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Two new(-ish) cases which may interest members of the group:

In Heydon v NRMA Ltd (No 2) (2001) 53 NSWLR 600, NSWCA, Mason P takes a leaf from Lord Goff's book and approves his own discussion of interest awards in restitutionary claims in Mason and Carter.

In Niru Battery Manufacturing Co v Milestone Trading Ltd [2002] EWHC 1425 (Comm), Moore-Bick J breathes new life into the good faith / bad faith / actual knowledge / constructive knowledge / duty to enquire / negligence distinctions beloved of all knowing receipt / dishonest assistance enthusiasts, in the course of discussing the good faith requirement for the C of P defence.

His judgment is available on-line at:

http://www2.bailii.org/~jury/cases/EW/EWHC_Commercial_2002_1425.html

The best bit is para 135:

'In the light of these observations, and having regard to the nature of the principles underlying the right to restitution in the case of a mistaken payment and the defence of change of position, I do not think that dishonesty in the sense identified in Twinsectra Ltd v Yardley is the sole criterion of the right to invoke the defence of change of position. I do not think that it is desirable to attempt to define the limits of good faith; it is a broad concept, the definition of which, insofar as it is capable of definition at all, will have to be worked out through the cases. In my view it is capable of embracing a failure to act in a commercially acceptable way and sharp practice of a kind that falls short of outright dishonesty as well as dishonesty itself. The factors which will determine whether it is inequitable to allow the claimant to obtain restitution in a case of mistaken payment will vary from case to case, but where the payee has voluntarily parted with the money much is likely to depend on the circumstances in which he did so and the extent of his knowledge about how the payment came to be made. Where he knows that the payment he has received was made by mistake, the position is quite straightforward: he must return it. This applies as much to a banker who receives a payment for the account of his customer as to any other person: see, for example, the comment of Lord Mersey in Kerrison v Glyn, Mills, Currie & Co. (1912) 81 L.J.K.B. 465 (H.L.) at page 472. Greater difficulty may arise, however, in cases where the payee has grounds for believing that the payment may have been made by mistake, but cannot be sure. In such cases good faith may well dictate that an enquiry be made of the payer. The nature and extent of the enquiry called for will, of course, depend on the circumstances of the case, but I do not think that a person who has, or thinks he has, good reason to believe that the payment was made by mistake will often be found to have acted in good faith if he pays the money away without first making enquiries of the person from whom he received it.'

Niru is also interesting because counsel picked up on Lord Steyn's statement in Royal Brompton Hospital NHS Trust v Hammond [2002] UKHL 14, that Auld LJ was wrong in the Friends' Provident case to hold that contribution claims lie under the Civil Liability (Contribution) Act 1978 between parties, at least one of whom owes a restitutionary liability rather than a wrong-based liability. At para 150, Moore-Bick J adjourned for further argument on the implications of this. Personally I suspect that that the implications of it are that the parties will be left high and dry where one of them owes a wrong-based liability and the other a liability in UE, since claims between wrongdoers do not lie at common law, and claims between people who are not wrongdoers do not lie under the 1978 Act.

Best wishes to all,

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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