#10033 - Enrichment Essay - Restitution of Unjust Enrichment

ENRICHMENT ESSAY

OPENING

1. BATTERSEA

1. First limb of Battersea for an unjust enrich claim is whether D received a benefit (per Lord Steyn). This means D received value.

2. SUBJECTIVE DEVALUATION

1. Coined by Birks

2. Even if D has been objectively benefitted (ie. a reasonable man could regard himself as benefitted by what has occurred, or, put another way, C’s ‘performance’ has a market value), D may validly argue that the benefit has no value to him.

3. It has been explicitly referred to in a number of cases like Cressman v Coys and Sempra Metals

3. 2 STAGE TEST

1. Benedetti v Sawiris (SC) – in leading judgment Lord Clarke seemingly proposed a 2 stage test for establishing benefit (at 34):

1. what was the objective value of the benefit (ie. the price which a reasonable person in the defendant’s position would have had to pay for the services’)

2. Is it permissible to reduce this value to reflect D’s subjective views? (hence subjective devaluation)

2. These two stages serve to answer the overriding concern, stated by Lord Clarke [at para 11]: ‘The question remains what is the value of the unjust enrichment’

OBJECTIVE BENEFIT

1. Benefit can be positive or negative.

2. Positive benefit

1. I do something which directly gives you value

2. Eg. receipt of money, personal right to payment of a debt, improvements to land

3. Negative benefit

1. I do something which saves you money

2. Eg. receipt of services, use of another’s land

3. Gibb v Maidstone – also includes discharge of a legal obligation

Services

1. There are a number of different approaches:

1. Burrows

1. services have objective benefit from the moment they are received

2. So if it’s cutting your hair, the moment the first locks of hair are cut you’ve received benefit

2. Birks

1. services have object benefit from the moment they commence

2. Planche v Colburn – so C was contracted to write a book for D but tendered no part of it before contract was terminated for D’s breach. C was entitled to payment. Birks sees this as UE case

3. Burrows – describes this as an ‘unrealistic and overinclusive notion of benefit’ but ME I actually like it

3. Beatson

1. he dismisses pure services. So a haircut is not an objective benefit. He only values services that produce an end result (like a house). BUT

2. Cobbe v Yeoman’s Row – Lord Scott confirmed that the question is the value of the services themselves, not of any end-product THUS

3. Burrows – this is an underinclusive notion of benefit

OVERCOMING SUBJECTIVE DEVALUATION

1. As the law does cater for the individuality of value (by recognising subjective devaluation) there are several ways of overcoming D saying that he did not value the benefit received. Here are all the approaches to overcome D saying this:

TEST 1: INCONTROVERTIBLE BENEFIT

1. What is it?

1. It means that objective benefits that are so obviously beneficial that, irrespective of any conduct of D indicating choice, one would regard D as benefitted SO

2. No reasonable man could seriously deny that he has been benefitted so subjective devaluation is not relevant (eg. with money)

2. Approved

1. BP Exploration v Hunt – this concept received explicit approval

3. Different from other tests

1. unlike the other tests for overcoming subjective devaluation as it does not consider D’s conduct

4. Before or After Receipt

1. Cressman v Coys – test was determined by examining indicators of benefit after the enrichment BUT

2. Burrows – suggests that the usual approach is to consider indicators of benefit in acquiring the benefit AS APPROVED IN

3. BP Exploration v Hunt

Incontrovertible Benefit as a Presumed Benefit?

1. Misleading Term

1. Burrows suggests that the term ‘incontrovertible’ benefit suggests it cannot be rebutted AS PROFESSOR STEVENS SUGGESTS

2. ‘It is impossible to controvert what is incontrovertible’

2. Always Rebuttable?

1. There will always be occasions where D can argue that the receipt of a benefit (including money) had less value to them FOR EXAMPLE

2. Burrows – if D has received money from C, he could argue that he received no benefit still as this payment meant a 3^rd party didn’t pay him instead THUS

3. Burrows suggests it’s better to look at it as more of a presumption

3. Supported By Case Law?

1. Arguably Sempra Metals (HL) – in that their Lordships spoke of it being ‘presumed’ that the opportunity to use C’s money was beneficial, having regard to subjective devaluation to take account of D’s own circumstances (ie. that it was a government body which could borrow at lower rates than the commercial rate) EXPLAINED IN LAYMAN’S:

2. Sempra Metals, the government (D) took C’s money under advance corporation tax and kept it, despite it being contrary to the EC Treaty. When C claimed for the use of the money (ie. it was basically a huge interest-free loan) there was a presumption that this was incontrovertibly beneficial. But, the government could overcome this by highlighting how they could have borrowed money at a lower rate if they’d wanted by issuing Treasury bonds BUT

3. Lord Reed’s view in Benedetti that Sempra Metals was not about subjective devaluation!

4. Change of Position

1. The alternative view Burrows suggests is that in the example above, D could rely on change of position to avoid restitution. He says that whether this is dealt with through change of position or at the enrichment stage makes no difference ie. ‘the same answer ought to be reached’

2. ME:

• This change of position approach is the better view. BECAUSE

• Incontrovertible Benefit should mean that this is a benefit regardless of who received it. Thus, there is no need to take account of D’s subjective factors (which subjective devaluation hinges on). And thus, that is how it overcomes subjective devaluation. But, where D can still raise subjective factors to overcome this argument, then it diminishes the meaning of this approach THUS

• It maintains the neatness of viewing it as a irrefutable ALSO

• It means the burden of proof is on D to show factors which make money not an enrichment to him (which should be narrow and logically should be on D to prove, as invariably they will hinge on facts potentially unknown or unknowable to C)

Realisable Benefits Debate

1. What?

1. Where there is a positive benefit that can be converted into money, when should they be regarded as incontrovertibly beneficial?

2. Cressman v Coys – this debate was considered

2. Different Stances

1. Birks – narrow view – only +ve benefits that have been realised (ie. converted into money) are incontrovertibly beneficial

2. Goff and Jones – wide view – include realisable benefits, so receipt/improvement to chattel/land are treated as incontrovertibly beneficial even though D has not sold the goods or land

3. Burrows – supports a modification to Birks’ view Court regards D as incontrovertibly benefitted where it’s reasonably certain D will realise the benefit. Says that courts are accustomed to assessing damages for future losses

3. Burrows’ Objection to Other Views

1. Birks’ view suffers for the reliance on the date of trial. Realisation after the trial is ignored so Ds are encouraged to wait before realising benefit INDEED

2. Cressman v Coys – Mance J also speaks of the reality of people adopting tactical stances and hiding their true intentions until after trial

3. Goff and Jones avoid this, but they suffer for failing to acknowledge whether the realisation of the benefit is dependent on the individual (ie. an improvement to a car is not realisable to the person who cannot afford to sell it and buy a suitable replacement) BUT

4. ME: but doesn’t this miss the point, the whole idea of incontrovertible benefit is that it’s objective benefit that can’t be denied due to subjective factors, if we take account of whether the person can realise the benefit it nullifies this point THIS IMPACTS ON:

5. Is incontrovertible benefit a presumption based on the objective view, that can be undermined by the subjective factors (thus subjective devaluation still impacts on it) OR

6. Is incontrovertible benefit irrefutable, and those subjective factors have an impact on change of position (my preferred view)

4. My view on this

I. A realisable benefit can’t be incontrovertible benefit, because it requires consideration of D’s conduct (ie. will he sell it, when). Incontrovertible benefit should be a benefit that can be assessed objectively without consideration for subjective factors like this

Negative benefits – where they are incontrovertibly beneficial

1. Legally/Factually Certain

1. So where it is legally or factually certain that D has saved an expense, this is incontrovertibly beneficial EXAMPLE

2. Craven-Ellis v Canons – so services performed for a company which the company would have had to engage someone to carry out if C had not done so

2. Wigan Athletic

1. Maurice Kay LJ dissenting thought the extra-policing services in this case were an incontrovertible benefit

2. FACTS: D requested policing services for matches, but thought the level of policing was unnecessary and refused to pay for those extra policing

3. DECISION: CA majority held that police weren’t entitled to claim for those ‘extra’ policing services as they had not been requested and thus football club could not be said to have freely accepted them

4. Maurice Kay thought that as the extra policing was necessary to allow the games then they represented an incontrovertible benefit. There seems logic in this, BUT THEN HE WENT ON TO SAY:

5. Restitutionary remedy should have been given as there was an unjust factor BUT

6. It’s hard to see how the chief constable wasn’t just a risk taker, being that D had made clear they would not pay for the extra officers. So Maurice Kay was only correct about the police services being...