English unjust enrichment law

English unjust enrichment law is part of the English law of obligations, alongside contract and tort, and property. A claim in unjust enrichment requires benefits that have been obtained by someone to be given up if it would be "unjust" to retain them. The enrichment must be "unjust" if no valid legal transaction is present, such as a contract, trust, gift or estoppel. "Restitution", or restoration of the unjust gain, to the party to whom the enrichment came from is the main right that follows from an unjust enrichment. English courts have recognised that to found a claim there are four steps: (1) someone has to be enriched, (2) at the expense of someone else, (3) the enrichment must be unjust, and (4) there must be no defence, such as the defendant changing its position on the strength of the enrichment. Around 10 major "unjust factors" are typically recognised in English law, many of which are typically understood in contract as "vitiating factors". If someone receives an enrichment at another's expense, and this is a mistake, it happens with the claimant's ignorance of the transfer, after a failure of consideration, under duress, under undue influence or exploitation, through legal compulsion, out of necessity, when the transaction is illegal, or the claimant lacks capacity or acts ultra vires, then this will found a claim, so long as no defence operates. Unjust enrichment is an action based on strict liability to return the enrichment, and may frequently work concurrently with a claim in tort. For example, if someone is forced to make a contract to transfer property, the "unjust factor" of duress will vitiate the contract. The claimant will be entitled to have their property returned, and will also have a claim in tort against the one who made the threat.

The law of unjust enrichment is among the most recent and unsettled areas of English law, because only in 1991, in Lipkin Gorman v Karpnale Ltd,^[1] did the senior judiciary endorse unjust enrichment's existence. The principles of enrichment and expense are more stable in cases of transfers of goods or money, but contested in cases where labour and benefits in kind are passed. The scope of unjust factors raises controversy, as does the very approach of English law to require an "unjust factor" be identified, rather than presume there is a claim if facts of transfer are made out (as in a "resulting trust") but no positive act of consent or other legal ground is found. The law's remedial response to unjust enrichment is also contested, particularly regarding the availability of proprietary claims. It is established that proprietary restitution is available for tracing, and some mistakes, although it has not been acknowledged for other unjust factors. One view is that a proprietary response should always be available. A second view is that claims should only generate personal remedies, while an and unrelated to property law. A third view is that proprietary restitution ought generally to be available, unless the law would regard the claimant as having taken on the risk of the defendant's insolvency.^[2] The categories of defences are also controversial: "change of position" is a general defence, although the law recognises estoppel, the bona fide purchaser defence, and others as alternatives.

History

The modern law of unjust enrichment, at least in English law, was only expressly recognised by a majority of the House of Lords in 1991 in Lipkin Gorman v Karpnale Ltd.^[1] Nevertheless, many judges had previously acknowledged the basis of private law actions as founded up the principle of unjust enrichment before.^[3] Where they had not, cases that reflected the same idea had been described as being based on concepts such as "quasi-contract", resulting trusts, multiple statutes, specific actions like money had and received, or claims for rescission of consent based obligations. Through the 20th century, common lawyers followed reformers in the civil law, particularly the German Civil Code of 1900, to fashion a law of unjust enrichment. The American Law Institute drafted a Restatement of the Law of Restitution in 1937, and the first major text by Robert Goff and Gareth Jones appeared in 1966.^[4] Lord Goff gave the leading judgment in Lipkin Gorman v Karpnale Ltd 22 years later. Peter Birks was also instrumental in promoting the autonomy of unjust enrichment within the law of obligations, in his Introduction to the Law of Restitution and through his teaching.

• Theophilus, Paraphrase 3.27.3, 5
• Gaius, Institutes
• Hugo Grotius, Introduction to Dutch Jurisprudence (1634) §§III
• Hugo Grotius, De jure belli ac pacis or The law of war and peace (1625) Book II, Ch X, §1
• William Blackstone, Commentaries (1765)
• Moses v Macferlan (1760) 2 Burr 1005
• Kelly v Solari (1841) 9 M&W 54

