power to cut off the water supply for non-payment of rates they had neither done so nor threatened to do so. The plaintiff, who did not give evidence in the county Court, failed to recover the excess payments on the ground that they were made voluntarily. Both Judges of the Divisional Court, Cave and Wills, JJ. considered (at 639) that the mere existence of the power to cut off the water supply without any threat to exercise that power did not prevent the payment from being voluntary. The plaintiff argued for the Woolwich principle and referred to both Hooper v. Exeter Corp and Steele v. Williams but no reference to these cases appears in the reserved judgment. The lack of such a reference stems, in my view not from the fact that the Judges were wrong, as Mr. Gardiner submitted but rather from their recognition that the cases did not support the existence of such a principle as was contended for. In Queens of the River Steamship Co Ltd. v. Thames Conservators (1899) 15 TLR 474 improper charges levied for use of a pier were held by Phillimore, J. to be recoverable on the ground that the charges being illegal there was no consideration for the payment made. No further reason was given by the Judge and no authority was referred to in his very short judgment. While the case may appear to support the Woolwich principle it cannot be treated as a decision of any weight. In William Whiteley Ltd. v. R (1909) 101 LT 741, (1908-10) All ER Rep. 639 a company was charged duties by the Revenue on `male servants' whom they employed. The company initially expressed doubts as to their liability to duty but were informed that the Revenue were of the opinion that the duties were payable and that they would incur penalties if they did not pay. The company then paid the duties for three years. At the end of that time they again expressed doubts as to their liability to pay and for the next three years paid under protest. Finally they refuse to pay and a Divisional Court held that they were not liable to do so. A petition of right to cover the duties paid was unsuccessful. Walton, J, held that the payments were voluntary and therefore irrecoverable and he rejected the submissions of the plaintiffs that they were paid (i) in discharge of an illegal demand colore officii or (20) in any event under duress. Although Walton, J. referred on two occasions to the suppliants being under a mistaken belief that they were bound to pay the duties it is clear from his findings that in relation to at least the last three payments they were in considerable doubt as to their liability and he said (101 LT 741 at 745, (1908 10) All ER Rep. 639 at 641): `The suppliants knew all the facts. They had present to their minds plainly; when these payments were made, there was a question as to whether upon such servants as those in question duty was payable. They themselves raised that question and they paid the duties. They could have resisted payment. They must have known if proceedings were taken for penalties it would be open to them in such proceedings to raise the question as to whether the duties were payable or not, as they did, in fact, in 1906. They must have known and must have had present to their minds all that' Earlier the judge, after referring to the rule that money paid under mistake of law is irrecoverable had said (101 LT 741 at 745, (1908-10) All ER Rep 639 at 641): . `There is no doubt as to the general rule in Leake on Contracts [(5th Edn.) pp. 622-623) to which I have already referred, that money paid voluntarily--that is to say, without compulsion or extortion or undue influence, and, of course, I may add without any fraud on the part of the person to whom it is paid, and with knowledge of all the facts, though paid without any consideration, or in discharge of a claim not due, or a claim which might have been successfully resisted, cannot be recovered back. Mr. Gardiner argued that Walton, J erred in number of respects although he may have reached the right answer by the wrong route. I do not agree. His conclusion that there was no duress where the defendant could only put pressure on the plaintiff by the institution of proceedings, to which proceedings there would have been available the defence which ultimately prevailed, was, in my view, unimpeachable since there is ample authority for the view that a mere threat of action does not per se constitute duress. This accords with common sense since if there is defence to an unlawful demand the most appropriate time to raise it is when the demand is sought to be enforced by action. It the defence is good that will be the end conclusion that the case did not fall within the approach as enunciated by Isaacs, J. to decide the case on the basis of agree with the doubts expressed by Romer as to their understanding of the law at would go further and conclude that at least in case is that in factual plaintiffs contended for the principle relied on by Mr. Gardiner and failed to persuade the judge that such a principle existed. Maskell v. Homer (1915) 3 KB 1b6, (1914-15) All ER Rep. 595 concerned unlawful demands for market tolls. On the plaintiffs refusal to pay seizure took place, and thereafter on his solicitor's advice the plaintiff paid under protest. Later when the plaintiff challenged the defendant's demands seizure either took place or was threatened. Some years later it appeared from a decision in the Chancery Division that the tolls had been unlawfully demanded and the plaintiff sued for their recovery. It was held that as he had only paid to avoid seizure of his goods and never voluntarily nor intending to give up his rights to the sums paid nor to close the transactions, he was entitled to recover those payments which were not barred by the statute of limitation. Lord Reading, CJ drew a distinction between payments made to close a transaction and those made to avoid seizure in the allowing passage ((1915) 3 KB 106 at 118, (1914-15) All ER Rep. 595 at 597): 'If a person with knowledge of the facts pays money, which he is not in law bound to pay, and in circumstances implying that he is paying, it voluntarily to close the transaction, he cannot recover it. Such a payment is in law like a gift, and the transaction cannot be reopened. If a person pays money, which he is not bound to pay, under the compulsion of urgent and pressing necessity or of seizure, actual or threatened, of his goods he can recover it as money had and received. The money is paid not under duress in the strict sense of the term, as that implies duress of person, but under the pressure of seizure or detention of goods which is analogous to that of duress. Payment under such pressure establishes that 'the payment is not made voluntarily to close the transaction.' He later quoted with approval ((1915) 3 KB 106 at 119, (1914-15) All ER Rep. 595 at 598) the following dictum of Willes, J. in Great Western Rly. Co. v. Sutton (1869) LR 4 HL 226 at 249: `When a man pays more than he is bound to do by law for the performance of a duty which the law says is owed to him for nothing, or for less than he has paid, there is a compulsion or concussion in respect of which he is entitled to recover the excess by condictio indebiti, or action for money had and received. This is every day's practice as to excess freight.' Lord Reading, CJ later explained why payment in or under threat of an action is irrecoverable ((1915) 3 KB 106 at 121--122, (1914-15) All ER Rep. 595 at 599): `There is no doubt that if a person pays in an action or under threat of action the money cannot be recovered by him, as the payment is made to avoid the litigation to determine the right to the money claimed. Such payment is not made to keep alive the right to recover it, inasmuch as the opportunity is thus afforded of contesting the demand, and payment in such circumstances is payment to close the transaction and not to keep it open. Even if the money is paid in the action accompanied by a declaration that it is paid without prejudice to the payer's right to recover it, the payment is a voluntary payment, and the transaction is closed.' Mr. Gardiner submitted that this case was neutral relation to the Woolwich