Another Tale of Two Toms – Restitution of Mistaken Payments, and Interceptive Subtraction, again – updated

Toms: Holland/er

Actor Tom Hollander (imdb | wikipedia | image source) told an anecdote to Seth Meyers on the Late Night tv show (geoblocked NCB clip | YouTube clip), about when he received a bonus payslip meant for actor Tom Holland (imdb | wikipedia | image source). At the time, the two actors shared an agent, who obviously mixed up his own clients, so it’s not a surprise that the rest of us do too. For example, after the casting of Captain America: Civil War (2016 | imdb) was announced, I thought it was a brave decision to have Mr Collins play Spiderman! Hollander’s story relates to one of Holland’s subsequent outings as Spiderman. Hollander told Meyers that he got an email containing Holland’s first box office bonus payslip for The Avengers: Infinity War (2018 | imdb). Hollander said that it was for an “astonishing amount of money”.

Writing in The Guardian, Stuart Heritage commented that this is “a nice little insight into the world where there are too many famous Toms with similar surnames”. Indeed, not only are there too many Toms with the same surnames, sometimes they receive each other’s money, not merely the payslip. I’ve blogged about one such example, where Florida golfer Thomas Fleetwood received British golfer Tommy Fleetwood’s winnings for a twelfth place finish in the 2018 Open golf championship. In my post, I explained how, where such payments are misdirected, they can be recovered either by the payor or by the intended payee. So, if Tom Hollander had tried to retain Tom Holland’s bonus, not only could the agent have sued to recover it, but SpiderMan would (in the alternative) also have been able to sue Mr Collins to recover it too.

Update (31 January 2024 and 4 March 2024): writing on Twitter, @SpinningHugo commented:

It is extremely unlikely indeed that the intended payee has a claim against the recipient. That was always the case, but is now even clearer in the UK following the UKSC decision in ITC. Birks’ examples of “interceptive subtraction” all had specific rationales.

Given that the misdirected Holland/er payment seems to have happened in England, this is an important objection, but I don’t think it’s necessarily fatal to SpiderMan’s claim against Mr Collins.

First, a superb discussion of the alternative specific rationales that may underlie Birks’ examples of interceptive subtraction is to be found in Lionel Smith “Three-party restitution: a critique of Birks’s theory of interceptive subtraction” (1991) 11 Oxford Journal of Legal Studies 481. Birks’ reply is at Peter Birks “At the Expense of the Claimant: Direct and Indirect Enrichment in English Law” (2000) Oxford University Comparative Law Forum 1.

Second, Hugo refers to “the UKSC decision in ITC“; that is a reference to Revenue and Customs v The Investment Trust Companies [2018] AC 275, [2017] UKSC 29 (11 April 2017). In an earlier blogpost on this point (to which this post is merely an updating footnote), I read Lord Reed (at [46]-[51]) in that case, and Lords Sumption and Mance in the subsequent Lowick Rose LLP v Swynson Ltd [2018] AC 313, [2017] UKSC 32 (11 April 2017) (at [20], [58]-[68]), as deciding that, whilst there must be some transactional connnection between the two parties, this does not always need be a direct transfer from plaintiff to defendant, and that the relevant connection might include a series of closely connected transactions. Similarly, Andrew Burrows “‘At the Expense of the Claimant’: A Fresh Look” [2017] Restitution Law Review 167 (SSRN) points out that, in ITC, Lord Reed’s essential starting point is that there has to be a direct transfer of value from the plaintiff to the defendant, and that most of the exceptions to the ‘direct transfer’ rule can be analysed as situations where there is the equivalent of a direct transfer. In ITC itself, the defendants’ enrichment was not at the expense of the plaintiffs because there was no transfer of value by the plaintiffs to the defendants. There was a transfer of value from the plaintiffs to third parties, and a subsequent transfer of value from the third parties to the defendant, but this did not amount to a transfer from the plaintiffs to the defendants. In particular, it did not amount, in reality, to a single scheme through a series of connected transactions (as Lord Reed in ITC (at [63]-[66]) explained the result in (the difficult) Menelaou v Bank of Cyprus UK Ltd [2016] AC 176, [2015] UKSC 66 (4 November 2015)). Nor were the payments in Lowick Rose v Swynson closely connected in reality.

Hugo is clearly taking a tight reading of these cases, focussing perhaps on the requirement that the series of connected transactions must have been intended to function as one composite transaction. If so, then this focus would clearly exclude interceptive subtraction by unintended misdirection as a sufficient connection. However, whilst Burrows also takes a narrow reading of ITC, he accepts (as he must, given that this is what Lord Reed says) that, to the general rule that only direct providers can claim restitution, there are some exceptions where the circumstances can be regarded as the equivalent of a direct transfer. Closely connected transactions can plainly amount to the equivalent of a direct transfer, and that is the question that was at issue in Menelaou (where the transactions were sufficiently closely connected), ITC (where the transactions were unconnected), and Lowick Rose (same). But the structures of the claims at issue in those cases are very different from that at issue here. And my point in the earlier blogpost was that, if English law does not always require a direct transfer rule, and can accommodate a series of closely connected transactions, then it can also accommodate the principle of interceptive subtraction. So, I don’t think that either ITC or Lowick Rose has necessarily closed the door to interceptive subtraction. In particular, in Burrows’ language, the question is whether that situation can be regarded as the equivalent of a direct transfer. And that point remains to be decided.

Third, even if ITC or Lowick Rose could be said to have closed that door as a matter UK law, this isn’t necessary the position elsewhere in the common law world. For example, the Supreme Court of Canada has expressly adopted Birks’ approach (see LAC Minerals v International Corona Resources [1989] 2 SCR 574, 669-670, (1989) 61 DLR (4th) 14, 45, 1989 CanLII 34 (SCC) (11 August 1989) (La Forest J)). And there are many Irish and US cases in my last blogpost that are not as easily explained away as the English cases in Smith’s paper.