=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 12:54:00 +0100 Reply-To: "Penner,JE" Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: "Penner,JE" Subject: FW: constructive trust in proceeds of theft MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----_=3D_NextPart_001_01C417E0.058C4E2E" This is a multi-part message in MIME format. ------_=3D_NextPart_001_01C417E0.058C4E2E Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted to = =3D say that a thief holds any proceeds from the sale of stolen goods on =3D trust for the true owner. My question what is the relationship of this =3D trust with the rights of the buyer from the thief of the stolen goods? =3D This no doubt reveals my shocking ignorance of contract law.=3D20 It seems to me that there are a couple of possible ways in which the =3D buyer can assert a right to the proceeds the thief receives from the =3D sale, i.e. the money the buyer paid the thief for the owner's goods: (1) Assuming that the sale is clearly fraudulent, such that the thief =3D would be liable for the tort of deceit, is it possible that the buyer =3D could claim that the contract was void ab initio? If so, then in the =3D case contemplated by LBW, then the constructive trust of proceeds would =3D be a trust over the buyer's property, which seems clearly wrong.=3D20 (2) If this is not the right analysis, then it would seem at the =3D very minimum that the buyer has the right to rescind the transaction for = =3D fraudulent misreprentation (the misrepresentation by the thief being =3D that he had good title); now we have two possible scenarios; if we =3D assume that the buyer rescinds before the true owner makes a claim =3D against him for conversion or claims a right in the proceeds of the =3D sale, is the resulting legal or equitable title he gets still subject to = =3D owner's LBW trust? If he does not rescind before either the owner makes =3D a claim against him for conversion or asserts title in the proceeds, =3D then does the buyer necessarily lose out to the LBW trust because a =3D right to rescind is a 'mere equity', which does not bind someone with an = =3D equitable ownership interest? This strikes me as all very complicated because it depends upon the time = =3D at which the owner's LBW trust arises. If it arises by operation of law =3D upon the sale, then it effectively extinguishes any right to rescind or =3D any other appropriate legal or equitable interest that the buyer might =3D have in the money he paid, which was, after all, his property to begin =3D with, and I don't see how that is necessarily just. Indeed, it seems to =3D me that as a matter of justice, equity's first concern should be to =3D ensure that the innocent buyer is able to recover the proceeds and any =3D traceable product, not the true owner, who has a strict liability claim =3D against the buyer in any case - his mere taking possession of the car =3D will render him liable whether the contract under whose auspices he did =3D so is void ab initio or avoided later.=3D20 One might say of course, that none of this matters practically, for if =3D the true owner asserts title in the substitute, the proceeds, then he in = =3D essence 'adopts' or ratifies the sale by the thief of his original =3D goods, so that the buyer is no longer liable for conversion. And if the =3D buyer retains a legal or equitable interest in the proceeds that =3D prevails over the owner, then he will merely have to transfer an =3D equivalent amount to the owner anyway, because of his strict liability =3D for conversion. But what if the proceeds increase in value? Say the =3D thief sells the owner's car to the buyer for its true value of =3DA310,00= 0 =3D (its true value, which he then invests in shares now worth =3DA315,000. =3D Both the owner and the buyer will wish to have an interest in these =3D proceeds. If the owner gets them, he will have an asset worth =3DA35,000 = =3D more than what he would get from the conversion claim. Equally, if the =3D buyer gets the proceeds, he will be able to meet his conversion =3D liability of =3DA310,000 and keep the extra =3DA35000 of value. So this d= oes =3D seem to me to raise a real issue.=3D20 J E Penner =3D20 ------_=3D_NextPart_001_01C417E0.058C4E2E Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable
 Assume Lord Browne-Wilkinson in= =3D20 Westdeutsche is properly interpreted to say that a thief holds =3D any=3D20 proceeds from the sale of stolen goods on trust for the true owner. My =3D question=3D20 what is the relationship of this trust with the rights of the buyer from = =3D the=3D20 thief of the stolen goods? This no doubt reveals my shocking ignorance =3D of=3D20 contract law.=3D20

It seems to me that there are a couple of possible= =3D ways in=3D20 which the buyer can assert a right to the proceeds the thief receives =3D from the=3D20 sale, i.e. the money the buyer paid the thief for the owner’s =3D goods:

(1)  =3D20 Assuming that the sale is clearly fraudulent, such that the thief = =3D would=3D20 be liable for the tort of deceit, is it possible that the buyer could =3D claim that=3D20 the contract was void ab initio? If so, then in the case contemplated by = =3D LBW,=3D20 then the constructive trust of proceeds would be a trust over the =3D buyer’s=3D20 property, which seems clearly wrong. 

 (2)   If this is no= t =3D the right=3D20 analysis, then it  would = =3D seem at the=3D20 very minimum that the buyer has the right to rescind the transaction for = =3D fraudulent misreprentation (the misrepresentation by the thief being =3D that he had=3D20 good title); now we have two possible scenarios; if we assume that the =3D buyer=3D20 rescinds before the true owner makes a claim against him for conversion =3D or=3D20 claims a right in the proceeds of the sale, is the resulting legal or =3D equitable=3D20 title he gets still subject to owner’s LBW trust? If he does not =3D rescind before=3D20 either the owner makes a claim against him for conversion or asserts =3D title in=3D20 the proceeds, then does the buyer necessarily lose out to the LBW trust =3D because=3D20 a right to rescind is a ‘mere equity’, which does not bind =3D someone with an=3D20 equitable ownership interest?

This strikes me as all very complicated because it= =3D depends=3D20 upon the time at which the owner’s LBW trust arises. If it arises =3D by operation=3D20 of law upon the sale, then it effectively extinguishes any right to =3D rescind or=3D20 any other appropriate legal or equitable interest that the buyer might =3D have in=3D20 the money he paid, which was, after all, his property to begin with, and I =3D don’t see how=3D20 that is necessarily just. Indeed, it seems to me that as a matter of =3D justice,=3D20 equity’s first concern should be to ensure that the innocent buyer = =3D is able to=3D20 recover the proceeds and any traceable product, not the true owner, who =3D has a=3D20 strict liability claim against the buyer in any case – his mere =3D taking=3D20 possession of the car will render him liable whether the contract under =3D whose=3D20 auspices he did so is void ab initio or avoided later.

One might say of course, that none of this matters= =3D20 practically, for if the true owner asserts title in the substitute, the=3D= 20 proceeds, then he in essence ‘adopts’ or ratifies the sale =3D by the thief of his=3D20 original goods, so that the buyer is no longer liable for conversion. =3D And if the=3D20 buyer retains a legal or equitable interest in the proceeds that =3D prevails over=3D20 the owner, then he will merely have to transfer an equivalent amount to =3D the=3D20 owner anyway, because of his strict liability for conversion. But what =3D if the=3D20 proceeds increase in value? Say the thief sells the owner’s car to = =3D the buyer for=3D20 its true value of =3DA310,000 (its true value, which he then invests in =3D shares now=3D20 worth =3DA315,000. Both the owner and the buyer will wish to have an =3D interest in=3D20 these proceeds. If the owner gets them, he will have an asset worth =3D =3DA35,000 more=3D20 than what he would get from the conversion claim. Equally, if the buyer =3D gets the=3D20 proceeds, he will be able to meet his conversion liability of =3DA310,000= =3D and keep=3D20 the extra =3DA35000 of value. So this does seem to me to raise a real =3D issue. 

J E =3D Penner

 

------_=3D_NextPart_001_01C417E0.058C4E2E-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 13:31:23 +0100 Reply-To: "Penner,JE" Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: "Penner,JE" Subject: FW: [RDG:] FW: constructive trust in proceeds of thef= t MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----_=3D_NextPart_001_01C417E5.3E30A552" This is a multi-part message in MIME format. ------_=3D_NextPart_001_01C417E5.3E30A552 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable Further to my last query, I should also have mentioned that in its =3D concurrent or auxiliary jurisdiction the court of equity has on any =3D number of occasions assisted the victim of a fraud by allowing him to =3D trace into the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. = =3D Why should not the buyer of the worthless title to the owner's car not =3D be able to invoke the same assistance and claim the proceeds of the =3D property of which he was defrauded? =3D20 JEP -----Original Message----- From: Penner,JE=3D20 Sent: 01 April 2004 12:54 To: ENRICHMENT@LISTS.MCGILL.CA Subject: [RDG:] FW: constructive trust in proceeds of theft Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted to = =3D say that a thief holds any proceeds from the sale of stolen goods on =3D trust for the true owner. My question what is the relationship of this =3D trust with the rights of the buyer from the thief of the stolen goods? =3D This no doubt reveals my shocking ignorance of contract law.=3D20 It seems to me that there are a couple of possible ways in which the =3D buyer can assert a right to the proceeds the thief receives from the =3D sale, i.e. the money the buyer paid the thief for the owner's goods: (1) Assuming that the sale is clearly fraudulent, such that the thief =3D would be liable for the tort of deceit, is it possible that the buyer =3D could claim that the contract was void ab initio? If so, then in the =3D case contemplated by LBW, then the constructive trust of proceeds would =3D be a trust over the buyer's property, which seems clearly wrong.=3D20 (2) If this is not the right analysis, then it would seem at the =3D very minimum that the buyer has the right to rescind the transaction for = =3D fraudulent misreprentation (the misrepresentation by the thief being =3D that he had good title); now we have two possible scenarios; if we =3D assume that the buyer rescinds before the true owner makes a claim =3D against him for conversion or claims a right in the proceeds of the =3D sale, is the resulting legal or equitable title he gets still subject to = =3D owner's LBW trust? If he does not rescind before either the owner makes =3D a claim against him for conversion or asserts title in the proceeds, =3D then does the buyer necessarily lose out to the LBW trust because a =3D right to rescind is a 'mere equity', which does not bind someone with an = =3D equitable ownership interest? This strikes me as all very complicated because it depends upon the time = =3D at which the owner's LBW trust arises. If it arises by operation of law =3D upon the sale, then it effectively extinguishes any right to rescind or =3D any other appropriate legal or equitable interest that the buyer might =3D have in the money he paid, which was, after all, his property to begin =3D with, and I don't see how that is necessarily just. Indeed, it seems to =3D me that as a matter of justice, equity's first concern should be to =3D ensure that the innocent buyer is able to recover the proceeds and any =3D traceable product, not the true owner, who has a strict liability claim =3D against the buyer in any case - his mere taking possession of the car =3D will render him liable whether the contract under whose auspices he did =3D so is void ab initio or avoided later.=3D20 One might say of course, that none of this matters practically, for if =3D the true owner asserts title in the substitute, the proceeds, then he in = =3D essence 'adopts' or ratifies the sale by the thief of his original =3D goods, so that the buyer is no longer liable for conversion. And if the =3D buyer retains a legal or equitable interest in the proceeds that =3D prevails over the owner, then he will merely have to transfer an =3D equivalent amount to the owner anyway, because of his strict liability =3D for conversion. But what if the proceeds increase in value? Say the =3D thief sells the owner's car to the buyer for its true value of =3DA310,00= 0 =3D (its true value, which he then invests in shares now worth =3DA315,000. =3D Both the owner and the buyer will wish to have an interest in these =3D proceeds. If the owner gets them, he will have an asset worth =3DA35,000 = =3D more than what he would get from the conversion claim. Equally, if the =3D buyer gets the proceeds, he will be able to meet his conversion =3D liability of =3DA310,000 and keep the extra =3DA35000 of value. So this d= oes =3D seem to me to raise a real issue.=3D20 J E Penner =3D20 ------_=3D_NextPart_001_01C417E5.3E30A552 Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable
Further to my last query, I should also have= =3D mentioned=3D20 that in its concurrent or auxiliary jurisdiction the court of equity has = =3D on any=3D20 number of occasions assisted the victim of a fraud by allowing him to =3D trace into=3D20 the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. Why should = =3D not the=3D20 buyer of the worthless title to the owner's car not be able to invoke =3D the same=3D20 assistance and claim the proceeds of the property of which he was=3D20 defrauded?
 
JEP
-----Original Message-----
From: Penner,JE =3D
Sent: 01=3D20 April 2004 12:54
To: =3D ENRICHMENT@LISTS.MCGILL.CA
Subject:=3D20 [RDG:] FW: constructive trust in proceeds of theft

 Assume Lord Browne-Wilkinson in= =3D20 Westdeutsche is properly interpreted to say that a thief holds =3D any=3D20 proceeds from the sale of stolen goods on trust for the true owner. My =3D question=3D20 what is the relationship of this trust with the rights of the buyer from = =3D the=3D20 thief of the stolen goods? This no doubt reveals my shocking ignorance =3D of=3D20 contract law.=3D20

It seems to me that there are a couple of possible= =3D ways in=3D20 which the buyer can assert a right to the proceeds the thief receives =3D from the=3D20 sale, i.e. the money the buyer paid the thief for the owner’s =3D goods:

(1)  =3D20 Assuming that the sale is clearly fraudulent, such that the thief = =3D would=3D20 be liable for the tort of deceit, is it possible that the buyer could =3D claim that=3D20 the contract was void ab initio? If so, then in the case contemplated by = =3D LBW,=3D20 then the constructive trust of proceeds would be a trust over the =3D buyer’s=3D20 property, which seems clearly wrong. 

 (2)   If this is no= t =3D the right=3D20 analysis, then it  would = =3D seem at the=3D20 very minimum that the buyer has the right to rescind the transaction for = =3D fraudulent misreprentation (the misrepresentation by the thief being =3D that he had=3D20 good title); now we have two possible scenarios; if we assume that the =3D buyer=3D20 rescinds before the true owner makes a claim against him for conversion =3D or=3D20 claims a right in the proceeds of the sale, is the resulting legal or =3D equitable=3D20 title he gets still subject to owner’s LBW trust? If he does not =3D rescind before=3D20 either the owner makes a claim against him for conversion or asserts =3D title in=3D20 the proceeds, then does the buyer necessarily lose out to the LBW trust =3D because=3D20 a right to rescind is a ‘mere equity’, which does not bind =3D someone with an=3D20 equitable ownership interest?

This strikes me as all very complicated because it= =3D depends=3D20 upon the time at which the owner’s LBW trust arises. If it arises =3D by operation=3D20 of law upon the sale, then it effectively extinguishes any right to =3D rescind or=3D20 any other appropriate legal or equitable interest that the buyer might =3D have in=3D20 the money he paid, which was, after all, his property to begin with, and I =3D don’t see how=3D20 that is necessarily just. Indeed, it seems to me that as a matter of =3D justice,=3D20 equity’s first concern should be to ensure that the innocent buyer = =3D is able to=3D20 recover the proceeds and any traceable product, not the true owner, who =3D has a=3D20 strict liability claim against the buyer in any case – his mere =3D taking=3D20 possession of the car will render him liable whether the contract under =3D whose=3D20 auspices he did so is void ab initio or avoided later.

One might say of course, that none of this matters= =3D20 practically, for if the true owner asserts title in the substitute, the=3D= 20 proceeds, then he in essence ‘adopts’ or ratifies the sale =3D by the thief of his=3D20 original goods, so that the buyer is no longer liable for conversion. =3D And if the=3D20 buyer retains a legal or equitable interest in the proceeds that =3D prevails over=3D20 the owner, then he will merely have to transfer an equivalent amount to =3D the=3D20 owner anyway, because of his strict liability for conversion. But what =3D if the=3D20 proceeds increase in value? Say the thief sells the owner’s car to = =3D the buyer for=3D20 its true value of =3DA310,000 (its true value, which he then invests in =3D shares now=3D20 worth =3DA315,000. Both the owner and the buyer will wish to have an =3D interest in=3D20 these proceeds. If the owner gets them, he will have an asset worth =3D =3DA35,000 more=3D20 than what he would get from the conversion claim. Equally, if the buyer =3D gets the=3D20 proceeds, he will be able to meet his conversion liability of =3DA310,000= =3D and keep=3D20 the extra =3DA35000 of value. So this does seem to me to raise a real =3D issue. 

J E =3D Penner

 

------_=3D_NextPart_001_01C417E5.3E30A552-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 15:10:57 +0100 Reply-To: Charles Mitchell Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Charles Mitchell Mime-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D_18990125=3D=3D_.ALT" -- =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D_1899012= 5=3D=3D_.ALT Content-Type: text/plain; charset=3D"iso-8859-1"; format=3Dflowed Content-Transfer-Encoding: quoted-printable I appreciate that this is not a particularly helpful reply to James'=3D20 question, but when considering the respective rights of the true owner of= =3D20 the stolen goods and the purchaser of the goods in the situation which he= =3D20 postulates, it might be useful to bear in mind that three first-instance=3D= 20 judges have now shown a marked reluctance to extend Lord B-W's rule to th= e=3D =3D20 case where a claimant is fraudulently induced to enter a contract under=3D= 20 which he transfers property to a defendant (besides questioning the=3D20 rightness of Lord B-W's rule even in the case of the thief): Box v Barcla= ys=3D =3D20 Bank [1998] Lloyd's Law Reports Banking 185, 200-1 (Ferris J); Papamichae= l=3D =3D20 v National Westminster Bank [2003] 1 Lloyd's Rep 341, [231]-[241] (Judge=3D= 20 Chambers QC); Shalson v Russo [2003] EWHC 1637 (Ch), [106]-[127] (Rimer J= ). On a completely different point, Mummery LJ has just reaffirmed Sir Marti= n=3D =3D20 Nourse's comments in Hammond v Osbourn, to hold in Niersmans v Pesticcio=3D= 20 [2004] EWCA Civ 372 that UI is not an equitable wrong: the relevant bit i= s=3D =3D20 para 20: The insistence of Mr Thomas that Maureen had "done nothing wrong" is an=3D= 20 instance of the "continuing misconceptions" mentioned by Sir Martin Nours= e=3D =3D20 in Hammond about the circumstances in which gifts will be set aside on th= e=3D =3D20 ground of presumed undue influence. Although undue influence is sometimes= =3D20 described as an "equitable wrong" or even as a species of equitable fraud= ,=3D =3D20 the basis of the court's intervention is not the commission of a dishones= t=3D =3D20 or wrongful act by the defendant, but that, as a matter of public policy,= =3D20 the presumed influence arising from the relationship of trust and=3D20 confidence should not operate to the disadvantage of the victim, if the=3D= 20 transaction is not satisfactorily explained by ordinary motives: Allcard = v.=3D =3D20 Skinner (1887) 36 Ch D 145 at 171. The court scrutinises the circumstance= s=3D =3D20 in which the transaction, under which benefits were conferred on the=3D20 recipient, took place and the nature of the continuing relationship betwe= en=3D =3D20 the parties, rather than any specific act or conduct on the part of the=3D= 20 recipient. A transaction may be set aside by the court, even though the=3D= 20 actions and conduct of the person who benefits from it could not be=3D20 criticised as wrongful. The presumption arising from the trust and=3D20 confidence of their relationship made it unnecessary, for example, for=3D= 20 Bernard to prove that Maureen actually had influence over him in relation= =3D20 to the gift of the, House, let alone that she in fact exercised undue=3D2= 0 influence or applied improper pressure to obtain the Deed of Gift. Whethe= r=3D =3D20 or not Maureen's conduct could be described as "wrongful", the requiremen= t=3D =3D20 of the doctrine of undue influence is that it must be "affirmatively=3D20 established that the donor's trust and confidence in the donee has not be= en=3D =3D20 betrayed or abused: " see Hammond at paragraph 32. On that point Mr Thoma= s=3D =3D20 relied on the part played by Miss Tindall. On-line at: http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html Charles At 13:31 01/04/2004 +0100, you wrote: Further to my last query, I should also have mentioned that in its=3D20 concurrent or auxiliary jurisdiction the court of equity has on any numbe= r=3D =3D20 of occasions assisted the victim of a fraud by allowing him to trace into= =3D20 the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. Why should=3D= 20 not the buyer of the worthless title to the owner's car not be able to=3D= 20 invoke the same assistance and claim the proceeds of the property of whic= h=3D =3D20 he was defrauded? JEP -----Original Message----- From: Penner,JE Sent: 01 April 2004 12:54 To: ENRICHMENT@LISTS.MCGILL.CA Subject: [RDG:] FW: constructive trust in proceeds of theft Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted to= =3D20 say that a thief holds any proceeds from the sale of stolen goods on trus= t=3D =3D20 for the true owner. My question what is the relationship of this trust wi= th=3D =3D20 the rights of the buyer from the thief of the stolen goods? This no doubt= =3D20 reveals my shocking ignorance of contract law. It seems to me that there are a couple of possible ways in which the buye= r=3D =3D20 can assert a right to the proceeds the thief receives from the sale, i.e.= =3D20 the money the buyer paid the thief for the owner s goods: (1) Assuming that the sale is clearly fraudulent, such that the thief=3D= 20 would be liable for the tort of deceit, is it possible that the buyer cou= ld=3D =3D20 claim that the contract was void ab initio? If so, then in the case=3D20 contemplated by LBW, then the constructive trust of proceeds would be a=3D= 20 trust over the buyer s property, which seems clearly wrong. (2) If this is not the right analysis, then it would seem at the ver= y=3D =3D20 minimum that the buyer has the right to rescind the transaction for=3D20 fraudulent misreprentation (the misrepresentation by the thief being that= =3D20 he had good title); now we have two possible scenarios; if we assume that= =3D20 the buyer rescinds before the true owner makes a claim against him for=3D= 20 conversion or claims a right in the proceeds of the sale, is the resultin= g=3D =3D20 legal or equitable title he gets still subject to owner s LBW trust? If h= e=3D =3D20 does not rescind before either the owner makes a claim against him for=3D= 20 conversion or asserts title in the proceeds, then does the buyer=3D20 necessarily lose out to the LBW trust because a right to rescind is a mer= e=3D =3D20 equity , which does not bind someone with an equitable ownership interest= ? This strikes me as all very complicated because it depends upon the time = at=3D =3D20 which the owner s LBW trust arises. If it arises by operation of law upon= =3D20 the sale, then it effectively extinguishes any right to rescind or any=3D= 20 other appropriate legal or equitable interest that the buyer might have i= n=3D =3D20 the money he paid, which was, after all, his property to begin with, and = I=3D =3D20 don t see how that is necessarily just. Indeed, it seems to me that as a=3D= 20 matter of justice, equity s first concern should be to ensure that the=3D= 20 innocent buyer is able to recover the proceeds and any traceable product,= =3D20 not the true owner, who has a strict liability claim against the buyer in= =3D20 any case his mere taking possession of the car will render him liable=3D2= 0 whether the contract under whose auspices he did so is void ab initio or=3D= 20 avoided later. One might say of course, that none of this matters practically, for if th= e=3D =3D20 true owner asserts title in the substitute, the proceeds, then he in=3D20 essence adopts or ratifies the sale by the thief of his original goods, s= o=3D =3D20 that the buyer is no longer liable for conversion. And if the buyer retai= ns=3D =3D20 a legal or equitable interest in the proceeds that prevails over the owne= r,=3D =3D20 then he will merely have to transfer an equivalent amount to the owner=3D= 20 anyway, because of his strict liability for conversion. But what if the=3D= 20 proceeds increase in value? Say the thief sells the owner s car to the=3D= 20 buyer for its true value of =3DA310,000 (its true value, which he then in= vests=3D =3D20 in shares now worth =3DA315,000. Both the owner and the buyer will wish t= o=3D have=3D20 an interest in these proceeds. If the owner gets them, he will have an=3D= 20 asset worth =3DA35,000 more than what he would get from the conversion cl= aim.=3D =3D20 Equally, if the buyer gets the proceeds, he will be able to meet his=3D20 conversion liability of =3DA310,000 and keep the extra =3DA35000 of value= . So=3D this=3D20 does seem to me to raise a real issue. J E Penner Dr Charles Mitchell Reader in Law Director of Postgraduate Taught Programmes School of Law King's College London Strand London WC2R 2LS tel: 020 7848 2290 fax: 020 7848 2465 -- =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D_1899012= 5=3D=3D_.ALT Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable I appreciate that this is not a particularly helpful reply to James' question, but when considering the respective rights of the true owner of the stolen goods and the purchaser of the goods in the situation which he postulates, it might be useful to bear in mind that three first-instance judges have now shown a marked reluctance to extend Lord B-W's rule to the case where a claimant is fraudulently induced to enter a contract under which he transfers property to a defendant (besides questioning the rightness of Lord B-W's rule even in the case of the thief): Box v Barclays Bank [1998] Lloyd's Law Reports Banking 185, 200-1 (Ferris J); Papamichael v National Westminster Bank [2003] 1 Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo [2003] EWHC 1637 (Ch), [106]-[127] (Rimer J).

On a completely different point, Mummery LJ has just reaffirmed Sir Martin Nourse's comments in Hammond v Osbourn, to hold in Niersmans v Pesticcio [2004] EWCA Civ 372 that UI is not an equitable wrong: the relevant bit is para 20:

The insistence of Mr Thomas that Maureen had "done nothing wrong" is an instance of the "continuing misconceptions" mentioned by Sir Martin Nourse in Hammond about the circumstances in which gifts will be set aside on the ground of presumed undue influence. Although undue influence is sometimes described as an "equitable wrong" or even as a species of equitable fraud, the basis of the court's intervention is not the commission of a dishonest or wrongful act by the defendant, but that, as a matter of public policy, the presumed influence arising from the relationship of trust and confidence should not operate to the disadvantage of the victim, if the transaction is not satisfactorily explained by ordinary motives: Allcard v. Skinner (1887) 36 Ch D 145 at 171. The court scrutinises the circumstances in which the transaction, under which benefits were conferred on the recipient, took place and the nature of the continuing relationship between the parties, rather than any specific act or conduct on the part of the recipient. A transaction may be set aside by the court, even though the actions and conduct of the person who benefits from it could not be criticised as wrongful. The presumption arising from the trust and confidence of their relationship made it unnecessary, for example, for Bernard to prove that Maureen actually had influence over him in relation to the gift of the, House, let alone that she in fact exercised undue influence or applied improper pressure to obtain the Deed of Gift. Whether or not Maureen's conduct could be described as "wrongful", the requirement of the doctrine of undue influence is that it must be "affirmatively established that the donor's trust and confidence in the donee has not been betrayed or abused: " see Hammond at paragraph 32. On that point Mr Thomas relied on the part played by Miss Tindall.

