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Law Quarterly Review

2018

The unjust enrichment disaster

Robert Stevens

Subject: Restitution . Other related subjects: Unjustified enrichment.

Keywords: Restitution; Unjust enrichment;

Cases:
Investment Trust Companies (In Liquidation) v Revenue and Customs Commissioners [2017]
UKSC 29; [2018] A.C. 275; [2017] 4 WLUK 268 (SC)
Lipkin Gorman v Karpnale Ltd [1991] 2 A.C. 548; [1991] 6 WLUK 47 (HL)
Menelaou v Bank of Cyprus Plc [2015] UKSC 66; [2016] A.C. 176; [2015] 11 WLUK 82
(SC)
International Energy Group Ltd v Zurich Insurance Plc UK [2015] UKSC 33; [2016] A.C.
509; [2015] 5 WLUK 536 (SC)
Swynson Ltd v Lowick Rose LLP (In Liquidation) (formerly Hurst Morrison Thomson LLP)
[2017] UKSC 32; [2018] A.C. 313; [2017] 4 WLUK 238 (SC)
Banque Financiere de la Cite SA v Parc (Battersea) Ltd [1999] 1 A.C. 221; [1998] 2 WLUK
561 (HL)
Deutsche Morgan Grenfell Group Plc v Inland Revenue Commissioners [2006] UKHL 49;
[2007] 1 A.C. 558; [2006] 10 WLUK 631 (HL)
Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Commissioners
[2007] UKHL 34; [2008] 1 A.C. 561; [2007] 7 WLUK 507 (HL)

*L.Q.R. 574  I. The Claim

The decisions of the UK Supreme Court in Revenue and Customs Commissioners v

Investment Trust Companies 1 and Lowick Rose LLP v Swynson Ltd 2 have retreated from a
more expansive approach to the law of restitution. Although these cases are to be warmly
welcomed, the court is unable to articulate why the kinds of limitations on recovery it
specifies are justifiable. This article seeks to address that problem. It seeks to identify the
reasons for restitution that any properly constructed system of private law ought to recognise.

Unfortunately, the account presented here has a poorer fit, in some respects, with English law
than it does with that in many other systems, both common law and civilian. The important
implication for English law is that it has taken a wrong turn in a number of cases. So, as we
shall see, some decisions of our ultimate appellate court are either wrongly reasoned ( Lipkin
Gorman v Karpnale Ltd ;3 Menelaou v Bank of Cyprus ;4 International Energy Group Ltd v
Zurich Insurance Plc )5 or, more seriously, wrongly decided ( Banque Financière de la Cité v
Parc (Battersea) Ltd ;6 Deutsche Morgan Grenfell v Inland Revenue Commissioners ;7
   
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Sempra Metals Ltd v Commissioners of Inland Revenue ). 8 To understand why requires an

overview of the entire subject.

Recent books, specifically Birks’ Unjust Enrichment9 and Goff and Jones: The Law of
Unjust Enrichment,10 have attempted to narrow the scope of their subject by excluding gains
by wrongdoing from their coverage. What has remained is, however, still four or five
different jigsaw puzzles in one box. They are not even different parts of the same overall
picture, unless that picture is private law itself. The different kinds of claim that remain have
no more in common with each other than any one of them has with the now excluded
category of "restitution for wrongs". Treating them together has led to error.

Here are two simple examples: C enters into a contract to provide financial services for D.
After performance, C discovers that D had made material misrepresentations to C that had
induced entry into the bargain. C seeks to rescind and claim restitution of the value of the
work done. *L.Q.R. 575 

C is a driver in a car accident involving multiple vehicles that leads to the injury of X. X
successfully sues C for damages. C now seeks a contribution from D, who was also
responsible for the accident.

The reason for the claim in the first case—the reason for the injustice that must be corrected,
or if one prefers the "unjust factor"—is quite different from that in the second. If the reasons
justifying the claims are different, they are not alike in any other useful sense. In neither case
is the claim based upon a contract or a wrong, but a category of "other claims" tells us
nothing about which of those are similar and which dissimilar.

II. Methodological Problems

1. Classification

Law is not a science, thankfully. Scientists are solely concerned with facts. Physicists are
unconcerned with what gravity ought to be, but want to know what it is. Biologists classify
animals and plants according to facts in the world that have no moral significance. Some
animals are carnivores, and there is no blame attached to that.

