Category Archives: Equity

Edinburgh Corporation -v- Lord Advocate; HL 1879

Competing claims to a mixed fund were resolved by the application of equitable principles. Funds had been contributed by a benefactor of a hospital for particular trust purposes and had for more than 170 years been held, administered and applied as part of the general funds of the hospital. The Court of Session had been directed by an earlier decision of the House of Lords to settle how much of the funds which had been managed in this way belonged to the hospital. The Court of Session held that the benefactor’s funds had been immixed with the funds of the hospital from an early period down to that date, and that they must therefore be held to have participated proportionately with the hospital’s funds and property in the increase of value of the aggregate funds and property of the hospital during that period. Steps were then taken to ascertain and fix the amount of the whole of the aggregate funds and what the amount of the benefactor’s funds was in proportion to the present value of the aggregate. The case was again appealed on the question whether it was right to treat the two funds as having been inextricably mixed up.
Held: The decision was upheld Lord Blackburn The Court of Session solved the difficulty “in a way perfectly consistent with justice and good sense, and not inconsistent with any technical rule of law, and no other solution has been suggested which would be so satisfactory.” and “No other way was suggested at the bar in which the fund, if the two were inextricably mixed up, could be apportioned except that of taking the proportion which the two funds bore to each other, and dividing the mixed fund in that proportion; and I cannot myself see any other way.”

Court: HL
Date: 01-Jan-1879
Judges: Lord Blackburn
References: (1879) 4 AC 823,
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Filed under Equity, Scotland

Falcke -v- Scottish Imperial Insurance Co; CA 1886

The owner of a policy of life assurance mortgaged the policy to secure repayment of a loan. Subsequently the owner, now the owner of an equity of redemption in the policy, paid two annual premiums which became due under the policy. The policy was then sold and a question arose as to whether the proceeds of sale should be applied in repaying the owner the amount of the two premiums in priority to the claims of the mortgagee.
Held: The owner had not acquired by the payments of the premiums any interest in the policy in priority to the claims of the mortgagee.
Cotton LJ said: “if a stranger pays a premium on a policy that payment gives him no lien on the policy. A man by making a payment in respect of property belonging to another, if he does so without request, is not entitled to any lien or charge on that property for such payment.”
Bowen LJ said: “The general principle is, beyond all question, that work and labour done or money expended by one man to preserve or benefit the property of another do not according to English law create any lien upon the property saved or benefited, nor, even if standing alone, create any obligation to repay the expenditure. Liabilities are not to be forced upon people behind their backs any more than you can confer a benefit upon a man against his will.”

Court: CA
Date: 01-Jan-1886
Judges: Cotton LJ, Bowen LJ
References: (1886) 34 ChD 234,
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Filed under Equity

In re Re Rose, Midland Bank Executor and Trustee Company Limited -v- Rose; ChD 1949

The testator handed a transfer of the relevant shares to the donee, Mr Hook, together with the relevant certificates. The transfer had not been registered by the date of his death.
Held: Equity will not compel an imperfect gift to be completed. Nevertheless, the testator had done everything in his power to divest himself of the shares in question to Mr Hook. He had executed a transfer. It was not suggested that the transfer was not in accordance with the company’s regulations. He had handed that transfer together with the certificates to Mr Hook. There was nothing else the testator could do. Mr Hook’s legal title would not be perfected until the directors passed the transfer for registration, but that was not an act which the testator had to do, it was an act which depended on the discretion of the directors. The gift was effective

Court: ChD
Date: 01-Jan-1949
Judges: Jenkins J
References: [1949] Ch 78,
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Filed under Company, Equity, Wills and Probate

Deutsche Morgan Grenfell Group Plc -v- Inland Revenue and Another; HL 25-Oct-2006

The tax payer had overpaid Advance Corporation Tax under an error of law. It sought repayment. The revenue contended that the claim was time barred.
Held: The claim was in restitution, and the limitation period began to run from the date when the claimants discovered their mistake. The appellants had submitted that section 33 of the 1973 Act provided the second of only two remedies for recovery of tax paid under a mistake of law. The first remedy was said to be a common law right to recover tax unlawfully demanded, of which Lord Walker of Gestingthorpe said: “When parliament enacts a special regime providing special rights and remedies, that regime may (but does not always) supersede and displace common law rights and remedies (or more general statutory rights and remedies). Whether it has that effect is a question of statutory construction.”

