Phillips v Hughes 1979 (1) SA 225 (N)

Phillips v Hughes 1979 (1) SA 225 (N)

Issue: Whether a person who has made a mistake of law is entitled to restitution of money paid under that mistake.

Facts:

Phillips and Hughes were co-owners of a company. Phillips agreed to purchase Hughes' share in the company for R100,000. However, Phillips mistakenly believed that he was only liable to pay R50,000. As a result, Phillips paid Hughes R50,000 and refused to pay the remaining R50,000.

Hughes sued Phillips for the remaining R50,000. Phillips argued that he should not be liable to pay the remaining R50,000 because he had made a mistake of law.

Held:

The Court held that Phillips was not entitled to restitution of the money he had paid. The Court reasoned that a mistake of law is not a ground for restitution unless it can be shown that the mistake was induced by the other party. In this case, there was no evidence that Hughes had induced Phillips to make the mistake.

Key Facts:

• Two individuals were co-owners of a company.
• One individual agreed to purchase the other individual's share in the company for a specific amount of money.
• The individual who agreed to purchase the share mistakenly believed that they were only liable to pay half of the agreed-upon amount.
• The individual made the initial payment and refused to pay the remaining amount.
• A lawsuit was filed to recover the remaining payment.

Reasons:

• The Court held that the individual was not entitled to recover the money they had already paid.
• The Court reasoned that a mistake of law is not a ground for restitution unless it can be shown that the mistake was induced by the other party.
• In this case, there was no evidence that the other party had induced the individual to make the mistake.

Conclusion:

The Court's decision in Phillips v Hughes 1979 (1) SA 225 (N) is a significant case in South African law. The Court's decision made it clear that a person who has made a mistake of law is generally not entitled to restitution of money paid under that mistake.