Company loses first attempt to recover £200k 'paid by mistake'

In a recent legal tussle, Bonvilston Vale Ltd faced setbacks in its pursuit to reclaim £200,000 allegedly paid in error to contractor Amser Building Ltd. The intricate details of the case, involving a terminated contract, a new contractor in the shadows, and a finance director's directive gone awry, paint a compelling narrative.

A company has failed in its first attempt to recover £200,000 that it claims was paid to a contractor by mistake. The case involved Bonvilston Vale Ltd v Amser Building Ltd.Bonvilston had hired Amser for a development project. On several occasions, Bonvilston indicated that it would not pay some of the invoices, but later made the requested payment. In May 2021 the state of account was that £202,060 was ostensibly due to Amser. In June 2021 Bonvilston purported to terminate the contract. It stated that it later hired a new contractor, although there was no signed contract in evidence. In February 2022, Bonvilston received £200,000 from a lender. A finance director emailed an employee instructing her to "pay the contractor". The employee stated that she had forgotten about the new contractor, and in the purchase ledger she only found Amser’s invoice. She therefore paid £202,060 to Amser and informed the finance director. She stated that he immediately emailed her "no".

Bonvilston’s case was that the payment had been made in error. It contacted Amser and asked for the return of the payment, but Amser replied that it did not believe there had been an error. The High Court rejected Bonvilston’s claim for summary judgment that the money should be repaid. It held that the documentary evidence tended to support that it had been a mistake, or at least that Bonvilston wanted to recover it on the basis of mistake. However, no internal documents had been shown regarding the situation with the new contractor, so the factual background behind the alleged mistake could not be determined. There were discrepancies in the alleged timeline after the payment was made. There was a real prospect that Bonvilston would fail to establish its case of mistake and so the issue would have to be determined at a full trial.

Please contact us if you would like more information about the issues raised in this article or any aspect of litigation and protecting your business on 020 8290 0333 or email info@judge-priestley.co.uk

For further information on our Dispute Resolution services, please click here.