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IDENTIFICATION OF THE PROPRIETARY INTEREST

The first question which must be considered to establish a proprietary restitutionary claim is whether the claimant has a proprietary interest in the property which was received by the defendant. This notion of a subsisting proprietary interest was usefully described by

Birks as the proprietary base,[1] which indicates that it is the necessary foundation upon which the proprietary claim will be built. The proprietary base may be established in two different ways. First, the claimant may have a continuing proprietary interest where the nature of the transfer was such that title to the property did not pass to the defendant. In this type of case the claimant’s proprietary interest will have been retained.[2] Secondly, even though the legal title may have passed to the defendant, the claimant will have a proprietary interest in the property received by the defendant where the circumstances surrounding the transfer were such that it is possible to recognize that the claimant has an equitable interest in the particular property. In this type of case the claimant’s proprietary interest will have been created.[3]

  • [1] PBH Birks, An Introduction to the Law of Restitution (rev edn, Oxford: Clarendon Press, 1989), 378-85.This phrase was adopted by Millett J in Macmillan Inc v Bishopsgate Investment Trustplc (No 3) [1995] 1 WLR978, 989. See also Smalley v Bracken Partners [2003] EWCA Civ 1875, [2004] WTLR 599.
  • [2] Sometimes legal title will pass to the defendant but it will be revested in the claimant, for example byrescission. See p 480, below.
  • [3] See Grantham, ‘Doctrinal Bases for the Recognition of Proprietary Rights’ who characterizes these twoapproaches in terms of the ‘property approach’ and the ‘duty approach’.
 
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