Banque Financiere de la Cite v Parc (Battersea) Ltd [1998] UKHL 7 is an English unjust enrichment case, concerning the framework for a claim.
Parc Ltd got a second loan from Omnicorp Overseas Ltd (which was part of the same group, and whose parent was managed by Mr Herzig), which got another charge.
Banque Financiere de la Cite, a Swiss bank, gave Parc Ltd a third loan of DM30million but got no charge.
Instead it got a ‘postponement letter’ saying other companies in the group (including OOL) would not enforce their charges until BFC had been paid.
a mistake to regard the availability of subrogation as a remedy to prevent unjust enrichment as turning entirely upon the question of intention, whether common or unilateral.
Such an analysis has inevitably to be propped up by presumptions which can verge on outright fictions, more appropriate to a less developed legal system than we now have .
But Robert Walker J. concluded that properly construed the letter of postponement was intended to be directly binding on all companies in the Omni Group.
And I am reinforced in this view by the fact that Robert Walker J., who was steeped in the realities of the context of the letter, ultimately favoured it.
In any event, the important point is that BFC would not have lent had it not mistakenly believed that its priority in respect of intra-group indebtedness was secured effectively against subsidiaries of the group.
Nevertheless both courts ultimately treated the question at stake as being whether BFC is entitled to be subrogated to the rights of RTB.
That position may have seemed natural at a stage when BFC apparently claimed to be entitled to step in the shoes of RTB as chargee with the usual proprietary remedies.
In these circumstances it seems sensible to consider directly whether the grant of the remedy would be consistent with established principles of unjust enrichment.
The loan to Mr. Herzig was a genuine one spurred on by the motive of avoiding Swiss regulatory requirements.
It does not alter the reality that OOL was enriched by the money advanced by BFC via Mr. Herzig to Parc.
It is now necessary to mention the other factors which the Court of Appeal relied on in concluding that BFC was not entitled to succeed.
At one stage he argued that this feature is relevant to the exercise of a discretion but I understood him ultimately to concede that the relief sought is not discretionary.
In any event, the neglect of BFC is akin to the carelessness of a mistaken payor: it does not by itself undermine the ground of restitution.Lord Griffiths concurred.
Lord Clyde agreed, saying the claim was based in unjust enrichment, or nemo debet locupletari aliena jactura.