On-line at: http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.ht= ml


Charles
At 13:31 01/04/2004 +0100, you wrote:
Further to my last = query, I should also have mentioned that in its concurrent or auxiliary jurisdiction the court of equity has on any number of occasions assisted the victim of a fraud by allowing him to trace into the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. Why should not the buyer of the worthless title to the owner's car not be able to invoke the same assistance and claim the proceeds of the property of which he was defrauded?
 
JEP
-----Original Message-----
From: Penner,JE
Sent: 01 April 2004 12:54
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: [RDG:] FW: constructive trust in proceeds of theft

 Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted to say that a thief holds any proceeds from the sale of stolen goods on trust for the true owner. My question what is the relationship of this trust with the rights of the buyer from the thief of the stolen goods? This no doubt reveals my shocking ignorance of contract law.

It seems to me that there are a couple of possible ways in which the buyer can assert a right to the proceeds the thief receives from the sale, i.e. the money the buyer paid the thief for the owner s goods:

(1)   Assuming that the sale is clearly fraudulent, such that the thief would be liable for the tort of deceit, is it possible that the buyer could claim that the contract was void ab initio? If so, then in the case contemplated by LBW, then the constructive trust of proceeds would be a trust over the buyer s property, which seems clearly wrong.

 (2)   If this is not the right analysis, then it  would seem at the very minimum that the buyer has the right to rescind the transaction for fraudulent misreprentation (the misrepresentation by the thief being that he had good title); now we have two possible scenarios; if we assume that the buyer rescinds before the true owner makes a claim against him for conversion or claims a right in the proceeds of the sale, is the resulting legal or equitable title he gets still subject to owner s LBW trust? If he does not rescind before either the owner makes a claim against him for conversion or asserts title in the proceeds, then does the buyer necessarily lose out to the LBW trust because a right to rescind is a mere equity , which does not bind someone with an equitable ownership interest?

This strikes me as all very complicated because it depends upon the time at which the owner s LBW trust arises. If it arises by operation of law upon the sale, then it effectively extinguishes any right to rescind or any other appropriate legal or equitable interest that the buyer might have in the money he paid, which was, after all, his property to begin with, and I don t see how that is necessarily just. Indeed, it seems to me that as a matter of justice, equity s first concern should be to ensure that the innocent buyer is able to recover the proceeds and any traceable product, not the true owner, who has a strict liability claim against the buyer in any case his mere taking possession of the car will render him liable whether the contract under whose auspices he did so is void ab initio or avoided later.

One might say of course, that none of this matters practically, for if the true owner asserts title in the substitute, the proceeds, then he in essence adopts or ratifies the sale by the thief of his original goods, so that the buyer is no longer liable for conversion. And if the buyer retains a legal or equitable interest in the proceeds that prevails over the owner, then he will merely have to transfer an equivalent amount to the owner anyway, because of his strict liability for conversion. But what if the proceeds increase in value? Say the thief sells the owner s car to the buyer for its true value of =3DA310,000 (its true value, which= he then invests in shares now worth =3DA315,000. Both the owner and the buye= r will wish to have an interest in these proceeds. If the owner gets them, he will have an asset worth =3DA35,000 more than what he would get from t= he conversion claim. Equally, if the buyer gets the proceeds, he will be able to meet his conversion liability of =3DA310,000 and keep the extra =3D= A3500=3D 0 of value. So this does seem to me to raise a real issue.

J E Penner

 

Dr Charles Mitchell
Reader in Law
Director of Postgraduate Taught Programmes
School of Law
King's College London
Strand
London WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 2465
-- =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D_1899012= 5=3D=3D_.ALT-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 15:35:44 +0100 Reply-To: "Hedley, Steve" Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: "Hedley, Steve" Subject: Re: FW: constructive trust in proceeds of theft MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----_=3D_NextPart_001_01C417F6.9D433E80" This message is in MIME format. Since your mail reader does not understan= d this format, some or all of this message may not be legible. ------_=3D_NextPart_001_01C417F6.9D433E80 Content-Type: text/plain; charset=3D"iso-8859-1" At the risk of being even less helpful than Charles, I'd add that in the = law of sale of goods it would be rare to drag questions of fraud into the mat= ter unless unavoidable. A purported sale of property to which the seller can'= t pass title would be a breach of s 12 SGA, which would give rise to a rise= to terminate the contract, fraud or no fraud. There is clearly then a perso= nal action to recover money paid, but as Charles says there is little authori= ty suggesting that there is anything more to it. Steve Hedley Faculty of Law, University College, Cork -----Original Message----- From: Penner,JE [mailto:J.E.Penner@LSE.AC.UK] Sent: 01 April 2004 12:54 To: ENRICHMENT@LISTS.MCGILL.CA Subject: [RDG:] FW: constructive trust in proceeds of theft Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted to = say that a thief holds any proceeds from the sale of stolen goods on trust fo= r the true owner. My question what is the relationship of this trust with t= he rights of the buyer from the thief of the stolen goods? This no doubt reveals my shocking ignorance of contract law. It seems to me that there are a couple of possible ways in which the buye= r can assert a right to the proceeds the thief receives from the sale, i.e. the money the buyer paid the thief for the owner's goods: (1) Assuming that the sale is clearly fraudulent, such that the thief would be liable for the tort of deceit, is it possible that the buyer cou= ld claim that the contract was void ab initio? If so, then in the case contemplated by LBW, then the constructive trust of proceeds would be a trust over the buyer's property, which seems clearly wrong. (2) If this is not the right analysis, then it would seem at the very minimum that the buyer has the right to rescind the transaction for fraudulent misreprentation (the misrepresentation by the thief being that= he had good title); now we have two possible scenarios; if we assume that th= e buyer rescinds before the true owner makes a claim against him for conversion or claims a right in the proceeds of the sale, is the resultin= g legal or equitable title he gets still subject to owner's LBW trust? If h= e does not rescind before either the owner makes a claim against him for conversion or asserts title in the proceeds, then does the buyer necessar= ily lose out to the LBW trust because a right to rescind is a 'mere equity', which does not bind someone with an equitable ownership interest? This strikes me as all very complicated because it depends upon the time = at which the owner's LBW trust arises. If it arises by operation of law upon the sale, then it effectively extinguishes any right to rescind or any ot= her appropriate legal or equitable interest that the buyer might have in the money he paid, which was, after all, his property to begin with, and I do= n't see how that is necessarily just. Indeed, it seems to me that as a matter= of justice, equity's first concern should be to ensure that the innocent buy= er is able to recover the proceeds and any traceable product, not the true owner, who has a strict liability claim against the buyer in any case - h= is mere taking possession of the car will render him liable whether the contract under whose auspices he did so is void ab initio or avoided late= r. One might say of course, that none of this matters practically, for if th= e true owner asserts title in the substitute, the proceeds, then he in esse= nce 'adopts' or ratifies the sale by the thief of his original goods, so that the buyer is no longer liable for conversion. And if the buyer retains a legal or equitable interest in the proceeds that prevails over the owner, then he will merely have to transfer an equivalent amount to the owner anyway, because of his strict liability for conversion. But what if the proceeds increase in value? Say the thief sells the owner's car to the bu= yer for its true value of =A310,000 (its true value, which he then invests in shares now worth =A315,000. Both the owner and the buyer will wish to hav= e an interest in these proceeds. If the owner gets them, he will have an asset worth =A35,000 more than what he would get from the conversion claim. Equ= ally, if the buyer gets the proceeds, he will be able to meet his conversion liability of =A310,000 and keep the extra =A35000 of value. So this does = seem to me to raise a real issue. J E Penner ------_=3D_NextPart_001_01C417F6.9D433E80 Content-Type: text/html; charset=3D"iso-8859-1"
At the risk of being even less helpful than Charles, I'd add that in the law of = sale of goods it would be rare to drag questions of fraud into the matter unless unavoidable. A purported sale of property to which the seller can't pass = title would be a breach of s 12 SGA, which would give rise to a rise to termina= te the contract, fraud or no fraud.  There is clearly then a personal actio= n to recover money paid, but as Charles says there is little authority suggest= ing that there is anything more to it. 
 

Steve Hedley
Faculty of Law, University College, Cork

-----Original Message-----
From: Penner,JE [mailto:J.E.Penner@LSE.AC.UK]
Sent: 01 April 2004 12:54
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: [RDG:= ] FW: constructive trust in proceeds of theft

 Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted to say that a thief holds a= ny proceeds from the sale of stolen goods on trust for the true owner. My question what is the relationship of this trust with the rights of the = buyer from the thief of the stolen goods? This no doubt reveals my shocking ignorance of contract law.

It seems to me that there are a couple of possible= ways in which the buyer can assert a right to the proceeds the thief receives f= rom the sale, i.e. the money the buyer paid the thief for the owner's goods:

(1)&nb= sp;  Assuming that the sale is clearly fraudulent, such that the thie= f would be liable for the tort of deceit, is it possible that the buyer could c= laim that the contract was void ab initio? If so, then in the case contempla= ted by LBW, then the constructive trust of proceeds would be a trust over the = buyer's property, which seems clearly wrong. 

 (2)<= SPAN style=3D"FONT: 7pt 'Times New Roman'">   If this is no= t the right analysis, then it  = would seem at the very minimum that the buyer has the right to rescind the transaction for fraudulent misreprentation (the misrepresentation by th= e thief being that he had good title); now we have two possible scenarios; if w= e assume that the buyer rescinds before the true owner makes a claim agai= nst him for conversion or claims a right in the proceeds of the sale, is the re= sulting legal or equitable title he gets still subject to owner's LBW trust? If= he does not rescind before either the owner makes a claim against him for conversion or asserts title in the proceeds, then does the buyer necess= arily lose out to the LBW trust because a right to rescind is a 'mere equity'= , which does not bind someone with an equitable ownership interest?

This strikes me as all very complicated because it= depends upon the time at which the owner's LBW trust arises. If it arises by op= eration of law upon the sale, then it effectively extinguishes any right to res= cind or any other appropriate legal or equitable interest that the buyer might = have in the money he paid, which was, after all, his property to begin with, and I do= n't see how that is necessarily just. Indeed, it seems to me that as a matter o= f justice, equity's first concern should be to ensure that the innocent b= uyer is able to recover the proceeds and any traceable product, not the true ow= ner, who has a strict liability claim against the buyer in any case - his me= re taking possession of the car will render him liable whether the contrac= t under whose auspices he did so is void ab initio or avoided later.

One might say of course, that none of this matters practically, for if the true owner asserts title in the substitute, the proceeds, then he in essence 'adopts' or ratifies the sale by the thief= of his original goods, so that the buyer is no longer liable for conversion. A= nd if the buyer retains a legal or equitable interest in the proceeds that pr= evails over the owner, then he will merely have to transfer an equivalent amou= nt to the owner anyway, because of his strict liability for conversion. But w= hat if the proceeds increase in value? Say the thief sells the owner's car to = the buyer for its true value of =A310,000 (its true value, which he then in= vests in shares now worth =A315,000. Both the owner and the buyer will wish to h= ave an interest in these proceeds. If the owner gets them, he will have an ass= et worth =A35,000 more than what he would get from the conversion claim. E= qually, if the buyer gets the proceeds, he will be able to meet his conversion liability of =A310,000 and keep the extra =A35000 of value. So this doe= s seem to me to raise a real issue. =

J E Penner=

 

<= /BODY> ------_=3D_NextPart_001_01C417F6.9D433E80-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 10:45:33 -0500 Reply-To: John Swan Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: John Swan MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----_=3D_NextPart_001_01C41800.5E89CAA1" This is a multi-part message in MIME format. ------_=3D_NextPart_001_01C41800.5E89CAA1 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable Some answers to James Penner's questions under the common law and =3D ignoring some special rules and the possible application of some =3D statutes are: * If the "thief" is a thief and stole the goods, whether the =3D owner has a right or not against the thief, the owner can recover the =3D value of the goods from the purchaser in conversion. The owner can =3D pursue the goods into the hands of anyone who acts inconsistently with =3D the owner's title. The claims against art galleries for paintings, =3D etc., looted after WW II are of this type. Note also that no one in the = =3D chain of wrongful holders and certainly not the last is likely to be =3D protected by the Limitations Act. * The right of the owner to recover from the thief and from the = =3D wrongful holder is, presumably, subject to the limit imposed by the =3D Privy Council in Mahesan: the owner cannot recover more than once. The = =3D ultimate holder, on being made liable to the owner, can sue his or her =3D seller, and so on back up the line. The person who bought from the =3D thief can sue him or her. Such claims could be brought under the Sale =3D of Goods Act. * The old common law right to "waive the tort" and to claim the = =3D proceeds of the tort from the tortfeasor may also give the owner a =3D claim, but that claim would not be based on a trust. I would have =3D thought, without the benefit of any review of the cases, that the real =3D question is whether the proceeds received by the thief can be traced. * If the goods are obtained by fraud, the "purchaser's" title =3D is voidable. In this situation, the goods can be obtained from the =3D "purchaser" on the rescission of the contract. The "purchaser" is, of =3D course, liable under the contract or for damages for deceit. Since the =3D "purchaser's" title is voidable and not void, a bona fide purchaser for =3D value from that person will now get good title. See, e.g., Lewis v. =3D Avery. I am not sure how this analysis plugs into the points that concerned Mr. = =3D Penner, but I think that the distinction between theft and fraud has to =3D be kept in mind. John Swan =3D20 -----Original Message----- From: Charles Mitchell [mailto:charles.mitchell@KCL.AC.UK]=3D20 Sent: April 1, 2004 9:11 AM To: ENRICHMENT@lists.mcgill.ca Subject: [RDG:] =3D20 I appreciate that this is not a particularly helpful reply to James' =3D question, but when considering the respective rights of the true owner =3D of the stolen goods and the purchaser of the goods in the situation =3D which he postulates, it might be useful to bear in mind that three =3D first-instance judges have now shown a marked reluctance to extend Lord =3D B-W's rule to the case where a claimant is fraudulently induced to enter = =3D a contract under which he transfers property to a defendant (besides =3D questioning the rightness of Lord B-W's rule even in the case of the =3D thief): Box v Barclays Bank [1998] Lloyd's Law Reports Banking 185, =3D 200-1 (Ferris J); Papamichael v National Westminster Bank [2003] 1 =3D Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo [2003] = =3D EWHC 1637 (Ch), [106]-[127] (Rimer J). On a completely different point, Mummery LJ has just reaffirmed Sir =3D Martin Nourse's comments in Hammond v Osbourn, to hold in Niersmans v =3D Pesticcio [2004] EWCA Civ 372 that UI is not an equitable wrong: the =3D relevant bit is para 20: The insistence of Mr Thomas that Maureen had "done nothing wrong" is an =3D instance of the "continuing misconceptions" mentioned by Sir Martin =3D Nourse in Hammond about the circumstances in which gifts will be set =3D aside on the ground of presumed undue influence. Although undue =3D influence is sometimes described as an "equitable wrong" or even as a =3D species of equitable fraud, the basis of the court's intervention is not = =3D the commission of a dishonest or wrongful act by the defendant, but =3D that, as a matter of public policy, the presumed influence arising from =3D the relationship of trust and confidence should not operate to the =3D disadvantage of the victim, if the transaction is not satisfactorily =3D explained by ordinary motives: Allcard v. Skinner (1887) 36 Ch D 145 at =3D 171. The court scrutinises the circumstances in which the transaction, =3D under which benefits were conferred on the recipient, took place and the = =3D nature of the continuing relationship between the parties, rather than =3D any specific act or conduct on the part of the recipient. A transaction =3D may be set aside by the court, even though the actions and conduct of =3D the person who benefits from it could not be criticised as wrongful. The = =3D presumption arising from the trust and confidence of their relationship =3D made it unnecessary, for example, for Bernard to prove that Maureen =3D actually had influence over him in relation to the gift of the, House, =3D let alone that she in fact exercised undue influence or applied improper = =3D pressure to obtain the Deed of Gift. Whether or not Maureen's conduct =3D could be described as "wrongful", the requirement of the doctrine of =3D undue influence is that it must be "affirmatively established that the =3D donor's trust and confidence in the donee has not been betrayed or =3D abused: " see Hammond at paragraph 32. On that point Mr Thomas relied on = =3D the part played by Miss Tindall.=3D20 On-line at: http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html Charles At 13:31 01/04/2004 +0100, you wrote: Further to my last query, I should also have mentioned that in its =3D concurrent or auxiliary jurisdiction the court of equity has on any =3D number of occasions assisted the victim of a fraud by allowing him to =3D trace into the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. = =3D Why should not the buyer of the worthless title to the owner's car not =3D be able to invoke the same assistance and claim the proceeds of the =3D property of which he was defrauded? =3D20 JEP -----Original Message----- From: Penner,JE=3D20 Sent: 01 April 2004 12:54 To: ENRICHMENT@LISTS.MCGILL.CA Subject: [RDG:] FW: constructive trust in proceeds of theft Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted to = =3D say that a thief holds any proceeds from the sale of stolen goods on =3D trust for the true owner. My question what is the relationship of this =3D trust with the rights of the buyer from the thief of the stolen goods? =3D This no doubt reveals my shocking ignorance of contract law.=3D20 It seems to me that there are a couple of possible ways in which the =3D buyer can assert a right to the proceeds the thief receives from the =3D sale, i.e. the money the buyer paid the thief for the owner s goods: (1) Assuming that the sale is clearly fraudulent, such that the thief =3D would be liable for the tort of deceit, is it possible that the buyer =3D could claim that the contract was void ab initio? If so, then in the =3D case contemplated by LBW, then the constructive trust of proceeds would =3D be a trust over the buyer s property, which seems clearly wrong.=3D20 (2) If this is not the right analysis, then it would seem at the =3D very minimum that the buyer has the right to rescind the transaction for = =3D fraudulent misreprentation (the misrepresentation by the thief being =3D that he had good title); now we have two possible scenarios; if we =3D assume that the buyer rescinds before the true owner makes a claim =3D against him for conversion or claims a right in the proceeds of the =3D sale, is the resulting legal or equitable title he gets still subject to = =3D owner s LBW trust? If he does not rescind before either the owner makes =3D a claim against him for conversion or asserts title in the proceeds, =3D then does the buyer necessarily lose out to the LBW trust because a =3D right to rescind is a mere equity , which does not bind someone with an =3D equitable ownership interest? This strikes me as all very complicated because it depends upon the time = =3D at which the owner s LBW trust arises. If it arises by operation of law =3D upon the sale, then it effectively extinguishes any right to rescind or =3D any other appropriate legal or equitable interest that the buyer might =3D have in the money he paid, which was, after all, his property to begin =3D with, and I don t see how that is necessarily just. Indeed, it seems to =3D me that as a matter of justice, equity s first concern should be to =3D ensure that the innocent buyer is able to recover the proceeds and any =3D traceable product, not the true owner, who has a strict liability claim =3D against the buyer in any case his mere taking possession of the car will = =3D render him liable whether the contract under whose auspices he did so is = =3D void ab initio or avoided later.=3D20 One might say of course, that none of this matters practically, for if =3D the true owner asserts title in the substitute, the proceeds, then he in = =3D essence adopts or ratifies the sale by the thief of his original goods, =3D so that the buyer is no longer liable for conversion. And if the buyer =3D retains a legal or equitable interest in the proceeds that prevails over = =3D the owner, then he will merely have to transfer an equivalent amount to =3D the owner anyway, because of his strict liability for conversion. But =3D what if the proceeds increase in value? Say the thief sells the owner s =3D car to the buyer for its true value of =3DA310,000 (its true value, which= =3D he then invests in shares now worth =3DA315,000. Both the owner and the =3D buyer will wish to have an interest in these proceeds. If the owner gets = =3D them, he will have an asset worth =3DA35,000 more than what he would get = =3D from the conversion claim. Equally, if the buyer gets the proceeds, he =3D will be able to meet his conversion liability of =3DA310,000 and keep the= =3D extra =3DA35000 of value. So this does seem to me to raise a real issue.=3D= 20 J E Penner =3D20 Dr Charles Mitchell Reader in Law Director of Postgraduate Taught Programmes School of Law King's College London Strand London WC2R 2LS tel: 020 7848 2290 fax: 020 7848 2465 ------_=3D_NextPart_001_01C41800.5E89CAA1 Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable

Some =3D answers to James Penner’s questions under the common law and ignoring some special =3D rules and the possible application of some statutes are:

•=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0 If the =3D “thief” is a thief and stole the goods, =3D whether the owner has a right or not against the thief, the owner can recover the =3D value of the goods from the purchaser in conversion.=3DA0 The owner can pursue the= =3D goods into the hands of anyone who acts inconsistently with the owner’s =3D title.=3DA0 The claims against art galleries for paintings, etc., looted after WW II = =3D are of this type.=3DA0 Note also that no one in the chain of wrongful holders an= d certainly not the last is likely to be protected by the Limitations =3D Act.

•=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0 The righ= t of the owner to =3D recover from the thief and from the wrongful holder is, presumably, subject to the limit =3D imposed by the Privy Council in Mahesan: =3DA0the owner cannot recover more than once.=3DA0 The ultimate holder, on being =3D made liable to the owner, can sue his or her seller, and so on back up the line.=3DA0= =3D The person who bought from the thief can sue him or her.=3DA0 Such claims =3D could be brought under the Sale of Goods Act.

•=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0 The old = common law right =3D to “waive the tort” and to claim the proceeds of the tort from the tortfeasor may also give =3D the owner a claim, but that claim would not be based on a trust.=3DA0 I would= =3D have thought, without the benefit of any review of the cases, that the real =3D question is whether the proceeds received by the thief can be =3D traced.

•=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0=3DA0 If the g= oods are obtained =3D by fraud, the “purchaser’s” title is voidable.=3DA0 In this situation, the goods can be obtained from= =3D the “purchaser” on the rescission of the contract.=3DA0 The “purchaser” is, o= f =3D course, liable under the contract or for damages for deceit.=3DA0 Since the =3D “purchaser’s” title is voidable and not void, a bona fide purchaser for value from =3D that person will now get good title.=3DA0 See, e.g., Lewis v. =3D Avery.

I am =3D not sure how this analysis plugs into the points that concerned Mr. Penner, but I = =3D think that the distinction between theft and fraud has to be kept in =3D mind.

John =3D Swan

 

-----Origi= nal Message-----
From: Charles Mitchell [mailto:charles.mitchell@KCL.AC.UK]
Sent:
April 1, 2004 9:11 AM
To: =3D ENRICHMENT@lists.mcgill.ca
Subject: =3D [RDG:]

 

I appreciate that this is not a particularly helpful reply to =3D James' question, but when considering the respective rights of the true owner =3D of the stolen goods and the purchaser of the goods in the situation which he postulates, it might be useful to bear in mind that three first-instance = =3D judges have now shown a marked reluctance to extend Lord B-W's rule to the case = =3D where a claimant is fraudulently induced to enter a contract under which he =3D transfers property to a defendant (besides questioning the rightness of Lord B-W's = =3D rule even in the case of the thief): Bo= x =3D v Barclays Bank [1998] Lloyd's Law Reports Banking 185, 200-1 =3D (Ferris J); Papamichael v National =3D Westminster Bank [2003] 1 Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo [2003] EWHC 1637 (Ch), [106]-[127] =3D (Rimer J).

On a completely different point, Mummery LJ has just reaffirmed Sir =3D Martin Nourse's comments in Hammond v =3D Osbourn, to hold in Niersmans v =3D Pesticcio [2004] EWCA Civ 372 that UI is not an equitable wrong: the relevant bit =3D is para 20:

The insistence of Mr Thomas that Maureen had "done nothing =3D wrong" is an instance of the "continuing misconceptions" mentioned by =3D Sir Martin Nourse in Hammond =3D about the circumstances in which gifts will be set aside on the ground of presumed = =3D undue influence. Although undue influence is sometimes described as an "equitable wrong" or even as a species of equitable fraud, the = =3D basis of the court's intervention is not the commission of a dishonest or =3D wrongful act by the defendant, but that, as a matter of public policy, the =3D presumed influence arising from the relationship of trust and confidence should =3D not operate to the disadvantage of the victim, if the transaction is not satisfactorily explained by ordinary motives: Allcard v. Skinner (1887) 36 Ch D 145 at 171. The court scrutinises =3D the circumstances in which the transaction, under which benefits were =3D conferred on the recipient, took place and the nature of the continuing relationship =3D between the parties, rather than any specific act or conduct on the part of the recipient. A transaction may be set aside by the court, even though the =3D actions and conduct of the person who benefits from it could not be criticised =3D as wrongful. The presumption arising from the trust and confidence of their relationship made it unnecessary, for example, for Bernard to prove that Maureen actually had influence over him in relation to the gift of the, =3D House, let alone that she in fact exercised undue influence or applied improper pressure to obtain the Deed of Gift. Whether or not Maureen's conduct =3D could be described as "wrongful", the requirement of the doctrine of =3D undue influence is that it must be "affirmatively established that the =3D donor's trust and confidence in the donee has not been betrayed or abused: =3D " see
Hammond at paragraph 32. On that point Mr Thomas relied on the part =3D played by Miss Tindall.

On-line at:
http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html<= /a=3D >


Charles
At 13:31 01/04/2004 +0100, you wrote:
Further to my last query, I should also have mentioned = =3D that in its concurrent or auxiliary jurisdiction the court of equity has on =3D any number of occasions assisted the victim of a fraud by allowing him to =3D trace into the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. Why =3D should not the buyer of the worthless title to the owner's car not be able to =3D invoke the same assistance and claim the proceeds of the property of which he =3D was defrauded?
 
JEP
-----Original Message-----
From: Penner,JE
Sent: 01 April 2004 =3D 12:54
To: =3D ENRICHMENT@LISTS.MCGILL.CA
Subject: [RDG:] FW: =3D constructive trust in proceeds of theft

 Assume Lord Browne-Wilkinson in =3D Westdeutsche is properly =3D interpreted to say that a thief holds any proceeds from the sale of stolen goods on =3D trust for the true owner. My question what is the relationship of this trust with =3D the rights of the buyer from the thief of the stolen goods? This no doubt =3D reveals my shocking ignorance of contract law.

It seems to me that there are a couple of possible ways in which the =3D buyer can assert a right to the proceeds the thief receives from the sale, i.e. =3D the money the buyer paid the thief for the owner s goods:

(1)   Assuming that the sale is clearly fraudulent, such that =3D the thief would be liable for the tort of deceit, is it possible that the =3D buyer could claim that the contract was void ab initio? If so, then in the =3D case contemplated by LBW, then the constructive trust of proceeds would be a =3D trust over the buyer s property, which seems clearly wrong.

