Armstrong v Winnington Networks.

Harris
Joffe
There were two claims, as distinguished in Foskett and per Dr Smith
Proprietary Restitution
Claim at Common Law (B)
Personal claim parasitic on the
prior violation of a proprietary
right,
Vindication of property rights
Requires
(1)D in receipt of property
(2) that belonged to C.

Claim in restitution for unjust

enrichment (A)
Based upon the notion that the
defendant has been enriched at the
claimants expense and should so
disgorge the profits.
Reversal of unjust enrichment.
Requires
(1)D has been enriched (2) at
Cs expense

NOT concerned about

showing that the defendant
has been enriched. He could
have paid full sum and still be
required to return the property
Winnington.

NOT concerned about showing that

the property in the hands of the
defendant is a traceable substitute.
The passing of BO to the defendant
is no defence. Indeed it founds the
claim.

Equitys darling.

Change of position

The question here was one of following the EUAs, but then tracing
into the proceeds as substitutes for the property the claimants
initially held.
Lipkin Gorman
1. Based on tracing. The firm sought to trace it original property
subsisting in th echoes in action constituted by its bank
balance into the cash Cass obtained as the proceeds of the
cheque written in his favour by the Casino.
2. Special on the basis that the contractual dealings between
Cass and the Club were void ab initio as they were gambling
contracts. The club gave no consideration, and Lord
Templeman held that had this not been the case there would
have been no action in unjust enrichment at all because there
would have been no enrichment.
3. It was a case of proprietary restitution claim at common
law. Goff was at pains to stress that the Solicitors retained
legal title throughout (possible as the money held for Cass by
the Casino was in a separate current account). Foskett said
so. So did Beldam LJ in Jones v Jones.
Jones v Jones

1. Based on common law. The plaintiffs retained title and the

defendant never acquired legal title or equitable title (she was
no constructive trust in her favour). The appropriate cause of
action was an action for debt against Raphaels bank.
Foskett v McKeown.
(1)Cf. table.
(2)Although he was talking about equitable rights, they apply
with equal force to the enforcement of legal rights in property.
(Winnington)
Concludes that there is such a common law claim to proprietary
restitution> BUT it does not apply to chattels and land (as tort of
conversion covers this). It is not the same as money had and
received as it can also apply to choses in action (as on the facts of
Jones v Jones) In other words, if the legal title remains vested with
the claimant a proprietary restitutionary claim at common law is
available in respect of receipt by the defendant of a chose in action.
Unjust Enrichment Claim
No claim as the defendants had not been enriched at the claimants
expense. They had paid full satisfaction of the EUAs, albeit to a third
party. Lord Templeman in Lipkin opinion prevents this claim as there
has been no enrichment.
BUT
(1)For this to succeed you would need to justify that Lipkin
Gorman was a case based on the reversal of unjust
enrichment at common law.
(2)This is very difficult given millet in Foskett who emphatically
rejected the UE basis for tracing.
(3)However, given that Foskett was a case dealing solely with the
assertion of proprietary rights in equity, it could be said that
Millet did not technically reject UE as the basis for common
law tracing.
(4)Therefore, Lipkin Gorman can be read as a case dealing with
the reversal of unjust enrichment.
a. BUT legal title would have to had remained in the
defendant throughout.
Bona Fide?
Substance
Millet in MacMillan Inc v Bishopsgate. Until and unless alerted the
defendant is allowed to assume that he is dealing with honest men.
Lord Neuberger in Sinclair Investments (UK) LTs v Versialles Trade
Finance. Stated that depending on the context, a defendant may
have ought to have appreciated that a proprietary claim was in

existence or taken steps to so ascertain. i.e. carry out the 4 and 5

level knowledge.
Concludes that a person with 4 or 5 level knowledge may not
necessarily be equitys darling for the purpose of a defence to the
claimant vindicating legal title.
Application
Applies to Common Law Proprietary Restitution.
o Foskett per Millett.
o At law? Could rely on Millet, but what if you said he
was only referring to equity? Doesnt it simply clear
equitable title. NO, also applies at law. Lord Templeman
in Lipkin, on the understanding that this is indeed a case
of common law restitution and considered that the
defence was available. Winnington.
o Also on the basis that legal title binds the world.
Cannot apply to UE. If a defendant purchases with notice,
how can he then rely on his subsequent squandering of the
money as a change in position. Goff only talked of change of
position in the context of UE.
Change of position
Substance
Niru Battery.
Bad faith is not limited to dishonesty.
Jones v Churcher can require positive duties to act.
Application
Applies to UE per foskett and lipkin.
Does not apply to CLR.
o Templeman in Lipkin talked of BF only in the context of
PRC, not in the context of UE.
o Winnington.
Stolen property is affixed with a trust when the act of theft itself is
committed in favour of the beneficiaries. Westdeutsche. If not, the
very act of receipt which creates the trust would, if accepted,
prevent a claim on the basis that, at that moment, they had not yet
received property subject to a trust. You could never hace knowing
assistance claims.