Ministry of Health v Simpson

Nov. 23. Lorp Simonps. My Lords, I think that the
reasoning and conclusion of the Court of Appeal are unimpeach-
able, and it is right to add that, if Wynn-Parry, J., had had
the advantage of the citation of authorities and of the argument
based upon them which the Court of Appeal and your Lordships
have had, he might have come to a different conclusion. ~~

The problem for determination can be simply stated and it
is perhaps surprising that the sure answer to it is only to be
found by examination of authorities which go back nearly 300
years. Acting under a mistake the personal representatives of
a testator whose residuary disposition is invalid distribute his

residuary estate upon the footing that it is valid. Have the.

t

next of kin a direct claim in equity against the persons to whom .

it has been wrongfully distributed? I think that the authorities
clearly establish that, subject to certain qualifications which ]
shall state, they have such a claim.

I think that it is important in the discussion of this question
to remember that the particular branch of the jurisdiction of the
Court of Chancery with which we are concerned relates to
the administration of assets of a deceased person. While in the

(87) 2 Giff. 504, 507-8. (90) (1867) L. R. 2 H. L. 149.
(88) [1920] 1 Ch. 320, 324-5. (91) [1910] 1 K. B. 56.
(99) 1 My. & K. 200, 202. (92) (1823) 2 B. & C. 149.

265

H. L. (E.)
1950

MINISTRY
or HEALTH
v.
SIMPSON.

266

H. L. (E.)
1950

MINISTRY
oF HEALTH
v.
SIMPSON.

Lord Simonds.

HOUSE OF LORDS (1951)

development of this jurisdiction certain principles were established
which were common to it and to the comparable jurisdiction in
the execution of trusts, I do not find in history or in logic any
justification for an argument which denies the possibility of an
equitable right in the administration of assets because, as 1t 1s
alleged, no comparable right existed in the execution of trusts.
I prefer to look solely at the authorities which are strictly germane
to the present question: it is from them alone that the nature
and extent of the equity are to be ascertained.

Before I turn back to the 17th century when the Court of
Chancery was gradually wresting from the Spiritual Courts the
jurisdiction in administering the assets of deceased persons and
framing apt rules to that end, I will first refer to a statement
made by Lord Davey early in this century, which, as I think,
illuminates the position. In Harrison v. Kirk (93) Lord Davey
says this: '' But the Court of Chancery, in order to do justice
'" and to avoid the evil of allowing one man to retain what is
'really and legally applicable to the payment of another man,
'devised a remedy by which, where the estate had been
'' distributed either out of court or in court without regard to
'the rights of a creditor, it has allowed the creditor to recover
"back what has been paid to the beneficiaries or the next of kin
'who derive title from the deceased testator or intestate "'

The importance of this statement is manifold. It explains
the basis of the jurisdiction, the evil to be avoided and its
remedy: its clear implication is that no such remedy existed at
common law: it does not suggest that it is relevant whether the
wrong payment was made under error of law or of fact: it is
immaterial whether those who have been wrongly paid are
beneficiaries under the will or next of kin, it is sufficient that
they derive title from the deceased. It is true that Lord Davey
expressly dealt with the case of a claimant creditor not a
beneficiary or next of kin. I shall show your Lordships that what
he said of the one might equally well be said of the other. It
would be strange if a court of equity, whose self-sought duty it
was to see that the assets of a deceased person were duly
administered and came into the right hands and not into the
wrong hands, devised a remedy for the protection of the unpaid
creditor but left the unpaid legatee or next of kin unprotected.

I think, my Lords, that it is not necessary for me to review
all the authorities. This has been done with exhaustive accuracy
by the Court of Appeal. I will refer only to certain cases which
appear to me to be landmarks in the history of the equitable
doctrine. In any such history the name of Lord Nottingham
must have first place. In Noel v. Robinson (94) the Lord

(98) [1904] A. C. 1, 7. (94) 1 Vern. 90, 93.

A. C. AND PRIVY COUNCIL.

2

Chancellor, after referring to the practice of the Spiritual Courts H. L. (&

under which the executor was entitled to demand security of the
legatee before paying his legacy in case the amount was required
in discharge of debts, said: . but in this court, though
'there be no provision made for refunding, yet the common
'justice of this court will compel a legatee to refund. It is
'certain that a creditor shall compel the legatee to refund, and
'so shall one legatee compel the other, where the assets become
"deficient..."

