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Sender:
Robert Stevens
Date:
Wed, 11 Aug 1999 09:43:45 +0100
Re:
Change of Position

 

In Amoco v TGTL the Court of Appeal refused to allow the defence of change of position to be invoked. The CATS parties built a pipeline for gas. Before the pipeline had been built they entered into an agreement with TGTL by which TGTL reserved part of the capacity of the pipeline for themselves. TGTL were obliged to pay in instalments for the capacity reserved from the commencement date, April Fool's day 1993, regardless of whether they used the pipe. The price of gas fell sharply in 1994. TGTL wanted to get out of the deal. TGTL started paying from 1 April 1993 but stopped at the end of September 1994 arguing that the date for commencement had not begun. They argued that the pipeline was not ready for use and that no monies were consequently due. Before Langley J. this argument was rejected but the CA allowed TGTL's appeal and ordered CATS to repay the money paid under mistake. CATS argued change of position. If they had known that the pipeline was not ready or if TGTL had refused to pay the instalments they would have quickly insured that the pipeline was ready so that payments became payable.

Tuckey L.J. rejected the change of position defence as "the change of position must relate to the receipt of money" and that the CATS parties had merely "mistakenly believed that they had complied with the contract when they had not."

Comments anyone?


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