swarb.co.uk - law index
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Equity - From: 1990 To: 1990
This page lists 8 cases, and was prepared on 21 May 2019.
Motor Oil Hellas (Corinth) Refineries SA v Shipping Corporation of India (The Kanchenjunga) Times, 19 February 1990; [1990] CLY 4077; [1990] 1 Lloyd's Rep 391
1990
HL
Lord Goff of Chieveley
Insurance, Contract, Equity
A ship was caught in harbour when an air raid broke out. The master took the ship to sea where it suffered damage. Held: The shipowners were protected by a war risks clause in the charterparty agreement. As to waiver by election, Lord Goff of Chieveley said: "In the present case, we are concerned with an election which may arise in the context of a binding contract, when a state of affairs comes into existence in which one party becomes entitled, either under the terms of the contract or by the general law, to exercise a right, and he has to decide whether or not to do so. His decision, being a matter of choice for him, is called in law an election. Characteristically, this state of affairs arises where the other party has repudiated the contract or has otherwise committed a breach of the contract which entitles the innocent party to bring it to an end, or has made a tender of performance which does not conform to the terms of the contract. .
In all cases, he has in the end to make his election, not as a matter of obligation, but in the sense that, if he does not do so, the time may come when the law takes the decision out of his hands, either by holding him to have elected not to exercise the right which has become available to him, or sometimes by holding him to have elected to exercise it. Instances of this phenomenon are to be found in s. 35 of the Sale of Goods Act 1979. In particular, where with knowledge of the relevant facts a party has acted in a manner which is consistent only with his having chosen one of the two alternative and inconsistent courses of action then open to him - for example, to determine a contract or alternatively to affirm it - he is held to have made his election accordingly . . perhaps because a party who elects not to exercise a right which has become available to him is abandoning that right, he will only be held to have done so if he has so communicated his election to the other party in clear and unequivocal terms Moreover, it does not require consideration to support it, and so it is to be distinguished from an express or implied agreement, such as a variation of the relevant contract, which traditionally requires consideration to render it binding in English Law."
Sale of Goods Act 1979 35
1 Citers
Dole Dried Fruit and Nut Co v Trustin Kerwood Ltd [1990] 2 Ll Rep 309; [1990] 2 Lloyd's Rep 309
1990
CA
Lloyd LJ
Contract, Equity
The defendant had an exclusive distributorship agency for the plaintiff in England. Under that agreement, the plaintiff sold its prunes and raisins to the defendant under separate contracts of sale. The plaintiff claimed the price of goods sold under the latest of such sale contracts. Three weeks later the plaintiffs commenced separate proceedings in which they claimed $735,000 for goods sold and delivered under several sales. The defendants did not dispute the plaintiff's claim but claimed in equity to set-off their counterclaim for unliquidated damages for repudiation by the plaintiff of the distributorship agreement. Held: The counterclaim could be set off, creating an arguable defence to the claim for the price of goods sold.
Lloyd LJ regarded the impeachment test and the Newfoundland Railway test as merely "the same test in different language". Referred to the exceptional rule about no set-off against freight, he continued: "But for all ordinary purposes, the modern law of equitable set-off is to be taken as accurately stated by the Court of Appeal in Hanak v. Green . . It is not enough that the counterclaim is "in some way related to the transaction which gives rise to the claim". It must be "so closely connected with the plaintiff's demand that it would be manifestly unjust to allow him to enforce payment without taking into account the crossclaim": see The Nanfri per Lord Denning . . The authority of these cases has not been diminished by The Dominique. They establish that the mere existence of a crossclaim is insufficient. The claim and crossclaim must arise out of the same contract or transaction, and must also be so inseparably connected that the one ought not to be enforced without taking into account the other."
and "The sale contracts were thus concluded in fulfilment of the agency agreement." and "In those circumstances the claim and the counterclaim are sufficiently closely connected to make it unjust to allow the plaintiffs to claim the price of goods sold and delivered without taking account of the defendants' counterclaim for damages for breach of the agency agreement. If that is right, then the defendants are entitled to rely on their counterclaim as a set-off. It follows that they have an arguable defence for the purposes of [Order 14]. Accordingly I would dismiss the plaintiffs' appeal."
1 Cites
1 Citers
Re Curtain Dream plc [1990] BCLC 925
1990
Knox J
Equity, Land, Company
The company sought to finance its stock. It first sold it to a finance company, then repurchased it on terms including a retention of title clause. Held: The whole transaction was, in its nature, a charge on the company's assets, and as such was registerable as a company charge.
