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1. RECOUPMENT, CONTRIBUTION & SUBROGATION
RECOUPMENT / REIMBURSEMENT
Essence of Recoupment
Brook's Wharf & Bull Wharf v Goodman Bros (1937) (CA) - Lord Wright MR
- essence is where there is  liability for the same debt on both claimant and defendant and  claimant has been legally compelled to pay but  defendant gets the benefit of the payment because his debt is discharged entirely or pro tanto, 
and the defendant is liable to pay the claimant i.e. X sues C for damage incurred by C and D. But then C can claim against D (1.1.b)
Types of Recoupment Burrows - a standalone primary/secondary liability analysis may be a problem in situations where X retains C's property unless a debt is paid by C to X. Birks describes this as proprietary liability, because the property is encumbered by a liability. However, this distorts the meaning of liability. It is better to recognise that legal compulsion comprises two categories of recoupment: [a] C discharges D's liability to X in order to recover C's property, [b] C and D both liability to X but C's liability is secondary to D's
Claimant ("C") and Defendant ("D") Both Liable to Third Party ("X")
D's Liability Moule v Garrett (1872) (HC) - lessee C compelled to pay for breach of covenant could seek reimbursement from D, an assignee, even though there had been intermediate assignees. Also, D could have been sued for breach of covenants so C had discharged D's liability.
Bonner v Tottenham & Edmonton Building Society (1899) (CA) - C assigned lease to X who mortgaged it to D. X went bankrupt and D took possession but failed to pay landlord. Landlord sued C for breach of covenant. C was compelled to pay landlord and sought to recover from D. Held that D's liability had not been discharged because D was a sublessee who was not liable to pay landlord any rent
Fortis Bank v India Overseas Bank (2011) (HC) - C agreed to pay X by letter of credit to be opened by D. Held that payment by C had not discharged any liability of D
Brook's Wharf & Bull Wharf v Goodman Bros (1937) (CA) - D imported squirrel skins from Russia and stored them in C's warehouse. D was primarily liable to pay tax to X but C had agreed to pay as well. C paid the tax when X demanded it. Lord Wright MR - D, as importer, was still liable for tax because C's payment did not supersede D's liability even though X could not compel payment a second time. An obligation on the part of C to pay implied by statute. Gebhardt v Saunders (1892) (CA) - house leased by D to C, which had a blocked drain. X served a notice requiring D or C to abate the nuisance. Primary responsibility for this fell on D, but C paid repairs. C then sued D for recoupment. Charles J - C was directly liable towards X and D was legally compellable to do the work. Therefore C could recover (1.2.c)
Seizure of Property Cases
C can get a claim for recoupment if he is compelled to pay, even if not liable to pay: Exall v Partridge (1799) (CA) - C left carriage in D's garage for repairs. D failed to keep up payments on the lease of the garage from X. X sought remedy of distrainment, i.e. keeping property until D was paid. C paid D's rent to get his carriage back. Grose J
- this was a compulsory (as opposed to voluntary) payment because the only way C could get his goods back was by paying. Therefore there was an implied promise by D to pay C Johnson v Royal Mail Steam Packet (1867) (HC) - C's ship was seized because D had failed to pay wages of crew. C paid the sum in order to obtain possession and was allowed to a claim in recoupment from D
D is Primarily Liable to X as Between C and D
Person Who Benefits From the Arrangement Primarily Liable Moule v Garrett (1872) (HC) - Willes J - if a party (C) is liable by immediate privity of contract to another (X) but the whole benefit of the contract is taken by another party (D), C is entitled to be indemnified by D in respect of the performance of the obligation
C Does Not Act Voluntarily
The original idea was that payment must be requested from C. However, this became implied. Nonetheless, remnants of the idea remained If C not legally compelled to pay, he is treated as having acted voluntarily. If he is legally compelled to act he is not treated as having acted voluntarily (e.g. Exall v Partridge) Bonner v Tottenham & Edmonton Building Society (1899) (CA) - Smith CJ - both C and D must be compellable to pay X. Otherwise, the C ? X payment is voluntary, which raises no implication of a request by D to pay X
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