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Mistake in law

Advanced Arbor Services PL v Phung [2009] NSWSC 1331. Johnson J.

The GIO engaged consultant dentist Dr Andrew Howe who remarked in a noted telephone call to the insurer in April 2003 that this was ‘a complete case of fraud … by the dentist’.

Dr Howe had reported: “I find it difficult to believe that Mr Dean suffered the devitalization and fracture of every tooth in his mouth in what must have been a minor injury.”

The insurer continued to make payments to the dentist, its officers giving evidence of belief of obligation.

According to Johnson J, infra [37], “Although Dr Howe’s telephone call and report raised real issues concerning the extent of treatment being provided by the defendant to Mr Dean, the view was taken that all of this stemmed from some injury suffered in the workplace which saw Mr Dean attending the defendant in the first place.

"This view may be fairly characterised as a mistake in law.

"The June 2003 payment was made to the defendant in the mistaken belief that he was entitled to the payment as part of the acceptance of liability by the insurer.”

The defendant had removed all the worker’s dental nerves, reduced all the teeth and fitted 28 crowns.

Further >> * Recovery against rogue treater 40 WCMS 2  *   * Dean v Phung 65 WCMS

Glad Cleaning Service PL & GIO v Vukelic [2010] NSWSC 422. Slattery J. 07.05.10.

Slattery J said [27]: “The common law and statutory principles applicable to GIO’s claim are not controversial.

"There is a common law right to restitution for unjust enrichmentPavey & Matthews PL v Paul (1987) 162 CLR 221.

"A payment by mistake is sufficient to give rise to a prima facie obligation on the part of the payee to make restitution for unjust enrichment: David Securities PL v Commonwealth Bank (1992) 175 CLR 353 at 379 and ANZ Banking Group v Westpac (1988) 164 CLR 662 at 673.”

Then [29]: “The mistake made here may be able to be characterised as a mistake of fact or a mistake of law.

"On the available material what the GIO claims officer did may be characterised as a mistake of fact if that officer made an error as to whether the Commonwealth had demanded the sum of $63,603.12 from GIO. This could occur for example if the file had temporarily become unavailable to the claims officer and that officer then made the payment without actual knowledge of the demand.

“The non-payment may also perhaps be explained by the GIO claims officer being aware of the Commonwealth’s demand but erroneously not believing that there was a proper legal basis for satisfying that demand. This would be a mistake of law.

“On the available materials the former appears to be more likely. There is no evidence of GIO contemporaneously considering GIO's legal liability to satisfy the Commonwealth's demand. Even if the circumstances are characterised as a mistake of law, recovery is still possible: David Securities v Commonwealth Bank (1992) 175 CLR 353.”



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