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Equity - From: 2002 To: 2002

This page lists 17 cases, and was prepared on 21 May 2019.

 
Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560; [2002] 2 EGLR 71; [2002] 23 EG 123; [2002] 17 EG 154
2002
CA
Lord Justice Peter Gibson
Equity, Contract, Registered Land
Swainland Builders Ltd owned the freehold of a block of flats. It had granted 99-year leases at ground rents of all the flats except numbers 11 and 18. It had intended to sell the block subject to the retention of flats 11 and 18 which it initially proposed to let on shorthold tenancies but with a view to granting long leases at premiums in the future.
In October 1998 Freehold Properties Ltd agreed to buy the block for £60,000. It correctly understood the aggregate ground rents of £4,875 on the assumption that all 39 flats were let on the same long leasehold terms. By September 1999 the vendor's solicitor had confirmed by letter to the purchaser's solicitor that the vendor was not intending to sell flats 11 and 18 and in the interim the vendor was to be treated as any other tenant of the block.
Long leases of the two flats were never granted and the transfer of the freehold by the vendor failed to reserve any rights to the two flats for the benefit of the vendor. On becoming aware of that omission the vendor issued proceedings claiming that there had been a mistake which was common to the parties and contrary to their common intention.
At trial Neuberger J concluded that the intention of the parties seemed quite clear from the evidence. He ordered rectification of the transfer so as to provide for the grant to the vendor of leases in respect of the two flats. Held: The court summarised the requirements for rectification for mutual mistake, namely: "The party seeking rectification must show that: (1) the parties had a common continuing intention, whether or not amounting to an agreement, in respect of a particular matter in the instrument to be rectified; (2) there was an outward expression of accord; (3) the intention continued at the time of the execution of the instrument sought to be rectified; (4) by mistake, the instrument did not reflect that common intention. The following points derive from the authorities: (1) the standard of proof required if the court is to order rectification is the ordinary standard of the balance of probabilities . . (2) While it must be shown what was the common intention, the exact form of words in which the common intention is to be expressed is immaterial if, in substance and in detail, the common intention can be ascertained . . (3) The fact that a party intends a particular form of words in the mistaken belief that it is achieving its intention does not prevent the court from giving effect to the true common intention . . "
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Classic International Pty Ltd v Lagos [2002] NSWSC 115
2002

