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Colin Riegels
Sat, 31 May 1997 09:28:37 +0100
Failure of Consideration


Once again the time of year has arrived when students pass more than a casual eye over the daily law reports in "The Times," remembering fearful stories of days past when decisions such as Westdeutsche v. Islington and R. v. P. came out mere days before finals papers. A case of similarly late arrival if not the same significance may have recently been decided by the Court of Appeal.

The facts of Ellis v. Chief Adjudication Officer ("The Times" 14th May 1997) were not particularly remarkable. Mrs Ellis had given her house to her daughter on the condition that she would be able to live there for as long as was practical. As seems typical in English cases, the daughter threw Mrs Ellis out and sold the house. Mrs Ellis' application for income support was refused by the Chief Adjudication Officer on the grounds that as the daughter had reneged upon her promise, Mrs Ellis retained an interest in the house, and that decision was ultimately upheld by the court of appeal.

On first blush, this simply furnishes an excellent example of restitution recognised in a non-contractual situation (although it is unclear from the typically opaque report in "The Times," it appears that there was no intent to enter legal relations). Thus it will provide a useful modern illustration to Professor Birks to go with the older "marriage" cases (Re Ames [1946] Ch 217 etc.) in supporting the view that for recovery of failure of consideration, consideration should be used in the historical sense rather than the modern contractual doctrine (see Fibrosa Spolka v. Fairbairn Lawson [1943] AC 32).

Nonetheless, there are two features of Ellis v. C.A.O. that might give it potentially a much wider application. Firstly, Mrs Ellis did enjoy a period of occupation before she was unceremoniously evicted. Although it seems clear that the point was not argued before the court (the decision focuses entirely upon whether the condition was sufficiently certain) it is undeniable that Mrs Ellis did receive some part of what she had been promised, and the facts seem indistinguishable from the old "apprentice" cases (Whincup v. Hughes (1871) LR 6 CP 78 etc.) Taken with the admittedly obiter comments of the court of appeal in D.O. Ferguson v. Sohl (1992) 62 Build L.R. 95 at 105, that mere partial failure of consideration was of no significance, it seems that a credible argument can now be mounted in favour of a litigant who has only endured a partial failure.

Secondly, it does raise the interesting question of how far the courts will be prepared to go in allowing restitution for failed bases. Searches for the historical origins of the doctrine of consideration have invariably been rather fruitless (see Holmes, 1 LQR 162), and in any event it must be questionable to what extent it is desirable to let historical antecedent shape our law in this modern age. It will, for the moment, remain an open question whether or not one day we will enjoy a cause of action, as do many continental systems, for the recovery of gifts made on a false protestation of friendship.

Certainly, the first possible implication is to be treated as a welcome potential step along the road which has been famously neglected by Parliamentary apathy, but the second may represent the first step on a rather slipperier slope.

Only time will tell, but hopefully not until after the exams.


Lady Margaret Hall, Oxford

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