Shalson v Russo: ChD 11 Jul 2003

The claimant sought recovery of substantial sums he had advanced by way of loan, where the loan was induced by fraud. He sought to trace the funds into, inter alia, a motor yacht which it had been used to purchase.
Held: The transaction was voidable, not immediately void. On discovery of the fraud, the claimant could put forward a proprietary claim to the money in order to trace them. The lender did not have the benefit of an immediate constructing trust of the money loaned before the contract was rescinded. It was the implied rescission of the loan contract which enabled the proprietary interest. In this case it was not appropriate to allow the claimant to consolidate an overdrawn current and a deposit account. Only those funds which put the account in credit could be taken into account.

Judges:

Rimer J

Citations:

Times 03-Sep-2003, Gazette 18-Sep-2003

Jurisdiction:

England and Wales

Citing:

CitedBanque 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 . .
CitedEl Ajou v Dollar Land Holdings Plc and Another ChD 3-Jan-1993
A non active director may still be company’s ‘directing mind’. The doctrine of attributing the actions of individuals to a company is that ‘Their minds are its mind; their intention its intention; their knowledge its knowledge.’
Tracing was no . .
CitedLonhro v Fayed (No 2) 1992
. .
Lists of cited by and citing cases may be incomplete.

Equity, Contract

Updated: 28 July 2022; Ref: scu.186099