#6800 - Sumpter V. Hedges - Restitution of Unjust Enrichment BCL

Sumpter v. Hedges

Facts

The action was for work done and materials provided. The plaintiff, a builder, had contracted with the defendant to build upon the defendant's land two houses and stables for the sum of 565l. The plaintiff did part of the work, amounting in value to about 333l., and had received payment of part of the price. He then informed the defendant that he had no money, and could not go on with the work. The learned judge found that he had abandoned the contract. The defendant thereupon finished the buildings on his own account, using for that purpose certain building materials which the plaintiff had left on the ground. The judge gave judgment for the plaintiff for the value of the materials so used, but allowed him nothing in respect of the work which he had done upon the buildings.

Holding

A. L. Smith LJ

The law is that, where there is a contract to do work for a lump sum, until the work is completed the price of it cannot be recovered. Therefore the plaintiff could not recover on the original contract. It is suggested however that the plaintiff was entitled to recover for the work he did on a quantum meruit. But, in order that that may be so, there must be evidence of a fresh contract to pay for the work already done. With regard to that, the case of Munro v. Butt appears to be exactly in point. That case decides that, unless the building owner does something from which a new contract can be inferred to pay for the work already done, the plaintiff in such a case as this cannot recover on a quantum meruit… there being no circumstances to justify an inference of a fresh contract the plaintiff must fail.

Chitty L J

A long series of cases in which it has been decided that there must in such a case be some evidence of a new contract to enable the plaintiff to recover on a quantum meruit… He says: “In the case of goods sold and delivered, it is easy to shew a contract from the retention of the goods; but that is not so where work is done on real property.” I think the learned judge was quite right in holding that in this case there was no evidence from which a fresh contract to pay for the work done could be inferred.

Collins LJ

If the plaintiff had merely broken his contract in some way so as not to give the defendant the right to treat him as having abandoned the contract, and the defendant had then proceeded to finish the work himself, the plaintiff might perhaps have been entitled to sue on a quantum meruit on the ground that the defendant had taken the benefit of the work done. But that is not the present case. There are cases in which, though the plaintiff has abandoned the performance of a contract, it is possible for him to raise the inference of a new contract to pay for the work done on a quantum meruit from the defendant's having taken the benefit of that work, but, in order that that may be done, the circumstances must be such as to give an option to the defendant to take or not to take the benefit of the work done.

Where, as in the case of work done on land, the circumstances are such as to give the defendant no option whether he will take the benefit of the work or not, then one must look to other facts than the mere taking the benefit of the work in order to ground the inference of a new contract. In this case I see no other facts on which such an inference can be founded. The mere fact that a defendant is in possession of what he cannot help keeping, or even has done work upon it, affords no ground for such an inference. He is not bound to keep unfinished a building which in an incomplete state would be a nuisance on his land.

I am therefore of opinion that the plaintiff was not entitled to recover for the work which he had done.

Comments:

1. This case does not seem to have been decided on the basis that a person in breach of contract cannot claim restitution. On the other hand, the decision seems to have been based on the ground that there is nothing to overcome a subjective devaluation argument by the plaintiff. At least three factors point in this direction:

   1. Value of materials was allowed be recovered by the plaintiff (see headnote) – but value of construction was not. This is because the materials left behind by the plaintiff were used by the defendant in further construction.

   2. Chitty LJ cites with approval a passage by Bramwell B. that indicates that if this case were concerned with goods, mere retention would have been sufficient. This is because enrichment in that case is proved by the retention of a readily returnable benefit.

   3. Finally, Collins LJ expressly states, “If the plaintiff had merely broken his contract in some way so as not to give the defendant the right to treat him as having abandoned the contract, and the defendant had then proceeded to finish the work himself, the plaintiff might perhaps have been entitled to sue on a quantum meruit on the ground that the defendant had taken the benefit of the work done.” Clearly the concern here is that there is nothing to indicate that the defendant subjectively enriched.