Indeed not. In fact, the opinion specifically denies it: 'This is not a case where Finchill changed its position on the faith of the cheques' (para 30).

However, I doubt whether that can really be correct in principle ....

Which principle is that?

The simplest explanation of the result seems to be that Sanwa can't recover sums which they have not, in the event, lost.

Should any doctrinal significance be given to the statement that 'there was a loose circle of moneys flowing from [Sanwa] to Finchill to Alpha and back to [Sanwa]'? I hope not, for two reasons. Firstly, I cannot see why a failure to establish a 'loose circle' should justify over-compensation of Sanwa. Secondly, I dread the prospect of cases distinguishing 'loose but sufficiently tight circles' from 'over-loose circles'. The 'loose circle' is surely just a mildly colourful turn of phrase, not a legal test.

Is change of position relevant? That would turn the spotlight on Finchill's conduct, which was regarded as wrongful, though possibly nonetheless in good faith (see para 29). Yet however bad Finchill's behaviour, why should Sanwa recover what they have not, in the event, lost? It seems to me that the result should be the same even if Finchill had been party to Alpha's illegal scheme. If I trick you out of £1000, but to help hide the fraud I induce a crony to give you £100 back, then it seems to me that you can only sue me for £900, however the matter is dressed up doctrinally.

Steve Hedley

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FACULTY OF LAW, UNIVERSITY OF CAMBRIDGE

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www.stevehedley.com
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Christ's College Cambridge CB2 3BU
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