New Club Garage v Milborrow and Son 1931 GWL 86

New Club Garage v Milborrow and Son 1931 GWL 86

Issue: Whether a person who has paid money to another person under a mistake of fact is entitled to recover the money, even if the other person has changed their position in reliance on the receipt of the money.

Facts:

New Club Garage, a company that owned a garage, employed Milborrow and Son, a company that owned a motor car repair shop, to repair a car for New Club Garage. New Club Garage paid Milborrow and Son for the repairs.

However, New Club Garage later discovered that the repairs had not been carried out properly and that the car was still defective. New Club Garage then demanded that Milborrow and Son return the money that had been paid for the repairs.

Milborrow and Son refused to return the money, arguing that they had changed their position in reliance on the receipt of the money and that they would be prejudiced if they were now required to repay the money.

New Club Garage then sued Milborrow and Son for the return of the money.

Held:

The Court held that New Club Garage was entitled to recover the money from Milborrow and Son. The Court reasoned that New Club Garage had paid the money to Milborrow and Son under a mistake of fact and that they were therefore entitled to recover the money, even though Milborrow and Son had changed their position in reliance on the receipt of the money.

Key Facts:

• A company paid a motor car repair shop to repair a car.
• The car was not repaired properly.
• The company demanded that the motor car repair shop return the money that had been paid for the repairs.
• The motor car repair shop refused to return the money, arguing that they had changed their position in reliance on the receipt of the money.
• The company sued the motor car repair shop for the return of the money.

Reasons:

• The Court held that the company was entitled to recover the money from the motor car repair shop because the company had paid the money to the motor car repair shop under a mistake of fact and that they were therefore entitled to recover the money, even though the motor car repair shop had changed their position in reliance on the receipt of the money.

Conclusion:

The Court's decision in New Club Garage v Milborrow and Son 1931 GWL 86 is a significant case in South African law. The Court's decision clarified the law relating to the rights of persons who have paid money to another person under a mistake of fact.