Court: HL
Date: 25-Oct-2006
Judges: Lord Hoffmann, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe and Lord Brown of Eaton-under-Heywood
Statutes: Limitation Act 1980 32(1), Taxes Management Act 1973 33
Links: Bailii, HL,
References: [2006] UKHL 49, Times, 26-Oct-2006, [2007] 1 AC 558, [2006] BTC 781, [2007] Eu LR 226, [2007] 1 CMLR 14, [2006] STI 2386, [2006] 3 WLR 781, [2007] 1 All ER 449
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Filed under Corporation Tax, Equity, Limitation, Taxes Management

Phipps -v- Boardman; HL 1966

A trustee has a duty to exploit any available opportunity for the trust. “Rules of equity have to be applied to such a great diversity of circumstances that they can be stated only in the most general terms and applied with particular attention to the exact circumstances of each case. The relevant rule for the decision of this case is the fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of his trust, which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict.” “The whole of the law is laid down in the fundamental principle exemplified in Lord Cranworth’s statement [in Aberdeen Railway Co v. Blaikie]. But it is applicable, like so many equitable principles which may affect a conscience, however innocent, to such a diversity of different cases that the observations of judges and even in your Lordships’ House in cases where this great principle is being applied must be regarded as applicable only to the particular facts of the particular case in question and not regarded as a new and slightly different formulation of the legal principle so well settled.” and “The phrase

Court: HL
Date: 01-Jan-1966
Judges: Lord Upjohn, Lord Hodson
Links: Bailii,
References: [1966] 3 All ER 721, [1967] 2 AC 46, [1966] UKHL 2
Cases Cited:

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Filed under Equity, Trusts

In re Rose, Rose -v- Inland Revenue Commissioners; CA 1952

The deceased had executed instruments of transfer and delivered them with the relevant certificates to the transferees.
Held: The transfers were transferred the whole of the deceased’s title both legal and equitable in the shares and all advantages attached to the shares as from the date on which the transfers were executed and delivered subject, as regards the legal title, to the provisions of the articles as to registration and the directors’ discretionary power to refuse registration. A transfer under seal in the form appropriate under the company’s regulations, coupled with delivery of the transfer and certificate to the transferee, does suffice, as between transferor and transferee, to constitute the transferee the beneficial owner of the share, and the circumstance that the transferee must do a further act in the form of applying for and obtaining registration in order to get in and perfect his legal title, having been equipped by the transferor with all that is necessary to enable him to do so, does not prevent the transfer from operating, in accordance with its terms as between the transferor and transferee, and making the transferee the beneficial owner. Milroy v Lord did not prevent the imposition of a trust as a matter of law if the gift was complete but the donor retained the subject-matter.

Court: CA
Date: 01-Jan-1952
Judges: Evershed MR L, Jenkins LJ
Links: Bailii,
References: [1952] 1 Ch 499, [1952] EWCA Civ 4, [1952] 1 All ER 1217, [1952] 1 TLR 1577, (1952) 31 ATC 138, [1952] TR 175
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Filed under Company, Equity

Allnutt and Another -v- Wilding and others; Re Strain (deceased);; CA 3-Apr-2007

The trustees of a discretionary settlement requested its rectification on the basis that the now deceased settlor’s solicitor had mistakenly not appreciated the need to confer interests in possession on the beneficiaries, with the consequence that the settlement had not given effect to the settlor’s underlying intention of making a potentially exempt transfer of funds in order to avoid paying Inheritance Tax. They now appealed against a refusal of rectification.
Held: The appeal failed. The lower court correctly rejected the rectification. The object of that remedy was to enable parties to correct mistakes in the way their transaction had been recorded, and not to enable them to change the substance of the transaction they had entered into. The settlor had executed the settlement he had intended to execute, and there was no operative mistake in the way that his intentions had been recorded; Rectification is about setting the record straight.
Mummery LJ discussed rectfication of a voluntary settlement, and described the availability of rectification: ‘This can be done by the court when, owing to a mistake in the drafting of the document, it fails to record the settlor’s true intentions. The mistake may, for example, consist of leaving out words that were intended to be put into the document, or putting in words that were not intended to be in the document or, through a misunderstanding by those involved about the meaning of the words or expressions that were used in the document. Mistakes of this kind have the effect that the document, as executed, is not a true record of the settlor’s intentions.’

