Equity - 1995

Equity. See also Trusts

These cases are extracted from a very large database. The entries on that database are now being published individually to the main swarb.co.uk website in a much improved form. As cases are published here, the entry here will be replaced by a link to the same case in that improved form on swarb.co.uk. In addition the swarb.co.uk site includes very substantial numbers of cases after 2000. Please take the time to look.  

This page lists 18 cases, and was prepared on 19 May 2014. These case are being transferred one by one to the main swarb.co.uk site which presents them better, with links to full text where we have it, and much improved cross referencing.
El Ajou -v- Dollar Land Holdings Plc [1995] 2 All ER 213
Robert Walker J
Equity Casemap

The tracing of assets into the hands of a third party depends upon a notional charge. There are no inflexible rules. The essential elements of 'knowing receipt' are: "For this purpose the plaintiff must show, first, a disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the defendant of assets which are traceable as representing assets of the plaintiff; and thirdly, knowledge on the part of the defendant that the assets he received are traceable to a breach of fiduciary duty." The successful completion of a tracing exercise may be preliminary to a personal claim.
Castle Phillips Finance -v- Piddington [1995] 1 FLR 783
Sir John May, McCowan LJ, McCowan LJ
Land, Equity Casemap

The wife charged the matrimonial home to Lloyds to secure the husband's indebtedness. The husband subsequently agreed with Barclays for the indebtedness to be refinanced. The husband and an accomplice forged her signature on a transfer of the matrimonial home into joint names and on a remortgage. When Barclays pressed for repayment, the husband applied to the claimant, which agreed to make a loan. The claimants' loan was applied in paying off the husband's indebtedness to Barclays, including that part of Barclays' indebtedness which arose from its having paid off Lloyds. The husband defaulted in repaying the claimant's loan, and the claimant commenced proceedings against the husband and the wife claiming possession of the matrimonial home on the basis that it was entitled to be subrogated to Barclays. The judge held that Barclays was entitled by subrogation to the Lloyds charge and that the wife was bound in respect of so much of the secured indebtedness under the Barclays charge as derived from the payment by Barclays to discharge the Lloyds charge. She appealed, saying the conditions for subrogation were not satisfied. The claimant contended that it was entitled to be subrogated to the Lloyds charge in respect of the sum paid to Barclays out of the claimant's loan. Counsel for the claimant submitted that, under the principle of subrogation, the claimant was entitled to step into the shoes of Barclays, which (to the extent of £4735.39) was in turn entitled to step into the shoes of Lloyds and thus to enforce the Lloyds charge. Held: That submission was accepted. Subrogation "embraces more than a single concept in English law". "I do not think it is open to this court to reinterpret the Butler v. Rice line of authorities in the way which [counsel for the wife] would have us do in the light of the approval of the broad principle laid down in such cases and approved in decisions binding on us. I feel it right to add that for my part, given that the court in a case like the present is having to choose between allocating a loss, either to the innocent mortgagor or to the innocent provider of the moneys, I do not regard it as unjust that in accordance with Butler v. Rice the loss should fall on the mortgagor who otherwise takes a windfall benefit. I say that despite the fact that, as [counsel for the wife] rightly stressed, the wife in the present case had no contract with [the claimant], was not the principal debtor, knew nothing of the transaction under which [the claimant] lent money to the husband and has never ratified the discharge of the mortgage on the property. [Counsel for the wife] also advanced the further argument that it would be an unwarranted extension of the Butler v. Rice principle if [the claimant] were to be held entitled to step into the shoes of Lloyds by what he called sub-subrogation. For my part, I see no conceptual difficulty in this. As the judge held, Barclays was entitled to the Lloyds security by subrogation when Barclays discharged the debt to Lloyds, thinking that it was to obtain an effective security for its own money. When [the claimant] discharged the debt to Barclays, thinking that it was obtaining an effective security for its own money, it became entitled to the same security as Barclays [had]. I would, therefore, hold that by subrogation [the claimant] became entitled to the same security as that held by Barclays, [that] is to say the Lloyds charge." The court rejected the argument advanced on behalf of the claimant based on imputed consent on the part of the wife.
South Tyneside Metropolitan BC -v- Svenska International plc; 1995
Boustany -v- Piggott; PC 1995
Racal Group Services Limited -v- Ashmore [1995] STC 1151
Peter Gibson LJ
Equity Casemap

The company had covenanted to pay an annual sum to charity. Since the last payment under the covenant was to be made less than three years after the execution of the deed, an intended tax advantage was not secured. Held: The company's appeal failed, and the court denied rectification, on the footing that the company had failed to establish to the required standard that the covenant did not give effect to its true intention. Peter Gibson LJ approved a statement as to rectification in Snells Equity: "What is rectified is not a mistake in the transaction itself, but a mistake in the way in which transaction has been expressed in writing".
Tsb Bank Plc -v- Camfield
18 Jan 1995
A court is not able to impose conditions for granting equitable relief.
Morgan Guaranty Trust Co of New York -v- Lothian Regional Council 1995 SLT 299; 1995 SC 151
19 Jan 1995
Lord Hope of Craighead
Equity, Scotland Casemap

Money paid under error in law is repayable according to equity, and without statutory authority on the ground of unjustified enrichment.
Halifax Building Society -v- Brown and Another; Raphael Jorn Helmsley Ltd -v- Same; CA 08-Feb-1995
Langton -v- Langton and Another [1995] 2 FLR 890
24 Feb 1995
Equity, Undue Influence Casemap

