Royal Bank of Scotland v Watt [1990] ScotCS CSIH_2 (06 November 1990)

Royal Bank of Scotland v Watt [1990] ScotCS CSIH_2 (06 November 1990)

The Inner House held that the pursuers' claim was properly one of repetition based on condictio indebiti, as the payment was made under a mistake. The defender had the benefit of the funds once credited to his account and could dispose of them as he wished. The onus was on the defender to show that it would be inequitable to require repayment, which he failed to do, having acted unreasonably and without sufficient inquiry into the suspicious transaction. The equities favored the pursuers, who were innocent victims of fraud. Accordingly, the pursuers were entitled to decree for the full sum claimed.

Citation
[1990] ScotCS CSIH_2
Parties
Pursuer: Royal Bank of Scotland plc; Defender: Watt
Jurisdiction
Scotland
Judgment Date
06 November 1990
Procedural Posture
Civil / Appeal (reclaiming Motion) From Lord Ordinary to Inner House
Outcome
Appeal allowed; decree for pursuers for full sum with interest; defender's pleas repelled.
Legal Topics
Condictio Indebiti, Repetition, Unjust Enrichment, Equitable Remedies, Mistaken Payment, Banking Fraud
Contract Law Restitution Banking Law Condictio Indebiti Repetition Unjust Enrichment Equitable Remedies Mistaken Payment +1 more

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Parties

Royal Bank of Scotland plc

Pursuer

Watt

Defender

Procedural Posture

Civil / Appeal (reclaiming Motion) From Lord Ordinary to Inner House

Legal Issues

  1. 1 Whether the defender is liable to repay a sum paid to him by the pursuers under a mistake, where the payment resulted from a fraud and the defender claims not to have benefited from the payment.
  2. 2 Whether, in an action for repetition based on condictio indebiti, the pursuer must prove that the defender was enriched (lucratus), or whether the focus is on whether it would be inequitable for the defender to retain the money.

Ratio Decidendi

The Inner House held that the pursuers' claim was properly one of repetition based on condictio indebiti, as the payment was made under a mistake. The defender had the benefit of the funds once credited to his account and could dispose of them as he wished. The onus was on the defender to show that it would be inequitable to require repayment, which he failed to do, having acted unreasonably and without sufficient inquiry into the suspicious transaction. The equities favored the pursuers, who were innocent victims of fraud. Accordingly, the pursuers were entitled to decree for the full sum claimed.

Court Disposition

Appeal allowed; decree for pursuers for full sum with interest; defender's pleas repelled.

Orders

  • Recall of Lord Ordinary's interlocutor.
  • Sustain first two pleas-in-law for pursuers.