Equity - 1995

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This page lists 18 cases, and was prepared on 28 October 2012.

El Ajou -v- Dollar Land Holdings Plc [1995] 2 All ER 213
1995 ChD Robert Walker J	Equity	Casemap 1 Cites 1 Citers
	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
1995 CA Sir John May, McCowan LJ, McCowan LJ	Land, Equity	Casemap 1 Cites 1 Citers
	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] 1 All ER 545
1995	Equity	Casemap 1 Cites 1 Citers
	The question was asked as to whether an anticipatory change of position could support a defence to a claim for restitution: "save perhaps in exceptional circumstances, the defence of change of position is in principle confined to changes which take place after receipt of the money … It does not however follow that the defence of change of position can never succeed where the alleged change occurs before the receipt of the money."

Boustany -v- Piggott [1995] 69 P&CR 298
1995 PC Lord Templeman	Contract, Equity	Casemap 1 Cites 1 Citers
	In discussing what was said to be unconscionable contract, the Board accepted that "It is not sufficient to attract the jurisdiction of equity to prove that a bargain is hard, unreasonable or foolish; it must be proved to be unconscionable, in the sense that "one of the parties to it has imposed the objectionable terms in a morally reprehensible manner, that is to say in a way which affects his conscience"

Racal Group Services Limited -v- Ashmore [1995] STC 1151
1995 CA Peter Gibson LJ	Equity	Casemap 1 Citers
	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 CA	Equity
	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 IHCS 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
8 Feb 1995 CA	Equity
	A gift of a deposit to a Husband and Wife buying a house can operate to give the Wife an equity against the Building Society lender even though house was purchased only in the husband's name.

Langton -v- Langton and Another [1995] 2 FLR 890
24 Feb 1995 ChD	Equity, Undue Influence	Casemap 1 Citers
	The doctrine of 'unconscionable bargain' does not extend to gifts obtained by undue influence.

Commissioner for the New Towns -v- Cooper (Great Britain) Ltd, (Formerly Coopind Uk Ltd) [1995] 2 All ER 929; [1995] Ch 259; [1995] 26 EG 129
4 Mar 1995 CA Stuart-Smith LJ, Evans LJ, Farquharson LJ	Land, Contract, Equity	Casemap 1 Citers
	The trial judge had dismissed a claim for rectification on the basis that the defendant hoped and suspected, but did not know, of the relevant mistake by the plaintiff. Held: Rectification was ordered because the defendant had sought to mislead the plaintiff into making the relevant mistake, the plaintiff had in fact made it, and this was sufficiently unconscionable conduct on the part of the defendant to render it liable to rectification. The deliberate attempt to hide the other's mistake made the contract unenforceable. An offer and acceptance of a land contract may not be by letter. Rectification may in certain circumstances be ordered, where there has been no common mistake, but one party has proceeded on a base which the other knew to be mistaken. Where A intends B to be mistaken as to the construction of a contract and diverts B's attention from discovering the mistake by making false and misleading statements and B makes the mistake which A intends, then suspicion and not actual knowledge of the mistake is enough for rectification to be granted. Stuart-Smith LJ said: "[W]here a false representation is made for the purpose of inducing the other party to adopt a certain course of conduct and the representation is such as to influence a person behaving reasonably to adopt that course of conduct, the court should infer, in the absence of evidence to the contrary, that the representation did have that effect." and "In the case of unilateral mistake, that is to say where only one party is mistaken as to the meaning of the contract, rectification is not ordinarily appropriate. This follows from the ordinary rule that it is the objective intention of the parties which determines the construction of the contract and not the subjective intention of one of them. Also, it would generally be inequitable to compel the other party to execute a contract, which he had no intention of making, simply to accord with the mistaken interpretation of the other party: see Olympia Sauna Shipping Co SA v Shinwa Kaiun Kaisha Ltd [1985] 2 Lloyds Rep. 364, 371 per Bingham J. But the court will intervene if there are "additional circumstances that render unconscionable reliance on the document by the party who has intended that it should have effect according to its terms:" Spry, Equitable Remedies, 4th ed. (1990), p.599. The debate in this case turns on what amounts to unconscionable conduct."
	Law of Property (Miscellaneous Provisions) Act 1989 2

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 CA 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 CA	Equity
	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 IHCS	Equity
	Sums received as agent but paid in overdrawn account are untraceable.