Framework

Since the formal acknowledgement of unjust enrichment in English law by the House of Lords in Lipkin Gorman v Karpnale Ltd^[6] four main steps have been accepted in a claim. These steps were promoted by Peter Birks on the view that, if unjust enrichment were to be regarded as an equal pillar of the law of obligations, it needed a mnemonic like those found for contractual formation (offer, acceptance, consideration, creation of legal relations) or for a claim in negligence (duty of care, breach, causation, not too remote). The House of Lords in Banque Financière de la Cité v Parc (Battersea) Ltd,^[7] approved four questions that were basic to a claim: (1) is a defendant enriched or benefited? (2) is the enrichment at the claimant's expense? (3) is the enrichment unjust? (4) are there any defences? This meant that when Banque Financière lent DM 30 million to Parc Ltd to discharge a security interest held by another bank, mistakenly thinking that it would have priority, upon Parc Ltd's insolvency, Banque Financière was entitled to get the position of having that other bank's charge (to be "subrogated"). Otherwise, Parc Ltd would have been (1) enriched by having received the benefit of a loan, (2) at Banque Financière's expense, (3) on the basis of a mistake in the transaction terms, and (4) there was no other defence Parc Ltd could point to. Many cases work on more simpler facts. For instance in Kelly v Solari^[8] Mrs Solari received money from her husband's life insurance policy. It then transpired that Mr Solari had not in fact paid the final premium installment. The Court of Exchequer held that the money could be recovered. Mrs Solari had (1) been enriched, (2) at the insurance company's expense, (3) because the money was not due this was unjust, and (4) Mrs Solari had not, for example, changed her position by spending money. In principle it is thought that the same framework can be used in any unjust enrichment claim.

Enrichment

Sources for enrichment Exall v Partridge (1799) 8 TR 308, 101 ER 1405 BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783 Regional Municipality of Peel v Canada [1992] 3 SCR 762 Rowe v Vale of White Horse DC [2003] EWHC (Admin) 388 McDonald v Coys of Kensington (Sales) Ltd [2004] EWCA Civ 47 Sempra Metals Ltd v IRC [2007] UKHL 34 Cobbe v Yeoman's Row Management Ltd [2008] UKHL 55 Manchester Police v Wigan Athletic Ltd [2008] EWCA Civ 1449 Benedetti v Sawiris [2013] UKSC 50 See English unjust enrichment law

Unlike a claimant in tort who alleges that their rights or interests have been harmed or wronged,^[9] a claimant in unjust enrichment alleges that the defendant has been "enriched" at the claimant's expense. The idea of "enrichment" is thought to separate unjust enrichment from compensatory actions such as the tort of negligence, or strict liability claims like conversion or trespass, where there is no necessity to show the defendant was "enriched" by harming another's rights (except in the sense that the defendant has exercised freedom of conduct). The concept of "enrichment" is deliberately open to capture multiple rights and interests that could hold value. The central complication is that sometimes, when people have received something, they may seek to argue that it was not valuable to them (it is "subjectively devalued"). In cases of assets or money, it is simpler to show that there has been an objective or "incontrovertible" benefit, and it is freely accepted. However this becomes more complex for services or work. First, and most simply, a valuable good will usually count as an enrichment. For example, in McDonald v Coys of Kensington (Sales) Ltd, Mr McDonald was sold a Mercedes for £20,290 but was mistakenly also given a personalised number plate worth £15,000. By the time anyone realised, it had been registered in his name, and thus he was entitled to it under statute. The auctioneers, who bought the original owners' claim, sought recovery of the number plate's value. Mance LJ held the value could be recovered, because in principle "justice requires that a person, who... has a benefit or the right to a benefit for which he knows that he has not bargained or paid, should reimburse the value... if it is readily returnable without substantial difficulty or detriment and he chooses to retain it".^[10] Even though Mr McDonald acquired the registration plate as a necessary part of the statutory scheme for registering vehicles, he still had the choice to give it up, and therefore was enriched. Second, a transfer of money will be enrichment. In Sempra Metals Ltd v IRC it transpired that Sempra Metals Ltd had paid too much in advance corporation tax (a mistake of law), and it sought recovery of the money with compound interest.^[11] The House of Lords held (reversing this point in Westdeutsche Landesbank v Islington LBC^[12] the compound interest was indeed available upon the claim: the full time-value of money, in addition to the initial sum of the enrichment. Third, if a claimant discharges a defendant's liability, this will count as an enrichment. In the old case of Exall v Partridge,^[13] Exall paid the rent to Partridge's landlord, because the landlord had seized Partridge's coachbuilding shop, and Exall's carriage with it while it was there for repair, for unpaid rent. Exall then sued Partridge to recover the money for the liability he had discharged. The Court of King's Bench held the money could be recovered. Grose J said "the law implies a promise by the three defendants to repay", although now the law recognises that the implication of a "promise" is fictitious, and liability exists simply because the defendant would otherwise be unjustly enriched.