 (2)   If this is not the right analysis, then it  =3D would seem at the very minimum that the buyer has the right to rescind the transaction for fraudulent misreprentation (the misrepresentation by the = =3D thief being that he had good title); now we have two possible scenarios; if we = =3D assume that the buyer rescinds before the true owner makes a claim against him =3D for conversion or claims a right in the proceeds of the sale, is the =3D resulting legal or equitable title he gets still subject to owner s LBW trust? If =3D he does not rescind before either the owner makes a claim against him for =3D conversion or asserts title in the proceeds, then does the buyer necessarily lose out =3D to the LBW trust because a right to rescind is a mere equity , which does not =3D bind someone with an equitable ownership interest?

This strikes me as all very complicated because it depends upon the time = =3D at which the owner s LBW trust arises. If it arises by operation of law =3D upon the sale, then it effectively extinguishes any right to rescind or any other appropriate legal or equitable interest that the buyer might have in the = =3D money he paid, which was, after all, his property to begin with, and I don t see how that is necessarily just. =3D Indeed, it seems to me that as a matter of justice, equity s first concern =3D should be to ensure that the innocent buyer is able to recover the proceeds and any traceable product, not the true owner, who has a strict liability claim =3D against the buyer in any case his mere taking possession of the car will render =3D him liable whether the contract under whose auspices he did so is void ab =3D initio or avoided later.

One might say of course, that none of this matters practically, for if =3D the true owner asserts title in the substitute, the proceeds, then he in essence =3D adopts or ratifies the sale by the thief of his original goods, so that the =3D buyer is no longer liable for conversion. And if the buyer retains a legal or =3D equitable interest in the proceeds that prevails over the owner, then he will =3D merely have to transfer an equivalent amount to the owner anyway, because of his =3D strict liability for conversion. But what if the proceeds increase in value? =3D Say the thief sells the owner s car to the buyer for its true value of =3DA310,00= 0 =3D (its true value, which he then invests in shares now worth =3DA315,000. Both the =3D owner and the buyer will wish to have an interest in these proceeds. If the owner =3D gets them, he will have an asset worth =3DA35,000 more than what he would get = =3D from the conversion claim. Equally, if the buyer gets the proceeds, he will be =3D able to meet his conversion liability of =3DA310,000 and keep the extra =3DA35000= of =3D value. So this does seem to me to raise a real issue.

J E Penner

 

Dr Charles Mitchell
Reader in Law
Director of Postgraduate Taught Programmes
School of Law
King's College
London
Strand
London WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 2465

=3D00 ------_=3D_NextPart_001_01C41800.5E89CAA1-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 11:14:02 -0500 Reply-To: Jason Neyers Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Jason Neyers Subject: Undue Influence MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"------------080509000605090301050005" --------------080509000605090301050005 Content-Type: text/plain; charset=3DISO-8859-1; format=3Dflowed Content-Transfer-Encoding: 8bit If UI is not a wrong of some sort then why should the court be intervening? Why should I have to look out for the best interests of someone else? If the best that the Eng. CA can come up with is policy (which tends to make me suspicious), then I would at least like to know which policy is being served and why this might outweigh other policies such as certainty, etc. Charles Mitchell wrote: > I appreciate that this is not a particularly helpful reply to James' > question, but when considering the respective rights of the true owner > of the stolen goods and the purchaser of the goods in the situation > which he postulates, it might be useful to bear in mind that three > first-instance judges have now shown a marked reluctance to extend > Lord B-W's rule to the case where a claimant is fraudulently induced > to enter a contract under which he transfers property to a defendant > (besides questioning the rightness of Lord B-W's rule even in the case > of the thief): Box v Barclays Bank [1998] Lloyd's Law Reports Banking > 185, 200-1 (Ferris J); Papamichael v National Westminster Bank [2003] > 1 Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo > [2003] EWHC 1637 (Ch), [106]-[127] (Rimer J). > > On a completely different point, Mummery LJ has just reaffirmed Sir > Martin Nourse's comments in Hammond v Osbourn, to hold in Niersmans v > Pesticcio [2004] EWCA Civ 372 that UI is not an equitable wrong: the > relevant bit is para 20: > > The insistence of Mr Thomas that Maureen had "done nothing wrong" is > an instance of the "continuing misconceptions" mentioned by Sir Martin > Nourse in Hammond about the circumstances in which gifts will be set > aside on the ground of presumed undue influence. Although undue > influence is sometimes described as an "equitable wrong" or even as a > species of equitable fraud, the basis of the court's intervention is > not the commission of a dishonest or wrongful act by the defendant, > but that, as a matter of public policy, the presumed influence arising > from the relationship of trust and confidence should not operate to > the disadvantage of the victim, if the transaction is not > satisfactorily explained by ordinary motives: Allcard v. Skinner > (1887) 36 Ch D 145 at 171. The court scrutinises the circumstances in > which the transaction, under which benefits were conferred on the > recipient, took place and the nature of the continuing relationship > between the parties, rather than any specific act or conduct on the > part of the recipient. A transaction may be set aside by the court, > even though the actions and conduct of the person who benefits from it > could not be criticised as wrongful. The presumption arising from the > trust and confidence of their relationship made it unnecessary, for > example, for Bernard to prove that Maureen actually had influence over > him in relation to the gift of the, House, let alone that she in fact > exercised undue influence or applied improper pressure to obtain the > Deed of Gift. Whether or not Maureen's conduct could be described as > "wrongful", the requirement of the doctrine of undue influence is that > it must be "affirmatively established that the donor's trust and > confidence in the donee has not been betrayed or abused: " see Hammond > at paragraph 32. On that point Mr Thomas relied on the part played by > Miss Tindall. > > On-line at: http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html > > > Charles > At 13:31 01/04/2004 +0100, you wrote: > Further to my last query, I should also have mentioned that in its > concurrent or auxiliary jurisdiction the court of equity has on any > number of occasions assisted the victim of a fraud by allowing him to > trace into the proceeds of the fraud -- Agip (Africa), El Ajou, etc > etc. Why should not the buyer of the worthless title to the owner's > car not be able to invoke the same assistance and claim the proceeds > of the property of which he was defrauded? > > JEP > -----Original Message----- > From: Penner,JE > Sent: 01 April 2004 12:54 > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: [RDG:] FW: constructive trust in proceeds of theft > > Assume Lord Browne-Wilkinson in Westdeutsche is properly interpreted > to say that a thief holds any proceeds from the sale of stolen goods > on trust for the true owner. My question what is the relationship of > this trust with the rights of the buyer from the thief of the stolen > goods? This no doubt reveals my shocking ignorance of contract law. > > It seems to me that there are a couple of possible ways in which the > buyer can assert a right to the proceeds the thief receives from the > sale, i.e. the money the buyer paid the thief for the owner s goods: > > (1) Assuming that the sale is clearly fraudulent, such that the > thief would be liable for the tort of deceit, is it possible that the > buyer could claim that the contract was void ab initio? If so, then in > the case contemplated by LBW, then the constructive trust of proceeds > would be a trust over the buyer s property, which seems clearly wrong. > > (2) If this is not the right analysis, then it would seem at the > very minimum that the buyer has the right to rescind the transaction > for fraudulent misreprentation (the misrepresentation by the thief > being that he had good title); now we have two possible scenarios; if > we assume that the buyer rescinds before the true owner makes a claim > against him for conversion or claims a right in the proceeds of the > sale, is the resulting legal or equitable title he gets still subject > to owner s LBW trust? If he does not rescind before either the owner > makes a claim against him for conversion or asserts title in the > proceeds, then does the buyer necessarily lose out to the LBW trust > because a right to rescind is a mere equity , which does not bind > someone with an equitable ownership interest? > > This strikes me as all very complicated because it depends upon the > time at which the owner s LBW trust arises. If it arises by operation > of law upon the sale, then it effectively extinguishes any right to > rescind or any other appropriate legal or equitable interest that the > buyer might have in the money he paid, which was, after all, his > property to begin with, and I don t see how that is necessarily just. > Indeed, it seems to me that as a matter of justice, equity s first > concern should be to ensure that the innocent buyer is able to recover > the proceeds and any traceable product, not the true owner, who has a > strict liability claim against the buyer in any case his mere taking > possession of the car will render him liable whether the contract > under whose auspices he did so is void ab initio or avoided later. > > One might say of course, that none of this matters practically, for if > the true owner asserts title in the substitute, the proceeds, then he > in essence adopts or ratifies the sale by the thief of his original > goods, so that the buyer is no longer liable for conversion. And if > the buyer retains a legal or equitable interest in the proceeds that > prevails over the owner, then he will merely have to transfer an > equivalent amount to the owner anyway, because of his strict liability > for conversion. But what if the proceeds increase in value? Say the > thief sells the owner s car to the buyer for its true value of =A310,00= 0 > (its true value, which he then invests in shares now worth =A315,000. > Both the owner and the buyer will wish to have an interest in these > proceeds. If the owner gets them, he will have an asset worth =A35,000 > more than what he would get from the conversion claim. Equally, if the > buyer gets the proceeds, he will be able to meet his conversion > liability of =A310,000 and keep the extra =A35000 of value. So this doe= s > seem to me to raise a real issue. > > J E Penner > > > > Dr Charles Mitchell > Reader in Law > Director of Postgraduate Taught Programmes > School of Law > King's College London > Strand > London WC2R 2LS > > tel: 020 7848 2290 > fax: 020 7848 2465 -- Jason Neyers January Term Director Assistant Professor of Law Faculty of Law University of Western Ontario N6A 3K7 (519) 661-2111 x. 88435 --------------080509000605090301050005 Content-Type: text/html; charset=3Dus-ascii Content-Transfer-Encoding: 7bit If UI is not a wrong of some sort then why should the court be intervenin= g? Why should I have to look out for the best interests of someone else?&nbs= p; If the best that the Eng. CA can come up with is policy (which tends to make me suspicious), then I would at least like to know which policy is being served and why this might outweigh other policies such as certainty, etc.

Charles Mitchell wrote:
I appreci= ate that this is not a particularly helpful reply to James' question, but when considering the respective rights of the true owner of the stole= n goods and the purchaser of the goods in the situation which he postulates= , it might be useful to bear in mind that three first-instance judges have now shown a marked reluctance to extend Lord B-W's rule to the case where a claimant is fraudulently induced to enter a contract under which he tra= nsfers property to a defendant (besides questioning the rightness of Lord B-W's rule even in the case of the thief): Box v Barclays Bank [1998] Ll= oyd's Law Reports Banking 185, 200-1 (Ferris J); Papamichael v National West= minster Bank [2003] 1 Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Sh= alson v Russo [2003] EWHC 1637 (Ch), [106]-[127] (Rimer J).

On a completely different point, Mummery LJ has just reaffirmed Sir Mart= in Nourse's comments in Hammond v Osbourn, to hold in Niersmans v Pesticcio [2004] EWCA Civ 372 that UI is not an equitable wrong: the relevant bit is para 20:

The insistence of Mr Thomas that Maureen had "done nothing wrong" is an instance of the "continuing misconceptions" mentioned by Sir Martin Nours= e in Hammond about the circumstances in which gifts will be set asid= e on the ground of presumed undue influence. Although undue influence is so= metimes described as an "equitable wrong" or even as a species of equitable fraud= , the basis of the court's intervention is not the commission of a dishones= t or wrongful act by the defendant, but that, as a matter of public policy, the presumed influence arising from the relationship of trust and confide= nce should not operate to the disadvantage of the victim, if the transaction is not satisfactorily explained by ordinary motives: Allcard v. Skinne= r (1887) 36 Ch D 145 at 171. The court scrutinises the circumstances in which the transaction, under which benefits were conferred on the reci= pient, took place and the nature of the continuing relationship between the part= ies, rather than any specific act or conduct on the part of the recipient. A t= ransaction may be set aside by the court, even though the actions and conduct of the person who benefits from it could not be criticised as wrongful. The pres= umption arising from the trust and confidence of their relationship made it unnec= essary, for example, for Bernard to prove that Maureen actually had influence ove= r him in relation to the gift of the, House, let alone that she in fact exe= rcised undue influence or applied improper pressure to obtain the Deed of Gift. Whether or not Maureen's conduct could be described as "wrongful", the re= quirement of the doctrine of undue influence is that it must be "affirmatively esta= blished that the donor's trust and confidence in the donee has not been betrayed or abused: " see Hammond at paragraph 32. On that point Mr Thomas relied on the part played by Miss Tindall.

On-line at:
http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html=


Charles
At 13:31 01/04/2004 +0100, you wrote:
Further to my last que= ry, I should also have mentioned that in its concurrent or auxiliary jurisdiction the court of equity has on any number of occasions assisted the victim of a f= raud by allowing him to trace into the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. Why should not the buyer of the worthless title to the owner's car not be able to invoke the same assistance and claim the proce= eds of the property of which he was defrauded?
 
JEP
-----Original Message-----
From: Penner,JE
Sent: 01 April 2004 12:54
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: [RDG:] FW: constructive trust in proceeds of theft

 Assume Lord Browne-Wilkinson in Westdeut= sche is properly interpreted to say that a thief holds any proceeds from the s= ale of stolen goods on trust for the true owner. My question what is the rela= tionship of this trust with the rights of the buyer from the thief of the stolen g= oods? This no doubt reveals my shocking ignorance of contract law.

It seems to me that there are a couple of possible ways in which the buy= er can assert a right to the proceeds the thief receives from the sale, i.e. the money the buyer paid the thief for the owner s goods:

(1)   Assuming that the sale is clearly fraudulent, such that = the thief would be liable for the tort of deceit, is it possible that the buyer cou= ld claim that the contract was void ab initio? If so, then in the case conte= mplated by LBW, then the constructive trust of proceeds would be a trust over the buyer s property, which seems clearly wrong.

 (2)   If this is not the right analysis, then it  w= ould seem at the very minimum that the buyer has the right to rescind the transaction for fraud= ulent misreprentation (the misrepresentation by the thief being that he had goo= d title); now we have two possible scenarios; if we assume that the buyer r= escinds before the true owner makes a claim against him for conversion or claims a right in the proceeds of the sale, is the resulting legal or equitable title he gets still subject to owner s LBW trust? If he does not rescind before either the owner makes a claim against him for conversion or asser= ts title in the proceeds, then does the buyer necessarily lose out to the LB= W trust because a right to rescind is a mere equity , which does not bind s= omeone with an equitable ownership interest?

This strikes me as all very complicated because it depends upon the time at which the owner s LBW trust arises. If it arises by operation of law u= pon the sale, then it effectively extinguishes any right to rescind or any ot= her appropriate legal or equitable interest that the buyer might have in the money he paid, which was, after all, his property to begin with, a= nd I don t see how that is necessarily just. Indeed, it seems to me that as a matter of justice, equity s first concern should be to ensure that the innocent buyer is able to recover the proceeds and any traceable product, not the true owner, who has a strict liability claim against the buyer in any case his mere taking possession of the car will render him liable whe= ther the contract under whose auspices he did so is void ab initio or avoided later.

One might say of course, that none of this matters practically, for if t= he true owner asserts title in the substitute, the proceeds, then he in esse= nce adopts or ratifies the sale by the thief of his original goods, so that t= he buyer is no longer liable for conversion. And if the buyer retains a lega= l or equitable interest in the proceeds that prevails over the owner, then he will merely have to transfer an equivalent amount to the owner anyway, because of his strict liability for conversion. But what if the proceeds increase in value? Say the thief sells the owner s car to the buyer for i= ts true value of £10,000 (its true value, which he then invests in sha= res now worth £15,000. Both the owner and the buyer will wish to have an in= terest in these proceeds. If the owner gets them, he will have an asset worth &p= ound;5,000 more than what he would get from the conversion claim. Equally, if the bu= yer gets the proceeds, he will be able to meet his conversion liability of &p= ound;10,000 and keep the extra £5000 of value. So this does seem to me to raise= a real issue.

J E Penner

 

Dr Charles Mitchell
Reader in Law
Director of Postgraduate Taught Programmes
School of Law
King's College London
Strand
London WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 2465
--

Jason Neyers

January Term Director

Assistant Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435 



--------------080509000605090301050005-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 20:24:17 +0100 Reply-To: William Swadling Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: William Swadling Subject: Re: Undue Influence Comments: To: Jason Neyers MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----=3D_NextPart_000_00EF_01C41827.4E8AFFE0" This is a multi-part message in MIME format. ------=3D_NextPart_000_00EF_01C41827.4E8AFFE0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable If I pay you =3DA3100 by mistake, you commit no wrong in your receipt. =3D Yet a court will intervene and order you to repay me that amount. The =3D point which Mummery LJ is making, and quite rightly so, is that the =3D repayment of money paid through undue influence can be explained as a =3D species of unjust enrichment, without any need to rely on wrongdoing.=3D2= 0 W J Swadling ----- Original Message -----=3D20 From: Jason Neyers=3D20 To: ENRICHMENT@LISTS.MCGILL.CA=3D20 Sent: Thursday, April 01, 2004 5:14 PM Subject: [RDG:] Undue Influence If UI is not a wrong of some sort then why should the court be =3D intervening? Why should I have to look out for the best interests of =3D someone else? If the best that the Eng. CA can come up with is policy =3D (which tends to make me suspicious), then I would at least like to know =3D which policy is being served and why this might outweigh other policies =3D such as certainty, etc.=3D20 Charles Mitchell wrote: I appreciate that this is not a particularly helpful reply to James' = =3D question, but when considering the respective rights of the true owner =3D of the stolen goods and the purchaser of the goods in the situation =3D which he postulates, it might be useful to bear in mind that three =3D first-instance judges have now shown a marked reluctance to extend Lord =3D B-W's rule to the case where a claimant is fraudulently induced to enter = =3D a contract under which he transfers property to a defendant (besides =3D questioning the rightness of Lord B-W's rule even in the case of the =3D thief): Box v Barclays Bank [1998] Lloyd's Law Reports Banking 185, =3D 200-1 (Ferris J); Papamichael v National Westminster Bank [2003] 1 =3D Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo [2003] = =3D EWHC 1637 (Ch), [106]-[127] (Rimer J). On a completely different point, Mummery LJ has just reaffirmed Sir =3D Martin Nourse's comments in Hammond v Osbourn, to hold in Niersmans v =3D Pesticcio [2004] EWCA Civ 372 that UI is not an equitable wrong: the =3D relevant bit is para 20: The insistence of Mr Thomas that Maureen had "done nothing wrong" is = =3D an instance of the "continuing misconceptions" mentioned by Sir Martin =3D Nourse in Hammond about the circumstances in which gifts will be set =3D aside on the ground of presumed undue influence. Although undue =3D influence is sometimes described as an "equitable wrong" or even as a =3D species of equitable fraud, the basis of the court's intervention is not = =3D the commission of a dishonest or wrongful act by the defendant, but =3D that, as a matter of public policy, the presumed influence arising from =3D the relationship of trust and confidence should not operate to the =3D disadvantage of the victim, if the transaction is not satisfactorily =3D explained by ordinary motives: Allcard v. Skinner (1887) 36 Ch D 145 at =3D 171. The court scrutinises the circumstances in which the transaction, =3D under which benefits were conferred on the recipient, took place and the = =3D nature of the continuing relationship between the parties, rather than =3D any specific act or conduct on the part of the recipient. A transaction =3D may be set aside by the court, even though the actions and conduct of =3D the person who benefits from it could not be criticised as wrongful. The = =3D presumption arising from the trust and confidence of their relationship =3D made it unnecessary, for example, for Bernard to prove that Maureen =3D actually had influence over him in relation to the gift of the, House, =3D let alone that she in fact exercised undue influence or applied improper = =3D pressure to obtain the Deed of Gift. Whether or not Maureen's conduct =3D could be described as "wrongful", the requirement of the doctrine of =3D undue influence is that it must be "affirmatively established that the =3D donor's trust and confidence in the donee has not been betrayed or =3D abused: " see Hammond at paragraph 32. On that point Mr Thomas relied on = =3D the part played by Miss Tindall.=3D20 On-line at: http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html Charles At 13:31 01/04/2004 +0100, you wrote: Further to my last query, I should also have mentioned that in its =3D concurrent or auxiliary jurisdiction the court of equity has on any =3D number of occasions assisted the victim of a fraud by allowing him to =3D trace into the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. = =3D Why should not the buyer of the worthless title to the owner's car not =3D be able to invoke the same assistance and claim the proceeds of the =3D property of which he was defrauded? =3D20 JEP -----Original Message----- From: Penner,JE=3D20 Sent: 01 April 2004 12:54 To: ENRICHMENT@LISTS.MCGILL.CA Subject: [RDG:] FW: constructive trust in proceeds of theft Assume Lord Browne-Wilkinson in Westdeutsche is properly =3D interpreted to say that a thief holds any proceeds from the sale of =3D stolen goods on trust for the true owner. My question what is the =3D relationship of this trust with the rights of the buyer from the thief =3D of the stolen goods? This no doubt reveals my shocking ignorance of =3D contract law.=3D20 It seems to me that there are a couple of possible ways in which the = =3D buyer can assert a right to the proceeds the thief receives from the =3D sale, i.e. the money the buyer paid the thief for the owner s goods: (1) Assuming that the sale is clearly fraudulent, such that the =3D thief would be liable for the tort of deceit, is it possible that the =3D buyer could claim that the contract was void ab initio? If so, then in =3D the case contemplated by LBW, then the constructive trust of proceeds =3D would be a trust over the buyer s property, which seems clearly wrong.=3D= 20 (2) If this is not the right analysis, then it would seem at the = =3D very minimum that the buyer has the right to rescind the transaction for = =3D fraudulent misreprentation (the misrepresentation by the thief being =3D that he had good title); now we have two possible scenarios; if we =3D assume that the buyer rescinds before the true owner makes a claim =3D against him for conversion or claims a right in the proceeds of the =3D sale, is the resulting legal or equitable title he gets still subject to = =3D owner s LBW trust? If he does not rescind before either the owner makes =3D a claim against him for conversion or asserts title in the proceeds, =3D then does the buyer necessarily lose out to the LBW trust because a =3D right to rescind is a mere equity , which does not bind someone with an =3D equitable ownership interest? This strikes me as all very complicated because it depends upon the =3D time at which the owner s LBW trust arises. If it arises by operation of = =3D law upon the sale, then it effectively extinguishes any right to rescind = =3D or any other appropriate legal or equitable interest that the buyer =3D might have in the money he paid, which was, after all, his property to =3D begin with, and I don t see how that is necessarily just. Indeed, it =3D seems to me that as a matter of justice, equity s first concern should =3D be to ensure that the innocent buyer is able to recover the proceeds and = =3D any traceable product, not the true owner, who has a strict liability =3D claim against the buyer in any case his mere taking possession of the =3D car will render him liable whether the contract under whose auspices he =3D did so is void ab initio or avoided later.=3D20 One might say of course, that none of this matters practically, for =3D if the true owner asserts title in the substitute, the proceeds, then he = =3D in essence adopts or ratifies the sale by the thief of his original =3D goods, so that the buyer is no longer liable for conversion. And if the =3D buyer retains a legal or equitable interest in the proceeds that =3D prevails over the owner, then he will merely have to transfer an =3D equivalent amount to the owner anyway, because of his strict liability =3D for conversion. But what if the proceeds increase in value? Say the =3D thief sells the owner s car to the buyer for its true value of =3DA310,00= 0 =3D (its true value, which he then invests in shares now worth =3DA315,000. =3D Both the owner and the buyer will wish to have an interest in these =3D proceeds. If the owner gets them, he will have an asset worth =3DA35,000 = =3D more than what he would get from the conversion claim. Equally, if the =3D buyer gets the proceeds, he will be able to meet his conversion =3D liability of =3DA310,000 and keep the extra =3DA35000 of value. So this d= oes =3D seem to me to raise a real issue.=3D20 J E Penner =3D20 Dr Charles Mitchell Reader in Law Director of Postgraduate Taught Programmes School of Law King's College London Strand London WC2R 2LS tel: 020 7848 2290 fax: 020 7848 2465 -- Jason Neyers January Term Director Assistant Professor of Law Faculty of Law University of Western Ontario N6A 3K7 (519) 661-2111 x. 88435=3D20 ------=3D_NextPart_000_00EF_01C41827.4E8AFFE0 Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable
If I pay you =3DA3100 by mistake, you commit no wrong in your =3D receipt. =3D20 Yet a court will intervene and order you to repay me that amount.  =3D The=3D20 point which Mummery LJ is making, and quite rightly so, is that the = =3D repayment of money paid through undue influence can be explained as = =3D a=3D20 species of unjust enrichment, without any need to rely=3D20 on wrongdoing. 
 
W J Swadling
----- Original Message -----
From:=3D20 Jason =3D Neyers
Sent: Thursday, April 01, 2004= =3D 5:14=3D20 PM
Subject: [RDG:] Undue =3D Influence

If UI is not a wrong of some sort then why should the =3D court be=3D20 intervening? Why should I have to look out for the best interests of =3D someone=3D20 else?  If the best that the Eng. CA can come up with is policy =3D (which=3D20 tends to make me suspicious), then I would at least like to know which = =3D policy=3D20 is being served and why this might outweigh other policies such as =3D certainty,=3D20 etc.

Charles Mitchell wrote:
I appreciate that this is not a particularly =3D helpful=3D20 reply to James' question, but when considering the respective rights = =3D of the=3D20 true owner of the stolen goods and the purchaser of the goods in the = =3D situation which he postulates, it might be useful to bear in mind =3D that three=3D20 first-instance judges have now shown a marked reluctance to extend =3D Lord=3D20 B-W's rule to the case where a claimant is fraudulently induced to =3D enter a=3D20 contract under which he transfers property to a defendant (besides=3D= 20 questioning the rightness of Lord B-W's rule even in the case of the = =3D thief):=3D20 Box v Barclays Bank [1998] Lloyd's Law Reports Banking 185, =3D 200-1=3D20 (Ferris J); Papamichael v National Westminster Bank [2003] 1 =3D Lloyd's=3D20 Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo =3D [2003] EWHC=3D20 1637 (Ch), [106]-[127] (Rimer J).

