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Many thanks for this, Eoin. So far as personal reviving subrogation goes, I agree with you that there is generally no point in using it, and that whenever it appears in cases it generally turns out to be a tricksy way of allowing a disguised direct action in UE in circumstances where the courts don't want to admit that this is what they are really doing - cf the invalid loans cases I discuss in my subrogation book at 154-5. There are some procedural advantages that a claimant might obtain by acquiring a personal claim via reviving subrogation, e.g. a better limitation rule - but the question of principle arises whether claimants should be allowed to obtain such advantages, a point that is flagged up in Frank's piece on limitation in Lessons of the Swaps Litigation at 371.

So far as East Cork Foods is concerned, this looks to me like a case of money paid pursuant to improper application of legal process, which RDG members will recognize as a controversial area since it seems that we cannot agree what the ground of recovery is in such cases. Personally I like the policy of maintaining the integrity of the legal system, but I can see the force of the other arguments summarized in Ben's excellent [2001] RLR piece, and let's not reopen the debate all over again! Usually these cases have only two parties because the claimant pays the defendant pursuant to a court order, but in East Cork Foods the claimant pays a third party pursuant to a court order and (I am assuming) the effect of his payment is to discharge the defendant's own liability to the third party. In principle I would say that this extra wrinkle does not stop the unjust factor being the same in the 3-party case as in the 2-party case (whatever we want to say the unjust factor is).

Charles

At 10:45 24/10/2003 +0100, you wrote:

Dear Charles,

I agree with your comments about Niru to the effect that you

can't see why he [Moore-Bick J] is willing to allow recovery via one route but not via the other. In my view reviving subrogation could only be available for reasons that would compel the conclusion that the reimbursement or contribution claim was available too, and I should also have thought that the availability of the direct route to recovery would then make subrogation redundant in the absence of any secured claim to which C might be subrogated.

Not only do I agree with this, but I might even go further and say that if personal reviving subrogation and the direct restitutionary action achieve the same end, what is the need for the former anyway? Of course, if MBJ is right, and subrogation lies but contribution doesn't, that of itself demonstrates the need; but if you are right (and I think you are) that both should lie, what is the need for the former anyway: more generally, if personal subrogation responds to unjust enrichment, why go through the hoops of the indirect action when UE will generate a more straightforward direct action?

The result seems like a good one, since it is clearly unsatisfactory that a meritorious contribution claimant should be left without a remedy because of gaps in the courts' jurisdiction under the 1978 Act, but the reasoning seems unduly complex. I expect that part 2 will now follow part 1 to the CA, and so we must hope that they sort it all out for us there.

This is not a million miles away from an Irish Supreme Court case called East Cork Foods v O'Dwyer Steel [1978] IR 103 (SC). The parties had both been defendants in a tort action, in which they were found to be 20/80% liable respectively; East Cork Foods appealed to the Supreme Court but the High Court refused to put a stay on the order and the plaintiff executed against East Cork Foods; on their appeal, the Supreme Court held that ECF were not liable at all in tort, and that O'DS were 100% liable. Not being liable, of course, meant that ECF were no longer 'wrongdoers' for the purposes of the contribution provisions of the Civil Liability Act, 1961, and therefore they were forced to go elsewhere to find a legal reason to recover from O'DS the debt they had been compelled to pay to the tort-plaintiff. The Supreme Court allows recovery, talks important restitution talk (but messes it up by referring to constructive trusts once or twice):

"So far I have been dealing with the matter on the footing that the second defendant would be entitled, if its claim were resisted, to recover back the £20,000 in an action for money had and received. The basis of such a claim is quasi-contract. It is usually dealt with in the books on contract. The plaintiff succeeds in this type of action, because, it is said, the law imputes to the debtor a promise to pay the debt. The historical reason for this fiction was to enable the claim to be brought as a form of indebitatus assumpsit. It was a pleader's stratagem. In most cases however, it is in the teeth of the facts to impute to the debtor a promise to pay. So long as the forms of action governed the course of litigation, it was necessary for the Courts to go along with this transparent fiction. Nowadays, however, when the forms of action have long since been buried, the concept of implied contract is an unreal and outdated rationale Judges in modern times prefer to look at the reality of the situation rather than engage in the pretence that the defendant promised to pay the debt.

In the present case, while the ... defendant (if it were necessary for it to do so) could recover the £20,000 in an action for money had and received, it would be an affront to truth and reality to say that the basis of that cause of action is an implied promise to repay the money. The real reason why the Courts would uphold the claim is because it would be unjust and inequitable to allow the ... defendant to keep the money. To refuse the claim would mean that the ... defendant would be unjustly enriched. The [plaintiff] ... should never have been required to pay the money."

That was the good stuff, but then he went and spoiled it all by saying something stupid like

"... Fair dealing and common sense should have told the first defendant that it had a fiduciary responsibility in regard to the money. In the event, it has been held that the ... defendant was not entitled to be paid any part of the £20,000, so the law must treat that defendant as a constructive trustee of the whole sum for the second defendant.

If it were now necessary for the second defendant to sue for the £20,000, I would hold that, in lieu of an action for money had and received, the second defendant could seek a declaration that the £20,000 is held by the ... defendant as constructive trustees for the [plaintiff] ..., and an order that the money be paid over ... It would be manifestly unconscionable for the first defendant to retain a profit made by it on the £20,000 at the expense of the [plaintiff] ...".

I have in at least four articles criticised the Irish judiciary for too easy a move from unjust enrichment to constructive trust (see most recently O'Dell 'Unjust Enrichment and the Remedial Constructive Trust' (2001) 23 DULJ 71) but Henchy J isn't confusing them so much as self-consciously moving from law to equity, from money had and received to constructive trust, for the old Westdeutsche reason of interest. But the stuff about the nature of the action for money had and received is very important, and demonstrates for you the kind of direct action which MBJ rejected.

Finally, the most recent contribution and indemnity case in the Irish High Court, nothing very spectacular, but just for interest: Ulster Bank Commercial Services Ltd v. Trade Credit Brokers Ltd. & Ors [2003] IEHC 42 (4 July 2003).

All the best from Dublin,

Eoin

--
EOIN O'DELL BCL(NUI), BCL(Oxon), FTCD, BL,
Fellow, Trinity College Dublin,
Barrister; Registrar, and Director of Research,
School of Law, Trinity College, Dublin 2, Ireland.
+ 353 (0)1 608 1178 (w) 677 0449 (fx)
(All opinions are personal. No legal responsibility whatsoever is accepted.)