Commonwealth v Butler

The Commonwealth of Australia sought to recover from Mr. Butler a sum of money it had paid to him by mistake. The dispute concerned whether Mr. Butler was legally obliged to repay the mistaken payment, which arose from an error in calculating his entitlement to a pension. The matter was heard by the High Court of Australia.

The central legal issue before the High Court was whether the Commonwealth was entitled to recover money paid under a mistake of fact, notwithstanding that the recipient had no knowledge of the mistake and had acted in good faith. Specifically, the Court had to consider the application of the common law principles governing recovery of money paid by mistake, and whether any equitable considerations or statutory provisions altered this position.

The High Court held that the common law right to recover money paid by mistake of fact is not defeated by the recipient's lack of knowledge or good faith. The Court affirmed the principle that where money is paid under a mistake of fact, the payer is entitled to recover it, unless the payee has, in reliance on the payment, changed their position in such a way that it would be inequitable to require repayment. In this instance, the Court found that Mr. Butler had not demonstrated any change of position that would render repayment inequitable.

The High Court ordered that the Commonwealth was entitled to recover the sum paid to Mr. Butler by mistake.