I pause here for two purposes. First, I point out that already

in 1682 a creditor and a legatee shared the remedy established by -

the common justice of the Court of Chancery. Secondly, it is a
proper moment at which to deal with an argument which was put
forward by learned counsel for the appellant. They urged that
it was only in a limited class of cases that the Spiritual Court
required a legatee, who was paid his legacy, to give security ;
first, to meet the contingency of further creditors appearing, and,
secondly, to meet the case of a deficiency of assets to pay all
legacies of equal rank pari passu; and that the remedy which the
Court of Chancery gave should be similarly circumscribed. The
purpose and effect of the argument, if accepted, would be to deny
any remedy against persons wrongly paid to next of kin rightfully
entitled. I cannot accept this argument. In the first place I
am by no means satisfied that the practice of the Spiritual Court
was so limited. The contention was largely based on the fact
that the only two precedents of bonds which had been discovered
did not cover any other than the contingencies already mentioned.
At this distance of time I do not think that this can be regarded
as conclusive evidence of the practice. But in the second place
I see no justification for regarding the equitable doctrine of the
Court of Chancery as limited to the previous practice, if it was
the practice, of the Spiritual Court. That it was not so regarded
will appear from a later case to which I will shortly refer.

I pass over numerous cases in which the equitable remedy
was refined and elaborated: their effect is stated in the judgment
of the Court of Appeal and summarized in the passage from
Roper on Legacies (4th ed., 1847), Vol. I, ec. VII, s. III, pp. 456-
60, which is cited in that judgment (95). But I should in passing
mention Orr v. Kaines (96) in which it was clearly established
that the right of an underpaid legatee to claim directly against

1950

MINISTR

oF HRawt
v.

SIMPSON

Lord Simon

al

the overpaid legatee is subject to this qualification, that he must ,'

first exhaust his remedy against the executor who has made the
wrongful payment. It was for this reason that I mentioned at
an earlier stage of this opinion that the next of kin must be
deemed to have recovered from the executors all that they could

(95) [1948] Ch. 465, 483. (96) 2 Ves. Sen. 194.

——

268 HOUSE OF LORDS [1951]

H. L. (E.) recover. They had then no other way to recover the balance
1950 that was due to them than by proceeding directly against the
~————— appellant and other institutions amongst which the executors had
MINISTRY distributed the estate.
oF HEALTH
v. It must at this point be said that a distinction on which
ee Wynn-Parry, J., relied has no validity. Not having had his
Lord Simonds. attention called to the earlier authorities, the learned judge was
er disposed to think that the equitable remedy, even where it
existed, was only available to an unpaid creditor or legatee if the
estate had been administered by the court. There is no ground
for this broad distinction, though it may well be that a distinction
exists, viz.: that, where the executor has distributed the estate
under an order of the court, the unpaid creditor would not be
required to bring a further action against him before proceeding
against persons wrongfully paid.

I go forward nearly a century, during which the equitable
doctrine had been recognized by successive Lord Chancellors and
Masters of the Rolls, and come to David v. Frowd (97) a case
upon which the respondents rely as most nearly resembling the
present case. The resemblance lies in the fact that there too the

" plaintiff was next of kin of an intestate who claimed against the
defendants that the estate of the intestate should have been paid
to her but had been wrongfully paid to them. The distinction,
if it is a material one, is that there the payment had been due
to a mistaken view (whether of fact or law) that the defendants
were the true next of kin, here it was due to a mistaken view
as to the validity of the residuary bequest.

My Lords, I think that, subject always to one point to which
I shall presently refer, David v. Frowd (98) is an authority
strongly in favour of the respondents. It is fatal to the
appellants' argument, which I have already mentioned, that the

~ equitable remedy was confined to the cases of unpaid creditor or

legatee, and is consistent only with the view that the remedy was
one (to adapt Lord Davey's words) devised by the Court of
Chancery in the administration of assets of a deceased person to
avoid the evil of allowing one man to retain money legally payable
to another and was applicable wherever it could appropriately be
applied.

Two other cases upon which the respondents relied I will
mention before I examine those which the appellant cited as
supporting his contention, the first Peterson v. Peterson (99), in
which Lord Romilly, M.R., once more asserted the equity,
making no distinction between claimant residuary legatees and

~

(97) 1 My. & K. 200. (99) L. R. 8 Eq. 111.
(98) Ibid.