principle but I think that is to take too favourable view of it. In the passages to which I have referred I understand Lord Reading, CJ to be predicating some measure of compulsion in addition to the unlawful demand before recovery is available. In A-G v. Wiltus United Dairies Ltd. (1921) 37 TLR 884 the defendants resisted an unlawful demand for a levy on milk purchased by them under a licence granted by the Food Controller. The following passage from the judgment of Atkin, LJ (at 887) was relied on by Mr. Gardiner as showing that recoverability was not dependent on any measure of compulsion: It makes no difference that the obligation to pay the money is expressed in the form of an agreement. It was illegal for the Food Controller to require such an agreement as condition of any licence. It was illegal for him to enter into such an agreement. The agreement itself not enforceable against the other contracting party; and if he had paid under it he could, having paid under protest, recover back the sums paid, as money had and received to his use. The reference to recovery of money paid was obiter and Atkin, LJ referred to no authority throughout his judgment. It may well be that he considered payment of the levy was necessary prerequisite of obtaining the licence and hence amounted to a form of compulsion. If, on the other hand, he was stating m a matter of principle that the coupling of a protest with a payment of money unlawfully demanded per se rendered that payment recoverable he was expressing view for which no authority prior to that date has been cited this House and which were contrary to those expressed by Lord Reading, CJ in Maskell v. Horner. In that case Lord Reading, CJ said ((1915) 3 KB 106 at 120 1914- All ER Rep. 595 at 598. `I do not think that the mere fact of a payment under protest would be sufficient to entitle the plaintiff to succeed; but I think that it affords some evidence, when accompanied by other circumstances, that it affords some evidence, when accompanied by other circumstances, that the payment was not voluntarily made to 'end the matter.' This comment was made in the context of the dictum of Wifes, J. in Great Western Rly. Co. v. Sutton (1869) LR 4 HL 226 at 249 which he had previously cited with approval and which presupposed that compulsion had induced the payment. As Windeyer, J. said in Mason v. New South Wales (1959) 102 CLR 108 at 143: `But there is no magic in a protest; for a protest may accompany a voluntary payment or be absent from one compelled.' T & J Brocklebank Ltd. v. R (1925) 1 KB 52, CA; rvsg (1924) 1 KB 647 concerned the grant by the Shipping Controller of a licence to cell a ship under an unlawful condition as to the payment to him of a proportion of the sale price. It was held both by Avory, J. and the Court of Appeal that the payment in terms of the unlawful condition was not voluntary having been made for the purpose of obtaining the licence and could therefore be recovered as in Morgan v. Palmer. The case does not assist Woolwich. Nor does National Pari-Mutuel Association Ltd. v. R (1930) 47 TLR 110 in which it was held that payment of betting duty under a statutory provision thought by the plaintiffs to be applicable but later held by this House in similar case to be inapplicable, was made under a mistake of law and not of fact and was therefore irrecoverable. No question of payment under duress was raised. In Twyfrd v. Manchester Corp (1946) 1 All ER 621, (1946) Ch. 236 the plaintiff, although believing that he was not liable, for some years paid fees under protest for permission to recut and repaint tombstones in a cemetery. In an action to recover those fees it was held that the registrar of the cemetery had no right to demand fees for recutting and repainting but that there being no suggestion that any unpleasant result would follow from non-payment the plaintiff must be taken to have paid voluntarily. Romer, J. relied on William Whiteley Ltd. v. R and Slater v. Burnley Corp. in reaching his decision, and he also referred to the `principle of duress coleri officii' in a manner which showed that the necessary duress required something more than a simple demand by an official (see (1946) 1 All ER 621 at 627, (1946) Ch. 236 at 241). This is another case in which the Woolwich principle could readily have been applied in favour of the plaintiff had it existed. In Glasgow Corp. v. Lord Advocate 1959 SC 203 the corporation, having for a number of years paid purchase tax on manufactured stationery, erroneously believing it to be due, sought to recover it when it was held not to be chargeable. Two separate grounds were advanced in support of the claim, namely (1) the broad Constitutional point that as the Customs and Excise Commissioners had no authority from Parliament to impose the charges and the corporation were under no legal liability to pay them the latter should be entitled to recover, and (2) that the condictio indebiti applied where there was error in the interpretation of a public general statute. The Lord President (Lord Clyde) rejected both grounds and in relation to the first observed that no authority of any kind had been cited to justify it and that A-G v. Wilts United Dairies Ltd. was not in point. The Lord President (at 230) also made the following observation in relation to the consequences of sustaining the first ground: `It would, in my opinion, introduce an element of quite unwarrantable uncertainty into the relations between the taxpayers and the Exchequer if there could be a wholesale opening up of transactions between them whenever any Court put a new interpretation upon an existing statutory provision imposing a tax.' South of Scotland Electricity Board v. British Oxygen Co. Ltd. (No: 2) (1959) 2 All ER 225, (1959) 1 WLR 587 concerned an action by the pursuer companies against an electricity board seeking declarator and payment in respect of unlawful overcharges by the defenders for the supply of electricity. The issue before this House was whether the action should go to proof before answer or be dismissed and proof before answer was allowed. In the course of his speech Viscount Kilmuir, LC said ((1959) 2 All ER 225 at 232-233, (1959) 1 WLR 587 at 596): `The respondents were charged more than is warranted by the statute. Then it is clear that, until a Court so declares, the respondents have no alternative but to continue to pay the charges demanded of them. In principle, the appellants should not be permitted to retain payments for which they have no warrant to charge. The respondents may, therefore, recover whatever sum they may be able to prove was in excess of such a charge as would have avoided undue discrimination against them. I cannot find anything in the cases decided under the railway and electricity statutes which would necessitate or lead to a contrary view. I respectfully agree with Lord Patrick that Great Western Ry. Co. v. Sutton and Lancashire and Yorkshire Ry. Co. v, Gidlow (1875) L R 7 HL 517 support this view.' Mr. Gardiner relied on the first part of this quotation stating the principle of recoverability in wide terms. I do not, however, consider that Viscount Kilmuir, LC was intending to state that any payment in response to any unlawful demand could be recovered. His reference to the respondents having no alternative but to continue to pay and to Great Western Rly. Co. Ltd. v. Sutton suggests that he was referring to payments made to avoid unpleasant consequences other than a simple action of payment. My Lords, that concludes my analysis of what I perceive to be the important British cases but before seeking to draw conclusions therefrom I must refer to certain Commonwealth and American cases. In Sargood Bros. v. Commonwealth (1910) 11 CLR 258 duties were charged under a proposed tariff which exceeded the tariff subsequently enacted. The excess was held to be recoverable as not having been paid voluntarily. Mr. Gardiner relied on the following passage in the judgment of O'Connor, J. as supporting the Woolwich principle inasmuch as he made no mention of the payment having to be exacted for the performance of a duty (at 276-277). "The first ground is taken that