Patching v Dubbins: 1853

The purchase-deed of a house in a terrace contained a covenant on the part of the vendor, unexplained by any recital, that no building should be erected on any part of the land of the vendor lying on the east side of the said terrace and opposite to the plot of land thereby conveyed. The owners of the other houses had also similar covenants. Held, that the latter words were not merely descriptive of the position of the land, but restricted the general meaning of the former words ; and that the covenant applied only to that part of the land which lay immediately opposite, and was of the width of the plot conveyed.
The general rule that the construction must be taken most strongly against the grantor, modified by the necessity of giving effect to every word of the instrument, if it can reasonably be done.
According to Tulk v. Moxhay (2 Ph. 774), if parties purchase land with notice of a covenant concerning it, but which does not run with the land so as to bind them at law, equity will not permit them to do anything contrary to the true meaning of that covenant.
Delay in taking legal proceedings and other acts not amounting to acquiescence in the infringement of a right.
To deprive a Plaintiff of a legal right at the hearing of the cause a case of acquiescence must be shewn much stronger than such as would be a sufficient defence to an interlocutory application by him, and must amount not only to positive license, but to an implication of an actual grant.
A Plaintiff litigating a question depending upon the construction of a doubtful instrument, not being a will, if the construction be decided against him, must pay the costs of the suit.

Citations:

(1853) Kay 1, [1853] EngR 894, (1853) 69 ER 1

Links:

Commonlii

Citing:

Considered – Tulk v Moxhay 22-Dec-1848
Purchaser with notice bound in Equity
A, being seised of the centre garden and some houses in Leicester Square, conveyed the garden to B in fee, and B covenanted for himself and his assigns to keep the garden unbuilt upon.
Held: A purchaser from B, with notice of the covenant, was . .
Lists of cited by and citing cases may be incomplete.

Land, Equity, Costs

Updated: 29 April 2022; Ref: scu.183262

Tinsley v Milligan: HL 28 Jun 1993

Two women parties used funds generated by a joint business venture to buy a house in which they lived together. It was vested in the sole name of the plaintiff but on the understanding that they were joint beneficial owners. The purpose of the arrangement was so that false benefit claims could be made to the Department of Social Security which was duly done. The money obtained helped the parties in a small way with their bills. Subsequently, the defendant repented of the frauds and told the DSS. The parties quarrelled and the plaintiff moved out. The plaintiff claimed possession and asserted that she was the sole owner of the property. The defendant counterclaimed for an order for sale and a declaration that the plaintiff owned the property on trust for the pair of them in equal shares.
Held: Illegality bars a claim under prescription only if the Plaintiff has to rely upon the illegal element to make out the claim. Illegality does not defeat claim unless the illegality goes to the root of the claim. The claimant cannot found his claim on an unlawful act. But when the claimant is not seeking to enforce an unlawful contract but founds his case on collateral rights acquired under the contract the court is neither bound nor entitled to reject the claim unless the illegality of necessity forms part of the claimant’s case. ‘It is important to observe that, as Lord Mansfield made clear, the principle is not a principle of justice; it is a principle of policy, whose application is indiscriminate and so can lead to unfair consequences as between the parties to litigation. Moreover, the principle allows no room for the exercise of any discretion by the court in favour of one party or the other.’ and `the following propositions emerge: (1) property in chattels and land can pass under a contract which is illegal and therefore would have been unenforceable as a contract; (2) a plaintiff can at law enforce property rights so acquired provided that he does not need to rely on the illegal contract for any purpose other than providing the basis of his claim to a property right; (3) it is irrelevant that the illegality of the underlying agreement was either pleaded or emerged in evidence: if the plaintiff has acquired legal title under the illegal contract that is enough.’
A ‘public conscience’ test has no place in determining the extent to which rights created by illegal transactions should be recognised. Lord Goff said that the adoption of that test: ‘would constitute a revolution in this branch of the law, under which what is in effect a discretion would become vested in the court to deal with the matter by the process of a balancing operation, in place of a system of rules, ultimately derived from the principle of public policy enunciated by Lord Mansfield C.J. in Holman v Johnson , 1 Cowp. 341 which lies at the root of the law relating to claims which are, in one way or another, tainted by illegality.’ and ‘It is important to observe that, as Lord Mansfield made clear, the principle is not a principle of justice; it is a principle of policy, whose application is indiscriminate and so can lead to unfair consequences as between the parties to the litigation. Moreover the principle allows no room for the exercise of any discretion by the court in favour of one party or the other.’
Lord Browne-Wilkinson said: ‘The law was developing in another direction during the 19th century. There was originally a difference of view as to whether a transaction entered into for an illegal purpose would be enforced at law or in equity if the party repented of his illegal purpose before it had been put into operation, i.e. the doctrine of locus poenitentiae. It was eventually recognised both at law and equity that if the plaintiff had repented before the illegal purpose was carried through, he could recover his property: see Taylor v Bowers, 1 Q.B.D. 291; Symes v Hughes, L.R. 9 Eq. 475. The principle of locus poenitentiae is in my judgment irreconcilable with any rule that where property is transferred for an illegal purpose no equitable proprietary right exists. The equitable right, if any, must arise at the time at which the property was voluntarily transferred to the third party or purchased in the name of the third party. The existence of the equitable interest cannot depend upon events occurring after that date. Therefore if, under the principle of locus poenitentiae, the courts recognise that an equitable interest did arise out of the underlying transaction, the same must be true where the illegal purpose was carried through. The carrying out of the illegal purpose cannot, by itself, destroy the equitable interest. The doctrine of locus poenitentiae therefore demonstrates that the effect of illegality is not to prevent a proprietary interest in equity from arising or to produce a forfeiture of such right: the effect is to render the equitable interest unenforceable in certain circumstances. The effect of illegality is not substantive but procedural. The question therefore is ‘In what circumstances will equity refuse to enforce equitable rights which undoubtedly exist?’

Judges:

Lord Browne-Wilkinson, Lord Goff

Citations:

Independent 06-Jul-1993, Times 28-Jun-1993, [1994] 1 AC 340, [1993] UKHL 3, [1993] 3 WLR 126, [1993] 3 All ER 65

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Appeal from – Tinsley v Milligan CA 1992
The court considered the defence of illegal user to a claim to have established an easement by prescription: ‘These authorities seem to me to establish that when applying the ‘ex turpi causa’ maxim in a case in which a defence of illegality has been . .
Cited – Holman v Johnson 5-Jul-1775
ex turpi causa non oritur actio
A claim was made for the price of goods which the plaintiff sold to the defendant in Dunkirk, knowing that the defendant’s purpose was to smuggle the goods into England. The plaintiff was met with a defence of illegality.
Held: The defence . .
Cited – Curtis v Perry 10-Mar-1802
Fraudulent Registrations Ineffective
Ships had been purchased by a partnership, but were then held separately in the name of one of them. Only later were they included within the partnership accounts, but the separate registrations were maintained, and unlawfully so as to avoid them . .
Cited – Bowmakers Ltd v Barnet Instruments Ltd CA 1945
An action was brought for the wrongful conversion of machine tools delivered under hire purchase agreements which contravened wartime statutory orders. The plaintiff established its legal title to the goods at issue without relying upon the illegal . .
Approved – Chettiar v Chettiar PC 14-Feb-1962
(Malaya) A father, in registering shares in the names of his children, had transferred the beneficial interest in those shares to them. Many years later the father had treated the shares as his own. The question arose as to whether this fact . .
Disapproved – Euro-Diam Ltd v Bathurst CA 1988
The court had found that securities had been registered misleadingly in the US. The court held that it could not aid illegality. The court considered the defence of ‘ex turpi cause non oritur actio’. Kerr L.J: ‘The ex turpi causa defence ultimately . .
Mentioned – Pearce v Brooks 1866
The contract was for the hire of an ornamental brougham to a prostitute which was supplied with knowledge that it would be used ‘as part of her display’. She returned it in a damaged condition, and refused to make any payments under the contract as . .

Cited by:

Cited – David MacDonald v Geoffrey Myerson, John Callaghan, Derek A H Law CA 26-Jan-2001
The claimant had been involved in mortgage frauds, using the defendant firm of solicitors. He claimed an account following sales of the properties. At the time of the sales, the first defendant knew of the false identities used. The defendants . .
Cited – Colen and Another v Cebrian (UK) Limited CA 20-Nov-2003
The company paid the claimant sales commission. Part was diverted and paid to his wife to reduce the tax payable. The employer had appealed a finding of unfair disamissal, the company arguing that the contract was illegal.
Held: The contract . .
Cited – 21st Century Logistic Solutions Limited (In Liquidation) v Madysen Limited QBD 17-Feb-2004
The vendor sold computers to the defendant, intending not to account to the commissioners for the VAT. The seller went into liquidation, and the liquidator sought payment. The purchaser had been unaware of the intended fraud and resisted payment. . .
Cited – Costello v Chief Constable of Derbyshire Constabulary CA 22-Mar-2001
The police seized a car from Mr Costello, believing that it was stolen. The seizure was lawful at the time, by virtue of section 19 of PACE. The police never brought any criminal proceedings against Mr Costello, but they refused to return the car to . .
Cited – Bakewell Management Limited v Brandwood and others HL 1-Apr-2004
Houses were built next to a common. Over many years the owners had driven over the common. The landowners appealed a decision that they could not acquire a right of way by prescription over the common because such use had been unlawful as a criminal . .
Applied – Gibbs Mew Plc v Gemmell and Gibbs Mew Plc and Centric Pub Company Ltd v Gemmell CA 22-Jul-1998
The brewery sought possession of a public house, tied by type. The lessee claimed damages for breach of Art. 81 and a declaration that the Block Exemption was inapplicable to his lease. His appeal from the judge’s order in favour of the brewery was . .
Cited – Dunbar (As Administrator of Tony Dunbar Deceased) v Plant CA 23-Jul-1997
The couple had decided on a suicide pact. They made repeated attempts, resulting in his death. Property had been held in joint names. The deceased’s father asked the court to apply the 1982 Act to disentitle Miss Plant.
Held: The appeal was . .
Cited – Soleimany v Soleimany CA 4-Mar-1998
The parties were Iranian Jews, father and son. The son arranged to export carpets from Iran in contravention of Iranian law. The father and son fell into dispute about their contracts and arranged for the issues to be resolved by the Beth Din . .
Cited – Polanski v Conde Nast Publications Ltd HL 10-Feb-2005
The claimant wished to pursue his claim for defamation against the defendant, but was reluctant to return to the UK to give evidence, fearing arrest and extradition to the US. He appealed refusal of permission to be interviewed on video tape. Held . .
Cited – Sudershan Kumar Rampal v Surendra Rampal CA 19-Jul-2001
The parties were divorced, but when the husband applied for ancillary relief, the wife petitioned for nullity on the basis that the marriage was bigamous. The husband countered that she had known that his first marriage had only ended after this . .
Cited – J v S T (Formerly J) CA 21-Nov-1996
The parties had married, but the male partner was a transsexual, having been born female and having undergone treatment for Gender Identity Dysphoria. After IVF treatment, the couple had a child. As the marriage broke down the truth was revealed in . .
Cited – Lowson v Coombes CA 26-Nov-1998
A house was purchased by an unmarried couple to live together, but conveyed into the female partner’s sole name. Her partner was still married, and she feared that on his death his wife would inherit.
Held: ‘the case being one of illegality, I . .
Cited – Collier v Collier CA 30-Jul-2002
Fraudulent Intent Negated Trust
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 . .
Cited – Halifax Plc v Chandler CA 13-Nov-2001
The claimant had sought payment of a substantial shortfall debt from the defendant after repossessing and selling the defendant’s home. It compromised that debt, and was paid, but now sought to re-open the compromise on the basis of an alleged . .
Cited – Slater v Simm ChD 27-Apr-2007
The deceased and her partner did not marry but owned three properties together. They could not agree on the interpretation of the documents setting out their interests, and whether they had been varied.
Held: The court set out the various . .
Cited – Vellino v Chief Constable of Greater Manchester Police CA 31-Jul-2001
The police were not under any duty to protect someone who had been arrested from injuring himself in an attempt to escape. The claimant had a history of seeking to avoid capture by jumping from his flat window. On this occasion he injured himself in . .
Cited – Gray v Thames Trains Ltd and Another CA 25-Jun-2008
The claimant was a victim of the Ladbroke Grove rail crash. He later committed and was convicted of a manslaughter and detained under the 1983 Act. He said that the accident had caused a major personality change. The defendant relied on the defence . .
Cited – Enfield Technical Services Ltd v Payne and Another CA 22-Apr-2008
The appellant company appealed dismissal of their defence to a claim for unfair dismissal that the employment contract was tainted with illegality. The EAT had heard two cases with raised the question of the effect on unfair dismissal claims of . .
Cited – SQ v RQ and Another FD 31-Jul-2008
The home in which the family had lived was held in the name of a brother. Each party claimed that it was held in trust for them. Chancery proceedings had been consolidated into these ancillary relief applications. The home had been in the husband’s . .
Cited – Gibson v Revenue and Customs Prosecution Office CA 12-Jun-2008
The claimant’s husband had been made subject to a criminal confiscation order in the sum of pounds 5.5 million. She now sought to appeal an action against life policies in which she claimed a 50% interest.
Held: Despite the finding that she . .
Cited – Gray v Thames Trains and Others HL 17-Jun-2009
The claimant suffered psychiatric injury in a rail crash caused by the defendant’s negligence. Under this condition of Post-Traumatic Stress Disorder, the claimant had later gone on to kill another person, and he had been detained under section 41. . .
Cited – Moore Stephens (A Firm) v Stone Rolls Ltd (in liquidation) HL 30-Jul-2009
The appellants had audited the books of the respondent company, but had failed to identify substantial frauds by an employee of the respondent. The auditors appealed a finding of professional negligence, relying on the maxim ex turpi causa non . .
Applied – Webb v Chief Constable of Merseyside Police CA 26-Nov-1999
The Police had confiscated money suspected to be the proceeds of drug trafficking, but no offence was proved. The magistrates had refused to return the money under the 1897 Act. The claimants now sought to reciver it under civil proceedings.
Cited – O’Leary International Ltd v North Wales Police Admn 31-May-2012
The company employed drivers to cross the UK. They were stopped and did not have the requisite drivers records. Instead they produced certificates as to having had rest days. These proved false, and the drivers said that the had been produced for . .
Cited – Merseyside Police v Owens Admn 31-May-2012
The police had refused to returns items seized from Mr Owens on the basis that to do so would indirectly encourage and assist him in suspected criminal activity. CCTV footage had been removed from him to attempt identify an arsonist of a house.The . .
Cited – Twentieth Century Fox Film Corp and Others v Harris and Others ChD 5-Feb-2013
The court was asked whether a copyright owner has a proprietary claim to money derived from infringement of the copyright.
Held: He did not. No such argument could be shown to have suceeded before. . .
Cited – Les Laboratoires Servier and Another v Apotex Inc and Others SC 29-Oct-2014
Ex turpi causa explained
The parties had disputed the validity a patent and the production of infringing preparations. The english patent had failed and damages were to be awarded, but a Canadian patent remained the defendant now challenged the calculation of damages for . .
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .
Cited – Patel v Mirza SC 20-Jul-2016
The claimant advanced funds to the respondent for him to invest in a bank of which the claimant had insider knowledge. In fact the defendant did not invest the funds, the knowledge was incorrect. The defendant however did not return the sums . .
Lists of cited by and citing cases may be incomplete.

