Opinion Number. 1335


RECOVERY OF MONEY PAID UNDER MISTAKE OF FACT Recovery of commonwealth war pension paid under mistake of fact

Key Legislation


The Chairman, Repatriation Commission

The Chairman of the Repatriation Commission has forwarded for advice the following memorandum:

  • The Repatriation Commission would be glad if the Solicitor-General would express an opinion on this case. The following is a resume:
  1. A. was invalided from the Royal Naval Reserve (Imperial) on the 9th August, 1916, on account of insanity in respect of which he was granted a pension by the Imperial authorities. Shortly after he migrated to Western Australia, where he subsequently enlisted in the Australian Imperial Force, but after a period of service extending over a few weeks only he was discharged suffering from delusional insanity, which the Army Medical Officers stated was not in any way attributable to his service in the A.I.F. A., however, lodged a claim for payment of a Commonwealth war pension and through an oversight he was granted a pension at the maximum rate by the previous Administration as from the day following his discharge, 22.1.18.
  2. The irregularity of the grant was not discovered until March last, when it was ascertained that the British Ministry of Pensions had granted A. a pension of 27/6 per week for the period 11.6.18 to 2.9.19 and 40/- weekly from 3.9.19 until his discharge from the Hospital for Insane where he has been an inmate ever since his discharge from the A.I.F.
  3. In view of the fact that the pension was granted in error further payments were suspended and the Accountant of the Office of the Official Trustee was interviewed in order to discover whether there were any prospects of recovering the amount paid. It was ascertained that A. has a credit with that office which exceeds the amount of the Commonwealth pension paid, viz. £451.6.7. The Official Trustee, however, queries the Commission’s power to claim a refund. He points out that section 28 of the Act gives power to review any assessment or determination, but apparently gives no power of authority to make such review or determination retrospective.
  4. The Commission would therefore be glad if the Solicitor-General would be good enough to advise it on the point raised by the Official Trustee.
  5. The relative file is being forwarded herewith for perusal.

It is an established rule of law that money paid under a mistake of fact may, subject to certain restrictions (which need not, I think, be considered here), be recovered by the payer. (See Halsbury’s Laws of England Vol. 21, pp. 29–31).

A mistake would, in my opinion, be deemed to have occurred when the payer, at the date of payment, was ignorant of the real facts (Ibid. at p. 30, paras. 56, 57).

Further, even if the facts had once been known by the payer, but had been forgotten, it appears that the payer may recover moneys paid by reason of his having forgotten the facts (Ibid. p. 30, para. 56).

In the case of F., the Commonwealth was not, at the respective dates of payment aware of his right to an Imperial pension. A. stated, however, in his application for pension dated the 5th January, 1918, that he was in receipt of a pension of 7/6d. per week from the Admiralty.

By reason of the payment to A. of an Imperial pension the Commonwealth’s liability (if any) to pay him a pension under the Australian Soldiers’ Repatriation Act was reduced. (See para. (c) of proviso to section 23).

It appears, however, that the Commonwealth was not, at any time, liable to pay A. a pension, as his incapacity was not attributable to his service in the Commonwealth Naval or Military Forces. That fact was known to the Commonwealth at the respective dates of payment, but appears to have been overlooked. Provided, therefore, that the fact was merely forgotten, and there was no clear intention to pay, notwithstanding the existence of that fact, I think that it would be held that the payment was made under a mistake of fact.

In my opinion, although very little care appears to have been taken to ascertain the exact liability of the Commonwealth in A.’s case, proceedings by the Commonwealth to recover the amount paid to A. under the Australian Soldiers’ Repatriation Act would be successful.

[Vol. 20, p. 190]