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I am meant to be marking examination papers at the moment. Hence I now find myself writing to draw the group's attention to several points of interest which emerge from Lord Nicholls' speech in the Kuwaiti Airlines case, now available on-line at the HL website.

1/ He considers that where a victim of conversion goes for a restitutionary remedy to recover the converter's gain, the converter should be entitled to raise the defence of change of position, even though he is a 'wrongdoer' in the sense that conversion is a civil wrong. So at para 79 he states:

'Vindication of a plaintiff's proprietary interests requires that, in general, all those who convert his goods should be accountable for benefits they receive. They must make restitution to the extent they are unjustly enriched. The goods are his, and he is entitled to reclaim them and any benefits others have derived from them. Liability in this regard should be strict subject to defences available to restitutionary claims such as change of position: see Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548.'

2/ He thinks that the restitutionary remedy to which a victim of conversion is entitled where the converter has made a gain is restitutionary damages, writing at para 87 that 'the court may order him to pay damages assessed by reference to the value of the benefit he derived from his wrongdoing', and continuing in paras 88-89 to reanalyse Solloway v McLaughlin [1938] AC 247 and BBMB Finance (Hong Kong) Ltd v Eda Holdings Ltd [1990] 1 WLR 409 as cases illustrating this principle.

3/ Apparently recanting from his previous comments in Tang Man Sit v Capacious Investments Ltd, where he considered that the victim of an equitable wrong could only be entitled to compensation and restitution on an either/or basis, he envisages that compensatory and restitutionary damages can both be awarded to a victim of conversion in appropriate cases where there is no overlap between the two. At para 87 he writes:

'the fundamental object of an award of damages for conversion is to award just compensation for loss suffered. Sometimes, when the goods or their equivalent are returned, the owner suffers no financial loss. But the wrongdoer may well have benefited from his temporary use of the owner's goods. It would not be right that he should be able to keep this benefit. The court may order him to pay damages assessed by reference to the value of the benefit he derived from his wrongdoing. I considered this principle in Attorney General v Blake [2001] 1 AC 268, 278-280. In an appropriate case the court may award damages on this 'user principle' in addition to compensation for loss suffered. For instance, if the goods are returned damaged, the court may award damages assessed by reference to the benefit obtained by the wrongdoer as well as the cost of repair.'

Charles

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Dr Charles Mitchell
Lecturer in Law
School of Law
King's College London
Strand
LONDON WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 2465
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