Equity, Contract

Leading Case

Updated: 29 April 2022; Ref: scu.89901

England and Wales

Equity, Banking

Updated: 25 April 2022; Ref: scu.620454

Interactive Technology Corporation Ltd v Ferster: CA 5 Jul 2018

Citations:

[2018] EWCA Civ 1594

Links:

Bailii

Jurisdiction:

England and Wales

Equity, Damages

Updated: 24 April 2022; Ref: scu.618969

Watson and Another v Eyre: ChD 24 Apr 2018

Judges:

Saffman HHJ

Citations:

[2018] EWHC 500 (Ch)

Links:

Bailii

Jurisdiction:

England and Wales

Land, Equity

Updated: 22 April 2022; Ref: scu.616137

O’Sullivan v Management Agency and Music Limited: CA 1985

The claimant alleged undue influence. As a young singer he had entered into a management agreement with the defendant which he said were prejudicial and unfair. The defendant argued that the ‘doctrine of restitutio in integrum applied only to the rescission of contracts for misrepresentation or mistake, and did not apply to equitable relief where contracts had been entered into as the result of undue influence.’
Held: Rescission might still be granted if practical justice can be achieved. Agreements obtained by undue influence were set aside even though the parties could not be restored to their original positions.
Dunn LJ said: ‘If the case had to be decided according to the principles of the common law, it might have been argued that at the date when the respondent issued his writ he was not entitled to rescind the purchase, because he was not then in a position to return to the appellant in specie that which he had received under the contract, in the same plight as that in which he had received it: Clarke v. Dickson, E.B. and E. 148. But it is necessary here to apply the doctrine of equity, and equity has always regarded as valid the disaffirmance of a contract induced by fraud even though precise restitutio in integrum is not possible, if the situation is such that, by the exercise of its powers, including the power to take accounts of profits and to direct inquiries as to allowances proper to be made for deterioration, it can do what is practically just between the parties, and by so doing restore them substantially to the status quo: Erlanger v. New Sombrero Phosphate Co., 3 App.Cas. 1218, at pp.1278, 1279, Brown v. Smith (1924) 34 C.L.R. 160, 165,169; Spence v.Crawford [1939] 3 All E.R. 271, 279, 280. It is not that equity asserts a power by its decree to avoid a contract which the defrauded party himself has no right to disaffirm, and to revest property the title to which the party cannot affect. Rescission for misrepresentation is always the act of the party himself: Reese River Silver Mining Co. Ltd. (Directors of the) v. Smith (1869) L.R. 4 H.L. 64, 73. The function of a court in which proceedings for rescission are taken is to adjudicate upon the validity of a purported disaffirmance as an act avoiding the transaction ab initio, and, if it is valid, to give effect to it and make appropriate consequential orders: see Abram Steamship Co. Ltd. v. Westville Shipping Co. Ltd. [1923] A.C. 773. The difference between the legal and the equitable rules on the subject simply was that equity, having means which the common law lacked to ascertain and provide for the adjustments necessary to be made between the parties in cases where a simple handing back of property or repayment of money would not put them in as good a position as before they entered into their transaction, was able to see the possibility of restitution in integrum, and therefore to concede the right of a defrauded party to rescind, in a much wider variety of cases than those which the common law could recognise as admitting of rescission. Of course, a rescission which the common law courts would not accept as valid cannot of its own force revest the legal title to property which had passed, but if a court of equity would treat it as effectual the equitable title to such property revests upon the rescission.’ and ‘This analysis of the authorities shows that the principle of restitutio in integrum is not applied with its full rigour in equity in relation to transactions entered into by persons in breach of a fiduciary relationship, and that such transactions may be set aside even though it is impossible to place the parties precisely in the position in which they were before, provided that the court can achieve practical justice between the parties by obliging the wrongdoer to give up his profits and advantages, while at the same time compensating him for any work that he has actually performed pursuant to the transaction.’
Fox LJ said: ‘Accordingly, it seems to me that the principle that the court will do what is practically just as between the parties is applicable to a case of undue influence even though the parties cannot be restored to their original position. That is, in my view, applicable to the present case. The question is not whether the parties can be restored to their original position; it is what does the justice of the case require? That approach is quite wide enough, if it be necessary in the individual case, to accommodate the protection of third parties. The rights of a bona fide purchaser for value without notice would not in any event be affected’.

Judges:

Dunn LJ, Fox LJ

Citations:

[1985] QB 428, (1984) 2 IPR 499, [1984] 3 WLR 448, [1985] 3 All ER 351

Jurisdiction:

England and Wales

Citing:

Approved – Alati v Kruger 29-Nov-1955
(High Court of Australia) The remedy of rescission is only available if the parties can be returned to their respective positions before the contract was made. Dixon CJ said: ‘It is not that equity asserts a power by its decree to avoid a contract . .

Cited by:

Cited – Halpern and Another v Halpern and others ComC 4-Jul-2006
The court considered whether a party can avoid a contract procured by duress in circumstances where he cannot offer the other party substantial restitutio in integrum.
Held: Unless the claimant could offer counter-restitution, the remedy of . .
Cited – Fiona Trust and Holding Corp and others v Privalov and others ComC 20-Oct-2006
The parties disputed whether their claim should be arbitrated.
Held: A claim as to whether the contract itself had been made was not one which could be arbitrated by provisions in that contract. It does not arise ‘under’ the contract. The . .
Cited – Halpern and others v Halpern and Another (No 2) CA 3-Apr-2007
The parties had settled by compromise a dispute about the implementation of a will before the Beth Din. It was now said that the compromise agreement had been entered into under duress and was unenforceable. The defendant said that rescission could . .
Cited – Imageview Management Ltd v Jack CA 13-Feb-2009
The appellant company acted for the respondent footballer in placing him with a football club. The respondent said that he had also taken a payment from the club, nominally for arranging a work permit. The respondent said this was improper. The . .
Lists of cited by and citing cases may be incomplete.

(1867) 1 LR Scotch Appeals 145

Jurisdiction:

Scotland

England and Wales

Citing:

Cited – Nocton v Lord Ashburton HL 19-Jun-1914
The defendant solicitor had persuaded his client to release a charge, thus advancing the solicitor’s own subsequent charge on the same property. The action was started in the Chancery Division of the High Court. The statement of claim alleged fraud . .

Cited by:

Appeal From – Target Holdings Ltd v Redferns (A Firm) and Another HL 21-Jul-1995
The defendant solicitors had acted for a purchaser, Crowngate, which had agreed to buy a property from a company called Mirage for andpound;775,000. Crowngate had arranged however that the property would first be passed through a chain of two . .
Cited – Charter Plc and Another v City Index Ltd and others ChD 12-Oct-2006
An employee of the claimant had fraudulently spent several million pounds of the claimant’s money on personal bets through the defendant company. The claimant said that the defendants knew the origin of the funds and were liable to repay them. . .
Lists of cited by and citing cases may be incomplete.

Legal Professions, Trusts, Equity

Updated: 11 February 2022; Ref: scu.89717

AIB Group (UK) Plc v Mark Redler and Co Solicitors: SC 5 Nov 2014

Bank not to recover more than its losses

The court was asked as to the remedy available to the appellant bank against the respondent, a firm of solicitors, for breach of the solicitors’ custodial duties in respect of money entrusted to them for the purpose of completing a loan which was to be secured by a first charge over the borrowers’ property. The solicitors had acted for both the bank and the borrowers. The bank appealed against rejection of its claim to be entitled to recover the entire sum it had paid, asserting a breach of trust, notwithstanding that its actual losses were rather less.
Held: The bank’s appeal failed. It was entitled to recompense only for the actual loss suffered. Payment of the amount claimed would be penal and retrograde.
Lord Toulson said: ‘The purpose of a restitutionary order is to replace a loss to the trust fund which the trustee has brought about. To say that there has been a loss to the trust fund in the present case of pounds 2.5m by reason of the solicitors’ conduct, when most of that sum would have been lost if the solicitors had applied the trust fund in the way that the bank had instructed them to do, is to adopt an artificial and unrealistic view of the facts.’
and: ‘in circumstances such as those in Target Holdings the extent of equitable compensation should be the same as if damages for breach of contract were sought at common law. That is not because there should be a departure in such a case from the basic equitable principles applicable to a breach of trust, whether by a solicitor or anyone else . . Rather, the fact that the trust was part of the machinery for the performance of a contract is relevant as a fact in looking at what loss the bank suffered by reason of the breach of trust, because it would be artificial and unreal to look at the trust in isolation from the obligations for which it was brought into being. I do not believe that this requires any departure from proper principles.’
Lord Reed concluded: ‘Some of the typical obligations of the trustee of a fund are strict: for example, the duty to distribute the fund in accordance with the purposes of the trust. Others are obligations of reasonable care: for example, the duty to exercise reasonable care and skill in the management of the fund. Since these equitable obligations relate to a fund held for trust purposes, the trustee’s liability for a breach of trust will, again putting the matter broadly, depend upon its effect upon the fund: the measure of compensation will generally be based upon the diminution in the value of the fund caused by the trustee’s default.’
and: ‘The result of the appeal was undoubtedly correct. The mortgage advance had been paid out prematurely and to the wrong person, with the consequence that at that point the trustee did not have the charges which he ought to have had. That deficiency was however remedied when the charges were obtained some weeks later. The assets under the control of the trustee were then exactly what they ought to have been. There was nothing missing from the trust fund, and therefore no basis for a claim for restoration. For the same reason, there was no basis for a claim to compensation by the mortgagee.’

Judges:

Lord Neuberger, Lady Hale, Lord Wilson, Lord Reed, Lord Toulson

Citations:

[2014] UKSC 58, [2014] 3 WLR 1367, [2014] WLR(D) 466, UKSC 2013/0052, [2015] AC 1503

Links:

Bailii, WLRD, Bailii Summary, SC, SC Summary

Statutes:

Judicature Act 1873

Jurisdiction:

England and Wales

Citing:

At ChD – AIB Group (UK) Plc v Mark Redler and Co (A Firm) ChD 23-Jan-2012
The claimant bank sought damages from the defendant solicitors, saying that they had paid on mortgage advance moneys but failed to deliver as promised and required, a first mortgage over the property purchased. The solicitors had failed to discharge . .
Cited – Target Holdings Ltd v Redferns (A Firm) and Another HL 21-Jul-1995
The defendant solicitors had acted for a purchaser, Crowngate, which had agreed to buy a property from a company called Mirage for andpound;775,000. Crowngate had arranged however that the property would first be passed through a chain of two . .
At CA – AIB Group (UK) Plc v Mark Redler and Co Solicitors CA 8-Feb-2013
The defendant firm of solicitors had acted for the claimants under instructions to secure a first charge over the secured property. They failed to secure the discharge of the existing first charge, causing losses. AIB asserted breach of trust.
Cited – Caffrey v Darby 1801
A fiduciary has a strict duty to account; equity imposes stringent liability on a fiduciary as a deterrent – pour encourager les autres. Lord Eldon LC said: ‘It would be very dangerous, though no fraud could be imputed to the trustees, and no kind . .
Cited – Nocton v Lord Ashburton HL 19-Jun-1914
The defendant solicitor had persuaded his client to release a charge, thus advancing the solicitor’s own subsequent charge on the same property. The action was started in the Chancery Division of the High Court. The statement of claim alleged fraud . .
Cited – Canson Enterprises Ltd v Boughton and Co 21-Nov-1991
Canlii Supreme Court of Canada – Canada – Damages — Breach of fiduciary duty — Solicitor preparing conveyance not advising purchasers of secret profit made on a flip — On agreed facts, purchasers fully . .
Cited – Libertarian Investments Ltd v Hall 6-Nov-2013
(Hong Kong) A trustee owes a duty to hold trust funds and apply them for the purposes of the trust (a stewardship or custodial duty). He is bound to answer for his stewardship when called on by the beneficiary to do so. If for any reason he . .
Cited – Bartlett v Barclays Bank Trust Co Ltd (Nos 1 and 2) ChD 1980
A claim was made against a trustee for compensation for losses incurred during the administration of the trust.
Held: For a court to order an account by a trustee on the basis of wilful default, and make the defendant liable not only for . .
Cited – Agricultural Land Management Ltd v Jackson (No 2) 2-May-2014
(Supreme Court of Western Australia) Equity – Fiduciary duties – Whether mere existence of conflict is actionable – Whether a breach of conflict rule requires a fiduciary actually to act in a position of conflict and pursue or prefer a personal . .
Cited – Mothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .
Cited – Ex parte Adamson; In re Collie CA 1878
The Court of Chancery never entertained a suit for damages occasioned by fraudulent conduct or for breach of trust, and that the suit was always for ‘an equitable debt, or liability in the nature of a debt’. . .
Cited – Livingstone v Rawyards Coal Co HL 13-Feb-1880
Damages or removal of coal under land
User damages were awarded for the unauthorised removal of coal from beneath the appellant’s land, even though the site was too small for the appellant to have mined the coal himself. The appellant was also awarded damages for the damage done to the . .
Cited – Magnus v Queensland National Bank 1888
A custodial bank was liable to restore trust funds merely because it dissipated the trust funds in a manner which was not authorised. Lord Halsbury LC said: ‘we are not at liberty to speculate whether the same result might not have followed whether . .
Cited – Bank of New Zealand v New Zealand Guardian Trust Co Ltd 1999
New Zealand Court of Appeal – Gault J said: ‘Recent cases show a trend in favour of analysis by reference to the scope of the duty, and enquire as to the risks against which there was a duty to protect the plaintiff. In South Australia Asset . .
Cited – Kelly v Cooper and Cooper Trading As Cooper Associates (A Firm) Co PC 19-Oct-1992
Bermuda – The fiduciary obligations imposed on an agent will depend on the express and implied terms of the contract. Although an agent is, in the absence of contractual provision, in breach of his fiduciary duties if he acts for another who is in . .
Cited – Hodgkinson v Simms 30-Sep-1994
Supreme Court of Canada – Fiduciary duty — Non-disclosure — Damages — Financial adviser — Client insisting that adviser not be involved in promoting — Adviser not disclosing involvement in projects — Client investing in projects suggested by . .
Cited – Cadbury Schweppes v FBI Foods 28-Jan-1999
Supreme Court of Canada – Commercial law – Confidential information – Breach of confidence – -Remedies – Manufacturer using confidential information obtained under licensing agreement to manufacture competing product – Whether permanent injunction . .
Cited – FHR European Ventures Llp and Others v Cedar Capital Partners Llc SC 16-Jul-2014
Approprietary remedy against Fraudulent Agent
The Court was asked whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or . .
Cited – KM v HM 29-Oct-1992
Supreme Court of Canada – Limitation of actions – Torts – Assault and battery – Incest – Woman bringing action against father for damages for incest – Whether or not action limited by Limitations Act – Application of the reasonable discoverability . .
Cited – Breen v Williams 6-Sep-1996
High Court of Australia – Medicine – Doctor/patient relationship – Medical records – Patient’s right to access – Contractual right – Doctor’s duty to act in patient’s ‘best interests’ with utmost good faith and loyalty – Patient’s proprietary right . .
Cited – Maguire v Makaronis 25-Jun-1997
High Court of Australia – Equity – Fiduciary duties – Solicitor and client relationship – Mortgage by clients in favour of solicitors – Ascertainment of particular fiduciary duties.
Equity – Equitable remedies – Rescission – Relevance of . .
Cited – Youyang Pty Ltd v Minter Ellison Morris Fletcher 3-Apr-2003
High Court of Australia – Trusts – Express trust – Money received by firm of solicitors to be held for a specific purpose and in accordance with specific conditions – Misapplication of funds by firm – Breach of express trust – Liability of firm as . .
Cited – Pilmer v Duke Group Ltd 3-Apr-2003
High Court of Australia – Trusts – Express trust – Money received by firm of solicitors to be held for a specific purpose and in accordance with specific conditions – Misapplication of funds by firm – Breach of express trust – Liability of firm as . .
Cited – Amaltal Corpn Ltd v Maruha Corpn 20-Feb-2007
Supreme Court of New Zealand – Blanchard J said that even in a commercial relationship, there might be aspects which engaged fiduciary obligations: ‘That is because in the nature of that particular aspect of the relationship one party is entitled to . .
Cited – Premium Real Estate Ltd v Stevens 6-Mar-2009
Supreme Court of New Zealand – The court was asked as to the forfeiture of remuneration by an agent for breach of fiduciary duty.
Held: In relation to remoteness of damage, it was observed that the question of foreseeability in common law . .
Cited – Akai Holdings Ltd v Kasikornbank PCL 8-Nov-2010
Court of Final Appeal – Hong Kong – Lord Neuberger of Abbotsbury NPJ said: ‘the notion that equitable compensation is assessed on a somewhat different basis from common law damages is clearly right (albeit that the difference can be overstated)’ and . .

Cited by:

Cited – Purrunsing v A’Court and Co (A Firm) and Another ChD 14-Apr-2016
The claimant had paid money for a property, but the seller was a fraudster and no money or title was recovered. The claimant sued both his conveyancers and the solicitors who had acted for the fraudster, in each case innocently. The defendants each . .
Lists of cited by and citing cases may be incomplete.