Cases involving the rendering of services, and especially the personal performance of work, have presented greater difficulty historically. Some of the more extreme opinions of nineteenth century judges appeared to view labour as being inherently worthless unless an employer had expressly promised a certain amount of pay for doing work.^[15] However, more recent cases have adopted a distinction between commercial service providers, and those with very unequal bargaining power. A fourth category of cases cover the rendering of a service in general.^[16] In Rowe v Vale of White Horse DC,^[14] Mr Rowe received sewerage services free of charge from 1985 to 2001 because of an administrative error. Lightman J held this was an incontrovertible benefit, and Mr Rowe had to pay. Similarly, in Manchester Police v Wigan Athletic AFC Ltd, a football club received extra policing services at its football games. Because it freely accepted these service, it had to pay.^[17] A fifth category of cases involve personal performance of work, particularly by people rather than corporations. In Cobbe v Yeoman's Row Management Ltd^[18] the House of Lords held that Mr Cobbe's efforts to obtain planning permission for a development on land owned by Yeoman's Row Ltd should be compensated at a market rate, albeit that this was far lower than the gain received by Yeoman's Row Ltd. Stress was laid on the fact that Mr Cobbe acted without a fully detailed contract, but was a commercial party who could protect himself. Similarly, the Supreme Court held in Benedetti v Sawiris that when Mr Benedetti worked to arrange a takeover for Mr Sawiris without agreeing on a contractual payment for his services, Benedetti's commission would reflect the market value of his work, rather than a percentage of the profits that Sawiris took for investing his capital.^[19] The emphasis on the commercial context of these cases suggests that a market assessment of quantum meruit for work is inapplicable to labour markets characterised by unequal bargaining power: here the more appropriate guide is a fair valuation of the gain provided by the work.^[20]

Expense of another

Sources for expense BP Exploration Co (Libya) Ltd v Hunt (No 2) [1983] 2 AC 352 Lipkin Gorman v Karpnale Ltd [1988] UKHL 12 Trustee of FC Jones and Son v Jones [1997] EWCA Civ 1324 Kleinwort Benson Ltd v Birmingham CC [1996] 4 All ER 733 Roxborough v Rothmans of Pall Mall Ltd [2001] HCA 68 Kingstreet Invest Ltd v New Brunswick [2007] 1 SCR 3 Banque Belge pour l’Etranger v Hambrouck [1921] 1 KB 321 FII Group Litigation v HMRC [2012] UKSC 19 Investment Trust Companies v HMRC [2012] EWHC 458 (Ch) Relfo Ltd v Varsani [2014] EWCA Civ 360 Butler v Rice [1910] 2 Ch 277 Brown and Davis v Galbraith [1972] 1 WLR 997 See English unjust enrichment law

The second general requirement of an unjust enrichment action is that an "enrichment" (something of objective value) comes at the "expense" of the claimant. The reason for this is partly thought to delineate the autonomy of unjust enrichment as an action from claims founded on wrongs that also trigger restitution. A claim for restitution for wrongs, such as for breach of duty to avoid conflicts of interest, does allege the defendant had been enriched (e.g. by a bribe or taking an opportunity that belonged to a corporation^[21] or a trust^[22]) but it is said that this does not come at the "expense" of the claimant in the same way as other claims (except in the sense that the fiduciary's intangible duty of loyalty is "expended"). There is no necessary "subtraction" from the defendant's wealth, if the concept of subtraction is confined to meaning a pre-existing asset. Two main difficulties have then been debated in the cases: namely whether the "expense" of the claimant has to match the enrichment in value, and whether the enrichment received by the defendant needs to be directly from the claimant or can go via a third party. Generally, the courts have adopted the view that there needs to be neither complete "equivalence", nor "directness", so long as a causal connection between enrichment and expense may be shown.

Cases where the enrichment being claimed is more than the expense to the defendant usually arise where work is combined with an asset or something is done or happens so that it increases in value. In BP Exploration Co (Libya) Ltd v Hunt (No 2)^[23] Robert Goff J held that BP was entitled to recover a just sum of money for its capital investment in a Libyan oil field owned by Hunt, although their contract had been frustrated by the 1969 Libyan coup d'état, under the Law Reform (Frustrated Contracts) Act 1943. The recovery was more than its investment, but said Robert Goff J, ‘where the benefit does not consist of money, then the defendant’s enrichment will rarely be equal to the plaintiff’s expense.’ In Trustee of FC Jones and Son v Jones, the Trustee in Bankruptcy of an insolvent farming firm claimed back money that had been misappropriated from the firm and invested by Mrs Jones in potato futures (derivative contracts speculating on the price of potatoes).^[24] Only £11,700 was taken before the firm went insolvent, but the potato futures had risen in value to £50,760. Millett LJ held that the Trustee was entitled to claim the full sum of money, despite the value rise, as it came directly from the misappropriated funds.^[25] It had been debated whether the defendant can resist a claimant, by arguing it had "passed on" the expense through its other market transactions. In Kleinwort Benson Ltd v Birmingham CC^[26] the Court of Appeal denied there was any such defence,^[27] although this position is inconsistent with a number of statutes, such as the Value Added Tax Act 1994 section 80.

