Restitution Discussion Group Archives
| Sender: |
Charles Mitchell |
| Date: |
Wed, 2 Jul 2003 15:13:58 +0100 |
| Re: |
National Commercial Bank (Jamaica) Ltd v Hew |
The PC's decision in National Commercial Bank (Jamaica)
Ltd v Hew can be found at:
http://www.privy-council.org.uk/files/other/national%20hew.rtf-adv.rtf
In his speech for the Judicial Committee, Lord Millett
offers the following observations:
[30] ... the doctrine [of undue influence]
involves two elements. First, there must be a relationship capable of
giving rise to the necessary influence. And secondly the influence generated
by the relationship must have been abused.
[33] ... However great the influence
which one person may be able to wield over another equity does not intervene
unless that influence has been abused. Equity does not save people from
the consequences of their own folly; it acts to save them from being
victimised by other people: see Allcard v Skinner (1887) 36 Ch
D 145, 182.
[34] Thus it must be shown that the
ascendant party has unfairly exploited the influence he is shown or
presumed to possess over the vulnerable party. It is always highly relevant
that the transaction in question was manifestly disadvantageous to the
person seeking to set it aside; though this is not always necessary:
see C I B C Mortgages plc v Pitt [1994] 1 AC 200. But "disadvantageous"
in this context means "disadvantageous" as between the parties. Unless
the ascendant party has exploited his influence to obtain some unfair
advantage from the vulnerable party there is no ground for equity to
intervene. However commercially disadvantageous the transaction may
be to the vulnerable party, equity will not set it aside if it is a
fair transaction as between the parties to it.
This seems to me to be a narrower understanding of the
manifest disadvantage requirement than that articulated in Etridge
by Lord Nicholls, who considered that a transaction would be manifestly
to the disadvantage of a claimant if it were not readily explicable by
reference to the ordinary motives of reasonable people. Lord Millett's
formulation is narrower than this because it holds transactions to be
manifestly disadvantageous only if they place the defendant in a better
position because he has 'obtain[ed] some unfair advantage from the vulnerable
party'. So, for example, Lord Millett's formulation appears to exclude
cases where a claimant confers a benefit on a third party, while Lord
Nicholls' formulation does not.
Charles
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