Unjust Enrichment Flashcards
1
Q
Unjust enrichment is a…
A
action for the value of the money, services or property received by the D
2
Q
P has to establish that…
A
there was an enrichment on the objective approach
3
Q
The burden is on the P because they brought the claim, but the D can respond by…
A
arguing subjective devaluation because the D is responding, the burden is now shifted to them
4
Q
When was the law of unjust enrichment created?
A
1991
5
Q
What was unjust enrichment before it was created?
A
Quasi Contract and Equitable Analysis
6
Q
What is the remedy?
A
Restitution
7
Q
What was the historical causes of action before the law of unjust enrichment?
A
Money had and received, money paid, quantum meruit & quantum valebat
8
Q
What is money had and received?
A
I paid money to you and I want it back
9
Q
What is money paid?
A
Where the P paid the money to a third party in a way that benefits the D and the P wants the money back
10
Q
What is quantum meruit?
A
Paying for services. I have don’t something for you, but you haven’t been paid
11
Q
What is quantum valebat?
A
Payment for chattels received. Haven’t given you money, but I can give you something and I want money back for it
12
Q
What is the 4 elements for unjust enrichment?
A
- Was the D enriched?
- Was the enrichment at the P’s expense?
- Was the enrichment unjust?
- Are there any defences?
13
Q
If you claim to get back two $50 bank notes, will you win?
A
No, you will get restitution for the value, not the property (you transferred ownership)
14
Q
Not the law of property because the P has to say…
A
You owe me an obligation to give me my money back
15
Q
What if is a chattel?
A
You can’t get the object back, but you can get the value back
16
Q
Can you get interest back?
A
Yes
17
Q
Will the subjective argument work in porperty?
A
No because you transferred ownership so you can only get the value back
18
Q
If you give property if you thought it was someone else then…
A
You may have a case of invalid transfer and still the owner of those bank notes, so the property was not transferred
19
Q
Cases for the second element? (enrichment at the P’s expense)
A
Portman Building Society Port of Brisbane v ANZ Taylor v Laird Brenner v First Artists Management Ford v Perpetual Trustees Victoria SEMPRA METALS
20
Q
Facts on Portman Building Society?
A
The condition of the loan is for residential purposes. Building Society transfers the money to the solicitor to pay the vendor. They discover it is now going to be used as a guest house, so they want their money back. The money was paid in the belief that it would be used for a property that would be for residential purposes only, so it was a mistaken belief. The P’s sue the solicitor because they have the deepest pockets, but they failed because it is not the lawyers money, it is held on trust for the vendor and the equity still belongs to the P’s. The lawyer never benefitted from the money.
21
Q
Cases that used the change if position defence?
A
Portman Building Society
22
Q
What if the payment has gone into trust?
A
There is no claim becuase the equity still belongs to the P, as seen in Portman Building Society
23
Q
Cleaning your property without you knowledge, can you then claim payment?
A
No because the courts will say you have not been enriched as you didn’t want the cleaning done
24
Q
Why is the 3 situations of free acceptance?
A
- If you are out, then you don’t need to pay
- You requested the service, then it will be in the law of contract
- You didn’t request the service and if you are at the house when they are painting and do nothing, then you would be liable for unjust enrichment.
25
What is free acceptance?
Like painting open houses to get money, the D should be barred from denying benefit. Where the D actively encourages P to provide goods or services through words or conduct falling short of an actual request, both the evidence and sound legal policy may prevent her arguing that she did not want what she got. Cleaning my show and instead of stopping it, you ignore it (the acceptance is complied)
26
Which approach do you take for services?
Objective is the default, you can win if the service continues to have market value
27
When can the courts use a subjective approach for services?
If other people value it, but the P doesn't then you can
28
Case for Services?
Taylor v Laird
| Brenner v First Artist Management
29
Facts on Brenner v First Artist Management
Where a person requests another to do something, it is not unreasonable for the law to conclude that the former sees some benefit in the performance. The objective test would fail, as there is no market value, if the comeback succeeded it would be different. Subjectively, the D valued the services P performed
30
What approach do you take if you request the benefit?