Palmer J
Commonwealth, Equity, Contract
(New South Wales Supreme Court) "I am satisfied that both parties believed that the agreement for lease would validly take effect according to its terms and that had they known of the substantial variation which the Retail Leases Act 1994 would impose upon the agreement, they would not have entered into it" and "42. I do not need to consider the vexed question of whether the mistake in the present case is one of fact or one of law. As to whether, in the law of Australia, the doctrine of common "mistake applies to" a mistake of law, I need do no more that set out the following passage from Cheshire and Fifoot’s Law of Contract 8th Aust Ed., para 12.8: "Operative mistake traditionally has been confined to mistakes of fact and not of law. This distinction has always been blurred and has been notoriously difficult to apply. It appears that equity did not draw a clear line between mistakes of fact and law. If there was such a rule, it was often honoured in the breach. In Western Australia the law/fact distinction has been abolished by legislation (with certain safeguards). The whole question has now almost certainly been laid to rest by the decision of the High Court in David Securities Pty Ltd v Commonwealth Bank (1992) 175 CLR 353. In that case the distinction between mistake of law and mistake of fact was rejected in the light of a very considerable body of judicial and academic criticism of the distinction. . . . the rule precluding recovery of moneys paid under a mistake of law should be held not to form part of the law in Australia."
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Pankhania v The London Borough of Hackney [2002] EWHC 2441 (Ch)
2002
ChD
Rex Tedd QC
Equity, Contract
A brochure listing properties to be sold at auction decribed the property as being subject to a terminable licence. In fact it was a secure tenancy. The question arose as to whether a misrepresentation of law could found a cause of action. Held: "I have concluded that the "misrepresentation of law" rule has not survived the decision in Klienwort Benson Ltd. Its historical origin is as an off-shoot of the "mistake of law" rule, created by analogy with it, and the two are logically inter-dependent. Both are grounded in the maxim "ignorantia juris non excusat", a tag whose dubious utility would have been enhanced, had it gone on to explain who was not excused and from what. As it stands, it means no more than that ignorance of the general law does not excuse anyone from compliance with it, a proposition with which criminal lawyers are familiar. In translation, it has become distorted and amplified meaning, in such expressions as "everyone" is taken to know the Law", from which follow two further propositions (underpinning the "mistake of law" and "misrepresentation of law" rules respectively) (i) " as you are taken to know the law, it is your fault if you are mistaken as to it, even if I have misrepresented it to you, and because of that you should have no relief". Those two propositions bear little relation to, and do not follow logically from, the maxim "ignorantia juris non excusat", but save for its Latin roots, no basis for the "misrepresentation of law" rule is to be found, as Lane L.J. remarked in Andre. The distinction between fact and law in the context of relief from misrepresentation has no more underlying principle to it than it does in the context of relief from mistake. Indeed, when the principles of mistake and misrepresentation are set side by side, there is a stronger case for granting relief against a party who has induced a mistaken belief as to law in another, than against one who has merely made the same mistake himself. The rules of the common law should, so far as possible, be congruent with one another, and based on coherent principle. The survival of the "misrepresentation of law" rule following the demise of the "mistake of law" rule would be more than a quixotic anachronism. Its demise rids this area of the law of a series of distinctions, such as the "private rights" exception, whose principal function has been to distinguish the "mistake of law" rule, and confine it to a very narrow compass, albeit not to extinguish it completely."
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Allan v Rea Brothers Trustees Limited [2002] EWCA Civ 85
8 Feb 2002
CA
Lord Justice Aldous, Lord Justice Robert Walker, Lord Justice Keene
Financial Services, Trusts, Equity
The claimant appealed dismissal of his claim for damages for breach of trust. The respondent had administered his pension, a 'small self-administered scheme'. The regulations required a pensioner trustee who took on specific duties. He had been persuaded by a crook to appoint the defendant to act, knowing that it was intended to draw from the scheme unlawfully, by pretending to be an employee of a company scheme to which the assets had been transferred. Held: The money transferred was already subject to an express trust. There was a difference between a proprietary and a personal remedy for breach of trust, the latter being affected by the knowledge of the breach in the claimant. Although the transfer of funds did not create a resulting trust, the assets were already trust assets. A beneficiary cannot complain of a breach of trust in which he knowingly participated or acquiesced. Appeal dismissed.
Retirement Benefits Schemes (Restriction on Discretion to Approve) (Small Self-Administered Schemes) Regulations 1991 (1991 No.1614)
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Halifax Plc v Omar [2002] EWCA Civ 121
20 Feb 2002
CA
Lord Justice Simon Brown, Lord Justice Laws, And, Lord Justice Jonathan Parker
Land, Equity, Registered Land
The respondent occupied a flat as a tenant. The landlord had acquired it by means of a fraud on the claimant lender. The lender had been given an equitable charge over the property, and now claimed possession as subrogated to the original fraudulent owner. The tenant claimed to have taken and paid for a lease from one of the later parties to the fraud. He claimed an equitable charge by subrogation in priority to the claimant. The lender had not taken steps to register any caution to protect its interests. Held: There are three requirements for subrogation. The money must have been used to pay the purchase price, that it had been paid by them solely for this purpose, and that the transaction was always to be on the basis that they would achieve a charge. Tracing is neither a claim nor a remedy but a process, and subrogation is a remedy, not a cause of action. The respondent was an innocent third party purchaser without notice of the claimant's interest. There is a distinction between subrogation to a security, which includes rights in rem, and subrogation merely to the indebtedness itself which operated only in personam. The doctrine of subrogation is that, where A's money is used to pay off B, a secured creditor, A is entitled in equity to an assignment of B's security rights. The appeal failed, and the interest of the lender had priority.
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Ciro Citterio Menswear plc (in Administration) and Others v Thakrar and Others Times, 02 April 2002
27 Feb 2002
ChD
Anthony Mann, QC
Company, Equity
A loan had been made by the company to a director. The money had been used to purchase property, and upon the company's insolvency, the Administrator sought to trace the loan into the property. Held: Unless there were special circumstances, a loan to a company director by the company was voidable only. Since it remained valid until avoided, no trusteeship arose in respect of the advance, and equitable remedies including tracing could not be used.
Companies Act 1985 330 341

