england-and-wales theft debt is-x-legal hypothetical
Can you keep money that was refunded in error?
<p>If a person pays a debt due to a company, and gets a receipt showing the debt has been fully satisfied, but then that company (potentially in error) refunds the full amount without any communication explaining why, can that person keep the repayment?</p>
<p>As far as that person is concerned the debt has been paid, so does the fact that the company chose to make the refund make it their problem?</p>

<p>Not returning a payment made in error may amount to theft.</p>
<p><a href="https://www.legislation.gov.uk/ukpga/1968/60/section/5" rel="noreferrer">s.5(4) of the Theft Act 1968</a> covers this scenario:</p>
<blockquote>
<p>Where a person gets property by another’s mistake, and is under an obligation to make restoration (in whole or in part) of the property or its proceeds or of the value thereof, then to the extent of that obligation the property or proceeds shall be regarded (as against him) as belonging to the person entitled to restoration, and an intention not to make restoration shall be regarded accordingly as an intention to deprive that person of the property or proceeds.</p>
</blockquote>
<p>And the leading case law is <a href="http://www.e-lawresources.co.uk/A-G-Ref--No-1-of-1983-.php#:%7E:text=A%2DG%20Ref%20(No%201%20of%201983)&amp;text=The%20defendant%2C%20a%20police%20woman,money%20from%20her%20bank%20account." rel="noreferrer">A-G Ref (No 1 of 1983) [1985] QB 182</a> where, in similar circumstances:</p>
<blockquote>
<p>The defendant, a police woman, received an overpayment in her wages by mistake. She had noticed that she had received more than she was entitled to but did not say anything to her employer. She did not withdraw any of the money from her bank account. The trial judge directed the jury to acquit. The Attorney General referred a question to the Court of Appeal.</p>
<p>Held [on appeal]:</p>
<p>It was possible for a theft conviction to arise where the defendant had not withdrawn the money. <strong>There was a legal obligation to return the money received by mistake.</strong></p>
</blockquote>

<p>Speaking in very general terms, the law of England and Wales allows for the recovery of payments made by mistake. See, for example, Virgo, <a href="https://books.google.com.au/books?id=VnM_CgAAQBAJ" rel="noreferrer">The Principles of the Law of Restitution</a> (2015) at p 157:</p>
<blockquote>
<p>A claim to recover money mistakenly paid by the claimaint to the defendant is often regarded as the paradigm example of a restitutionary claim founded on the <a href="https://en.wikipedia.org/wiki/Unjust_enrichment" rel="noreferrer">unjust enrichment</a> principle. In such a case there is clearly an enrichment at the claimant's expense and, at least where the reason for the claimant making the payment arose from a mistaken belief that he or she was liable to pay the money to the defendant, there is a clear justification for restoring the value of the money to the claimant, since the claimant's intention to make the payment can readily be treated as vitiated by the mistake.</p>
</blockquote>
<p>Further information is freely available in the Wikipedia article on <em><a href="https://en.wikipedia.org/wiki/Barclays_Bank_Ltd_v_W_J_Simms,_Son_and_Cooke_(Southern)_Ltd" rel="noreferrer">Barclays Bank Ltd v W J Simms, Son and Cooke (Southern) Ltd</a></em> [1980] 1 QB 677. Although the basic principle is simple, the concept of &quot;mistake&quot; contains a lot of complexity, and there are various defences available to a claim in unjust enrichment, such as <a href="https://en.wikipedia.org/wiki/Change_of_position" rel="noreferrer">change of position</a>. This is particularly relevant if the mistake is not brought promptly to the payee's attention.</p>
<p>Therefore, the question &quot;can the person keep the repayment?&quot; cannot be answered definitively. However, to a first approximation, the answer is &quot;no.&quot;</p>
