Scottish Court of Session Decisions

LORD SORN .—Prior to the year 1940 the pursuer worked as a Clyde docker but did not belong to any trades union. In connexion with certain war-time arrangements for handling cargoes at the Clyde ports, the pursuer, and a considerable number of others in the same position, received in July 1940 a letter from the secretary of the Scottish Transport and General Workers Union inviting them to join the union. As a result of this the pursuer, and others, on 27th July 1940 signed a form of application for membership prepared by the union. The application was for temporary membership during the war. The union admitted him to membership on that basis, although, as we now know from the decision in Martin v. Scottish Transport and General Workers Union, they were acting ultra vires in doing so. The pursuer paid an entry fee and thereafter weekly contributions from July 1940 till July 1948 as a member of the union and as required by the rules of that body. The total amount so paid comes to £15, 8s. It having now transpired that he never was a member at all, the pursuer seeks to recover the money so paid. On these facts it is apparent that the payments in question were exacted by the union and paid by the pursuer in the mistaken belief that he had become a member and was bound by the union rules. There is thus revealed a clear ease of money paid under mistake, opening the way for the pursuer to bring a condictio indebiti for its recovery. It is suggested in the pleadings, and it was argued, that the pursuer is also in a position to avail himself of the condictio causa data causa non secuta, but I doubt whether that remedy is the appropriate one here. The condictio causa data is the appropriate remedy where money has been paid by one of the parties to a contractual obligation and where there has been a subsequent failure of consideration. The suggestion was that the application for admission constituted an offer on the part of the pursuer and that the act of the union in admitting him constituted an acceptance which concluded a contract between them in the terms contained in the application form. The money subsequently paid by the pursuer, it was argued, should be treated as money paid under that contract. This idea is too forced and too artificial to be acceptable. The payments made by a member of an association to the association under its rules cannot reasonably be referred to a supposed pre-admission contract. The reality of the situation is that they are exacted and paid in virtue of his status as a member and because the rules are binding upon him as such.

The learned Sheriff took the view that a condictio indebiti was open to the pursuer and gave effect to that view by holding that he was entitled to recover the money he had paid in full. He did not hold any inquiry to explore the question whether, in the whole circumstances of the case, it would be equitable for the defenders to retain the money paid, in whole or in part, and the only question to my mind is whether he should have suspended judgment until this had first been done. Certainly the form of the pleadings does not expressly invite this course, but none the less I think it is the course which ought to be adopted. The condictio indebiti is an equitable remedy and the position with regard to it is, I consider, correctly stated in Gloag on Contract, (2nd ed.) at p. 61:

"Repayment of money paid by mistake has always been regarded as an equitable claim, not to be sustained unless it appears that retention of the money would be inequitable."

There are, in the present case, averments made by the defenders which, if proved, might make it appear equitable that they should retain the money, in whole or in part, and I think they must be given an opportunity of proving these averments, which are denied by the pursuer. They say, in effect, that the pursuer, albeit that he was never a de jure member, got value for his money. The learned Sheriff dismisses these averments on the ground that, if the pursuer did get any advantages from his membership, it cost the defenders nothing to provide them. I am not satisfied that this consideration necessarily rules out the point in an adjustment of the equities and, in any event, it cannot be safely assumed at this stage that the defenders should be regarded as having incurred no expense in respect of the pursuer's membership. On the face of the situation the pursuer enjoyed the current benefit of membership of the union, whatever that may be found to amount to, both in a general way and in the special war-time conditions of work; whereas, on the other hand, one would suppose the union was involved in some current expense on account of its members, including so-called members like the pursuer. Beyond these general observations I do not propose at this stage, and without knowing the facts, to express any opinion as to how the learned Sheriff should adjust the equities or as to the elements he should take into account. I think the proper course is to remit the case to him in order that he may allow a proof with the object of putting himself in a position to undertake this task. The record as it stands is not very well directed to what is now the only matter left in issue and the learned Sheriff may think it desirable to give the parties an opportunity of focusing the issue, and the points hinc inde they wish him to consider, by way of amendment of the record. With all the relevant facts and arguments finally before him he will just have to try and do justice—it may have to be rough justice—guided by equitable rather than legal considerations.

LORD RUSSELL .—I agree.

LORD CARMONT .—I also agree with Lord Sorn's opinion.