A nice case on rescission in the English CA yesterday. A crook steals zillions from a couple of pension funds, his wife having previously left and and divorced him. Some of those stolen zillions (about £1.5 million) are paid to the ex-wife under the divorce settlement. Since she's entirely innocent, the £1.5 million is safe in her hands as a bona fide purchaser. But she later discovers that the crook has (surprise surprise) lied to her and to the divorce court about his assets. She successfully takes steps to set aside -- rescind -- the settlement in order to get more from her ex-husband.

But then, Whoops! The CA hold, reversing Peter Smith J, that although by rescinding the settlement agreement she doesn't  re-vest the £1.5 million in her ex she deprives herself of the status of good faith purchaser and leaves herself subject to a restitutionary claim from the pension funds in respect of it.

Seems odd to me at first sight (apart from unfair), in taking far too literally the idea that a rescinded transaction is deemed never to have taken place at all. But do others have other ideas?

Andrew

[See Independent Trustee Services Ltd v GP Noble Trustees Ltd & Ors [2012] EWCA Civ 195]

ANDREW TETTENBORN
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