The doctrine of 'unconscionable bargain' does not extend to gifts obtained by undue influence.
Commission for the New Towns -v- Cooper (Great Britain) Ltd, (Formerly Coopind UK Ltd); CA 04-Mar-1995
Boscawen and Others -v- Bajwa and Others; Abbey National Plc -v- Boscawen and Others [1996] 1 WLR 328; [1995] EWCA Civ 15
10 Apr 1995
Millett LJ, Stuart-Smit LJ, Millet LJ
Equity, Trusts Casemap

1 Citers
The defendant had charged his property to the Halifax. Abbey supplied funds to secure its discharge, but its own charge was not registered. It sought to take advantage of the Halfax's charge. Held: A mortgagee whose loan is used to repay another charged debt is subrogated to that debt, and can rely on that charge. Millett LJ: "If the plaintiff succeeds in tracing his property, whether in its original or in some changed form, into the hands of the defendant, and overcomes any defences which are put forward on the defendant's behalf, he is entitled to a remedy. The remedy will be fashioned to the circumstances. The plaintiff will generally be entitled to a personal remedy; if he seeks a proprietary remedy he must usually prove that the property to which he lays claim is still in the ownership of the defendant. If he succeeds in doing this the court will treat the defendant as holding the property on a constructive trust for the plaintiff and will order the defendant to transfer it in specie to the plaintiff. But this is only one of the proprietary remedies which are available to a court of equity. If the plaintiff's money has been applied by the defendant, for example, not in the acquisition of a landed property but in its improvement, then the court may treat the land as charged with the payment to the plaintiff of a sum representing the sum by which the value of the defendant's land has been enhanced by the use of the plaintiff's money. And if the plaintiff's money has been used to discharge a mortgage on the defendant's land, then the court may achieve a similar result by treating the land as subject to a charge by way of subrogation in favour of the plaintiff."
Link[s] omitted
McGrath -v- Wallis
12 Apr 1995
The presumption of advancement is now to be seen as a doctrine of last resort.
Style Financial Services Ltd -v- Bank of Scotland (Scotland)
23 May 1995
Sums received as agent but paid in overdrawn account are untraceable.
Halifax Building Society -v- Thomas and Another; CA 29-Jun-1995
Midland Bank -v- Cooke and Another; CA 13-Jul-1995
First National Bank Plc -v- Thompson; CA 25-Jul-1995
Tribe -v- Tribe [1996] Ch 107; [1995] 3 WLR 913; [1995] EWCA Civ 20
26 Jul 1995
Millett LJ
Equity, Company Casemap

The plaintiff held 499 of the 500 issued shares of a company. In 1986 he wished to retire and transferred 30 shares to his son, one of four children, who was to take over the business. In 1988 he was worried about a bill for dilapidations and to safeguard his position and with the intention of defrauding his creditors, he transferred the remaining shares. The judge found that the father and the son had agreed that the shares would be held on trust for the father pending the settlement of the dilapidation claims. Held: The illegal (but unused) purpose of a gift was admitted as evidence to rebut the presumption of advancement.
Millett LJ "But it does not follow that subsequent conduct is necessarily irrelevant. Where the existence of an equitable interest depends upon a rebuttable presumption or inference of the transferor's intention, evidence may be given of the subsequent conduct in order to rebut the presumption or inference which would otherwise be drawn." and
“In my opinion the following propositions represent the present state of the law. (1) Title of property passes both at law and in equity even if the transfer is made for an illegal purpose. The fact that title has passed to the transferee does not preclude the transferor from bringing an action for restitution. (2) The transferor’s action will fail if it would be illegal for him to retain any interest in the property. (3) Subject to (2) the transferor can recover the property if he can do so without relying on the illegal purpose. This will normally be the case where the property was transferred without consideration in circumstances where the transferor can rely on an express declaration of trust or a resulting trust in his favour. (4) It will almost invariably be so where the illegal purpose has not been carried out. It may be otherwise where the illegal purpose has been carried out and the transferee can rely on the transferor’s conduct as inconsistent with his retention of a beneficial interest. (5) The transferor can lead evidence of the illegal purpose whenever it is necessary for him to do so provided that he has withdrawn from the transaction before the illegal purpose has been wholly or partly carried into effect. It will be necessary for him to do so (i) if he brings an action at law or (ii) if he brings proceedings in equity and needs to rebut the presumption of advancement. (6) The only way in which a man can protect his property from his creditors is by divesting himself of all beneficial interest in it. Evidence that he transferred the property in order to protect it from his creditors, therefore, does nothing by itself to rebut the presumption of advancement; it reinforces it. To rebut the presumption it is necessary to show that he intended to retain a beneficial interest and conceal it from his creditors. (7) The court should not conclude that this was his intention without compelling circumstantial evidence to this effect. The identity of the transferee and the circumstances in which the transfer was made would be highly relevant. It is unlikely that the court would reach such a conclusion where the transfer was made in the absence of an imminent and perceived threat from known creditors.”
Link[s] omitted
Brinks Ltd -v- Abu-Saleh and Others (No 3) [1996] CLC 133
23 Oct 1995
Rimer J
1 Cites
1 Citers
A person must know of the existence of an obligation of trust to be liable as an accessory to an act in breach of that trust. A person cannot be liable for dishonest assistance in a breach of trust unless he knows of the existence of the trust or at least the facts giving rise to the trust.