¥

A. C. AND PRIVY COUNCIL.

next of kin, and, the second, In re Rivers (100), where Eve, J.,
recognized and applied it.

Here then, my Lords, is a long line of authority extending
over more than 250 years, resting on decisions of judges of the
highest authority and broken by no dissentient voice. Why
should it not cover the present case? Three arguments put
forward by the appellant I have already mentioned and disposed
of, the first founded upon a supposed relation between the
assumed practice of the Spiritual Court and the scope of the
remedy provided by the Court of Chancery, the second based
upon a distinction between wrongful payments made when there
has and when there has not been administration by the court,
and the third (which is bound up with the first) that there is a
distinction between claimant residuary legatees and next of kin.

It remains to deal with two other arguments. It was said
that the equity was not applicable against a '' stranger '' and that
the appellant (or the hospital through whom it claimed) having
been paid money to which it was not lawfully entitled, since the
disposition under which it took was invalid, was to be regarded
as a stranger. This argument is wholly without substance. The
hospital received 4,0001. for no other reason than that the
executors thought that it was a proper object for the testator's
bounty. It was treated as a beneficiary under the testator's will
and, to use Lord Davey's words, derived title under it. It does
not appear to me that a person so receiving money from the
estate of a testator is in a different position from any other person
to whom money is paid upon the footing that under the testator's
will money can be lawfully paid to him though in fact the
payment is wrongful. :

I come finally to the argument upon which counsel for the
appellant laid the greatest stress, relying not only on the judg-
ment of Wynn-Parry, J., but upon the other cases which have
yet to be examined. It was that the equitable remedy was

subject at least to this qualification, that it was not applicable -

where the wrongful payment was made in error of law. It was
said that in every case where it had been applied the wrongful
payment had been made under a mistake of fact and that
wherever the principle had been stated without any such qualifica-
tion, it must be read, nevertheless, as subject to it. I think, my
Lords, that this argument which found favour with the judge is
misconceived.

In the first place, though in almost all the reported cases the
probability is that the wrongful payment was made under a
mistake of fact, that is not true of all of them and in many of
them, while the probability is in one direction, there can be no

(100) [1920] 1 Ch. 320.
[1951] A. C. 18

269

H. L. (E.)
1950

MINISTRY
oF Hrauty
v.
SIMPSON.

Lord Simonds.

VA

270

H. LL. (B.)
1950

MINISTRY
OF HEALTH
vO.
SIMPSON.

Lord Simonds.

HOUSE OF LORDS ——-[ 1951)

certainty without further information which is not now available.
This leads directly to the second reason. In not one of the many
cases where the equity was applied was any suggestion made in
argument or judgment that the issue depended on the nature of
the mistake under which the wrongful payment had been made.
It is not credible that, if the distinction between mistake of fact
and law was relevant, it would never have been mentioned,
particularly at a time when in the courts of common law it' was
being established. And here it may be observed that the
equitable doctrine was well settled before that event took place:
for such cases as Farmer v. Arundel (101); Bize v. Dicka-
son (102); Brisbane v. Dacres (103); Bilbie v. Lumley (104),
show that up to the end of the eighteenth century there were in
high places doubts as to the validity of the distinction in the
common law.

In the third place the most satisfactory reason for the
distinction rests in the maxim, itself probably taken from the
criminal law, ignorantia juris neminem excusat: see Baylis v.
Bishop of London (105). The man who makes a wrong payment
because he has mistaken the law may not plead his own
ignorance of the law and so cannot recover what he has wrong-
fully paid. It is difficult to see what relevance this distinction
can have, where a legatee does not plead his own mistake or his
own ignorance but, having exhausted his remedy against the
executor who has made the wrongful payment, seeks to recover
money from him who has been wrongfully paid. To such a suit
the executor was not a necessary party and there was no means
by which the plaintiff could find out whether his mistake was of
law or of fact or even whether his wrongful act was mistaken or
deliberate. He could guess and ask the court to guess but he
could prove nothing. I reject. therefore the suggestion that the
equitable remedy in such circumstances was thus restricted and
repeat that it would be a strange thing if the Court of Chancery,
having taken upon itself to see that the assets of a deceased
person were duly administered, was deterred from doing justice
to creditor, legatee or next of kin because the executor had done
him wrong under a mistake of law. If in truth this were so, I
think that the Father of Equity would not recognize his child.