It might be thought that lawyers classify law in much the same way, by grouping cases
together that have the same facts in common.11 In his work Peter Birks implied at certain
points that this is so when he sought to classify duties in private law according to certain
kinds of events (manifestations of consent, wrongs, unjust enrichment, other events), which
are types of fact.12 But if we really thought that was all there was to it, then there would
seem to be nothing better or worse about selecting another kind of fact that claims have in
common (monetary value, height of litigant, etc.).

Many legal categories take their unity from the consideration of justice why particular rights
   
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of that kind exist. Obligations to pay damages following a wrong take their unity from the
persistence of the reason underlying the initial primary duty that has been breached. This now
takes the form of a duty of next-best compliance: pay damages to ensure the claimant is
placed in the position as near as money can do it to the wrong not having been committed.
Contract takes its unity from the consideration of justice that agreements, subject to various
conditions, create legal rights that ought to be enforced. If unjust enrichment were a single
subject, there would be a reason of this kind unifying it. In classifying legal obligations in this
way, which is essential to ensuring that like cases are treated alike, lawyers are inevitably
engaged in a quite different endeavour from the scientist.

The leading practitioners’ text on the law of unjust enrichment denies the above:

"Whatever may be the underlying moral justifications for the award of restitution in these
cases, the ‘unjust’ element in ‘unjust enrichment’ is simply a ‘generalisation of all the factors
which the law recognises as calling for restitution’. In other words, unjust enrichment is not
an abstract moral principle *L.Q.R. 576  to which the courts refer when deciding cases; it is
an organising concept that groups decided cases on the basis that they share a set of common
features, namely that in all of them the defendant has been enriched by the receipt of a benefit
gained at the claimant’s expense in circumstances that the law deems to be unjust. The
reasons why the courts have held a defendant’s enrichment to be unjust vary from one set of
cases to another, and for this reason the law of unjust enrichment more closely resembles the
law of torts (recognising a variety of reasons why a defendant must compensate a claimant
for harm) than it does the law of contract (embodying a single principle that expectations
engendered by binding promises must be fulfilled). In this respect, ‘English law does not
have a unified theory of restitution’". 13

Without some kind of moral or normative principle it is impossible to ascertain which

"common features" are relevant. Date the claim arose? Nationality of parties? By placing the
law of unjust enrichment in the same sequence as legal categories that are distinguished by
the reason for the existence of particular kinds of claim, the implication is that the law of
unjust enrichment is the same.

Some legal categories are unified in other ways. So, we distinguish public duties from private
ones not because of the reason for their existence but rather on the basis of their form. Private
duties are correlative in the sense that there is a rightholder who has control over whether the
duty is to be performed, whereas public duties are not owed to any particular individual. We
can distinguish rights in rem from rights in personam on the basis that the former relate to
physical things and are exigible against the rest of the world, whereas the latter are exigible
only against an identifiable individual. This tells us nothing about the reasons (if any) that
justify the existence of rights that are of these kinds. Is the law of restitution or the law of
unjust enrichment, unified by its form?

We could write books and deliver courses on "gain based claims", which claimed no further
unity than that structural similarity, but that is not the subject-matter of the modern books and
   
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courses. They exclude obligations to return because of a contractual duty to do so. The
decision to exclude "restitution for wrongs" from modern books and courses is purportedly
based upon the idea that such claims arise for a different kind of reason, while the remainder
has a unity.

Worse, what we mean by "enrichment" varies according to the kind of claim we are bringing,
does not have the meaning it has in ordinary language, and so will mislead unless used with
great caution. As we shall see, in some cases we are reversing a performance rendered,
sometimes the value of a right received, in others a right retained, in some what it would have
cost to discharge an obligation, and in still others the expense compelled to incur on another’s
behalf. The subject lacks even the weak formal unity of being concerned with the same kinds
of "enrichment". There is no genus to which these species belong.

2. The four stage test

The commitment to material similarity based upon unity of reason, is most prominent in
relation to the division of the subject into four questions (Is the defendant enriched? Is the
enrichment at the expense of the claimant? Is the *L.Q.R. 577  enrichment unjust? Is there a
defence?)14 Such division assumes commonality: that what can constitute an enrichment, or
the necessary connection between claimant and defendant, will be the same in each case.
Unlike earlier works that divided the law vertically according to different kinds of claim for
restitution (money paid by mistake, contribution between co-sureties, etc.),15 the subject is
now divided horizontally assuming that the different elements of each claim are capable of
being analysed using the four questions, each question being independent of the others.

