Unjustified Enrichment (L25) Flashcards
What is unjustified enrichment?
“A person may be said to have received unjustified enrichment at another’s expense when he has obtained a benefit from his actings or expenditure, without there being a legal ground which would justify him in retaining that benefit, and it is in accordance with equity that he should account for that enrichment.”
Dollar Land Ltd v CIN Properties Ltd 1996 SC 331, per Lord Cullen at 348.
What are the requirements for unjustified enrichment?
Enrichment.
- ‘Obtained a benefit’. A benefit that has ended up in someone else’s hands. Property / trusts / money.
At another’s expenditure.
- ‘From [another’s] actings or expenditure’.
Unjustified.
- ‘Without there being a legal ground which would justify him retaining that benefit’.
Equitable between the parties to reverse the enrichment.
- ‘In accordance with equity that he should account for that enrichment’.
- Question of remedy must address the question of equity.
Which case is the ‘classic example’ on the course for unjustified enrichment?
RBS v Watt 1991 SC 48.
What makes enrichment unjustified?
Absence of legal ground for retention.
Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1998 SC (HL) 90.
Lord Hope at 98-99:
“The remedy is available where the enrichment lacks a legal ground to justify the retention of the benefit. In such circumstances it is held to be unjust.”
What are the legal grounds for lawful retention of an enrichment?
Examples:
- Contract.
- Gift / donation.
- Inheritance under a valid will.
- Satisfaction of a court decree.
- Satisfaction of statutory payment demand.
What are some ‘failed contract situations’ where unjustified enrichment DOES apply?
No consensus in idem = no contract.
- Where parties think there is a contract, but no consent is present.
- Mathieson.
Contract is void.
- Benefits have moved and been transferred; yet contract is void.
- Morrison v Robinson.
Contract is frustrated.
- Can provide remedy for any contractual rights left after frustration.
Illegality in the contract.
- One cannot sue due to illegality.
- Patel v Mirza.
What are some ‘failed contract situations’ where unjustified enrichment DOES NOT apply?
These are governed by the law of contract and not the law of UE…
Contract held voidable and reduction granted.
- Restitutio in integrum not UE.
Part-performed but rescinded contract following breach.
What did Lord Rodger say in Shilliday v Smith 1998 SC 725 about the Scots law approach to unjustified enrichment?
“…. A person may be said to be unjustly enriched at another’s expense when he has obtained a benefit from the other’s actings or expenditure, without there being a legal ground which would justify him in retaining that benefit…”
“As the law has developed, it has identified various situations where persons are to be regarded as having been unjustly enriched at another’s expense and where the other person may accordingly seek to have the enrichment reversed. The authorities show that some of these situations fall into recognisable groups or categories.”
“Since these situations correspond, if only somewhat loosely, to situations where remedies were granted in Roman law, in referring to the relevant categories our law tends to use the terminology which is found in the Digest and Code.”
“The person framing the pleadings must consider how the defender’s enrichment has come about and then search among the usual range of remedies to find a remedy or combination of remedies which will achieve his purpose of having that enrichment reversed.”
What is the structure of liability from the Shilliday case?
- Enrichment.
- “A benefit from the other’s actings or expenditure”. - At another’s expense.
- Direct conferral identifies parties to claim. - Unjustified.
- “Unjustified” means “without there being a legal ground which would justify him in retaining that benefit”.
- Classify into ‘recognisable groups or categories’ to identify cause of action i.e. an individual legal ‘claim’ explaining why “unjustified” in relevant fact situation. - Remedies.
- Choose “remedy or combination of remedies which will achieve … purpose of having that enrichment reversed”.
What did Lord Rodger say about ‘categories’ in Shilliday?
Identify relevant category:
- “The authorities show that some of these situations fall into recognisable groups or categories”.
What do the content of the ‘categories’ of unjustified enrichment mean?
Content of categories reflects how “the defender’s enrichment has come about”:
“The ways in which enrichment may come about are important because the reasons for regarding the enrichment as unjustified differ according to the category in which cases fall…” (Gloag & Henderson 15th edn, para 24.02).
How are the individual categories of UE claims separated out?
The individual categories of situation fall into three broader groups.
Lord Brodie in Pert v McCaffrey [2020] CSIH 5.
Distinguishes categories of “transfer” and “imposition”; “taking/interference” is the other in this scheme.
What are the broad groups of UE types?
Transfer: conferral of property or money, or performance of services.
Imposition.
- E.g. Improvement of another’s property or payment of their debt.
Taking/interference.
- Use of another’s property, money or rights.
What are the individual claims under enrichment by transfer?
Condictio indebiti.
Condictio causa data causa non secuta.
Condictio ob causam finitam.
Condictio ob turpem vel iniustam causam.
Condictio sine causa.
In summary, what is the claim of condicitio indebiti?
Recovery of benefit because it was undue.
