Restitution Discussion Group Archives
| Sender: |
Charles Mitchell |
| Date: |
Mon, 23 Oct 2006 12:25:00 +0100 |
| Re: |
Charter plc v City Index Ltd [2006] EWHC 2508 (Ch) |
Dear Charles,
I absolutely accept that claims for
money paid by mistake and for payment of debts weren't meant to be,
and aren't, covered by the 1978 Act. But I'm not sure the claim for
knowing receipt can be lumped together with them. As regards mistaken
payments and claims in debt it is simply beside the point that the claimant
suffered a reduced loss, or no loss at all. Not so, I suggest, with
knowing receipt. Suppose in Target Holdings v Redferns [1996]
AC 421 the money wrongly paid away by the solicitors had passed through
the hands of some party X, and X (having paid it away) had been sued
for knowing receipt. It seems self-evident that if the solicitors could
pray in aid the fact that the claimants' loss had not been caused by
their paying the money to X, X must be allowed to say the same about
his receiving it from them.
If so, then whatever noises people
may make about restitution, I think that in this connection we're talking
about liability for damage of the kind the 1978 Act was meant to address.
Dear Andrew
I'm afraid I have some problems with this. For the reasons
set out in Hayton & Marshall at 707-711 (following Lord Millett and
Steven Elliott) Lord B-W made a false move when he dragged causation into
Target as the claim made against the trustee was not wrong-based.
But even if that were not so, I still wouldn't agree that it is 'self-evident'
that a knowing recipient should escape liability because the trustee who
has paid him can rely on a causation argument to escape his own liability
to the beneficiaries. One might as well say that the recipient of a mistaken
payment should not have to repay the money because a solicitor who carelessly
advised the mistaken payor to pay the money is not liable in negligence
because the payor would have paid the money anyway. Whether or not the
solicitor's negligence causes the payor's loss, the payor is still out
of pocket, and the recipient correspondingly enriched, as a result of
the payor's mistake. The recipient must repay regardless of the solicitor's
position. Why is this not also true of the knowing recipient?
Best wishes
Charles
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