the payment was voluntary. In one sense it was. It was in fact made without protest and in the ordinary course of Customs business. But it was paid with the knowledge on both sides that Customs control over goods imported may be exercised in support of illegal as well as of legal demands of duty. The principle of law applicable in such cases is well-recognised. Where an officer of Government in the exercise of his office obtains payment of moneys as and for a charge which the law enables him to demand and enforce, such moneys may be recovered back from him if it should afterwards turn out that they were not legally payable even though no protest was made or question raised at the time of payment. Payments thus demanded colore officii are regarded by the law as being made under duress. The principle laid down in Morgan v. Palmer, Steele v. Williams, and adopted in Hooper v. Exeter Corporation clearly establish that proposition (After referring to a section of the relevant Customs Act which was said to give an importer an opportunity to obtain his goods without making an irrevocable payment of the duty claimed O'Connor, J. continued:) The Collector has the power to keep the goods under Customs control until the importer either pays the duty or takes the advantage of the section. The latter he can do only by depositing with the Collector the whole amount of the duty. He may, it is true, exercise his free will as to which of these courses he shall adopt. But there is a compulsion to adopt one or the other, and whichever course he may take he cannot ;obtain possession of his goods without handing over to the Collector either absolutely or conditionally the amount claimed as duty." I do not read this passage as stating that an unlawful demand which is enforceable is per se insufficient to found recovery. The references to Morgan v. Palmer and the other two cases and to the compulsion on the importer to adopt one of two courses suggest that O'Conner, J. was referring to a situation where there was not only an unlawful demand but a means of enforcing it without recourse to litigation. This judgment therefore, does not support the Woolwich principle. Mason v. New South Wales (1959) 102 CLR 108 concerned fees paid by the plaintiffs to obtain licences to carry goods between states. It was subsequently held by the Privy Council that permits were not required by persons in the position of the plaintiffs. In paying the fees the plaintiffs were aware of the pending appeal and paid under protest. The Act under which the permits were purported required empowered authorized officers to seize unlicensed vehicles. The High Court of Australia (McTiernan, J. dissenting) held that the payments were not made voluntarily but under duress and were therefore, recoverable. Dixon, C.J. said (at 116): "In all these circumstances I think that it is a proper inference that, in the case of each journey in question, the plaintiffs paid the money unwillingly and only because they apprehended on reasonable grounds that without the permit which could not otherwise be obtained officers acting under the authority of the State of New South Wales would or might stop the motor vehicle and refuse to allow it to proceed upon the journey." He expressed doubts as to whether money paid in response to an unlawful demand by the Crown could not be recovered in the absence of some threatened action or inaction, but he considered that English authority seemed to say that it was not recoverable. He said (at 117): "We are dealing with the assumed possession by the officers of Government of what turned out to be a void authority. The moneys were paid over by the plaintiffs to avoid the apprehended consequence of a refusal to submit to the authority. It is enough if there be just and reasonable grounds for apprehending that unless payment he made an unlawful and injurious course will be taken by the defendant in violation of the plaintiffs' actual rights." Fullager, J. (at 124) considered that the payments were made in order to avoid a very real risk that a refusal to pay would be followed by action which could be ruinous to the plaintiffs' Kitto, J. said (at 126): "The proposition need not be questioned that where an Act purports, invalidly, to require a payment to be made, leaving the liability to be enforced by means of an action in which the invalidity of the statute is an available defence, a person who might have relied upon that defence but has paid without raising it should not be held, just because he was obeying the de facto command of a legislature, to have made the payment involuntarily. But even in the case of such an Act, if there are superadded provisions which attach to non-payment consequences other than a bare liability to be sued, there can be no justification for refusing to have regard to those consequences and to consider whether the existence of the provisions creating them has placed the payer under such pressure that the payments have not in truth been voluntary." The final paragraph of his judgment included the following passage (at 129): "I do not myself feel justified in attaching much weight to the tenuous evidence upon which we were invited to find that the plaintiffs made their payments because of apprehensions induced by words or conduct of State officials that vehicles would or might be seized and detained under section

47. My judgment rests upon the view that the plaintiffs had quite enough compulsion upon them from the terms of the Act itself, apart altogether from anything that may have been said or done by officers of Government. Under that compulsion they parted with their money." As I understand it, Kitto, J. is saying that the mere availability to the payee of summary remedies for non-payment may amount to sufficient compulsion on the payer to entitle him to recover irrespective of whether the payee has given any indication that the proposes of excise such remedies. In this view he was alone. Windeyer, J. rejected any idea that mere superiority of position of the defendant was a ground of recovery in the following passage (at 142): "The importance of the matter is that the plaintiffs cannot succeed simply because of the superior position of the defendant. They must go further and establish that there was, in a legal sense, compulsion by something actually done or threatened, something beyond the implication of duress arising from a demand by person in authority, which suffices in a true colore officii case. Further the plaintiffs must establish that they actually paid because of this compulsion, and not voluntarily despite it." He differed from Kitto, J. in his approach to the amount of compulsion necessary in this passage (at 144): "... but the mere appearance on the statute book of a measure providing for penalties and forfeitures does not mean that all moneys collected pursuant to the statute are exorted by the Crown. It is, in my view, necessary for the plaintiffs to do more than point to the provisions of the statute. They must show that the Crown by its servants was exercising, or threatening to exercise, powers under the statute in such a way as to constitute compulsion in law. A threat of proceedings for a pecuniary penalty does not make a payment made thereafter involuntary; for the payer might have defended .the proceedings and relied upon the unlawfulness of the demand (William Whiteley Ltd. v. The King and Wertin v. The Commonwealth (1938) 59 CLR 150). But a payment made under pressing necessity to avoid a seizure of goods, or to obtain the release of goods unlawfully detained, or to prevent some interference with or withholding of a legal right, is compelled and not voluntary and is recoverable in an action for money had and received." I consider that the foregoing reason of Windeyer, J. accords better with prior authority such as Slater v. Burnley Corp. (1888) 59 LT 636, and is to be preferred. Mr. Gardiner founded on a passage in the dissenting judgment of Wilson, J. in Air Canada v. British Columbia (1989) 59 DLR (4th) at 169: "It is, however, my view that payments made under unconstitutional legislation are not `voluntary' in a sense which should prejudice the taxpayer. The taxpayer, assuming the validity of the statute as I believe it is entitled to do, considers itself obligated to pay. Citizens are expected to be law-abiding. They are expected to pay their taxes. Pay first and object later is the general rule." While there may be much to be said for the views expressed in this passage it seems to me with all respect to Wilson, J. that she was stating what she thought the law ought to be rather than what it is. La Forest, J. who delivered the leading judgment on behalf of the majority concluded (at 196) that the rule should be against recovery of ultra vires taxes, at least in the case of unconstitutional statutes" and went on (at 199) to reject the proposition that payment under an ultra vires statutes constituted compulsion. Finally, I refer to two American cases, Fairbanks v. Snow (1887) 13 NE 596 and Atchison Topeka and Santa Fe Rly. Co. v. O'Connor (1912) 223 US