I turn now to the cases on which the appellant relies. The
first of these is Rogers v. Ingham (106) and, as it is placed in
the forefront of the appellant's argument (as it was in the judg-
ment of the judge), it is worth examining in some detail. The
headnote reads as follows: '' The court will not in all cases relieve

(101) 2 W. Bl. 824. (104) 2 Bast 469.
(102) 1 Term Rep. 285. (105) [1913] 1 Ch, 127
(103) 5 Taunt. 143, (106) 3 Ch. D. 351.

A. C. AND PRIVY COUNCIL.

"against a payment of money under mistake of law. An
"" executor, acting on the advice of counsel on the construction of
'a will, proposed to divide in certain proportions a fund between
""two legatees. One of the legatees being dissatisfied took the
"" opinion of counsel, which agreed with the former opinion. The
"" executor then divided and paid over the fund in accordance with
""the opinions. Two years afterwards the dissatisfied legatee
"filed a bill against the executor and the othér legatee, alleging
"that the will had been wrongly construed, and claiming repay-
""ment from the other legatee: Held (affirming the decision of
'" Hall, V.-C.), that the suit could not be maintained ''.

As appears from the headnote, the case came first before
Hall, V.-C., and, though there is no note of the argument before
him, it is clear from his judgment how he regarded the issue.
"It seems to me,'' he said (107), '' that the fund was divided
"as a matter of arrangement between the parties, and that
"having taken place more than two years before the bill was
"filed, I ought not to give the assistance of this court for the
"* purpose of recalling that fund from the defendant, who received
"it upon the faith and footing of what took place on that
""oecasion.'' From his judgment the plaintiff appealed, and again
it is clear how the issue was regarded both by counsel and
by the court. '"' Payment by my trustee is payment by me, and
""T ought to recover the money. .... A court of equity can
"relieve against the consequences of a mistake of law; moreover
"this is hardly a pure question of law.'' Thus argued the
counsel for the appellant (108). He made no reference to the
long line of authority which confirmed the equitable right that
arises in an administration of assets, perhaps because the act of
wrongful distribution was done by Ingham, the surviving executor
and trustee, not in his capacity of executor (in this respect the
headnote is misleading) but in his capacity of trustee distributing
a trust fund. He may have thought and he may have rightly
thought (I do not think it necessary to decide it) that the cases
had no relevance to an alleged breach of trust. Nor on the other
hand did counsel for the respondent legatee point out that
according to the established rule the plaintiff could not recover
from him until she had exhausted her remedy against Ingham or
his estate. Ingham had in fact died and his executor was a party
to the suit, but he seems to have taken no part in the proceedings
and there was no evidence that Ingham's estate was insolvent.

It was in these circumstances that James, L.J., almost in the
opening words of his judgment said (109): '' When a trustee, by
'the direction or with the authority of his cestui que trust, pays

4

(107) 3 Ch. D. 353. (109) Ibid. 355. ,
(108) Ibid. 354.

271

H. L. (B,)
1950

MINISTRY
oF HEALTH
Vv.
SIMPSON.

Lord Simonds.

272

H. L. (B)
1950

MINISTRY
oF HEALTH
0.
SIMPSON,

Lord Simonds.

HOUSE OF LORDS [1951]

''money to a third person, no matter under what claim of right
'or under what circumstances, it is exactly the same as if the
'' cestui que trust had received the money from the trustee, and
'"had herself paid it to that person. It is simply a question of
'' money paid by the lady, or by the lady's direction, out of money
'' of hers which the trustee had in hand to a person who said that
'"he had a claim to the money ''.

Already it is suéficiently clear what are the facts to which the
relevant law must be applied, but I will cite a few lines more
which are a clue to the whole judgment. '' That being so,'' the
Lord Justice goes on, ''it is reduced, as it appears to me,
''to a mere action for money had and received, and it is the
'same as if A through a third person had paid money to B,
' thinking that B was entitled to it, B thinking also that he was
'' entitled to it; there having been, as it is now said, a mistake of

'" law which was common to both parties.'' It is in this context
that he later uses the words so much relied on by the appel-
lant: ''I have no doubt that there are some cases which have

'"been relied on, in which this court has not adhered strictly
'to the rule that a mistake in law is not always incapable of .
'" being remedied in this court; but relief has never been given
"in the case of a simple money demand by one person against
'another, there being between those two persons no fiduciary
'"' relation whatever, and no equity to supervene by reason of the
'"" conduct of either of the parties''. It is, I think, clear that
the Lord Justice, whose every word on a question of equitable
principle is weighty, was dealing solely with a case where (in his
own language) a trustee by the direction or with the authority
of his cestui que trust pays money to a third person, and was not
dealing with a case where without his acquiescence or even his
knowledge an executor wrongs a creditor or beneficiary by paying
to another money which should be paid to him.