Equity, Damages, Legal Professions

Leading Case

Updated: 11 February 2022; Ref: scu.538296

National Australia Bank Ltd v Bond Brewing Holdings Ltd: 1991

(Supreme Court of Victoria) The court had appointed a receiver without requiring a cross-undertaking in damages. The order was then set aside, and compensation was sought. There had been no cross-undertaking.
Held: If it had power to award compensation it would do so. However, after an exhaustive review of authorities from three continents, the court unanimously concluded that the court had no such power; and that a person against whom an injunction is granted but later discharged is ‘without remedy’ in the absence of a cross-undertaking.
Kaye J: ‘It is therefore clear from the authorities to which I have referred that the practice followed for nearly 150 years of requiring a plaintiff seeking an interim or interlocutory injunction to give an undertaking as to damages has been based on the view that otherwise the defendant would be without remedy in the event of the order having been improperly made.’
Murphy J: ‘Next, restitutio in integrum has been espoused as a principle by the appellants. The cases relied upon to support the assertion that it is just and equitable to award monetary compensation for any loss caused the appellants do not in my view go this far in terms. It must be conceded that it is an established principle that it is just and equitable to allow interest upon money ordered to be repaid to a defendant who has been wrongly ordered to pay a capital sum to a plaintiff’ and
‘The fallacy in the appellants’ case appears to me to rest in the fact that they cannot point to a right entitling them in equity to monetary compensation. What the respondents have done is come to the court seeking payment of an alleged debt, and in the course of such action have sought interlocutory equitable relief in support of that claim. The court has ruled that the interlocutory equitable relief sought was wrongly granted, and have set it aside, but this did not constitute the breach or infringement of any recognisable right in equity which might have entitled the appellants/defendants to monetary compensation or might have obliged the respondents to put the appellants ‘in as good a position pecuniarily as that in which he was’ (they were) ‘before the injury’: Nocton v Lord Ashburton [1914] A.C. 932, at p.952.’ and
‘Nowhere have the researches of counsel found a relevant precedent in which, in the absence of an undertaking, an award of monetary compensation has been made to compensate a defendant for loss occasioned [to] his property by the making of an erroneous order that has been subsequently set aside’
Brooking J: ‘With all due respect to W.S. Gilbert’s Lord Chancellor, in practice the law is not always the true embodiment of everything that’s excellent. Mistakes are made from time to time.’ and
‘The first question is that of the limits of the principle expressed by Lord Cairns in Rodger’s Case. For the passage cannot be read as asserting that the court will always ensure, so far as possible, that no suitor suffers as a result of the act of the court a loss for which there is no redress. The law being what it is, and judges being what they are, many wrong judgments and orders are given and made. These can be corrected on appeal. But there are and must be limits to how far the courts will go in putting matters right on appeal.’ and
‘But while the cases show that the courts will often, by way of setting things right on appeal, go beyond the mere substitution of the right judgment or order for the wrong one, it is not the law that the court will always ensure, so far as possible, that no suitor suffers as a result of the act of the court a loss for which there is no redress. Any such unlimited principle is inconsistent with the law’s recognition of the torts of malicious abuse of process and malicious institution of proceedings, with their uncertain, but certainly limited, scope: Metall und Rohstoff v Donaldson Lufkin and Jenrette [1989] 3 W.L.R. 563, at pp. 611-15. And any such unlimited principle would mean that an appellate court would be entitled or obliged to award compensation or damages whenever it set aside an erroneous judgment or order which had caused damage to the appellant which was not regarded for this purpose as too remote. Yet many final judgments or orders that may be set aside on appeal are apt to cause great damage to the unsuccessful party in circumstances where it is unthinkable that the appellate court should have power to award damages or compensation. An order winding up a corporation is about as drastic an order as one could imagine. Such an order will rarely be stayed pending an appeal, and great and irremediable damage may be done to the corporation by the order in the meantime. But I have never heard it suggested that if a winding up order is set aside on appeal the appellate court may award damages or compensation against the party who obtained it. At the trial of an action a final injunction to prevent the commission of a nuisance may put the defendant out of business. May the court of appeal not only set aside the injunction but also award damages for the destruction of the defendant’s business? A judgment for possession of business premises may mean financial disaster for the defendant who claims that his lease has not been duly determined. If there is no stay and the defendant succeeds on appeal, is he to be awarded damages on the principle that the court must take care that ‘no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court.’

Judges:

Murphy J, Kaye J, Brooking J

Citations:

[1991] 1 VR 386

Mummery LJ

Citations:

[2007] EWCA Civ 412, [2007] WTLR 941, 9 ITELR 806

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

Cited – Gibbon v Mitchell ChD 1990
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 . .

Cited by:

Cited – Oun v Ahmad ChD 19-Mar-2008
The parties agreed in writing for the sale of leasehold property to the claimant. One document had been signed, but later one said that it had not included an aportionment. Another document then set out the apportionment. When the defendant refused . .
Cited – Fender (Administrator of FG Collier and Sons Ltd) v National Westminster Bank Plc ChD 26-Sep-2008
The administrator sought declarations as to whether to treat the bank as a secured or unsecured creditor.
Held: The court directed the Administrator to recognise the Bank as a secured creditor, as if the Deed of Release had never been . .
Cited – Ashcroft v Barnsdale and Others ChD 30-Jul-2010
The parties sought to rectify a deed of family arrangement varying a will. The variation deed had had several mistakes which in fact increased the sum of Inheritance Tax owed. HMRC refused to accept the rectification deed unless approved by the . .

Lists of cited by and citing cases may be incomplete.

Equity

Updated: 27 January 2022; Ref: scu.251766

Lloyds Bank plc v Rosset: CA 13 May 1988

Claim by a wife that she has a beneficial interest in a house registered in the sole name of her husband and that her interest has priority over the rights of a bank under a legal charge executed without her knowledge. The case raises a point of importance in the law of registered conveyancing. Shortly stated, the point is whether, to have the protection afforded to overriding interests in respect of registered land, the wife needs to be in actual occupation of the house when the legal charge is executed as distinct from being in actual occupation by the later date on which the bank’s charge is registered in the land registry.

Purchas LJ, Mustill LJ, Nicholls LJ
[1988] EWCA Civ 11, [1989] Ch 350, [1988] 3 All ER 915
Bailii
Land Registration Act 1925 70(1)(g)
England and Wales
Citing:
Cited – National Provincial Bank Ltd v Hastings Car Mart Ltd ChD 27-Mar-1963
Cross J set out the nature of overriding interests: ‘Overriding interests are, speaking generally, matters which are not usually shown on title deeds or mentioned in abstracts of title and as to which, in consequence, it is not possible to form a . .
Cited – Weldon v Weldon (No 1) 27-Nov-1883
The duty of the Court to issue an attachment for non-obedience of a decree for restitution of conjugal rights is the same since the Divorce Acts as it was before.
It is not a sufficient compliance by a husband with a decree for restitution of . .
Cited – In re Boyle’s Claim ChD 1961
Mr. Boyle sought compensation in respect of a rectification of the register by removal from his title of land belonging to a neighbour. Since Mr. Boyle’s registered title was subject to overriding interests, he would not have been entitled to . .
Cited – National Provincial Bank Ltd v Hastings Car Mart Ltd CA 1964
The purpose and effect of section 70(1)(g) of the Land Registration Act 1925 was to make applicable to registered land the same rule as previously had been held to apply to unregistered land. (Russell LJ, Dissenting) ‘Nor should the mind be in any . .
Cited – National Provincial Bank v Ainsworth HL 13-May-1965
The respondent stayed on in the family home owned by her husband after he had left, and resisted a possession order sought by the chargee. The husband had charged the house as security for his business debts.
Lord Wilberforce described the . .
Cited – Williams and Glyn’s Bank Ltd v Boland HL 19-Jun-1980
Wife in Occupation had Overriding Interest
The wife had made a substantial financial contribution to the purchase price of the house which was registered only in her husband’s name, and charged to the bank. The bank sought possession. The wife resisted saying that she had an overriding . .
Cited – Barnhart v Greenshields PC 5-Dec-1853
Pemberton Leigh said: ‘With respect to the effect of possession merely, we take the law to be, that if there be a tenant in possession of land, a purchaser is bound by all the equities which the tenant could enforce against the vendor, and that the . .
Cited – Strand Securities Ltd v Caswell CA 2-Feb-1965
The leaving of furniture in a flat or having a key to the flat or making occasional use of it was not enough to constitute actual occupation. Where A permits B to occupy land on B’s own behalf by way of gratuitous licence, A’s capacity as licensor . .
Cited – Gissing v Gissing HL 7-Jul-1970
Evidence Needed to Share Benefical Inerests
The family home had been purchased during the marriage in the name of the husband only. The wife asserted that she had a beneficial interest in it.
Held: The principles apply to any case where a beneficial interest in land is claimed by a . .
Cited – Eves v Eves CA 28-Apr-1975
The couple were unmarried. The female partner had been led by the male partner to believe, when they set up home together, that the property would belong to them jointly. He had had told her that the only reason why the property was to be acquired . .
Cited – Williams and Glyn’s Bank Ltd v Boland CA 1979
Money was raised on mortgage of registered land and paid to a single trustee holding the land on trust for sale, and it was held that the rights of beneficiaries who were in occupation and of whom no enquiries had been made were not mere minor . .
Cited – Midland Bank Plc v Dobson CA 12-Jul-1985
The trial judge had been entitled to find a common intention constructive trust from evidence which he accepted that the parties treated the house as ‘our house’ and had a ‘principle of sharing everything’. Although the judge should approach such . .
Cited – Grant v Edwards and Edwards CA 24-Mar-1986
A couple were not married but lived together in Vincent Farmhouse in which the plaintiff claimed a beneficial interest on separation. The female partner was told by the male partner that the only reason for not acquiring the property in joint names . .
Cited – In re Connolly Brothers Ltd (No. 2) CA 1912
A company had granted a debenture over all its assets, present and future, but wishing to acquire an additional property, it approached a third party who agreed to finance the purchase against a charge. It contracted to buy the property at pounds . .
Cited – Security Trust Co v The Royal Bank of Canada PC 1-Dec-1975
(Bahamas) A company, Fisher agreed to buy land with part of the purchase price to be paid by a fixed date and the balance secured by a mortgage to the vendor. A conveyance and a mortgage were duly executed and held in escrow pending payment of the . .
Cited – Church of England Building Society v Piskor CA 1954
A purchaser, let into possession before completion, granted weekly tenancies to Captain Hamilton and others. The plaintiff building society loaned the sum of pounds 1,600 to assist the purchaser with completion, the money being paid over on . .

Cited by:
Appeal from – Lloyds Bank plc v Rosset HL 29-Mar-1990
The house had been bought during the marriage but in the husband’s sole name. The plaintiff’s charge secured the husband’s overdraft. The bank issued possession proceedings. Mr Rosset had left, but Mrs Rosset claimed, as against the bank an interest . .
Cited – Stack v Dowden HL 25-Apr-2007
The parties had cohabited for a long time, in a home bought by Ms Dowden. After the breakdown of the relationship, Mr Stack claimed an equal interest in the second family home, which they had bought in joint names. The House was asked whether, when . .
Approved – Abbey National Building Society v Cann HL 29-Mar-1990
Registered land was bought with an advance from the plaintiff. The transfer and charge were registered one month later, but in the meantime, the buyer’s parents moved in. When the buyer defaulted, his mother resisted possession proceedings, saying . .
Cited – Scott v Southern Pacific Mortgages Ltd and Others SC 22-Oct-2014
The appellant challenged a sale and rent back transaction. He said that the proposed purchaser had misrepresented the transaction to them. The Court was asked s whether the home owners had interests whose priority was protected by virtue of section . .

Lists of cited by and citing cases may be incomplete.

Trusts, Registered Land, Equity

Updated: 27 January 2022; Ref: scu.251494

Matchmove Ltd v Dowding and Another: CA 7 Dec 2016

Appeal against a finding that an oral agreement for the purchase of land was effective through a proprietary estopple and a constructive trust.

Sir Terence Etherton MR, Lloyd Jones LJ and Arnold J
[2016] EWCA Civ 1233
Bailii
Law of Property (Miscellaneous Provisions) Act 1989 2(5)
England and Wales

Land, Contract, Equity, Estoppel

Updated: 26 January 2022; Ref: scu.572005

Dexia Crediop Spa v Comune Di Prato: ComC 10 Nov 2016

Walker J
[2016] EWHC 2824 (Comm)
Bailii
England and Wales

Financial Services, Equity

Updated: 26 January 2022; Ref: scu.571756

Creggy v Barnett and Another: CA 11 Oct 2016

Appeal by the defendant, against an order requiring Mr Creggy to pay to the claimants the sum of US$2,305,795.68 including interest as equitable compensation for his breach of fiduciary duty in transferring in 1998 approximately US$1.2m to a Maltese lawyer. The monies came from the Swiss bank accounts of two Liberian companies, Pound Investments Inc and Glacier Investments Inc which, together with other offshore structures, were established by Mr Creggy for the purpose, as the judge found, of tax avoidance.

Sir Terence Etherton MR, Patten, Sales LJJ
[2016] EWCA Civ 1004
Bailii
England and Wales

Equity, Torts – Other

Updated: 24 January 2022; Ref: scu.570109

Seager v Copydex Ltd: CA 1967

Mr Seager had invented a patented carpet grip which he manufactured and marketed under the trade mark Klent. There were protracted negotiations between Mr Seager and Copydex over a proposal for Copydex to market the Klent. One of the issues in the negotiations was the price at which Mr Seager was to supply the product. During a meeting with two representatives of Copydex Mr Seager disclosed to them an alternative design of grip which could be produced more cheaply. Although there was a dispute as to precisely what had been disclosed at the meeting, there was no dispute that the disclosure was in confidence The defendants had manufactured a carpet grip, honestly and unconsciously making use of that confidential information. The alternative design was not covered by Mr Seager’s patent.
Held: The court upheld Mr Seager’s claim for breach of an equitable obligation of confidence, holding that Copydex must have unconsciously made use of the information which Mr Seager gave them The court ordered damages to be assessed on a restitutionary basis.
Lord Denning MR said: ‘The law on this subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent. The principle is clear enough when the whole of the information is private. The difficulty arises when the information is in part public and in part private. As, for instance, in this case. A good deal of the information which Mr Seager gave to Copydex Ltd. was available to the public, such as the patent specification in the Patent Office, or the KLENT grip, which he sold to anyone who asked. If that was the only information he gave them, he could not complain. It was public knowledge. But there was a good deal of other information he gave them which was private, such as the difficulties which had to be overcome in making a satisfactory grip; the necessity for a strong, sharp, tooth; the alternative forms of tooth; and the like. When the information is mixed, being partly public and partly private, then the recipient must take special care to use only the material which is in the public domain. He should go to the public source and get it; or, at any rate, not be in a better position than if he had gone to the public source. He should not get a start over others by using the information which he received in confidence. At any rate, he should not get a start without paying for it. It may not be a case for injunction or even for an account, but only for damages, depending on the worth of the confidential information to him in saving him time and trouble.’ The court confirmed the equitable remedy for breach of confidence: ‘The law on this subject does not depend on any implied contract. It depends on the broad principle of equity that he who has received information in confidence shall not take unfair advantage of it. He must not make use of it to the prejudice of him who gave it without obtaining his consent. The principle is clear enough when the whole of the information is private. The difficulty arises when the information is in part public and in part private. As, for instance, in this case. A good deal of the information which Mr Seager gave to Copydex Ltd. was available to the public, such as the patent specification in the Patent Office, or the KLENT grip, which he sold to anyone who asked. If that was the only information he gave them, he could not complain. It was public knowledge. But there was a good deal of other information he gave them which was private, such as the difficulties which had to be overcome in making a satisfactory grip; the necessity for a strong, sharp, tooth; the alternative forms of tooth; and the like. When the information is mixed, being partly public and partly private, then the recipient must take special care to use only the material which is in the public domain. He should go to the public source and get it; or, at any rate, not be in a better position than if he had gone to the public source. He should not get a start over others by using the information which he received in confidence. At any rate, he should not get a start without paying for it. It may not be a case for injunction or even for an account, but only for damages, depending on the worth of the confidential information to him in saving him time and trouble’. Where information is mixed partly public and private, then the recipient must take special care to use only the material, which is in the public domain: ‘He should go to the public source and get it; or, at any rate, not be in a better position than if he had gone to the public source.’