This independent building blocks approach to the subject has caused two kinds of error. First,
it can be assumed that because some of the claims do not have feature X (e.g. some kind of
performance rendered from claimant to defendant), like cases being treated alike requires that
it is never a necessary condition of any claim for restitution that feature X is satisfied.16 This
leads to the conditions for liability for the different kinds of claim being watered down, so
that we are left with the law of the lowest common denominator. Secondly, it can be assumed
that because some claims do have feature Y (e.g. they are susceptible to the defence of
change of position) like cases being treated alike requires that all claims should.17 The
combination of these two problems can lead to both mistakes, and over-complexity, as
various policy reasons are then invoked to explain the cases where the logic of the starting
assumption cannot explain the positive law or what our instincts tell us it ought to be.

3. Normative inadequacy

An example: C, mistakenly believing that they owe D £1 million, pays over that sum in cash.
C subsequently discovers the error and seeks restitution from D.

This is often treated as a central example of a claim in unjust enrichment. Clearly there is no
   
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contractual entitlement to repayment; nor has the defendant committed any wrong. All legal
systems everywhere, of which I am aware, allow a claim for restitution in such a case. Why?

An explanation that has been put forward is that the claimant’s consent to the defendant’s
enrichment (or possibly of the transfer of the right to the cash) is vitiated by the mistake that
has been made.18 This is said to be one of a sequence of claims where the claimant’s consent
to the defendant’s enrichment is impaired, qualified or absent, justifying restitution.

This explanation will not do. The problem with a "claimant-sided"19 account is that it
provides no explanation as to why the defendant should be obliged to do anything at all. C’s
mistake was nothing to do with D. By what mechanism can another’s actions impose
obligations upon me to which I do not consent? *L.Q.R. 578 

One common answer is to point to other examples of claims of strict liability. If, for example,
I pick up your umbrella, honestly and reasonably believing it to be my own, I am liable for
conversion: it will not avail me that I was wholly blameless in my actions. But, in such a
case, the defendant is being held liable both for the violation of a right of another, and for
their own actions for which they are responsible. The problem with the standard explanation
for the recovery of the mistaken payment based upon the claimant’s vitiation of consent is not
that liability is strict but that a new obligation is being imposed for which the defendant is in
no way responsible.

Another suggestion is that it is unobjectionable to require the defendant to repay because this
will leave them no worse off than if the mistake had never been made in the first place. This
is not a positive explanation for imposing liability, but merely a negative one, explaining why
an obligation explicable on another basis may be morally unobjectionable. We are still
wanting an explanation as to how the claimant’s mistakenly enriching the defendant can,
without more, justify the imposition of an obligation.

It cannot.

III. Performance

1. A problematic example

C and D each own one of only two examples of a rare collectible stamp worth thousands of
pounds. C, by mistake, destroys his stamp, which causes D ’s stamp to more than double in
value. D sells his stamp. C seeks restitution from D of the enrichment D has made at C’s
expense.20

Some accounts of the law of unjust enrichment appear to justify imposing an obligation upon
D in such a case.21 The elements of the four stage test for unjust enrichment appear to have
been made out. D is undoubtedly factually better off as a result of C ’s error. There is some
dispute as to whether D ’s enrichment must correlate with a loss suffered by C, but here there
   
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is no doubt that there is at least considerable overlap between the two, and so D ’s enrichment
is at C ’s expense, at least to that extent. The mistake C has made is not one as to a liability to
pay, but confining recovery to that category of mistake has long been deprecated. After all, if
the justification for the claim is the vitiation of the claimant’s consent, that does not vary
according to the kind of mistake made. Absent any defence, such as change of position if D
has given away the realised gain, there appears to be no answer to the logic of there being a
claim in this case.

If we accept that no claim should succeed, and no legal system anywhere allows one in such a
case, something has gone wrong with the theory. *L.Q.R. 579 

2. Incidental benefits?

As all can see that no claim should succeed, some kind of policy exception might be
invoked. So, it has been suggested that a claim will fail where the defendant’s enrichment is
an "incidental benefit".