The next case to be considered is In re Robinson (110). Two
preliminary observations may be made, first, that the case was
not concerned with a wrongful distribution of assets in the
administration of an estate, secondly, that the sole question was
what, if any, Statute of Limitations was applicable to the claim.
The claim was by a beneficiary under a trust, who alleged that
he had been underpaid, directly against a beneficiary under the
same trust who had been overpaid. The judge had first to deter-
mine its nature. It was, he said (111), a '' mere money demand
"by the plaintiff against the defendant ''. He then states the
rival contentions, the defendant saying that it was in reality a
common law action for money had and received and therefore
barred by the lapse of six years under the statute of James I

'

(110) [1911] 1 Ch. 502. (111) Ibid. 507

,°

A. C. AND PRIVY COUNCIL.

the plaintiff on the other hand saying that, where a trust fund
had by mistake been paid by the trustee to the wrong beneficiary,
there was not in the old Court of Chancery any bar by lapse of
time to the recovery of lost money. He says that the defendant's
contention would prima facie appear to be right, analysing the
position and saying that the party whose money has been wrongly
paid away could at all events have maintained a suit in equity for
it—a statement which points the contrast between such a suit
and one by a legatee against a legatee in which the joinder of the
executor as plaintiff was fatal (See Hodges v. Waddington (112) )
—and concludes (118): '' But whether the action is treated as a
" strict claim in law for money had and received, or whether it is
"brought as a claim in equity through the medium of the
'' trustee—in whichever way it is regarded—at first sight, inas-
"much as the court has always acted by analogy to the statute,
'" one can see no reason why the period fixed by the statute should
"not bar the right of the plaintiff to recover "'

The judge then deals with certain cases on which the plaintiff
had relied and sums up by a classification of the cases in which
mistakes have been made by trustees in payment of trust funds.
I doubt, with respect, whether the classification is exhaustive,
but in any case it is made for no other purpose than to show in
what cases a court of equity regarded a claim by a cestui que
trust as not barred by any lapse of time. The judge concludes
thus (114): "' The present case resolves itself into this—that
"although, owing to the fact that the plaintiff is not the person
'"who paid the money, the action is one which could not have
""been maintained at common law, it is in substance a mere
'"money demand to which a court of equity, acting by analogy
""to the statute, would apply the same period of limitation "'

I have been led to examine this case at some length because
of the emphasis laid upon it by the appellant. Having done so,
I find in it no support for the contention that the equity which
is the foundation of the present claim is qualified by the condition
that the wrongful payment must not have been made under a
mistake of law. The judge was not considering that question.
With great respect, I cannot (notwithstanding the subsequent
approval of Romer, J., in the case to which I next refer) accept
his reading of the decree made by Lord Romilly, M.R., in Harris
v. Harris (No. 2) (115), for it is, I think, clear that the defendant
in that suit was in effect held liable to repay moneys which he
had been wrongly paid, though in form the liability was declared
to be to replace certain annuities of which he had received the
proceeds of sale. Nor, with respect, can I assent to the view

(112) 2 Vent. 360. (114) Ibid. 513.
(113) [1911] 1 Ch. 502, 508. (115) 29 Beay. 110.

273

H. L. (E.)
1950

MinistRY
oF Haute
Vv.
SIMPSON.

Lord Simonds.

—_—

274 HOUSE OF LORDS [1951]

H. L. (E.) first expressed by the judge (116) that the action is prima facie
1950 ''in reality a common law action for money had and received '',
though I would be inclined to accept the modified statement
Coil ale already cited with which he concludes his judgment. I see no
v. reason to doubt that to a claim whether made by legatee against
2 dete legatee or by cestui que trust against cestui que trust, in respect
of a payment made under a mistake of fact or of law, a court of
equity could properly before the Limitation Act of 1939 came
into force apply by analogy the statute of James I. Nor do
I understand that counsel for the respondents on this appeal
dissents from that proposition.

