82,964
edits
Lloyds Bank v Independent Insurance: Difference between revisions
Lloyds Bank v Independent Insurance (view source)
Revision as of 13:45, 20 February 2021
, 20 February 2021no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 34: | Line 34: | ||
'''[[Ostensible authority]]''': If not, actual authority, did the bank have [[ostensible authority]]? This is a tricky area and Lord Justice Peter Gibson, realising he did not ''have to'' address this question, preferred not to. Discretion is the better part of valour, and all. | '''[[Ostensible authority]]''': If not, actual authority, did the bank have [[ostensible authority]]? This is a tricky area and Lord Justice Peter Gibson, realising he did not ''have to'' address this question, preferred not to. Discretion is the better part of valour, and all. | ||
'''[[Restitution]]''': If Lloyds had ''any'' kind of [[authority]], could it claim ''restitution'' of the mistaken payment? | '''[[Restitution]]''': If Lloyds had ''any'' kind of [[authority]], could it claim ''restitution'' of the mistaken payment? Here, the Court of Appeal unanimously agreed it could not, and pointed to the famous “condition 2(b)” articulated by Robert Goff J in {{Casenote|Barclays Bank Ltd|WJ Simms}}: | ||
{{Quote|“(2) [''A claim for [[restitution]]''] may however fail if [...] (b) the payment is made for good [[consideration]], in particular if the money is paid to discharge and does discharge a [[debt]] owed to the payee (or a [[principal]] on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt”}} | |||
Lloyds had made the rather careful argument that, whether or not it was authorised to make the payment, Independent would be receive a “windfall” enrichment at Lloyd’s expense, since the effect of authorisation would be to discharge the debt. Enrichment, yes; “unjustified”, no: this was no windfall, but the satisfaction of a debt. Nor was Lloyds’ without ''legal'' remedy: as they had acted within their mandate, Lloyds had a claim, in the form of their overdraft, against WF.<ref>That WF might not be able to ''pay'' it, meaning they were short of a ''factual'' remedy, is beside the point. This the the business as usual risk that a bank takes on, and can guard against by not advancing funds against uncleared payments.</ref> | |||
It is true that there is an ''economic'' argument here, which Robert Goff adverted to in Barclays: | |||
{{Quote|“It is, of course, true that the mistake was entirely of the Plaintiffs’ making and that the Defendants were not at fault in any way in accepting or indeed for the time being seeking to retain the payment; ''on the other hand, the Defendants were prepared to extend credit to WF by appointing them as their agents and by allowing them to collect premium, whereas the Plaintiffs had never been prepared to have WF as a debtor''.<ref>Emphasis added.</ref> Moreover, if the Defendants are entitled to retain the payment, it may properly be regarded as a windfall: had the Plaintiffs not made the mistake which they did, the Defendants would have been left to their remedies against WF ...”}} | |||
In {{Casenote|Barclays Bank Ltd|WJ Simms}} Robert Goff J had found there was no actual authority and the bank’s payment ''did not'' discharge the debt in question. There, restitution ''was'' available, not being defeated by Condition 2(b). Here it was not. | |||
{{sa}} | {{sa}} | ||
* [[Discharge-for-value defense]] | |||
*[https://www.bailii.org/ew/cases/EWCA/Civ/1998/1853.html Judgment transcript] | *[https://www.bailii.org/ew/cases/EWCA/Civ/1998/1853.html Judgment transcript] | ||
*{{casenote|Citigroup|Brigade Capital Management}} | *{{casenote|Citigroup|Brigade Capital Management}} | ||
*{{casenote|Barclays Bank Ltd|WJ Simms}} | *{{casenote|Barclays Bank Ltd|WJ Simms}} | ||
{{ref}} | {{ref}} | ||