Lord Denning MR, Salmon LJ, Winn LJ
[1967] 1 WLR 923, [1967] RPC 349
England and Wales
Cited by:
Cited – Regina v Department of Health, Ex Parte Source Informatics Ltd CA 21-Dec-1999
Where information was given by a patient to the pharmacist, and he took the data, stripping out any possibility of the individual being identified, the duty of confidence which attached to the prescription was not breached by the passing on of the . .
Cited – EPI Environmental Technologies Inc and Another v Symphony Plastic Technologies Plc and Another ChD 21-Dec-2004
The claimant had developed an additive which would assist in making plastic bags bio-degradable. They alleged that, in breach of confidentiality agreements, the defendants had copied the product. The defendants said the confidentiality agreement was . .
Cited – Ratiu, Karmel, Regent House Properties Ltd v Conway CA 22-Nov-2005
The claimant sought damages for defamation. The defendant through their company had accused him acting in such a way as to allow a conflict of interest to arise. They said that he had been invited to act on a proposed purchase but had used the . .
Cited – B and B v A County Council CA 21-Nov-2006
The claimants sought damages from the defendant local authority after their identities had been wrongfully revealed to the natural parents of the adoptees leading to a claimed campaign of harassment. The adopters has specifically requested that . .
See Also – Seager v Copydex (No. 2) CA 1969
. .
Cited – Vestergaard Frandsen A/S and Others v Bestnet Europe Ltd and Others SC 22-May-2013
The claimant companies appealed against a reversal of their judgment against a former employee that she had misused their confidential trade secrets after leaving their employment. The companies manufactured and supplied bednets designed to prevent . .
Cited – Attorney General v Guardian Newspapers Ltd (No.1) HL 13-Aug-1987
A retired secret service officer intended to publish his memoirs through the defendant. The house heard an appeal against a temporary injunction restraining publication.
Held: Lord Bridge delivered his dissenting speech in the case of . .
Cited – Vestergaard Frandsen Sa ( Mvf3 Aps) and Others v Bestnet Europe Ltd and Others CA 20-Apr-2011
The claimants manufactured insecticidal fabrics. They claimed that the defendants had produced their own product using confidential information obtained from their former employees now working for the defendant. The courts had granted injunctions . .
Cited – Paymaster (Jamaica) Ltd and Another v Grace Kennedy Remittance Services Ltd PC 11-Dec-2017
(Court of Appeal of Jamaica) The parties disputed the ownership of copyight in certain computer software, and also an allegation of the misuse of confidential information. . .

Lists of cited by and citing cases may be incomplete.

Intellectual Property, Equity

Updated: 22 January 2022; Ref: scu.182798

Whiteley v Delaney: HL 9 Dec 1913

A. mortgaged property in Yorkshire to B. in order to secure a loan of pounds 300. He subsequently granted a second mortgage to the respondent C, and both mortgages were recorded under the Yorkshire Registries Acts. In order to provide the money to pay off C, A’s daughter D undertook to buy the property if she could find someone to advance pounds 300 to pay off B, and she instructed E, a solicitor, to this effect. E, ignorant of the existence of C’s mortgage, arranged for F lending the pounds 300 on mortgage, paid off B, and obtained from him the title-deeds, and prepared three dispositions of the property-( a) B to A, (b) A to D, (c) D to F-in security. C sued F, D, and A to have it declared that in virtue of deed (a) his mortgage had priority over F’s.
Held that F was equitable transferee of B’s first mortgage, and entitled to priority over C.

Lord Chancellor (Viscount Haldane), Lords Kinnear, Dunedin, and Atkinson
[1913] UKHL 855, 51 SLR 855
Bailii
England and Wales

Land, Equity

Updated: 22 January 2022; Ref: scu.632763

Merito Financial Services Ltd v Yelloly: ChD 11 Aug 2016

Allegation of breach of fiduciary duty

Master Matthew
[2016] EWHC 2067 (Ch)
Bailii
England and Wales

Trusts, Equity

Updated: 22 January 2022; Ref: scu.568640

Re Monroe Schneider Associates (Inc) and Barry Lee Schneider v: 31 Jul 1992

Federal Court of Australia – prior to 1875 the Chancery Court had to be somewhat circumspect when asked to rescind a judgment given in a common law court:

[1992] FCA 367, (1992) 109 ALR 137, (1992) 37 FCR 234
Austlii
Australia
Cited by:
Cited – Takhar v Gracefield Developments Ltd and Others SC 20-Mar-2019
The claimant appellant alleged that properties she owned were transferred to the first defendant under undue influence or other unconscionable conduct by the second and third defendants. The claim was dismissed. Three years later she claimed to set . .

Lists of cited by and citing cases may be incomplete.

Equity, Litigation Practice

Updated: 21 January 2022; Ref: scu.671565

Gorbunova v The Estate of Boris Berezovsky (Aka Platon Elenin) (Deceased) and Others: ChD 22 Jul 2016

Arnold J
[2016] EWHC 1829 (Ch)
Bailii
England and Wales

Wills and Probate, Equity

Updated: 20 January 2022; Ref: scu.567382

In re Leslie; Leslie v French: ChD 1883

The court gave guidance as to the circumstances in which an individual who had paid a premium on a policy belonging to someone else could claim an interest in the policy: ‘In my opinion a lien may be created upon the moneys secured by a policy by payment of premiums in the following cases: First. By contract with the beneficial owner of the policy. Secondly. By reasons of the right of trustees to an indemnity out of their trust property for money expended by them in its preservation. Thirdly. By subrogation to this right of trustees of some person who may at their request have advanced money for the preservation of the property. Fourthly. By reason of the right vested in mortgagees, or other persons having a charge upon the policy, to add to their charge any moneys which have been paid by them to preserve the property . .’ And ‘except under the circumstances to which I have referred, no lien is created by the payment of the premiums by a mere stranger or by a part owner’.

Justice Fry
(1883) 23 ChD 552
England and Wales
Cited by:
Cited – Foskett v McKeown and Others CA 27-Jun-1997
Various people had paid money with the promise of acquiring an interest in land in Portugal. The scheme was fraudulent. The funds had been used to purchase a life/investment policy. The policy was held in trust for the fraudster’s mother but he had . .
Cited – Strutt v Tippett CA 1890
The list set out in re Leslie for the ways in which one person might claim an interest in an insurance policy in another’s name, was not exhaustive. . .
Cited – Foskett v McKeown and Others HL 18-May-2000
A property developer using monies which he held on trust to carry out a development instead had mixed those monies with his own in his bank account, and subsequently used those mixed monies to pay premiums on a life assurance policy on his own life, . .

Lists of cited by and citing cases may be incomplete.

Insurance, Equity

Updated: 20 January 2022; Ref: scu.187411

In Re Oatway; Hertslet v Oatway: ChD 1903

A trustee put trust money into his bank account and then used some of the funds from that bank account to buy shares. The rest of the money in the account was dissipated, and the shares were worth less than the trust money which had been misappropriated.
Held: The trustee was not entitled to claim that it was the trust money which had dissipated and that the investment was made from the trustee’s own money. The investment was presumed to have been made with the trust’s money, meaning the trust could claim a proprietary interest in the shares irrespective of the order of withdrawals. For the purposes of the equitable remedy of tracing, if A is able to trace his property into the hands of B then he is entitled to its return.

Joyce J
[1903] 2 Ch 356
England and Wales
Cited by:
Cited – Allen and Another v Rochdale Borough Council CA 23-Mar-1999
Land was sold. It had been used as playing fields. The freehold and leasehold interests in the land were held by the respondent, and the claimants asserted it was held as bare trustees for them as charitable trustees for the school foundation. The . .

Lists of cited by and citing cases may be incomplete.

Equity

Updated: 20 January 2022; Ref: scu.187407

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.’

Rimer J
[2000] Pensions LR 15
England and Wales
Citing:
Cited – Re Butlin’s Settlement Trusts 1976
Sir Billy Butlin had executed a voluntary settlement to allow a majority of trustees to exercise a power under the settlement. By a drafting error the settlement did not give effect to this intention.
Held: The court could rectify the . .
Cited – Frederick E Rose (London) Limited v William H Pim Junior and Co Limited 1953
The plaintiffs, who were London merchants, had been asked by Egyptian buyers to supply ‘feveroles’. Not knowing what this term meant, they asked the defendants’ representative, who responded that ‘feveroles’ meant horsebeans. Relying on this . .

Cited by:
Cited – AMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .
Cited – Trustee Solutions Ltd and others v Dubery and Another ChD 21-Jun-2006
The rules of a pensions scheme were altered. It was required that any such alteration be in writing, but the trustees had not signed the document creating the amendment.
Held: The words ‘writing under hand’ clearly required a signature, and . .

Lists of cited by and citing cases may be incomplete.

Equity, Financial Services

Updated: 20 January 2022; Ref: scu.184574

Lyell v Kennedy: HL 1 Aug 1889

The true owner may recover money which was rightfully his from a person to whom the money in question had been wrongly paid by the collector of the money. A fiduciary is one who has undertaken, whether on request or without request, of his own motion to act on behalf of another in circumstances in which equity will not allow him ‘to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect’.

(1889) 14 App Cas 437, [1889] UKLawRpAC 36
Commonlii
England and Wales
Citing:
See Also – Lyell v Kennedy (No 3) CA 8-Apr-1884
The plaintiff claimed to be entitled to land as purchaser from the heir-at-law of an intestate, who had died many years earlier. The land was in the possession of the defendant, and the central issue in the action was whether the defendant’s . .

Cited by:
Cited – Fisher v Brooker and Another ChD 20-Dec-2006
The claimant said that he had contributed to the copyright in the song ‘A Whiter Shade of Pale’ but had been denied royalties. He had played the organ and particularly the organ solo which had contrbuted significantly to the fame of the record.
Cited – Clarence House Ltd v National Westminster Bank Plc CA 8-Dec-2009
The defendant tenants, anticipating that the landlord might delay or refuse consent to a subletting entered into a ‘virtual assignment’ of the lease, an assignment in everything but the deed and with no registration. The lease contained a standard . .

Lists of cited by and citing cases may be incomplete.

Equity, Agency

Updated: 20 January 2022; Ref: scu.247517

Haywood v The Brunswick Permanent Benefit Building Society: CA 3 Dec 1881

The land had been conveyed in consideration of a rent charge and a covenant to build and repair buildings.
Held: A mortgagee of the land was not liable on the covenant either at law or in equity even though he had notice of it.
Brett LJ said that Tulk -v- Moxhay: ‘decided that an assignee taking land subject to a certain class of covenants is bound by such covenants if he has notice of them, and that the class of covenants comprehended within the rule is that covenants restricting the mode of using the land only will be enforced. It may be also, but it is not necessary to decide here, that all covenants also which impose such a burden on the land as can be enforced against the land would be enforced … It is said that if we decide for the defendants we shall have to overrule Cooke v. Chilcott, 3 Ch. D. 694. If that case was decided on the equitable doctrine of notice, I think we ought to overrule it.’
Cotton LJ said: ‘Let us consider the examples in which a court of equity has enforced covenants affecting land. We find that they have been invariably enforced if they have been restrictive, and that with the exception of the covenants in Cooke v. Chilcott 3 Ch. D. 694, only restrictive covenants have been enforced.’ and that Tulk v. Moxhay: ‘lays down the real principle that an equity attaches to the owner of the land
The covenant to repair can only be enforced by making the owner put his hand into his pocket, and there is nothing which would justify us in going that length.’

Cotton LJ, Brett LJ
(1881) 8 QBD 403, (1881-1882) 8 QBD 403, [1881] UKLawRpKQB 160
Commonlii
England and Wales
Cited by:
Cited – London and South Western Railway Co v Gomm CA 1882
A grant was given to repurchase property, but was void at common law for the uncertainty of the triggering event.
Held: The ‘right’ to ‘take away’ the claimants’ estate or interest in the farm was immediately vested in the grantee of the right . .
Cited – Rhone and Another v Stephens HL 17-Mar-1994
A house was divided, the house being retained along with the roof over the cottage, and giving a covenant to repair the roof on behalf of the owner of the house. The cottage owner sought to enforce the covenant against a later owner of the house. . .

Lists of cited by and citing cases may be incomplete.

Land, Equity

Updated: 19 January 2022; Ref: scu.260255

Whaley Bridge Calico Printing Co v Green: QBD 12 Jan 1879

A director of a company who negotiated a purchase by the company for pounds 20,000 of a property was promised but did not receive pounds 3,000 out of the pounds 20,000 from the vendor.
Held: The contract was to be treated as having been entered into for the benefit of the purchaser without proof of fraud. The vendor was liable to the company for the pounds 3,000, because the company was entitled to treat the contract between the vendor and the director as made by the director on behalf of the company. Bowen J held that it ‘could not be successfully denied’ that if the pounds 3,000 had been paid to the director he would have held it on trust for the company.

Bowen J
(1879) 5 QBD 109, [1879] UKLawRpKQB 4
Commonlii
England and Wales

Equity, Contract

Updated: 18 January 2022; Ref: scu.551510

Ramsden v Dyson: HL 11 May 1866

The Vice-Chancellor had held that two tenants of Sir John Ramsden, the owner of a large estate near Huddersfield, were entitled to long leases of plots on the estate. They ostensibly held the plots as tenants at will only, but they had spent their own money in building on the strength of assurances, said to have been given to them by the landowner’s agent, that they would never be disturbed.
Held: The decision was overturned. The difference of opinion was over an issue of fact, that is the substance of what was said on the occasion when some tenants agreed to be tenants at lower rents than were being paid by other tenants of Sir John Ramsden.
Lord Kingsdown, dissenting on the facts, said: ‘The rule of law applicable to the case appears to me to be this; if a man, under a verbal agreement with a landlord for a certain interest in land, or what amounts to the same thing, under an expectation, created or encouraged by the landlord, that he shall have a certain interest, takes possession of such land, with the consent of the landlord, and upon the faith of such promise or expectation, with the knowledge of the landlord, and without objection by him, lays out money upon the land, a Court of equity will compel the landlord to give effect to such promise or expectation. This was the principle of the decision in Gregory v. Mighell 18 Ves. 328, and, as I conceive, is open to no doubt.’ Even if there were uncertainty as to the terms of the contract, a court of equity could nevertheless interfere in order to prevent fraud but that it was unclear what, in that case, the remedy should be. The choices were between the grant of a specific interest in the land and the grant of a restitutionary remedy such as monetary compensation.
Lord Cranworth LC said: ‘If any one makes an assurance to another, with or without consideration, that he will do or will abstain from doing a particular act, but he refuses to bind himself, and says that for the performance of what he has promised the person to whom the promise has been made must rely on the honour of the person who has made it, this excludes the jurisdiction of Courts of equity no less than of Courts of law.’

