(C) THE DEFENCE APPLIES REGARDLESS OF WHETHER THE CLAIMANT SEEKS A PERSONAL OR PROPRIETARY RESTITUTIONARY REMEDY

The defence will apply regardless of whether the remedy which the claimant seeks is personal or proprietary. This is because the time at which the question of bona fide purchase is considered is when the defendant received the property or its proceeds. If at this point the defendant was in good faith and had provided value for the property, the claimant’s title will be defeated and he or she will be unable to show that the defendant retained property in which the claimant had a proprietary interest or even that the defendant had received such property.

That the defence is available where the claimant seeks a personal restitutionary remedy was recognized by the House of Lords in Lipkin Gorman (a firm) v Karpnale Ltd,²³ where the claimant’s action for money had and received was founded on its continuing proprietary interest. The House ofLords accepted that this action might have been defeated ifthe defendant had been a bona fide purchaser, although the defence could not be established on the facts since the money had been transferred pursuant to an unlawful gambling transaction, so the defendant could not be considered to have provided value. Similarly, it has been recognized that the equitable action for restitution arising from the mistaken payment of assets in the administration of an estate can be defeated if the recipient of property from the estate was a bona fide purchaser for value.^{[1] [2]}

(D) RESURRECTION OF THE PROPRIETARY INTEREST

A proprietary interest will not be defeated if the property is reacquired from the bona fide purchaser by a trustee^[3] or where the transaction involving the transfer to the bona fide purchaser is rescinded, because the transaction will be a nullity and will operate retrospectively, converting the recipient into a volunteer.^[4]

• [1] [1991] 2 AC 548. See also Clarke v Shee and Johnson (1774) 1 Cowp 197,98 ER 1041 and Nelson v Larholt[1948] 1 KB 339.
• [2] Ministry of Health v Simpson [1951] AC 251 and Re J Leslie Engineers Co Ltd [1976] 1 WLR 292, 299
• [3] (Oliver J). 25 Wilkes v Spooner [1911] 2 KB 473.
• [4] Independent Trustee Service Ltd v GP Noble Trustees Ltd [2012] EWCA Civ 196, [2013] Ch 91. SeeB Hacker, ‘The Effect of Rescission on Bona Fide Purchase’ (2012) LQR 493.