Then it is subjective, even if there is no objective basis
31
What are the three views of the first element? (has the D been eniched?
1. Yes because there is a factual benefit to the D
2. If you both agree then you have a concurrent liability (more than one cause of action available)
3. No because the title is yours (you've just got your own property)
32
What do the courts look at when they take an objective approach? *for the first element*
Did the object that the D receive, have market value? And what was the value?
33
What do the courts look at when they take a subjective approach? *for the first element*
What was the benefit to the D?
34
Facts of SEMPRA METALS?
Paid tax in corporation advance to the IRD (they did have to pay the tax, but not at the time they paid it), it was breach of European law (mistaken payment).. They went to court to received the money back and the interest on it. It was not the D's fault. The dissenting took at the subjective approach to look at what the D actually gained. The D had to return simple interest, not compound interest
35
What questions do you asked when you are determining if the D was enriched?
Does the thing that the D received have market value? Then we let the D argue subjective devaluation
36
When can't the D argue subjective devaluation?
When the D requested the benefit, free acceptance or incontrovertible benefit
37
What is the top three incontrovertible benefits?
1. Money
2. Non-money benefits realised in money
3. Non-money benefits when were legally or factually necessary for the D
38
Facts of Peel v Canada
About incontrovertible benefit. Local authority was ordered to pay for the childcare provided because it was believe by the act. The court never had an obligation, they could sue the children or the government. There was an enrichment, but they failed because they cannot establish that the benefit was not incontrovertible.
39
What is an incontrovertible benefit?
Something that can't be denied
40
Facts of McDonald v Coys of Kensington
The P were auctioneers and they sold the car to D and they mistakenly included the personalised number plate. The auctioneers were under an obligation with the vendor not to sell the plate and they breached that contractual obligation. This was unjust enrichment
41
Facts of BENEDETTI v SWARIS
They were entitled to a millions, the trial found hat the market value of the services in question was $36 million, but the trial judge awarded $75 million because the P made an earlier offer to the D of that amount. It indicates the subjective value of the P services, the D was prepared to pay 75 million because that’s how much they value the service. Subjective revaluation was rejected by the SC.
42
What did the SC in BENEDETTI v SWARIS say?
¡ Starting point is objective market value
§ Burden of proof on the P
¡ The D is then permitted to argue ‘subjective devaluation’
§ Burden of proof on the D
§ This will require evidence
¡ No subjective revaluation
43
Why do we allow subjective devaluation, not revaluation?
Because we want to respect the D freedom of choice. “it is not necessary in order to protect a defendant’s freedom of choice,” as stated in BENEDETTI v SWARIS by Lord Clarke
44
Facts on MENELAOU V BANK OF CYPRUS
P was the bank and had charges over the property. The loan of the property was $2.2 million. The owners borrowed money to purchase the property. The owners wanted to downsize and pay off their debt and get a new property for their daughter who is the D. The lawyers failed to secure the charge over the new property, so there is no charge over the property. P lend money, but to the owners not to D. It was at the P's expense because if the mistake had not been made, they would've had a charge over the property
45
What test do you applied for the second question? (was the enrichment at the P's expense?)
There is a test we apply if there was causation, did the mistake cause them to pay the money
46
What happens if I give you the money and then you give it to a friend?
Leap frog to the next D
47
Cases for the second element? (was the enrichment at the P's expense?)
MENELAOU V BANK OF CYPRUS
The Ruabon Steamship Co Ltd v The London Assurance
Edinburgh and District Tramways Co Ltd v Courtenay
48
Facts of The Ruabon Steamship Co Ltd v The London Assurance
Ship had been damaged on a voyage. The cost to repair was paid and the ships insurance (P). The owners of the ship had a surgery at the same time whilst the ship was at the repairs. The insurance claims that the survey was a benefit to the D. Whether the survey or not, the D would've had to pay for the ship to be on dry dock for that period. The P did benefitted, but they would've had to pay that anyway
49
Facts on Edinburgh and District Tramways Co Ltd v Courtenay
The P was a storage a fancy type of paper, in which it needed to be placed in a heated room. Some of the heat escaped and goes into the rooms above. The people upstairs now didn't have to pay to heat their rooms. The P is heating their property for the O's own purposes and it happens that some of the heat escapes. The P was going to heat the place anyways
50
Facts on Commissioners v The Investment Trust Companies
The P employed investment managers to do service and they had to pay tax. The P entered in an arrangement with the investors and they will pay the tax, they agreed to pay the amount of the tax to the investment to the IRD. The statute was invalid, so the tax never had to be paid. The P is suing IRD. No they can not
51
What is interceptive subtraction?
