Scott Pagel and Ivor Farman, two former Goldman Sachs types, set
up their own hedge fund in the headier days of the early 2000s.
Things didn't go so well at first, and the pair renegotiated
their 50/50 split of the profits of the LLP they used as a vehicle
for the venture. After a better stretch, things really started to
go awry -- to the point where Pagel said he was 'flirting with
insolvency every five minutes' as a result of large personal
tax liabilities in the USA. Push came to shove in 2008, when the
fund experienced heavy losses from a position in illiquid stocks
chosen by Farman. Farman, in an e-mail, said that if the 'the
sh*t' ever hit the fan he would do 'whatever I can to look
after you'. The sh*t did exactly that, and while relations
between the partners (like the fund's performance) continued to
deteriorate, Farman nevertheless made a 'goodwill gesture'
of shares which realised ₤3.8
million (in response to Pagel's demand for₤5 million). Pagel wanted to
document the gift as 'a sign of our enduring friendship',
but by that point Farman sought the return of the gift, on the
grounds that he had made it by mistake and on the basis of
misrepresentations by Pagel, who (it was alleged) was nowhere as
near the financial brink as he had claimed. First-world problems,
The law on this is clear (thanks to Futter v Revenue and
Customs Commissioners,  UKSC 26), said Mackie J: 'a
gift may be recovered by the donor from the donee where there is a
causative mistake of sufficient gravity as to the legal character
or nature of a basic transaction or as to some matter of fact or
law which is basic to the transaction and where retention of the
gift would be unconscionable'; it is 'irrelevant'
whether the mistake was not known to, much less induced by, the
donee or resulted from the carelessness of the donor: Pagel v
Farman,  EWHC 2210 (Comm). The judge noted that gifts
like Farman's are 'uncommon in commerce', concluding
that he had failed to make his case. While Farman would not have
known the details of Pagel's tax position, he would have had a
general awareness of it and of the value of Pagel's unredeemed
holdings; talk of Pagel's impending ruin was therefore
'probably commercial hyperbole of the kind deployed by Mr
Farman himself from time to time', and it was much more likely
that Farman was trying to make up for the very large losses he had
caused, in order to keep the venture afloat and in spite of the bad
blood between him and Pagel.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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