This website uses cookies to ensure you get the best experience on our website. Learn more

BCL Law Notes Restitution of Unjust Enrichment BCL Notes

In Re Farepack Food And Gifts Notes

Updated In Re Farepack Food And Gifts Notes

Restitution of Unjust Enrichment BCL Notes

Restitution of Unjust Enrichment BCL

Approximately 620 pages

These are detailed case summaries (excerpts from cases - not paraphrased) I made during the Oxford BCL for the Restitution of Unjust Enrichment course....

The following is a more accessible plain text extract of the PDF sample above, taken from our Restitution of Unjust Enrichment BCL Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

In Re Farepack Food and Gifts

Facts

The company, “Farepak”, operated a Christmas savings scheme under which customers could spread their Christmas savings over a year by making small contributions month by month so that enough had accumulated by the beginning of November to buy a shopping voucher, a hamper or other goods. The scheme operated through a system of “agents”, who were typically work colleagues, friends or members of the same family as the customers. The agents collected the money and forwarded it to Farepak.

October 11, 2006, the directors decided to cease trading and Farepak went into administration on October 13, 2006. It was heavily insolvent so that any dividend would be only a few pence in the pound and it could not fulfil its Christmas 2006 orders with the result that a lot of people who relied on Farepak's scheme to provide them with their Christmas food or presents would suffer real hardship. In the three days leading up to the administration the directors sought to ring-fence the moneys received from customers in that period so that it could be returned to customers if necessary.

The directors executed a trust deed that read as follows:

(1) Farepak holds the Farepak Food and Gifts Limited Savings Club Account, account number 50114239 at sorting code 011001, with the Royal Bank of Scotland plc ('the Farepak Account'). Moneys are paid into this account by Farepak's customers.

(2) Farepak ceased trading as from close of business on 10 October 2006

(3) Farepak has entered into this deed to ensure that, in the event of insolvency, money paid into the Farepak Account on or after 11 October 2006 is held on trust for the relevant payors and can be returned to them in due course.

Holding

The agents were agents of the company, not consumers

On the material that I have seen it seems apparent that the agents are agents of the company, and they are not agents of customers (or at least not in any material respect). The agents' terms and conditions specify that they are agents of the company (see above) and the trade association provisions (admittedly not strictly contractual for these purposes) indicate the same thing.

Once money is passed to the agent it is being passed to the shop just as much as money paid over a counter and placed into a till in a conventional shop becomes the shop's money.

Quitclose Trust

Mr Trace argued this point. He argued that an analysis of the facts and the customer conditions showed that there was a payment for a specific purpose, and that since that purpose had not been fulfilled the customer money was held on resulting trust.

Unfortunately, on the material that I have had the argument fails. I have already held that the money is taken by the agents as agent for Farepak. That of itself does not militate against the existence of a Quistclose trust. However, there is no suggestion that the agent was expected to keep the money separate from other money (or indeed his or her own), and it is indeed known that it was mixed with the money of others and paid over to Farepak with the money of others. Again, that of itself it not inconsistent with a Quistclose trust, but it does not help. But crucially, there is no suggestion that the money ought to have been put on one side by Farepak pending the...

Buy the full version of these notes or essay plans and more in our Restitution of Unjust Enrichment BCL Notes.

More Restitution Of Unjust Enrichment Bcl Samples