?
52
What questions do you ask for the third question for injustice? (was the enrichment unjust?)
Was there defects in legal capacity or mistakes or failure basis
53
What are some examples of defects in legal capacity?
Minors, mental capacity and transactions that are ultra virus (council or government departments)
54
Case for Injustice:
| Defects in Legal Capacity?
Auckland Harbour Board v R
55
Facts on Auckland Harbour Board v R
Ministers of railways was authorised to pay when a letter had been granted. The statute changed to pay when the lease had been granted. The money was paid in ultra virus, so the payment was illegal. They looked at tracing, but said we should use following instead of tracing
56
Cases for mistake
Kelly v Solari
Barclays Bank
Kleinwort Benson
Deutsche Morgan Grenfell
57
What if is made by mistake?
I think that where money is paid to another under the influence of a mistake, that is, upon the supposition that a specific fact is true, which would entitle the other to the money, but which fact is untrue, and the money would not have been paid if it had been known to the payer that the fact was untrue, an action will lie to recover it back, and it is against conscience to retain it
58
Facts on Kelly v Solari
The P is an insurance company and the D is a widow of a man who had a life insurance policy with P. The man died and the insurance company paid out the D under the policy. Turns out they were obligated to pay because the premium wasn't paid. The was didn't do anything wrong, if you paid someone by mistake you get it back
59
A mistaken claim can fail if...
(a) the payer intends that the payee shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; or (b) the payment is made for good consideration, in particular if the money is paid to discharge, and does discharge, a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; or (c) the payee has changed his position in good faith, or is deemed in law to have done so, as stated in Barclays Bank
60
Facts on Barclays Bank
The third party issued for the D for 24,000 pounds and then it directs its bank to stop the cheque. The bank overlooked that instruction and still paid out. But there is an issue with this mistaken payment because you can't get the money back because you would've had to pay anyways.
61
A claim for restitution cannot be founded on a...
Misprediction
62
What section under the Property Law Act 2007 is about mistake?
s 74A
63
Cases for mistake
Kelly v Solari
Barclays Bank
Kleinwort Benson
64
Facts on Kleinwort Benson
Not a mistake cause at the moment of payment that is what everyone believed the law was. It was always the law that the P was able to apply for an exemption. Similar to Morgan
65
Facts on Kelly v Solari
The P is an insurance company and the D is a widow of a man who had a life insurance policy with P. The man died and the insurance company paid out the D under the policy. Turns out they were obligated to pay because the premium wasn't paid. The was didn't do anything wrong, if you paid someone by mistake you get it back
66
A mistaken claim can fail if...
(a) the payer intends that the payee shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; or (b) the payment is made for good consideration, in particular if the money is paid to discharge, and does discharge, a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; or (c) the payee has changed his position in good faith, or is deemed in law to have done so, as stated in Barclays Bank
67
Facts on Barclays Bank
The third party issued for the D for 24,000 pounds and then it directs its bank to stop the cheque. The bank overlooked that instruction and still paid out. But there is an issue with this mistaken payment because you can't get the money back because you would've had to pay anyways.
68
A claim for restitution cannot be founded on a...
Misprediction
69
Cases on voluntary submission?
Hookway v Racing Victoria
| Lloyds Bank v Independent Insurance
70
Facts on Deutsche Morgan Grenfell?