• Banque Belge pour l’Etranger v Hambrouck [1921] 1 KB 321
• Test Claimants in the FII Group Litigation v HMRC [2010] EWCA Civ 103
• Investment Trust Companies (in liq) v HMRC [2012] EWHC 458 (Ch)
• Relfo Ltd (in liq) v Varsani [2012] EWHC 2168 (Ch) [85]-[90] and [2014] EWCA Civ 360

• Brown and Davis v Galbraith [1972] 1 WLR 997
• Butler v Rice [1910] 2 Ch 277

Factors and basis

Although English law states that one of a number of unjust factors must be shown for a claim in unjust enrichment,^[28] this is not the approach in most other systems of law. In most civil law jurisdictions, if there has been an "absence of basis" for a transfer of value, or enrichment, there is a claim in unjust enrichment unless some positive justification can be found. For example, a consent based obligation, like a contract, gift, express trust, may be present, which defeats the claim in unjust enrichment. When fully informed and true consent is not given, this is the equivalent of finding an "unjust factor" in English law. A contract or gift will be cancelled if there is duress, misrepresentation, and so on. Then it is a separate and further question as to whether the enrichment can be returned. With an absence of basis, the enrichment will be viewed as unjustified. It follows that in the vast majority of cases the distinction between an "unjust factors" approach and an "absence of basis" approach is an issue of semantic emphasis, and holds no practical consequence.

• Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349
• Woolwich v IRC [1993] AC 70
• Test Claimants in the FII Group Litigation v HMRC [2012] UKSC 19, [2012] Bus LR 1033 [162]
• Deutsche Morgan Grenfell Group plc v IRC [2006] UKHL 49

Defences

• ‘It is evident that in these situations the strict liability from which we recoil is actually the only acceptable regime. The reason is that the [demand for a repayment of windfall gain] does not aim to make you bear a loss or to inflict a deterrent punishment on you. Strong facts are needed to justify unpleasant outcomes of that kind which will leave you worse off. The [enrichor] is not trying to make you worse off. He seeks only that you should give up the gain obtained at the shop’s expense.’ (Birks, 7)
• Kleinwort Benson Ltd v Birmingham CC [1996] 4 All ER 733
• Kingstreet Investments Ltd v New Brunswick (Finance) 2007 SCC 1
• Value Added Tax Act 1994 s 80(7)

• Dubai Aluminium Co Ltd v Salaam [2003] 2 AC 366
• Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89

• Test Claimants in the FII Group Litigation v HMRC [2012] UKSC 19, [2012] Bus LR 1033 [162]
• Sinclair v Brougham [1914] AC 398
• Pavey & Matthews Pty Ltd v Paul [1987] HCA 5, (1987) 162 CLR 221
• Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, 688 and 710-711

Unjust factors

Other than mistakes, a variety of categories of "unjust factors" are said to generate unjust enrichment situations. Undue influence, duress, incapacity and illegality are examples of vitiating factors in contract. Contract law's analysis has been used to explain why courts do not uphold contracts in these situations. These are cases of unjust enrichment. The following ten categories are examples of "unjust factor" (or what Peter Birks argued could be unified under one principle of a basis of a right being absent) which may ground a claim of restitution for unjust enrichment.^[29]

Failure of consideration

Failure by breach sources Roxborough v Rothmans of Pall Mall Ltd Chillingworth v Esche Giles v Edwards Hunt v Silk Bush v Canfield Rowland v Divall Yeoman Credit Ltd v Apps DO Ferguson & Associates v M Sohl The Mikhail Lermontov Planche v Colburn De Bernardy v Harding Boomer v Muir Taylor v Motability Finance Ltd Dies v British and International Mining and Finance Co Rover International Ltd v Cannon Film Sales Ltd Stocznia Gdanska SA v Latvian Shipping Co Sumpter v Hedges Law Comm, Pecuniary Restitution on Breach of Contract (1983) No 121 See English unjust enrichment

• Meaning of consideration
• Contracts discharged for breach
  • Claim by the innocent party for the recovery of money paid
  • Claim by the innocent party for the value of work done
  • Claim by the party in breach for the recovery of money paid
  • Claim by the party in breach for the value of the work done

