Macmillan Inc v Bishopsgate Investment Trust Plc and Others (No 3): ChD 1 Jul 1993

Bona fide chargees for value of shares situated in New York and held on trust for Macmillan were able, by application of New York law, to take the shares free of Macmillan’s prior equitable interest of which the chargees had had no notice. Where under the lex situs of the relevant trust property the effect of a transfer of the property by the trustee to a third party is to override any equitable interest which would otherwise subsist, that effect should be recognised as giving the transferee a defence to any claim by the beneficiary, whether proprietary or simply restitutionary.
Millett J said: ‘In order to ascertain the applicable law under English conflict of laws, it is not sufficient to characterise the nature of the claim: it is necessary to identify the question at issue . . Any claim, whether it be a claim that can be characterised as restitutionary or otherwise, may involve a number of issues which may have to be decided according to different issues of law. Thus it is necessary for the court to look at each issue and to decide the appropriate law to apply to the resolution of that dispute.’ and
‘The determination of a question of priority between competing claims to property is based on considerations of domestic legal policy, since it involves striking a balance between two competing desiderata, the security of title and the security of a purchase. A decision by an English court, based on English principles of conflict of laws, that the question should be determined by the application of the rules of a foreign law is also based on considerations of legal policy, albeit at a higher level of abstraction. It involves a policy decision, at the higher level, that the policy which has been adopted, at the lower level, by English law should not be applied because the considerations which led to its adoption in the domestic law are not relevant in the particular circumstances of the case; and to a policy decision, at a higher level, that the policy which has been adopted, at the lower level, by the foreign law should be applied in its stead. In my judgment there is or ought to be no scope for the doctrine of renvoi in determining a question of priority between competing claims to shares, and in the absence of authority which compels me to do so – and there is none – I am not willing to extend it to such a question’.
Millett J described the case of Norris v Chambres: ‘A suit in equity was instituted between two parties resident in England to enforce an equitable lien to land situate abroad. The court declined to entertain the suit. It held that, although a purchaser to whom land out of the jurisdiction of the court had been agreed to be sold by a person within the jurisdiction may obtain an order for specific performance against the vendor . . he cannot obtain an order against a third party to whom the vendor has conveyed the property even though such person took with notice of the contract and is within the jurisdiction. The case was treated as one of jurisdiction, but it would today more properly be regarded as one of choice of law; whether the claim be brought against the vendor himself or against his transferee, the plaintiff would be invoking the in personam jurisdiction of the court against a defendant who was amenable to that jurisdiction. The difference between the two cases is that in the second case there is no equity or privity between the parties which the court can enforce except such equity, if any, as may arise from the transferee’s notice; while the sufficiency of such notice to affect the transferee’s title is a matter for the lex situs. If, by that law, the transfer to the defendant extinguished the plaintiff’s interest notwithstanding the defendant’s notice, the plaintiff no longer has any proprietary interest upon which he can base his suit in England.’
Millett J
[1995] 1 WLR 978, [1995] 3 All ER 747
England and Wales
ExplainedNorris v Chambres 1862
A company director had advanced part of a loan for the purchase of a mine in Prussia. He died, and because of lack of funds, his estate risked losing everything. His estate sought its recovery.
Held: ‘With respect to this advance, I think . .

Cited by:
Appeal fromMacmillan Inc v Bishopsgate Investment Trust Plc and Others (No 3) CA 2-Nov-1995
The question of ownership of a company is to be decided according to law of country where the company is incorporated. Conflict of laws rules are to be used to look to the issue in the case not the cause of action.
Staughton LJ said: ‘In any . .
CitedR Griggs Group Ltd and others v Evans and others (No 2) ChD 12-May-2004
A logo had been created for the claimants, by an independent sub-contractor. They sought assignment of their legal title, but, knowing of the claimant’s interest the copyright was assigned to a third party out of the jurisdiction. The claimant . .
CitedKnight v Axa Assurances QBD 24-Jul-2009
The claimant was injured in a car accident in France. The defendant insurer said that the quantification of damages was to be according to French law and the calculation of interest also. The claimant said that English law applied.
Held: The . .
Commented onGlencore International AG v Metro Trading International Inc and others ComC 1-Aug-2001
Under English conflicts of laws rules the transfer of title to movable property is governed by the law of the place where the property is situated.
Moore-Bick J commented obiter on a dictum of Millett J in Macmillan: ‘However, if the lex situs . .
CitedIran v Berend QBD 1-Feb-2007
The Republic of Iran sought the return of a fragment of ancient Achaemenid relief in the possession of the defendant, saying that it was part of an ancient monument. The defendant said that she had bought it properly at an auction in Paris. The . .
CitedAkers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .

These lists may be incomplete.
Updated: 09 February 2021; Ref: scu.199522