280. In the former the defendant alleged that her signature to a promissory note was obtained by duress and threats on her husband's part. Holmes, J. said (13 NE 596 at 598): "Again, the ground upon which a contract is voidable for duress is the same as the case of fraud, and is that, whether it springs from a fear or a belief, the party has been subjected to an improper motive for action." The latter case was an action to recover taxes paid under duress and protest, the plaintiff contending that the levying statute was unconstitutional, and the defendant contending that payment was voluntary. Holmes, J. said (223 USC 280 at 285-286). "It is reasonable that a man who denies the legality of a tax should have a clear and certain remedy. The rule being established that apart from special circumstances he cannot interfere by injunction with the State's collection of its revenues, an action at law to recover back what he has paid is the alternative left. Of course we are speaking of those cases where the State is not put to an action if the citizen refused to pay. In these latter he can interpose his objections by way of defence, but when, as is common, the State has a more summary remedy, such as distress, and the party indicates by protest that he is yielding to what he cannot prevent, Courts sometimes perhaps have been a little too slow to recognize the implied duress under which payment is made. But even if the State is driven to an action if at the same time the citizen is put at a serious disadvantage in the assertion of his legal, in this case of his Constitutional rights, by defence in the suit, just may require that he should be at liberty to avoid those disadvantages by paying promptly and bringing suit on his side. He is entitled to assert his supposed right on reasonable equal terms." The serious disadvantages to which the plaintiffs could have been put in that action were (1) the possible forfeiture of their right to do business within the State until the tax was paid; Holmes, J. recognized that it might not be possible to establish the forfeiture without quo warranto but considered that even before or until such a proceeding the effect of the clause on the plaintiffs' business could be serious, and (2) the incurring of a penalty which would continue to accrue and accumulate pending litigation should the plaintiffs ultimately fail. Holmes, J. considered that in these circumstances the payment was made under duress. He was there dealing not with summary remedies available to the State to which a citizen had no opportunity to state a defence, but rather to additional consequences which might adversely affect a citizen should he fail in his defence to the claim to the principal sum. These views, which have undoubted attraction, give some support to the Woolwich principle but they are inconsistent with the reasoning in Slater v. Burnley Corp., William Whiteley Ltd. v. R. Twyford v. Manchester Corp. and with that of Windeyer, J. in Mason v. New South Wales. My Lords, that concludes my somewhat prolonged analysis of the main authorities. Running through the authorities is the distinction between voluntary payments and payments made under compulsion or duress--the former being irrecoverable, the latter recoverable. The difference in the various authorities lies in the determinations as to what constitutes compulsion or duress. Although the matter does not arise in this appeal because Woolwich were fully aware of all the relevant circumstances, I cannot help feeling that there is some illogicality in treating as voluntary a payment by someone who justifiably believes that the demand is lawful whereas in fact it turns out to be unlawful. Voluntary to my mind suggests that the payer being aware of all relevant circumstances including the true state of the law or perhaps having a doubt but not caring which way that doubt is resolved consciously makes a decision to pay. Indeed, I very much doubt whether in all cases the distinction between mistake of fact and of law can be justified any longer. Can the reasoning of Lord Ellenbrough, CJ. in Bilbie v. Lumley (1802) 2 East 469, (1775-1802) All ER Rep. 425 be appropriately applied to the complex legislation both primary and subordinate to which the citizen is subject in present times? These are, however, matters for the Law Commission and not for this appeal. Woolwich did not suggest that the difference between the treatment of vountary and compulsory payments. was wrong, rather did the principle involve the proposition that an unlawful demand by the Crown for tax or other similar impost per se implied a measure of compulsion or duress which entitled the payer to recover. My Lords, I have no doubt that the weight of authority is against such a proposition and does not support the Woolwich principle. If this House were to apply such a principle it would involve going beyond what any of the authorities have decided, departing from such decisions as Slater v. Burnley Corp. William Whiteley Ltd. v. R. and Twyford v. Manchester Corp. which have stood for many years and would involve making new law. For reasons to which shall refer later I do not think that we should do that. In reaching this conclusion I desire to express my general agreement with the very careful reasoning of Relph Gibson, L.J. (See (1991) 4 All ER 577, (1991) 3 WLR 790). Further support for the view that there does not exist a principle such as Woolwich contends for is to be found in statutory provisions for the recovery of imports which should not have been paid. The Law Commission consultation paper on the Restitution of Payments made under a Mistake of Law (Law Com no 20), paras. 3.20-3.36 sets out a number of statutory provisions for the recovery of payments made to public authorities. These include such matters as value added tax, excise duty and car tax, income-tax, corporation tax, capital gains tax, petroleum revenue tax, inheritance tax, stamp duty, social security contributions and community charges. I do not propose to refer to the various provisions in detail. If the Woolwich principle comprehends payments made, under a mistake of law then such payments are also covered by the statutory provisions. If the principle does not comprehend such payments, as the majority of the Court of Appeal held to be the case, then there are other situations covered by the provisions which would also be within the ambit of the Woolwich principle. The importance of these statutory provisions appears to me to be that Parliament has considered at various times and in various contexts the need for recovery of imposts paid but not due and has legislated in a manner which suggests that no such general principle as Woolwich contends for was thought to be in existence. It is in this context relevant to mention briefly section 9 of the General Rate Act, 1967 which provided that an amount paid in respect of rates and not recoverable apart from this section could properly be refunded on five specified grounds, some of which would fall within the Woolwich principle. In Town Hamlets Lodon BC v. Chetnik Developments Ltd. (1988) 1 All ER 961 at 967, (1988) AC 858 at 873 874 Lord Bridge explained the principle underlying the section as follows: "But, to articulate