The Restatement of the English Law of Unjust Enrichment22 states that a benefit is incidental
where "the claimant has an objective unconnected with the defendant’s enrichment". This
exceptional limitation on recovery has now been endorsed by the Supreme Court.23 Three
problems arise. First, and most importantly, no explanation is given as to why it should matter
whether the enrichment is unconnected with any objective of the claimant. Without some
reason, it looks ad hoc, introduced to explain away examples that do not fit the theory.
Secondly, there are many examples of cases where the defendant’s enrichment is unrelated to
any objective of the claimant yet recovery is allowed, including the leading case in the
area.24 No explanation is proffered as to why incidental benefits as defined sometimes do,
and sometimes do not, count. Thirdly, even if the party mistakenly destroying the stamp did
so with the objective of enriching the defendant, perhaps believing that the other intended to
reward them, this additional fact alone should not suffice to allow a claim.

The "incidental benefits" exception amounts to no more than observing that the necessary
connection between claimant and defendant is missing, without explaining what that
necessary connection should be.

The mere fact that the defendant has been left better off as a result of what the claimant has
mistakenly done is insufficient because the normative explanation for recovery is missing.
The fortuity of a corresponding factual loss suffered by the claimant is neither here nor there.

3. The error

The error that has been made is in wrongly identifying the relevant "enrichment" that
requires reversal. Consider again: C enters into a contract to provide financial services to D.
After performance, C discovers that D had made material misrepresentations to C that had
   
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induced entry into the bargain. C seeks to rescind and claim restitution of the value of the
work done.

Let it be assumed that as a result of the service provided D either realises a monetary gain of
£1 million or is saved an expense equivalent to that sum. Let it also be assumed that it cost C
£1 million to render the service. What if the market value of the service is a lower figure, say
£500,000, a sum much lower than D would have in fact paid to obtain it. What is the relevant
enrichment?

Modern textbooks, following the natural meaning of the word "enrichment", focus upon the
consequences of the performance rendered from C to D. *L.Q.R. 580  25 The consequential
gain is the improvement in D ’s factual position. That has improved by £1 million. Judges,
too, have accepted a consequential economic improvement in the defendant’s position as
sufficient to establish that the defendant is "enriched". 26

If we take seriously the idea that what matters is the resultant improvement in the
defendant’s position, this seems to confine "enrichment" either to a realised or possibly
realisable gain in the defendant’s hands, or an expense saved as a result of what the defendant
has done. Beatson took the logic of this position seriously when he argued that the
enrichment should be confined to the "end product" of what the claimant had done.27

The positive law has never reflected this position. Services that have no end product, and
those that have not saved the defendant any necessary expense that would otherwise have
been incurred, such as the painting of coal white, have long had to be paid for if freely
accepted.28 But how can free acceptance establish that the defendant has been left better off
by what the defendant had done? It cannot. The problem does not disappear by arguing that
an "enrichment" is established where benefits have been requested. Goods or services that I
have requested do not necessarily leave me better off than I otherwise would have been
either. Indeed, in some cases such as the painting of coal white, they may leave me worse off
than I would have been had I never received them.

What needs to be reversed is not the consequence of the performance from C to D, but the
performance rendered by C and accepted by D. In the case of a service that needs reversal the
"enrichment" is the service itself, not any realised gain that results from it.29 It does not
matter that the balance sheet improvement of the defendant’s position is vastly greater, or
lower, than the market value of the service itself. The law takes as its starting point the
market value of the service provided, not for arbitrary reasons but because that is what is
being reversed.

Similarly, in the case of money paid, what must be reversed is the payment, not its
consequences. So: C pays D £1,000 by mistake. Because now able to do so, D invests an
equivalent sum in shares in a Biotech company that proves enormously successful. The lack
of the equivalent sum causes C to refrain from making an equivalent investment that would
have been equally successful.
   
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D should be obliged to make restitution of £1,000, not any greater factual gain made even
where it fortuitously coincides with an equivalent loss suffered by C.30 That there has been a
performance from C to D cannot justify reversal of anything other than the performance
itself.

The reason why no recovery should be allowed in the case of the mistakenly destroyed stamp
should now be clear. There has been no performance rendered from C to D that requires
reversal. The owner of the still-extant stamp has not been "enriched" in the legally relevant
sense. *L.Q.R. 581 

4. Performance defined

Performance has three elements. First, what the claimant is seeking to reverse is that
claimant’s doing. So: C pays X £1,000 by mistake. X, delighted by this windfall, pays £200 to
D, a charity.

