On 11 April 2017 the Supreme Court gave judgment in Lowick Rose LLP v Swynson Ltd, overturning the decisions of the CA and of Rose J in favour of the Claimant. Despite feeling some sympathy for the Claimant’s position, the Court unanimously held that the claim failed. The facts, in summary, were as follows. The Defendants had advised Swynson, a company controlled by Mr Hunt, a wealthy businessman. In reliance on the Defendants’ advice Swynson lent in excess of £15m to a company, EMSL, which company ultimately was unable to repay the loan. Subsequently, Mr Hunt personally lent £18.663m to EMSL in order to enable it to repay Swynson. Mr Hunt was left with a loss of the sum lent to EMSL. The issue was whether Mr Hunt or Swynson could recover the loss from the Defendants. Rose J had held that no duty of care was owed to Mr Hunt and that finding was not appealed. However, she and the CA found that the repayment by EMSL via the loan advanced by Mr Hunt was res inter alios acta which meant that Swynson could still recover from the Defendants. That decision was upheld in the CA (Longmore, Davis and Sales LJJ). Mr Hunt additionally argued that even if Swynson could not recover, he could recover by reason of the doctrine of transferred loss or in restitution relying on the principle of equitable subrogation. The Supreme Court rejected each of the routes to recovery:
The leading judgment in the Supreme Court was delivered by Lord Sumption. Lord Mance delivered a concurring judgment in which he expressed some sympathy for Mr Hunt’s position. Lord Neuberger agreed with Lord Sumption on all issues and with Lord Mance on res inter alios acta and transferred loss but also pointed out that he did not see any significant variation in the reasoning of each of his fellow Justices on the unjust enrichment issue.
The judgment is here.
Mark Howard QC appeared in the Supreme Court (but not below) for the successful Appellants/Defendants, instructed by Reynolds Porter Chamberlain.