The difficulty with these (re-) interpretations of Shell UK v Total UK is

that the court seem to think that the cause of action is that of the

beneficiaries, not the trustee. The requirement of joining the trustee is

seen as a technical one [142]. So, the court don't think it is a case of

the trustee recovering losses suffered by someone else, but of the

beneficiaries claiming in their own right.

Now, the original source of the problem seems to me to be the decision

that there can only be four joint tenants following the 1925 Law of

Property Act. For myself (and I know this is controversial) I don't think

that reform was ever justifiable. So, in this case the only reason why

they did not have legal title was because they were prevented by the

legislation. So, the merits do seem to be with the claimants.

That said, I think it is wrong in allowing for consequential loss suffered

by the beneficiaries to be actionable (as is, for example, Norsk also

wrong). The cases cited don't support this step. The decision of the CA in

MCC v Lehman doesn't seem to be considered. The dismissal of the argument

for the contrary result as "legalistic" [132] is not a highpoint of the

common law.

Maybe, maybe, we can stretch the cases which allow for recovery by the

rightholder of losses suffered by a third party. That isn't what the CA

did here though.

Rob

> Are the issues raised when the trustee sues on behalf of a beneficiary

> not much the same as those in relational economic loss as in Canadian

> National Railway Co. v. Norsk Pacific Steamship Co. [1992] 1 S.C.R.

> 1021; 91 D.L.R. (4th) 289, or in the assignment and "black hole" cases

> like Linden Gardens Trust Ltd. v. Lenesta Sludge Disposals Ltd. et al.;

> St. Martins Property Corp. Ltd. v. Sir Robert McAlpine & Sons Ltd.,

> [1994] 1 A.C. 85, [1993] 3 All E.R. 417, Darlington Borough Council v.

> Wiltshier Northern Ltd. [1995] 3 All E.R. 895, [1995] 1 W.L.R. 68 (C.A.)

> and Panatown Ltd. v. Alfred McAlpine Construction Ltd., [2001] 1 A.C.

> 518, at 529, [2000] 4 All E.R. 97, at 106 (H.L.)?

>

>

>

> Angela Swan

>

>

>

> -----Original Message-----

> From: Jason Neyers [mailto:jneyers@uwo.ca]

> Sent: April 1, 2010 10:17 AM

> Cc: ODG

> Subject: ODG: Beneficial owners

>

>

>

> Dear All:

>

>

>

> This discussion has raised an interesting issue (for me at least). Why

> is a trustee allowed to obtain damages representing the consequential

> losses of the beneficial owners?  Is he or she really getting

> consequential damages or are the damages more like substitutive damages

> (if we use Rob's terminology). I don't know the answer, because I just

> don't know the cases.

>

>

>

> If it truly is the case that this is what a trustee can do (i.e. get

> someone else's consequential losses), then it does seem to be form over

> substance to not let the beneficial owner sue directly.

>

>

>

> Cheers,

>

>

>

> Jason Neyers

>

> Associate Professor of Law

>

> Faculty of Law

>

> University of Western Ontario

>

> N6A 3K7

>

> (519) 661-2111 x. 88435

>

>

>

>

>

>

>

> Lionel Smith, Prof. wrote:

>

>> 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

>

>>

>

>>

>

>

--

Robert Stevens

Professor of Commercial Law

University College London