“Mistaken payments create immediate constructive trusts giving equitable proprietary interests.”
Chase Manhattan Bank mistakenly paid the same sum twice to Israel-British Bank, which subsequently went into liquidation. Chase sought to trace the money and claim proprietary interest.
Whether a mistaken payment creates a constructive trust giving rise to proprietary rights allowing tracing in equity.
Goulding J held that a constructive trust arose immediately upon the mistaken payment, giving Chase an equitable proprietary interest allowing tracing.
Established important precedent for constructive trusts arising from mistaken payments. Demonstrates equity's role in protecting against unjust enrichment through proprietary remedies.
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OSCOLA Citation
Chase Manhattan Bank NA v Israel-British Bank (London) Ltd [1981] Ch 105
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