I agree with that.

While some of Lord Nicholls' comments might be read in support of the civilian model (especially the second sentence in para 4), they are, when read in context, entirely consistent with the approach that he proposed in 1998 ("Knowing Receipt: The Need for a New Landmark"). And at that time, he was understood to support "knowing receipt" as a species of unjust enrichment in which strict liability is triggered by the plaintiff's lack of intention (an unjust factor). From that perspective, the bits about the validity of the agreement simply pertain to the issue of subsidiarity. A claim in unjust enrichment cannot normally get off the ground if the relevant transfer is governed by an enforceable contract. Unless the agreement is invalidated, "questions of 'knowing receipt' ... do not arise."

I don't think I agree with that, although the point is not crystal clear. The point is the case was nothing to do with knowing receipt and nor was Akindele. Consequently I don't think he is saying anything, consistent or otherwise with his earlier view about knowing receipt. If B holds an asset on trust for A and transfers that asset in breach of trust to C, A may wish to claim that C is liable for 'knowing' receipt. There is a live and lively debate about the degree of fault, if any, required to hold the defendant liable, to which Lord Nicholls has made a valuable contribution. This was not what happened in Akindele. The Claimant (ICIC) entered into an agreement with the defendant. What they were seeking to do was obtain restitution of the benefit conferred under the agreement. Lord Nicholls is saying that this turned upon whether the directors who entered into the contract had actual or ostensible authority to enter into the contract. As they were fraudsters, they clearly had no actual authority. Did they have ostensible authority? This should turn upon whether a reasonable person in the defendant's position would have thought, and did think, that they had the authority to enter into the contract. Put another way, the true question was whether the defendant ought to have known about the fraud. This is why the 'Court of Appeal in Akindele's case fell into error', not because they failed to follow his view in the 1998 piece.

Akindele was emphatically not a case where strict liability was appropriate. I read Lord Nicholls as providing some support for the view that where the purported contract entered into is void for want of actual or ostensible authority, restitution should follow. Where a contract is void for want of corporate capacity, restitution follows (Guinness Mahon v Kensington). Where a contract is void because the human agents who purported to enter into the contract lacked actual or ostensible authority, restitution also follows.

I do wonder, however, how easy it is to square his statement on proprietary restitution with Westdeutsche v Islington LBC.

Robert Stevens
Barrister
Fellow and Tutor in Law
Lady Margaret Hall
Oxford University