Halifax Building Society -v- Thomas and Another [1996] Ch 217; [1995] EWCA Civ 21; [1995] 4 All ER 673; [1996] 2 WLR 63
29 Jun 1995 CA Glidewell LJ, Glidewell LJ	Equity, Damages	Casemap 1 Citers
	A Building Society cannot keep any excess proceeds of sale of a house mortgaged to it by fraud. Policy was against unjust enrichment and will not allow a lender to take a profit from a fraudulent borrower. Peter Gibson LJ said: "I remain wholly unpersuaded that in the circumstances of the present case the law should accord a restitutionary remedy to a secured creditor who has elected not to avoid the mortgage but to affirm it and has received full satisfaction thereunder. To my mind there is an inconsistency between a person being such a creditor and yet claiming more than that to which he is contractually entitled and which he has already fully recovered. Once the creditor has so elected and recovered in full, I do not see why the law should come to his aid to allow him to make a further claim. In re Simms; Ex parte Trustee [1934] Ch. 1 this court refused to allow a trustee in bankruptcy, who had elected to treat a receiver as a tortfeasor for converting to his own use the chattels of a bankrupt, to recover the profits made by the receiver as money had and received. The authority of that case is weakened by the reliance by this court on the now exploded implied promise theory, but I note that it is still cited in textbooks: see, for example, Chitty on Contracts, 27th ed. (1994), vol. 1, p. 1437, para. 29-052) and it serves to illustrate that not every action for an account of profits from a wrongdoer, even where there has been use of the plaintiff's property, will be allowed, and that it may be barred when there has been an election for another remedy. Further I am not satisfied that in the circumstances of the present case it would be right to treat the unjust enrichment of Mr. Thomas as having been gained "at the expense of" the society, even allowing for the possibility of an extended meaning for those words to apply to cases of non-subtractive restitution for a wrong. There is no decided authority that comes anywhere near to covering the present circumstances. I do not overlook the fact that the policy of law is to view with disfavour a wrongdoer benefiting from his wrong, the more so when the wrong amounts to fraud, but it cannot be suggested that there is a universally applicable principle that in every case there will be restitution of benefit from a wrong. As Professor Birks says (An Introduction to the Law of Restitution, p. 24): "there are some circumstances in which enrichment by wrongdoing has to be given up. That is, the wrong itself is not always in itself a sufficient factor to call for restitution." On the facts of the present case, in my judgment, the fraud is not in itself a sufficient factor to allow the society to require Mr. Thomas to account to it." Glidewell LJ said: "The proposition that a wrongdoer should not be allowed to profit from his wrongs has an obvious attraction. The further proposition, that the victim or intended victim of the wrongdoing, who has in the event suffered no loss, is entitled to retain or recover the amount of the profit is less obviously persuasive." and "In order to succeed in this appeal, Mr. Waters is required to establish that the second proposition is correct, and that English law provides a mechanism by which it can be given effect. Despite his able argument, I cannot discern that there is any such general established principle. Indeed, Mr. Waters has to concede that there is no English authority upon which he can rely to establish his right to succeed either in the law of restitution, under the head of unjust enrichment, or in the law of constructive trusts. The sole American decision which appears to be directly in point, that of the U.S. District Court for the Southern District of New York in Federal Sugar Refining Co. v. United States Sugar Equalization Board (1920) 268 F. 575, is not sufficiently persuasive to secure a visa for admission into English jurisprudence. Like Judge Maddocks, in the passage from his judgment quoted by Peter Gibson L.J., I cannot conclude that the principle for which Mr. Waters contends is at present established as part of our law."
	Link[s] omitted

Midland Bank -v- Cooke and Another [1995] 4 All ER 562; [1995] 2 FLR 915
13 Jul 1995 CA Lord Justice Stuart-Smith, Lord Justice Waite and Lord Justice Schiemann	Equity, Trusts	Casemap 1 Citers
	The bank sought to enforce a charge given by the husband to secure a business loan. The property was purchased from the husband's and his family's resources and the loan, and was in his name. There had been no discussion or agreement between husband and wife at the time of the acquisition as to the basis upon which the property was held by the husband, or as to the extent of their respective beneficial interests. Held: The wife was entitled to half share in the property. She had made a contribution equal to one half of the wedding gift, had a claim under Rossett. An equal equitable interest in a home could be inferred without proof of explicit words: "I would therefore hold that positive evidence that the parties neither discussed nor intended any agreement as to the proportions of their beneficial interest does not preclude the court, on general equitable principles, from inferring one". Cash contributions were not the sole determinant of the value of a share of the equity in a home.

First National Bank Plc -v- Thompson
25 Jul 1995 CA	Equity, Registered Land, Land
	A charge executed before a purchase was 'fed' by a subsequent purchase and had priority. 'Feeding the estoppel' doctrine may apply to charges on registered land. The estoppel was fed by a later purchase without a clear recital of the title in the charge.
	Land Registration Act 1925

Tribe -v- Tribe [1996] Ch 107; [1995] 3 WLR 913; [1995] EWCA Civ 20
26 Jul 1995 CA Millett LJ	Equity, Company	Casemap 1 Citers
	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 ChD Rimer J	Equity	Casemap 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.