Lord Cranworth LC, Lord Wensleydale and Lord Westbury, Lord Kingsdown dissenting
[1866] LR 1 HL 129, [1866] 12 Jur NS 506, [1866] UKLawRpHL 7
Commonlii
England and Wales
Cited by:
Cited – Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd ChD 1981
The fundamental principle that equity is concerned to prevent unconscionable conduct permeates all the elements of the doctrine of estoppel. In the light of the more recent cases, the principle ‘requires a very much broader approach which is . .
Cited – Gonthier and Another v Orange Contract Scaffolding Ltd CA 25-Jun-2003
The question of a proprietary estoppel as between landlord and tenant arose. An agreement had been reached subject to contract for the grant of a lease, with an option to purchase. The tenant was allowed into possession before the documentation was . .
Cited – Holiday Inns Inc v Broadhead 1974
The parties negotiated for a lease, but never signed a contract. The plaintiff expended considerable sums to try to get planning, and once acquired it sought to buy the land, and claimed that Mr Broadhead had taken an unconscionable advantage, . .
Cited – Cobbe v Yeomans Row Management Ltd and Others ChD 25-Feb-2005
Principles for Proprietary Estoppel
A developer claimed to have agreed that upon obtaining necessary planning permissions for land belonging to the respondents, he would purchase the land at a price reflecting its new value. The defendant denied that any legally enforceable agreement . .
Criticised – Crabb v Arun District Council CA 23-Jul-1975
The plaintiff was led to believe that he would acquire a right of access to his land. In reliance on that belief he sold off part of his land, leaving the remainder landlocked.
Held: His claim to have raised an equity was upheld. The plaintiff . .
Followed – Inwards v Baker CA 13-Jan-1965
An indulgent father had encouraged his son to build a bungalow on his, the father’s, land. The son had done so in the expectation, encouraged by the father, that he would be permitted to remain in occupation.
Held: The court formulated the . .
Cited – Willmott v Barber ChD 19-Jun-1880
In 1869 Barber granted a 99-year lease of three acres of land in east London, subject to a covenant against assignment or sub-letting without consent. In 1874, in breach of covenant, he sub-let one acre on an annual tenancy to Willmott (who owned a . .
Cited – Strover and Another v Strover and Another ChD 10-May-2005
Insurance policies had been taken out by the partners in a firm. The surviving family of one and the remaining partners contested ownership. The policy was held in part for the benefit of the family. The premiums had been paid from partnership . .
Cited – Vehicles and Supplies Ltd and others v Financial Institutions Services Ltd PC 28-Jun-2005
(Jamaica) Parties had entered into a joint venture, before one fell into severe financial difficulties. A scheme of arrangement was proposed in which plots which were part of the development would be apportioned, but steps were not taken to complete . .
Cited – Uglow v Uglow and others CA 27-Jul-2004
The deceased had in 1976 made a promise to the claimant. The promise was not honoured in the will, and the claimant asserted a proprietary estoppel.
Held: The judge was right to have found that the promise was bound up with the claimant being . .
Cited – Thorner v Curtis and others ChD 26-Oct-2007
The claimant said that the deceased, his father and a farmer, had made representations to him over many years that if the claimant continued to work on the farm, he would leave the farm to him in his will. He died intestate. He claimed a proprietary . .
Cited – Yeoman’s Row Management Ltd and Another v Cobbe HL 30-Jul-2008
The parties agreed in principle for the sale of land with potential development value. Considerable sums were spent, and permission achieved, but the owner then sought to renegotiate the deal.
Held: The appeal succeeded in part. The finding . .
Cited – Thorner v Major and others CA 2-Jul-2008
The deceased had written a will, revoked it but then not made another. The claimant had worked for the deceased understanding that property would be left to him, and now claimed that the estate property was held under a trust for him.
Held: . .
Cited – Thorner v Major and others HL 25-Mar-2009
The deceased had made a will including a gift to the claimant, but had then revoked the will. The claimant asserted that an estoppel had been created in his favour over a farm, and that the defendant administrators of the promisor’s estate held it . .
Cited – Western Fish Products Ltd v Penwith District Council and Another CA 22-May-1978
Estoppel Cannot Oust Statutory Discretion
The plaintiff had been refused planning permission for a factory. The refusals were followed by the issue of Enforcement Notices and Stop Notices. The plaintiff said that they had been given re-assurances upon which they had relied.
Held: The . .

Lists of cited by and citing cases may be incomplete.

Estoppel, Landlord and Tenant, Equity

Leading Case

Updated: 18 January 2022; Ref: scu.188171

Lipkin Gorman (a Firm) v Karpnale Ltd: HL 6 Jun 1991

The plaintiff firm of solicitors sought to recover money which had been stolen from them by a partner, and then gambled away with the defendant. He had purchased their gaming chips, and the plaintiff argued that these, being gambling debts, were worthless, and that therefore no consideration had been given.
Held: The casino’s defence succeeded. The defence against a restitutionary claim that the defendant had altered his position was available to a person who had changed his position actin in good faith so that it would be inequitable to require him to make restitution.
Lord Goff said: ‘where an innocent defendant’s position is so changed that he will suffer injustice if called upon to repay or to repay in full, the injustice of requiring him so to repay outweighs the injustice of denying the plaintiff restitution. If the plaintiff pays money to the defendant under a mistake of fact, and the defendant then, acting in good faith, pays the money or part of it to charity, it is unjust to require the defendant to make restitution to the extent that he has so changed his position. Likewise, on facts such as those in the present case, if a thief steals my money and pays it to a third party who gives it away to charity, that third party should have a good defence to an action for money had and received. In other words, bona fide change of position should of itself be a good defence in such cases as these. The principle is widely recognised throughout the common law world.’ and
‘It is well established that a legal owner is entitled to trace his property into its product, provided that the latter is indeed identifiable as the product of his property . . Of course, ‘tracing’ or ‘following’ property into its product involves a decision by the owner of the original property to assert his title to the product in place of his original property.’
Lord Templeman discussed the value of chips issued by a casino to a gambler: ‘Thus within the club chips were treated as currency and on leaving the club Cass could exchange chips for money whenever he chose to do so. The chips themselves were worthless and at all times remained the property of the club but the club would redeem them for cash.’
Lord Bridge of Harwich said: ‘I agree with my noble and learned friend, Lord Goff of Chieveley, that it is right for English law to recognise that a claim to restitution, based on the unjust enrichment of the defendant, may be met by the defence that the defendant has changed his position in good faith. I equally agree that in expressly acknowledging the availability of the defence for the first time it would be unwise to attempt to define its scope in abstract terms, but better to allow the law on the subject to develop on a case by case basis.’

Lord Templeman, Lord Bridge, Lord Ackner and Lord Griffiths, Lord Goff
[1991] 2 AC 548, [1988] UKHL 12, [1991] 3 WLR 10
Bailii
Gaming Act 1845 18
England and Wales
Citing:
At CA – Lipkin Gorman v Karpnale Ltd CA 1989
A partner in a firm of solicitors stole money from them, and spent it gambling with the defendants. The firm sued also their banker, who had been held to be aware of the defaulting partner’s weaknesses and activities.
Held: The solicitors . .
Cited – Miller v Race 1758
A bank note made out to bearer and payable on demand was to be treated as currency. Conversion did not lie because there is no property in currency. Lord Mansfield said: ‘So, in the case of money stolen, the true owner cannot recover it, after it . .
Cited – Clarke v Shee and Johnson 1774
A servant diverted money from customers of his employer and bought lottery tickets. Lotteries were illegal and void under the Lottery Act 1772. The master recovered from the defendants who were the holders of the lottery and had innocently received . .
Cited – Aubert v Walsh 1810
The parties had wagered on 15 September 1808 that the war with France would end before 1 July 1810. One party to the wager withdrew in October 1808, and sought recovery of his stake.
Held: He was entitled to its return. Lord Mansfield said: . .
Cited – Hudson v Robinson 1816
A partner in a firm fraudulently contracted in the names of the partnership to sell goods to the plaintiff. He received the purchase price from the plaintiff and then did not delivery the goods.
Held: The plaintiff buyer could recover the . .
Cited – Orton v Butler 3-May-1822
A count stating that defendant had and received to the use of the plaintiff a certain sum of money, to be paid by the defendant to the plaintiff upon request ; and the non-payment upon request, and that the defendant converted and disposed thereof . .
Cited – Foster v Green 1862
Cash may not be subject to a claim for conversion. . .
Cited – Bainbrigge v Browne ChD 19-May-1881
An impoverished father had prevailed upon his inexperienced children to charge their reversionary interests under their parents’ marriage settlement to pay his mortgage debts. Undue influence was claimed.
Held: The defendants who were not . .
Cited – Shoolbred v Roberts 1899
A bankrupt won andpound;100 in a billiards game. The stake was given to stakeholders.
Held: The bankrupt’s trustee could recover the bankrupt’s own stake from the stakeholder but not the stake of the loser. Phillimore J said that: ‘I am bound . .
Cited – Black v S Freeman and Co 1910
(High Court of Australia) A thief stole money from the husband, and gave it to the victim’s wife. The victim sought to recover it from her.
Held: The money was repayable. Once stolen it was subject to a trust in favour of the victim wich could . .
At first instance – Lipkin Gorman (a Firm) v Karpnale Ltd 1987
A partner in the plaintiff firm of solicitors stole money from them and spent it gambling in the defendant’s casino. The plaintiff cought to recover the money from the defendant, saying that as a gambling debt, no consideration had been given. They . .
Cited – Banque Belge pour L’Etranger v Hambrouck 1921
Money was stolen by a thief. He then paid it by way of a gift into the bank account of the woman with whom he was living. The victim claimed its return from the woman and her bankers. GBP315 of the balance in her account represented part of the . .
Cited – Transvaal and Delagoa Bay Investment Co Ltd v Atkinson 1944
Money stolen from a company was paid by the thief into a bank account of his wife. All the money was expended, mostly by being returned to the husband. . .
Cited – Taylor and Another v Sir Thomas Plumer KBD 10-Feb-1815
Sir Thomas Plumer gave a bank draft to a stockbroker for the purpose of buying exchequer bills, and the stockbroker instead used the draft for buying American securities and doubloons for his own purposes.
Held: Sir Thomas was able to trace . .
Cited – Marsh v Keating HL 1834
Keating owned 12,000 pounds interest or share in joint stock reduced 3 per cent annuities, standing to her with the Bank of England, where the accounts were entered in the form of debtor and creditor accounts in the ledgers of the bank. Under what . .
Cited – Bolton Partners v Lambert 1889
The equitabe remedy of ratification cannot be relied upon so as to render an innocent recipient a wrongdoer. Cotton LJ said ‘an act lawful at the time of its performance [cannot] be rendered unlawful, by the application of the doctrine of . .
Cited – CHT Ltd v Ward 1965
Davies LJ discussed whether a casino gave good consideration when supplying gambling chips to customers: ‘People do not game in order to win chips; they game in order to win money. The chips are not money or money’s worth; they are mere counters or . .
Cited – Ministry of Health v Simpson; In re Diplock dec HL 1950
The will of Cable Diplock purported to make a gift to charity, and was distributed accordingly. The house however found the gift to be invalid.
Held: A personal remedy existed for the recovery of amounts wrongly paid in the distribution of an . .
Cited – Commercial Banking Co of Sydney Ltd v Mann PC 1961
The respondent Mann practiced as a solicitor in partnership with Richardson. They kept a ‘trust account’ in the partnership name with the Australian and New Zealand Bank in Sydney (‘ANZ’). Under the partnership agreement, all assets belonged to . .
Cited – Moses v Macferlan KBD 1760
An action for money had and received will only lie where it is inequitable for the defendant to retain the money. The defendant in an action for money had and received ‘can be liable no further than the money he has received’. . .
Cited – London and River Plate Bank Ltd v Bank of Liverpool Ltd 1896
Mathew J said: ‘when a bill becomes due and is presented for payment the holder ought to know at once whether the bill is going to be paid or not’. And ‘it is manifest that the position of a man of business may be most seriously compromised, even by . .
Cited – Durrant v Ecclesiastical Commissioners for England and Wales 1880
An action would lie against a recipient of money, paid under a mistake if fact, who (without notice of the mistake) had paid on the money in good faith as a principal to a third party from whom the recipient could not recover. The court rejected the . .
Cited – Price v Neal 1762
Money paid under a forged bill may be irrecoverable. . .
Cited – Golightly v Reynolds 1774
The identity of funds was traced through different hands and shops. . .
Cited – R E Jones Ltd v Waring and Gillow Ltd HL 1926
In the case of a confidence man whose plan might have been frustrated by an unexpected contact between the two innocent parties; the House of Lords were divided as to whether that equivocal contact amounted to a representation. Viscount Cave LC . .
Cited – Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd HL 15-Jun-1942
A contract for the supply by the respondents of special machinery to be manufactured by them was treated as an ordinary contract for the sale of goods. It began valid, but suffered frustration by the outbreak of war.
Held: Lord Wright restated . .
Cited – Avon County Council v Howlett CA 1983
The plaintiff, through its computerised system for the payment of wages, had overpaid the defendant to the extent of andpound;1,007. He had suffered an injury and been absent from work. The Council sought to recover the overpayment on the grounds . .
Cited – Union Bank of Australia Ltd v McClintock PC 1922
Where a partner obtains money by drawing on a partnership bank account without authority, he alone and not the partnership obtains legal title to the money so obtained. . .
Cited – Bute (Marquess) v Barclays Bank Ltd 1955
McGaw was the manager of three farms belonging to the plaintiff. He applied to the Department of Agriculture for Scotland for farm subsidies. After he left, the Department sent him three warrants in respect of the subsidies. The warrants were made . .

Cited by:
Cited – Rose v AIB Group (UK) plc and Another ChD 9-Jun-2003
The bank had received and paid substantial sums from the company before the petition for insolvency had been presented, and had discharged the director’s charge on his house. The liquidator sought restitution under the Act. The bank replied that it . .
Cited – Niru Battery Manufacturing Company, Bank Sepah Iran v Milestone Trading Limited CA 23-Oct-2003
The claimant had contracted to purchase lead from some of the defendants. There were delays in payment but when funds were made available they should have been repaid. An incorrect bill of lading was presented. The bill certified that the goods had . .
Cited – Commerzbank Ag v Price-Jones CA 21-Nov-2003
The respondent had received a bonus of andpound;250,000. His employers wrote to him in error increasing it. He later chose to stay rather than take redundancy because he now expected the full amount. He resisted an order for restitution. The . .
Cited – Dextra Bank and Trust Company Limited v Bank of Jamaica PC 26-Nov-2001
(Jamaica) A cheque was drawn which was used as part a complex financial arrangement intended to purchase foreign currency to work around Jamaica’s foreign exchange control regulations. It was asserted that by presenting the cheque used in the . .
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – AbouRahmah and Another v Abacha and others QBD 28-Nov-2005
Claims were made as to an alleged fraud by some of the respondents. . .
Cited – Boscawen and Others v Bajwa and Others; Abbey National Plc v Boscawen and Others CA 10-Apr-1995
The defendant had charged his property to the Halifax. Abbey supplied funds to secure its discharge, but its own charge was not registered. It sought to take advantage of the Halifax’s charge which had still not been removed.
Held: A mortgagee . .
Cited – Sempra Metals Ltd v Inland Revenue Commissioners and Another HL 18-Jul-2007
The parties agreed that damages were payable in an action for restitution, but the sum depended upon to a calculation of interest. They disputed whether such interest should be calculated on a simple or compound basis. The company sought compound . .
Cited – Grosvenor Casinos Ltd v National Bank of Abu Dhabi ComC 17-Mar-2008
Banker’s reference no guarantee
An Arab businessman lost pounds 18m at the claimant casino, and wrote scrip cheques against his account with the defendant. The claimant obtained judgment, but being unable to enforce that judgment pursued his bank. The club had used a system where . .
Cited – Kommune and Another v DEPFA Acs Bank ComC 4-Sep-2009
Local authorities in Denmark sought to recover sums paid to the defendant banks for swap trading, saying that the payments had been outwith their powers. . .
Cited – Bankers Trust Company v Namdar and Namdar CA 14-Feb-1997
The bank sought repayment of its loan and possession of the defendants’ property. The second defendant said that the charge had only her forged signature.
Held: Non-compliance with section 2 of the 1989 Act does not make a bargain illegal, and . .
Cited – Jeremy D Stone Consultants Ltd and Another v National Westminster Bank Plc and Another ChD 11-Feb-2013
The claimants asserted an equitable claim against funds held by the defendant bank in the name of a company owned by another defendant who they said defrauded them through a Ponzi investment scheme.
Held: The claim failed. On the evidence, the . .
Cited – Scottish Equitable v Derby 16-Mar-2001
The claimant company sought repayment of a sum paid in error to the defendant. She replied that she had changed her position as a result of and relying upon the payment.
Held: The court gave as ‘the most obvious example’ of the kind of . .
Cited – The Ritz Hotel Casino Ltd v Al Daher QBD 15-Aug-2014
The claimant sought to recover andpound;1m on unpaid cheques. The cheques represented half of the sum gambled away by the defendant in one evening. She now alleged that the claimant had not complied with its duties under the 2005 Act to act . .
Cited – In re Hampton Capital Ltd ChD 9-Jul-2015
The companyy’s joint administrator requested orders under section 238 as against various payments made by the Company and for payment of the equivalent sums. . .
Cited – Investment Trust Companies v Revenue and Customs CA 12-Feb-2015
The claimants having sought repayment of overpaid VAT, they now complained of sums deducted by the Revenue.
Held: The Court allowed the Lead Claimants’ appeal, to the extent of the notional pounds 75 paid in respect of dead periods, and . .
Cited – John Ruskin College v Harley QBD 26-Nov-2013
A sum had been paid into court in 1997. Other sums were paid out, but this sum was left against costs liability. It was discovered much laterand paid out to the claimant. The former defendant now said that it had been paid out twice, and alleged . .
Cited – Revenue and Customs v The Investment Trust Companies SC 11-Apr-2017
Certain investment trust companies (ITCs) sought refunds of VAT paid on the supply of investment management services. EU law however clarified that they were not due. Refunds were restricted by the Commissioners both as to the amounts and limitation . .
Cited – Lowick Rose Llp v Swynson Ltd and Another SC 11-Apr-2017
Losses arose from the misvaluation of a company before its purchase. The respondent had funded the purchase, relying upon a valuation by the predecessor of the appellant firm of accountants. Further advances had been made when the true situation was . .

