OGH: Arbitrary Actions with Disputed Funds

Jul 8, 2022 Benn-Ibler Rechtsanwälte

Sums of money transferred to a person by erroneous means may, under certain circumstances, not fall under the case facts described in Section 1440 sentence 2 of the Austrian General Civil Code (Allgemeines Bürgerliches Gesetzbuch, ABGB).

Together with his former business partner, the defendant was a 50% shareholder in several companies, including the plaintiff company. When the business relationship was dissolved, it was stipulated in the implementation agreement that an employee of the defendant would still be available for a certain period of time to perform the plaintiff's preliminary accounting. Due to an oversight, a corporate income tax credit was mistakenly transferred to the defendant instead of the plaintiff because an incorrect account was used.

The plaintiff now demands repayment of this amount. A set-off from claims to retained earnings, which the defendant refuted, was inadmissible according to Section 1440 of the Austrian General Civil Code, ABGB, because the tax credit had been paid out without the consent of the plaintiff's then sole shareholder. The defendant argued that this was neither arbitrary nor underhanded appropriation.

While the court of first instance found the claim to be justified and the court of appeal in turn upheld the defendant, the Austrian Supreme Court (OGH) ruled as follows:

The purpose of Section 1440 sentence 2 First Group of Cases, ABGB, is to prevent unlawful self-help. In an earlier decision, the Supreme Court had ruled that monies which, contrary to an agreement, are not paid out but instead are claimed as compensation shall not be considered to have been taken underhandedly. Since the defendant received the money without any action on his part (a vicarious liability on the part of the employee was also ruled out in this case), there was no question of arbitrary or underhanded appropriating of the money. However, the second case group of Section 1440 sentence 2 ABGB also needed to be considered. Because a set-off is already inadmissible if the good was voluntarily rendered to the person setting it off, the same must apply even more if the rendering was done in error. Case Group Two was therefore not applicable.

Due to the resulting increase in monetary gain, however, repayment was permissible on the basis of Section 1041 of the Austrian General Civil Code.

OGH 1 Ob 69/22m (18.05.2022)