On a completely different =3D point,=3D20 Mummery LJ has just reaffirmed Sir Martin Nourse's comments in =3D Hammond v=3D20 Osbourn, to hold in Niersmans v Pesticcio [2004] EWCA Civ = =3D 372=3D20 that UI is not an equitable wrong: the relevant bit is para =3D 20:

The=3D20 insistence of Mr Thomas that Maureen had "done nothing wrong" is an =3D instance=3D20 of the "continuing misconceptions" mentioned by Sir Martin Nourse in = =3D Hammond about the circumstances in which gifts will be set =3D aside on=3D20 the ground of presumed undue influence. Although undue influence is=3D= 20 sometimes described as an "equitable wrong" or even as a species of=3D= 20 equitable fraud, the basis of the court's intervention is not the =3D commission=3D20 of a dishonest or wrongful act by the defendant, but that, as a =3D matter of=3D20 public policy, the presumed influence arising from the relationship =3D of trust=3D20 and confidence should not operate to the disadvantage of the victim, = =3D if the=3D20 transaction is not satisfactorily explained by ordinary motives: =3D Allcard=3D20 v. Skinner (1887) 36 Ch D 145 at 171. The court scrutinises the=3D= 20 circumstances in which the transaction, under which benefits were =3D conferred=3D20 on the recipient, took place and the nature of the continuing =3D relationship=3D20 between the parties, rather than any specific act or conduct on the =3D part of=3D20 the recipient. A transaction may be set aside by the court, even =3D though the=3D20 actions and conduct of the person who benefits from it could not be=3D= 20 criticised as wrongful. The presumption arising from the trust and=3D= 20 confidence of their relationship made it unnecessary, for example, =3D for=3D20 Bernard to prove that Maureen actually had influence over him in =3D relation to=3D20 the gift of the, House, let alone that she in fact exercised undue =3D influence=3D20 or applied improper pressure to obtain the Deed of Gift. Whether or =3D not=3D20 Maureen's conduct could be described as "wrongful", the requirement =3D of the=3D20 doctrine of undue influence is that it must be "affirmatively =3D established=3D20 that the donor's trust and confidence in the donee has not been =3D betrayed or=3D20 abused: " see Hammond at paragraph 32. On that point Mr =3D Thomas relied=3D20 on the part played by Miss Tindall.

On-line at: http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.htm= l<=3D /A>


Charles
At=3D20 13:31 01/04/2004 +0100, you wrote:
Further to my last query, I should also have mentioned tha= t =3D in its=3D20 concurrent or auxiliary jurisdiction the court of equity has on any =3D number=3D20 of occasions assisted the victim of a fraud by allowing him to trace = =3D into=3D20 the proceeds of the fraud -- Agip (Africa), El Ajou, etc etc. Why =3D should not=3D20 the buyer of the worthless title to the owner's car not be able to =3D invoke=3D20 the same assistance and claim the proceeds of the property of which =3D he was=3D20 defrauded?
 
JEP
----- Origin= al=3D20 Message-----
From: Penner,JE
Sent: 01 April =3D 2004=3D20 12:54
To:
ENRICHMENT@LISTS.M CGILL.CA=3D
Subject:=3D20 [RDG:] FW: constructive trust in proceeds of =3D theft

 Assume Lord Browne-Wilkinson in Westdeutsche is =3D properly=3D20 interpreted to say that a thief holds any proceeds from the sale of =3D stolen=3D20 goods on trust for the true owner. My question what is the =3D relationship of=3D20 this trust with the rights of the buyer from the thief of the stolen = =3D goods?=3D20 This no doubt reveals my shocking ignorance of contract law. =3D

It=3D20 seems to me that there are a couple of possible ways in which the =3D buyer can=3D20 assert a right to the proceeds the thief receives from the sale, =3D i.e. the=3D20 money the buyer paid the thief for the owner s =3D goods:

(1)  =3D20 Assuming that the sale is clearly fraudulent, such that the thief =3D would be=3D20 liable for the tort of deceit, is it possible that the buyer could =3D claim=3D20 that the contract was void ab initio? If so, then in the case =3D contemplated=3D20 by LBW, then the constructive trust of proceeds would be a trust =3D over the=3D20 buyer s property, which seems clearly wrong. =3D

 (2)  =3D20 If this is not the right analysis, then it  would seem at the =3D very=3D20 minimum that the buyer has the right to rescind the transaction for=3D= 20 fraudulent misreprentation (the misrepresentation by the thief being = =3D that he=3D20 had good title); now we have two possible scenarios; if we assume =3D that the=3D20 buyer rescinds before the true owner makes a claim against him for=3D= 20 conversion or claims a right in the proceeds of the sale, is the =3D resulting=3D20 legal or equitable title he gets still subject to owner s LBW trust? = =3D If he=3D20 does not rescind before either the owner makes a claim against him =3D for=3D20 conversion or asserts title in the proceeds, then does the buyer =3D necessarily=3D20 lose out to the LBW trust because a right to rescind is a mere =3D equity ,=3D20 which does not bind someone with an equitable ownership=3D20 interest?

This strikes me as all very complicated because it =3D depends=3D20 upon the time at which the owner s LBW trust arises. If it arises by = =3D operation of law upon the sale, then it effectively extinguishes any = =3D right=3D20 to rescind or any other appropriate legal or equitable interest that = =3D the=3D20 buyer might have in the money he paid, which was, after all, =3D his=3D20 property to begin with, and I don t see how that is necessarily =3D just.=3D20 Indeed, it seems to me that as a matter of justice, equity s first =3D concern=3D20 should be to ensure that the innocent buyer is able to recover the =3D proceeds=3D20 and any traceable product, not the true owner, who has a strict =3D liability=3D20 claim against the buyer in any case his mere taking possession of =3D the car=3D20 will render him liable whether the contract under whose auspices he =3D did so=3D20 is void ab initio or avoided later.

One might say of course, = =3D that=3D20 none of this matters practically, for if the true owner asserts =3D title in the=3D20 substitute, the proceeds, then he in essence adopts or ratifies the =3D sale by=3D20 the thief of his original goods, so that the buyer is no longer =3D liable for=3D20 conversion. And if the buyer retains a legal or equitable interest =3D in the=3D20 proceeds that prevails over the owner, then he will merely have to =3D transfer=3D20 an equivalent amount to the owner anyway, because of his strict =3D liability=3D20 for conversion. But what if the proceeds increase in value? Say the =3D thief=3D20 sells the owner s car to the buyer for its true value of =3DA310,000 = =3D (its true=3D20 value, which he then invests in shares now worth =3DA315,000. Both th= e =3D owner and=3D20 the buyer will wish to have an interest in these proceeds. If the =3D owner gets=3D20 them, he will have an asset worth =3DA35,000 more than what he would = =3D get from=3D20 the conversion claim. Equally, if the buyer gets the proceeds, he =3D will be=3D20 able to meet his conversion liability of =3DA310,000 and keep the =3D extra =3DA35000 of=3D20 value. So this does seem to me to raise a real issue.

J E=3D2= 0 Penner

 

Dr= =3D Charles=3D20 Mitchell
Reader in Law
Director of Postgraduate Taught=3D20 Programmes
School of Law
King's College =3D London
Strand
London=3D20 WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 =3D 2465
--

Jason Neyers

January Term Director

Assistant Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435 


------=3D_NextPart_000_00EF_01C41827.4E8AFFE0-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 21:28:13 +0100 Reply-To: William Swadling Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: William Swadling Subject: Fw: [LF] University Lecturership in Property Law and Trusts MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----=3D_NextPart_000_016E_01C41830.3D06A900" This is a multi-part message in MIME format. ------=3D_NextPart_000_016E_01C41830.3D06A900 Content-Type: text/plain; charset=3D"Windows-1252" Content-Transfer-Encoding: quoted-printable Please forgive any breach of etiquette, but I wondered if members of the = =3D list might be interested in a new permanent position in Property and =3D Trusts offered by the University of Oxford. Alternatively, if you know =3D of anyone who might be interested, I'd be grateful if you'd pass it on. Bill Swadling UNIVERSITY OF OXFORD FACULTY OF LAW In association with Trinity College UNIVERSITY LECTURERSHIP IN PROPERTY LAW AND TRUSTS Salary up to =3DA342,900 per annum (under review) Applications are invited for this new post, to start on 1 October 2004=3D= 20 or as soon as possible after that date. The University Lecturership is=3D= 20 associated with a tutorial fellowship at Trinity College. The combined=3D= 20 university and college salary will be according to age on a scale up to=3D= 20 =3DA342,900 per annum (pay award pending), plus housing allowance and =3D other=3D20 college allowances. Further particulars (containing details of the=3D20 duties and full range of benefits and allowances associated with both=3D2= 0 the university and the college posts) may be obtained on the web at=3D20 http://www.admin.ox.ac.uk/fp/ or from Mrs S.E. Samuelson, Faculty=3D20 Administrator, Faculty of Law, St Cross Building, St Cross Road, Oxford, = =3D OX1 3UL (email: lawfac@law.ox.ac.uk, tel. 01865 271491). The closing=3D20 date for applications is Tuesday 4 May 2004. This post is in an area currently designated by the Higher Education=3D20 Funding Council as a shortage subject under its =3D91Golden Hello=3D92 =3D Scheme.=3D20 The appointee may therefore be eligible for a three year salary=3D20 supplement if he or she fulfils certain conditions and if funds are=3D20 available in the limited budget for the scheme. The University is an equal opportunities employer. ------=3D_NextPart_000_016E_01C41830.3D06A900 Content-Type: text/html; charset=3D"Windows-1252" Content-Transfer-Encoding: quoted-printable
Please forgive any breach of etiquette, but I wondered if members =3D of the=3D20 list might be interested in a new permanent position in Property and =3D Trusts=3D20 offered by the University of Oxford.  Alternatively, if you know of = =3D anyone=3D20 who might be interested, I'd be grateful if you'd pass it on.
 
Bill Swadling

UNIVERSITY OF OXFORD

FACULTY OF =3D LAW

In=3D20 association with Trinity College

UNIVERSITY LECTURERSHIP IN =3D PROPERTY LAW=3D20 AND TRUSTS

Salary up to =3DA342,900 per annum (under=3D20 review)

Applications are invited for this new post, to start on 1 = =3D October=3D20 2004
or as soon as possible after that date. The University =3D Lecturership is=3D20
associated with a tutorial fellowship at Trinity College. The =3D combined=3D20
university and college salary will be according to age on a scale up = =3D to=3D20
=3DA342,900 per annum (pay award pending), plus housing allowance and= =3D other=3D20
college allowances. Further particulars (containing details of the=3D= 20
duties and full range of benefits and allowances associated with =3D both=3D20
the university and the college posts) may be obtained on the web at =3D
http://www.admin.ox.ac.uk/fp/ =3D or from=3D20 Mrs S.E. Samuelson, Faculty
Administrator, Faculty of Law, St Cross=3D= 20 Building, St Cross Road, Oxford,
OX1 3UL (email: lawfac@law.ox.ac.uk
, tel. 01865= =3D 271491).=3D20 The closing
date for applications is Tuesday 4 May 2004.

This = =3D post is=3D20 in an area currently designated by the Higher Education
Funding =3D Council as a=3D20 shortage subject under its =3D91Golden Hello=3D92 Scheme.
The appoint= ee =3D may=3D20 therefore be eligible for a three year salary
supplement if he or =3D she=3D20 fulfils certain conditions and if funds are
available in the limited = =3D budget=3D20 for the scheme.

The University is an equal opportunities=3D20 employer. ------=3D_NextPart_000_016E_01C41830.3D06A900-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Thu, 1 Apr 2004 16:28:38 -0500 Reply-To: Jason Neyers Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Jason Neyers Subject: Re: Undue Influence Comments: To: William Swadling MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"------------000103080001000609030101" --------------000103080001000609030101 Content-Type: text/plain; charset=3DISO-8859-1; format=3Dflowed Content-Transfer-Encoding: 8bit I guess the trouble that I have is that I fail to see how it can be an UE when there is a "juristic reason" justifying the retention of the value, in most cases of UI a gift or contract. In order to show that the enrichment is unjust, one must then attack the underlying contract or gift which requires some sort of fault (duress, breach of fiduciary duty, etc.) or the implicit objective agreement of the parties that it is not to bind in certain circumstances (conditional gift, fundamental mistake in assumptions, etc.). If UI is not about fault then how does it upset the underlying contract or gift so that UE can operate? As an aside, the other problem that I have with the doctrine is that the presumptions of UI are seemingly applied counter intuitively -- i.e. in the very type of relationship where one would be most likely to subvert their desire for gain or equivalent exchange, such as family relationships, the law presumes some sort of quasi-fault rather than the fulfillment of natural obligation. Cheers, William Swadling wrote: > If I pay you =A3100 by mistake, you commit no wrong in your receipt. > Yet a court will intervene and order you to repay me that amount. The > point which Mummery LJ is making, and quite rightly so, is that the > repayment of money paid through undue influence can be explained as a > species of unjust enrichment, without any need to rely on wrongdoing. > > W J Swadling > > ----- Original Message ----- > From: Jason Neyers > To: ENRICHMENT@LISTS.MCGILL.CA > Sent: Thursday, April 01, 2004 5:14 PM > Subject: [RDG:] Undue Influence > > If UI is not a wrong of some sort then why should the court be > intervening? Why should I have to look out for the best interests > of someone else? If the best that the Eng. CA can come up with is > policy (which tends to make me suspicious), then I would at least > like to know which policy is being served and why this might > outweigh other policies such as certainty, etc. > > Charles Mitchell wrote: > >> I appreciate that this is not a particularly helpful reply to >> James' question, but when considering the respective rights of >> the true owner of the stolen goods and the purchaser of the goods >> in the situation which he postulates, it might be useful to bear >> in mind that three first-instance judges have now shown a marked >> reluctance to extend Lord B-W's rule to the case where a claimant >> is fraudulently induced to enter a contract under which he >> transfers property to a defendant (besides questioning the >> rightness of Lord B-W's rule even in the case of the thief): Box >> v Barclays Bank [1998] Lloyd's Law Reports Banking 185, 200-1 >> (Ferris J); Papamichael v National Westminster Bank [2003] 1 >> Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo >> [2003] EWHC 1637 (Ch), [106]-[127] (Rimer J). >> >> On a completely different point, Mummery LJ has just reaffirmed >> Sir Martin Nourse's comments in Hammond v Osbourn, to hold in >> Niersmans v Pesticcio [2004] EWCA Civ 372 that UI is not an >> equitable wrong: the relevant bit is para 20: >> >> The insistence of Mr Thomas that Maureen had "done nothing wrong" >> is an instance of the "continuing misconceptions" mentioned by >> Sir Martin Nourse in Hammond about the circumstances in which >> gifts will be set aside on the ground of presumed undue >> influence. Although undue influence is sometimes described as an >> "equitable wrong" or even as a species of equitable fraud, the >> basis of the court's intervention is not the commission of a >> dishonest or wrongful act by the defendant, but that, as a matter >> of public policy, the presumed influence arising from the >> relationship of trust and confidence should not operate to the >> disadvantage of the victim, if the transaction is not >> satisfactorily explained by ordinary motives: Allcard v. Skinner >> (1887) 36 Ch D 145 at 171. The court scrutinises the >> circumstances in which the transaction, under which benefits were >> conferred on the recipient, took place and the nature of the >> continuing relationship between the parties, rather than any >> specific act or conduct on the part of the recipient. A >> transaction may be set aside by the court, even though the >> actions and conduct of the person who benefits from it could not >> be criticised as wrongful. The presumption arising from the trust >> and confidence of their relationship made it unnecessary, for >> example, for Bernard to prove that Maureen actually had influence >> over him in relation to the gift of the, House, let alone that >> she in fact exercised undue influence or applied improper >> pressure to obtain the Deed of Gift. Whether or not Maureen's >> conduct could be described as "wrongful", the requirement of the >> doctrine of undue influence is that it must be "affirmatively >> established that the donor's trust and confidence in the donee >> has not been betrayed or abused: " see Hammond at paragraph 32. >> On that point Mr Thomas relied on the part played by Miss Tindall. >> >> On-line at: http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html >> >> >> Charles >> At 13:31 01/04/2004 +0100, you wrote: >> Further to my last query, I should also have mentioned that in >> its concurrent or auxiliary jurisdiction the court of equity has >> on any number of occasions assisted the victim of a fraud by >> allowing him to trace into the proceeds of the fraud -- Agip >> (Africa), El Ajou, etc etc. Why should not the buyer of the >> worthless title to the owner's car not be able to invoke the same >> assistance and claim the proceeds of the property of which he was >> defrauded? >> >> JEP >> -----Original Message----- >> From: Penner,JE >> Sent: 01 April 2004 12:54 >> To: ENRICHMENT@LISTS.MCGILL.CA >> Subject: [RDG:] FW: constructive trust in proceeds of theft >> >> Assume Lord Browne-Wilkinson in Westdeutsche is properly >> interpreted to say that a thief holds any proceeds from the sale >> of stolen goods on trust for the true owner. My question what is >> the relationship of this trust with the rights of the buyer from >> the thief of the stolen goods? This no doubt reveals my shocking >> ignorance of contract law. >> >> It seems to me that there are a couple of possible ways in which >> the buyer can assert a right to the proceeds the thief receives >> from the sale, i.e. the money the buyer paid the thief for the >> owner s goods: >> >> (1) Assuming that the sale is clearly fraudulent, such that the >> thief would be liable for the tort of deceit, is it possible that >> the buyer could claim that the contract was void ab initio? If >> so, then in the case contemplated by LBW, then the constructive >> trust of proceeds would be a trust over the buyer s property, >> which seems clearly wrong. >> >> (2) If this is not the right analysis, then it would seem at >> the very minimum that the buyer has the right to rescind the >> transaction for fraudulent misreprentation (the misrepresentation >> by the thief being that he had good title); now we have two >> possible scenarios; if we assume that the buyer rescinds before >> the true owner makes a claim against him for conversion or claims >> a right in the proceeds of the sale, is the resulting legal or >> equitable title he gets still subject to owner s LBW trust? If he >> does not rescind before either the owner makes a claim against >> him for conversion or asserts title in the proceeds, then does >> the buyer necessarily lose out to the LBW trust because a right >> to rescind is a mere equity , which does not bind someone with an >> equitable ownership interest? >> >> This strikes me as all very complicated because it depends upon >> the time at which the owner s LBW trust arises. If it arises by >> operation of law upon the sale, then it effectively extinguishes >> any right to rescind or any other appropriate legal or equitable >> interest that the buyer might have in the money he paid, which >> was, after all, his property to begin with, and I don t see how >> that is necessarily just. Indeed, it seems to me that as a matter >> of justice, equity s first concern should be to ensure that the >> innocent buyer is able to recover the proceeds and any traceable >> product, not the true owner, who has a strict liability claim >> against the buyer in any case his mere taking possession of the >> car will render him liable whether the contract under whose >> auspices he did so is void ab initio or avoided later. >> >> One might say of course, that none of this matters practically, >> for if the true owner asserts title in the substitute, the >> proceeds, then he in essence adopts or ratifies the sale by the >> thief of his original goods, so that the buyer is no longer >> liable for conversion. And if the buyer retains a legal or >> equitable interest in the proceeds that prevails over the owner, >> then he will merely have to transfer an equivalent amount to the >> owner anyway, because of his strict liability for conversion. But >> what if the proceeds increase in value? Say the thief sells the >> owner s car to the buyer for its true value of =A310,000 (its true >> value, which he then invests in shares now worth =A315,000. Both >> the owner and the buyer will wish to have an interest in these >> proceeds. If the owner gets them, he will have an asset worth >> =A35,000 more than what he would get from the conversion claim. >> Equally, if the buyer gets the proceeds, he will be able to meet >> his conversion liability of =A310,000 and keep the extra =A35000 o= f >> value. So this does seem to me to raise a real issue. >> >> J E Penner >> >> >> >> Dr Charles Mitchell >> Reader in Law >> Director of Postgraduate Taught Programmes >> School of Law >> King's College London >> Strand >> London WC2R 2LS >> >> tel: 020 7848 2290 >> fax: 020 7848 2465 > >-- >Jason Neyers >January Term Director >Assistant Professor of Law >Faculty of Law >University of Western Ontario >N6A 3K7 >(519) 661-2111 x. 88435 > > > -- Jason Neyers January Term Director Assistant Professor of Law Faculty of Law University of Western Ontario N6A 3K7 (519) 661-2111 x. 88435 --------------000103080001000609030101 Content-Type: text/html; charset=3Dus-ascii Content-Transfer-Encoding: 7bit I guess the trouble that I have is that I fail to see how it can be an UE when there is a "juristic reason" justifying the retention of the value, in most cases of UI a gift or contract.  In order to show that the e= nrichment is unjust, one must then attack the underlying contract or gift which req= uires some sort of fault (duress, breach of fiduciary duty, etc.) or the implic= it objective agreement of the parties that it is not to bind in certain circ= umstances (conditional gift, fundamental mistake in assumptions, etc.).  If UI= is not about fault then how does it upset the underlying contract or gift s= o that UE can operate?

As an aside, the other problem that I have with the doctrine is that the presumptions of UI are seemingly applied counter intuitively -- i.e. in t= he very type of relationship where one would be most likely to subvert their desire for gain or equivalent exchange, such as family relationships, the law presumes some sort of quasi-fault rather than the fulfillment of natu= ral obligation.   

Cheers,

William Swadling wrote:
If I pay you £100 by mistake, you commit no wrong in your re= ceipt.  Yet a court will intervene and order you to repay me that amount.  = The point which Mummery LJ is making, and quite rightly so, is that the repay= ment of money paid through undue influence can be explained as a species= of unjust enrichment, without any need to rely on wrongdoing. 
 
W J Swadling
----- Original Message -----
Sent: Thursday, April 01, 2004 5:14 PM
Subject: [RDG:] Undue Influence

If UI is not a wrong of some sort then why should the court be interve= ning? Why should I have to look out for the best interests of someone else?&= nbsp; If the best that the Eng. CA can come up with is policy (which tends t= o make me suspicious), then I would at least like to know which policy i= s being served and why this might outweigh other policies such as certainty= , etc.

Charles Mitchell wrote:
I appreciate that this is not a particularly helpful reply to J= ames' question, but when considering the respective rights of the true own= er of the stolen goods and the purchaser of the goods in the situation which he postulates, it might be useful to bear in mind that three f= irst-instance judges have now shown a marked reluctance to extend Lord B-W's rule to the case where a claimant is fraudulently induced to enter a cont= ract under which he transfers property to a defendant (besides questionin= g the rightness of Lord B-W's rule even in the case of the thief): = Box v Barclays Bank [1998] Lloyd's Law Reports Banking 185, 200-1 (F= erris J); Papamichael v National Westminster Bank [2003] 1 Lloyd's Rep 341, [231]-[241] (Judge Chambers QC); Shalson v Russo [2003] E= WHC 1637 (Ch), [106]-[127] (Rimer J).

On a completely different point, Mummery LJ has just reaffirmed Sir Martin Nourse's comments in Hammond v Osbourn, to hold in = Niersmans v Pesticcio [2004] EWCA Civ 372 that UI is not an equitable wron= g: the relevant bit is para 20:

The insistence of Mr Thomas that Maureen had "done nothing wrong" is an instance of the "continuing misconceptions" mentioned by Sir Mart= in Nourse in Hammond about the circumstances in which gifts will be set aside on the ground of presumed undue influence. Although und= ue influence is sometimes described as an "equitable wrong" or even as a species of equitable fraud, the basis of the court's intervention is not the commission of a dishonest or wrongful act by the defendan= t, but that, as a matter of public policy, the presumed influence arisi= ng from the relationship of trust and confidence should not operate to the disadvantage of the victim, if the transaction is not satisfacto= rily explained by ordinary motives: Allcard v. Skinner (1887) 36 C= h D 145 at 171. The court scrutinises the circumstances in which the t= ransaction, under which benefits were conferred on the recipient, took place and the nature of the continuing relationship between the parties, rathe= r than any specific act or conduct on the part of the recipient. A tra= nsaction may be set aside by the court, even though the actions and conduct o= f the person who benefits from it could not be criticised as wrongful. The presumption arising from the trust and confidence of their relat= ionship made it unnecessary, for example, for Bernard to prove that Maureen actually had influence over him in relation to the gift of the, Hous= e, let alone that she in fact exercised undue influence or applied impr= oper pressure to obtain the Deed of Gift. Whether or not Maureen's conduc= t could be described as "wrongful", the requirement of the doctrine of undue influence is that it must be "affirmatively established that t= he donor's trust and confidence in the donee has not been betrayed or a= bused: " see Hammond at paragraph 32. On that point Mr Thomas relied on the part played by Miss Tindall.

On-line at:
http://www.bailii.org/ew/cases/EWCA/Civ/2004/372.html=


Charles
At 13:31 01/04/2004 +0100, you wrote:
Further to my las= t query, I should also have mentioned that in its concurrent or auxiliary jur= isdiction the court of equity has on any number of occasions assisted the vict= im of a fraud by allowing him to trace into the proceeds of the fraud -= - Agip (Africa), El Ajou, etc etc. Why should not the buyer of the wor= thless title to the owner's car not be able to invoke the same assistance a= nd claim the proceeds of the property of which he was defrauded?
 
JEP
-----Original Message-= ----
From: Penner,JE
Sent: 01 April 2004 12:54
To: ENRICHMENT@LISTS.MC GILL.CA
Subject: [RDG:] FW: constructive trust in proceeds of t= heft

 Assume Lord Browne-Wilkinson= in Westdeutsche is properly interpreted to say that a thief holds any proceeds from the sale of stolen goods on trust for the true owner. My question wh= at is the relationship of this trust with the rights of the buyer from the thief of the stolen goods? This no doubt reveals my shocking ign= orance of contract law.

It seems to me that there are a couple of possible ways in which the buyer can assert a right to the proceeds the thief receives from the sale, i.e. the money the buyer paid the thief for the owner s goods:=

(1)   Assuming that the sale is clearly fraudulent, such t= hat the thief would be liable for the tort of deceit, is it possible that the buye= r could claim that the contract was void ab initio? If so, then in the case contemplated by LBW, then the constructive trust of proceeds wo= uld be a trust over the buyer s property, which seems clearly wrong.
 (2)   If this is not the right analysis, then it&nbs= p; would seem at the very minimum that the buyer has the right to rescind the transaction for fraudulent misreprentation (the misrepresentation by the thief b= eing that he had good title); now we have two possible scenarios; if we a= ssume that the buyer rescinds before the true owner makes a claim against him for conversion or claims a right in the proceeds of the sale, is the resulting legal or equitable title he gets still subject to owne= r s LBW trust? If he does not rescind before either the owner makes a claim against him for conversion or asserts title in the proceeds, t= hen does the buyer necessarily lose out to the LBW trust because a right to rescind is a mere equity , which does not bind someone with an eq= uitable ownership interest?

