Dextra Bank & Trust Company Limited v Bank of Jamaica

Dextra Bank & Trust Company Limited v Bank of Jamaica [2002] UKPC 50 is a recent and important case in unjust enrichment in the Privy Council.

Facts

Dextra drew a cheque for $2,999,000 from its bankers to lend to the Bank of Jamaica. Its agents told Dextra the money was for a loan. The Bank of Jamaica was told the money was for foreign currency purchased by its agents. They gave the money to the agents, but the agents were fraudsters. Dextra wanted restitution.

Judgment

The Privy Council held that the claim failed, first because Dextra had made no relevant mistake of fact, and second because the Bank of Jamaica had changed its position. On the question of the change of position defence, Dextra argued that the Bank of Jamaica were relatively at fault, and therefore their defence should fail. Lord Bingham and Lord Goff said in the course of their advice,

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‘it has been well settled for over 150 years that the plaintiff may recover “however careless [he] may have been, in omitting to use due diligence”: see Kelly v Solari (1841) 9 M & W 54 at p. 59, per Parke B. It seems very strange that, in such circumstances, the defendant should find his conduct examined to ascertain whether he had been negligent, and still more so that the plaintiff's conduct should likewise be examined for the purposes of assessing the relative fault of the parties. Their Lordships find themselves to be in agreement with Professor Peter Birks who, in his article already cited on Change of Position and Surviving Enrichment at p. 41, rejected the adoption of the criterion of relative fault in forthright language. In particular he stated (citing Thomas v Houston Corbett & Co. [1969] NZLR 151) that the New Zealand courts have shown how hopelessly unstable the defence [of change of position] becomes when it is used to reflect relative fault. Certainly, in the case of Thomas, the reader has the impression of judges struggling manfully to control and to contain an alien concept.’ (at [45]

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See also

• English unjust enrichment law