Court: CA
Date: 03-Apr-2007
Judges: Mummery LJ
Links: Bailii,
References: [2007] EWCA Civ 412, [2007] WTLR 941, 9 ITELR 806
Cases Cited:
  • Gibbon -v- Mitchell, ChD, Cited, ([1990] 1 WLR 1304)

Cited By:
  • Oun -v- Ahmad, ChD, Cited, (Bailii, [2008] EWHC 545 (Ch))
  • Fender (Administrator of FG Collier & Sons Ltd) -v- National Westminster Bank Plc, ChD, Cited, (Bailii, [2008] EWHC 2242 (Ch))
  • Ashcroft -v- Barnsdale and Others, ChD, Cited, (Bailii, [2010] EWHC 1948 (Ch))

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Filed under Equity

Lansing Linder Ltd -v- Alber; ChD 2000

Pension scheme rules were amended varying the ages etc for retirement. The rules gave the company power to amend the rules with the consent of the Trustees. The original rules permitted early retirement on an immediate, but actuarially reduced, pension. Under the original rules, members of the scheme in service (actives) required the consent of the trustees and the company to take early retirement; those who had left service (deferreds) required the trustees’ consent. The company claimed that the omission of the requirement for consent in the new rules was in error and that it was always intended that the right should be subject to consent of the company and trustees. The cost to the company of there being no requirement of consent was considerable, particularly with regard to the valuation of the benefits of deferreds. The memoranda and minutes of the trustees’ meetings made no reference to consent being required for early retirement.
Held: In relation to the actives, there was insufficient evidence that the absence in the new rules of the need for consent for early retirement between 60 and 65 on an unreduced pension failed to give effect to the intentions of the company and the trustees. But with regard to the deferreds, there was no positive intention to change their position. Rectification was refused, even as regards the deferreds, because “The evidence shows that, when they executed the deed, they had no clear common understanding of what it provided, and no clear common intention as to what it should provide. The only common thread of intention which appears to link the signatories was an intention to sign, wholly blindly, the document which was put before them on the basis that, as it was prepared by [the scheme administrators and scheme solicitors], it must be one they could safely sign. In short, their intention was no more complicated than to sign a deed in the form produced to them, whatever it in fact provided, and knowing that in material respects it had gone beyond the limits of what had been resolved …” In any event there was no outward expression of accord. Responding to the argument that, since this was not a contract case, the applicable principles were those in Re Butlin’s Settlement, and there was no need for outward expression of accord, “I agree… that the present claim is not one to rectify a contract, since no authority has been cited to me which expressly identifies the rectification requirements in a claim such as the present. I agree also that it may be said that to apply the Rose v Pim requirement of an outward expression of accord to the present case does involve a development of the principles. If so, however, I take the view that such a development requires only the smallest of steps.”

Court: ChD
Date: 01-Jan-2000
Judges: Rimer J
References: [2000] Pensions LR 15,
Cases Cited:
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Filed under Equity, Financial Services

Re Cartwright; Avis -v- Newman; 1889

A tenant for life is not liable in damages for permissive waste. “Since the Statutes of Marlbridge and of Gloucester there must have been hundreds of thousands of tenants for life who have died leaving their estates in a condition of great dilapidation. Not once, so far as legal records go, have damages been recovered against the estate of a tenant for life on that ground. To ask me in that state of the authorities to hold that a tenant for life is liable for permissive waste to a remainderman is to my mind a proposition altogether startling. I should not think of coming to such a decision without direct authority upon the point. Such authority as there is seems to me to be against the contention, and in opposition to the positive decisions in Gibson v. Wells, Herne v. Bembow, and Jones v. Hill 7 Taunt. 392, there are only to be found certain dicta of Baron Parke and the late Lord Justice Lush which seem to amount to this, that the words of the Statutes of Marlbridge and Gloucester are sufficient to include the case of permissive waste, at any rate where there is an obligation on the person who has the particular estate not to permit waste, whether that obligation does or does not exist at the common law in the case of a tenant for life. But at the present day it would certainly require either an Act of Parliament or a very deliberate decision of a Court of great authority to establish the law that a tenant for life is liable to a remainderman in case he should have permitted the buildings on the land to fall into a state of dilapidation. I therefore think that this claim must be disallowed.”

Date: 01-Jan-1889
Judges: Kay J
References: (1889) 41 Ch D 532,
Cases Cited:
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Filed under Equity, Landlord and Tenant

Anthony Wroe (T/a Telepower) -v- Exmos Cover Limited; CA 8-Feb-2000

A licensee was in occupation of premises under an agreement which clearly denied the intention to create a tenancy. He refused to leave when requesting asserting that he was a tenant. Mistaking the law the landlord treated the occupier as a tenant and sought possession as such.
Held: The court refused jurisdiction, and the landlord was not to be estopped from returning to his assertion that the occupier was a mere licensee. There was no evidence that the occupier had relied upon any assertion that a tenancy existed to his detriment.

Court: CA
Date: 08-Feb-2000
Links: Gazette, Times, Bailii,
References: [2000] EWCA Civ 31,

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Filed under Equity, Landlord and Tenant