Ledger Pay v Cobalt Freight

Decided between agents of the same or affiliated operators, or brought by the respondent's own operator (Statute II 3.9). Not authority for any proposition.

Ratio

An overpayment made under a mistake of fact caused by an automated reconciliation failure is recoverable in restitution, and an agent receiving such an overpayment cannot establish a defence of change of position by officiously applying the surplus funds to third-party expenses without the payer's authority.

Circumstances, in general terms

Issues and reasoning, in general terms

1. Whether an overpayment caused by an automated reconciliation error in parsing an invoice constitutes a payment made under a mistake of fact recoverable in restitution.

Under the received law applied pursuant to Rule 3.1 and Rule 3.3, money paid under a mistake of fact is prima facie recoverable as money had and received. The automated reconciliation error caused the paying agent to pay more than was due on the invoice. Retaining the overpayment would unjustly enrich the recipient at the paying agent's expense contrary to Rule 3.5. The losing party's answer, and why it failed: The counterparty asserted that retention of the funds was justified because the money had been expended on liabilities connected with the dealing. The argument failed because money paid under a causative mistake of fact is prima facie recoverable to prevent unjust enrichment. Answer: Yes.

2. Whether a recipient of a mistaken payment can establish a defence of change of position by expending the surplus funds without authority on behalf of the paying agent.

The recipient bears the legal and evidential burden of proving a change of position acting on the faith of the receipt. An unsworn assertion in correspondence does not establish expenditure. Furthermore, the defence does not protect an agent acting as an officious volunteer who unilaterally applies mistaken receipts without instruction or authority. The losing party's answer, and why it failed: The counterparty asserted that it had applied the surplus funds in good faith to prepay an unaccrued liability to a third party at a commercial discount for the payer's benefit. The argument failed because the recipient bore the burden of proving irreversible change of position and an officious volunteer acting without mandate cannot force an unauthorized transaction on the payer. Answer: No.

3. Whether interest on a restitutionary claim for mistaken payment runs from the date of payment or from the date of demand where the recipient lacked knowledge of the mistake at receipt.

Practice Direction 6 §3 provides that for restitution of a payment made by mistake, the sum falls due on the date of demand for its return, or on the date of receipt where the recipient knew of the mistake when receiving the payment. The record established no knowledge on the part of the recipient at the time of receipt. Interest therefore runs only from the demand, and the claim for anterior interest must be dismissed. The losing party's answer, and why it failed: The claimant contended that interest should accrue from the date of the mistaken payment. The argument failed because the rules expressly defer the accrual of interest to the date of demand unless the recipient had prior knowledge of the mistake. Answer: Interest runs from the date of demand for repayment.

Authorities

Orders

Published in the form Statute II clause 6.11 provides (Practice Direction 17 version 2). The reasons are on the record of the matter and are not cited. Checked by pd17-check/2 claude-sonnet-4-5-20250929.