Although D has accepted a payment of £200, this payment was not made by C.31 Similarly,
inaction, such as the mistaken failure to exercise a valuable power or initiate proceedings in
time, thereby leaving the lucky defendant factually better off as a result, should not suffice.
Where an executory contract is set aside there is also no performance to reverse.

Secondly, the action rendered must have been intended by C to have been for D. So: C cuts
down the hedge that neighbours C’s land with D in order to improve the view. D thinks the
work is being done for D ’s benefit, when it is not, and stands by admiring the work.

Although D may have benefited from the work, and by standing by might be taken to have
accepted it, the work was not done for D, and so its value is irrecoverable. (Notice that it
should not matter whether C was mistaken in cutting the hedge.)

Thirdly, the performance must have been accepted by D. Pollock C.B.’s aphorism that "One
cleans another’s shoes, what can the other do but put them on?"32 reflects what the law is
and ought to be. There should be no claim available even where, as things turn out, the
cleaning leaves the defendant better off than they otherwise would be. The bilateral nature of
the necessary relation has caused some to prefer the word "transaction",33 but where a
contract is set aside it is the performance rendered under it that must be reversed.

5. The significance of performance

A defendant who receives a performance from a claimant does so either on the basis that it is
made for some justified reason, or that it is not. If the recipient knows from the outset that
there is no justifying reason for the performance (e.g. it is not a gift, payment of a debt owed
etc.), then that recipient must make restitution. If the recipient initially believes that there is a
good reason for the performance, or does not care, and the claimant can now show that there
was not (e.g. shows that the payment was made under a mistake as to liability) then again the
   
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defendant must make restitution.

To suffice, a performance cannot be made unilaterally: a performance rendered by the

claimant must have been accepted by the defendant. Returning to the core case of the
mistaken payment, the payment of a sum of money can be made only if accepted by the
recipient.

This meets the objection that the defendant is not responsible for the state of affairs that
requires correction. It is not the case, and cannot be, that the justification *L.Q.R. 582  for
recovery is wholly "claimant sided". Such an approach would be immoral. We would be
using the defendant as a means to an end, requiring them to correct an injustice that was not
of their doing.

We cannot distinguish "enrichment" and "at the expense of" as separate elements of this kind
of claim: they are the same thing looked at from one side or the other. The same justifying
reason for restitution (the performance for which there is no reason) applies to both parties
concurrently. The elements of the claim form a single normative sequence and cannot be
separated one from another.

If the law were concerned with the consequences of performance, the relevant time for
quantification of gain would be the time of trial. Just as in determining consequential loss in
the law of damages, it would make no sense to ignore facts that have occurred in the interim
in quantifying any consequential gain. This is not the positive law in England, nor should it
be. If the relevant "enrichment" is the performance, that must be quantified at the time it is
rendered; it cannot diminish or increase after that time.

The requirement that acceptance is required is obscured in English law because of the rules
for the passing of rights. If I wish to convey title to a camel to you without your knowledge,
let alone acceptance, it appears that I can (exceptionally) do so. I can make a deed in your
favour so that title to the camel can pass to you without any action being required on your
part.34 However, such transfer of title is conditional. If you do not wish title to the camel you
have the choice to disclaim it. Where therefore title has been transferred by mistake the
transferor can put the transferee to choice. Accept or reject. If you reject, your refusal to
return would be conversion. If you accept where you know there is no reason justifying the
performance, you ought to make restitution. The claimant can put the defendant to this
choice, and recover either on the basis that no transfer has been made, or that it has and is
unjustified.

As it is for the right to camels, so it is for the right to cash. I cannot unconditionally transfer
the title to cash to you without consent. If I dump a bundle of used £10 notes on your
doorstep intending them to become yours the cash remains mine without co-operation on
your part.

The use of agents for receipt does not alter the need for acceptance by the recipient before a
payment can be made. If I owe you £100, then present this sum to you, that will not alone
   
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discharge the debt without your co-operation through acceptance. (Once sued the debtor may
invoke the defence of tender, a defence that would be otiose if it were possible to pay another
through unilateral act.) A payment of money requires co-operation on the recipient’s part.
Similarly, I cannot discharge my debt to you by paying an equivalent sum to any high street
bank at all for your account. If, however, I pay it into your account with your bank this is
effective because that bank is authorised to receive on your behalf. The bank’s acceptance is
attributed to its customer because that is what the bank has been authorised to do on its
principal’s behalf. The customer has accepted because its agent has accepted. *L.Q.R. 583 

6. "Transfers of value"

In English, if I transfer something to you, you acquire something that I previously had. So, it
is meaningful to speak of my transferring possession of a car to you through the act of
delivery. I had the possession, now you do. Similarly, I can transfer a right to you. If I have
the right to exclusive possession forever of Blackacre, I can convey this right to exclude
others from that area of land to you, nowadays by altering the land register.