Sources for impossibility Paradine v Jane [1647] EWHC KB J5 Courturier v Hastie [1856] UKHL J3 Taylor v Caldwell [1863] EWHC QB J1 Krell v Henry [1903] 2 KB 740 Bell v Lever Brothers Ltd [1931] UKHL 2 Maritime Fish Ltd v Ocean Trawlers Ltd [1935] UKPC 1 Fibrosa Spolka v Fairbairn Lawson Ltd [1942] UKHL 4 Law Reform (Frustrated Contracts) Act 1943 (c 40) Fraser & Co v Denny Mott & Dickson Ltd [1944] UKHL 3 Solle v Butcher [1950] 1 KB 671 McRae v Commonwealth Disposals [1951] HCA 79 Davis Contractors Ltd v Fareham UDC [1956] UKHL 3 John Walker & Sons Ltd [1977] 1 WLR 164 National Carriers Ltd v Panalpina (Northern) Ltd [1980] UKHL 8 BP Exploration Co (Libya) v Hunt (No 2) [1983] 2 AC 352 The Superservant Two [1989] EWCA Civ 6 Gamerco SA v ICM Fair Warning Ltd [1995] EWHC QB 1 The Great Peace [2002] EWCA Civ 1407 See common mistake and frustration in English law

• Contracts discharged by frustration
• Lampleigh v Brathwait (1615) Hobart 105, 80 ER 255
• Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] 2 All E.R. 122, on frustration

• Work done in anticipation of a contract which does not materialise
  • William Lacey (Hounslow) Ltd v Davis
  • British Steel Corporation v Cleveland Bridge and Engineering Co Ltd
  • Regalian Properties Ltd v London Docklands Development Corporation
  • Countrywide Communications Ltd v ICL Pathway Ltd

• Contracts which are unenforceable for want of formality
  • Thomas v Brown

• Void contracts
  • Craven-Ellis v Canons Ltd
  • Rover International Ltd v Cannon Film Sales Ltd
  • Westdeutsche Landesbank Girozentrale v Islington LBC
  • Gruiness Mahon & Co Ltd v Kensington and Chelsea Royal LBC
  • Goss v Chilcott

• Subsisting contracts
  • Roxborough v Rothmans of Pall Mall Ltd

• Free acceptance
  • Rowe v Vale of White Horse District Council

Mistake

Mistake sources Kelly v Solari Aiken v Short Morgan v Ashcroft Barclays Bank Ltd v WJ Simms Ltd Lloyds Bank plc v Independent Insurance Co Ltd Dextra Bank & Trust Co Ltd v Bank of Jamaica [2002] UKPC 50 Bilbie v Lumley Kleinwort Benson Ltd v Lincoln CC Nurdin & Peacock plc v DB Ramsden & Co Ltd Greenwood v Bennett Torts (interference with Goods) Act 1977 ss 1, 3(7), 6 County of Carelton v City of Ottawa Banque Financiere de la Cite v Parc (Battersea) Ltd Newbigging v Adam Whittington v Seale-Hayne Car and Universal Finance Co Ltd v Caldwell See English unjust enrichment and Mistakes in English law

• Mistaken payments
  • Mistakes of fact
  • Dextra Bank & Trust Company Limited v Bank of Jamaica [2002] UKPC 50
  • Mistakes of law
• Benefits in kind rendered by mistake
• Rescission of an executed contract entered into by mistake

Misrepresentation

Misrepresentation sources Carter v Boehm (1766) 3 Burr 1905 Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 Redgrave v Hurd (1881) 20 Ch D 1 Derry v Peek [1889] UKHL 1 Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] UKHL 4 Car and Universal Finance Co Ltd v Caldwell [1965] 1 QB 525 Misrepresentation Act 1967 Lambert v Co-op Insurance Ltd [1975] 2 Lloyd's Rep 485 Esso Petroleum Co Ltd v Mardon [1976] EWCA Civ 4 East v Maurer [1990] EWCA Civ 6 Royscot Trust Ltd v Rogerson [1991] EWCA Civ 12 Saamco v York Montague Ltd [1996] UKHL 10 Shogun Finance Ltd v Hudson [2003] UKHL 62 Unfair Commercial Practices Directive 2005/29/EC Unfair Trading Regulations 2008 (SI 2008/1277) Misrepresentation in English law

• Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, on misrepresentation

Ignorance

Ignorance sources Holiday v Sigil (1826) 2 C&P 176 Banque Belge pour L'Etranger v Hambrouck [1921] 1 KB 321 Agip (Africa) Ltd v Jackson [1990] Ch 265 Lipkin Gorman v Karpnale Ltd [1988] UKHL 12 Carl-Zeiss Stiftung v Herbert Smith & Co (No 2) [1969] 2 Ch 276 Re Montagu's Settlement Trusts [1987] Ch 264 Belmont Finance Corp v Williams Ltd (No 2) [1980] 1 All ER 393 Re Diplock [1951] AC 251 Criterion Properties plc v Stratford LLC [2004] UKHL 28 See English unjust enrichment

