Response to MIG Claims

A few extract below from J Roberts v National Guardian Mortgage Corperation 1993. I a not sure about the relevance of this as much of it goes over my head but some of you seem to have a very good understanding of this sort of thing.

Any thoughts? The full text is on http://www.law.cam.ac.uk/restitution/archive/englcases/roberts.htm

The essence of the argument that is put forward for Mr Roberts (the appellant) is founded on a passage in the speech of Lord Diplock in the case of Orakpo v. Manson Investments Ltd. [1978] AC 95. That was a case which was concerned with the Moneylenders Acts (now, happily, no longer with us), and it is important to bear in mind it was particularly involved with s 6 of the Moneylenders Act 1927, which provided that: "No contract for the repayment by a borrower of money lent to him by a moneylender, and no security given by the borrower in respect of any such contract, shall be enforceable unless a note or memorandum in writing of the contract be made. The note or memorandum aforesaid shall contain all the terms of the contract". The passage in Lord Diplock's speech which is particularly relied on is at page 105 D to F. He said this: "In the first place the origin of the right of subrogation is the contract between the borrower and the moneylender for the loan of money by the moneylender to the borrower. The contract either will or will not incorporate a term that the moneys lent shall be applied in discharging a security on the property of the borrower in favour of a third party. If it does, the term that the moneys shall be so applied must be included in the note or memorandum under section 6. If it does not and there is no contractual obligation upon the borrower to apply the moneys in this way (as was held to be the case in Hanyet Securities Ltd v. Mallet [1968] 1 WLR 1265), the expectation of the parties that the money will in fact be used by the borrower for his purposes does not give rise to any right of subrogation in the moneylender even if the money is so applied". "Subrogation may result from agreement, or it may arise by operation of law in a number of different situations. In some circumstances the debtor may know nothing whatever about the transactions which had caused a third party to become subrogated to the rights of his original creditor". Some rights by subrogation are contractual in their origin as in the case of contracts of insurance. Others, such as the right of an innocent lender to recover from a company moneys borrowed ultra vires to the extent these have been expended on discharging the company's lawful debts are in no way based on contract and appear to defeat classification except as an empirical remedy to prevent a particular kind of unjust enrichment".

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