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RDG
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Niru v Milestone, familiar to restitutionists for what
Moore-Bick J says about change of position, now has a follow-up in Niru
2.
To recap. Niru paid out by l/c against falsified bills
of lading. CAI, the bankers to the (bankrupt) beneficiary, passed the
money on to associated companies of that beneficiary, and it duly vanished.
CAI all but knew what was going on, and was held liable to return Niru's
money mistakenly paid, without the benefit of any change of position defence
(Niru
1).
In fact, in Niru 1, Niru also got judgment jointly in
tort against SGS, who had negligently certified (in effect) that the bills
of lading were in order.
In Niru 2, SGS come back, saying "once we've satisfied
the judgment against us, can we please have contribution / subrogation
/ recoupment against CAI?" Moore-Bick J again:
(1) Contribution under the 1978 Act: No. Not liable for
the same (or for that matter any) damage, since CAI were liable in unjust
enrichment alone - obvious since Royal
Brompton.
(2) Contribution as a concurrent debtor (i.e. a common
judgment debt): No. The underlying circumstances (whatever they are) mean
that the prima facie right doesn't apply, and there's no wider right here
than under the 1978 Act. But SGS could apparently have contribution under
this head for the costs jointly ordered against them and CAI.
(3) Recoupment: No. This is rather more controversial.
True, SGS were compellable to pay a judgment debt for which CAI were also
liable: to that extent every $ they paid got CAI proportionately off the
hook. But this wasn't enough. The liabilities on which the judgment had
been based mattered here, not the judgment debt itself. But for the judgment,
payment by SGS wouldn't have discharged CAI's liability to repay Niru:
hence no recoupment situation arose. If SGS had paid voluntarily it would
have been (?simply) subrogated to Niru's rights against CAI. This latter
point, I think, is new.
(4) Subrogation. Yes. BFC
v Parc fell to be expansively interpreted. As between CAI and SGS,
CAI ought to pay even though SGS were wrongdoers and CAI weren't. SGS
by paying discharged CAI's liability, and if SGS didn't get subrogation
CAI would be unjustly enriched. Here, in a slightly odd contrast to the
recoupment situation, the liabilities under the judgment debts were what
mattered.
More details: [2003] EWHC 1032 (Comm), on Casetrack and
(no doubt) elsewhere.
Happy holidays
Andrew
Andrew Tettenborn MA LLB Tel: 01392-263189 / +44-392-263189 (international) Snailmail: School of Law, [School homepage: http://www.ex.ac.uk/law/
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