• Common law strict liability subject to defences
• Holiday v Sigil
• Banque Belge pour L'Etranger v Hambrouck
• Agip (Africa) Ltd v Jackson

• Equity, knowing receipt and dealing
• Carl-Zess Stiftung v Herbert Smith & Co (No 2), dishonesty required
• Re Montagu's Settlement Trusts
• Belmont Finance Corp v Williams Furniture Ltd (No 2), negligence also held to be sufficient
• BCCI (Overseas) Ltd v Akindele, unconscionability as the test

• Re Diplock, strict liability subject to defences as an exception

Duress

Duress cases Barton v Armstrong [1973] UKPC 2 Astley v Reyonds Skeate v Beale The Atlantic Baron [1979] QB 705 Pao On v Lau Yiu Long [1979] UKPC 2 Universe Tankships of Monrovia v International Transport Workers' Federation B&S Contracts and Design Ltd v Victor Green Publications Ltd Crescendo Management Pty Ltd v Westpact Banking Corp Dimskal Shipping Co SA v International Transport Workers' Federation Huyton SA v Peter Cremer GmbH & Co R v Attorney General for England and Wales [2003] UKPC 22 Williams v Bayley Silsbee v Webber Mutual Finance Ltd v John Wetton & Sons Ltd Norreys v Zeffert English unjust enrichment and unconscionability in English law

Undue influence and exploitation

Undue influence and weakness Allcard v Skinner (1887) 36 Ch D 145 Royal Bank of Scotland plc v Etridge (No 2) [2001] UKHL 44 R v Attorney General for England and Wales [2003] UKPC 22 National Commercial Bank (Jamaica) Ltd v Hew Louth v Diprose Fry v Lane Cresswell v Potter Boustany v Pigott Credit Lyonnais Bank Nederland NV v Burch Earl of Ayelsford v Morris Alec Lobb (Garages) Ltd v Total Oil (Great Britain) Ltd The Medina The Port Caledonia and The Anna Green v Portsmouth Stadium Ltd See English unjust enrichment

• Relational undue influence
• Allcard v Skinner (1887) 36 Ch D 145

• The role of unconscionable conduct
• Exploitation of the mental inadequacy of the claimant
• Exploitation of the economic weakness of the claimant
• Exploitation of the difficult circumstances of the claimant
• Illegality to protect vulnerable persons from exploitation

Legal compulsion

Compulsory discharge of another's liability can happen (1) to recover one's goods, or (2) if someone falls under a common liability for another.

• Exall v Partridge
• Edmunds v Wallingford
• Moule v Garrett
• Gebhardt v Saunders
• Brook's Wharf and Bull Wharf Ltd v Goodman Brothers
• Owen v Tate
• Niru Battery Manufacturing Co v Milestone Trading Ltd (No 2)
• Bonner v Tottenham and Edmonton Permanent Investment Building Society
• Re Nott and Cardiff Corp
• Metropolitan Police District Receiver v Croydon Corp
• Land Hessen v Gray and Gerrish
• Esso Petroleum Ltd v Hall, Russell & Co Ltd
• Crantrave Ltd v Lloyds Bank plc
• Deering v Earl of Winchelsea
• Civil Liability (Contribution) Act 1978 ss 1(1), 2(1), 2(3), 3, 6(1)

Necessity

Necessity sources Nicholson v Chapman Falcke v Scottish Imperial Insurance Co Jenkins v Tucker Rogers v Price Ambrose v Kerrison Bradshaw v Beard The Goring Prager v Blatspiel Stamp and Heacock Ltd China Pacific SA v Food Corporation of India In re Rhodes Great Northern Railway v Swaffield Matheson v Smiley In re Berkeley Applegate Ltd See English unjust enrichment

Illegality

Sources for illegality Holman v Johnson (1775) 1 Cowp 341 Pearce v Brooks (1866) LR 1 Ex 213 Archbolds (Freightage) Ltd v S Spanglett Ltd [1961] 2 QB 374 Enderby Town FC Ltd v Football Association Ltd [1971] Ch 591 De Wutz v Hendricks (1824) 2 Bing 314 Beresford v Royal Exchange Assurance [1938] AC 586 Arbitration Act 1996 sections 68-69, 87 Nordenfelt v Maxim, Nordenfelt Guns Ltd [1894] AC 535 Esso Ltd v Harper's Garage (Stourport) Ltd [1967] UKHL 1 Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308 Alec Lobb (Garages) Ltd v Total Oil Ltd [1984] EWCA Civ 2 Hughes v Liverpool Victoria Legal Friendly Society [1916] 2 KB 482 Tinsley v Milligan [1994] 1 AC 340 Taylor v Bowers (1876) 1 QBD 291 Kearley v Thomson (1890) 24 QBD 742 Bigos v Bousted [1951] 1 All ER 92 See illegality in English law

• Lipkin Gorman v Karpnale Ltd

Incapacity

Incapacity sources Valentini v Canali Steinberg v Scala (Leeds) Ltd Pearce v Brain Hart v O'Connor Brougham v Dwyer Commonwealth of Australia v Burns Woolwich Equitable BS v IRC See English unjust enrichment

• Companies Act 2006 ss 39-40
• Gibb v Maidstone and Tunbridge Wells NHS Trust [2010] EWCA Civ 678 [26]-[27] held an NHS trust had not acted ultra vires so that a £250k payment to a former chief executive could not be recovered as being irrationally overpaid.