the apparent principle underlying the section more precisely it is surely envisaged in each of the five cases where the section authorises refunds of amounts paid in respect of rates which would otherwise be irrecoverable that the rate payer who has paid rates in compliance with a demand note which he might have successfully resisted may appropriately be relieved of the consequences of his oversight." This passage is interesting as it assumes that there would have been no right of recovery in any of the cases to which the section referred although had the Woolwich principle been applicable there would have been recovery, apart from the section, in some. Mr. Gardiner submitted as an alternative that even if the Woolwich principle did not apply, nevertheless the payment to the Revenue was made under duress and was therefore, recoverable. He accepted that his submissions on duress were substantially subsumed in his primary argument but he maintained that a threat by the Crown to sue put Woolwich on unequal terms and that this was sufficient to constitute duress. Nolan, J. rejected this argument as did Ralph Gibson and Butler-Sloss LJJ (see (1991) 4 All ER 577 at 617 at 617-618, 637, (1991) 3 WLR 790 at 833-834, 855). Nolan, J. referred to Winderyer, J. 's definition of colore officii and continued ((1989) STC 111 at 117, (1989) 1 WLR 137 at 144): "There is, however, an analogous and broader principle embracing demands for money by the Crown or public authorities which come under the heading of duress because of the nature of the sanctions levied or threatened against the subject if he refuses to pay. This principle has been applied; and the money held to be recoverable, in cases where the sanction has amounted to duress of the person of the subject or of his goods. The principle does not, however, apply if the sanction involves only the institution of legal proceedings for the recovery of the money and penalties. These propositions are illustrated by the decisions in William Whiteley Ltd. v. R. and in the Mason case." He said ((1989) STC 111 at (1989) 1 WLR 137 at 146): "The potential cost to Woolwich of refusing to pay in terms of damage to reputation and interest liabilities may have been commercially unacceptable but I cannot regard it as involving duress on the part of Revenue. The position might be different if Woolwich had paid under threat of the Revenue taking distress proceedings without a Court order under section 61 of the Taxes Management Act, 1970, but as I have said there is no evidence that such drastic and highly unusual proceedings were either threatened by the Revenue or anticipated by Woolwich, still less that Woolwich had a reasonable apprehension of being put out of business by them." Nolan, J.'s reference to duress on the part of the Revenue is important because the duress with which the law is concerned is that exerted by the defendant and not that exerted by extraneous circumstances such as general commercial considerations. Duress to be relevant must be found within the four walls of the transaction. In this case Woolwich would, in relation to the Revenue, have been no worse off if they had refused payment of the tax claimed and raised the defence which subsequently proved successful. I, therefore, agree with Nolan, J. and the majority of the Court of Appeal that Woolwich are not entitled to recover on the ground of duress. That is sufficient for the disposal of this appeal which I would allow albeit with no little regret. The Revenue obtained a huge sum of money which they had no right to demand and they are now hanging on to a very large amount of interest which they have no moral right to retain. In Sebel Products Ltd. v. Customs and Excise Comrs. (1949) 1 All ER 729 at 731-732, (1949) Ch. 409 at 413 Vaisey, J. said: "By the Crown Proceedings Act, 1947, section 21(1), the defendants are placed in the same position as the ordinary subjects of the Crown and I see no reason why they should not in appropriate cases refuse to refund money paid to them voluntarily under a mistake of law as the revenue authorities were held to be entitled to do in the case of William Whiteley, Ltd. v. R and National Pari-Mutuel Assocn. Ltd. v. R. At the same time I cannot help feeling that the defence is one which ought to be used with great discretion, and that for two reasons. First, because the defendants, being an emanation of the Crown, which is the source and fountain of justice, are, in my opinion, bound to maintain the highest standards of probity and fair dealing comparable to those which the Courts, which derive their authority from the same source and fountain, impose on the officers under their control: see Re: Tyler ((1907) 1 KB 865, (1904-7) All ER Rep. 181:" In Tower Hamlets London BC v. Chetnik Developments Ltd. (1988) 1 All ER 961 at 970, (1988) AC 858 at 877 Lord Bridge referred to:-- " .... the broader consideration that Parliament must have intended rating authorities to act in the same high-principled was expected by the Court of its own officers and not to retain rates paid under a mistake of law, or on an erroneous evaluation ... unless there were, as Parliament must have contemplated there might be in some cases, special circumstances in which a particular overpayment was made such as to justify retention of the whole or part of the amount overpaid." These observations are in my view equally applicable to the Revenue and to sums by way of principal or interest retained by them. If it could have seen a respectable way to dismiss this appeal I should have been happy to do so. However, as I have already remarked, I do not consider that it would be appropriate for this House to make new law in this instance. In Glasgow Corp. v. Lord Advocate 1959 SC 203 at 230 the Lord President (Lord Clyde) pointed out the problems which could arise if there were a wholesale opening up of prior transactions and Ralph Gibson, LJ clearly had such problems in mind when he summarised his reasons (see (1991) 4 All ER 577 at 631, (1991) 3 WLR 790 at 849). The application of the Woolwich principle in the present case might well create no administrative difficulties inasmuch the payment was made under protest and was almost immediately followed by an application for judicial review. The Revenue were thus aware from the outset that the validity of their demand was being challenged. The position would have been very different in the case of a payment made some years before which was sought to be recovered because a Court in another case had ruled that the regulation under which the demand had been made had all along been ultra vires. There is in theory a good deal to be said for the submission of Professor, Briks in his Introduction to the Law of Restitution (1985) P.295 that a payer should be able to recover payments demanded ultra vires by a public authority on the sole ground that retention of such payment would infringe the principle of "no taxation without Parliament" enshrined in the Bill of Rights (1688). However, it is clear that in practice some limitation would have to be imposed on any such principle. During the course of argument Mr. Gardiner suggested certain alternative modifications to the Woolwich principle as initially enunciated by him. First and foremost he maintained that a mistake of law would be no defence to the application of the principle but as alternatives he submitted that the principle would be subject to the mistake of law defence or that the defence or mistake of law should be abrogated altogether. He also sought to draw a distinction between an unlawful demand made under an ultra vires instrument and one made under an intra vires instrument which was misconstrued or misapplied. A distinction which I consider to be without a difference. Public authorities are creatures of statute and can do no more than the statute permits them to do. A demand by such an authority under an ultra vires regulation is no more or no less unlawful than a demand under a valid regulation which does not apply to the situation in which the demand is made. I mention these matters because they show that to accept the Woolwich principle in one or other of its forms would appear to involve a choice of what the law should be rather than a decision as to what it is. To apply the Woolwich principle as initially enunciated without limitation could cause very serious practical difficulties of administration and specifying appropriate limitations presents equal difficulties. For example, what, if any, knowledge is required on the part of a payer at the time of payment to entitle him to recovery at a later date? Or how long should any right to repayment last? Is it in the public interest that a public authority's finances should be disrupted by wholly unexpected claims for repayment years after the money in question has been received? These are all matters which would arise in any reform of the law to encompass some such principle as Woolwich contends for and are matters with which the legislature is best equipped to deal. LORD BROWNS-WILKINSON:

My Lords, in this case your Lordships are all agreed that, as the law at present stands, tax paid under protest in response to an ultra vires demand is not recoverable at common law. The authorities are fully analysed in the speeches of my noble and learned friends Lord Keith, Lord Jauncey and Lord Goff and I agree with those analyses. The issue which divides your Lordships is whether this House should now reinterpret the principles lying behind the authorities so as to give a right of recovery in such circumstances. On that issue, I agree with my noble and learned friend Lord Goff that, for the reasons he gives, it is appropriate to do so. Although as yet there is in English Law no general rule giving the plaintiff a right of recovery from a defendant who has been unjustly enriched at the plaintiff s expense, the concept of unjust enrichment lies at the heart of all the individual instances in which the law does give a right of recovery. As Lord Wright said in Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. (1942) 2 All ER 122 at 135, (1943) AC 32 at 61: "The claim was for money paid for a consideration which had failed. It is clear that any civilised system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep. Such remedies in English Law are generically different from remedies in contract or in tort, and are now recognized to fall within a third category' of the common law which has been called quasi- contract or restitution." In the present case the concept of unjust enrichment suggests that the plaintiffs should have a remedy. The Crown demanded and received payment of the sum by way of tax alleged to be due under regulations subsequently held by your Lordships' House to be ultra vires (see (1991) 4 All ER 92, (1990) 1 WLR 1400). The payment was made under protest. Yet the Crown maintains that it was under no legal obligation to repay the wrongly extracted tax and in consequence is not liable to pay interest on the sum held by it between the date it received the money and the date of the order of Nolan, J. If the Crown is right, it will be enriched by the interest on money to which it had no right during that period. In my judgment, this is the paradigm of a case of unjust enrichment. As in so many other fields of English law, the occasions on which recovery is permitted have been built up on a case by case basis. For present purposes there are in my judgment two streams of authority relating to moneys wrongly extracted by way of impost. One stream is founded on the concept that money paid under an ultra vires demand for a tax or other impost has been paid without consideration. The other stream is based on the notion that such payments have been made under compulsion, the relative positions and powers of the two parties being unequal. The stream based on the concept of payment without consideration stems from what Lord Mansfield, CJ. said in Campbell v. Hall (1774) 1 Cowp 204, (1558-1774) All ER Rep. 252 and is reflected in the decision in Dew v. Parson (1819) 2 B & Ald 562,106 ER

471. In Steele v. Williams (1853) 8 Exch. 625 at 632, 155 ER 1502 at 1505 Martin B said that the payment in that case was not a voluntary payment but was more like the case of money paid without consideration'. In Queens of the River Steamship Co. Ltd. v. River Thames Conservators (1899)15 TLR 474 Phillimore, J. founded his decision on the fact that there was no consideration for the payment. Although this stream seems subsequently to have run into the sand, I find the approach attractive: money paid on the footing that there is a legal demand is paid for a reason that does not exist if that demand is a nullity. There is in my view a close analogy to the right to recover money paid under a contract the consideration for which has wholly failed. The other stream, based on compulsion, stems from Morgan v. Palmer (1824) 2 B & C 729, 107 ER 554 and the majority decision in Steele v. Williams. In their inception, these authorities were based on the fact that the payer and payee were not on an equal footing and it was this inequality which gave rise to the right to recovery. However, most of the cases which arose for decision were concerned with payments extracted ultra vires by persons who in virtue of their position could insist on the wrongful payment as a precondition to affording the payer his legal rights, i.e. they were payments colore officii. In consequence, the Courts came to limit the cases in which recovery of an ultra vires impost was allowed to cases where there had been an extraction colore officii. I can see no reason in principle to have restricted the original wide basis of recovery to this limited class of case. In my judgment, as a matter of principle the colore officii cases are merely examples of a wider principle, viz. that where the parties are on an unequal footing so that money is paid by way of tax or other impost in pursuance of a demand by some public officer, these moneys are recoverable since the citizen is, in particie, unable to resist the payment save at the risk of breaking the law or exposing himself to penalties or other disadvantages. In my view the principle is correctly expressed by Holmes, J. in Atchison Topeka and Santa Fee Rly. Co. v. O'Connor (1912) 223 US 280 at 285-286, where he said: "It is reasonable that a man who denies the legality of a tax should have a clear and certain remedy. The rule being established that apart from special circumstances he cannot interfere by injunction with the State collection of its revenues, an action at law to recover back what he has paid is the alternative left. Of course we are speaking of those cases where the State is not put to an action if the citizen refuses to pay. In these latter he can interpose his objections by way of defence, but when, as is common, the State has a more summary remedy, such as distress, and the party indicates by protest that he is yielding to what he cannot prevent, Courts sometimes perhaps have been a little too slow to recognize the implied duress under which payment is made. But even if the State is driven to an action, if at the same time the citizen is put at a serious disadvantage in the assertion of his legal and in this case of his Constitutional rights, by defence in the suit, justice may require that he should be at liberty to avoid those disadvantages-by paying promptly and bringing suit on his side. He is entitled to assert his supposed right on reasonably equal terms." In cases such as the present both the concept of want of consideration and payment under implied compulsion are in play. The money was demanded and paid for tax, yet no tax was due: there was a payment for no consideration. The money was demanded by the State from the citizen any the inequalities of the parties' respective positions is manifest even in the case of a major financial institution like the Woolwich Building Society. There are, therefore, in my judgment sound reasons by way of analogy for establishing the law in the scene which Lord Goff proposes. I agree with him that the practical objections to taking this course are not sufficient to prevent this House from establishing the law in accordance with both principle and justice. I too therefore, would dismiss this appeal. LORD SLYNN OF HADLEY.