 
Burke v LFOT Pty Ltd 187 ALR 612; [2002] HCA 17
18 Apr 2002

Gaudron ACJ, McHugh, Kirby, Hayne, Callinan JJ
Commonwealth, Damages, Equity, Natural Justice
(High Court of Australia) Trade and commerce - Damages - Equitable contribution - Liability to pay damages under ss 75B, 82, 87 of Trade Practices Act 1974 (Cth) for breach of s 52 of the Act - Whether solicitor who gave negligent advice should contribute to the loss suffered by his client as a consequence of another's misrepresentation which loss could have been avoided by careful advice by the solicitor - Whether equitable maxims prevent requirement of contribution.
Equity - Equitable contribution - Scope of - Requirement of co-ordinate liability - Whether solicitor who gave negligent advice should contribute to loss suffered by client as a consequence of another's representation where the loss could have been avoided by careful advice by the solicitor.
Contribution - Equitable contribution - Scope of and availability - Co-ordinate liability - Requirements of - Whether compatible with the obligations imposed by Trade Practices Act 1974 (Cth) for breach of s 52 of the Act.
Words and phrases - "co-ordinate liability", "natural justice".
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 On Demand Information Plc and others v Michael Gerson (Finance) Plc and others; HL 18-Apr-2002 - Times, 02 May 2002; Gazette, 23 May 2002; [2002] UKHL 13; [2003] 1 AC 368; [2002] CLC 1140; [2002] 1 All ER (Comm) 641; [2002] BCC 673; [2002] 2 WLR 919; [2002] 2 All ER 949
 
Healey v Brown [2002] 19 EG 147; [2002] EWHC Ch 1405; (2002) 19 EG 147
25 Apr 2002
ChD
David Donaldson QC HHJ
Wills and Probate, Land, Equity
The two deceased had made mutual wills bequeathing the family home. The survivor transferred the property during his life to defeat the agreement. It was now said that the arrangement fell foul of the 1989 Act and was unenforceable. Held: Subject to the 1989 Act the arrangement was enforceable. As to the 1989 Act: "section 2(1) deprives any non-compliant agreement of the legal status and hence effect of a binding contract, where section 40 of the 1925 Act (and the predecessor Statute of Frauds) had simply rendered such an agreement unenforceable." and "as a matter of both principle and authority, that the agreement embodied in mutual non-revocable wills containing a bequest of land is a contract for the disposition of land." If section 2 did apply the documents would not satisfy it, and "section 2(1) of the 1989 Act applies so as to deprive the mutual will compact of any legal effect as a contract. The significance of this conclusion lies in the fact that the mutual wills doctrine is anchored in contract, and presupposes a legally binding agreement." However the doctrine of part performance could in this case be applied to impose a trust on the defendant.
Law Reform (Miscellaneous Provisions) Act 1989 2
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UCB Corporate Services Limited v Christine Ann Williams Times, 27 May 2002; Gazette, 13 June 2002; [2002] EWCA Civ 555
2 May 2002
CA
Lord Justice Peter Gibson
Land, Equity, Undue Influence
The wife of a borrower sought to defend a claim for possession of the property by the chargor. She claimed that he signature had been obtained by an equitable fraud. Held: Undue influence occurred when improper means of persuasion were used to procure the complainant's consent such that the consent ought not fairly to be treated as the expression of the complainant's free will. Equity proceeded on the basis that there was no consent. Such would be enough to set aside the transaction as against the wrongdoer, and the lender was fixed with notice of that right. There was no need for the wife to establish that but for the trick, she would not have signed.
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Inntrepreneur Pub Company (CPC) and Another v Sweeney Times, 26 June 2002; Gazette, 27 June 2002
27 May 2002
ChD
Mr Justice Park
Damages, Torts - Other, Equity, Costs
The landlord sought an injunction against the defendant. The defendant countered, relying upon sec 2(1). Held: The remedy provided by the section was limited to the award of damages. It could not, therefore, be used to defend an action for an injunction. Whilst he might be entitled in equity to repudiate the lease, he could not repudiate only part of the lease. The landlord might e criticised for its earlier conduct of the case, but rule 44 was concerned with the behaviour of the parties in conducting the litigation itself, and the rule could not be used to overturn the costs consequences because of misbehaviour outside the litigation.
Misrepresentation Act 1967 2(1) - Civil Procedure Rules 44.3(4)(a)

