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BCL Law Notes Restitution of Unjust Enrichment BCL Notes

Commerzbank V. Jones Notes

Updated Commerzbank V. Jones Notes

Restitution of Unjust Enrichment BCL Notes

Restitution of Unjust Enrichment BCL

Approximately 620 pages

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Commerzbank v. Jones

Facts

At the age of 30 Mr Price-Jones began working for the Bank as an investment banker from 10 April 2000. He was made redundant on 16 November 2001. During the contract period he received a total of 1m “compensation”.

In his claim form dated 7 March 2002 Mr Price-Jones contended that he was entitled to be paid a further sum of 250,000, as a guaranteed bonus due for payment on 31 December 2001. The Bank accepted that he was entitled to a guaranteed bonus in respect of the performance year 2001, but it sought to set off against that sum the 250,000 paid to him by mistake on 15 December 2000.

Court found that the second payment was made as a mistake. The question now was whether Mr. Jones had so changed his position in reliance of that payment that now he could not be required to give back that payment to the cover.

Holding

Mr. Jones’ Claim: Mr Price-Jones decided “to stay at the Bank as a result of 29 June 2000 letter and his understanding of it”. The letter “caused Mr Price-Jones to change his position”. If, in late June 2000, Mr Price-Jones had “decided to leave the Bank, he stood a very good chance of obtaining similar employment elsewhere”. Reference was made to his profile in the market and to the buoyant nature of the market in which he was working “in a vogue area”.

I have no hesitation in finding that, if it had not been for 29 June 2000 letter, Mr Price-Jones would have taken steps in late June 2000 to seek employment with another investment bank.

Anticipatory Reliance

The change of position proposed by Mr Price-Jones occurred before the overpayment of 250,000 was received by him on 15 December 2000. In general and in practice a relevant change of position is more likely to occur after receipt of the overpayment.

In this case the change of position pleaded by Mr Price-Jones was his decision not to move from the Bank. His decision was made after the letter of 29 June 2000, but before he received the 250,000 in December 2000. He made the decision in the mistaken belief that he would be entitled to receive two guaranteed bonuses totalling 515,000 for the performance year 2000.

In my judgment, the mere reversal of the normal order of events does not affect the availability of the defence. As was held by the Judicial Committee of the Privy Council in the Dextra Bank case at p 204, the question whether it would be inequitable to require restitution can arise in cases of “anticipatory reliance” where a recipient of an overpayment has already changed his position in good faith in the...

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