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Alf Vaughan And Co. V. Royscott Notes

BCL Law Notes > Restitution of Unjust Enrichment BCL Notes

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FACTS The defendant owned a number of vehicles which were held by the plaintiff company under various hire-purchase and lease agreements. The hire-purchase agreements included options to purchase, and the lease agreements gave the plaintiff to the right to sell the vehicles as the defendant's agent subject to certain conditions. The defendant was entitled to terminate the agreements and recover possession of the vehicles on the appointment of an administrative receiver of any of the plaintiff's assets. The plaintiff subsequently went into administrative receivership, and the receivers wanted to sell its business, including the vehicles, as a going concern. They therefore offered to pay the defendant the remaining sums due under the hirepurchase and lease agreements, totalling approximately PS34,000 (the settlement figure). However, the defendant terminated the agreements, and threatened to take possession of the vehicles unless the plaintiff paid it PS82,000. The receivers accepted under protest, and duly paid the sum demanded by the defendant. In subsequent proceedings, the plaintiff sought to recover the difference between the settlement figure and the amount actually paid, contending that its agreement to pay the higher sum had been induced by duress to goods. Receiver's intention to sell as a going concern: It was the receivers' intention to sell the company's business as a going concern for which purpose they desired to be able to give any purchaser title to the vehicles, the subject of these agreements. This, the defendant understood. By 23 June 1997 the receivers had, indeed, obtained an offer for the business from Schreiber Filters Ltd (Schreiber) on the basis that they procure title to any lease or hire-purchase assets. Defendant's entitlement to possession: Each of the agreements did, indeed, entitle the defendant to terminate the order with or without notice upon the appointment of an administrative receiver of any of the company's assets. On the following day, therefore, the defendant sent agents to the company's premises to repossess the vehicles. HOLDING Causation I have no doubt and find as a fact that the defendant's threat to recover the vehicles was a significant cause inducing the receiver to authorise Mr Nuttall's undertaking to pay PS82,000. It is clear that but for the need to obtain a withdrawal of the recovery agents

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