Lists of cited by and citing cases may be incomplete.

Equity, Contract

Leading Case

Updated: 15 January 2022; Ref: scu.184533

Bainbridge and Another v Bainbridge: ChD 22 Apr 2016

Matthews M
[2016] EWHC 898 (Ch)
Bailii
England and Wales
Citing:
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .

Lists of cited by and citing cases may be incomplete.

Equity

Updated: 14 January 2022; Ref: scu.562806

Whitbread And Others v Thomas Jordan And William Boulnois The Younger; And By Supplemental Bill, William Henry Whitbread And Others v Edward Edwards, Stephen Pontin And Robert Collins: 12 Feb 1835

[1835] EngR 511, (1833, 1834, 1835) 1 Y and C Ex 303, (1835) 160 ER 123
Commonlii
England and Wales

Land, Equity

Updated: 14 January 2022; Ref: scu.316019

Der Merwe v Goldman and Others: ChD 11 Apr 2016

The claimants had executed a deed creating a trust of their house, in ignorance of tax changes making such an arrangement liable to Inheritance Tax. The claimant now sought the setting aside of the settlement.
Held: The order was made, no consideration having been given.

Morgan J
[2016] EWHC 790 (Ch), [2016] WLR(D) 179, [2016] 4 WLR 71, [2016] WTLR 913
Bailii, WLRD
Inheritance Tax Act 1984 1 2 3
England and Wales

Inheritance Tax, Equity

Updated: 13 January 2022; Ref: scu.562026

Scottish Equitable v Derby: 16 Mar 2001

The claimant company sought repayment of a sum paid in error to the defendant. She replied that she had changed her position as a result of and relying upon the payment.
Held: The court gave as ‘the most obvious example’ of the kind of decision made by a payee which, even though it involves no immediate expenditure, will nonetheless give rise to the defence of change of position, the voluntary giving up of a job at an age when it would not be easy to get new employment.

[1863] EngR 722, (1863) 1 H and M 468, (1863) 71 ER 205
Commonlii
England and Wales

Contract, Equity

Updated: 06 January 2022; Ref: scu.283377

Behrens v Heilbut: 1956

A voluntary settlement was rectified despite it not being a representation of a previously negotiated bargain.

Harman J
(1956) 222 LJ Jo 290
England and Wales
Cited by:
Cited – AMP (UK) Plc and Another v Barker and Others ChD 8-Dec-2000
The claimants were interested under a pension scheme. Alterations had been made, which the said had been in error, and they sought rectification to remove a link between early leaver benefits and incapacity benefits. The defendant trustees agreed . .

Lists of cited by and citing cases may be incomplete.

Equity

Updated: 05 January 2022; Ref: scu.184581

Freedman v Freedman and Others: ChD 21 May 2015

Application made by Part 8 Claim for an order that a settlement dated 4 February 2013 and made between the parties be set aside on the ground of equitable mistake.

Proudman J
[2015] EWHC 1457 (Ch)
Bailii
England and Wales

Trusts, Equity

Updated: 30 December 2021; Ref: scu.547065

Cadlock v Dunn and Another: ChD 13 May 2015

The equity of exoneration could be applied for a wife who had charged her beneficial half share of the matrimonial property to secure a loan to her husband to enable him to re-acquire his half share from his trustee in bankruptcy. The wife obtained no financial benefit from the payment. The benefit to the wife was being able to stay in her house, a benefit incapable of financial valuation. It was clear from Re Pittortou that if any sums are spent on joint or household expenditure or otherwise for the joint benefit of the parties, the equity does not arise in respect of those sums.

Behrens HHJ
[2015] EWHC 1318 (Ch), [2015] BPIR 739
Bailii
England and Wales
Cited by:
Cited – Armstrong v Onyearu and Another CA 11-Apr-2017
Exoneration of partner’s equity on insolvency
The court considered the equity of exoneration, where property jointly owned by A and B is charged to secure the debts of B only, A is or may be entitled to a charge over B’s share of the property to the extent that B’s debts are paid out of A’s . .

Lists of cited by and citing cases may be incomplete.

Equity

Updated: 30 December 2021; Ref: scu.546559

Graham-York v York and Others: CA 10 Feb 2015

The claimant challenged a possession order made in respect of the house she occupied, alleging a constructive trust in her favour. The house had been occupied by the unmarried co-habiting couple for nearly 25 years before the death of one of them. He was the registered proprietor of the property but his partner, the appellant, claimed a beneficial interest under a common intention constructive trust. The issues were, first, whether she had any such interest and, if so, its size and, secondly, whether any such interest had priority over a registered legal charge granted by the deceased. At first instance, the judge held that the appellant had a 25% beneficial interest over which the charge took priority. The appellant now contended that her interest was 50% and that it took priority over the charge but this second issue became in the course of argument a question whether the appellant was entitled to an equity of exoneration in respect of the secured indebtedness.
Held: The sole issue at trial had been whether the appellant’s interest took priority over the charge, and reliance on an equity of exoneration as against the deceased’s estate had never been pleaded. It was raised only after judgment and it was by then too late because the judge had not made findings as to the use or destination of the loan proceeds. If it had been pleaded, it would have raised the issue ‘whether all or some of the debt secured by the mortgage charge represented lending which was not incurred for the benefit of the joint household but solely for the benefit of the deceased Norton York and/or his business interests’. If that was the case, there would have been the possibility, but not the inevitability, that she would be entitled to the equity. Whether the equity arises ‘depends upon the presumed intention of the parties and is highly fact-sensitive.’
As regards the possibility of an equity of exoneration arising, Tomlinson LJ said: ‘However for what it is worth the inference from such evidence as there was seems to me to point away from, rather than towards, the conclusion that the borrowing was for the benefit of Norton York alone. It was the judge’s implicit finding that Norton York was responsible for generating almost all of the income, and thus the assets, which the family unit enjoyed. It is apparent therefore that Miss Graham-York shared the benefit of the deceased’s business ventures and it would be unconscionable that she should do so without sharing the burden of the mortgage. As noted in paragraph 18 above, it was in fact her evidence that Norton York’s business ventures ‘provided us with the wherewithal to live on’. The point was well made by Miss Haren that the question whether it was intended by the parties that the beneficial interest of one of them should be exonerated from the burden of the mortgage debt, is dependent upon the same factors as come into the equation when considering the whole course of dealing between the parties in relation to the property, for the purpose either of deducing their intention or of determining what is fair in relation to their respective shares of the beneficial entitlement. The judge having concluded that Miss Graham-York’s entitlement was 25%, it would be artificial and illogical not to acknowledge that that must in the circumstances be a 25% interest subject to the mortgage indebtedness from which both she and Norton York had derived benefit.’

Moore-Bick VP, Tomlinson, King LJJ
[2015] EWCA Civ 72
Bailii
England and Wales
Cited by:
Cited – Armstrong v Onyearu and Another CA 11-Apr-2017
Exoneration of partner’s equity on insolvency
The court considered the equity of exoneration, where property jointly owned by A and B is charged to secure the debts of B only, A is or may be entitled to a charge over B’s share of the property to the extent that B’s debts are paid out of A’s . .

Lists of cited by and citing cases may be incomplete.

Land, Equity

Updated: 27 December 2021; Ref: scu.542439

Nilon Ltd and Another v Royal Westminster Investments Sa and Others: PC 21 Jan 2015

(British Virgin Islands) The primary questions which were the subject of argument were (1) whether a claimant (A) can bring proceedings for rectification of the share register of a company (D1) when the reason for rectification is an untried allegation that a defendant (D2) has agreed to allot shares in D1 to A; and (2) if so, whether D2 is a necessary and proper party to A’s claim against D1 and whether the BVI is an appropriate forum for A’s claim against D.

Lord Mance, Lord Sumption, Lord Carnwath, Lord Toulson, Lord Collins
[2015] UKPC 2
Bailii

Commonwealth, Company, Equity, Jurisdiction

Updated: 27 December 2021; Ref: scu.541689

Nexus Communications Group Ltd v Lambert and Others: ChD 31 Jan 2005

The purchaser under a share sale agreement sought money due in default. The vendors had accounts prepared for them which would give rise to a large sum being payable to the claimant. They served a notice disputing the accounts. The notice implied that a discussion period had been reached, but they also claimed that the purchaser had not himself completed certain stages and that therefore that stage had not been reached.
Held: The equitable doctrine of election, requiring a party taking the benefit of a document to accept also the burden applied to litigation where a party was seeking to present inconsistent arguments. In order for the claimant to put the defendant to that election, he had to show that the defendant had taken some futher step beyond the pleadings which would make it inequitable to pursue both lines of argument.

Gabriel Moss QC
Times 03-Mar-2005
England and Wales

Equity, Litigation Practice

Updated: 27 December 2021; Ref: scu.223462

Dibbins v Dibbins: 1896

A partnership deed provided an option for a surviving partner to purchase a deceased’s partner’s share upon giving notice within three months of the death. The partner who survived was not of sound mind, but his solicitor gave timely notice, later confirmed by an order under the Lunacy Acts. A second notice was then given, but out of time.
Held: The option had not been exercsied within the necessary time limit, and no contract had been created of which the second notice could take the benefit.
Chitty J said: ‘The doctrine of equity, that time is not of the essence of the contract, is not one of universal application, and it is settled with reference to options of this kind that there is no difference as to time between the rule of equity and the rule of common law; in other words, in exercising an option of this nature where time is limited the option must be exercised (if at all) within the time for which it is expressed to be given, both at law and in equity.’
To be valid, the exercise of an option to acquire an interest in property must be performed strictly in accordance with its prescribed terms. A failure could not be rectified by the executor out of time since ratification of an act does not apply retrospectively.

Chitty J
[1896] 2 Ch 348, [1896] 65 LJ Ch 724, 75 LT 137, 44 WR 595, 40 Sol Jo 599
England and Wales
Citing:
Distinguished – Bolton Partners v Lambert 1889
The equitabe remedy of ratification cannot be relied upon so as to render an innocent recipient a wrongdoer. Cotton LJ said ‘an act lawful at the time of its performance [cannot] be rendered unlawful, by the application of the doctrine of . .

Cited by:
Cited – Haugland Tankers As v RMK Marine Gemi Yapim Sanayii Ve Deniz Tasimaciligi Isletmesi As ComC 9-Mar-2005
An option agreement was granted for the sale of a ship hull. The option was excercised but the defendant claimed the commitment fee required was not paid.
Held: The exercise of an option had to be in the precise terms set out in the contract. . .
Cited – Di Luca v Juraise (Springs) Limited; Amess and Amess CA 6-Oct-1997
In regard to options for the purchase of land, time constraints are of the essence. An option is not a contract but an irrevocable offer that matures into a bilateral contract upon due exercise of the option during the option term . .

Lists of cited by and citing cases may be incomplete.

Contract, Equity

Updated: 27 December 2021; Ref: scu.223446

Halsall v Brizell: ChD 1957

Land in Liverpool was sold in building plots. The vendors retained the roads and sewers and a promenade and sea wall. A separate deed of covenant of 1851 between the vendors and the owners of the plots which had by then been sold, recited that the retained lands were intended to be left upon trust to be used and enjoyed by the owners of the plots and their successors in title. The owners of the plots by the deed covenanted that they and their successors in title would pay a due proportion of the expenses of maintenance of the roads, sewers promenade and sea wall. That proportion was to be determined in an Annual General Meeting of the owners of the plots. The successors in title of an original covenantor were prepared to pay a contribution in respect of one plot but challenged the validity of a resolution at an Annual General Meeting requiring them to pay several contributions because the building on their plot had been subdivided into flats.
Held: Upjohn J said that the successors in title to the covenantors could not be sued on the covenants, but ‘it is conceded that it is ancient law that a man cannot take benefit under a deed without subscribing to the obligations thereunder.’
and
‘If the defendants did not desire to take the benefit of this deed, for the reasons I have given, they could not be under any liability to pay the obligations thereunder. But, of course, they do desire to take the benefit of this deed. They have no right to use the sewers which are vested in the plaintiffs, and I cannot see that they have any right, apart from the deed, to use the roads of the park which lead to their particular house. The defendants cannot rely on any way of necessity or on any right by prescription, for the simple reason that when the house was originally sold in 1931 to their predecessor in title he took the house on the terms of the deed of 1851 which contractually bound him to contribute a proper proportion of the expenses of maintaining the roads and sewers, and so forth, as a condition of being entitled to make use of those roads and sewers. Therefore, it seems to me that the defendants here cannot, if they desire to use this house, as they do, take advantage of the trusts concerning the user of the roads contained in the deed and the other benefits created by it without undertaking the obligations thereunder. Upon that principle it seems to me that they are bound by this deed, if they desire to take its benefits.’

Upjohn J
[1957] 1 All ER 371, [1957] Ch 169
England and Wales
Cited by:
Cited – Bhullar and Another v McArdle CA 10-Apr-2001
The defendant had registered a caution against the claimant’s land at the Land Registry. The claimant sought its removal and now appealed an order for rectification of the register against him. The parties had reached oral agreements as to the . .
Cited – IDC Group Ltd and others v Clark and others CA 25-Jun-1991
Sir Nicolas Browne-Wilkinson VC reviewed the cases about constructive trust claims summarising the result as follows: ‘That decision [Lyus] was approved by the Court of Appeal in Ashburn Anstalt v Arnold . . The Court of Appeal put what I hope is . .
Cited – Allied London Industrial Properties Limited v Castleguard Properties Limited CA 24-Jul-1997
The parties disputed the effect of a conveyance of land from 1985 and an associated deed of variation. The variation added an easement which was argued by the purchaser to have attached to the land, and was said by the vendor to have been personal . .
Cited – Beckenham Mc Ltd v Centralex Ltd and others ChD 10-Jun-2004
. .
Cited – Schiffahrtsgesellschaft Detlef Von Appen Gmbh v Wiener Allianz Versichrungs Ag and Voest Alpine Intertrading Gmbh CA 16-Apr-1997
. .
Cited – Bluestorm Ltd v Portvale Holdings Ltd CA 13-Feb-2004
The appellant was a lessee of some premises within a development. They purchased the freehold through a subsidiary but then failed to make repairs. When the other tenants withheld the service charges, the company was liquidated. Another tenant . .
Cited – Rhone and Another v Stephens HL 17-Mar-1994
A house was divided, the house being retained along with the roof over the cottage, and giving a covenant to repair the roof on behalf of the owner of the house. The cottage owner sought to enforce the covenant against a later owner of the house. . .
Cited – Tito v Waddell (No 2); Tito v Attorney General ChD 1977
Equity applies its doctrines to the substance, not the form, of transactions. In respect of the rule against self dealing for trustees ‘But of course equity looks beneath the surface, and applies its doctrines to cases where, although in form a . .
Cited – Rhone and Another v Stephens HL 17-Mar-1994
A house was divided, the house being retained along with the roof over the cottage, and giving a covenant to repair the roof on behalf of the owner of the house. The cottage owner sought to enforce the covenant against a later owner of the house. . .
Cited – Davies and Others v Jones and Another CA 9-Nov-2009
The parties contracted for the sale of land for development. The contract allowed for the costs of environmental remediation, but disputed the true figure set by the eventual builder and retained. The court now heard argument about whether the sum . .
Cited – Thompson v Bee and Another CA 20-Nov-2009
The parties disputed the extent and nature of the use allowed for an unregistered but express right of way. The track had been obtained by use for agriculture. The dominant owner appealed against a finding that it was limited to agricultural use, . .

Lists of cited by and citing cases may be incomplete.

Contract, Land

Updated: 22 December 2021; Ref: scu.189960

Tulk v Moxhay: 22 Dec 1848

Purchaser with notice bound in Equity

A, being seised of the centre garden and some houses in Leicester Square, conveyed the garden to B in fee, and B covenanted for himself and his assigns to keep the garden unbuilt upon.
Held: A purchaser from B, with notice of the covenant, was bound by it in equity, whether he was bound at law or not, and an injunction was granted to restrain him infringing the covenant. The equitable doctrine is that restrictive covenants follow the land to the new owner on notice. The subsequent owner must be found to have notice before he will be bound by the covenants.
The burden of a positive covenant will not run with the land. In order to bind a successor in title: 1) the covenant must be negative in substance 2) It must benefit the land of the covenantee, 3) The burden must be intended to run with the land, and 4) the successor must have notice of the covenant.
Lord Cottenham LC said: ‘It is said that the covenant being one which does not run with the land, this court cannot enforce it; but the question is, not whether the covenant runs with the land, but whether a party shall be permitted to use the land in a manner inconsistent with the contract entered into by his vendor, and with notice of which he purchased.’ and ‘if an equity is attached to the property by the owner, no one purchasing with notice of that equity can stand in a different situation from the party from whom he purchased.’