I am brought now to the case of In re Mason (117). The
judgment of Romer, J., in that case, so far as it was in any way
relevant to the matter under appeal, was that a petition of right
presented by the next of kin of a lunatic who had died in 1798
was barred by the statute of James I. Ido not doubt that the
decision was correct for the same reasons that I have given in
regard to the decision in In re Robinson (118). But the appellant
relies upon certain statements by the judge which in his conten-
tion militate against the view that the equitable doctrine relied on
by the respondents was applicable where the wrongful payment
was made under a mistake of law.

The judge makes the assumption that the whole of the estate
of the lunatic had come into the hands of King George III and
says (119): "' On that assumption the claim of the suppliants is
'" one to recover from the Crown moneys that in fact belonged to
"" Maria L'Epine's next of kin, but was wrongfully paid over by
""her administrators to King George III. It is, in other words,
""a claim by a cestui que trust to recover from a third party
""money which his trustee has by mistake paid to that third
'party. Such a claim is one for money had and received''. I

pause to observe that the judge, who had had cited to him none

of the long line of cases involving claims for refund in the

, administration of assets, treated the claim as if it were a claim

| by one cestui que trust.against another and then referred to such

'a claim as one for money had and received. And it was upon

that footing that after referring to the case of In re Robinson (120)

he said (121) that "'if the claim of the trustee would be barred

""in an action at law by any Statute of Limitations, the claim

a "of the cestui que trust, so far as it was one for money had and

'""yeceived, would be equally barred''. My Lords, I must with

the greatest deference to the judge observe that an action by

ee legatee or next of kin to recover money paid to the wrong person
¢

Lord Simonds.

'

(116) [1911] 1 Ch, 502, 507. (119) [1928] Ch. 885, 391.
(117) [1928] Ch. 385, (120) [1911] 1 Ch. 502,
(118) [1911] 1 Ch, 502, (121) [1928] Ch. 385, 392.

A. C. AND PRIVY COUNCIL.

in the administration of assets is not a claim by one cestui que
trust against another, and that, whatever may be said of the
latter, it cannot with any formal accuracy be said that the former
is an action for money had and received. Such an action is an
action at common law deriving from indebitatus assumpsit: I
will not embark upon the rather arid dispute whether its gist was
an implied promise, but it has, I think, no relation to the equity
_ by which for 300 years such a claim as the respondents now make
has been supported. It is true that in Moses v. Macferlan (122)
Lord Mansfield, C.J., said, '' In one word, the gist of this kind
"of action is, that the defendant . . . is obliged by the ties of
""natural justice and equity to refund the money'', but this
broad statement contained perhaps less the basis upon which the
action at common law was founded than an aspiration as to the
area over which it might one day extend. There remained a
field over which "* this essentially common-law action '' (as Lord
Sumner called it in Sinclair v. Brougham (123) ) did not extend.
The plaintiff in David v. Frowd (124), for instance, could not,
I think, have maintained an action for money had and received

in a court of common law. If this is so, the fact that, as the *

common law action developed, it was established that a mistake
of law would not support a claim for repayment, appears to me
to afford no justification for saying that this equitable right was.
similarly limited. Therefore while, as I have said, I do not
question the decision, which was indeed affirmed by the Court
of Appeal, I do not think that it helps the appellant's case. In
the Court of Appeal Lawrence, L.J. (125), agreed that the pro-
ceedings were "'in effect'' proceedings for money had and
received. My respectful comment would be that this is not an
inaccurate statement since the effect of the action, if it succeeds,
would be the same.

The appellant next relied on some observations made by
Maugham, J., in In re Blake (126), a case not unlike In re
Mason (127), in that here too it was pleaded by the Crown that
a claim made by petition of right was barred by the statute of
James I. In the course of his judgment the judge said (128):
'* An action in the Chancery Division brought by the next of kin
'' against a person to whom the administrator had wrongly paid
'' part of the personal estate of the intestate under a mistake of
''fact (not joining the administrator and seeking administration)
'' would be in the nature of a common law action for money had
'" and received, and the court acting on the analogy of the statute
'' of James I (21 Jac. 1, c. 16) would hold the claim to be barred

(122) (1760) 2 Burr, 1005, 1012. (126) [1932] 1 Ch. 54.
(123) [1914] A. C. 398, 456. (127) [1928] Ch. 385; [1929] 1 Ch. 1.
(124) 1 My. & K. 200. (128) [1932] 1 Ch. 54, 60.

(125) [1929] 1 Ch. 1, 12.