 
Mohamad Al Fayed v The Commissioner of Police of the Metropolis Gazette, 01 August 2002; [2002] EWCA Civ 780; A2/2002/0758
29 May 2002
CA
Lord Justice Walker, Lord Phillips MR, Clarke LJ
Litigation Practice, Civil Procedure Rules, Equity
During an action, advice from counsel had been inadvertently disclosed to the claimants. The defendant sought to restrain use of the papers in the trial. It was accepted that the papers attracted legal professional privilege, but the police also sought public interest immunity. Held: A solicitor considering documents released to him owes no duty to the disclosing party. Once disclosure has in fact been made, it is too late to seek an injunction to protect the document against use, save in the case of an obvious mistake. The court is exercising an equitable jurisdiction, and there are no rigid rules. There had been discussions about the disclosure or withholding of different documents on different grounds, and the mistake need not have been obvious. The injunction was discharged.
Clarke LJ set out the principles applicable: "In our judgment the following principles can be derived from those cases:
i) A party giving inspection of documents must decide before doing so what privileged documents he wishes to allow the other party to see and what he does not.
ii) Although the privilege is that of the client and not the solicitor, a party clothes his solicitor with ostensible authority (if not implied or express authority) to waive privilege in respect of relevant documents.
iii) A solicitor considering documents made available by the other party to litigation owes no duty of care to that party and is in general entitled to assume that any privilege which might otherwise have been claimed for such documents has been waived.
iv) In these circumstances, where a party has given inspection of documents, including privileged documents which he has allowed the other party to inspect by mistake, it will in general be too late for him to claim privilege in order to attempt to correct the mistake by obtaining injunctive relief.
v) However, the court has jurisdiction to intervene to prevent the use of documents made available for inspection by mistake where justice requires, as for example in the case of inspection procured by fraud.
vi) In the absence of fraud, all will depend upon the circumstances, but the court may grant an injunction if the documents have been made available for inspection as a result of an obvious mistake.
vii) A mistake is likely to be held to be obvious and an injunction granted where the documents are received by a solicitor and:
a) the solicitor appreciates that a mistake has been made before making some use of the documents; or
b) it would be obvious to a reasonable solicitor in his position that a mistake has been made;
and, in either case, there are no other circumstances which would make it unjust or inequitable to grant relief.
viii) Where a solicitor gives detailed consideration to the question whether the documents have been made available for inspection by mistake and honestly concludes that they have not, that fact will be a relevant (and in many cases an important) pointer to the conclusion that it would not be obvious to the reasonable solicitor that a mistake had been made, but is not conclusive; the decision remains a matter for the court.
ix) In both the cases identified in vii) a) and b) above there are many circumstances in which it may nevertheless be held to be inequitable or unjust to grant relief, but all will depend upon the particular circumstances.
x) Since the court is exercising an equitable jurisdiction, there are no rigid rules."
Civil Procedure Rules 31.2
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Clark v Chandler Gazette, 11 July 2002
28 Jun 2002
CA
Lords Justice Thorpe and Chadwick and Mr Justice Wall
Land, Contract, Equity, Wills and Probate
The respondent had purchased a property in her sole name, but held the property with her husband. On a breakdown of the marriage, he signed a transfer of the property but the consideration was not settled. After his death, it was argued that the document was ineffective under the 1989 Act because it had not been signed by both parties. Held: The property was actually held under a joint tenancy. The failure to settle the consideration was enough to defeat its interpretation even as a conditional disposition. Accordingly the joint tenancy had not been severed, and the widow took the entire property by survivorship.
Law of Property (Miscellaneous Provisions) Act 1989 2 - Law of Property Act 1925 53(1)(c)