This strikes me as all very complicated because it depends upon the time at which the owner s LBW trust arises. If it arises by operatio= n of law upon the sale, then it effectively extinguishes any right to rescind or any other appropriate legal or equitable interest that the buyer might have in the money he paid, which was, after all, his property to begin with, and I don t see how that is necessarily just. Indeed, it seems to me that as a matter of justice, equity s first c= oncern should be to ensure that the innocent buyer is able to recover the p= roceeds and any traceable product, not the true owner, who has a strict liab= ility claim against the buyer in any case his mere taking possession of th= e car will render him liable whether the contract under whose auspices he did so is void ab initio or avoided later.

One might say of course, that none of this matters practically, for if the true owner asserts title in the substitute, the proceeds, the= n he in essence adopts or ratifies the sale by the thief of his origin= al goods, so that the buyer is no longer liable for conversion. And if the buyer retains a legal or equitable interest in the proceeds that prevails over the owner, then he will merely have to transfer an equ= ivalent amount to the owner anyway, because of his strict liability for conv= ersion. But what if the proceeds increase in value? Say the thief sells the owner s car to the buyer for its true value of £10,000 (its true = value, which he then invests in shares now worth £15,000. Both the owner a= nd the buyer will wish to have an interest in these proceeds. If the owner gets them, he will have an asset worth £5,000 more than what h= e would get from the conversion claim. Equally, if the buyer gets the procee= ds, he will be able to meet his conversion liability of £10,000 an= d keep the extra £5000 of value. So this does seem to me to raise a r= eal issue.

J E Penner

 

Dr Charles Mitchell
Reader in Law
Director of Postgraduate Taught Programmes
School of Law
King's College London
Strand
London WC2R 2LS

tel: 020 7848 2290
fax: 020 7848 2465
--

Jason Neyers

January Term Director

Assistant Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435 



--

Jason Neyers

January Term Director

Assistant Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435 

--------------000103080001000609030101-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 07:08:29 +0800 Reply-To: Low Fatt Kin Kelvin Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Low Fatt Kin Kelvin Subject: Re: Undue Influence MIME-Version: 1.0 Content-Type: text/plain; charset=3D"UTF-8" Content-Transfer-Encoding: base64 SSBoYXZlIGxlc3MgZGlmZmljdWx0eSBhY2NlcHRpbmcgdW5kdWUgaW5mbHVlbm NlIGFzIGEgc= 3Bl Y2llcyBvZiB1bmp1c3QgZW5yaWNobWVudCB1bnJlbGF0ZWQgdG8gdGhlIGZhdWx 0IG9mIHRoZ= SB0 cmFuc2ZlcmVlLiBKdXN0IGFzIGEgY2F1c2F0aXZlIG1pc3Rha2UgbWF5IG9wZXJhd GUgdG8gd= ml0 aWF0ZSBhbiBpbnRlbnRpb24gdG8gbWFrZSBhIGdpZnQgKHdpdGhvdXQgaXQgbmVj ZXNzYXJpb= Hkg YmVpbmcgZnVuZGFtZW50YWwgaW4gdGhlIGNvbnRyYWN0dWFsIHNlbnNlIGFuZ CB3aXRob3V0I= HRo ZSB0cmFuc2ZlcmVlIGJlaW5nIGF0IGZhdWx0IGluIGFueSB3YXkpLCBpdCBpcyBlbn RpcmVse= SBw bGF1c2libGUgdGhhdCB0aGUgc2FtZSBpcyB0cnVlIHdoZXJlIGEgZ2lmdCBpcyB0YW ludGVkI= GJ5 IHVuZHVlIGluZmx1ZW5jZSAod2hpY2ggbWF5IGJlIHRoYXQgZXhlcmNpc2VkIGJ5I HNvbWVvb= mUg b3RoZXIgdGhhbiB0aGUgdHJhbnNmZXJlZSkuIA0KIA0KTXkgb25seSBjb25jZXJuIHd pdGggd= Ghl IHJlamVjdGlvbiBvZiB1bmR1ZSBpbmZsdWVuY2UgYXMgYSBzcGVjaWVzIG9mIHd yb25nIGFzI= Hdl bGwgKGJ5IHdheSBvZiBhbHRlcm5hdGl2ZSBhbmFseXNpcykgaXMgd2hlcmUgQiBle GVyY2lzZ= XMg dW5kdWUgaW5mbHVlbmNlIG92ZXIgQSwgY2F1c2luZyBBIHRvIG1ha2UgYSBnaW Z0IHRvIEMgY= W5k IEMgYm9uYSBmaWRlIGNoYW5nZXMgaGlzIHBvc2l0aW9uIG9yIGJlY29tZXMgYm Fua3J1cHQgc= 28g dGhhdCBBJ3MgY2xhaW0gYWdhaW5zdCBDIGlzIGVpdGhlciBleHRpbmd1aXNoZW QsIHJlZHVjZ= WQg b3Igd29ydGhsZXNzLiBJbiB0aGVzZSBjaXJjdW1zdGFuY2VzLCBpZiB0aGUgYWx0Z XJuYXRpd= mUg YW5hbHlzaXMgaXMgbm90IGF2YWlsYWJsZSwgdGhlbiBBIGNhbm5vdCBjbGFpbS BhcyBhZ2Fpb= nN0 IEIuIEkgYW0gbm90IHN1cmUgaWYgdGhpcyBjb25jbHVzaW9uIGlzIG5lY2Vzc2Fya Wx5IGNvc= nJl Y3QuDQogDQpUbyBhbnN3ZXIgTXIgTmV5ZXIncyBwb2ludCBhYm91dCBwcmVzd W1lZCB1bmR1Z= SBp bmZsdWVuY2UgYmVpbmcgY291bnRlci1pbnR1aXRpdmUsIGl0IGlzIG5vdCBzdWZm aWNpZW50I= G1l cmVseSB0byBlc3RhYmxpc2ggc29tZSBzb3J0IG9mIHJlbGF0aW9uc2hpcCBvZiB0cnVz dCBhb= mQg Y29uZmlkZW5jZSB0byByYWlzZSB0aGUgcHJlc3VtcHRpb24uIEl0IGlzIG5lY2Vzc2F yeSB0b= ywg YWNjb3JkaW5nIHRvIExvcmQgTmljaG9sbHMsIGRlbW9uc3RyYXRlIHRoYXQgdGhl IHRyYW5zY= WN0 aW9uIGNhbGxzIGZvciBhbiBleHBsYW5hdGlvbi4gQmVhcmluZyBpbiBtaW5kIHRoaX MgYWRka= XRp b25hbCByZXF1aXJlbWVudCwgSSBkbyBub3Qgc2VlIGhvdyBpdCBpcyBjb3VudGVyL WludHVpd= Gl2 ZS4NCiANCktlbHZpbiBMb3cNCkFzc2lzdGFudCBQcm9mZXNzb3INCjEzIExhdyBMa W5rDQpGY= WN1 bHR5IG9mIExhdw0KTmF0aW9uYWwgVW5pdmVyc2l0eSBvZiBTaW5nYXBvcmUN ClNpbmdhcG9yZ= SAx MTc1OTANClRlbDogNjg3NDQxOTINCkZheDogNjc3OTA5NzkNCg0KCS0tLS0tT3J pZ2luYWwgT= WVz c2FnZS0tLS0tIA0KCUZyb206IEVucmljaG1lbnQgLSBSZXN0aXR1dGlvbiAmIFVuan VzdCBFb= nJp Y2htZW50IExlZ2FsIElzc3VlcyBvbiBiZWhhbGYgb2YgSmFzb24gTmV5ZXJzIA0KCV NlbnQ6I= EZy aSAwMi8wNC8yMDA0IDA1OjI4IA0KCVRvOiBFTlJJQ0hNRU5UQExJU1RTLk1DR 0lMTC5DQSANC= glD YzogDQoJU3ViamVjdDogUmU6IFtSREc6XSBVbmR1ZSBJbmZsdWVuY2UNCgkNC gkNCgkgDQoNC= g=3D=3D ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 07:36:03 +0800 Reply-To: Low Fatt Kin Kelvin Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Low Fatt Kin Kelvin Subject: Re: MIME-Version: 1.0 Content-Type: text/plain; charset=3D"UTF-8" Content-Transfer-Encoding: base64 VGhlIGRpZmZpY3VsdHkgaXMgcmFpc2VkLCBJIGJlbGlldmUsIGJ5IHRoZSBwb3Nz aWJsZSBhc= md1 bWVudCB0aGF0IGJvdGggdGhlIG9yaWdpbmFsIG93bmVyIGFuZCB0aGUgcHVyY2h hc2VyIGFyZ= SBl bnRpdGxlZCB0byB0cmFjZSBmcm9tIHRoZWlyIG9yaWdpbmFsIGFzc2V0IGludG8ga XRzIHN1Y= nN0 aXR1dGVzLiBJbiB0aGlzIHJlc3BlY3QsIG15IHZpZXcgaXMgdGhhdCByZWZlcmVuY 2UgdG8gT= G9y ZCBCVydzIGNvbnN0cnVjdGl2ZSB0cnVzdCBhbmFseXNpcyBpcyBhIHJlZCBoZXJya W5nIG9mI= HNv cnRzLiBJIGhhdmUgYWx3YXlzIHJlYWQgTG9yZCBCVyB0byBtZWFuIHRoYXQgY SBjb25zdHJ1Y= 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____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 09:42:26 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Undue Influence Comments: To: Jason Neyers MIME-Version: 1.0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit I don't think I agree with some of the points made in Professor Neyers la= st post.: "In order to show that the enrichment is unjust, one must then attack the underlying contract or gift which requires some sort of fault (duress, breach of fiduciary duty, etc.) or the implicit objective agreement of th= e parties that it is not to bind in certain circumstances (conditional gift= , fundamental mistake in assumptions, etc.). If UI is not about fault then how does it upset the underlying contract or gift so that UE can operate?= " I don't think this can be correct. One party's innocent misrepresentation entitles the other party to rescind a contract. No fault is required; rescission is not based upon an implied agreement that the contract it is capable of being rescinded. I also doubt whether duress necessarily impli= es fault (eg The Atlantic Baron [1979] QB 705). A breach of fiduciary duty m= ay also be wholly innocent (eg Boardman v Phipps [1967] 2 AC 407) and is alw= ays a wrong although duress and undue influence are probably not. It may be that, like misrepresentation, undue influence can be a wrong (i= .e. a breach of duty) which gives rise to a claim for damages where it is applied fraudulently (cf duress) or even possibly negligently (cf Hedley Byrne). When the undue influence with the counter party arises wholly innocently I doubt whether it is a wrong but it does entitle the dependen= t party to rescind (cf Allcard v Skinner (1887) 36 ChD 145 with Redgrave v Hurd (1881) 20 ChD 1). RS -- Jason Neyers January Term Director Assistant Professor of Law Faculty of Law University of Western Ontario N6A 3K7 (519) 661-2111 x. 88435 ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 09:10:20 -0500 Reply-To: jneyers@UWO.CA Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Jason Neyers Subject: Re: Undue Influence Comments: To: William Swadling MIME-Version: 1.0 Content-Type: text/plain; charset=3DISO-8859-1 Content-Transfer-Encoding: 8bit Dear Colleagues: I think that I have been misunderstood: William Swadling wrote: Unjust Enrichment is most avowedly not about fault: see Birks, The R= ole of Fault in the Law of Unjust Enrichment, in Swadling & Jones (edd), Th= e Search for Principle (Oxford, 1999). That is not what I was trying to say. My point is that UE is about enrich= ments that are unjustified (at least from a Canadian perspective). An enrichmen= t cannot be unjustified when there is a valid legal reason explaining why X= has Y's value. In cases of that you would term "mistake," there is no valid legal reason why X has Y's value and hence it must be returned, as you po= int out not because X is at fault, but because the value is Y's. My point was tha= t in cases of UI there is a valid legal reason (usually a contract or gift) justifying X's retention of Y's value. Hence, the only way it can be an U= E is to find a way to knock out this valid legal reason. So my claim is not= the UE is about fault but that in some instances a wrong is a necessary practica= l precursor to one succeeding in an UE claim. Robert Stevens wrote: I don't think this can be correct. One party's innocent misrepresent= ation entitles the other party to rescind a contract. No fault is required= ; rescission is not based upon an implied agreement that the contract = it is capable of being rescinded. This raises the question of why a contract can be rescinded for a materia= l innocent misrepresentation. I agree the reason is not fault. But I do not= agree that it has nothing to do with the implied agreement of the parties. I se= e the reason for the courts intervention, being similar to the reason the court intervenes (or is asked to intervene) in cases like Scott v. Coulson, Bel= l v. Lever Bros. The implied agreement/condition is that the contract is to b= ind only their shared fundamental assumption is true. Hence if you would have= put the point to the parties in Redgrave v. Hurd, they would have objectively agreed that the contract was to bind only if the practice brought in L400= per year. While one may not agree with this analysis, it has a long history: = see Grotius, The Law and War and Peace, Bk. II c.11 and the work of Peter Ben= son, The Unity of Contract of Law (2001: CUP). As I argued above, once the con= tract is set aside on this basis, then UE can follow. Robert Stevens wrote: A breach of fiduciary duty may also be wholly innocent (e.g.\ Boardman v Phipps [1967] 2 AC 407) and is always a wrong. I fail to see how this impeaches what I have said. It is like saying one = may breach a contract without fraud or negligence but it is still considered = a wrong -- the fault being failure to deliver what was promised. If anythin= g it seems to support my contention that UI could be a wrong even if the fault element might not be fraud or negligence. Low Fatt Kin Kelvin wrote: To answer Mr Neyer's point about presumed undue influence being coun= ter- intuitive, it is not sufficient merely to establish some sort of relationship of trust and confidence to raise the presumption. It is necessary to, according to Lord Nicholls, demonstrate that the trans= action calls for an explanation. Bearing in mind this additional requiremen= t, I do not see how it is counter-intuitive. Being no expert on UI (so I would be happy to be disabused of this notion= ) my understanding of the cases is that generally a "transaction calls for an explanation" when it to the material disadvantage of the party entering into it. When is someone most likely to enter into a s= uch a transaction such as guaranteeing a loan? When they are in a close family relationship. Yet instead of presuming that the basis of the transaction = was natural love and affection or mutual support, the essence of family life,= the court presumes it was on the basis of an influence which was 'undue'. Is that not at least somewhat counter-intuitive? Cheers, > > -- > Jason Neyers > January Term Director > Assistant Professor of Law > Faculty of Law > University of Western Ontario > N6A 3K7 > (519) 661-2111 x. 88435 > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 16:55:53 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Undue Influence Comments: To: jneyers@UWO.CA MIME-Version: 1.0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit Jason Neyers wrote: > This raises the question of why a contract can be rescinded for a mater= ial > innocent misrepresentation. I agree the reason is not fault. But I do n= ot agree > that it has nothing to do with the implied agreement of the parties. I = see the > reason for the courts intervention, being similar to the reason the cou= rt > intervenes (or is asked to intervene) in cases like Scott v. Coulson, B= ell v. > Lever Bros. The implied agreement/condition is that the contract is to bind > only their shared fundamental assumption is true. Hence if you would ha= ve put > the point to the parties in Redgrave v. Hurd, they would have objective= ly > agreed that the contract was to bind only if the practice brought in L4= 00 per > year. While one may not agree with this analysis, it has a long history= : see > Grotius, The Law and War and Peace, Bk. II c.11 and the work of Peter Benson, > The Unity of Contract of Law (2001: CUP). I do not find this a convincing explanation as to why a misrepresentation entitles the misrepresentee to rescind. I would be prepared to concede that where there is a common fundamental mistake made by both parties to a contract one plausible explanation as t= o why the contract is void is that there is an implied condition precendent that the agreement is not to bind. So, A agrees to hire B's music hall and surrounding gardens. Unknown to both = A and B, ten minutes before the deal was struck the music hall had burnt to the ground. We might be prepared to say, on an officious bystander test, that there i= s no contract because it was an implied condition precedent that the music hall existed. We might also be prepared to say that if the music hall bur= nt down ten minutes after the agreement that there was an implied condition subsequent that the deal was to come to an end. There are other plausible explanations for the result that the contract i= s no longer on foot and in the context of frustration the implied condition analysis has become unfashionable. Where rescission for misrepresentation is concerned, the misrepresentatio= n need not be fundamental nor need it be shared. All that is necessary is t= hat the misrepresentation, however minor, was in part a cause of the decision= to enter into the deal (Edgington v Fitmaurice (1885) 29 ChD 459). A agrees to charter B's ship for six months. Wholly innocently, B misrepresents the size of the propellor. The size of the propellor played= a minor role in A's decision to hire the ship. As the contract is voidable, not void, the implied term would have to be something like: "If either party misrepresents to the other, regardless of fault, a matte= r material to the other's entering into the contract, this shall entitle th= e other party to avoid the deal.' I don't think myself that such an impled term passes the officious bystan= der test. If we say the term is implied by law, rather than fact, we just get back to asking why the law should imply such a term. It seems to me that a better explanation is that the misrepresentee's consent has been vitiated by the misrepresentation and that this entitles him to set aside the deal. If I make you a gift because of a misrepresentation you have made to me I am entitled to recover the gift. = I do not, myself think that this can be explained through an implied agreem= ent to return the gift. Similarly if I enter into a contract with you because= of your holding a gun to my head or because I am hopelessly dependent upon y= ou, I can avoid the deal. I don't think that this is because of any implied agreement that I am entitled to do so. RS ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 17:31:11 +0100 Reply-To: Andrew.Dickinson@CLIFFORDCHANCE.COM Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Andrew.Dickinson@CLIFFORDCHANCE.COM Subject: Re: Undue Influence MIME-Version: 1.0 Content-Type: text/plain; charset=3D"ISO-8859-1" I agree with Robert. Implied contractual terms are an unsatisfactory way= of explaining frustration or common mistake (where both parties have reached= an objective agreement on an equal footing) (see Great Peace Shipping v. Tsavliris [2003] QB 679, [73] (CA) ("What do these developments in the la= w of frustration have to tell us about the law of common mistake? First tha= t the theory of the implied term is as unrealistic when considering common mistake as when considering frustration. Where a fundamental assumption u= pon which an agreement is founded proves to be mistaken, it is not realistic = to ask whether the parties impliedly agreed that in those circumstances the contract would not be binding. The avoidance of a contract on the ground = of common mistake results from a rule of law under which, if it transpires t= hat one or both of the parties have agreed to do something which it is impossible to perform, no obligation arises out of that agreement."). They are an even less satisfactory way of explaining vitiating factors su= ch as misrepresentation, duress and undue influence, where the conduct of on= e party (innocent or otherwise) has unbalanced the relationship in such a w= ay as to justify the other being given the legal option, subject to certain qualifications, to undo the bargain (see John Cartwright's analysis in- "Unequal Bargaining"). Sometimes that option is exercisable unilaterally (e.g. rescission at common law for fraud) and sometimes it requires the sanction of the court (e.g. rescission in equity for undue influence). T= he remedy of rescission, in many cases, also effects restitution between the parties. The idea that an implied contractual term is necessary, or appropriate, to achieve this result over-complicates the analysis and is reminiscent of the argument that the reversal of unjust enrichment was itself founded on an implied contract. Andrew -----Original Message----- From: Robert Stevens [mailto:robert.stevens@LAW.OXFORD.AC.UK] Sent: 02 April 2004 16:56 To: ENRICHMENT@LISTS.MCGILL.CA Subject: Re: [RDG:] Undue Influence Jason Neyers wrote: > This raises the question of why a contract can be rescinded for a mater= ial > innocent misrepresentation. I agree the reason is not fault. But I do n= ot agree > that it has nothing to do with the implied agreement of the parties. I = see the > reason for the courts intervention, being similar to the reason the cou= rt > intervenes (or is asked to intervene) in cases like Scott v. Coulson, B= ell v. > Lever Bros. The implied agreement/condition is that the contract is to bind > only their shared fundamental assumption is true. Hence if you would ha= ve put > the point to the parties in Redgrave v. Hurd, they would have objective= ly > agreed that the contract was to bind only if the practice brought in L4= 00 per > year. While one may not agree with this analysis, it has a long history= : see > Grotius, The Law and War and Peace, Bk. II c.11 and the work of Peter Benson, > The Unity of Contract of Law (2001: CUP). I do not find this a convincing explanation as to why a misrepresentation entitles the misrepresentee to rescind. I would be prepared to concede that where there is a common fundamental mistake made by both parties to a contract one plausible explanation as t= o why the contract is void is that there is an implied condition precendent that the agreement is not to bind. So, A agrees to hire B's music hall and surrounding gardens. Unknown to both = A and B, ten minutes before the deal was struck the music hall had burnt to the ground. We might be prepared to say, on an officious bystander test, that there i= s no contract because it was an implied condition precedent that the music hall existed. We might also be prepared to say that if the music hall bur= nt down ten minutes after the agreement that there was an implied condition subsequent that the deal was to come to an end. There are other plausible explanations for the result that the contract i= s no longer on foot and in the context of frustration the implied condition analysis has become unfashionable. Where rescission for misrepresentation is concerned, the misrepresentatio= n need not be fundamental nor need it be shared. All that is necessary is t= hat the misrepresentation, however minor, was in part a cause of the decision= to enter into the deal (Edgington v Fitmaurice (1885) 29 ChD 459). A agrees to charter B's ship for six months. Wholly innocently, B misrepresents the size of the propellor. The size of the propellor played= a minor role in A's decision to hire the ship. As the contract is voidable, not void, the implied term would have to be something like: "If either party misrepresents to the other, regardless of fault, a matte= r material to the other's entering into the contract, this shall entitle th= e other party to avoid the deal.' I don't think myself that such an impled term passes the officious bystan= der test. If we say the term is implied by law, rather than fact, we just get back to asking why the law should imply such a term. It seems to me that a better explanation is that the misrepresentee's consent has been vitiated by the misrepresentation and that this entitles him to set aside the deal. If I make you a gift because of a misrepresentation you have made to me I am entitled to recover the gift. = I do not, myself think that this can be explained through an implied agreem= ent to return the gift. Similarly if I enter into a contract with you because= of your holding a gun to my head or because I am hopelessly dependent upon y= ou, I can avoid the deal. I don't think that this is because of any implied agreement that I am entitled to do so. RS ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . ******* This message and any attachment are confidential and may be privileged or= otherwise protected from disclosure. If you are not the intended recipi= ent, please telephone or email the sender and delete this message and any= attachment from your system. If you are not the intended recipient you = must not copy this message or attachment or disclose the contents to any = other person. For further information about Clifford Chance please see our website at h= ttp://www.cliffordchance.com or refer to any Clifford Chance office. ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 11:13:48 -0500 Reply-To: jneyers@uwo.ca Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Jason Neyers Organization: University of Western Ontario Subject: Re: Undue Influence Comments: To: Robert Stevens MIME-Version: 1.0 Content-Type: text/plain; charset=3Dus-ascii Content-Transfer-Encoding: 7bit As an aside, Hamish Stewart has an article in the August edition of the C= anadian Bar Review which (if the abstract is any indication) is critical of the v= itiated consent / over-borne will theory of duress and which might be of interest= to members of the RDG. See http://www.cba.org/CBA/canadian_bar_review/CBRAugust2003/August2003.asp. Cheers, Robert Stevens wrote: > Jason Neyers wrote: > > > This raises the question of why a contract can be rescinded for a mat= erial > > innocent misrepresentation. I agree the reason is not fault. But I do= not > agree > > that it has nothing to do with the implied agreement of the parties. = I see > the > > reason for the courts intervention, being similar to the reason the c= ourt > > intervenes (or is asked to intervene) in cases like Scott v. Coulson,= Bell > v. > > Lever Bros. The implied agreement/condition is that the contract is = to > bind > > only their shared fundamental assumption is true. Hence if you would = have > put > > the point to the parties in Redgrave v. Hurd, they would have objecti= vely > > agreed that the contract was to bind only if the practice brought in = L400 > per > > year. While one may not agree with this analysis, it has a long histo= ry: > see > > Grotius, The Law and War and Peace, Bk. II c.11 and the work of Peter > Benson, > > The Unity of Contract of Law (2001: CUP). > > I do not find this a convincing explanation as to why a misrepresentati= on > entitles the misrepresentee to rescind. > I would be prepared to concede that where there is a common fundamental > mistake made by both parties to a contract one plausible explanation as= to > why the contract is void is that there is an implied condition precende= nt > that the agreement is not to bind. So, > > A agrees to hire B's music hall and surrounding gardens. Unknown to bot= h A > and B, ten minutes before the deal was struck the music hall had burnt = to > the ground. > We might be prepared to say, on an officious bystander test, that there= is > no contract because it was an implied condition precedent that the musi= c > hall existed. We might also be prepared to say that if the music hall b= urnt > down ten minutes after the agreement that there was an implied conditio= n > subsequent that the deal was to come to an end. > > There are other plausible explanations for the result that the contract= is > no longer on foot and in the context of frustration the implied conditi= on > analysis has become unfashionable. > > Where rescission for misrepresentation is concerned, the misrepresentat= ion > need not be fundamental nor need it be shared. All that is necessary is= that > the misrepresentation, however minor, was in part a cause of the decisi= on to > enter into the deal (Edgington v Fitmaurice (1885) 29 ChD 459). > > A agrees to charter B's ship for six months. Wholly innocently, B > misrepresents the size of the propellor. The size of the propellor play= ed a > minor role in A's decision to hire the ship. > > As the contract is voidable, not void, the implied term would have to b= e > something like: > > "If either party misrepresents to the other, regardless of fault, a mat= ter > material to the other's entering into the contract, this shall entitle = the > other party to avoid the deal.' > > I don't think myself that such an impled term passes the officious byst= ander > test. If we say the term is implied by law, rather than fact, we just g= et > back to asking why the law should imply such a term. > > It seems to me that a better explanation is that the misrepresentee's > consent has been vitiated by the misrepresentation and that this entitl= es > him to set aside the deal. If I make you a gift because of a > misrepresentation you have made to me I am entitled to recover the gift= . I > do not, myself think that this can be explained through an implied agre= ement > to return the gift. Similarly if I enter into a contract with you becau= se of > your holding a gun to my head or because I am hopelessly dependent upon= you, > I can avoid the deal. I don't think that this is because of any implied > agreement that I am entitled to do so. > > RS -- Jason Neyers Assistant Professor of Law Faculty of Law University of Western Ontario N6A 3K7 (519) 661-2111 x. 88435 ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 11:26:30 -0500 Reply-To: smiths Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: smiths Subject: Re: Undue Influence Comments: To: Robert Stevens MIME-Version: 1.0 Content-Type: text/plain; charset=3Dus-ascii Content-Transfer-Encoding: 7bit If I may add a small comment to this debate, it is dangerous, I suggest, to place significant weight on analogies to the law of innocent misrepresentation. The reason is that the basis of this excuse is itself unclear. Robert is no doubt correct to say that the effect of an innocent misrepresentation is 'vitiate consent'. But why does it have this effect? Whatever reasons explain why a contract can be set aside for mistake (e.g., implied term, mistake vitiates consent)do not apply to innocent misrepresentations. This is true even if we drop the requirement that the mistake be shared, since it is a futher (and obviously sensible) requirement, shared by systems that allow for an excuse of unilateral mistake, that the mistake be serious. Nor does the analogy to duress or negl/fraudulent misrep. work, for the obvious reason that these acts involve wrongs. In short, the usual rule is that if there has been no wrongdoing, and nothing that otherwise significantly impairs consent (e.g., mistake, incapacity,) then the law leaves things as they are. So why an excuse of innocent mispresentation? Consistent with these observations, the civil law systems I am familiar with do not recognize an excuse of innocent misrepresentation. I am not at this point suggesting there should be no excuse of innocent misrepresentation. This is a complex issue that requires more thought. But I am suggesting that the excuse is difficult to square with the others kinds of excuses that the law does and should recognize, and thus we should be careful before we use it as the basis for explaining another area of the law. steve smith Robert Stevens wrote: > > Jason Neyers wrote: > > > This raises the question of why a contract can be rescinded for a mat= erial > > innocent misrepresentation. I agree the reason is not fault. But I do= not > agree > > that it has nothing to do with the implied agreement of the parties. = I see > the > > reason for the courts intervention, being similar to the reason the c= ourt > > intervenes (or is asked to intervene) in cases like Scott v. Coulson,= Bell > v. > > Lever Bros. The implied agreement/condition is that the contract is = to > bind > > only their shared fundamental assumption is true. Hence if you would = have > put > > the point to the parties in Redgrave v. Hurd, they would have objecti= vely > > agreed that the contract was to bind only if the practice brought in = L400 > per > > year. While one may not agree with this analysis, it has a long histo= ry: > see > > Grotius, The Law and War and Peace, Bk. II c.11 and the work of Peter > Benson, > > The Unity of Contract of Law (2001: CUP). > > I do not find this a convincing explanation as to why a misrepresentati= on > entitles the misrepresentee to rescind. > I would be prepared to concede that where there is a common fundamental > mistake made by both parties to a contract one plausible explanation as= to > why the contract is void is that there is an implied condition precende= nt > that the agreement is not to bind. So, > > A agrees to hire B's music hall and surrounding gardens. Unknown to bot= h A > and B, ten minutes before the deal was struck the music hall had burnt = to > the ground. > We might be prepared to say, on an officious bystander test, that there= is > no contract because it was an implied condition precedent that the musi= c > hall existed. We might also be prepared to say that if the music hall b= urnt > down ten minutes after the agreement that there was an implied conditio= n > subsequent that the deal was to come to an end. > > There are other plausible explanations for the result that the contract= is > no longer on foot and in the context of frustration the implied conditi= on > analysis has become unfashionable. > > Where rescission for misrepresentation is concerned, the misrepresentat= ion > need not be fundamental nor need it be shared. All that is necessary is= that > the misrepresentation, however minor, was in part a cause of the decisi= on to > enter into the deal (Edgington v Fitmaurice (1885) 29 ChD 459). > > A agrees to charter B's ship for six months. Wholly innocently, B > misrepresents the size of the propellor. The size of the propellor play= ed a > minor role in A's decision to hire the ship. > > As the contract is voidable, not void, the implied term would have to b= e > something like: > > "If either party misrepresents to the other, regardless of fault, a mat= ter > material to the other's entering into the contract, this shall entitle = the > other party to avoid the deal.' > > I don't think myself that such an impled term passes the officious byst= ander > test. If we say the term is implied by law, rather than fact, we just g= et > back to asking why the law should imply such a term. > > It seems to me that a better explanation is that the misrepresentee's > consent has been vitiated by the misrepresentation and that this entitl= es > him to set aside the deal. If I make you a gift because of a > misrepresentation you have made to me I am entitled to recover the gift= . I > do not, myself think that this can be explained through an implied agre= ement > to return the gift. Similarly if I enter into a contract with you becau= se of > your holding a gun to my head or because I am hopelessly dependent upon= you, > I can avoid the deal. I don't think that this is because of any implied > agreement that I am entitled to do so. > > RS > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, emai= l > . -- Stephen A. Smith Associate Professor Faculty of Law, McGill University 3674 Peel St. Montreal, Quebec H3A 1W9 CANADA Tel: (1) (514) 398-6633 Fax: (1) (514) 398-3233 ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 17:25:15 +0100 Reply-To: duncan.sheehan@uea.ac.uk Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Duncan Sheehan Subject: Re: Undue Influence & Natural Obligations Comments: To: jneyers@UWO.CA In-Reply-To: <1080915020.406d744cb93ce@mail.uwo.ca> MIME-Version: 1.0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit Dear all, I want to pick up on a number of things that have come out of the recent discussion on undue influence and in particular in Jason Neyer's contributions. A number of things then. Firstly I quite agree with Robert that this has nothing to do with implie= d agreements of any description, and nor does misrepresentation. Whenever I see implied agreement I immediately go on high alert, as it were, to see = if this is real. There are far too many imaginary implied agreements around without adding more, and it does seem to me to go back to the old error t= hat restitution is about implied contract (Sorry, Steve). It is either implie= d in fact, and on the officious bystander test I don't think it is, or it i= s not implied at all. If we are going to say it is implied by law we might = as well say there's a rule that undue influence works if X, Y and Z are true. If we are talking about fault and wrongs, and this may just be to perpetu= ate a misunderstanding, but I think it worth reiterating... I don't think und= ue influence is a wrong. Certainly if there is a wrong committed by the defendant on the claimant that may well vitiate the contract - fraud is g= ood case in point. That is to say no more than that a wrong is sufficient, bu= t that is no reason to say it is necessary. Crudely we can say that when we enter a contract, subject to the need to protect the other party, we shou= ld do so with full consent. Undue influence vitiates that and so with caveat= s to protect the defendant's right to expect a contract or transfer to rema= in in force, we vitiate the contract or transfer. This is no more than the o= ld debate as to whether undue influence is a claimant or a defendant sided unjust factor. Crucially though I want go off on a tangent and pick Jason Neyers up on h= is aside about natural obligation. It is far from obvious to me that the operation of the presumptions (along with Lord Nicholls' requirement of a transaction calling for an explanation) is counter-intuitive. My girlfrie= nd may well be legitimately pissed off with me if I never give her any presents, ever - Christmas, or birthday presents. Further you would expec= t that I would give her Christmas and birthday presents. This is just norma= l behaviour. She probably isn't entitled to expect that I reregister the ho= use I've bought to put it in her name instead of mine. That might not be quit= e normal - it may need explanation. It may be that our relationship is such that I am so love sick for her that I'll give her anything (Louth v Diprose). I think the point is that sometimes it is intuitive that I real= ly meant it because I love her, and sometimes it isn't. Sometimes these relationships are abused, and the presumption is an attempt to draw the l= ine between those relationships that are and are not abused. As importantly a= s that I want to squelch Jason Neyers' notion of natural obligation. It see= ms to me that he is using a phrase which has the capacity to cause immense difficulty, and he is using it in a very dangerous way. I have no obligation - natural or otherwise - to give presents to my girlfriend, whatever her expectations are, and whatever potentially unpleasant consequences there are of not indulging her expectations. To use the phra= se in this type of context raises the possibility of a very wide, vague and difficult to establish concept. It would then be legitimate to attack it = on this basis. I do believe in natural obligations, but I would want to conf= ine the term to invalid agreements where the reason the agreement is invalid does not reflect a belief that the agreement is itself "bad", for example= it is illegal, or a belief that the claimant needs protecting (undue influen= ce for instance). That has the advantage of keeping the concept in tight rei= n, and preventing it running off into the somewhat unruly "moral/ familial obligation" undergrowth. I will not go into this in any more detail (unless you want me to), but m= y latest utterances will be on the subject of natural obligations in, I thi= nk, the next issue of the LMCLQ. Duncan Dr Duncan Sheehan Postgraduate Admissions Officer Norwich Law School University of East Anglia Norwich NR4 7TJ United Kingdom > -----Original Message----- > From: Enrichment - Restitution & Unjust Enrichment Legal Issues > [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of Jason Neyers > Sent: Friday, April 02, 2004 3:10 PM > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: Re: [RDG:] Undue Influence > > > Dear Colleagues: > > I think that I have been misunderstood: > > William Swadling wrote: > > Unjust Enrichment is most avowedly not about fault: see > Birks, The Role of > Fault in the Law of Unjust Enrichment, in Swadling & Jones (edd), = The > Search for Principle (Oxford, 1999). > > That is not what I was trying to say. My point is that UE is > about enrichments > that are unjustified (at least from a Canadian perspective). An enrichm= ent > cannot be unjustified when there is a valid legal reason > explaining why X has > Y's value. In cases of that you would term "mistake," there is no valid > legal reason why X has Y's value and hence it must be returned, > as you point out > not because X is at fault, but because the value is Y's. My point > was that in > cases of UI there is a valid legal reason (usually a contract or gift) > justifying X's retention of Y's value. Hence, the only way it can be an= UE > is to find a way to knock out this valid legal reason. So my > claim is not the UE > is about fault but that in some instances a wrong is a necessary practi= cal > precursor to one succeeding in an UE claim. > > Robert Stevens wrote: > > I don't think this can be correct. One party's innocent > misrepresentation > entitles the other party to rescind a contract. No fault is requir= ed; > rescission is not based upon an implied agreement that the > contract it is > capable of being rescinded. > > This raises the question of why a contract can be rescinded for a mater= ial > innocent misrepresentation. I agree the reason is not fault. But > I do not agree > that it has nothing to do with the implied agreement of the > parties. I see the > reason for the courts intervention, being similar to the reason the cou= rt > intervenes (or is asked to intervene) in cases like Scott v. > Coulson, Bell v. > Lever Bros. The implied agreement/condition is that the contract > is to bind > only their shared fundamental assumption is true. Hence if you > would have put > the point to the parties in Redgrave v. Hurd, they would have objective= ly > agreed that the contract was to bind only if the practice brought > in L400 per > year. While one may not agree with this analysis, it has a long > history: see > Grotius, The Law and War and Peace, Bk. II c.11 and the work of > Peter Benson, > The Unity of Contract of Law (2001: CUP). As I argued above, once > the contract > is set aside on this basis, then UE can follow. > > Robert Stevens wrote: > > A breach of fiduciary duty may also be wholly innocent (e.g.\ > Boardman v Phipps [1967] 2 AC 407) and is always a wrong. > > I fail to see how this impeaches what I have said. It is like > saying one may > breach a contract without fraud or negligence but it is still considere= d a > wrong -- the fault being failure to deliver what was promised. If > anything it > seems to support my contention that UI could be a wrong even if the fau= lt > element might not be fraud or negligence. > > Low Fatt Kin Kelvin wrote: > > To answer Mr Neyer's point about presumed undue influence > being counter- > intuitive, it is not sufficient merely to establish some sort of > relationship of trust and confidence to raise the presumption. It = is > necessary to, according to Lord Nicholls, demonstrate that > the transaction > calls for an explanation. Bearing in mind this additional > requirement, I > do not see how it is counter-intuitive. > > Being no expert on UI (so I would be happy to be disabused of > this notion) my > understanding of the cases is that generally a "transaction calls for = an > explanation" when it to the material disadvantage of > the party entering into it. When is someone most likely to enter > into a such a > transaction such as guaranteeing a loan? When they are in a close famil= y > relationship. Yet instead of presuming that the basis of the > transaction was > natural love and affection or mutual support, the essence of > family life, the > court presumes it was on the basis of an influence > which was 'undue'. Is that not at least somewhat counter-intuitive? > > Cheers, > > > > > > -- > > Jason Neyers > > January Term Director > > Assistant Professor of Law > > Faculty of Law > > University of Western Ontario > > N6A 3K7 > > (519) 661-2111 x. 88435 > > > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, emai= l > . > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 18:05:24 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Undue Influence Comments: To: smiths MIME-Version: 1.0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit Two points > Nor does the > analogy to duress or negl/fraudulent misrep. work, for the obvious > reason that these acts involve wrongs. Do they? Pointing a gun at your head is a wrong but I am not sure that ev= ery instance of duress sufficient to avoid a contract is a wrong. A threat to defame amounts to duress and is a threat of a wrong but is it in itself a wrong? Steve also wrote " I suggest, to place significant weight on analogies to the law of innocent misrepresentation. The reason is that the basis of this excuse is itself unclear. " If I buy a car mistakenly believing it to have a 1.6 litre engine when it only has a 1.4 litre engine my mistake is not enough to get me out of the deal. The other party is entitled to say "I am entitled to rely upon the agreement we have struck. Your error is nothing to do with me." If, howev= er, my mistake is caused by the seller misrepresenting the car's engine size, whether innocently or not, I can say "My consent to this deal was vitiat= ed by my mistake for which you are responsible. The deal is off." These are = the rules of the game. Where there is no contract (eg a bare promise under a deed) my mistake al= one allows me to recover, I do not need to show that you induced my mistake. RS ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Fri, 2 Apr 2004 15:24:23 -0500 Reply-To: Jason Neyers Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Jason Neyers Subject: Re: Undue Influence and Innocent Misrepresentations Comments: To: Robert Stevens MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"------------020108020703020901080607" --------------020108020703020901080607 Content-Type: text/plain; charset=3Dus-ascii; format=3Dflowed Content-Transfer-Encoding: 7bit Robert Stevens wrote: Where rescission for misrepresentation is concerned, the misrepresentation need not be fundamental nor need it be shared. All that is necessary is that the misrepresentation, however minor, was in part a cause of the decision to enter into the deal (Edgington v Fitmaurice (1885) 29 ChD 459). I am not sure that this accurately states the law, at least not the Canadian common law. For example, Fridman, The Law of Contract (p. 320 ff) argues that the misrepresentation must be "substantial" and that a merely causative mistake induced by a innocent misrepresentation is not enough for rescission (citing Kennedy v. Royal Mail of Panama (1867) LR 2 QB 580 and other Canadian appellate authority). If this is correct, then I think that there is some justification for integrating IM into the law of mistake of fundamental assumptions. -- Jason Neyers January Term Director Assistant Professor of Law Faculty of Law University of Western Ontario N6A 3K7 (519) 661-2111 x. 88435 --------------020108020703020901080607 Content-Type: text/html; charset=3Dus-ascii Content-Transfer-Encoding: 7bit
Robert Stevens wrote:

Where rescission for misrepresentation is concerned, the misrepr= esentation need not be fundamental nor need it be shared. All that is necessary is t= hat the misrepresentation, however minor, was in part a cause of the d= ecision to enter into the deal (Edgington v Fitmaurice (1885) 29 ChD 459).
I am not sure that this accurately states the law, at least not the Canad= ian common law. For example, Fridman, The Law of Contract (p. 320 ff) argues that the misrepresentation must be "substantial" and that a merely causative mistake induced by a innocent misrepresentation is not enough f= or rescission (citing Kennedy v. Royal Mail of Panama (1867) LR 2 QB 580 and other Canadian appellate authority). If this is correct, then I t= hink that there is some justification for integrating IM into the law of mista= ke of fundamental assumptions.  
--

Jason Neyers

January Term Director

Assistant Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435 

--------------020108020703020901080607-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Sat, 3 Apr 2004 15:39:14 +0100 Reply-To: Robert Stevens Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Robert Stevens Subject: Re: Undue Influence and Innocent Misrepresentations Comments: To: Jason Neyers Content-Type: text/plain Content-Transfer-Encoding: binary MIME-Version: 1.0 I don't know what the Canadian cases are but Kennedy v Royal Mail of Pana= ma is a decision of Blackburn J. It is concerned with the ability to set = aside a contract at common law. At common law it was (and is) a requireme= nt that the misrepresentation be 'substantial.' At common law, of course,= the misrepresentation also had to be fraudulent. In equity, the misrepresentation neither has to be substantial nor does i= t have to be fraudulent: Edgington v Fitzmaurice. Does Canada not possess= the right to rescind for innocent misrepresentation in equity? RS In message <406DCBF7.4050207@uwo.ca> Jason Neyers writes= : > Robert Stevens wrote: > > Where rescission for misrepresentation is concerned, the > misrepresentation need not be fundamental nor need it be shared. Al= l > that is necessary is that the misrepresentation, however minor, was > in part a cause of the decision to enter into the deal (Edgington v > Fitmaurice (1885) 29 ChD 459). > > I am not sure that this accurately states the law, at least not the > Canadian common law. For example, Fridman, The Law of Contract (p. 320 > ff) argues that the misrepresentation must be "substantial" and that a > merely causative mistake induced by a innocent misrepresentation is not > enough for rescission (citing Kennedy v. Royal Mail of Panama (1867) LR > 2 QB 580 and other Canadian appellate authority). If this is correct, > then I think that there is some justification for integrating IM into > the law of mistake of fundamental assumptions. > > -- > Jason Neyers > January Term Director > Assistant Professor of Law > Faculty of Law > University of Western Ontario > N6A 3K7 > (519) 661-2111 x. 88435 > > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Sat, 3 Apr 2004 10:40:32 -0700 Reply-To: Rob Chambers Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Rob Chambers Subject: Undue Influence and Innocent Misrepresentations Mime-Version: 1.0 (Apple Message framework v613) Content-Type: multipart/alternative; boundary=3DApple-Mail-1--372382109 --Apple-Mail-1--372382109 Content-Transfer-Encoding: 7bit Content-Type: text/plain; charset=3DUS-ASCII; format=3Dflowed In Canada, contracts can be rescinded for innocent misrepresentation under the rules of equity. The cases are too numerous to mention, but Wurz v Devlin (1920) 52 DLR 414 (Saskatchewan CA) and Ennis v Klassen [1990] 4 WWR 609, 70 DLR (4th) 321 (Manitoba CA) provide good examples. As I understand it (although I've never investigated the issue and would be happy to be corrected), the requirement that the misrepresentation be substantial applies to fully executed sales of land. In that situation, it is too late to rescind unless the misrepresentation was either fraudulent or substantial: Shortt v MacLennan [1959] SCR 3, 16 DLR (2d) 161. With best wishes, Rob Chambers > From: Robert Stevens > Date: 3 April 2004 7:39:14 am GMT-07:00 > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: Re: [RDG:] Undue Influence and Innocent Misrepresentations > Reply-To: Robert Stevens > > I don't know what the Canadian cases are but Kennedy v Royal Mail of > Panama is a decision of Blackburn J. It is concerned with the ability > to set aside a contract at common law. At common law it was (and is) a > requirement that the misrepresentation be 'substantial.' At common > law, of course, the misrepresentation also had to be fraudulent. > In equity, the misrepresentation neither has to be substantial nor > does it have to be fraudulent: Edgington v Fitzmaurice. Does Canada > not possess the right to rescind for innocent misrepresentation in > equity? > RS --Apple-Mail-1--372382109 Content-Transfer-Encoding: 7bit Content-Type: text/enriched; charset=3DUS-ASCII In Canada, contracts can be rescinded for innocent misrepresentation under the rules of equity. The cases are too numerous to mention, but Wurz v Devlin (1920) 52 DLR 414 (Saskatchewan CA) and Ennis v Klassen [1990] 4 WWR 609, 70 DLR (4th) 321 (Manitoba CA) provide good examples. As I understand it (although I've never investigated the issue and would be happy to be corrected), the requirement that the misrepresentation be substantial applies to fully executed sales of land. In that situation, it is too late to rescind unless the misrepresentation was either fraudulent or substantial: Shortt v MacLennan [1959] SCR 3, 16 DLR (2d) 161. With best wishes, Rob Chambers 0000,0000,0000From: Robert Stevens < 0000,0000,0000Date: 3 April 2004 7:39:14 am GMT-07:00 0000,0000,0000To: ENRICHMENT@LISTS.MCGILL.CA 0000,0000,0000Subject: Re: [RDG:] Undue Influence and Innocent Misrepresentations 0000,0000,0000Reply-To: Robert Stevens < I don't know what the Canadian cases are but Kennedy v Royal Mail of Panama is a decision of Blackburn J. It is concerned with the ability to set aside a contract at common law. At common law it was (and is) a requirement that the misrepresentation be 'substantial.' At common law, of course, the misrepresentation also had to be fraudulent. In equity, the misrepresentation neither has to be substantial nor does it have to be fraudulent: Edgington v Fitzmaurice. Does Canada not possess the right to rescind for innocent misrepresentation in equity? RS --Apple-Mail-1--372382109-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Sat, 3 Apr 2004 22:11:32 +0100 Reply-To: Joshua Getzler Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Joshua Getzler Subject: Re: Undue Influence Comments: To: smiths In-Reply-To: <406D9436.1573CEB3@mcgill.ca> MIME-Version: 1.0 Content-Type: text/plain; charset=3Dus-ascii; format=3Dflowed Content-Transfer-Encoding: 7bit Steve Smith wrote: 'I am not at this point suggesting there should be no excuse of innocent misrepresentation. This is a complex issue that requires more thought. But I am suggesting that the excuse is difficult to square with the others kinds of excuses that the law does and should recognize, and thus we should be careful before we use it as the basis for explaining another area of the law.' I hesitate to pollute the airways with economic analysis, but is at least arguable that the law accords a remedy allowing rescission for innocent misrepresentation because the representor is more able (cheapest cost avoider) ) to guard against actively causing mistakes affectng both parties, compared to the information costs facing the representee. Trustwothy commercial information is therefore cheapened and costs of protecting oneself against the other side's errors are lessened. Also we call misrepresentations 'innocent' when negligence or deceit cannot readily be proven - but there may still be some wrongdoing lurking in the misrepresentor's behaviour, at least to the degree that the benefit of the contract is rightly denied to the representor. The duty to disclose accurate information in close relationships can readily be fitted into these models. Steve Smith's important new Clarendon Series book on 'Contract Theory' (OUP, 2004) has just been published, for which many congratulations to the author. Joshua Getzler ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Sun, 4 Apr 2004 11:16:03 -0400 Reply-To: Lionel Smith Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Lionel Smith Subject: Re: Undue Influence & Natural Obligations In-Reply-To: <001401c418cf$14aebf70$d198de8b@uea.ac.uk> Mime-Version: 1.0 (Apple Message framework v613) Content-Type: text/plain; charset=3DUS-ASCII; format=3Dflowed Content-Transfer-Encoding: 7bit Does "natural obligation" mean that "the transaction does not call for an explanation"? And perhaps that it does not reveal "manifest disadvantage"? Lionel ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Mon, 5 Apr 2004 09:35:11 +0100 Reply-To: duncan.sheehan@uea.ac.uk Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Duncan Sheehan Subject: Re: Undue Influence & Natural Obligations Comments: To: Lionel Smith In-Reply-To: MIME-Version: 1.0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit Dear all, I imagine that if there were a natural obligation, at least how I define them, that the answer would be no the transaction does not call for an explanation if there is one. I say this because if natural obligations ar= ise because we see the agreement to do act X as being worthy of some recognition, despite being unenforceable, it is inconsistent to say that there can be a natural obligation where there is undue influence, or undu= e infuence where there is a natural obligation. Where there is undue influe= nce the law states that there is a need to protect the claimant, which negati= ves the possibility of a natural obligation. Duncan Dr Duncan Sheehan Postgraduate Admissions Officer Norwich Law School University of East Anglia Norwich NR4 7TJ United Kingdom > -----Original Message----- > From: Enrichment - Restitution & Unjust Enrichment Legal Issues > [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of Lionel Smith > Sent: Sunday, April 04, 2004 4:16 PM > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: Re: [RDG:] Undue Influence & Natural Obligations > > > Does "natural obligation" mean that "the transaction does not call for > an explanation"? And perhaps that it does not reveal "manifest > disadvantage"? > > Lionel > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, emai= l > . > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Mon, 5 Apr 2004 10:25:56 +0100 Reply-To: William Swadling Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: William Swadling Subject: Re: Undue Influence & Natural Obligations Comments: To: duncan.sheehan@uea.ac.uk MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----=3D_NextPart_000_030E_01C41AF8.6196F070" This is a multi-part message in MIME format. ------=3D_NextPart_000_030E_01C41AF8.6196F070 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable The issue, surely, is not about an 'explanation' at all. The transfer =3D in Allcard v Skinner, for example, can be 'explained' as one where the =3D novice was acting under the influence of the Mother Superior. =3D Similarly, the 'explanation' of Chase Manhattan is that the second =3D transfer was made by mistake. Indeed, if these 'explanations' were =3D removed, the ground of claim would simply disappear. What Duncan seems =3D to be looking for is a justification for the transfers, not an =3D explanation. WJS=3D20 ----- Original Message -----=3D20 From: Duncan Sheehan=3D20 To: ENRICHMENT@LISTS.MCGILL.CA=3D20 Sent: Monday, April 05, 2004 9:35 AM Subject: Re: [RDG:] Undue Influence & Natural Obligations Dear all, I imagine that if there were a natural obligation, at least how I =3D define them, that the answer would be no the transaction does not call for an explanation if there is one. I say this because if natural obligations = =3D arise because we see the agreement to do act X as being worthy of some recognition, despite being unenforceable, it is inconsistent to say =3D that there can be a natural obligation where there is undue influence, or =3D undue infuence where there is a natural obligation. Where there is undue =3D influence the law states that there is a need to protect the claimant, which =3D negatives the possibility of a natural obligation. Duncan Dr Duncan Sheehan Postgraduate Admissions Officer Norwich Law School University of East Anglia Norwich NR4 7TJ United Kingdom > -----Original Message----- > From: Enrichment - Restitution & Unjust Enrichment Legal Issues > [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of Lionel Smith > Sent: Sunday, April 04, 2004 4:16 PM > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: Re: [RDG:] Undue Influence & Natural Obligations > > > Does "natural obligation" mean that "the transaction does not call =3D for > an explanation"? And perhaps that it does not reveal "manifest > disadvantage"? > > Lionel > > ____________________________________________________________________ > This message was delivered through the Restitution Discussion =3D Group, > an international internet LISTSERV devoted to all aspects of the =3D law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To =3D unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list =3D is > run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, =3D email > . > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, =3D email . ------=3D_NextPart_000_030E_01C41AF8.6196F070 Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable
The issue, surely, is not about an 'explanation' at all.  = =3D The=3D20 transfer in Allcard v Skinner, for example, can be 'explained' =3D as one=3D20 where the novice was acting under the influence of the Mother=3D20 Superior.  Similarly, the 'explanation' of Chase Manhattan = =3D is that=3D20 the second transfer was made by mistake.  Indeed, if these=3D20 'explanations' were removed, the ground of claim would simply=3D20 disappear.  What Duncan seems to be looking for is=3D20 a justification for the transfers, not an explanation.
 