• Hazell v Hammersmith and Fulham LBC [1992] 2 AC 1. Banks paid councils a lump sum (for Islington, £2.5m). The councils then paid the banks back at the prevailing interest rate. Banks paid councils back a fixed interest rate (this is the swap part). The point was that councils were gambling on what interest rates would do. So if interest rates fell, the councils would win. As it happened, interest rates were going up and the banks were winning. Islington was due to pay £1,354,474, but after Hazell, it refused, and waited to see what the courts said. At first instance Hobhouse J said that because the contract for the swap scheme was void, the council had been unjustly enriched with the lump sum (£2.5m) and it should have to pay compound interest (lots) rather than simple interest (lots, but not so much). But luckily for local government, three law Lords held that Islington only needed to repay with simple interest. There was no jurisdiction for compound interest. They said this was because there was no ‘resulting trust’.

• Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, the council had no authority to enter into a complex swap transaction with the German bank. So the House of Lords held that the council should repay the money they had been lent and a hitherto unknown ‘unjust’ factor was added to the list. Birks argued that the better explanation in all cases is an ‘absence of basis’ for the transfer of property. Searching through or adding to a list of open ended unjust factors simply concludes on grounds of what one wishes to prove, grounds that ‘would have to be constantly massaged to ensure that they dictated an answer as stable as is reached by the shorter ‘non basis’ route.’ (Birks (2005) 113)

• Banque Financiere de la Cite v. Parc (Battersea) Ltd [1999] 1 AC 221

• Deutsche Morgan Grenfell plc v IRC [2006] UKHL 49 at [26] Money was paid as tax under a statutory regime, which the ECJ later held to have infringed the EC Treaty. The House of Lords held that a claim could be made on grounds of a ‘mistake as to the law’. Professor Charles Mitchell prefers the reasoning of Park J at first instance, which recognised that there is not really a ‘mistake’ in terms of an ‘impairment of a claimant’s actual thought processes’. Lord Hoffmann recognised it only implicitly at [32].

Tracing and proprietary restitution

Tracing sources Taylor v Plumer [1815] EWHC KB J84 Banque Belge pour L'Etranger v Hambrouck [1921] 1 KB 321 Agip (Africa) Ltd v Jackson [1990] EWCA Civ 2 Lipkin Gorman v Karpnale Ltd [1988] UKHL 12 Trustee of FC Jones & Sons v Jones [1996] EWCA Civ 1324 Sinclair v Brougham [1914] AC 398 Re Diplock [1948] Ch 465 Barlow Clowes Ltd v Vaughan [1991] EWCA Civ 11 Re Hallett's Estate (1880) 13 Ch D 696 Re Oatway [1903] Ch 356 Re Tilley's Will Trusts [1967] Ch 1179 Foskett v McKeown [2000] UKHL 29 James Roscoe (Bolton) Ltd v Winder [1915] 1 Ch 62 Re Goldcorp Exchange Ltd [1994] UKPC 3 Space Ltd v Canadian Imperial Bank Ltd [1986] UKPC 1 Bishopsgate Investment Ltd v Homan [1994] EWCA Civ 33 Boscawen v Bajwa [1995] EWCA Civ 15 See English unjust enrichment and tracing

Tracing at common law

• Taylor v Plumer
• Banque Belge pour L'Etranger v Hambrouck
• Agip (Africa) Ltd v Jackson
• Lipkin Gorman v Karpnale Ltd
• Trustee of the Property of FC Jones and Sons v Jones

Tracing in equity

• Sinclair v Brougham
• Re Diplock [1948] Ch 465, 533, 534, and 539
• Barlow Clowes International Ltd v Vaughan [1992] 4 All ER 22
• Re Hallett's Estate (1880) 13 Ch D 696, 727
• Re Oatway [1903] 2 Ch 356, 360
• Re Tilley's Will Trusts
• Foskett v McKeown [2001] 1 AC 102, 127-8
• James Roscoe (Bolton) Ltd v Winder [1915] 1 Ch 62
• Re Goldcorp Exchange Ltd
• Bishopsgate Investment Management Ltd v Homan