If the P was based in UK he could get an excuse and not pay the tax. But they have to pay the tax after the payments were a few years later the European court that the UK scheme was in validation of the law. Similar to the Benson case. Problem was the Limitation Act. The mistake was reasonably discoverable was until the European courts made their judgment, that meant none of the claims were time barred, they paid anyway so different to Benson in that sense. It was a mistake not a misprediction. Gambling is taken a risk, but in this case, the p were not taking a risk, they paid because it was the only way that could avoid prosecution. So they can get there money back
71
Facts on Kleinwort Benson
Not a mistake cause at the moment of payment that is what everyone believed the law was. It was always the law that the P was able to apply for an excemption. Simiar to Morgan
72
What did the judge in
| Deutsche Morgan Grenfell (3) say about mistakes and mispredictions?
We should forget about mistake and misprediction, instead ask did the P take the risk when they were paying. We need to make a distinguish by someone is forced to make payment or making a payment by purposely taking a risks (putting in a bet)
73
What is voluntary submission in mistakes?
The P intends the D to have the money in any event if she pays:
1. Believing that the payment is not due
2. Doubting that the payment is not due
3. Without protest or inquiry
4. Accepting the risk
So they won't get restitution.
74
Cases on failure of basis?
```
Roxborough
Rowland v Divall
Yeoman Credit v Apps
Stocznia Gdanska SA
Hunt v Silk
Goss v Chillcott
Pavey and Matthews Ltd v Paul
```
75
Facts on Roxborough
In order to sell cigarettes, they needed a license, the arrangement was that the D would get the licenses and the P would pay the D to do that. The legislation made the license invalid. There has been no failure in performance by any promise made. Is it unconscionable for them to enjoy the payments when they weren't specifically intended that they should enjoy them? There is a failure of consideration. The basis of the payment was that they needed to pay the d to sell the cigarettes. There was a basis for the transaction and it failed. It would be unconstitutional
76
Cases on voluntary submission?
Hookway v Racing Victoria
77
Can you sue for unjust enrichment if there is a contract?
No you have to cancel the contract first
78
Why can't you get your money back?
If there is a good consideration for payment
79
Facts on Lloyds Bank v Independent Insurance
The cheque c=had not cleared and the p wanted his money back
The courts said no
The d was paid by mistake but the d doesn’t have to return the money because he was owned it anyway because the third party owned the debt. Yes the payment was made by mistake, but the d is not going to be required to return the money because he was owned money so there is good consideration for the p
80
What is failure of basis?
The P has to establish what the basis was (evidence cause the burden of proof is on the P) and that the basis failed (it hasn't come true and isn't going to come true. There is no rule for how long, it depends on the facts
81
What do you do if there has been an oral contract?
Plaintiff’s success but that is in order to show that (a) the benefits were not intended as a gift, and (b) that the defendant has not rendered the promised exchange value … The purpose of proving the contract is not to enforce it but to make out another cause of action having a different foundation in law, as seen in Pavey and Matthews Ltd v Paul
82
Facts on Roxborough
In order to sell cigarettes they needed a license, the arrangement was that the D would get the licenses and the P would pay the D to do that. Legislation made the license invalid. There has been no failure in performance by any promise made. Is it unconscionable for them to enjoy the payments, when they weren't specifically intended that they should enjoy them? There is a failure of consideration. The basis pf the payment was that they needed to pay the d to sell the cigarettes. There was a basis for the transaction and it failed. It would be unconstitutional
83
Facts on Rowland v Divall
The P purchased a car from the D and had it for 4 months and then discovered it was stolen. The thief is not the P or the D. The car is then returned to his true own and the P seeks restitution because they used it for 4 months for the purchase of the car. The court is saying that the P is entitled to do this. They have to get rid of the contract, and you can then sue for unjust enrichment
84
Can you sue for unjust enrichment if there is na contract?
