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Category: Subrogation

Properly distributing the burden of a debt, and the actual and presumed intentions of the parties: non-theories, theories and meta-theories of subrogation

13 January, 202518 January, 2025
| 1 Comment
| Restitution, Subrogation

Feet in the shoes of anotherBy means of the doctrine of subrogation, one person is substituted for another in the exercise of that other’s rights against a third person. In an oft-repeated (if not always apt) metaphor, the person receiving the benefit of subrogation is said to stand in the shoes of the other as against the third party (eg, Patten v Bond (1889) 60 LT 583 (Ch) 585 (Kay J); In re Bell Lines Ltd [2006] IEHC 188 (28 April 2006) (Dunne J); Lowick Rose LLP v Swynson Ltd [2018] AC 313, [2017] UKSC 32 (11 April 2017) [62] (Lord Mance)). However, the shoes are sometimes an imperfect, even an uncomfortable, fit. So, in Banque Financière de la Cité v Parc (Battersea) Ltd [1999] AC 221, [1998] UKHL 7 (26 February 1998) Lord Hoffmann commented that “the subject of subrogation is bedevilled by problems of terminology and classification which are calculated to cause confusion”, and a great many academic and judicial computer screens have been filled in seeking to allay that confusion. Now comes news of another labourer in the vineyard: Rory Gregson Subrogation and Marshalling (Hart Publishing, 2024); and a very welcome addition to the literature it is too. I am grateful to Hart Publishing for providing me with a pdf download to review here.…

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Subrogation – and liens, charges, and other securities – after Promontoria (Oyster) DAC v Kean [2023] IECA 181 (17 July 2023)

22 July, 202312 November, 2024
| 2 Comments
| Restitution, Subrogation

Oysters and GuinnessThe regular reader (thank you!) of this blog will know that I like to add an image at the start of most posts. Sometimes, it takes a while to find something appropriate. When searching for a suitable image for Promontoria (Oyster) DAC v Kean [2023] IECA 181 (17 July 2023), I was reminded that oysters and a pint or two of guinness are a perfect combination. Hence today’s image. As to the case that inspired it, in Promontoria (Oyster) DAC v Kean (noted here), [Kean], Pilkington J in the Court of Appeal, (Costello and Butler JJ concurring), held that the abolition of the creation of security over registered lands by the deposit of a land certificate did not abolish other forms of equitable security.

The time-honoured practice by which security over registered lands could be created by the deposit of a land certificate had been given statutory recognition by section 81 of the Local Registration of Title (Ireland) Act, 1891 and section 105 of the Registration of Title Act, 1964 (also here). However, section 73 of the Registration of Deeds and Title Act 2006 (also here) abolished this practice with effect from 31 December 2009. Any lien by means of holding a land certificate ceased to exist after that date (Promontoria (Oyster) DAC v Hannon [2020] 1 IR 364, [2019] IESC 49 (04 June 2019) confirmed the end of the lien), unless – pursuant to the transitional provision in section 73(3) of the 2006 Act – it was registered as a burden pursuant to section 69 of the 1964 Act (also here).…

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Restitution of mistaken payments, again: Chase quickly recovers $50billion; while Citibank eventually recovers (a mere) $500million, defeating defences of “discharge for value”

13 September, 202229 July, 2024
| 1 Comment
| Mistaken payments, Restitution, Restitution, Subrogation

RepaymentIn my previous post, I looked at Foris GFS Australia Pty Ltd v Manivel [2022] VSC 482 (26 August 2022), in which cryptocurrency trading platform Crypto.com accidentally transferred Aus$10.5m [€7.35m; US$7m; St£6.3m] to an Australian customer when processing an Aus$100 [€70; US$67; St£60] refund, by mistakenly entering her account number into the “payment amount” field. Elliott J held that part of the proceeds could be traced into a property gifted by the customer to her sister, who held the property on trust for the payor.

In this post, I want to look at two other computer-enhanced mistakes. The first is almost unbelievable:

Dad becomes 25th richest man in world after €45 billion lands in account after bank error

A family were made multi billionaires when a banking mishap saw [US$50 billion] €45 billion deposited into one lucky dad’s account, momentarily making him the 25th richest man in the world. … [He] was alerted to the huge sum by his staggered wife, …

The dad-of-two, from Louisiana in the US, … admitted to what had happened and arranged for the money to go back to its rightful owner. … When he alerted [his bank] Chase, they immediately began work to get the funds back, but never said where the money came from, or how the error came about.

…

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The varieties of subrogation

17 August, 201220 July, 2023
| No Comments
| Restitution, Subrogation

By means of the doctrine of subrogation, one person is substituted for another in the exercise of that other’s rights against a third person. In particular, it is the process by which one party is substituted for another so that the first party may enforce that other’s rights against a third party. Mark Leeming (Faculty of Law, University of Sydney) has just published “Subrogation, Equity and Unjust Enrichment” as Sydney Law School Research Paper No 12/52 on SSRN. It is a version of his paper in Glister and Ridge (eds) Fault Lines in Equity (Hart Publishing, Oxford, 2012) 27-43 (collecting the papers from the symposium “Comparative Perspectives on Equity” held at the University of Sydney on 14 December 2010). This is the abstract:

Is “unjust enrichment” merely a unifying theme, or is it something more, a legal norm in its own right capable of supplying answers to particular cases? Or, if that is a false distinction, and indeed “unjust enrichment” may be either, then what approach is more likely to result in a legal system whose operation is clear, certain and coherent? This paper is directed to those questions. It notes the highly divergent approaches to a single doctrine – subrogation – in the House of Lords and the High Court of Australia, with a view to evaluating which mode of reasoning leads to clarity, transparency and coherence.

