Dear colleagues,

Negligence

Following Lionel's point, the tortfeasor's duty of care is owed to the
trustee, not beneficiary. Thus, the tortfeasor ought to compensate the
trustee (not beneficiary) for the trustee's (not beneficiary's) loss, though
the trustee has to account to the beneficiary for the recovery.

Joining the trustee to the action allows the process to be shortcircuited.
But that is just the process; it might change the party who is paid. It
shouldn't change the amount that the tortfeasor has to fork out. What he
pays the trustee/beneficiary should be the loss suffered by the trustee (for
which the trustee accounts to the beneficiary); not the (greater) loss
suffered by the beneficiary.

Conversion

Prof Andrew Tettenborn has a piece ((1996) 55 CLJ 36) questioning a
beneficiary's right to sue in conversion (cited by the CA in MCC Proceeds v
Lehman Bros [1998] 4 All ER 675). MCC Proceeds referred to The Aliakmon
[1986] AC 785 as authority denying a beneficiary's right to sue in
negligence, and that was regarded as one of the factors for denying a
beneficiary's right to sue in conversion. Does it now mean that
beneficiaries should be allowed to sue in conversion too?

Happy holidays!

Kelry.

(Mr) Kelry C.F. Loi
Asst Prof, Faculty of Law
University of Hong Kong.

-----Original Message-----
From: Lionel Smith, Prof. [mailto:lionel.smith@mcgill.ca]
Sent: Thursday, April 01, 2010 6:18 AM
To: Jason Neyers; Colin Liew
Cc: ODG
Subject: Re: Beneficial owners can sue for negligently-caused economic loss
to property

Jason's two points are intimately linked.
The rights against rights theory says that the beneficiary's right is a
right in or against the trustee's ownership of the asset. The beneficiary
does not have any direct right against the tortfeasor, who owes a duty of
care to the trustee.
If however the trustee is joined as a party, then it becomes possible to
adjudicate his right against the tortfeasor, and also his obligation to the
beneficiary to account for the recovery to the beneficiary. If all parties
are joined, then a court can make an order that short circuits the two
claims.
Lionel


On 31-03-10 15:32 , "Jason Neyers" <jneyers@uwo.ca> wrote:

Dear Colleagues:

I was wondering if anyone had any thoughts about this case. I suppose one's
view might depend ultimately on how one views the rights enjoyed by the
equitable owner. If they are simply "rights against rights" as I have heard
argued at the various Obligations conferences, then the decision appears
wrongly decided.

I was also a little surprised with the ease that the Court of Appeal
side-stepped The Aliakmon:  what difference in justice is made when the
legal owner is joined?
Jason Neyers
Associate Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435


Colin Liew wrote:
Dear all,



The English Court of Appeal in Shell UK Ltd & Ors v Total UK Ltd & Ors
[2010] EWCA Civ 180 <http://www.bailii.org/ew/cases/EWCA/Civ/2010/180.html>
has decided (at [142]) that a duty of care is owed to a beneficial owner of
property by a defendant who can reasonably foresee that his negligent
actions will damage that property. If, therefore, such property is, in
breach of duty, damaged by the defendant, that defendant will be liable not
merely for the physical loss of that property but also for the foreseeable
consequences of that loss, such as the extra expenditure to which the
beneficial owner is put or the loss of profit which he incurs. Provided that
the beneficial owner can join the legal owner in the proceedings, it does
not matter that the beneficial owner is not himself in possession of the
property.




The appeal arose out of the 2005 Buncefield fire where, due to the
negligence of Total (as found by David Steel J in March 2009), substantial
damage was caused to the Hertfordshire Oil Storage Terminal. At issue in
this appeal, however, was whether Shell could claim damages against Total in
respect of economic losses caused to it as beneficial owner of land and
facilities at Buncefield.




Regards,

Colin