Enrichment by Imposition + by Taking + Defences (L29) Flashcards
What are the 3 forms of enrichment NOT based on transfer?
Unauthorised improvement to another’s property
= IMPOSITION.
Performance of another’s obligation
= IMPOSITON.
Unauthorised use of another’s property
= TAKING/INTERFERENCE.
When is unauthorised improvement to another’s property classed as UE?
When is this form of enrichment unjustified?
Requirements showing unjustified and no legal ground for retention:
- Enrichment (of true owner) caused by improvement of property.
- Possession of improver is in good faith.
- Error by improver in believing self to be owner.
- Exceptionally, may cover error caused by intending to benefit third party wrongly believing them owner or otherwise entitled to the property
What was the question in the case of Newton v Newton 1925 SC 715?
Could Mr Newton recover the value of improvements to his wife’s house on the basis he wrongly thought they were to his own benefit?
In the case of Newton v Newton 1925 SC 715, what did LJC Alness say about the presence of good faith possession?
“The test … is not whether there was a title or not, but whether there was bona fides on the part of the pursuer”.
“I see no ground in law or in reason to exclude the application of the doctrine if, although there may be no title, there was a bona fide belief on the part of the pursuer that there was a good title”.
In the case of Newton v Newton, what did LJC Alness say about the presence of error?
Mr Newton “entertained a clear – though as it turned out, mistaken – belief that he, and not his wife, was the owner of this property”.
In the case of Newton v Newton, what did LJC Alness say about the imposition of benefit through the expenditure?
Mr Newton “expended money upon the property in that honest belief”.
[That he was the owner of the property].
In the case of Newton v Newton, what did LJC Alness say about how the error should be judged based on the intention of the possessor?
“The one question upon which one has to clear one’s mind [is], namely, the mental attitude of the pursuer”.
“The question is not with regard to the true ownership of the house, but relates to the pursuer’s view of that ownership”.
“The pursuer … is merely seeking to prove his honest belief that there was no donation” [i.e. not a transfer].
What is the authority for enrichment by imposition in the form of the payment of another’s debt?
Reid v Lord Ruthven 1917 2 SLT 238.
What was the question in the case of Reid v Lord Ruthven?
Can Reid recover only by pursuing Kirk’s executors or does he have a claim directly against Ruthven?
What was the rule for payment of another’s debt as stated in Reid v Lord Ruthven?
Lord Anderson:
“… The law of Scotland follows the civil law as we find it expressed in 3 Inst. 29 pr.:
“An obligation is discharged if, with the creditor’s consent, payment is made by anyone on behalf of another; and it is immaterial who makes the payment, whether the debtor himself or one on his behalf. The debtor is freed on payment of the debt by another, whether the debtor was or was not aware of the payment, or whether it was made against his wishes.””
What was the decision in Reid v Lord Ruthven?
Ruthven’s debt is discharged by Reid’s payment:
“According to our law, the defender’s obligation to the bank is discharged”.
Ruthven is thereby enriched at Reid’s expense:
“The volunteer has … a legal right to demand repayment from the original debtor. What clothes him with this right is … the fact that payment has been made, with no intention of donating, on behalf of a third party. The legal basis of his claim is the right to be repaid what he has disbursed for another.”
What are the 2 main categories of enrichment by taking?
- From misuse of another’s property (e.g. invalid lease).
- From wrongdoing (e.g. breach of fiduciary duty to a trustee, company director etc).
What is the test for enrichment by taking?
- A use of property rights.
- Without authority of owner.
- Benefit measured by “just and reasonable consideration” for value of hypothetical bargain.
What is significant about the case of Earl of Fife v Wilson (1867) 3 M 323?
Lease of “shootings” in 1856 on estate belonging to Earl of Fife.
In 1857, with new owner, validity of lease challenged and after litigation, shootings only finally given up in 1861.
Benefit of occupation during contested period? Owner sued for recompense for the benefit arising from possession of shootings over the four years since lease first challenged.
Court of Session ordered “just and reasonable consideration” to be paid.
What is the main defence to UE?
Main general defence is ‘change of position’ = ‘loss of enrichment’.
Leading authority for this is: Credit Lyonnais v George Stevenson & Co Ltd (1901) 9 SLT 93.