…

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Subrogation, shipping, and unjust enrichment

18 October, 201022 July, 2023
| 1 Comment
| Restitution, Subrogation

Cheltenham & Gloucester storefront 2007In an earlier post, I discussed the subrogation claim in Bell Lines v Waterford Multiport Ltd [2006] IEHC 188 (28 April 2006) (Dunne J) rvsd [2010] IESC 15 (18 March 2010). My basic point was that subrogation arises for all sorts of reasons. As Lord Diplock put it in Orakpo v Manson Investments [1978] AC 95, followed in this respect by Neuberger LJ in Cheltenham & Gloucester Plc v Appleyard [2004] EWCA Civ 291 (15 March 2004) [32], it “embraces more than a single concept”. Apart from the insurance context where it is largely a matter of contract, several reasons have been proferred to explain when subrogation arises by operation of law.

For example, (i) it can reverse unjust enrichment; (ii) it arises on “well settled established principles and in defined circumstances”; (iii) it will be applied when “reason and justice” demand that it should be; (iv) it reflects the presumed or actual intention of the parties; and (v) it is all simply a matter of discretion. It is unlikely that a single over over-arching theory will explain the whole field. Instead, subrogation is a rather protean doctrine, founded upon many different principles. As a consequence, it is likely that unjust enrichment is simply the theoretical foundation of one facet of the doctrine of subrogation rather than for the whole ambit of the doctrine.…

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Shipping and subrogation

13 October, 201024 July, 2023
| 3 Comments
| Restitution, Subrogation

Bell Lines logo, via flagspot.netBy means of the doctrine of subrogation, one person is substituted for another in the exercise of that other’s rights against a third person. In particular, it is the process by which one party is substituted for another so that the first party may enforce that other’s rights against a third party. In the classic triangular fact pattern, it arises where a creditor has rights against a debtor, the third party pays the creditor, and is then subrogated to the rights of the creditor against the debtor. In Bell Lines v Waterford Multiport Ltd [2006] IEHC 188 (28 April 2006) rvsd [2010] IESC 15 (18 March 2010), unemployment agencies in the UK paid various entitlements to UK-based employees of an Irish company in liquidation, and successfully sought to be subrogated to those employees’ preferential claims against the company in the Irish liquidation.

The litigation raises, but does not answer, some rather profound questions about the nature of subrogation. In Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221, [1998] UKHL 7 (26 February 1998) and Bofinger v Kingsway (2009) 239 CLR 269, [2009] HCA 44 (13 October 2009), the House of Lords and the High Court of Australia took different approaches to the relationship of unjust enrichment and subrogation (see my previous posts).…

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Subrogation and unjust enrichment – hunting the snark

20 October, 200924 July, 2023
| 4 Comments
| High Court of Australia, Restitution, Subrogation

The Hunting of the SnarkThe Hunting of the Snark is a nonsense poem written by Lewis Carroll subtitled An Agony in 8 Fits. In Fit 6, the Barrister dreams that the eponymous Snark serves as counsel for the defence, finds the verdict as the jury, and passes sentence as the judge. Perhaps it is fitting then to observe that, by way of update to yesterday’s post about Bofinger v Kingsway Group Limited (2009) 239 CLR 269, [2009] HCA 44 (13 October 2009), Legal Eagle on SkepticLawyer characterises the judgment as “yet another snark at unjust enrichment”. True, but reaffirming a light approach to the “unifying legal concept” of unjust enrichment is not necessarily a bad thing, even if the tone is indeed unnecessarily snarky. She does concede that, “to give the High Court credit where credit is due, it gives reasoned arguments for rejecting the Banque Financière decision (see Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221; [1998] UKHL 7 (26 February 1998)). It would sound quite reasonable if it weren’t for the usual snark beforehand” (given my views in my earlier post, it’s no surprise that I agree with her here). Her snark is that the Court does not provide similarly reasoned arguments for what she sees as negative knee-jerk responses to unjust enrichment reasoning.…

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Subrogation and unjust enrichment in the High Court of Australia

19 October, 200924 July, 2023
| 3 Comments
| High Court of Australia, Restitution, Subrogation

Blofeld + Goldfinger = Bofinger
By means of the doctrine of subrogation, one person is substituted for another in the exercise of that other’s rights against a third person. In the classic triangular fact pattern, it arises where a creditor has rights against a debtor, and the plaintiff is subrogated to the rights of the creditor against the debtor. It is a doctrine which admits of many possible explanations. For example, on the view taken by Meagher, Gummow & Lehane, subrogation largely follows a similar pattern in a series of otherwise unconnected islands: they are content to set out the categories, which, for them, are not closed, and to conclude that there are no universally applicable criteria for the intervention of equity in such cases. On another view of subrogation, taken by Hedley, and by Lord Salmon in Orakpo v Manson Investments [1978] AC 95 (HL), there are some relatively loose connections between the specific contexts but only at an abstract level: Hedley argues for a broad general principle that (subject to defences) the plaintiff can exercise whatever rights the creditor would, but for the plaintiff’s payment, have had against the debtor; whilst Lord Salmon argued for an “entirely empirical … principle … that the doctrine will be applied only when the courts are satisfied that reason and justice demand that it should be”.…

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Hi there! Thanks for dropping by. I’m Eoin O’Dell, and this is my blog: Cearta.ie – the Irish for rights.


“Cearta” really is the Irish word for rights, so the title provides a good sense of the scope of this blog.

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