#6751 - Cressman V. Coys Of Kensington - Restitution of Unjust Enrichment BCL

Cressman v. Coys of Kensington [2004]

Facts

The late Mr Thomas Ashley Cressman owned a Mercedes 280SL car carrying the registration TAC 1. Mr and Mrs Cressman are his personal representatives. Coys are car auctioneers. Mr Cressman, no doubt for Mrs Cressman also, instructed Coys to sell the car without its personalised registration mark… These proceedings arise from Coys' failure to retain the mark, when the car was paid for by and delivered to Mr McDonald on 12 December 2000, and from Mr McDonald's subsequent refusal to re-transfer the mark.

Under regulations 3 and 4, if a seller is to sell a car but retain the right under the legislative scheme to its personalised registration mark, the seller needs to apply for and obtain a right of retention while still owner of the car. Coys failed to do this on behalf of the Cressmans…. However, Coys had made it clear prior to the auction that the vehicle was being sold without its existing registration number. Mr McDonald had, prior to the auction, carefully inspected the car. He admitted that he observed that the car had no number plates.

On 12 December 2000, Mr McDonald paid for and, under the relevant auction conditions, obtained title to the car. He collected it by trailer, still without any number plate, and unusable for this reason (and it appears probably also on other grounds) on a public road… The consequence of Coys' failure to obtain for the Cressmans a right of retention in respect of the registration mark was that, under the legislative scheme: (i) the mark remained assigned to the car upon and after its sale to Mr McDonald; and (ii) Mr McDonald was (unless he applied for its “retention” with a view to transferring it to another car) entitled to have the car registered in his name with that mark.

The judge also dealt with an unpleaded point that was raised in the light of Mr McDonald's evidence. This was that Mr McDonald had given the car to his partner. At the trial, Mr McDonald said that he was no longer the owner of the car, but precisely when and how it became his partner's was not directly addressed.

But the judge clearly considered, and I agree, that, as soon as Mr McDonald knew that the car had brought with it an entitlement to the mark, he knew that this was something that he was not supposed to have. The course of conversation on 13 December 2000 (as noted by Mr. McDonald himself) and his immediate pursuit of the registration of the car in his name under its old registration mark also suggest that he chose at once to take advantage of the evident mistake and to obtain the mark contrary to the bargain, rather than to investigate and take any step necessary to correct the mistake. Mr. McDonald’s subsequent conduct, as found by the judge, confirms the suggestion.

Holding

The court held that the defendant was enriched for reasons that fall under the following two broad heads: (1) On account of the Defendant’s conduct (2) Due to the incontrovertible nature of the benefit. The exact difference between these two heads is explained by the court in the following words: “Free acceptance” and “reprehensible seeking out” represent tests focusing on the circumstances under which Mr. McDonald came to have a car carrying the registration mark TAC 1, while “incontrovertible benefit” focuses on the subjective value to him of the mark once acquired, regardless of those circumstances.

I. Conduct of the Defendant

A. Readily Returnable Benefit

It seems to me, however, that the parties' submissions failed generally to give due weight to the fact that the academic debate in the passages cited about “free acceptance” and “indisputable benefit” relates primarily to situations (typically the supply of services) where any benefit is not readily returnable.

Here, because of Coys' mistake, Mr McDonald acquired a car on 12 December 2000 which had, under the statutory scheme, a right to the mark TAC 1. His acquisition of the car on that date cannot have involved any “free acceptance” of either the mark or the right to it. Mr Brownlee of Coys had reminded or told him and he knew on 12 December that he was not to get the old mark. But the process by which Mr McDonald came to have a car carrying that mark can, I think, be regarded as extending beyond 12 December 2000. In order to register himself as keeper he applied for a registration document, entering on the form V62 the mark TAC 1 in the knowledge that this would lead to the car being registered in his name with that mark. Notes B, C and E to the Retention of Vehicle Registration Number form V778/1 (trial document E14) indicate that Mr McDonald could, even on 13 December 2000, have applied to retain the mark, with a view to re-transferring it to the estate or its order. But he made, so far as appears, no inquiry and certainly did not pursue the obvious possibility that such a step could be taken.

By 5 January 2001, Mr McDonald was aware that the estate and Coys would be pursuing claims against him in relation to the mark. Notwithstanding that, he still did not make any application to retain the mark, with a view to its re-transfer to the estate. Only on or about 10 January 2001 did the DVLA register him as the keeper of the car with the mark TAC 1, so that he had every opportunity to correct the position before the mistake made in his favour was consolidated.

It is a salient feature of this case that Mr McDonald could have exercised a right of “retention” so as to retransfer the registration mark to the Cressmans' order, and would then in lieu have received from the DVLA the age-related mark which he had expected; he could have done this at any stage after his acquisition of the car-at least until its gift to his partner which, as I have said, cannot have been before 8 February 2001; and he refused to do this knowing that he had received the mark by mistake contrary to the auction bargain. The mark was here not just realisable, but easily returnable. The case lies outside the scope of Pollock CB's aphorism in Taylor v Laird (1856) 25 LJ Ex 329, 332: “One cleans another's shoes; what can the other do but put them on?”

….

Looking at the matter generally, I have no doubt that justice requires that a person, who (as a result of some mistake which it becomes evident has been made in the execution of an agreed bargain) has a benefit or the right to a benefit for which he knows that he has not bargained or paid, should reimburse the value of that benefit to the other party if it is readily returnable without substantial difficulty or detriment and he chooses to retain it (or give it away to a third party) rather than to retransfer it on request. Even if realisable benefit alone is not generally sufficient, the law should recognise, as a distinct category of enrichment, cases where a benefit is readily returnable. A person who receives another's chattel must either return it or pay damages, commonly measured by reference to its value. The mark is not a chattel, and it was not suggested before us that its return could at any stage (even before the gift to the partner) have been enforced, or that its non-return could sound in damages. (There were allegations below of implied duties to co-operate in the return of the mark, but the judge did not accept them, and there is no appeal in that respect.) However, Mr McDonald's insistence on keeping the mark and the absence of any obvious means of compelling its retransfer are reasons for analysing this case in terms of unjust enrichment. Mr McDonald knew that he had not bargained or paid for the mark. The mark or its benefit was in practice easily returnable. If Mr McDonald chose to keep it, then I see every reason for treating him as benefited.

It also seems to me unrealistic to suppose that Mr. McDonald did not in the circumstances himself attach value to the mark. By refusing to effect a retransfer, and by later giving the car with its mark away to his partner, Mr McDonald was exercising a deliberate preference to give himself and/or his partner the practical enjoyment of the mark for the meantime and the possibility of realising its monetary value in the longer term.

B. Free Acceptance

Bearing in mind the circumstances in which Mr McDonald came to register in his name a car carrying the mark TAC 1, it could, I think, be regarded as falling within the general principle of free acceptance advocated by Professor Birks and Goff &...