Fred's question does not seem to have provoked any response yet. To me, it seems clear that Lord Walker's view of the law is encapsulated in this sentence, found in [128]: "The court cannot decide the issue of what is unconscionable by an elaborate set of rules."
For my part, I find the craft work of the judgment to be not up to the standards that the UKSC usually reaches in private law. At [70] there is a lengthy quotation from Lloyd LJ in the CA. By the time we get to [98], the SC has disposed of this part of the
case, and on my reading has agreed with and adopted the law as stated in the passage quoted at [70]. But this is never clearly stated and while this part of the judgment is set out under headings, the conclusions (ie the law) under each of the headings are
not clearly stated.
On the principle formerly known as the Rule in Re Hastings-Bass, it seems that Jersey law is about to be amended to give the court a very wide jurisdiction to set aside dispositions by trustees for mistake (to be very widely defined). Another reason, I suppose,
to set up offshore.
The NZSC also released a judgment on mistake, last November: Stiassny v Commissioner of Inland Revenue [2012] NZSC 106, [2103] 1 NZLR 453
This appears to be an example of the relatively rare type of case in which a payment is made by mistake but is not recoverable because it was legally owing. The SC puts the conclusion in terms of 'good consideration'.
Lionel
Dear all,
Many thanks for sending this around, James. I would be interested in views on the second question in the case, i.e. the test for mistake. I am not sure that I understand it.
Lord Walker seems to envisage a two stage inquiry: (1) Is there (subjectively) a causative mistake? and, if so, (2) Is it (objectively) sufficient? As regards (1), the inquiry is pretty simple, being into what the claimant thought/ knew (with a gesture
to the details re: causative ignorance, etc.): Walker refers to the need to inquire into the 'state of mind' of the claimant. As regards (2), I begin to get a bit lost. We are told that 'the gravity of the causative mistake' must 'be assessed in terms of injustice
or, to use equity¹s cumbersome but familiar term, unconscionableness.' This inquiry 'must be objective.' The evaluation must be undertaken 'an intense focusŠon the facts of the particular case'.
On its face, this must of course mean that (1) is not of itself sufficient. Otherwise, (2) would be entirely surplus. So, some causative mistakes must be insufficient. As to which will and which will not count, I am surprised by the lack of guidance. We
know the requirement is not that the mistake be shared (as it must for common mistake), as Walker explicitly says that the mistake is unilateral. The focus is on 'seriousness' of the mistake. I don't know what makes a mistake serious. It's explicitly said
to not to be a test of 'serious' in the Great Peace sense. My sense is that Walker has been influenced by HMRC's suggestions in argument that 'gifts are different (and like contracts)' (& so require 'protection' from restitution). This leads him to
think that the mistake cannot be just causal; but, the 'protection' need not be so firm as to adopt Great Peace's seriousness. Which presumably means that seriousness is somewhere in between 'but for' and Great Peace. Does he have in mind
a test like Solle v Butcher? And the test there was what, exactly?
The repeated invocation of the need for 'facts' (one example of which Jamie helpfully excerpts below) doesn't take us any further. Piling facts upon facts does not tell us anything - does not give us any reasons for anything - without an argument about
how those facts give reasons. That is, more concretely here, unless we know what the facts are trying to establish, i.e. what the legal rule we are trying to prove actually is.
Various problems arise out of this. One is establishing the nature of the test. Another is the justification of the test. Yet another is how the test carries through (if at all) to gifts at common law. I'd be interested to hear any thoughts people have.
Best wishes,
Fred
On 9 May 2013, at 10:07, James Lee wrote:
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 court¹s discretion. Justice Paul Finn wrote in a paper, Equitable Doctrine and Discretion in Remedies published in Restitution: Past, Present
and Future (1998):
³The 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.²
The injustice (or unfairness or unconscionableness) of leaving a mistaken disposition uncorrected must be evaluated objectively, but with an intense focus (in Lord Steyn¹s 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
--
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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