1 Citers
Barclays Bank v Miller [1990] 1 WLR 343; [1990] 1 All ER 1040
1990
CA
Lord Justice Staughton
Equity
In a case of inordinate, culpable and prejudicial delay where it is seriously arguable that the cause of action would be time-barred if fresh proceedings were issued, the better course may be to dismiss the action for want of prosecution and leave the question of limitation for determination in those fresh proceedings if issued.
After considering the principle in Birkett v James that it is exceptional to strike out an action for want of prosecution if the limitation has not expired, Lord Justice Staughton said: "It seems to me that the House of Lords was not there considering a case where it was open to doubt and serious argument whether the cause of action would be time barred if a fresh writ were issued. In such a case it may well be that the interests of justice are best served by dismissing the action for want of prosecution, leaving it to the plaintiff, if he chooses to do so and if he has the funds, to start a fresh action. The alternative is that masters, and judges on appeal and even this court, may become embroiled, on an application to dismiss for want of prosecution, in long and elaborate arguments as to whether some future action, if it were brought, would be time barred. There is a good deal to be said for the view that masters should not have that task forced upon them when the problem may never arise and, if it does arise, could perhaps more conveniently be considered in another way."
1 Cites
1 Citers
Gibbon v Mitchell [1990] 1 WLR 1304; [1990] 3 All ER 338
1990
ChD
Millett J
Trusts, Equity
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to protective trusts), with the result that the fund became subject to discretionary trusts for the remainder of his life and only then would it vest in his two children, and also in further as yet unborn children. He was not advised that the effects of the deed would be to bring about a forfeiture of his life interest and thus invoke the operation of the discretionary trusts provided for in s 33 of the Trustee Act 1925. In fact, in entering the deed on the advice of his solicitors, the plaintiff had intended to reduce the effects of inheritance tax which would be incurred if the terms of the settlement, in which he purported to surrender his life interest, remained in force. Held: This was a case, not for rectification, but for setting aside for mistake. When challenging the decisions of trustees using the rule in Hastings-Bass, looking at considerations of the actual or potential adverse tax consequences of the exercise of the power are not relevant. The court limited the jurisdiction to set aside for mistake to cases where there is a mistake of law or fact as to the effect of the transaction itself as opposed merely to the consequence or advantages to be gained by entering into it.
Millett J reviewed the authorities and said: "In my judgment, these cases show that, wherever there is a voluntary transaction by which one party intends to confer bounty on another, the deed will be set aside if the court is satisfied that the disponor did not intend the transaction to have the effect that it did. It will be set aside for mistake whether the mistake is a mistake of law or of fact, so long as the mistake is as to the effect of the transaction itself and not merely as to its consequences or the advantages to be gained by entering into it. The proposition that equity will never relieve against mistakes of law is clearly too widely stated." and "Mr Gibbon did not merely execute the deed under a mistake of law as to the legal consequences of his doing so. He executed it under a mistake as to its legal effect . . Since its effect was not that which he intended, he is entitled to have it set aside."
Trustee Act 1925 33
1 Cites
1 Citers
Re Gorman; ChD 1990 - [1990] 1 WLR 616; [1990] 2 FLR 284
Stannard v Fisons Ltd; Stannard v Fisons Pensions Trust [1990] 1 PLR 179; (1992) IRLR 27; [1991] Pen LR 225
2 Jan 1990
CA
Trusts, Equity
The purchaser of a business said that the company had made insufficient contributions to its pensions fund before the transfer, and sought payment of the sums underpaid. The defendants argued that, applying Hastings-Bass, unless that principle were satisfied, the trustees' decision as to the amount to be transferred should not be disturbed. Held: Hastings-Bass and Mettoy involved the voluntary exercise by trustees of a discretion, whereas here the trustees were under an obligation to exercise their discretion at a particular time and after fulfilling a given condition. Having found that they had not complied with that obligation, so that the question was how their failure to perform that obligation should be remedied.
1 Cites
1 Citers
Agip (Africa) Ltd v Kingsley and others [1990] EWCA Civ 2; [1991] Ch 547; [1992] 4 All ER 451
21 Dec 1990
CA
Fox, Butler-Sloss, Beldam LJJ
Equity, Legal Professions
The claimant alleged that substantial sums had been obtained from it by fraud, and in part had passed through the hands of the respondent solicitors: "Agip does not contend that the defendants were parties to the fraud and had actual knowledge of it. The claim is at common law for money had and received. In the alternative, it is contended that the defendants are bound to account in equity as constructive trustees. As against the first and second defendants, Agip relies on the mere receipt of the money. In addition, however, it is alleged that all the defendants and in particular the first and third, were guilty of wilful and reckless failure to make inquiries in order to satisfy themselves that they were not acting in furtherance of a fraud."
[ Bailii ]
