Home Information Cases National Westminster Bank Plc v Somer International (UK) Ltd (2001)

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National Westminster Bank Plc v Somer International (UK) Ltd (2001)


The defendant could only rely on a plea of estoppel by representation, as a defence to the recovery of the entirety of a sum mistakenly transferred to it by the claimant, to the extent that it had acted to its detriment in reliance upon that representation.


Appeal by the defendant ('Somer') from the judgment of HH Judge Nelligan, by which he ordered Somer to repay to the claimant ('NWB') the sum of £38,688.02 previously transferred, as part of a larger sum, by mistake by NWB to Somer. Somer was an exporter of computer equipment. From time to time it received payment in dollars from foreign purchasers by sums paid to the credit account maintained with NWB. In April 1997 Somer was expecting a payment of between US$70,000 and $78,000 from one of its customers ('Mentor'). In that month, $76,708.57 received for credit to the account of another of NWB's customers was credited, in error, to Somer's dollar account. Somer was advised by NWB that the payment which it was awaiting from Mentor had been received. In reliance upon that advice, Somer released further goods to the value of £13,180.57 (or $21,616.14) to Mentor. In due course, NWB sought to recover the sum of $76,708.57 wrongly credited to Somer. In the interim, Mentor had ceased to trade, having failed to pay for the further goods delivered to it after April 1997. Somer raised a plea of estoppel by representation against NWB as to the entirety of the sum mistakenly transferred. The judge allowed that plea only to the extent of the $21,616.14 and ordered Somer to repay the balance, following Scottish Equitable plc v Gordon Derby (2001) Independent, May 07, 2001. Somer contended that the judge was wrong to follow the Scottish Equitable decision, being instead bound to follow the previous decision of the Court of Appeal in Avon County Council v Howlett (1983) 1 WLR 605.


(1) It was unattractive that, in a case of money paid under a mistake of fact, the extent of the recovery should depend on whether or not the payment had been accompanied by a representation that the transferee was entitled to the payment. (2) It was also clear that, where there had been such a representation, the doctrine of estoppel by representation appeared, subject to any equitable adjustment to reflect the actual detriment suffered, to dictate an "all or nothing" approach to the amount that could be recovered. (3) However, both Howlett and Scottish Equitable (supra) recognised that there remained scope for the operation of equity to alleviate the position on grounds of unfairness or unconscionability. (4) In this case, the judge had been entitled to find that the actual detriment suffered by Somer went to only part of the sum transferred mistakenly transferred to it, and that it would be unconscionable for it to retain the balance.

Appeal dismissed.

Court of Appeal
Peter Gibson LJ, Potter LJ, Clarke LJ
Judgment date
22 June 2001

​[2001] EWCA Civ 970