 
Collier v Collier [2002] EWCA Civ 1095; [2002] BPIR 1057; [2002] 6 ITELR 270
30 Jul 2002
CA
Lord Justice Aldous, Mance LJ
Equity, Trusts
The daughter claimant sought possession of business premises from her father who held them under leases. He claimed an order that the property was held in trust for him. The judge that at the time the properties were conveyed, the father had been fearful of a potential substantial liability and it had been done to protect the property against those creditors. Held: Equity will not permit a transferor of property by way of gift in order to perpetrate a fraud to pray in aid the existence of that illegal purpose in order to rebut a presumption of advancement. "the leases “were shams as between father and daughter”. The daughter “should at most be his nominee and effectively the lease should be available to be used only if required in order to deceive”. He made the grants to the daughter “with the intention that if it served his interest he should treat the grants as gifts, but if it did not he would claim that the grant was subject to his beneficial interest.” The transfers were carried out “with the object of defrauding the respective mortgagees of their security”. There had been no voluntary withdrawal from the transaction. To recover the property the father needed to rely upon the agreement which set up the trust. That agreement provided that the trust should be concealed from creditors and the Inland Revenue. The result is that the father cannot dispute the effect of the transfers of the property without relying upon his illegality. The property must lie where it rests. "
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Mountney v Treharne Times, 09 September 2002; Gazette, 10 October 2002; [2002] EWCA Civ 1174; [2003] Ch 135
8 Aug 2002
CA
Lord Justice Aldous, Lord Justice Laws and Lord Justice Jonathan Parker
Insolvency, Family, Equity
In ancillary relief proceedings in a divorce, the husband had been ordered to transfer his interest in property to his wife. Before it was put into effect, he became insolvent. The wife and receiver competed for the interest to have been transferred. Held: Upon the order taking effect (upon the decree absolute), the wife acquired an equitable interest in the property, and the trustee in bankruptcy took subject to that interest. The ratio in Maclurcan was directly applicable and binding, though the correctness of that decision was doubted. It is the order of the court exercising the matrimonial jurisdiction which effects the transfer of the beneficial interest not the subsequent disposition made by or on behalf of the individual who later becomes bankrupt.
Matrimonial Causes Act 1973 24(1)(a) - Insolvency Act 1986 283(5)
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Great Peace Shipping Ltd v Tsavliris (International) Ltd Times, 17 October 2002; Gazette, 07 November 2002; [2002] EWCA Civ 1407; [2003] QB 679; [2002] 2 Lloyd's Rep 653; [2002] 4 All ER 689
14 Oct 2002
CA
Lord Phillips MR, May, Laws LLJ
Litigation Practice, Contract, Equity
The parties contracted for the hire of a ship. They were each under a mistaken impression as to its position, and a penalty became payable. The hirer claimed that the equitable doctrine of mutual mistake should forgive him liability. Held: Over the years there had been a conflict caused by Lord Denning's creation of an equitable doctrine of common mistake. That could no longer be allowed to continue, and no such doctrine could apply, and rescission was not available. There was no clear way of distinguishing mistakes which were fundamental to the contract. The fact that a bargain produced a worse position for one party was insufficient to found a rescission unless the mistake is such that it makes the contract adventure impossible. Two of the elements which must be present if common mistake is to avoid a contract are the non-existence of the state of affairs must render contractual performance impossible; and the state of affairs must be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible.
Lord Phillips MR set out five condition which must be present if a contract was to be avoided as a mistake: "(i) there must be a common assumption as to the existence of a state of affairs; (ii) there must be no warranty by either party that that state of affairs exists; (iii) the non-existence of the state of affairs must not be attributable to the fault of either party; (iv) the non-existence of the state of affairs must render performance of the contract impossible; (v) the state of affairs may be the existence, or a vital attribute, of the consideration to be provided or circumstances which must subsist if performance of the contractual adventure is to be possible."
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Mcivor v The Northern Bank Executor and Trustee Company Ltd [2002] NICh 12
24 Oct 2002
ChNI

Equity

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