Lloyd's Maritime and Commercial Law Quarterly
RESTITUTION WITHOUT COUNTER-RESTITUTION
Guinness Plc v. Saunders
A plaintiff cannot usually obtain restitution while at the same time retaining a benefit received from the defendant by virtue of the same event or transaction. But in Guinness Plc v. Saunders
1 the company could recover money paid for work without making any allowance for the work which had been done for the money. This requires to be carefully explained. If there is a difficulty about the explanation to be found in the speeches in the House of Lords, it is that it appears to be confined too closely to the slightly unusual facts of the case. In particular, this was not a context in which it should have mattered whether the company claimed restitution under a voidable or a void contract.
A. The procedural context and the facts
Saunders took no part. The other defendant was Ward, and in substance the case is Guinness Plc v. Ward. The company’s claim was to recover £5.2 million. It succeeded in getting summary judgment under R.S.C. Ord. 27, r. 3, on the basis of admissions made. Sir Nicolas Browne-Wilkinson, V.-C., made an order to the effect that Ward (a) had received the money as constructive trustee, (b) was liable as a constructive trustee to repay the full sum, and (c) held subject to an equitable charge any bank accounts or other property into which it was traceable. Ward’s appeal, seeking a full trial, was dismissed by both the Court of Appeal and the House of Lords. In the House of Lords, speeches were delivered by Lord Templeman and Lord Goff. Lord Keith and Lord Brandon agreed with Lord Templeman; Lord Griffiths agreed with both Lord Templeman and Lord Goff.
The fact that there never was a trial of the merits, in combination with the notoriety of the underlying story, makes it imperative to emphasize that the pleadings made no allegations of bad faith on the part of Ward. Nor was it denied that Guinness had received valuable services from him. The visible facts were that a three-man committee of the Guinness board (Saunders, Roux and Ward) contracted with Ward for services in the nature of advice and negotiation in connection with the take-over of the Distillers company. Known to the committee, Ward’s interest was never disclosed to the full board. The fee was contingent—in the event of success, one fifth of 1% of the full value of the bid. The sum of £5.2 million was the quantification of that formula.
The facts relating to the actual payment, so far as they appeared, need to be highlighted. In May 1986, shortly after Guinness had successfully completed the bid, a Jersey company called Marketing and Acquisition Consultants submitted an invoice for £5.2 million for services rendered in connection with the take-over. The invoice was paid. Guinness was not at that moment aware that the Jersey company was controlled by and was claiming on behalf of its own director, Ward. No point
1. [1990] 2 W.L.R. 324 (H.L.), affirming [1988] 1 W.L.R. 863 (C.A.); and [1988] B.C.L.C. 43 (Ch.D.).
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