My Lords, the respondents to this appeal, the Woolwich Building Society (Woolwich), paid to the Inland Revenue (Commissioners almost h57m pursuant to demands made under the Income Tax (Building Societies) Regulations, 1986, Act, 1 S.I. 1986/482. They did so under protest that the money was not due because the 1986 Regulations were ultra vires and void. They immediately began proceedings for judicial review to challenge the validity of the 1986 Regulations. In those proceedings they succeeded (see (1991) 4 All ER 92, (1990) 1 WLR 1400, HL: affg (1987) STC 654 Nolan, J.). The Revenue repaid the amount of the tax and interest which accrued subsequent to the date of the decision of Nolan, J. on 31st July, 1987, but refused to pay interest prior to that date contending that the principal sum could not be recovered as a debt under section 35-A of the Supreme Court Act, 1981. In these proceedings Woolwich claims interest from tire-date of payment to 31st July, 1987 amounting in total to some Ł 6.7m. The question on the appeal can be stated shortly. Does the citizen have the right to recover from the Revenue money demanded by the Revenue and paid by him, which was not due in law because the demand was ultra vires? It is however, short, a question of fundamental importance. Many authorities been cited. These have been considered in depth in the judgments of the 'Court of Appeal and in the speeches of my noble and learned friends Lord Keith and Lord Jauncey; the principles to be derived from them have been analysed by my noble and learned friend Lord Goff. I have had the advantage of reading those speeches and it seems appropriate that I should set out my conclusions without repeating in detail the facts and points for decision in those authorities. It is convenient, however, before turning to the central question, to deal with a number of other issues which have arisen in argument. In the first place this tax was not, in my view, paid pursuant to a contract that if the money was held not to have been payable it would then fall due to be repaid, -thus excluding any right to interest before Nolan, J.'s decision. It was paid and accepted without prejudice to Woolwich's contention that it was never due and to any right to recover any payments made pursuant to the 1986 Regulations (see the letters of 12th and 23rd June, 1986 between Woolwich and the Revenue). Second, this is not a case where the tax was paid under a mistake of law made by the payer and the Revenue thus cannot, and does not, rely on the authorities which rule that a claim for money had and received does not lie where they were paid under a mistake of law. It is thus not necessary in this case to consider whether that rule is well-founded, though it seems to me that it is open to review by your Lordships' House. Third there is, as I see it, no-statutory provision on which Woolwich can rely to reclaim this money or any interest. Section 33 of the Taxes Management Act, 1970, even if it applies to composite rate tax, is not applicable for a number of reasons, not least that no valid assessment could be made under an invalid regulation, that no assessment was in fact made and that, even if made, the assessment could not on the facts of the present case have been said to be "excessive by reason of some error or mistake in a return". In other areas Parliament has specifically provided that tax paid which was not lawfully due to be paid may be recovered and it has laid down the machinery and the conditions for repayment, including the payment of interest. None of these other statutory provisions applies to the present case. I do not consider that the fact that Parliament has legislated extensively in this area means that no principle of recovery at common law can or should at this stage of the development of the law be found to exist. If the principle does exist that tax paid on a demand from the Crown when the tax was the subject of an ultra vires demand can be recovered as many had and received then, in my view, it is for the Courts to declare it. In so doing they do not usurp the legislative function. I regard the proper approach as the converse. If the legislature finds that limitations on the common law principle are needed for reasons of policy or good administration then they can be adopted by legislation, e.g. by a short limitation period, presumptions as to validity, even (which I mention but do not necessarily think appropriate since the matter has not been discussed) a power in the Courts to limit the effect of any order for recovery comparable to that conferred on the Court of Justice of the European Communities by Article 174 of the EEC Treaty. Because of the other legislative provisions dealing with repayment of various taxes it seems in any event that the number of cases where any principle of common law would need to be relied on is likely to be small. The "floodgates" arguments is therefore, not a persuasive one in this case. If it were a risk, then the Revenue would need to consider appropriate legislation. Finally, the Crown has contended that the proper procedure was for Woolwich to seek to challenge its decision not to pay interest by way of judicial review, although it would of course contend that no order should be made on such a review in the present case. I do not accept this. If a claim lies for money had and received, judicial review adds nothing. If the money falls in law to be repaid, a direct order for its repayment is more appropriate than a declaration that it should be repaid or an order setting aside a refusal to repay it. Moreover, if it is right here that the tax was repaid as a matter of extra statutory discretion, and interest from the date of Nolan, J.'s order was paid on the same basis, it is not clear to me how a review of the discretionary refusal to pay interest which was not due in law can properly be examined by way of judicial review. The cases cited, and referred to in depth by my noble and learned friends, have proceeded on the basis that on the one hand money paid under a mistake of fact or under duress or as it is said "colore officii" can be recovered, whereas money paid under a mistake of law or voluntarily "to close a transaction" or to avoid threatened litigation cannot. The present case does not fall clearly into any of these separate categories. On the one hand, so as to exclude recovery, the present was not a payment made under mistake of law nor was there any payment to avoid threatened litigation. It is quite impossible to say that Woolwich paid to close a transaction since it protested that it was not liable and it immediately sought to establish that the regulation was void. On the other hand none of the conditions which permits recovery was satisfied. There was no mistake of fact. There was no duress in a sense of an actual or threatened interference with the person or property of Woolwich as occurred in many of the cases (though I am of the view that the notion of duress or coercion should not be narrowly confined). There was no strictly a demand colore officii in the sense defined by Windeyer, J. in Mason v. New South Wales (1959)102 CLR 108 at

140. It thus has to be accepted that none of the cases cited provides in its ratio a decisive basis on which Woolwich can rely to support its claim. As Mr. Glick QC for the Crown showed, Campbell v. Hall (1774) 1 Cowp 204, (1558 1774) All ER Rep. 252 which appears to be favourable to Woolwich was really concerned with Constitutional issues rather than with the present question. Steele v. Williams (1853) 8 Exch. 625,155 ER 1502. Great Western Rly. Co. v. Sutton (1869) LR 4.HL 226, Morgan v. Palmer (1824) 2 B & C 729, 107 ER 554, Maskell v. Horner (1915) 3 KB 106, (1914-15) All ER Rep. 595, Sargood Bros. v. Commonwealth (1910) 11 CLR 258 and Mason v. New South Wales (1959) 102 CLR 108 were all concerned with claims for money paid under compulsion or colore officii. Yet in my view there is nothing in the authorities which precludes your Lordships' House from laying down that money paid by way of tax following an ultra vires demand by the Revenue is recoverable. On the other hand, there are in some cases statements of principle in general terms, which do not form part of the ratio decidendi and in others statements in dissenting judgments which it seems to me should be considered when the present question has to be resolved. Thus, Lord Mansfield, CJ. said in Campbell v. Hall (1774) 1 Cowp 204 at 205, (1558-1774) All ER Rep. 252 at 253: "The action is an action for money had and received; and it is brought upon this ground; namely, that the money was paid to the defendant without any consideration; the duty, for which, and in respect of which he received it, not having been imposed by lawful or sufficient authority to warrant the same." Lord Mansfield, CJ. said further in Moses v. Macferlan (1760) 2 Burr 1005 at 1012, (1558-1774) All ER Re. 581 at 585: "In one word, the gist of this kind of action (for money had and received) is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money." In Morgan v. Palmer (1824) 2 B & C 729 at 734-735, 107 ER 554 at 556 Abbott, CJ. said: 'Then as to the last point. It has been well-argued that the payment having been voluntary, it cannot be recovered back in an action for money had and received. I agree that such a consequence would have followed had the parties been on equal terms. But if one party has the power of saying to the other, `that which you require shall not be done except upon the conditions which I choose to impose', no person can contend that they stand upon any thing like an equal footing. Such was the situation of the parties to this action." In Steele v. Williams (1853) 8 Exch. 625 at 632-633, 155 ER 1502 at 1505 Martin B said: "As to whether the payment was voluntary, that has in truth nothing to do with the case. It is the duty of a person to whom an Act of Parliament gives fees, to receive what is allowed, and nothing more. This is more like the case of money paid without consideration

