Unjust Enrichment Notes

the law on unjust enrichment

has the defendant received an enrichment?

1. Money: (its exchange value) always an enrichment (BP Exploration v Hunt)

2. Use value? What you save by not having borrow

   Sempra Metals v IRC 07 suggested yes = enrichment

   Providential Assurance v HMRC SC 18: no! Depended on HMRC v ITC reasoning - the use value is not ‘at expense of C’ thus not enrichment

3. Property a benefit, but susceptible to subjective devaluation

4. Services with an end product:

   value of the service (not end product) will be the enrichment unless the service by C caused the end product (the enrichment)

   Yeoman’s Row v Cobbe 08: Lord Scott locksmith unlocking jewel in safe analogy - enrichment is service

   here about planning permission - said didn’t cause the enrichment, just unlocked inherent value

   I’d disagree - point of application is because you don't know if you can get it

5. Pure services:

   e.g lecturer - doesn't leave a market residuum

   Beatson believes cannot be an enrichment

• Burrows: if people wiling pay for service must be an enrichment

6. Discharge of obligations

   Exall v Partridge 1799 yes enrichment - here discharge of rent liability

   Menalaou v Bank of Cyprus 13 also said yes - here sig on charge defective so charge over property void - bank claimed D unjustly enriched

7. Forgoing claim/waiving - enrichment Gibbs v Maidstone 10

   value of the enrichment

• Judged at time of receipt not judgement (Hunt)

• Starting point: objective test (but can be subjectively devalued)

  Objective test: 2 ways of establishing (L Clarke Benedetti)

• start with ordinary market value - what normal person would pay on market - then consider ‘objective value’ (things market would take into account about D e.g red carpet actress)

• Relevant factors: not generosity etc but poor credit rating, gender, occupation, health, age, status (Lord Reid e.g Vanity fair/film star)

• note some authorities suggest contract price as ceiling on value - Way v Latilla but current law is that is merely evidential (shows how parties valued benefit) - L Neuberger Benedetti

• also note that if inadequate performance, price of benefit received under void contract can be reduced (Brit Steel Corp v Cleveland Bridge)

  Subjective devaluation:

• Chance to show you personally didn’t value it to full extent of the objective value! (L Clarke Benedetti)

• recognised in Falcke v Scottish Imperial Insurance 1886: ‘liabilities shouldn't be forced upon people behind backs any more than you can confer a benefit upon a man against his will’

• but note Lord Reed in Benedetti rejected subjective devaluation - said only way avoid D incurring liabilities against will is within grounds of restitution (disagree)

• note SC in Benedetti rejected notion of subjective over-valuation save in ‘exceptional’ circs

• Burrows, Goff & Jones think should be possible

  Ways of overriding subjective devaluation

1. Incontrovertible Benefit

• Describes a benefit demonstrably apparent/not subject to debate (JS Bloor v Pavillion Developments)

• Types:

1. Money (cash) - BP v Hunt

2. Anticipation of necessary expenditure

• Legal necessity e.g discharging obligation - Exall v Partridge 1799 - to get carriage back from L, C paid D’s rent

• Factual necessity - Re Berkley Applegate 89 - C a liquidator who provided services for D in respect of trust prop - if C hadn't D would've had pay s.o else thus incontrovertible

3. Failure to return property i.e you actually don’t value it you'd give back - McDonald v Coys of Kensington 04 - numberplate

4. Benefit realised in money i.e receive something & sell for - incontrovertible Rover v Canon Fil)

5. Benefit realisable in money i.e would have value if sold - debatable

• McDonald v Coys of Kensington Mance endorsed idea that resisability sufficient

• Goff/Jones agree

• Burrows midway position - test is is it reasonably certain D will realise the positive benefit in future, acknowledging risk of ‘realisability’. Take into account circs of D - I agree

• Birks/Virgo say no - realisability insufficient - not good enough reason interfere with autonomy

2. Request: you must have valued it here, thus can’t subjectively devalue it

3. Free acceptance: will override subjective devaluation (L Clarke Benedetti)

• 3 elements:

1. Opportunity to reject - ‘Hobson’s choice’ - as in CC Greater Manc Police v Wigan Athletic - no opportunity reject additional unneeded police force w.o rejecting all of them

6. D knew/should’ve that not gratuitous - Rowe v Vale of White Horse

7. D failed reject the benefit

3. at the expense of C

1. Direct enrichment: D must be directly enriched at C’s expense

• HMRC v ITC 17 SC: ‘at expense of’ shows C is right person sue (suffered loss) but only where suffered directly

• here ITC paid too much VAT, customers charge too much VAT - but VAT paid in advance thus not exactly C -> HMRC - indirect thus claim failed

• e.g Costello v MacDonald 11: C paid to D (company), D bust, C tried sue directors - no - not direct!

• but HMRC SC did recognise circs where indirect may suffice (Lord Reid)

8. Indirect enrichment:

1. Agency: agent drops out of the picture & C can sue D directly

2. Assignment: 3P may have assigned rights to C

3. Sham transaction: if transaction with 3P a sham then ignored thus direct e.g Relfo Ltd v Varsani 14:

4. Co-ordinated transaction: if 3P & D coordinated from start then can treat as 1 transaction

5. Trace property: but this is just equity really

6. Discharge of debt

7. Interceptive subtraction (Virgo) C tries get property from T but D takes it - D enriched at C’s expense (Official Custodian for Charities v Mackey)

3. Incidental benefits:

• Where C acts selfishly, but D benefits

• TFL Management v LLoyds TSB 13: argued acting selfishly should bar claim - rejected

• but HMRC overruled TFL - benefits received by D must be result of intentional transfer

• but conflicts with Exall v Partridge - core UE case thus question this aspect of ITC

• note in TFL - C sued T for sum of but court held T owed to D - C had incurred legal expenses in ultimately fighting D’s case thus wanted...

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