WJS 
----- Original Message -----
From:=3D20
Duncan Sheehan
Sent: Monday, April 05, 2004 =3D 9:35=3D20 AM
Subject: Re: [RDG:] Undue =3D Influence &=3D20 Natural Obligations

Dear all,

I imagine that if there were a natural = =3D obligation, at least how I define
them, that the answer would be no = =3D the=3D20 transaction does not call for an
explanation if there is one. I say = =3D this=3D20 because if natural obligations arise
because we see the agreement =3D to do act=3D20 X as being worthy of some
recognition, despite being unenforceable, = =3D it is=3D20 inconsistent to say that
there can be a natural obligation where =3D there is=3D20 undue influence, or undue
infuence where there is a natural =3D obligation.=3D20 Where there is undue influence
the law states that there is a need =3D to=3D20 protect the claimant, which negatives
the possibility of a natural=3D= 20 obligation.

Duncan

Dr Duncan Sheehan
Postgraduate =3D Admissions=3D20 Officer
Norwich Law School
University of East Anglia
Norwich =3D NR4=3D20 7TJ
United Kingdom

> -----Original Message-----
> =3D From:=3D20 Enrichment - Restitution & Unjust Enrichment Legal Issues
>=3D= 20 [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of Lionel Smith
> =3D Sent:=3D20 Sunday, April 04, 2004 4:16 PM
> To: ENRICHMENT@LISTS.M CGILL.CA=3D
>=3D20 Subject: Re: [RDG:] Undue Influence & Natural=3D20 Obligations
>
>
> Does "natural obligation" mean =3D that "the=3D20 transaction does not call for
> an explanation"? And perhaps =3D that it=3D20 does not reveal "manifest
> disadvantage"?
>
>=3D20 Lionel
>
>=3D20 =3D ____________________________________________________________________
&= =3D gt; =3D20 This message was delivered through the Restitution Discussion=3D20 Group,
>  an international internet LISTSERV devoted to all = =3D aspects=3D20 of the law
>  of unjust enrichment. To subscribe, send =3D "subscribe=3D20 enrichment" in
>  the body of a message to <listserv@lists.mcgill.ca
&g= t;=3D . To=3D20 unsubscribe,
>  send "signoff enrichment" to the same =3D address. To=3D20 make a posting to
>  all group members, send to <enrichment@lists.mcgill.ca=3D >.=3D20 The list is
>  run by Lionel Smith of McGill University, =3D tel. (+1)=3D20 514 398 6635, email
>  <lionel.smith@mcgill.ca>.<= BR=3D >>

_________________________________________________________ ___= =3D ________
 This=3D20 message was delivered through the Restitution Discussion =3D Group,
 an=3D20 international internet LISTSERV devoted to all aspects of the =3D law
 of=3D20 unjust enrichment. To subscribe, send "subscribe enrichment" =3D in
 the=3D20 body of a message to <listserv@lists.mcgill.ca&g= t;=3D . To=3D20 unsubscribe,
 send "signoff enrichment" to the same address. =3D To make a=3D20 posting to
 all group members, send to <enrichment@lists.mcgill.ca=3D >.=3D20 The list is
 run by Lionel Smith of McGill University, tel. =3D (+1) 514=3D20 398 6635, email
 <lionel.smith@mcgill.ca>.<= BR=3D >
------=3D_NextPart_000_030E_01C41AF8.6196F070-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Mon, 5 Apr 2004 12:04:44 +0100 Reply-To: duncan.sheehan@uea.ac.uk Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Duncan Sheehan Subject: Re: Undue Influence & Natural Obligations Comments: To: William Swadling In-Reply-To: <031101c41aef$ffdc2560$4fb801a3@bnc.ox.ac.uk> MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----=3D_NextPart_000_0005_01C41B06.2F356A40" This is a multi-part message in MIME format. ------=3D_NextPart_000_0005_01C41B06.2F356A40 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit That's fair, I think, but I'm not sure it makes a vast amount of differen= ce. My 'justification' removes their 'explanation'. Duncan Dr Duncan Sheehan Postgraduate Admissions Officer Norwich Law School University of East Anglia Norwich NR4 7TJ United Kingdom -----Original Message----- From: Enrichment - Restitution & Unjust Enrichment Legal Issues [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of William Swadling Sent: Monday, April 05, 2004 10:26 AM To: ENRICHMENT@LISTS.MCGILL.CA Subject: Re: [RDG:] Undue Influence & Natural Obligations The issue, surely, is not about an 'explanation' at all. The transfer = in Allcard v Skinner, for example, can be 'explained' as one where the novic= e was acting under the influence of the Mother Superior. Similarly, the 'explanation' of Chase Manhattan is that the second transfer was made by mistake. Indeed, if these 'explanations' were removed, the ground of cla= im would simply disappear. What Duncan seems to be looking for is a justification for the transfers, not an explanation. WJS ----- Original Message ----- From: Duncan Sheehan To: ENRICHMENT@LISTS.MCGILL.CA Sent: Monday, April 05, 2004 9:35 AM Subject: Re: [RDG:] Undue Influence & Natural Obligations Dear all, I imagine that if there were a natural obligation, at least how I def= ine them, that the answer would be no the transaction does not call for a= n explanation if there is one. I say this because if natural obligation= s arise because we see the agreement to do act X as being worthy of some recognition, despite being unenforceable, it is inconsistent to say t= hat there can be a natural obligation where there is undue influence, or undue infuence where there is a natural obligation. Where there is undue influence the law states that there is a need to protect the claimant, which negatives the possibility of a natural obligation. Duncan Dr Duncan Sheehan Postgraduate Admissions Officer Norwich Law School University of East Anglia Norwich NR4 7TJ United Kingdom > -----Original Message----- > From: Enrichment - Restitution & Unjust Enrichment Legal Issues > [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of Lionel Smith > Sent: Sunday, April 04, 2004 4:16 PM > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: Re: [RDG:] Undue Influence & Natural Obligations > > > Does "natural obligation" mean that "the transaction does not call = for > an explanation"? And perhaps that it does not reveal "manifest > disadvantage"? > > Lionel > > ___________________________________________________________________= _ > This message was delivered through the Restitution Discussion Grou= p, > an international internet LISTSERV devoted to all aspects of the l= aw > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscrib= e, > send "signoff enrichment" to the same address. To make a posting t= o > all group members, send to . The list = is > run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email > . > ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, em= ail . ------=3D_NextPart_000_0005_01C41B06.2F356A40 Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable
That's=3D20 fair, I think, but I'm not sure it makes a vast amount of difference. My = =3D 'justification' removes their 'explanation'.
 
Duncan=3D20
 

Dr Duncan Sheehan
Postgraduate Admissions =3D Officer
Norwich=3D20 Law School
University of East Anglia
Norwich NR4 7TJ
United=3D20 Kingdom

 
-----Original Message-----
From: Enrichment - =3D Restitution=3D20 & Unjust Enrichment Legal Issues =3D [mailto:ENRICHMENT@LISTS.MCGILL.CA]On=3D20 Behalf Of William Swadling
Sent: Monday, April 05, 2004 =3D 10:26=3D20 AM
To: ENRICHMENT@LISTS.MCGILL.CA
Subject: Re: =3D [RDG:]=3D20 Undue Influence & Natural Obligations

The issue, surely, is not about an 'explanation' at =3D all.  The=3D20 transfer in Allcard v Skinner, for example, can be =3D 'explained' as one=3D20 where the novice was acting under the influence of the Mother=3D20 Superior.  Similarly, the 'explanation' of Chase =3D Manhattan is=3D20 that the second transfer was made by mistake.  Indeed, if these=3D= 20 'explanations' were removed, the ground of claim would simply=3D20 disappear.  What Duncan seems to be looking for is=3D20 a justification for the transfers, not an explanation.
 
WJS 
----- Original Message -----
From:=3D20 Duncan Sheehan
To: ENRICHMENT@LISTS.MCGILL. CA =3D
Sent: Monday, April 05, 2004= =3D 9:35=3D20 AM
Subject: Re: [RDG:] Undue =3D Influence=3D20 & Natural Obligations

Dear all,

I imagine that if there were a =3D natural=3D20 obligation, at least how I define
them, that the answer would be =3D no the=3D20 transaction does not call for an
explanation if there is one. I =3D say this=3D20 because if natural obligations arise
because we see the agreement = =3D to do=3D20 act X as being worthy of some
recognition, despite being =3D unenforceable,=3D20 it is inconsistent to say that
there can be a natural obligation =3D where=3D20 there is undue influence, or undue
infuence where there is a =3D natural=3D20 obligation. Where there is undue influence
the law states that =3D there is a=3D20 need to protect the claimant, which negatives
the possibility of =3D a=3D20 natural obligation.

Duncan

Dr Duncan =3D Sheehan
Postgraduate=3D20 Admissions Officer
Norwich Law School
University of East=3D20 Anglia
Norwich NR4 7TJ
United Kingdom

> =3D -----Original=3D20 Message-----
> From: Enrichment - Restitution & Unjust =3D Enrichment=3D20 Legal Issues
> [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of = =3D Lionel=3D20 Smith
> Sent: Sunday, April 04, 2004 4:16 PM
> To: ENRICHMENT@LISTS.M CGILL.CA=3D
>=3D20 Subject: Re: [RDG:] Undue Influence & Natural=3D20 Obligations
>
>
> Does "natural obligation" mean =3D that "the=3D20 transaction does not call for
> an explanation"? And perhaps =3D that it=3D20 does not reveal "manifest
> disadvantage"?
>
>=3D20 Lionel
>
>=3D20 =3D ____________________________________________________________________
&= =3D gt; =3D20 This message was delivered through the Restitution Discussion=3D20 Group,
>  an international internet LISTSERV devoted to =3D all=3D20 aspects of the law
>  of unjust enrichment. To subscribe, = =3D send=3D20 "subscribe enrichment" in
>  the body of a message to =3D <listserv@lists.mcgill.ca&g= t;=3D . To=3D20 unsubscribe,
>  send "signoff enrichment" to the same =3D address. To=3D20 make a posting to
>  all group members, send to <enrichment@lists.mcgill.ca=3D >.=3D20 The list is
>  run by Lionel Smith of McGill University, =3D tel.=3D20 (+1) 514 398 6635, email
>  <lionel.smith@mcgill.ca>.<= BR=3D >>

_________________________________________________________ ___= =3D ________
 This=3D20 message was delivered through the Restitution Discussion =3D Group,
 an=3D20 international internet LISTSERV devoted to all aspects of the=3D20 law
 of unjust enrichment. To subscribe, send "subscribe =3D enrichment"=3D20 in
 the body of a message to <listserv@lists.mcgill.ca&g= t;=3D . To=3D20 unsubscribe,
 send "signoff enrichment" to the same address. = =3D To make=3D20 a posting to
 all group members, send to <enrichment@lists.mcgill.ca=3D >.=3D20 The list is
 run by Lionel Smith of McGill University, tel. =3D (+1) 514=3D20 398 6635, email
 <lionel.smith@mcgill.ca>.<= BR=3D >
------=3D_NextPart_000_0005_01C41B06.2F356A40-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Mon, 5 Apr 2004 09:39:49 -0400 Reply-To: Lionel Smith Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Lionel Smith Subject: Natural Obligations Mime-Version: 1.0 (Apple Message framework v613) Content-Transfer-Encoding: 7bit Content-Type: text/plain; charset=3DUS-ASCII; format=3Dflowed I post this on behalf of Hector MacQueen. I should say that I am aware of the sense of 'natural obligation' which he describes, which also exists in the civil law of Quebec, and was very familiar to common lawyers at least in the days of Lord Mansfield and Sir William Evans. I meant to suggest that as it relates to proof of undue influence, there may be no real difference between that idea and some of the formulations which common law courts have used. The words capture an underlying factual idea, which can issue in more than one legal consequence. Lionel Dear Lionel Apologies if I am coming into the middle of something here (I hadn't been following this thread until I saw your contribution), but as I understand "natural obligation", it means an obligation unenforceable as such in law but which nonetheless may have certain secondary effects in the law of obligations, e.g. if money is paid under a natural obligation such as a prescribed debt, it is not reclaimable as an unjustified enrichment; and it can be used in set-off. The root is Roman law and the concept is very familiar in continental European systems. Best wishes Hector -----Original Message----- From: Enrichment - Restitution & Unjust Enrichment Legal Issues [mailto:ENRICHMENT@LISTS.MCGILL.CA] On Behalf Of Lionel Smith Sent: 04 April 2004 16:16 To: ENRICHMENT@LISTS.MCGILL.CA Subject: Re: [RDG:] Undue Influence & Natural Obligations Does "natural obligation" mean that "the transaction does not call for an explanation"? And perhaps that it does not reveal "manifest disadvantage"? Lionel ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Mon, 5 Apr 2004 17:43:56 +0100 Reply-To: duncan.sheehan@uea.ac.uk Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Duncan Sheehan Subject: Re: Natural Obligations Comments: To: Lionel Smith In-Reply-To: MIME-Version: 1.0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit Dear all, I had not intended to... but here we go. I think it worth spelling out precisely what I do think these things are. Hector MacQueen's contribution almost precisely mirrors what I mean by natural obligations IN ENGLISH LAW. Indeed my argument is precisely that Lord Mansfield and Sir William Evans knew about these things, and they ha= ve never gone away, merely that since their major effect is to bar recovery = of payments under a mistake (almost invariably of law) they were buried by t= he mistake of law bar. Essentially the argument goes that there are some obligations that English law recognises as being worthy of some effect despite being unenforceable. The obligation should arise where the claimant has undertaken to do an ac= t, but the contract, under which he undertook the duty, is void; nonetheless= , we see the undertaking of the duty as worthy of some recognition. However= , the reason why the contract, or agreement, is void ought not indicate a disapproval of the act itself, or a need to protect the claimant. Thus wh= ere the contract is void for informality a natural obligation ought to be recognised; however, where the contract is void for the mistake of one of the parties relief ought not to be denied to that party. I understand tha= t this is a central case of natural obligations in several jurisdictions. I think that there are three types of natural obligation, which I have imaginatively labelled type 1, type 2, and type 3. Type 1 obligations are those that only bar recovery of money paid by mistake (either of law or fact). Type 2 obligations also support a future promise to do the act promised. This is the remnants of moral consideration integrated into the theory - it's notable that Treitel's general statement of when moral consideration arises is remarkably similar to the general idea lying behi= nd my concept of natural obligation. Type 3 obligations include other effect= s - ability to support accessory or guarantor liability - minors contracts fo= r instance (albeit only by statute). Duncan Dr Duncan Sheehan Postgraduate Admissions Officer Norwich Law School University of East Anglia Norwich NR4 7TJ United Kingdom > -----Original Message----- > From: Enrichment - Restitution & Unjust Enrichment Legal Issues > [mailto:ENRICHMENT@LISTS.MCGILL.CA]On Behalf Of Lionel Smith > Sent: Monday, April 05, 2004 2:40 PM > To: ENRICHMENT@LISTS.MCGILL.CA > Subject: [RDG:] Natural Obligations > > > I post this on behalf of Hector MacQueen. I should say that I am aware > of the sense of 'natural obligation' which he describes, which also > exists in the civil law of Quebec, and was very familiar to common > lawyers at least in the days of Lord Mansfield and Sir William Evans. I > meant to suggest that as it relates to proof of undue influence, there > may be no real difference between that idea and some of the > formulations which common law courts have used. The words capture an > underlying factual idea, which can issue in more than one legal > consequence. > > Lionel > > > > Dear Lionel > > Apologies if I am coming into the middle of something here (I hadn't > been following this thread until I saw your contribution), but as I > understand "natural obligation", it means an obligation unenforceable a= s > such in law but which nonetheless may have certain secondary effects in > the law of obligations, e.g. if money is paid under a natural obligatio= n > such as a prescribed debt, it is not reclaimable as an unjustified > enrichment; and it can be used in set-off. The root is Roman law and > the concept is very familiar in continental European systems. > > Best wishes > > Hector ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Mon, 5 Apr 2004 17:01:53 -0400 Reply-To: Jason Neyers Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Jason Neyers Subject: Undue Influence and Innocent Misrepresentations Comments: To: Andrew.Dickinson@CLIFFORDCHANCE.COM MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"------------060600090500020801070504" --------------060600090500020801070504 Content-Type: text/plain; charset=3Dus-ascii; format=3Dflowed Content-Transfer-Encoding: 7bit Dear Andrew: How is explaining common mistake or frustration as a rule of law better than saying that the whole tenor of the agreement objectively interpreted is consistent with the implication that these obligations were not to bind in certain circumstances (a natural law position). More importantly, the rule of law route is a cop-out since it does not explain why there should be such a rule of law. If the best that the CA can come up with is that a rule exists because the judges said so or for some unnamed criteria of policy or fairness, then the English common law understanding of this area is quite impoverished. Andrew.Dickinson@CLIFFORDCHANCE.COM wrote: >I agree with Robert. Implied contractual terms are an unsatisfactory wa= y of >explaining frustration or common mistake (where both parties have reache= d an >objective agreement on an equal footing) (see Great Peace Shipping v. >Tsavliris [2003] QB 679, [73] (CA) ("What do these developments in the l= aw >of frustration have to tell us about the law of common mistake? First th= at >the theory of the implied term is as unrealistic when considering common >mistake as when considering frustration. Where a fundamental assumption = upon >which an agreement is founded proves to be mistaken, it is not realistic= to >ask whether the parties impliedly agreed that in those circumstances the >contract would not be binding. The avoidance of a contract on the ground= of >common mistake results from a rule of law under which, if it transpires = that >one or both of the parties have agreed to do something which it is >impossible to perform, no obligation arises out of that agreement."). > >They are an even less satisfactory way of explaining vitiating factors s= uch >as misrepresentation, duress and undue influence, where the conduct of o= ne >party (innocent or otherwise) has unbalanced the relationship in such a = way >as to justify the other being given the legal option, subject to certain >qualifications, to undo the bargain (see John Cartwright's analysis in- >"Unequal Bargaining"). Sometimes that option is exercisable unilaterall= y >(e.g. rescission at common law for fraud) and sometimes it requires the >sanction of the court (e.g. rescission in equity for undue influence). = The >remedy of rescission, in many cases, also effects restitution between th= e >parties. The idea that an implied contractual term is necessary, or >appropriate, to achieve this result over-complicates the analysis and is >reminiscent of the argument that the reversal of unjust enrichment was >itself founded on an implied contract. > >Andrew > >-----Original Message----- >From: Robert Stevens [mailto:robert.stevens@LAW.OXFORD.AC.UK] >Sent: 02 April 2004 16:56 >To: ENRICHMENT@LISTS.MCGILL.CA >Subject: Re: [RDG:] Undue Influence > > >Jason Neyers wrote: > > > >>This raises the question of why a contract can be rescinded for a mater= ial >>innocent misrepresentation. I agree the reason is not fault. But I do n= ot >> >> >agree > > >>that it has nothing to do with the implied agreement of the parties. I = see >> >> >the > > >>reason for the courts intervention, being similar to the reason the cou= rt >>intervenes (or is asked to intervene) in cases like Scott v. Coulson, B= ell >> >> >v. > > >>Lever Bros. The implied agreement/condition is that the contract is to >> >> >bind > > >>only their shared fundamental assumption is true. Hence if you would ha= ve >> >> >put > > >>the point to the parties in Redgrave v. Hurd, they would have objective= ly >>agreed that the contract was to bind only if the practice brought in L4= 00 >> >> >per > > >>year. While one may not agree with this analysis, it has a long history= : >> >> >see > > >>Grotius, The Law and War and Peace, Bk. II c.11 and the work of Peter >> >> >Benson, > > >>The Unity of Contract of Law (2001: CUP). >> >> > >I do not find this a convincing explanation as to why a misrepresentatio= n >entitles the misrepresentee to rescind. >I would be prepared to concede that where there is a common fundamental >mistake made by both parties to a contract one plausible explanation as = to >why the contract is void is that there is an implied condition precenden= t >that the agreement is not to bind. So, > >A agrees to hire B's music hall and surrounding gardens. Unknown to both= A >and B, ten minutes before the deal was struck the music hall had burnt t= o >the ground. >We might be prepared to say, on an officious bystander test, that there = is >no contract because it was an implied condition precedent that the music >hall existed. We might also be prepared to say that if the music hall bu= rnt >down ten minutes after the agreement that there was an implied condition >subsequent that the deal was to come to an end. > >There are other plausible explanations for the result that the contract = is >no longer on foot and in the context of frustration the implied conditio= n >analysis has become unfashionable. > >Where rescission for misrepresentation is concerned, the misrepresentati= on >need not be fundamental nor need it be shared. All that is necessary is = that >the misrepresentation, however minor, was in part a cause of the decisio= n to >enter into the deal (Edgington v Fitmaurice (1885) 29 ChD 459). > >A agrees to charter B's ship for six months. Wholly innocently, B >misrepresents the size of the propellor. The size of the propellor playe= d a >minor role in A's decision to hire the ship. > >As the contract is voidable, not void, the implied term would have to be >something like: > >"If either party misrepresents to the other, regardless of fault, a matt= er >material to the other's entering into the contract, this shall entitle t= he >other party to avoid the deal.' > >I don't think myself that such an impled term passes the officious bysta= nder >test. If we say the term is implied by law, rather than fact, we just ge= t >back to asking why the law should imply such a term. > >It seems to me that a better explanation is that the misrepresentee's >consent has been vitiated by the misrepresentation and that this entitle= s >him to set aside the deal. If I make you a gift because of a >misrepresentation you have made to me I am entitled to recover the gift.= I >do not, myself think that this can be explained through an implied agree= ment >to return the gift. Similarly if I enter into a contract with you becaus= e of >your holding a gun to my head or because I am hopelessly dependent upon = you, >I can avoid the deal. I don't think that this is because of any implied >agreement that I am entitled to do so. > >RS > >____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email > . > > >******* > >This message and any attachment are confidential and may be privileged o= r otherwise protected from disclosure. If you are not the intended recip= ient, please telephone or email the sender and delete this message and an= y attachment from your system. If you are not the intended recipient you= must not copy this message or attachment or disclose the contents to any= other person. > >For further information about Clifford Chance please see our website at = http://www.cliffordchance.com or refer to any Clifford Chance office. > >____________________________________________________________________ > This message was delivered through the Restitution Discussion Group, > an international internet LISTSERV devoted to all aspects of the law > of unjust enrichment. To subscribe, send "subscribe enrichment" in > the body of a message to . To unsubscribe, > send "signoff enrichment" to the same address. To make a posting to > all group members, send to . The list is > run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email > . > > -- Jason Neyers January Term Director Assistant Professor of Law Faculty of Law University of Western Ontario N6A 3K7 (519) 661-2111 x. 88435 --------------060600090500020801070504 Content-Type: text/html; charset=3Dus-ascii Content-Transfer-Encoding: 7bit Dear Andrew:

How is explaining common mistake or frustration as a rule of law b= etter than saying that the whole tenor of the agreement objectively interpreted is consistent with the implication that these obligations were not to bin= d in certain circumstances (a natural law position). More importantly, the rule of law route is a cop-out since it does not explain why there should be such a rule of law. If the best that the CA can come up with is that a rule exists because the judges said so or for some unnamed criteria of po= licy or fairness, then the English common law understanding of this area is qu= ite impoverished.

Andrew.Dickinson@CLIFFORDCHANCE.COM wrote:
I agree with Robert.  Implied contractual terms are an u=

nsatisfactory way of

explaining frustration or common mistake (where both parties have reached=

 an

objective agreement on an equal footing) (see Great Peace Shipping v.

Tsavliris [2003] QB 679, [73] (CA) ("What do these developments in the la=

w

of frustration have to tell us about the law of common mistake? First tha=

t

the theory of the implied term is as unrealistic when considering common

mistake as when considering frustration. Where a fundamental assumption u=

pon

which an agreement is founded proves to be mistaken, it is not realistic =

to

ask whether the parties impliedly agreed that in those circumstances the

contract would not be binding. The avoidance of a contract on the ground =

of

common mistake results from a rule of law under which, if it transpires t=

hat

one or both of the parties have agreed to do something which it is

impossible to perform, no obligation arises out of that agreement.").



They are an even less satisfactory way of explaining vitiating factors su=

ch

as misrepresentation, duress and undue influence, where the conduct of on=

e

party (innocent or otherwise) has unbalanced the relationship in such a w=

ay

as to justify the other being given the legal option, subject to certain

qualifications, to undo the bargain (see John Cartwright's analysis in-

"Unequal Bargaining").  Sometimes that option is exercisable unilaterally

(e.g. rescission at common law for fraud) and sometimes it requires the

sanction of the court (e.g. rescission in equity for undue influence).  T=

he

remedy of rescission, in many cases, also effects restitution between the

parties.  The idea that an implied contractual term is necessary, or

appropriate, to achieve this result over-complicates the analysis and is

reminiscent of the argument that the reversal of unjust enrichment was

itself founded on an implied contract.