to call it a voluntary payment is an abuse of language. If a person who was occupied a considerable time in a search gave an additional fee to the parish clerk, saying, "I wish to make you some compensation for your time, `that would be a voluntary payment. But where a party says, `I can charge you such a sum by virtue of an Act of Parliament', it matters not whether the money is paid before or after the service rendered; if he is not entitled to claim it, the money may be recovered back." In A-G v. Wills United Dairies Ltd. (1921) 337 TLR 884 at 887 Atkin IJ said: "It makes no difference that the obligation to pay the money is expressed in the form of an agreement. It was illegal for the Food Controller to require such an agreement as a condition of any licence. It was illegal for him to enter into such an agreement. The agreement itself is not enforceable against the other contracting party; and if he had paid under it he could, having paid under protest, recover back the sums paid, as money had and received to his use." Finally, amongst the English cases I refer to Lord Wright's statement in Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. (1942) 2 All ER 122 at 135, (1944) AC 32 at 61: "The claim was for money paid for a consideration which had failed. It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is, to prevent a man from retaining the money of, or some benefit derived from, another which it is against conscience that he should keep. Such remedies in English law are generically different from remedies in contract or in tort, and are now recognized to fall within a third category of the common law which has been called quasi contract or restitution." There are passages from other common law jurisdictions. Thus in Mason v. New South Wales (1959)102 CLR 108 Dixon, CJ. clearly had doubts as to whether it was right that money paid pursuant to an unlawful demand of the Crown should not be recoverable. Kitto, J. (at 129) considered it sufficient that

"the plaintiff had quite enough compulsion upon them from the terms of the Act itself, apart altogether from anything that may have been said or done by officers of Government. Under that compulsion they parted with their money." This was a lone voice but his view reflects the sort of pressure which compels the taxpayer to pay even on an unlawful demand by the Revenue. A similar lone voice is to be found in the recent judgments of the Supreme Court of Canada in Air Canada v. British Columbia (1989) 59 DLR (4th) 161 at 169 1.70. Extracts from the forceful judgment of Wilson, J. have been set out by my noble and learned friends Lords Keith- and Lord Jauncey. I repeat that they are part of a dissenting judgment but if one is to consider what principle of law is to be applied in an area where there is no direct authority of your Lordships' House, it is relevant to have regard to them. At the end of the day I find that the statement of Holmes, J. in Atchison Topeka and Santa Fe Rly. Co. v. O'Connor (1912) 223 US 280 at 285 287 to be particularly persuasive when considering the principle of law to be applied. Holmes, J. said:-- "It is reasonable that a man who denies the legality of a tax should have a clear and certain remedy. The rule being established that apart from special circumstances he cannot interfere by injunction with the State's collection of its revenues, an action at law to recover back what he has paid is the alternative left. Of course we are speaking of those cases where the State is not put to an action if the citizen refuses to pay. In these latter he can interpose his objections by way of defence, but when, as is common, the State has a more summary remedy, such as distress, and the party indicates by protest that he is yielding to what he cannot prevent, Courts sometimes perhaps have been a little too slow to recognize the implied duress under which payment is made. But even if the State is driven to an action, if at the same time the citizen is put at a serious disadvantage in the assertion of his legal, in this case of his Constitutional rights, by defence in the suit, justice may require that he should be at liberty to avoid those disadvantages by paying promptly and bringing suit on his side. He is entitled to assert his supposed right on reasonable equal terms ... As appears from the decision below, the plaintiff could have had no certainty of ultimate success, and we are of opinion that it was not called upon to take the risk of having its contracts disputed and its business injured and of finding the tax more or less nearly doubled in case it finally had to pay. In other words, we are of opinion that the payment was made under duress." With these passages in mind it is well to recall the circumstances in which Nolan, J. found that Woolwich paid. They are set out strikingly in his judgment (see (1989) STC 111 at 115-116, (1989) 1 WLR 137 at 142-143): "The factors which induced Woolwich to make the payments are set out in Mr. Mason's affidavit dated 1st December, 1987 and may be summarized as follows. First and foremost, the requirements of the regulations as amplified in communications from the Revenue amounted on their face to lawful demands from the Crown. Woolwich would have expected any refusal of payment to lead to collections proceedings which would have been gravely embarrassing for Woolwich, the moreso as it would have been the only building society refusing to pay. Any publicity suggesting that Woolwich might be in difficulty in meeting its financial obligations, or that alone amongst building societies it was pursuing a policy of confrontation with the Crown, might have damaging effects far outweighing Woolwich's prospects of success on the issue of principle. Second, Woolwich feared that if it failed in its legal arguments it might incur penalties. Third, the three payments to which I have referred formed parts of larger quarterly payments, the other parts of which were agreed to have been correctly charged. At the time when the payments were made, it had not been possible to identify the amounts in dispute. Fourth, Woolwich was not, of course, to know at the time of payments that it would succeed in the judicial review proceedings. Had Woolwich failed in those proceedings, it would have faced a bill for interest, which would not have deductible for tax purposes, in an amount far exceeding the net return which Woolwich could have obtained from investing the money withheld." The Judge added that if Woolwich had not paid there might have been an assessment or a writ "with the result in either case of highly undesirable publicity for Woolwich if it had withheld the very large sums claimed by the Revenue to be due". There was an understandable fear by Woolwich of damage to its reputation. He concluded: "I `accept, as a practical matter, Woolwich had little choice but to make the three payments:" Although as I see it the facts do not fit easily into the existing category of duress or of claims colore officii, they shade into them. There is a common element of pressure which by analogy can be said to justify a claim for repayment. If I felt compelled to hold that the taxpayer in this case could not recover I would share the no little regret expressed by my noble and learned friend Loid Jauncey. With great defence .to him and to Lord Keith I. do not, however, feel so constrained by authority, by statute or by principle. I find it quite unacceptable in principle that the common law should have no remedy for a taxpayer who has paid large sums or any sum of money to the Revenue when those sums have been demanded pursuant to an invalid regulation and retained free of interest pending a decision of the Courts. It is said that William Whiteley Ltd. v. R (1909) 101 LT 741, (1908-10) All ER Rep. 639 and Twyford v. Manchester Corp. (1946) 1 All ER 621, (1946) Ch. 2.36 are authorities to the contrary. I consider that they are cases where payments were made to close a transaction and are to be treated as cases of voluntary payments. If they were not, in my view they were wrongly decided and they should not influence your Lordships' decision. Accordingly I consider that Glidewell and Butler-Sloss, LJJ were right to conclude that money paid to the Revenue pursuant to a demand which was ultra vires can be recovered as money had and received. The money was repayable immediately it was paid. I do not however, agree that this principle cannot apply where there is mistake of law. That is the situation where the relief is most likely to be needed and if it is excluded not much is left. This is not a case where the demand was based on an erroneous interpretation of legislation by the Revenue; my provisional view is that there is no distinction between such a case and a case like the present where the demand is based on ~ an invalid regulation and is, therefore, ultra vires. That does not have to be decided in this case, nor is it necessary to consider what defences would be open to such a claim for recovery of the money paid if it lay. My Lords, for the reasons given I would, however, dismiss this appeal. Appeal dismissed with costs. M.BA./501/F.C. Appeal dismissed.