| |
|Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 at 714C-715C: |
|Lord BW: He disagrees with the decision in Chase => it was based on a concept of retaining an equitable property in |
|money where, prior to the payment to the recipient bank, there was no existing equitable interest => I cannot |
|understand how the recipient's "conscience" can be affected at a time when he is not aware of any mistake => the judge |
|found that the law of England and that of New York were in substance the same. WRONG: NYC uses a remedial CT whereas |
|English law only recognises an institutional CT |
| |
|Banner Homes Group plc v Luff Developments Ltd [2000] Ch 372: P and D agreed informally that neither would bid for a plot |
|of land. D then did so and P claimed that D held it on trust for both of them. CA allowed P’s claim, saying that where |
|there was an arrangement as to the purchase of property between potential rivals, to give rise to a constructive trust it |
|was necessary to establish either advantage to the acquiring party or detriment to the non-acquiring party. The agreement |
|didn’t have to be enforceable, but it was essential that the circumstances made it inequitable for the acquiring party to |
|retain the property. |
| |
|Chadwick LJ: There are situations in which equity will impose a constructive trust on property acquired by one person, say|
|"A," in furtherance of some pre-acquisition arrangement or understanding with another, say "B," that, upon the acquisition|
|of the property by A in circumstances in which B kept out of the market, B would be granted some interest in the property.|
|Requirements: (1) an arrangement; (2) The agreement contemplated the possibility of one party acquiring the property and |
|that if he did so then the other party would take an interest; (3) The acquiring party didn’t inform the other one in time|
|to enable it to take part in the bid; (4) Unconscionability, defined here as the “existence of the advantage to the one |
|[party], or detriment to the other, gained or suffered as a consequence of the arrangement”. |
|Why does a CT arise here? This situation has nothing to do with property rights- the courts are effectively using a |
|remedial constructive trust without admitting it. Also this will encourage companies not to bother with binding |
|agreements, which is the proper way to deal with such a situation. |
|Chase Manhattan Bank v Israel-British Bank [1981] Ch 105: A New York
