(1) In Kleinwort Benson Ltd v. Lincoln City Borough Council et als  UKHL 38;  AC 349 the House of Lords stated that a “private transaction”, even if carried out by a public body, is not subject to the Woolwich Principle. Simply put, Lord Goff distinguished at page 381G-H between payments of “taxes and other similar fees” and payments in the context of ordinary private transactions. (1) It is clear from the case-law that “a limitation of the Woolwich principle to tax matters is unjustified”. The “Woolwich Principle” is derived from Woolwich Equitable Building Society v Inland Revenue Commissioners  AC 70, in which the House of Lords considered an application for reimbursement of taxes paid on the basis of an unlawful claim. Woolwich paid income taxes under certain regulations that were later found to be illegal. Revenues reimbursed taxes plus interest from the date of the judgment. Woolwich argued in the High Court that it should also receive interest from the date of payment. The High Court dismissed this action ( 1 WLR 137). The Court of Appeal held that the right to recover funds paid under an ultra vires claim aed was born immediately after payment (and that, therefore, interest had to be paid on revenue from the time of payment) ( 3 WLR 790).
The House of Lords upheld the decision of the Court of Appeal and confirmed that funds paid by a citizen to an authority in the form of taxes or other levies following an ultra vires claim by the authority were prima facie recoverable by the prima facie citizen. (2) Although coercion is a feature of many cases where the Woolwich Principle applies, the absence of coercive or punitive powers does not preclude a case from falling within the Woolwich Principle. Even if some level of coercion were required to bring a case into the Woolwich category, tangible economic power would be sufficient to enforce conditions (such as the threat to cancel games due to a lack of police action). (2) In assessing the location of “justice”, the court should consider a variety of factors; In general, common justice requires that money be reimbursed unless special circumstances or a policy principle provide otherwise. .