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BCL Law Notes Restitution of Unjust Enrichment Notes

Change Of Position Notes

Updated Change Of Position Notes

Restitution of Unjust Enrichment Notes

Restitution of Unjust Enrichment

Approximately 91 pages

A comprehensive guide to some of the key topics in the Restitution of Unjust Enrichment module taught on the BCL (but would also be useful for other similar courses).

It includes case summaries, various academic positions and a thorough analysis of some of the key debates within the topic in an easy digestible manner.

It focuses on contributions to this area of law from Andrew Burrows, Graham Virgo and Peter Birks, amongst others. ...

The following is a more accessible plain text extract of the PDF sample above, taken from our Restitution of Unjust Enrichment Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

CHANGE OF POSITION

DEFENCES GENERALLY

  1. As restitution expands, the defences have to respond and develop accordingly to prevent too much restitution

  2. Ways restitution has expanded:

  1. acceptance of ‘but for’ causation test for mistake

  2. abolition of the mistake of law bar

  3. willingness to evade the requirement of total failure of consideration

  1. The legal burden of proof switches to D once prima facie liability is established

ACCEPTANCE OF THE DEFENCE IN LIPKIN GORMAN

  1. Lipkin Gorman v Karpnale – HL recognised it by Lord Goff:

  1. ‘At present I do not wish to state the principle any less broadly than this: that the defence is available to a person whose position has so changed that it would be inequitable in all the circumstances to require him to make restitution, or alternatively to make restitution in full’

  1. There is some stuff on the history leading up to accepting this pp. 524-525 (really not relevant I don’t think)

BROAD NOTION OF FAIRNESS? - NO

  1. Commerzbank AG – Munby J interpreted Lord Goff’s statement as though he intended that the defence should be based on broad notions of fairness or equality between C and D BUT

  2. Lord Goff also said ‘the recovery of money is not, as a general rule, a matter of discretion for the court’ THUS

  3. Philip Collins v Davis – Parker J confirmed that it’s not a discretionary defence. Lord Goff was just stating the defence broadly so that subsequent courts could fill in the detail

ELEMENTS OF THE DEFENCE (need all 3)

  1. D’s circumstance have changed detrimentally

  2. The change of circumstances was caused by receipt of the enrichment

  3. He is not disqualified from relying on the defence

DISENRICHMENT PROVIDES THE JUSTIFICATION FOR THE DEFENCE

  1. What

  1. Burrows - Essentially, D has lost the enrichment

  2. So even though D was initially enriched, the change of position defence responds to the fact that enrichment has subsequently (or in anticipation of the initial enrichment) been countered by causally related loss or detriment so that overall D has not been enriched

  1. Birks’ Contrary View

  1. He thought the defence exists to ensure that people are free to dispose of wealth that appears to be theirs BUT

  2. this would mean the defence would only where D has made an active decision to change his position (so wouldn’t include where money was stolen from him)

  1. Disappointed Expectations

  1. Aren’t included

  1. UE is not related to wrong

  1. Unjust enrichment’s imposition of strict liability is merited so long as an inncent defendant is not required to put its hand in its pocket

  2. Burrows - Basically, UE is not about correcting a wrong, it’s about returning the status quo to both parties (ie. corrective justice). Change of position recognizes where this is not possible on the defendant’s side

  1. Irreversibility

  1. Edelman and Bant – say it’s not about disenrichment, it’s to protect D’s security of receipt. So it’s only where D has irreversibly changed his position that he can rely on it BUT

  2. Burrows – if a rich person is enriched by 100 and then uses other money to bet on a horse (which he wouldn’t otherwise have done), he has a change of position of defence were he to lose. But, he could still reverse the benefit, it’s not irreversible. So Edelman and Bant are wrong

DEBT

  1. Scottish Equitable – ROBERT WALKER LJ - paying off a debt will not usually be detrimental change of circumstances BUT

  2. Can be where for example D gave up a job as a result of paying of a debt (eg. Gertsch v Atsas)

ASSET

  1. Uncertainty

  1. this is untested

  1. Best view

  1. Burrows - If D has changed his position by buying an asset, then can only rely on change of position to the extent that the asset is lower in value than original enrichment

  1. Authority?

  1. Lipkin Gorman – Lord Templeman (dissenting judgment in this case) seemed to approve this view

  1. Alternative View

  1. Applying subjective devaluation, D does not want to sell asset and can’t take objective value of a realizable benefit (Burrows criticizes this)

CAUSATION

  1. But For Test is the Correct Test

  1. Scottish Equitable v Derby – D must prove that, but for receipt of the enrichment, he or she would not have suffered the detrimental change of circumstances

  1. However

  1. There are other cases that use different language for a causal test ie.

  1. Phillip Colins v Davis – ‘referable’ to the receipt of the enrichment

  2. Commerzbank – ‘relative connect’ with the payment

  1. Extraordinary

  1. Doesn’t have to be extraordinary, owing to Lord Goff’s words in Lipkin Gorman

  1. Not a general hardship defence

  1. Scottish Equitable v Derby - Has to be a link between D’s UE and his loss. So just because D has fallen on bad times since the enrichment, doesn’t mean he’s had a change of position

DETRIMENTAL RELIANCE NOT NEEDED (part of the causation test?)

  1. Narrow View

  1. Birks – change of position is just like estoppel without the need for representation. THUS

  2. Narrow view = must be shown that D acted to his detriment relying on the receipt of the benefit

  1. Wide View

  1. Goff and Jones – detrimental reliance is unnecessary

  1. Arguments favouring the Wide View

  1. Wasn’t stated as being necessary in Lord Goff’s formulation of the defence in Lipkin Gorman

  2. Burrows – wide view responds to the idea that D can be causally disenriched without reliance. So, if D’s bank pay her 100k by mistake, and then this is immediately stolen from D, it is unfair that D can be held strictly liable to make restitution of 100k.

  3. It prevents too much restitution, in that it means the defence can apply in more situations

  1. Approved

  1. Scottish Equitable v Derby – CA supported that there is no need for detrimental reliance, citing Burrows’ work. But, obiter, so still waiting for direct approval, although seems likely

  1. Exception – Anticipatory Change of Position

  1. Dextra Bank (Privy Council) – where the change of position occurred before the enrichment. This case approved anticipatory change of position

BAD FAITH

  1. Principle

  1. Lipkin Gorman – defence isn’t available to D who acts in bad faith when changing their position

  2. Lord Goff – ‘it is...

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