It is, however, legally meaningless to speak of the transfer of wealth or value,35 and the
Supreme Court’s adoption of this terminology is unfortunate.36 If at your request I sing a
song for you, nothing is transferred to you. After the song has been sung, you may be left
with a sensation of happiness (or not) but this is not something that I had beforehand. If I
instruct my bank to make a payment to your account with your bank, what you acquire, an
increase in the sum owed to you by your bank (assuming your account is in credit), is not
something I ever had. In the latter case we could say that what has been "transferred" is the
consequential factual balance sheet improvement in the defendant’s position, which reflects a
factual balance sheet deterioration on the claimant’s side, but that is to again misidentify the
relevant "enrichment".

The difference between a performance and a transfer of property or anything else, and that it
is the former that matters, is illustrated by the following example: C1 mistakenly believes that
they owe D £1,000. C1 requests C2 to pay D this sum on C1 ’s behalf. C2 pays D this sum in
cash. C2 would not have done so if he too had not also mistakenly believed that he owed C1
this sum.

Who has a claim against D ?

The law is37 (and ought to be) that C1 has a claim against D. C2 has a claim for
reimbursement from C1, but no claim against D. Why?

The only transfer that has occurred is between C2 and D. C2 has transferred both possession
of the physical notes and the right to them to D. However, the performance to D has not been
rendered by C2. C2 intended and did make that performance for C1: he did the action on his
behalf and at his request. This action by C2 is attributed to C1 because it was both authorised
by C1 and done by C2 on C1 ’s behalf. C1 rendered a performance to D because that was C1
   
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’s objective in the performance of the act of payment that was done on C1 ’s behalf.

7. Work done on another’s property

The most difficult cases are those where the claimant does work on another’s property
believing it to be their own.

An example of a case where there was no acceptance in the relevant sense is Greenwood v
Bennett .38 Bennett sent a car for repair. The repairer drove the car *L.Q.R. 584  and crashed
it, then sold it to Harper. Harper, mistakenly believing that he had obtained good title,
repaired the car, and sold it on to a finance company. The police recovered the car, and the
question arose who had better title to it: Bennett or Harper. The Court of Appeal concluded
that Bennett had the better title to the car but as a condition of recovery he had to reimburse
Harper for the work done.

By bringing the action, Bennett was seeking the law’s assistance to take, not just accept, the
benefit of the performance rendered by Harper without paying for it. In order to anticipate
this result, the condition on recovery was imposed.

Similarly, where two parties have a right to a thing, a priority dispute arises. In English law,
the starting position is that first in time prevails. If therefore I have possession of a thing
before you, I have a better claim to it than you do. Where a person has a right to a thing that
is inferior to another, and innocently spends money improving it, as Harper did, it is
justifiable to qualify the first in time rule, and permit the person with the prior entitlement to
prevail only where he is prepared to reimburse the party whose title is second in order of
time.

However, there should be no freestanding positive claim by the repairer in such a case, in the
absence of acceptance.

What if C has done work on D ’s thing (land or goods) mistakenly thinking it to be C ’s own,
and D has stood by and allowed the work to be carried out? C erects a building on Blackacre,
believing it to be C ’s land. D, the true landowner, stands by and allows the building to be put
up.

Here, C never intended any performance to D. It may be that the law concludes that D ’s
conduct bars or estops D’s right to exclude C from the area of Blackacre on which C has
erected the building, but no claim for reimbursement for the value of the work done should be
allowed.

Here is a familiar example: C a window cleaner cleans the windows of D ’s house mistakenly
believing the property to be one whose windows C has an agreement to clean. D is thereby
saved the expense of employing a window cleaner.

Without more, there is no justification for allowing C a claim in such a case. If D had seen C
do the work, silence could exceptionally constitute acceptance. It is legitimate for the law to
   
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impose on landowners positive duties of action (here to speak up) that persons generally are
not under, as the law’s quid pro quo for the right to exclude all others from the property. If,
however, C does have a claim in such a case, it is to the market value of the performance
rendered. It does not matter whether D, who has freely accepted, has been saved no expense
at all.

