The bank by mistake credited andpound;76,000 to the Defendant’s account and erroneously later indicated that it had come from a customer of the Defendant, M; in reliance on that, the Defendant dispatched goods to the value of some andpound;13,000 to M who later ceased trading and effectively disappeared without paying.
Held: The defendant’s appeal failed. Because the Defendant had only suffered detriment in relation to the andpound;13,000 it was not entitled to keep the balance because it will be unconscionable for it to do so. With respect to the defence of change of position to a claim for equitable restitution, ‘change of position’ only protects actual reduction of the transferee’s assets following receipt.’
Potter LJ said: ‘Similarly, the point is made that, albeit in Skyring -v Greenwood and Holt -v- Markham there was no exact enquiry into the degree to which each defendant had altered his financial position, there was equally no judicial statement that estoppel by representation could not operate pro tanto in an appropriate case. In Skyring -v- Greenwood, indeed, it is not clear that there was evidence of any detrimental reliance, the court simply assuming that it had taken place. In Holt -v- Markham, while it is clear from the judgment of Warrington LJ at 512 that not all the money had been spent, there is no indication whether the balance which remained was substantial and it is clear that, in addition to mere spending, the defendant had parted with his War Savings Certificates: see per Bankes LJ at 511. It seems to me that those cases do no more than establish that the court will generally think it appropriate to treat the matter broadly and will not require the defendant to demonstrate in detail the precise degree or value of the detriment which he has suffered in circumstances where, as Slade LJ pointed out, ‘he may find it difficult subsequently to recall and identify retrospectively the nature and extent of commitments undertaken or expenditure incurred as a result of an alteration in his general mode of living’. However, it is open to the court, acting on equitable principles, to take the view that some restitution is necessary, albeit the burden upon the defendant of proving the precise extent of his detriment should be a light one. In these circumstances, the court may well have broad regard to, without being bound to follow, the developing lines of the courts’ approach in `change of position’ cases. However, the two defences will remain distinct, unless or until the House of Lords rules otherwise.’
Peter Gibson LJ said: ‘I fully accept that the court, when assessing detriment, should not apply too demanding a standard of proof because of the practical difficulties faced by a defendant conducting a business who has been led to believe that the moneys paid by mistake are his (see the remarks of Slade L.J. in Howlett at pp. 621, 2) . . ‘
Lord Justice Peter Gibson, Lord Justice Potter, Lord Justice Clarke
[2001] EWCA Civ 970, [2002] QB 1286, [2002] 3 WLR 64, [2002] 1 All ER 198, [2001] All ER (D) 235, [2001] Lloyds Rep Bank 263
Bailii
England and Wales
Cited by:
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 . .
Lists of cited by and citing cases may be incomplete.
Equity, Banking
Leading Case
Updated: 01 November 2021; Ref: scu.160071
