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RDG
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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."
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