#6752 - Charles Rowe V. Vale Of White Horse District Council 2003 - Restitution of Unjust Enrichment BCL

Charles Rowe v. Vale of White Horse District Council [2003]

Facts

The Council as local housing authority built and operated a sewage treatment works and two pumping stations to provide for the disposal of sewage from its council houses and charged the costs of operating and maintaining the sewerage service to its Housing Revenue Account. The Council did not separately charge its tenants for the cost of the provision to them of the sewerage services… The Council entered into private contracts with the owners of certain properties which never belonged to the Council to provide sewerage services in return for payment for such services. From 1982 until 2001, whilst the Council recovered payment from those who entered into contracts for payment for such services, the Council made no claim for any payment for sewerage services from any of the owners of properties which it had sold, least of all Mr. Rowe. The reason for this lack of action during the period 1982–1995 was (according to the Council) an administrative oversight… Over the whole period from 1982 until the 26th March 2001 the Council gave no intimation to any house owner or occupier to whom it was providing sewerage services other than those with whom it had entered into contracts that there was any question of any charge being made for them…. In 2002 finally, after consultation with its legal advisors the council made a retrospective demand for payment for the last 13 years.

Mr Rowe protested that, if he had known that there was any question of such a liability arising, he would have wished to consider an alternative to continuing to accept the Council's services (e.g. acquiring and using a septic tank) and would each year have made provision to meet the eventual liability. It is however clear on the evidence that there was no practical alternative to use of the Council's sewerage services available at a price comparable to that which the Council intends to charge and Mr Rowe raises no defence of “change of position”.

Issue

Whether a claimant can recover payment for the supply of services under the principles of restitution where over the thirteen years that he made supplies to the defendant he never gave any intimation that he intended to make any charge for the supplies and in the circumstances the defendant reasonably believed that in obtaining such supplies he incurred no liability to the claimant or anyone else in respect of them.

Holding

There was incontrovertible benefit

12. It is common ground between the parties that the first two and the fourth conditions are satisfied, for Mr Rowe obtained the benefit of the sewerage services provided by the Council and there is no defence available e.g. of change of position. Originally in a case such as the present of a supply of services, it was necessary in order to satisfy the second condition to establish a request by the defendant for the services. But under the developing law of restitution it is now enough if either of two principles are brought into play. The first principle is that the second condition is to be deemed to be satisfied if the defendant has freely accepted (or acquiesced in the supply for consideration of) the services rendered. The second principle is that in exceptional circumstances the second condition is to be deemed satisfied if the defendant has been incontrovertibly benefited from their receipt: see Goff & Jones The Law of Restitution 6th ed. para 1002. The Council in this action contends that Mr Rowe freely accepted the sewerage services rendered and by reason of such free acceptance in accordance with the first principle the second condition is to be deemed satisfied. An essential ingredient for application of the principle of free acceptance is acquiescence by the defendant in the supply of the services for a consideration (a matter to which I turn when I consider the third condition). In the absence of proof of such acquiescence, the principle of free acceptance cannot be invoked to satisfy the second condition. But it is common ground that the receipt of the services constituted an incontrovertible benefit and that the second condition is to be deemed to be satisfied for this reason.

Free acceptance as an Unjust Factor – not established on facts

Citing Goff and Jones:

“… a defendant who is...