Unjustified Enrichment

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  • Created by: Zenab12
  • Created on: 27-04-16 17:59

Introduction

  • General Principle - anyone made richer by loss of another must restore or pay for benefit recieved. Obviously too wide to give rise in every case to an obligation to restore.
  • Enrichment is said to be unjustified and one which should be reversed if its retention is supported by no legal ground. i.e. recipet, valid contract

Key Recent Cases - Shiliday v Smith 1998 - where a home was bought on the basis of marriage. Money had been spent on doing the home up by SH. The parties then seperated and SH wanted money back. Claim of unjust enrichment, was successful as money was only spent on the idea of couple getting married.

  • Morgan Trs NY v Lothian Regional Council 1995 - where an agreement was struck and payments were to be made on specific dates by both parties. Bank had made payments but LRC did not make any payments.Held the contract made was void and Morgan Trs was entitled to get remunerations as they had unjustly been enriching LRC. LRC were found liable to repay the bank.
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Condictiones

  • Roman law condictiones can be seen as descriptions of situations in which an enrichment of any kind would be seen as unjustified , without necessarily categorising it.

Enrichment can be -

  • addition of a new asset to a person wealth
  • adding value to a person already existant wealth
  • preserving anothers asset
  • preforming an obligation lying upon another, saving that other the expense of preformance
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Receipt or Acquisition of Money

  • For title above - Morgan Trst NY v LRC 1995 - see page 1
  • Receipt or acquisition of other property - Findlay v Munro 1698 - F sent Ox to Macfarlane, but by mistake was delivered to M. M thought it was a gift, so killed it. M was enriched by receipt of animal and was held liable.
  • Improvement of another property - Newton v Newton 1925 House was bought by Mr N for his prospective wife. He believed he was homeowner so spent £400 improving and repairing it. Marriage broke down and ex Mrs N to-be was the owner. She was found to have been enrichedby having His improvements.
  • Unauthorised use of another property - Jarvis v Manson 1954 - jewellers bought a ring which they renovated, polished and resold. The ring had been stolen they were unaware. Held in good faith the jewellers were liable to the true owner to the extent of their enrichment for the resale.
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What to Consider

Must distinguish between -

Enrichment:

  • By transfer i.e. lands, money etc
  • By imposition
  • By taking

Difference between Transfer and Imposition

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Enrichment by Transfer

  • You are not able to get somethig back from somebody if the transfer was a reulst of a vild contract or gift.
  • Although if there is no legal ground for the contract or gift then you must show 1 of the condictiones is applicable.
  • Condictio Indebiti - action for recovery of an undue transfer. usually happens where transferor has made undue transfer in result of an error
  • Error may be in fact or in law. However transferors error need not be excusable.
  • Morgan Trs v LRC 1995
  • Bank of NY v North British Steel Group 1992 - Held that for BNY to recover any costs they would have to show they had the error in the first place
  • If error is non-liable the transfer is not recoverable - Scanlon v Scanlon 1990 - car was purched under HP by male partner. Female partner knew she was notliable under contract but thought they both owned car. Held error, not being liability, did not support recovery of payments.
  • Causa Data Causa Non Secuta - action for recovery of something which was transferred for future purpose but has failed to materialise. Shilliday v Smith 1998 - home renovated on babsi of marriage
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Enrichment by Imposition

  • These condictions are rearely relevant in cases of imposed enrichment
  • Unauthorised improvement of another property is a classic example - Newton v Newton 1925 - male partner bought home in view of his prospective wife. He believed he owned home and impoved it. female was found to own house after the relationship broke down. She was enriched by his improvements to the home
  • Law must be careful to distinguish both situations
  • Rules seem to be that an impoverished person in good faith may carry out improvement of a property they are in possession of.  
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Enrichement by Taking

  • This means a perosn may actively try to encroach upon another property so goods have been taken rather than transferred - arises in moveable goods usually
  • Shetland Islands Council v BP Ltd 1990 - BP leased land from Council whilst megotions were going on. They were unsuccessful. Held that BP could be made liable under the circumstances of the case.
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Defences

  • There can be serval defences - Personal Bar, Precription, Set-off, Acting in Goof Faith and Change of Position/loss of enrichement.
  • Change of Position - RBS v Watt 1991 -   was window-cleaner and had account with RBS. He met T in bank who asked him to cash a cheque for roughly £18'000. Cheque was forgery. W cashed the cheque and court rejected W's claim of defecne as Watt had been negligent.

Remedies

Repitition, Restitution and Recompense are the usual remides. In Transfer cases the remedy will typically by Repitition or Restituion - dependent on what was transferred etc. And in Imposition and Takinds cases the remedy is uauly Recompense.

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