Lord Cottenham LC, Knight Bruce LJ
(1848) 2 Ph 774, [1848] 1 H and TW 105, [1848] 18 LJ Ch 83, [1848] 13 LTOS 21, [1848] 13 Jur 89, [1848] 41 ER 1143 LC, (1848) 11 Beavan 571, [1848] EWHC Ch J34, [1848] EngR 1059, (1848) 1 H and Tw 105, (1848) 47 ER 1345, [1848] EngR 1065, (1848) 41 ER 1143, [1848] EngR 1005, (1848) 11 Beav 571, (1848) 50 ER 937
Bailii, Commonlii, Commonlii, Commonlii
England and Wales
Citing:
Cited – Keppell v Bailey ChD 29-Jan-1834
The court was asked whether the owner of land can burthen it in the hands of future owners by the creation of novel rights.
Held: Lord Brougham said: ‘It must not be supposed that incidents of a novel kind can be devised and attached to . .
Cited – Whatman v Gibson 5-Apr-1838
A, the owner of a piece of land, divided it into lots for building a row of houses, and a deed was made between him of the one part and X and Y, (who had purchased some of the lots from him) and the several persons who should at any time execute the . .
Cited – The Duke of Bedford v The Trustees of The British Museum 6-Jul-1822
Where land is conveyed in fee, by deed of feoffment, subject to a perpetual ground rent, and the feoffee covenants for himself, his heirs and assigns, with the feoffor, the owner of adjoining lands, his heirs, executors, administrators, and assigns, . .
Cited – Mann v Stephens 23-Jul-1846
A. being seised in fee of a house and a piece of open land near to it, sold and conveyed the house to E, and covenanted, for himself, his heirs and assigns, with B., his heirs and assigns, that no building whatever should at any time thereafter be . .

Cited by:
Criticised – London County Council v Allen 1914
A landowner applied to the plaintiffs for their sanction to a new street scheme. It was given but subject to his covenant to keep certain land unbuilt upon. He gave the covenant. The plaintiffs themselves had no land in the area capable of . .
Considered – Patching v Dubbins 1853
The purchase-deed of a house in a terrace contained a covenant on the part of the vendor, unexplained by any recital, that no building should be erected on any part of the land of the vendor lying on the east side of the said terrace and opposite to . .
Considered – Child v Douglas 5-May-1854
. .
Cited – Crest Nicholson Residential (South) Ltd v McAllister CA 1-Apr-2004
Land had been purchased which was subject to a restrictive covenant. The papers did not disclose the precise extent of the dominant land, the land which benefitted from the restriction.
Held: The land having the benefit of a covenant had to be . .
Applied – Hemingway Securities Ltd v Dunraven Ltd and another ChD 16-Aug-1994
The lease contained a covenant against sub-letting. The tenant created a sub-lease in breach of that covenant and without the consent of the landlord.
Held: The head landlord was entitled to an injunction requiring the sub-tenant to surrender . .
Cited – Abbey Homesteads (Developments) Limited v Northamptonshire County Council CA 1986
Clause 1 of an agreement between a company and the District Council required that the land should be sold subject to the conditions restricting and regulating the development. A clause provided ‘An area of 1.3 hectares adjacent to the playing field . .
Cited – University of East London Higher Education Corporation v London Borough of Barking and Dagenham and others ChD 9-Dec-2004
The University wanted to sell land for development free of restrictive covenants. It had previously been in the ownership of both the servient and dominant land in respect of a restrictive covenant. The Borough contended that the restrictive . .
Cited – Rhone and Another v Stephens HL 17-Mar-1994
A house was divided, the house being retained along with the roof over the cottage, and giving a covenant to repair the roof on behalf of the owner of the house. The cottage owner sought to enforce the covenant against a later owner of the house. . .
Cited – London and South Western Railway Co v Gomm CA 1882
A grant was given to repurchase property, but was void at common law for the uncertainty of the triggering event.
Held: The ‘right’ to ‘take away’ the claimants’ estate or interest in the farm was immediately vested in the grantee of the right . .
Cited – Noakes and Co Ltd v Rice HL 17-Dec-2001
A charge on a public house provided that even after repayment of the principal, the owner continued to be obliged to purchase his beer from the brewery, and that any non-payment would be charged on the property.
Held: The clauses operated as a . .
Cited – Coles v Sims 16-Jan-1854
. .
Cited – Taylor v Gilbertson 3-Jul-1854
. .
Cited – Johnstone v Hall 11-Mar-1856
. .
Cited – Hodson v Coppard 6-Nov-1860
. .
Cited – Heywood v Heywood 19-Nov-1860
. .
Cited – Earl of Zetland v Hislop HL 12-Jun-1882
. .
Cited – Bath Rugby Ltd v Greenwood and Others CA 21-Dec-2021
This appeal concerns the question whether an area of land in Bath known as the Recreation Ground, commonly called ‘the Rec’, is still subject to a restrictive covenant imposed in a conveyance of the Rec dated 6 April 1922 (‘the 1922 conveyance’). . .

Lists of cited by and citing cases may be incomplete.

Land, Equity

Leading Case

Updated: 22 December 2021; Ref: scu.181987

Tito v Waddell (No 2); Tito v Attorney General: ChD 1977

Equity applies its doctrines to the substance, not the form, of transactions. In respect of the rule against self dealing for trustees ‘But of course equity looks beneath the surface, and applies its doctrines to cases where, although in form a trustee has not sold to himself, in substance he has. Again one must regard the realities. If the question is asked: ‘Will a sale of trust property by the trustee to his wife be set aside?’, nobody can answer it without being told more; for the question is asked in a conceptual form, and manifestly there are wives and wives. In one case the trustee may have sold privately to his wife with whom he was living in perfect amity; in another the property may have been knocked down at auction to the trustee’s wife from whom he has been living separate and in enmity for a dozen years.’
The issue arose, in relation to ‘the 1931 transaction’, as to whether the acts of which the claimants complained were done on behalf of the Government of the Gilbert and Ellice Islands Colony (in which case no claim lay against the Crown, because excluded by the 1947 Act) or the Government of the United Kingdom (in which case, if a claim lay, it was not excluded). The court accepted that the colonial government was a subordinate government, all important decisions being referred to London, and the Crown, on the advice of the United Kingdom Government, having important powers that could be used to override acts of the colonial government. But the Vice-Chancellor concluded: ‘In my judgment the government of the United Kingdom was not the government of the Gilbert and Ellice Islands Colony at any material time. It had important advisory and supervisory functions, as well as paramount powers. It also contributed much to the governing of the colony, in general and to the 1931 transaction in particular, eg in settling the form of the 1931 lease; but it was not the government.’
As to damages: ‘Per contra, if the plaintiff has suffered little or no monetary loss in the reduction of value of his land, and he has no intention of applying any damages towards carrying out the work contracted for, or its equivalent, I cannot see why he should recover the cost of doing work which will never be done. It would be a mere pretence to say that this cost was a loss and so should be recoverable as damages.’

Megarry VC
[1977] Ch 106, [1977] 3 All ER 129, [1977] 3 WLR 972
Crown Proceedings Act 1947 40(2)(b)
England and Wales
Citing:
Applied – Wrotham Park Estate Ltd v Parkside Homes Ltd ChD 1974
55 houses had been built by the defendant, knowingly in breach of a restrictive covenant, imposed for the benefit of an estate, and in the face of objections by the claimant.
Held: The restrictive covenant not to develop other than in . .
Cited – Bracewell v Appleby ChD 1975
The defendant wrongly used and asserted a right of way over a private road to a house which he had built.
Held: To restrain the defendant from using the road would render the new house uninhabitable. The court refused an injunction on the . .
Cited – Halsall v Brizell ChD 1957
Land in Liverpool was sold in building plots. The vendors retained the roads and sewers and a promenade and sea wall. A separate deed of covenant of 1851 between the vendors and the owners of the plots which had by then been sold, recited that the . .

Cited by:
Cited – Bath and North East Somerset Council v HM Attorney General, The Treasury Solicitor (Bona Vacantia) ChD 31-Jul-2002
Land was conveyed to the Council’s predecessor on condition that it be left available for use for sports and similar recreations, and left as an open space. It was now sought to develop the land as a home for a football club. The Council sought . .
Cited – Rhone and Another v Stephens CA 17-Mar-1993
A house had been divided. The original owner covenanted to repair the roof over the part which had been sold off. A later purchaser of the that part sought to enforce the covenant against a subsequent owner of the main house. At first instance the . .
Cited – Wrotham Park Settled Estates v Hertsmere Borough Council CA 12-Apr-1993
Land had been purchased under compulsory purchase powers. It had been subject to restrictive covenants in favour of neighbouring land which would have prevented the development now implemented. The question was how the compensation should be . .
Cited – Surrey County Council v Bredero Homes Ltd CA 7-Apr-1993
A local authority had sold surplus land to a developer and obtained a covenant that the developer would develop the land in accordance with an existing planning permission. The sole purpose of the local authority in imposing the covenant was to . .
Cited – Jaggard v Sawyer and Another CA 18-Jul-1994
Recovery of damages after Refusal of Injunction
The plaintiff appealed against the award of damages instead of an injunction aftter the County court had found the defendant to have trespassed on his land by a new building making use of a private right of way.
Held: The appeal failed.
Cited – Regina v Secretary of State for Home Department ex parte Bancoult Admn 3-Mar-1999
Application for leave to appeal granted. . .
Cited – Radford v De Froberville 2-Jan-1977
A contract was made for the sale of a plot of land adjoining a house belonging to the plaintiff (the vendor) but occupied by his tenants, under which the defendant (the purchaser) undertook to build a house on the plot and also to erect a wall to a . .
Cited – Alfred Mcalpine Construction Limited v Panatown Limited HL 17-Feb-2000
A main contractor who was building not on his own land, would only be free to claim damages from a sub-contractor for defects in the building where the actual owner of the land would not also have had a remedy. Here, the land owner was able to sue . .
Cited – Newgate Stud Company, Newgate Stud Farm Llc v Penfold, Penfold Bloodstock Limited ChD 21-Dec-2004
The claimants sought damages from the defendant. He had been employed to manage their horse-racing activities, and it was alleged that he had made secret profits. The defendant denied any dishonesty, saying all matters were known to the deceased . .
Cited – Regina v Secretary of State for Foreign and Commonwealth Affairs ex parte Quark Fishing Limited HL 13-Oct-2005
The applicant had previously received licences to fish for Patagonian Toothfish off South Georgia. The defendant had instructed the issuer of the licence in such a way that it was not renewed. It now had to establish that its article 1 rights had . .
Cited – Manuel and Others v Attorney-General; Noltcho and Others v Attorney-General ChD 7-May-1982
The plaintiffs were Indian Chiefs from Canada. They complained that the 1982 Act which granted independence to Canada, had been passed without their consent, which they said was required. They feared the loss of rights embedded by historical . .
Cited – Co-Operative Insurance Society Ltd v Argyll Stores HL 21-May-1997
The tenants of a unit on a large shopping centre found the business losing money, and closed it in contravention of a ‘keep open’ clause in the lease. They now appealed from a mandatory injunction requiring them to keep the store open.
Held: . .
Cited – Rhone and Another v Stephens HL 17-Mar-1994
A house was divided, the house being retained along with the roof over the cottage, and giving a covenant to repair the roof on behalf of the owner of the house. The cottage owner sought to enforce the covenant against a later owner of the house. . .
Cited – Davies and Others v Jones and Another CA 9-Nov-2009
The parties contracted for the sale of land for development. The contract allowed for the costs of environmental remediation, but disputed the true figure set by the eventual builder and retained. The court now heard argument about whether the sum . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Cited – Ruxley Electronics and Construction Ltd v Forsyth HL 29-Jun-1995
Damages on Construction not as Agreed
The appellant had contracted to build a swimming pool for the respondent, but, after agreeing to alter the specification to construct it to a certain depth, in fact built it to the original lesser depth, Damages had been awarded to the house owner . .

Lists of cited by and citing cases may be incomplete.

Land, Equity, Constitutional, Damages

Leading Case

Updated: 22 December 2021; Ref: scu.183016

Rhone and Another v Stephens: HL 17 Mar 1994

A house was divided, the house being retained along with the roof over the cottage, and giving a covenant to repair the roof on behalf of the owner of the house. The cottage owner sought to enforce the covenant against a later owner of the house.
Held: His appeal was dismissed. Equity can enforce negative covenants on a freehold against subsequent owners, but not the burden of positive burdens. Such a burden did not pass with the land. To allow the enforcement would go against the common law rule preventing a third party enforcing a contract to which he was not party. The burden of a positive covenant will not be enforced against the covenantor’s successors in title, and nothing in section 79 has the effect of causing the burden of a positive covenant to run with the land.
Lord Templeman said: ‘Conditions can be attached to the exercise of a power in express terms or by implication. Halsall v. Brizell was just such a case and I have no difficulty in wholeheartedly agreeing with the decision. It does not follow that any condition can be rendered enforceable by attaching it to a right nor does it follow that every burden imposed by a conveyance may be enforced by depriving the covenantor’s successor in title of every benefit which he enjoyed thereunder. The condition must be relevant to the exercise of the right.’ and ‘Restrictive covenants deprive an owner of a right which he could otherwise exercise. Equity cannot compel an owner to comply with a positive covenant entered into by his predecessors in title without flatly contradicting the common law rule that a person cannot be made liable upon a contract unless he was a party to it. Enforcement of a positive covenant lies in contract; a positive covenant compels an owner to exercise his rights. Enforcement of a negative covenant lies in property; a negative covenant deprives the owner of a right over property.’

Lord Templeman, Lord Oliver of Aylmerton, Lord Woolf, Lord Lloyd, Lord Nolan
Independent 23-Mar-1994, Times 18-Mar-1994, [1994] 2 WLR 429, [1994] 2 AC 310, [1994] UKHL 3, [1994] 2 All ER 65
Bailii
England and Wales
Citing:
Cited – Austerberry v Oldham Corporation CA 1882
Land was conveyed to trustees, they covenanting to maintain and repair it as a road. The covenant was given to the owners and their heirs and assigns, and was given on behalf of the covenantors and their heirs and assigns.
Held: Neither the . .
Appeal from – Rhone and Another v Stephens CA 17-Mar-1993
A house had been divided. The original owner covenanted to repair the roof over the part which had been sold off. A later purchaser of the that part sought to enforce the covenant against a subsequent owner of the main house. At first instance the . .
Cited – Halsall v Brizell ChD 1957
Land in Liverpool was sold in building plots. The vendors retained the roads and sewers and a promenade and sea wall. A separate deed of covenant of 1851 between the vendors and the owners of the plots which had by then been sold, recited that the . .
Cited – Spencer’s Case 1583
An assignee of a lease will take both the benefit and burden of the covenants in the lease provided that there is privity of estate as between the person enforcing the covenant and the person against whom enforcement is sought, and the covenant . .
Cited – Tulk v Moxhay 22-Dec-1848
Purchaser with notice bound in Equity
A, being seised of the centre garden and some houses in Leicester Square, conveyed the garden to B in fee, and B covenanted for himself and his assigns to keep the garden unbuilt upon.
Held: A purchaser from B, with notice of the covenant, was . .
Cited – Haywood v The Brunswick Permanent Benefit Building Society CA 1881
The land had been conveyed in consideration of a rent charge and a covenant to build and repair buildings.
Held: A mortgagee of the land was not liable on the covenant either at law or in equity even though he had notice of it.
Brett LJ . .
Cited – Cooke v Chilcott 1876
The purchaser of land with a well covenanted to erect a pump and reservoir and to supply water from the well to all houses built on the vendor’s land. Enforcement was sought against a purchaser.
Held: He had purchased with notice of the . .
Cited – Cox v Bishop 1857
The lease was assigned to a man of straw.
Held: The covenants in the lease could not be enforced against an equitable assignee of the lease who had entered into possession. The covenants were not enforceable because there was no privity of . .
Cited – London and South Western Railway Co v Gomm CA 1882
A grant was given to repurchase property, but was void at common law for the uncertainty of the triggering event.
Held: The ‘right’ to ‘take away’ the claimants’ estate or interest in the farm was immediately vested in the grantee of the right . .
Cited – Morland v Cook CA 1868
Land below sea level was partitioned by a deed with a covenant that the expense of maintaining the sea wall should be borne by the owners of the lands and payable out of the lands by an acre-scot.
Held: The covenant was enforced against a . .
Cited – In re Nisbet and Potts’ Contract 1905
Where a party asserted he was a purchaser in good faith without notice and for value, the burden of proving all the elements of the defence is upon the purchaser. A title acquired by adverse possession was not paramount to, and did not destroy the . .
Cited – Halsall v Brizell ChD 1957
Land in Liverpool was sold in building plots. The vendors retained the roads and sewers and a promenade and sea wall. A separate deed of covenant of 1851 between the vendors and the owners of the plots which had by then been sold, recited that the . .
Cited – Jones v Price 1965
Willmer LJ said: ‘a covenant to perform positive acts . . is not one the burden of which runs with the land so as to bind the successors in title of the covenantor: see Austerberry v. Oldham Corporation.’ and ‘ . . properly speaking, an easement . .
Cited – Tophams Ltd v Earl of Sefton HL 1967
Section 79 of the Law of Property Act (relating to the burden of covenants) achieved no more than the introduction of statutory shorthand into the drafting of covenants. It does does not have the effect of causing covenants to run with the land . .
Cited – Tito v Waddell (No 2); Tito v Attorney General ChD 1977
Equity applies its doctrines to the substance, not the form, of transactions. In respect of the rule against self dealing for trustees ‘But of course equity looks beneath the surface, and applies its doctrines to cases where, although in form a . .

