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(iv) Particular Circumstances in Which Title Will Be Revested in the Claimant

Sometimes, where title has passed to the defendant, it may subsequently be revested in the claimant. The most important example of this is where the claimant has transferred property to the defendant pursuant to a contract which he or she is able to rescind at Law, by virtue of fraudulent misrepresentation, duress, or non-disclosure.[1] Where one party has transferred an asset to the other party pursuant to a contract which is voidable, title to the asset will be transferred to the other party.[2] Rescission at Common Law is a self-help mechanism which automatically revests legal title in the claimant.[3] It follows that, after rescinding the transaction, the claimant will be able to bring a proprietary restitutionary claim to vindicate his or her proprietary right. If the property has been dissipated, rescission of the transaction cannot have any proprietary consequences, since there will not be any title which can be revested in the claimant.[4]

Where property has been transferred under a contract which has been breached or frustrated then, once the contract has been repudiated by the other party, it is terminated only from the moment of repudiation and does not operate to revest title in the claimant. The difference between rescission and repudiation is that rescission operates to undo the transaction, whereas repudiation terminates the transaction for the future.

This analysis of rescission at Law has been convincingly challenged by Swadling who has concluded, following careful consideration of nineteenth century cases,[5] that rescission at Common Law should not have any proprietary consequences.[6] This is a persuasive argument. If a void or illegal contract can be effective to transfer legal title, then why should a contract which has been rescinded revest legal title?

  • [1] See p 21, above. 155 Load v Green (1846) 15 M and W 216, 221; 153 ER 828, 830 (Parke B).
  • [2] 156 See, in particular, Car and Universal Finance v Caldwell [1965] 1 QB 524.
  • [3] 157 Although the defendant will be liable to make restitution of the value of any benefit received under the
  • [4] transaction. See p 24, above.
  • [5] Especially Load v Green (1846) 15 M and W 216, 153 ER 828.
  • [6] WJ Swadling, ‘Rescission, Property and the Common Law’ (2005) 121 LQR 123.
 
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