NIRU Battery Manufacturing Company and Another v Milestone Trading Ltd and others: ComC 8 May 2003

There was a contract for the sale of lead ingots. The sale was supported by letters of credit but inaccurate certificates were issued to release payment. The parties sought now to amend the contributions in the light of the Royal Brompton Hospital case.
Held: It was too late now to argue for any fraud. That was not the basis on which the case had been pursued at trial. The case did not fall within the case for recoupment under Moule, nor was any claim for restitution nor a contribution appropriate. SGS was entitled to recover from CAI the whole of the sum paid under the judgment.
Moore-Bick J said: ‘I do not think that it is desirable to attempt to define the limits of good faith; it is a broad concept, the definition of which, in so far as it is capable of definition at all, will have to be worked out through the cases. In my view it is capable of embracing a failure to act in a commercially acceptable way and sharp practice of a kind that falls short of outright dishonesty as well as dishonesty itself. . . Where he knows that the payment he has received was made by mistake, the position is quite straightforward: he must return it. . . Greater difficulty may arise, however, in cases where the payee has grounds for believing that the payment may have been made by mistake, but cannot be sure. In such cases good faith may well dictate that an inquiry be made of the payer. The nature and extent of the inquiry called for will, of course, depend on the circumstances of the case, but I do not think that person who has, or thinks he was, good reason to believe that the payment was made by mistake will often be found to have acted in good faith if he pays the money away first making inquiries of the person from whom he received it.’

Moore-Bick J
[2003] EWHC 1032 (Comm)
England and Wales
See AlsoNiru Battery Manufacturing Company and Another v Milestone Trading Ltd and others ComC 11-Jul-2002
. .
CitedRoyal Brompton Hospital National Health Service Trust v Hammond and others HL 25-Apr-2002
The claimants sought damages against the defendants for their late delivery of a building. The contractors sought to share the damages with the architects who had certified the delays, defeating their own claims.
Held: The Act sought to extend . .
CitedTwinsectra Ltd v Yardley and Others HL 21-Mar-2002
Solicitors acted in a loan, giving an undertaking as to its application. In breach of that undertaking they released it to the borrower. The appellants appealed a finding of liability as contributors to the breach.
Held: ‘Money in a . .
CitedDubai Aluminium Company Limited v Salaam and Others HL 5-Dec-2002
Partners Liable for Dishonest Act of Solicitor
A solicitor had been alleged to have acted dishonestly, having assisted in a fraudulent breach of trust by drafting certain documents. Contributions to the damages were sought from his partners.
Held: The acts complained of were so close to . .
CitedMoule v Garrett CA 3-Feb-1872
An original tenant sought an indemnity from an assignee for a later claim by the landlord.
Held: The principles of recoupment are that where a plaintiff has been compelled by law to pay, or, being compellable by law, has paid, money which the . .

Cited by:
See AlsoNiru Battery Manufacturing Company and Another v Milestone Trading Ltd and others ComC 11-Jul-2002
. .
Appeal fromNiru 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 . .
CitedKommune 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. . .

Lists of cited by and citing cases may be incomplete.


Updated: 10 December 2021; Ref: scu.181957