No you have to cancel the contract first
85
Cases for change of position defence
Dextra Bank
Commerzbank v Price-Jones
National Bank Of NZ v Waitaki International Processing
86
Facts on Hunt v Silk
The P entered into an agreement that the D house was leased to the P. The D will issue the lease and do some updates to the property while P will pay for the lease. The P moves into the property before the lease is issued
But I never do up the property and never draw up a lease (D). The P complained and stayed at the property for a bit. The P moved out and terminated the lease. The P wants the few days rent back. The courts said you cant get the money back for unjust enrichment (may be able to sue for breach of contract for an oral agreement). It failed because you paid the money on the basis that it failed. The basis hasn’t completely failed because you pay to stay on the property and you did for some time so there has been partial performance
The basis which you paid the money has become partly true. So you cant get restitution on the failure of basis because the consideration hasn’t completely failed.
87
Facts on Goss v Chillcott
There is a loan. P loans money to the D. The loan was secured by mortgages on the D property. They faulted on the payment after paying some interest. The P wants to recover the loan. You have paid back some interest, but not the loan. Yes you should be able to get the money back, but the problem is there needs to be a total failure of basis (partly performed by paying the interest). The courts said they need to look at these in two different ways
You have paid back the interest but not the principle. If he was claiming back the interest, there would be no total failure of basis, but if you are claiming the loan then there has been a total failure of basis so the P hasn’t been paid for that at all. The courts said one hand was giving the loan (principle) and second was paying back the interest
So there has been a total failure basis for the principle.
88
What do you do if there has been an oral contract?
Plaintiff’s success but that is in order to show that (a) the benefits were not intended as a gift, and (b) that the defendant has not rendered the promised exchange value … The purpose of proving the contract is not to enforce it but to make out another cause of action having a different foundation in law., as seen in Pavey and Matthews Ltd v Paul
89
The question for the change of position defence to ask
Whether or not it is inequitable to deny the defendant a defence based on change of position when his decision to change his position was not in any way caused or contributed to by anything done or not done by the Bank but, on the contrary, was based entirely on his own erroneous understanding of what the Bank’s letter meant, as stated in Commerzbank v Price-Jones. And that the defence is available to a person whose position has so changed that it would be inequitable in all the circumstances to require him to make restitution, or alternatively to make restitution in full, as seen in National Bank Of NZ v Waitaki International Processing
90
What defence can the D use?
The Change of Position defence (I pay you $100 for mistaken belief and you received the money and you don’t believe it is a mistake - If you acted on the reliance of the legitimacy then you have the defence, If you independent give it to charity then you cant use that defence, you only donation because you were given that money) of change of position
91
What section in Property Law Act 2007 do you look at when using the change of position defence?
s 74B (Payments made under mistake of law or fact not always recoverable)
92
Cases for change of position defence
Dextra Bank
93
What the change of position defence occur before the transaction?
Yes, as seen in Dextra Bank. Because you are still relying on the transaction that will happen in the future
94
In deciding whether the D can use the change of position defence...
You don't look at who is more at fault
95
Facts of Commerzbank v Price-Jones
The D is banker and he is employed by the P. When people get paid bonus, the P offered a quarter of a million pounds. The D doesn’t think it is enough, he asks for more. The bank pays him twice, pays him the original bonus and again when the bonus was changed
He said he has been unjustly enriched, but there is a change of position because when he got paid instead of working he went on holiday. If he only received 265,000 he would’ve worked. So he gave up the opportunity to work when he got paid.
96
The question for the change of position defence to ask
Whether or not it is inequitable to deny the defendant a defence based on change of position when his decision to change his position was not in any way caused or contributed to by anything done or not done by the Bank but, on the contrary, was based entirely on his own erroneous understanding of what the Bank’s letter meant, as stated in Commerzbank v Price-Jones
97
Facts on National Bank Of NZ v Waitaki International Processing
The P gives the D $500,000 which was made by mistake. The D never believes that the money was owed, and tells him but the P assisted that they did owe that
The P is refusing repay. So the D brings it in a safe place and invest it in AA
And they protect the investment with securities. AA secures fails and the investment disappears. The P then realise the mistake and sues them
S 74B says did the D alter its position because the D never believed that the payment was invalid. He put it in AA to protect the money. The court says you can't use the statutory defence, you can use the common law defence. The D would not need to repay. The P is careless and the D has done nothing right. And the P loses
