Dear Colleagues,

With apologies for cross-posting, the UK Supreme Court has today decided the appeals in Pitt v Holt and Futter v Futter. The judgment is here - http://supremecourt.gov.uk/decided-cases/docs/UKSC_2011_0089_Judgment.pdf. The Court, in a single judgment from Lord Walker, affirmed the approach to trustees' mistakes from the Court of Appeal. So the rule in Re Hastings-Bass is not the rule from Re Hastings-Bass. It is necessary to prove that the trustees breached their duty in acting as they did, not simply that they would have acted differently.

However, perhaps more importantly for our members, the appeal in Pitt v Holt is allowed, on the basis of equitable mistake, adopting a test of whether the mistake was causative and of a sufficient gravity. The approach to be adopted to rescission in such cases is stated by Lord Walker at [126]:


"The gravity of the mistake must be assessed by a close examination of the facts, whether or not they are tested by cross-examination, including the circumstances of the mistake and its consequences for the person who made the vitiated disposition. Other findings of fact may also have to be made in relation to change of position or other matters relevant to the exercise of the court’s discretion. Justice Paul Finn wrote in a paper, Equitable Doctrine and Discretion in Remedies published in Restitution: Past, Present and Future (1998):

“The courts quite consciously now are propounding what are acceptable standards of conduct to be exhibited in our relationships and dealings with others . . . A clear consequence of this emphasis on standards (and not on rules) is a far more instance-specific evaluation of conduct.”

The injustice (or unfairness or unconscionableness) of leaving a mistaken disposition uncorrected must be evaluated objectively, but with an intense focus (in Lord Steyn’s well-known phrase in In re S (A Child) [2005] 1 AC 593, para 17) on the facts of the particular case. That is why it is impossible, in my view, to give more than the most tentative answer to the problems posed by Professor Andrew Burrows in his Restatement of the English Law of Unjust Enrichment (2013) p 66: we simply do not know enough about the facts."

Plenty of academic literature from list members is cited in Lord Walker's judgment.

I shall now e-mail my Trusts students to tell them the (I suppose happy) news that, two weeks before their exam, the law has not unduly changed on the first point.

Best wishes,
James

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James Lee
Lecturer and Director of Careers
Academic Fellow of the Inner Temple
Birmingham Law School
University of Birmingham
Edgbaston
Birmingham
B15 2TT, United Kingdom

Tel: +44 (0)121 414 3629
E-mail: j.s.f.lee@bham.ac.uk<mailto:j.s.f.lee@bham.ac.uk><mailto:j.s.f.lee@bham.ac.uk>


Web: http://www.birmingham.ac.uk/staff/profiles/law/lee-james.aspx

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