''Kleinwort Benson Ltd v Birmingham CC''
996
Year 996 ( CMXCVI) was a leap year starting on Wednesday of the Julian calendar.
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By place
Japan
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4 All ER 733 is an
English unjust enrichment law
The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a bene ...
case, concerning to what extent enrichment of the defendant must be at the expense of the claimant. It rejected a defence of "passing on" the gain against a claim of unjust enrichment.
Facts
Kleinwort Benson
Kleinwort Benson was a leading investment bank that offered a wide range of financial services from offices throughout the United Kingdom and Channel Islands. Two families, the Kleinworts and the Bensons, founded two different merchant banks in ...
, a bank, paid
Birmingham City Council
Birmingham City Council is the local authority for the city of Birmingham in the West Midlands, England. Birmingham has had an elected local authority since 1838, which has been reformed several times. Since 1974 the council has been a metropo ...
money under
interest rate swap agreements that were later declared to be ''
ultra vires
('beyond the powers') is a Latin phrase used in law to describe an act that requires legal authority but is done without it. Its opposite, an act done under proper authority, is ('within the powers'). Acts that are may equivalently be termed ...
'' and
void
Void may refer to:
Science, engineering, and technology
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* Void (composites), a pore that remains unoccupied in a composite material
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by the
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the lower house, the House of Commons of the United Kingdom, House of Commons, it meets in the Palace of Westminster in London, England. One of the oldest ext ...
.
['']Hazell v Hammersmith and Fulham LBC
''Hazell v Hammersmith and Fulham LBC'' 9922 AC 1 is an English administrative law case, which declared that local authorities had no power to engage in interest rate swap agreements because they were beyond the council's borrowing powers, and ...
'' 992
Year 992 ( CMXCII) was a leap year starting on Friday of the Julian calendar.
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2 AC 1 The council argued it did not have to repay the money because the bank had passed on its losses through hedging transactions long before.
Judgment
The
Court of Appeal
An appellate court, commonly called a court of appeal(s), appeal court, court of second instance or second instance court, is any court of law that is empowered to Hearing (law), hear a Legal case, case upon appeal from a trial court or other ...
rejected that there could be a passing on defence. It rejected that there was any analogy to compensating for loss, so that it could be avoided or passed on. First, the payments received by the bank under the hedge contract were not causally connected with the payments of the bank under the swap contract. Second, the claims in unjust enrichment are not subject to a restriction on the defendant’s gain that it must correspond with loss.
Evans LJ gave the leading judgment, referring to American, Australian and Canadian authority outlining the problems of a passing on defence.
Saville LJ gave the second judgment.
Morritt LJ concurred.
See also
*
English unjust enrichment law
The English law of unjust enrichment is part of the English law of obligations, along with the law of contract, tort, and trusts. The law of unjust enrichment deals with circumstances in which one person is required to make restitution of a bene ...
*
Local authorities swaps litigation
The local authorities swaps litigation (sometimes called simply the swaps cases) refers to a series of cases during the 1990s under English law relating to interest rate swap transactions entered into between banks and local authorities. The J ...
Notes
References
Bibliography
*{{cite book , first1=Robert , last1=Goff , author-link1=Robert Goff, Baron Goff of Chieveley , first2=Gareth , last2=Jones , author-link2=Gareth Jones (lawyer) , title=
Goff and Jones on the Law of Unjust Enrichment , date=2011 , edition=8th , editor-link1=Charles Mitchell (academic) , editor-first1=Charles , editor-last1=Mitchell , editor-first2=Paul , editor-last2=Mitchell , editor-first3=Stephen , editor-last3=Watterson , publisher=Sweet & Maxwell , isbn=978-1-84703-910-1
English unjust enrichment case law
English derivatives case law
Court of Appeal (England and Wales) cases
1996 in United Kingdom case law