275

H. L. (E.)
1950

MINISTRY
oF HEALTH
v.
SIMPSON.

Lord Simonds.

276

H. L. (E.)
1950

MINISTRY
OF HEALTH
0.
SIMPSON.

Lord Simonds.

=

HOUSE OF LORDS _ [1951]

'' after the lapse of six years from the date of payment''. It
would, I think, be hypercritical to quarrel with this statement in
which the judge so guardedly refers to such an action as being
'in the nature of a common law action''. In my judgment it
gives no support to the appellant's contention. Two other cases
I will do no more than mention, Hilliard v. Fulford (129) and
In re Hatch (180), for I am fully satisfied with the observations
of the Court of Appeal upon them.

Finally, my Lords, I must say some words on an argument of
a more general character put forward on behalf of the appellant.
The Court of Chancery, it was said, acted upon the conscience,
and, unless the defendant had behaved in an unconscientious
manner, would make no decree against him. The appellant or
those through whom he claimed, having received a legacy in good
faith and having spent it without knowledge of any flaw in their
title, ought not in conscience to be ordered to refund. My Lords,
I find little help in such generalities. Upon the propriety of a
legatee refusing to repay to the true owner the money that he
has wrongly received I do not think it necessary to express any
judgment. It is a matter on which opinions may well differ.
The broad fact remains that the Court of Chancery, in order to
mitigate the rigour of the common law or to supply its deficiencies,
established the rule of equity which I have described and this
rule did not excuse the wrongly paid legatee from repayment
because he had spent what he had been wrongly paid. No doubt
the plaintiff might by his conduct and particularly by laches
have raised some equity against himself; but if he had not done
so, he was entitled to be repaid. In the present case the respon-
dents have done nothing to bar them in equity from asserting
their rights. They can only be defeated if they are barred at law
by some Statute of Limitations.

It is common ground between the parties that the only statute
now applicable is the Limitations Act, 1989, which came into
operation on July 1, 1940, and the-question is which of the
sections of this Act is applicable to the present case. I hope I
shall not be thought wanting in respect to the elaborate argument
of counsel for the appellant if I deal with this question very :
shortly. I do so because on the main point, viz., the applicability
of s. 20, which the respondents assert and the appellant denies,
I am in complete agreement with the reasoning and conclusion
of the Court of Appeal and cannot usefully add anything of my
own. The present action is precisely within the language of the
section: it is in respect of a claim to the personal estate of Caleb
Diplock, and there is nothing in the ancestry of the section which
justifies, much less requires, a narrower meaning being given to

(129) 4 Ch. D. 389. (180) [1919] 1 Ch. 351.

A. C. AND PRIVY COUNCIL.

its words than they ordinarily bear. It is suggested that there
is something awkward or inapposite in the terminus a quo,
inasmuch as the relevant period is to run '' from the date when

'the right to receive the share . . . accrued''. I think that
this criticism is ill-founded. There is nothing inappropriate in @
legatee or next of kin who has brought no action for twelve years
after the executor's year has expired being barred from such
action whether against the executor himself or against the person
to whom the executor has made a wrongful payment. At the
least there is nothing so inappropriate in such a result as to
deprive the substantive words of the section of their plain mean-
ing. Section 20 applying to this action and, it being conceded
that the relevant period had not expired before it was brought, the
defence under the statute fails. I think it therefore unnecessary
to say anything about s. 26 by way of approval or disapproval
of what fell from the Court of Appeal. It is a section which
presents many problems.

One thing only remains to be said. The action was brought
by three only of the next of kin, who are said to be a numerous

body, and their claim was not that their share of the 4,000I.

wrongfully paid away should be paid to them but that the whole
of that sum should be paid to their co-plaintiff the judicial trustee
to be dealt with by him in due course of administration of the
estate. No objection was taken by the appellant to this course at
any stage of the action and his counsel has expressly disclaimed
any wish to do so now. Accordingly this appeal must be dis-
missed. But he has at the same time properly said that his
present disclaimer should not prejudice any other of the numerous
charitable institutions against whom similar actions are pending.
I agree and express no opinion whatever whether any such objec-
tion could be sustained.

I move, my Lords, that the appeal be dismissed with costs.

Lorp Normanp. My Lords, I concur.
Lorp Oaxsrey. My Lords, I agree.
Lorp Morton oF Henryton. My Lords, I also agree.
Lorp MacDrrmotr. My Lords, I also agree.
Appeal dismissed.