Cited by:
Cited – Allied London Industrial Properties Limited v Castleguard Properties Limited CA 24-Jul-1997
The parties disputed the effect of a conveyance of land from 1985 and an associated deed of variation. The variation added an easement which was argued by the purchaser to have attached to the land, and was said by the vendor to have been personal . .
Cited – Cantrell v Wycombe District Council CA 29-Jul-2008
The appellant had bought a house at auction. It had previously been sold by a local authority subject to a covenant by the buyer allowing the authority to nominate tenants. The covenant was said to be binding on successors in title, and was . .
Cited – Davies and Others v Jones and Another CA 9-Nov-2009
The parties contracted for the sale of land for development. The contract allowed for the costs of environmental remediation, but disputed the true figure set by the eventual builder and retained. The court now heard argument about whether the sum . .
Cited – CGIS City Plaza Shares 1 Ltd and Another v Britel Fund Trustees Ltd ChD 13-Jun-2012
cgis_britelChD2012
The claimants asserted a right of light either by prescription or under lost modern grant. The defendants argued that alterations in the windows arrangements meant that any prescription period was restarted.
Held: ‘the Defendant is not correct . .
Cited – Bath Rugby Ltd v Greenwood and Others CA 21-Dec-2021
This appeal concerns the question whether an area of land in Bath known as the Recreation Ground, commonly called ‘the Rec’, is still subject to a restrictive covenant imposed in a conveyance of the Rec dated 6 April 1922 (‘the 1922 conveyance’). . .

Lists of cited by and citing cases may be incomplete.

Equity, Land

Leading Case

Updated: 22 December 2021; Ref: scu.88768

School Facility Management Ltd and Others v Governing Body of Christ The King College: CA 12 Jul 2021

Nicola Davies, Popplewell, Dingemans LJJ
[2021] EWCA Civ 1053, [2021] WLR(D) 383, [2021] 1 WLR 6129, [2021] PTSR 1977
Bailii, WLRD
England and Wales

Contract, Equity

Updated: 21 December 2021; Ref: scu.665594

Freeman v Jeffries: CExC 1868

(Court of Exchequer) The incoming tenant plaintiff had agreed to buy the outgoing tenant’s interest in a farm at a price determined by two valuers. He paid pounds 2,000 on account; the valuation took place; the plaintiff gave to the outgoing tenant a post-dated promissory note for pounds 3,319, being the amount of the valuation (after deducting the pounds 2,000 paid on account); and the plaintiff entered into possession. Later, when he sold his interest in the farm to a third party, he claimed to have discovered errors in the valuation in respect of the inclusion of items that ought not to have been included, and items that did not exist. Nevertheless, he paid the promissory note at maturity without objection, but later, without any prior complaint or demand for repayment, he sued the defendant, claiming as moneys had and received to his use the whole price paid, namely pounds 5,319; alternatively, the deposit of pounds 2,000; alternatively, the remaining pounds 3,319; or, alternatively, an undefined sum that a jury should find to be the value of the items that ought not to have been included in the valuation.
Held: He was not entitled to recover. The valuers’ award was final between the parties.
Kelly CB and Martin B held that the conduct of the claimant had made it impossible to restore the parties to their original condition, or to do justice between them (ie rescind), and that therefore the claimant could not maintain an action for money had and received. Martin and Bramwell BB held that, to enable the plaintiff to maintain an action for money paid by mistake as money had and received by the defendant, notice of the mistake must have been given to the defendant and a demand made.
Martin B said: ‘The parties have entered into an agreement for the sale of the defendant’s interest in the farm, stock and crops, for an entire sum to be put on it by two valuers, and of which 2000l. was paid down . . A promissory note is given for the amount of the valuation according to the agreement, and is paid; the plaintiff enters into possession of the farm; he again sells his interest, and so ceases to be able to return to the defendant what he had got from him; and now, the valuer on this sale having discovered what he thinks to be a mistake (and what we must suppose to be such) in the former valuation, the plaintiff without notice brings an action against the defendant to recover the whole sum which he has paid under that valuation. We are asked to treat the whole affair as a nullity, and are told that this is the essence of justice. But the effect contended for could only be produced by a rescission of the contract, and the contract cannot be rescinded unless the parties can be restored to their original condition. But if one party has done an act by reason of which it has become impossible to put the other in the same situation as before, there can be no rescission, and the remedy, if any, must be on the contract. It is contended that under these circumstances, a contract will be implied to return the money; but I am not of that opinion. If an action lies for recovering the money paid for those items which ought not to have been included in the valuation, it would be an action for the return of a portion of the money paid, on the ground that the consideration had failed, and after notice given that it had failed. But unless some communication has been made by the plaintiff, he is not entitled to recover either the whole or any part of this sum. On the ground, therefore, that the plaintiff is not in a position to sue without having made a demand on the defendant, I am of opinion that this rule must be made absolute.’
Bramwell B said: ‘I give no opinion on many of the questions which have been discussed; but on the ground I am about to mention I think this rule must be made absolute. The plaintiff’s case is this: ‘I have paid money which I was not bound to pay, and which, if I had known facts which I now know, I should not have paid. I paid it on the footing of a valuation having been made, when, in fact, no valuation had been made; neither a valuation including in distinct items the matters which were to be valued, nor a valuation in general of the whole of the items for which I ought to pay.’ But if the plaintiff were under the circumstances entitled to be repaid the sum he claims, he ought to have given notice to the defendant of the facts by reason of which he was so entitled; because until he did so there could be no duty on the defendant to pay, it over.’
Orse Freeman v Jefferies

Kelly CB, and Martin and Pigott BB
(1868-69) LR 4 Ex 189
Commonlii
England and Wales
Citing:
Cited – Wilkinson And Another v Godefroy 17-Jan-1839
The court considered a claim for the recovery of money from a stakeholder to whom it had been entrusted, in which case a demand is necessary to throw upon the depositee a duty to repay. . .

Cited by:
Distinguished – Baker v Courage and Co 1910
The plaintiff had owned a public house. On selling the leasehold to the defendants brewers, they had overpaid him by andpound;1,000. He deposited a sum at interest with the defendants. When he came to withdraw the last of the deposit (by coincidence . .
Cited – Fuller v Happy Shopper Markets Ltd and Another ChD 6-Mar-2001
A tenant complained to the landlord about his failure to repair. He ceased paying rent, and the landlord eventually distrained for rent by direct action.
Held: The tenant was unable to claim a legal set-off because there was no context of . .

Lists of cited by and citing cases may be incomplete.

Equity, Landlord and Tenant

Updated: 20 December 2021; Ref: scu.416722

Three Rivers District Council and Others v Governor and Company of Bank of England: CA 6 Dec 1994

Equitable assignors of a deposit cannot pursue a claim for recovery of the assigned debt without joining in the assignee as a party, though it can sue in its own name.

Peter Gibson LJ
Times 06-Dec-1994, Independent 13-Dec-1994, [1996] QB 292
England and Wales
Cited by:
Cited – Roberts v Gill and Co Solicitors and Others SC 19-May-2010
The claimant beneficiary in the estate sought damages against solicitors who had acted for the claimant’s brother, the administrator, saying they had allowed him to take control of the assets in the estate. The will provided that property was to be . .

Lists of cited by and citing cases may be incomplete.

Equity, Banking, Litigation Practice

Updated: 20 December 2021; Ref: scu.89885

Baker v Courage and Co: 1910

The plaintiff had owned a public house. On selling the leasehold to the defendants brewers, they had overpaid him by andpound;1,000. He deposited a sum at interest with the defendants. When he came to withdraw the last of the deposit (by coincidence andpound;1,000) the defendants discovered their earlier mistake and refused to return the money. When sued they pleaded set-off and made a counterclaim, both of which the plaintiff opposed as statute-barred.
Held: A claim in restitution for a payment made under a mistake of law arises at the date of the payment. There was no requirement for a demand where the claim is for repayment of moneys paid under a mistake common to both parties (as opposed to a unilateral mistake).
Hamilton J discussed the judgments of Barons Martin and Bramwell saying: ‘in that case at the time the first instalment of the money was paid neither the plaintiff nor the defendant made any mistake. The mistake was made by the two valuers who were subsequently employed to value the farm which was the subject- matter of the sale. It was not until the plaintiff afterwards consulted a third valuer on his negotiating for the resale of the property that he discovered that the former valuers had included in their valuation certain items which they ought not to have included, and after this he paid over the balance of the money to the defendant at a time when he knew of the valuers’ mistake but the defendant did not. It was under those circumstances that Martin and Bramwell BB held that there was no duty on the defendant to repay the excess valuation until after notice of the mistake, which was not his mistake and of which he was unaware. I think it is clear that they so decided without reference to a case in which not only the party paying paid under a mistake, but also the party receiving the money was under a mistake at the time when he received it. In my opinion, therefore, the case of Freeman v Jefferies does not support the contention of the defendants.’

Hamilton J
[1910] 1 KB 56
England and Wales
Citing:
Distinguished – Freeman v Jeffries CExC 1868
(Court of Exchequer) The incoming tenant plaintiff had agreed to buy the outgoing tenant’s interest in a farm at a price determined by two valuers. He paid pounds 2,000 on account; the valuation took place; the plaintiff gave to the outgoing tenant . .

Cited by:
Cited – Kleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Cited – Fuller v Happy Shopper Markets Ltd and Another ChD 6-Mar-2001
A tenant complained to the landlord about his failure to repair. He ceased paying rent, and the landlord eventually distrained for rent by direct action.
Held: The tenant was unable to claim a legal set-off because there was no context of . .
Cited – Test Claimants In The Franked Investment Income Group Litigation v Inland Revenue SC 23-May-2012
The European Court had found the UK to have unlawfully treated differently payment of franked dividends between subsidiaries of UK companies according to whether all the UK subsidiaries were themselves UK based, thus prejudicing European . .

Lists of cited by and citing cases may be incomplete.

Equity

Updated: 18 December 2021; Ref: scu.236525

Fuller v Happy Shopper Markets Ltd and Another: ChD 6 Mar 2001

A tenant complained to the landlord about his failure to repair. He ceased paying rent, and the landlord eventually distrained for rent by direct action.
Held: The tenant was unable to claim a legal set-off because there was no context of legal proceedings upon which such a claim must depend, but nevertheless he was able to assert an equitable set-off, because of the close relationship between the claim and the basis of the set-off, which would leave a balance due to him.

Lightman J
Gazette 15-Feb-2001, Times 06-Mar-2001, [2001] EWHC Ch 702, [2001] 25 EG 159, [2001] 2 LLR 49, [2001] 2 Lloyd’s Rep 49, [2001] 2 EGLR 32, [2001] L and TR 16, [2001] 1 WLR 1681
Bailii
England and Wales
Citing:
Cited – Wilkinson And Another v Godefroy 17-Jan-1839
The court considered a claim for the recovery of money from a stakeholder to whom it had been entrusted, in which case a demand is necessary to throw upon the depositee a duty to repay. . .
Cited – Freeman v Jeffries CExC 1868
(Court of Exchequer) The incoming tenant plaintiff had agreed to buy the outgoing tenant’s interest in a farm at a price determined by two valuers. He paid pounds 2,000 on account; the valuation took place; the plaintiff gave to the outgoing tenant . .
Cited – Baker v Courage and Co 1910
The plaintiff had owned a public house. On selling the leasehold to the defendants brewers, they had overpaid him by andpound;1,000. He deposited a sum at interest with the defendants. When he came to withdraw the last of the deposit (by coincidence . .
Cited – Kleinwort Benson Ltd v South Tyneside Metropolitan Borough Council ChD 1994
A claim for money had and received fell within section 5 Limitation Act, should be treated with caution. Hobhouse J said: ‘The cause of action in money had and received arises when the relevant money is paid by the plaintiff to the defendant.’
Cited – Sim v Rotherham Metropolitan Borough Council 1981
The 1870 Act applied where an employee’s contract was terminated in the course of a period at the end of which payment would be made. Scott J said: ‘Mr Goudie submitted that the real question was whether a teacher was entitled to be paid for the . .
Cited – Aectra Refining and Marketing Inc v Exmar NN CA 15-Aug-1994
A time loss claim can found a legal set-off claim against ship owners, provided that the loss claim can be made in the same court. The court referred to a ‘transaction set-off and independent set-off’. Cross-claims must both be due and payable, and . .
Cited – Federal Commerce Ltd v Molena Alpha Inc; (The ‘Nanfri’) CA 1978
The court considered whether claim as against a shipowner could be set off against sums due under a time charter hire.
Held: Save for any contractual provision to the contrary a tenant is entitled to deduct from the rent payable, so as to . .
Cited – Eller v Grovecrest Investments Ltd CA 1995
The court set out the history of the development of the law relating to the availability of set-off in the case where a landlord has levied or intends to levy distress.
Held: The law had developed, and an equitable right of set off against a . .
Cited – Talbot v Frere CA 1878
Sir George Jessel MR said: ‘there could not be a set-off until action brought and set-off pleaded.’ . .
Cited – Stein v Blake HL 18-May-1995
Where A and B each have claims against each other and A is insolvent, the common amount is set off, and the net difference remains as a debt due.
Hoffmann L said: ‘It is a matter of common occurrence for an individual to become insolvent while . .

Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Equity

Updated: 18 December 2021; Ref: scu.80707

Wagstaff v Read: 20 Nov 1683

Purchaser not hurt in Chancery – Portman became bankrupt, the commissioners assign his Estate, whereof the Plaintiff made Title to some Goods, and exhibits his Bill. against the Defendant to discover the Goods, and their Value, and what and how much he paid for them, because the Plaintiff charges, they came to the Defendant’s possession after the bankrupt broke : The Defendant sets forth, for what Goods did ever come to his Hands, he bought of Portman bona fide, for a full and valuable consideration, nor did not know, nor had any Notice that at the Time of buying until the now Bill, was a bankrupt, or of any Account of his Bankruptcy, and pleads this Matter against any Discovery.

[1683] EngR 80, (1683) 2 Chan Cas 156, (1683) 22 ER 892 (C)
Commonlii
England and Wales

Equity, Insolvency

Updated: 16 December 2021; Ref: scu.401091

Esdaile and Others v La Nauze and Heyland: 15 Jun 1835

[1835] EngR 821, (1835) 1 Y and C Ex 394, (1835) 160 ER 160
Commonlii
England and Wales

Banking, Equity

Updated: 13 December 2021; Ref: scu.316329

Fine v Fine: ChD 21 May 2012

Claims for rectification of (a) two settlement trust deeds made in 1992 and (b) two deeds of appointment made under those trust deeds.

David Donaldson QC,
(Sitting as a Deputy Judge of the High Court)
[2012] EWHC 1811 (Ch)
Bailii
England and Wales

Equity, Trusts

Updated: 13 December 2021; Ref: scu.462433