Andrew



-----Original Message-----

From: Robert Stevens [mailto:robert.stevens@LAW.OXFORD.AC.U

K]

Sent: 02 April 2004 16:56

To: ENRICHMENT@LISTS.MCGILL.CA

Subject: Re: [RDG:] Undue Influence





Jason Neyers wrote:



  
This raises the question of why a contract can be resc=

inded for a material

innocent misrepresentation. I agree the reason is not fault. But I do not

    
agree

  
that it has nothing to do with the implied agreement o=

f the parties. I see

    
the

  
reason for the courts intervention, being similar to t=

he reason the court

intervenes (or is asked to intervene) in cases like Scott v. Coulson, Bel=

l

    
v.

  
Lever Bros.  The implied agreement/condition is that t=

he contract is to

    
bind

  
only their shared fundamental assumption is true. Henc=

e if you would have

    
put

  
the point to the parties in Redgrave v. Hurd, they wou=

ld have objectively

agreed that the contract was to bind only if the practice brought in L400

    
per

  
year. While one may not agree with this analysis, it h=

as a long history:

    
see

  
Grotius, The Law and War and Peace, Bk. II c.11 and th=

e work of Peter

    
Benson,

  
The Unity of Contract of Law (2001: CUP).

    


I do not find this a convincing explanation as to why a misrepresentation

entitles the misrepresentee to rescind.

I would be prepared to concede that where there is a common fundamental

mistake made by both parties to a contract one plausible explanation as t=

o

why the contract is void is that there is an implied condition precendent

that the agreement is not to bind. So,



A agrees to hire B's music hall and surrounding gardens. Unknown to both =

A

and B, ten minutes before the deal was struck the music hall had burnt to

the ground.

We might be prepared to say, on an officious bystander test, that there i=

s

no contract because it was an implied condition precedent that the music

hall existed. We might also be prepared to say that if the music hall bur=

nt

down ten minutes after the agreement that there was an implied condition

subsequent that the deal was to come to an end.



There are other plausible explanations for the result that the contract i=

s

no longer on foot and in the context of frustration the implied condition

analysis has become unfashionable.



Where rescission for misrepresentation is concerned, the misrepresentatio=

n

need not be fundamental nor need it be shared. All that is necessary is t=

hat

the misrepresentation, however minor, was in part a cause of the decision=

 to

enter into the deal (Edgington v Fitmaurice (1885)  29 ChD 459).



A agrees to charter B's ship for six months. Wholly innocently, B

misrepresents the size of the propellor. The size of the propellor played=

 a

minor role in A's decision to hire the ship.



As the contract is voidable, not void, the implied term would have to be

something like:



"If either party misrepresents to the other, regardless of fault, a matte=

r

material to the other's entering into the contract, this shall entitle th=

e

other party to avoid the deal.'



I don't think myself that such an impled term passes the officious bystan=

der

test. If we say the term is implied by law, rather than fact, we just get

back to asking why the law should imply such a term.



It seems to me that a better explanation is that the misrepresentee's

consent has been vitiated by the misrepresentation and that this entitles

him to set aside the deal. If I make you a gift because of a

misrepresentation you have made to me I am entitled to recover the gift. =

I

do not, myself think that this can be explained through an implied agreem=

ent

to return the gift. Similarly if I enter into a contract with you because=

 of

your holding a gun to my head or because I am hopelessly dependent upon y=

ou,

I can avoid the deal. I don't think that this is because of any implied

agreement that I am entitled to do so.



RS



____________________________________________________________________

 This message was delivered through the Restitution Discussion Group,

 an international internet LISTSERV devoted to all aspects of the law

 of unjust enrichment. To subscribe, send "subscribe enrichment" in

 the body of a message to . To uns=

ubscribe,

 send "signoff enrichment" to the same address. To make a posting to

 all group members, send to . =

The list is

 run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email

 .





*******



This message and any attachment are confidential and may be privileged or=

 otherwise protected from disclosure.  If you are not the intended recipi=

ent, please telephone or email the sender and delete this message and any=

 attachment from your system.  If you are not the intended recipient you =

must not copy this message or attachment or disclose the contents to any =

other person.



For further information about Clifford Chance please see our website at <=

a class=3D"moz-txt-link-freetext" href=3D"http://www.cliffordchance.com">=

http://www.cliffordchance.com or refer to any Clifford Chance office.



____________________________________________________________________

 This message was delivered through the Restitution Discussion Group,

 an international internet LISTSERV devoted to all aspects of the law

 of unjust enrichment. To subscribe, send "subscribe enrichment" in

 the body of a message to . To uns=

ubscribe,

 send "signoff enrichment" to the same address. To make a posting to

 all group members, send to . =

The list is

 run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email

 .

  

--

Jason Neyers

January Term Director

Assistant Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435 

--------------060600090500020801070504-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Tue, 6 Apr 2004 00:37:07 +0100 Reply-To: James Shirley Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: James Shirley Subject: rule of law/implied term MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----=3D_NextPart_000_0000_01C41B6F.4A3AE4F0" This is a multi-part message in MIME format. ------=3D_NextPart_000_0000_01C41B6F.4A3AE4F0 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit The answer to the last point made is surely this: the "rule of law" explanation is better than the implied term explanation because the latte= r suggests that the justification for the doctrines of innocent mistake/frustration is that they give effect to what the parties implicit= ly intended and are therefore important for the same reasons as other rules = of law justified in that way. The thing is that if we are wrong then there is a danger that those doctrines will develop away from their proper justification and fulfill their purposes less well. The doctrines of innocent mistake et al are justified not by a need to gi= ve effect to the intentions of the parties but by other important values: efficiency, substantive equality etc. While it is true that the value of the principle that we should uphold wh= at the parties intended can itself only be explained by reference to efficiency, autonomy etc, we need to recognise those situations in which = we are *not* giving effect to those values just to the extent that they fav= our the enforcement of agreements but to other extents and in their capacity = as values supporting other principles (such as the principle that no man sho= uld profit from his own wrong for example). Any notion that giving effect to these values is making decisions "for so= me unnamed criteria of policy or fairness" would be radically false: these values can be difficult to articulate and identify but they have names an= d it seems to me only go "unnamed" when judges pretend that doctrines such = as those discussed here can be explained in terms of contractual intention. ------=3D_NextPart_000_0000_01C41B6F.4A3AE4F0 Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable
The answer to the last point= =3D made is=3D20 surely this: the "rule of law" explanation is better than the implied =3D term=3D20 explanation because the latter suggests that the justification for the =3D doctrines=3D20 of innocent mistake/frustration is that they give effect to what the =3D parties=3D20 implicitly intended and are therefore important for the same reasons as =3D other=3D20 rules of law justified in that way.
 
The thing is that if we are wrong= =3D then there=3D20 is a danger that those doctrines will develop away from their =3D proper=3D20 justification and fulfill their purposes less well.
 
The doctrines of innocent mistake= =3D et al are=3D20 justified not by a need to give effect to the intentions of the parties =3D but by=3D20 other important values: efficiency, substantive=3D20 equality etc.
 
While=3D20 it is true that the value of the principle that we should uphold what =3D the=3D20 parties intended can itself only be explained by reference =3D to efficiency,=3D20 autonomy etc, we need to =3D recognise=3D20 those situations in which we are *not*  giving effect to those =3D values just=3D20 to the extent that they favour the enforcement of agreements but to =3D other=3D20 extents and in their capacity as values supporting other principles =3D (such as the=3D20 principle that no man should profit from his own wrong for=3D20 example).
 
Any notion that giving effect to = =3D these=3D20 values is making decisions "for some unnamed criteria of policy or =3D fairness"=3D20 would be radically false: these values can be difficult to articulate =3D and=3D20 identify but they have names and it seems to me only go "unnamed" when =3D judges=3D20 pretend that doctrines such as those discussed here can be explained in =3D terms of=3D20 contractual intention.
------=3D_NextPart_000_0000_01C41B6F.4A3AE4F0-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Tue, 6 Apr 2004 00:42:41 +0100 Reply-To: James Shirley Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: James Shirley Subject: Rule of law/implied term MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"----=3D_NextPart_000_0006_01C41B70.11865580" This is a multi-part message in MIME format. ------=3D_NextPart_000_0006_01C41B70.11865580 Content-Type: text/plain; charset=3D"iso-8859-1" Content-Transfer-Encoding: 7bit **A slightly corrected version of my last post: The answer to the last point made is surely this: the "rule of law" explanation is better than the implied term explanation because the latte= r suggests that the justification for the doctrines of innocent mistake/frustration is that they give effect to what the parties implicit= ly intended and are therefore important for the same reasons as other rules = of law justified in that way. The thing is that if we are wrong then there is a danger that those doctrines will develop away from their proper justification and fulfill their purposes less well. The doctrines of innocent mistake et al are justified not by a need to gi= ve effect to the intentions of the parties but by other important values: efficiency, substantive equality etc. While it is true that the value of the principle that we should uphold wh= at the parties intended can itself only be explained by reference to efficiency, autonomy etc, we need to recognise those situations in which = we are *not* giving effect to those values just to the extent that they fav= our the intentions of the parties but to other extents and in their capacity = as values supporting other principles (such as the principle that no man sho= uld profit from his own wrong for example). Any notion that giving effect to these values is making decisions "for so= me unnamed criteria of policy or fairness" would be radically false: these values can be difficult to articulate and identify but they have names an= d it seems to me only go "unnamed" when judges pretend that doctrines such = as those discussed here can be explained in terms of contractual intention. ------=3D_NextPart_000_0006_01C41B70.11865580 Content-Type: text/html; charset=3D"iso-8859-1" Content-Transfer-Encoding: quoted-printable
**A slightly=3D20 corrected version of my last post:
 
The answer to the last point= =3D made is=3D20 surely this: the "rule of law" explanation is better than the implied =3D term=3D20 explanation because the latter suggests that the justification for the =3D doctrines=3D20 of innocent mistake/frustration is that they give effect to what the =3D parties=3D20 implicitly intended and are therefore important for the same reasons as =3D other=3D20 rules of law justified in that way.
 
The thing is that if we are wrong= =3D then there=3D20 is a danger that those doctrines will develop away from their =3D proper=3D20 justification and fulfill their purposes less well.
 
The doctrines of innocent mistake= =3D et al are=3D20 justified not by a need to give effect to the intentions of the parties =3D but by=3D20 other important values: efficiency, substantive=3D20 equality etc.
 
While=3D20 it is true that the value of the principle that we should uphold what =3D the=3D20 parties intended can itself only be explained by reference =3D to efficiency,=3D20 autonomy etc, we need to =3D recognise=3D20 those situations in which we are *not*  giving effect to those =3D values just=3D20 to the extent that they favour the intentions of the parties but = =3D to other=3D20 extents and in their capacity as values supporting other principles =3D (such as the=3D20 principle that no man should profit from his own wrong for=3D20 example).
 
Any notion that giving effect to = =3D these=3D20 values is making decisions "for some unnamed criteria of policy or =3D fairness"=3D20 would be radically false: these values can be difficult to articulate =3D and=3D20 identify but they have names and it seems to me only go "unnamed" when =3D judges=3D20 pretend that doctrines such as those discussed here can be explained in =3D terms of=3D20 contractual intention.
------=3D_NextPart_000_0006_01C41B70.11865580-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D Date: Wed, 7 Apr 2004 11:06:13 -0400 Reply-To: axelrod Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: axelrod Subject: [rdg]: undue influence MIME-Version: 1.0 Content-Type: multipart/alternative; boundary=3D"------------030401040903080301050801" --------------030401040903080301050801 Content-Type: text/plain; charset=3Dus-ascii; format=3Dflowed Content-Transfer-Encoding: 7bit > > - > From: allan axelrod > > > > ----- Original Message ----- > From: Jason Neyers > To: ENRICHMENT@LISTS.MCGILL.CA > Sent: Monday, April 05, 2004 5:01 PM > Subject: [RDG:] Undue Influence and Innocent Misrepresentations > > Dear Andrew: > > How is explaining common mistake or frustration as a rule of law > better than saying that the whole tenor of the agreement > objectively interpreted is consistent with the implication that > these obligations were not to bind in certain circumstances (a > natural law position). More importantly, the rule of law route is > a cop-out since it does not explain why there should be such a > rule of law. If the best that the CA can come up with is that a > rule exists because the judges said so or for some unnamed > criteria of policy or fairness, then the English common law > understanding of this area is quite impoverished. > =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D > from AA: describing the excuse for mistake or overreaching as > a rule of law is a statement that on certain factual > circumstances, an otherwise okay contract will not be enforced: > for prediction purposes it is unnecessary to consider why > non-enforcement follows from mistake or over-reaching > > however, if one wishes to explain why the law-giver gave the > rule for mistake/overreaching, a possible explanation is > implied mutual intent and the higher rule that contract > enforcement is to serve intention. but only if the law-maker has > some empirical foundation for a particular implied intent > [implausible as a mutual intent in the overreaching case] is that > intent an explanation: if the lawmaker implies the intent not > because he believes it to be true, but because he wishes it were > true [ a natural law position?] or wishes that he could think of > another contract excuse, the intent thus imputed is not an > explanation but the beginning of another inquiry??? > > > --------------030401040903080301050801 Content-Type: text/html; charset=3Dus-ascii Content-Transfer-Encoding: 7bit


 
-
= From: allan axelrod

 
----- Original Message -----
Sent: Monday, April 05, 2004 5:01 PM
Subject: [RDG:] Undue Influence and Innocent Misrepresentations

Dear Andrew:

How is explaining common mistake or frustration as a rule of law better than saying that the whole tenor of the agreement objectively i= nterpreted is consistent with the implication that these obligations were not to bind in certain circumstances (a natural law position). More important= ly, the rule of law route is a cop-out since it does not explain why there should be such a rule of law. If the best that the CA can come up with is that a rule exists because the judges said so or for some unnamed c= riteria of policy or fairness, then the English common law understanding of th= is area is quite impoverished.
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D =3D=3D=3D=3D=3D= =3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D

from AA:    describing  = ;the  excuse for mistake or overreaching as a rule of law is a statement that on certain factua= l circumstances, an otherwise okay contract will not be enforced:  = for prediction purposes it is unnecessary   to consider why non-enforcement= follows from mistake or over-reaching
    ho= wever, if one wishes to explain why the law-giver gave the rule for mistake/overreachi= ng, a possible explanation is implied mutual intent and the higher rule= that contract enforcement is to serve intention.  but only if the= law-maker has some empirical foundation for a particular implied intent [implaus= ible as a mutual intent in the overreaching case] is that intent an explanation:  if the lawmaker implies = the intent not because he believes it to be true, but  because he wishes it = were true [ a natural law position?] or wishes that he could think of anoth= er contract excuse,  the intent thus imputed is not an exp= lanation but the beginning of another inquiry???
 

--------------030401040903080301050801-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . ======================================================================= == Date: Fri, 23 Apr 2004 14:18:21 -0400 Reply-To: Lionel Smith Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Lionel Smith Subject: Garland v Consumers Gas Mime-Version: 1.0 (Apple Message framework v613) Content-Transfer-Encoding: 7bit Content-Type: text/plain; charset=US-ASCII; format=flowed Yesterday the SCC released Garland v Consumers Gas, which was first mentioned on the RDG in Nov 98, following the case's first trip to the SCC. That Oct 98 decision was to the effect that late payment penalties collected by the regulated utility defendant were criminally unlawful. Despite that, on the remission of the case, the trial judge and Ont CA said there could still not be restitution. The SCC has overturned that: http://www.lexum.umontreal.ca/csc-scc/en/rec/html/2004scc025.wpd.html The court has decided that the way of the future for Canada is a modified juristic reason approach. The plaintiff must show that there is no established juristic reason for the enrichment. Then a prima facie case is made out, and the burden shifts to the defendant to show why there should not be restitution. Strangely, the court held that restitution is available only for payments made after the litigation was commenced in 1994. There are also comments on the defence of change of position (not available to a wrongdoing defendant, in this case, violation of criminal law). In general, the analysis is on the brief side. Lionel ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . ======================================================================= == Date: Thu, 29 Apr 2004 09:26:22 +0100 Reply-To: Andrew Tettenborn Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Andrew Tettenborn Subject: Niru 2 Mime-Version: 1.0 Content-Type: multipart/alternative; boundary="=====================_2231593==.ALT" --=====================_2231593==.ALT Content-Type: text/plain; charset="us-ascii"; format=flowed Niru 2 was decided in the CA yesterday (see [2004] EWCA Civ 487). To recap (v briefly). Niru pay out by mistake on a letter of credit relating to unavailable goods to CAI, a bank. They sue the bank for repayment, and also sue SGS, who certified that the goods were available, for negligence. In Niru 1, held that both CAI and SGS are liable, and that CAI doesn't have a defence of change of position. Hence judgment given against CAI and SGS jointly and severally. SGS pay the judgment and in Niru 2 seek from CAI (a) subrogation to Niru's rights against SGS, (b) recoupment from CAI, (c) contribution from CAI. The judge says they succeed on (a) but not (b) or (c). Both sides appeal. Held: (1) SGS can have subrogation, as decided below. (2) SGS could also have had recoupment, reversing the judge. (3) Probably SGS could have had contribution on the basis of Friends Provident v Hillier Parker. Although Royal Brompton cast doubt on Friends Provident, these doubts were obiter, and the CA pro tem remains bound by Friends Provident. Sedley went further and said he actually liked the result in FP. Happy days Andrew Andrew Tettenborn MA LLB Bracton Professor of Law Tel: 01392-263189 / +44-392-263189 (international) Cellphone: 07729-266200 / +44-7729-266200 (international) Fax: 01392-263196 / +44-392-263196 (international) Snailmail: School of Law, University of Exeter, Amory Building, Rennes Drive, Exeter EX4 4RJ England [School homepage: http://www.ex.ac.uk/law/ ] [My homepage: http://www.ex.ac.uk/law/staff/tettenborn/index.html]. --=====================_2231593==.ALT Content-Type: text/html; charset="us-ascii" Niru 2 was decided in the CA yesterday (see [2004] EWCA Civ 487).

To recap (v briefly). Niru pay out by mistake on a letter of credit relating to unavailable goods to CAI, a bank. They sue the bank for repayment, and also sue SGS, who certified that the goods were available, for negligence. In Niru 1, held that both CAI and SGS are liable, and that CAI doesn't have a defence of change of position. Hence judgment given against CAI and SGS jointly and severally.

SGS pay the judgment and in Niru 2 seek from CAI (a) subrogation to Niru's rights against SGS, (b) recoupment from CAI, (c) contribution from CAI. The judge says they succeed on (a) but not (b) or (c). Both sides appeal.


Held:

(1) SGS can have subrogation, as decided below.
(2) SGS could also have had recoupment, reversing the judge.
(3) Probably SGS could have had contribution on the basis of Friends Provident v Hillier Parker. Although Royal Brompton cast doubt on Friends Provident, these doubts were obiter, and the CA pro tem remains bound by Friends Provident. Sedley went further and said he actually liked the result in FP.

Happy days

Andrew


Andrew Tettenborn MA LLB
Bracton Professor of Law


Tel:           & nbsp;           01392-263189   /   +44-392-263189 (international)
Cellphone:             07729-266200   /   +44-7729-266200 (international)
Fax:           & nbsp;           01392-263196    /   +44-392-263196 (international)

Snailmail:    School of Law,
             ;       University of Exeter,
             ;       Amory Building,
             ;       Rennes Drive,
             ;       Exeter EX4 4RJ
             ;       England

             ;       [School homepage: http://www.ex.ac.uk/law/ ]
             ;       [My homepage:
             ;         http://www.ex.ac.uk/law/staff/tettenborn/index.html].
--=====================_2231593==.ALT-- ____________________________________________________________________ This message was delivered through the Restitution Discussion Group, an international internet LISTSERV devoted to all aspects of the law of unjust enrichment. To subscribe, send "subscribe enrichment" in the body of a message to . To unsubscribe, send "signoff enrichment" to the same address. To make a posting to all group members, send to . The list is run by Lionel Smith of McGill University, tel. (+1) 514 398 6635, email . ======================================================================= == Date: Thu, 29 Apr 2004 12:32:03 -0400 Reply-To: Lionel Smith Sender: Enrichment - Restitution & Unjust Enrichment Legal Issues From: Lionel Smith Subject: Understanding Unjust Enrichment, edited by Neyers, McInnes and Pitel Mime-Version: 1.0 (Apple Message framework v613) Content-Type: multipart/mixed; boundary=Apple-Mail-3--277575470 --Apple-Mail-3--277575470 Content-Type: multipart/alternative; boundary=Apple-Mail-4--277575469 --Apple-Mail-4--277575469 Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset=WINDOWS-1252; format=flowed A new book, which will be of interest to the members of the RDG, Lionel > Now published! > > Understanding Unjust Enrichment > Edited by Jason Neyers, Mitchell McInnes and Stephen Pitel > This book is a collection of articles based on Understanding Unjust=20= > Enrichment, a symposium held at the University of Western Ontario in=20= > January 2003. The articles, written from the perspective of English,=20= > Australian, Canadian, German and Jewish law, deal with numerous=20 > theoretical and practical issues that surround restitution and unjust=20= > enrichment. The articles outline recent developments across the=20 > Commonwealth, explain the unjust enrichment principle and its=20 > component parts, and address discrete issues such as tracing, choice=20= > of law, disgorgement damages for breach of contract, and the use of=20 > unjust enrichment in the cohabitation context. The contributors are=20 > Kit Barker, Peter Benson, Jeffrey Berryman, Michael Bryan, Andrew=20 > Burrows, Robert Chambers, Gerald Fridman, Peter Jaffey, Dennis=20 > Klimchuk, Thomas Krebs, John McCamus, Mitchell McInnes, Stephen Pitel,=20= > Stephen Waddams and Ernest Weinrib. > > Jason W. Neyers is an Assistant Professor of Law at the University of=20= > Western Ontario. > Mitchell McInnes is an Associate Professor of Law at the University=20= > of Western Ontario and a member of the Alberta Bar. > Stephen G.A. Pitel, is an Assistant Professor of Law at the=20 > University of Western Ontario and a member of the Ontario Bar. > > 20/04/04=A0=A0 234 x 156mm=A0 430pp > Hardback=A0=A0 1-84113-423-6=A0=A0 =A342.00=A0 / =8063.00=A0 = Discount=A0rate to e-mail=20 > list subscribers: =A337.80/ =8056.70 > http://www.hart.oxi.net/bookdetails.asp?id=3D581&bnd=3D0 > > To order at the discount rate, just complete the enclosed form and=20 > return to us by mail or fax (we do not recommend that you e-mail your=20= > credit card details to us, as this is not secure).=A0 If you have any=20= > queries, please do not hesitate to contact me. > > <> > > With good wishes, > > Jane Parker > Hart Publishing Ltd > Salters Boatyard > Folly Bridge > Abingdon Road > Oxford OX1 4LB > UK > Tel: +44 1865 245533 > Fax: +44 1865 794882 > Website http://www.hartpub.co.uk > > If you would like to be removed from this list at any time, just reply=20= > to this message with =93unsubscribe=94 typed in the subject box. --Apple-Mail-4--277575469 Content-Transfer-Encoding: quoted-printable Content-Type: text/enriched; charset=WINDOWS-1252 A new book, which will be of interest to the members of the RDG, Lionel ArialNow published!=20 ArialUnderstanding Unjust Enrichment=20 ArialEdited by Jason Neyers, Mitchell McInnes and Stephen Pitel=20 ArialThis book is a collection of articles based on Understanding Unjust Enrichment, a symposium held at the University of Western Ontario in January 2003. The articles, written from the perspective of English, Australian, Canadian, German and Jewish law, deal with numerous theoretical and practical issues that surround restitution and unjust enrichment. The articles outline recent developments across the Commonwealth, explain the unjust enrichment principle and its component parts, and address discrete issues such as tracing, choice of law, disgorgement damages for breach of contract, and the use of unjust enrichment in the cohabitation context. The contributors are Kit Barker, Peter Benson, Jeffrey Berryman, Michael Bryan, Andrew Burrows, Robert Chambers, Gerald Fridman, Peter Jaffey, Dennis Klimchuk, Thomas Krebs, John McCamus, Mitchell McInnes, Stephen Pitel, Stephen Waddams and Ernest = Weinrib. ArialJason W. Neyers is an Assistant Professor of Law at the University of Western Ontario.=20 ArialMitchell McInnes is an Associate Professor of Law at the University of Western Ontario and a member of the Alberta Bar.=20 ArialStephen G.A. Pitel, is an Assistant Professor of Law at the University of Western Ontario and a member of the Ontario Bar. Arial = Narrow8080,0000,000020/04/04=A0= A0 234 x 156mm=A0 430pp=20 Arial = Narrow8080,0000,0000Hardback=A0= A0 1-84113-423-6=A0=A0 =A342.00=A0 / =8063.00=A0 = Arial = Narrow8080,0000,0000Discount=A0r ate= to e-mail list subscribers: =A337.80/ = Arial = Narrow8080,0000,0000=805 6.7= 0=20 = Arial0000,0000,FFFFhttp://www.hart.oxi.net/bookdetails.asp?id=3D581&bnd=3D0=20 ArialTo order at the discount rate, just complete the enclosed form and return to us by mail or fax (we do not recommend that you e-mail your credit card details to us, as this is not secure).=A0 If you have any queries, please do not hesitate to contact me. Arial <<<>=20 ArialWith good wishes,=20 = Arial0000,0000,FFFFJane Parker=20 = Arial0000,0000,FFFFHart Publishing Ltd=20 = Arial0000,0000,FFFFSalters Boatyard=20 = Arial0000,0000,FFFFFolly Bridge=20 = Arial0000,0000,FFFFAbingdon Road=20 = Arial0000,0000,FFFFOxford OX1 4LB=20 = Arial0000,0000,FFFFUK=20 = Arial0000,0000,FFFFTel: +44 1865 245533=20 = Arial0000,0000,FFFFFax: +44 1865 794882=20 = Arial0000,0000,FFFFWebsite = Arial0000,0000,FFFFhttp://www.hartpub.co.uk=20 ArialIf you would like to be removed from this list at any time, just reply to this message with =93unsubscribe=94 typed in the subject box. = --Apple-Mail-4--277575469-- --Apple-Mail-3--277575470 Content-Transfer-Encoding: base64 Content-Type: application/msword; x-unix-mode=0666; name="Discount Order Form.doc" Content-Disposition: attachment; filename="Discount Order Form.doc" 0M8R4KGxGuEAAAAAAAAAAAAAAAAAAAAAPgADAP7/CQAGAAAAAAAAAAAAAAABAAAANwAAAAA AAAAA 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