Proprietary restitution

• Chase Manhattan Bank NA v Israel-British Bank (London) Ltd
• Lord Napier & Ettrick v Hunter
• Boscawen v Bajwa
• Westdeutsche Landesbank Girozentrale v Islington LBC

Following

• Jones v De Marchant (1916) 28 DLR 561

Tracing

• Shalson v Russo [2003] EWHC 1637 (Ch), [2005] Ch 281 [144]
• Turner v Jacob [2006] EWHC 1317 (Ch), [2008] WTLR 307 [100]-[102]

Mixing two claimants' money or money mixed with an innocent claimant

• Clayton’s case (1816) 1 Mer 529
• Russell-Cooke Trust Co v Prentis [2002] EWHC 2227 (Ch), [2003] 2 All ER 478 [55]
• Commerzbank AG v IMB Morgan plc [2004] EWHC 2771 (Ch), [2005] 1 Lloyd’s Rep 198

Backwards tracing

• Bishopsgate Investment Management Ltd v Homan [1994] 3 WLR 1270, 1274 and 1279
• Law Society v Haider [2003] EWHC 2486 (Ch) [40]-[41]

M Conaglen ‘Difficulties with Tracing Backwards’ (2011) 127 LQR 432

Swollen assets theory

• Space Investments Ltd v CIBC (Bahamas) Ltd [1986] 1 WLR 1072
• Serious Fraud Office v Lexi Holdings plc [2008] EWCA Crim 1443, [2009] QB 376 [46]-[58]

Defences

Change of position

• Lipkin Gorman v Karpnale Ltd
• Phillip Collins Ltd v Davis [2000] 3 All ER 808
• Scottish Equitable plc v Derby
• Commerzbank AG v Gareth Price-Jones
• Dextra Bank and Trust Co Ltd v Bank of Jamaica
• Niru Battery Manufacturing Co v Milestone Trading Ltd
• Barros Mattos Junior v Macdaniels Ltd
• RBC Dominion Securities Inc v Dawson

Estoppel

• Avon CC v Howlett
• Scottish Equitable plc v Derby
• National Westminster Bank plc v Somer International (UK) Ltd

Bona Fide Purchaser

It means that good value is given for receipt of assets without notice of breach of trust. It is a complete defence to any knowing receipt claim.

• Miller v Race
• Dextra Bank and Trust Co Ltd v Bank of Jamaica

Agency

Another available defence is ministerial receipt, i.e. the recipient defendant receives the assets as agent for another.

• Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation
• Portman Building Society v Hamlyn Taylor Neck

Counter restitution impossible

• Clarke v Dickson
• Armstrong v Jackson
• Spence v Crawford
• Smith New Court Securities Ltd v Scrimgeour Vickers Ltd
• Mahoney v Purnell

Passing On

• Kleinwort Benson Ltd v Birmingham CC
• Commissioner of State Revenue v Royal Insurance Australia Ltd

Illegality

• Oom v Bruce
• Smith v Bromley
• Smith v Cuff
• Parkinson v College of Ambulance Ltd
• Re Cavalier Insurance Co Ltd
• Mohamed v Alaga & Co
• Bowmakers Ltd v Barnet Instruments Ltd
• Tinsley v Milligan
• Tribe v Tribe
• Nelson v Nelson

Incapacity

• Cowern v Nield
• Stocks v Wilson
• R Leslie Ltd v Sheill
• Minors' Contracts Act 1987 s 3

Comparative law

Unjust enrichment is a developed and coherent field in continental civil law systems. Continental lawyers say someone is unjustly enriched when there is no basis for their possession or title to some right or property. A more correct way of saying it is that someone has been "unjustifiedly enriched". In German, the term is Ungerechtfertigte Bereicherung (§812 BGB) and in France the term is Enrichissement sans cause. English lawyers, however, have been accustomed to identify an "unjust factor". The difference between "unjust factors" and "absence of basis" as a unifying principle has generated a lot of debate, particularly since Peter Birks changed his mind in his second edition of Unjust Enrichment (2005) in the Clarendon Law Series, and argued that the continentals had got it right.

The two leading theorists that have revived unjust enrichment were Lord Goff, who produced Goff and Jones on Restitution and Professor Peter Birks.

See also

• Dextra Bank & Trust Company Limited v Bank of Jamaica
• Peter Birks
• Restitution

Notes

References

• P Birks, Unjust Enrichment (2nd Ed, Clarendon, Oxford, 2005)
• A Burrows, J Edelman and E McKendrick, Cases and Materials on the Law of Restitution (2nd Ed, OUP, Oxford, 2007)