8. A performance that has been agreed to be conditional

Consider: C agrees to hire a room from D to overlook a coronation parade. The hire fee is
agreed to be payable, and is paid, in advance. Unexpectedly, the coronation parade is
cancelled *L.Q.R. 585  .

Infamously, the Court of Appeal in Chandler v Webster 39 denied restitution in such a case.

They accepted that if the contract were "wiped out altogether"40 or "rescinded ab initio"41
that recovery would be permitted, but as the contract was merely discharged by frustration
and not avoided, refused to make an award.

If it were the case that restitution may only be awarded where there was no basis for the
performance rendered by C to D, then Chandler v Webster would be rightly decided. There
was a good reason why C paid D the hire fee: that is what C had agreed to do. The Chandler v
Webster fallacy is to think that restitution is confined to cases where there was an absence of
basis for the performance.

Peter Birks, who thought that all claims could be explained in this way, sought to overcome
this problem by claiming that termination of a contract did lead to there being no basis for the
performances rendered under it, in the same way that avoidance does.42 This neither reflects
the law as it is, nor should it. If I am dismissed for incompetence, I neither do nor should
have a claim for restitution of the value of the work I have done, subject to counter-restitution
being rendered for the nominal wages paid. There is, and will always be, a good justifying
basis for why I worked and why I was paid: that is what was agreed. Termination brings to an
end the obligations to perform, it does not mean there was no basis for prior performances
rendered.

A quite different justifying reason for recovery is required. In the example, where it has been
agreed that entitlement to the performance is subject to a condition subsequent occurring,
usually but not always a counter-performance rendered by the counterparty, where that
condition fails restitution must follow. Not to do so would be to treat the performance as
unconditional, where it has been agreed that it is not. In this context agreed forbearance, such
as foregoing a power to sue, may constitute the relevant performance.43

In order to understand the nature of this claim it is important to distinguish between an

agreement and an (enforceable) contract. It is a necessary condition of a contract that there is
an agreement, but all legal systems insist that there are many other necessary conditions that
must be fulfilled before it may be enforced. First it must also be agreed that the agreement is
   
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to be enforceable: "an intention to create legal relations". Secondly the agreement must be
sufficiently certain so that the court can determine what it is that it must compel to be done.
Thirdly some jurisdictions require formal conditions to be fulfilled in some cases (writing,
signatures). Fourthly common law jurisdictions require there to be some kind of exchange
("consideration"). Fifthly both parties must have the capacity to contract. Sixthly the
obligations to perform must not have been brought to an end by an event such as frustration.
And so on.

For the purpose of the kind of claim that should have succeeded in Chandler v Webster it
should be necessary only that it has been agreed between the parties that the performance is
conditional (i.e. that there is offer and acceptance on this *L.Q.R. 586  point). No further
condition of enforceability needs to be fulfilled as the claim is neither one for enforcement,
nor damages for breach of an enforceable contract. The label "quasi-contract" is not wholly
inapt to describe such a claim: the conditionality of the performance is found in the
agreement between the parties, not subjectively in the head of one or both of them.

Birks, in his earlier work, had sought to group claims for recovery based upon "failure of
consideration" with those for recovery of mistaken payments on the basis that the latter were
concerned with the vitiation of the claimant’s consent, while the former were based upon the
consent being qualified.44 This is incorrect. If we return to the example of Chandler v
Webster does it matter what the actual intentions of the claimant were? If the claimant
thought the payment was subject to another (or no) condition, does that matter once we have
established that it had been agreed that payment was conditional on the coronation taking
place? No.

Supporters of the "qualified consent" explanation have noticed that, as a matter of law,
whether a claim is to succeed seems to depend upon the basis being "objective" and "shared"
(i.e. entirely subjective conditions in the claimant’s head do not suffice). 45 No satisfactory
theory has been postulated to account for this. Birks suggested that someone who makes a
misprediction about the future, as opposed to a mistake as to the present, was a risk-runner
and therefore undeserving of assistance based simply upon an undisclosed qualification in
their mind. Many examples of wholly unexpected future events that nobody ran the risk of
occurring can be given to show the falsity of this claim, including the facts of Chandler v
Webster itself. Although these are claims for the recovery of a performance rendered, the
justification for restitution is wholly different from that for the recovery of a performance
rendered for no reason.

The failure of uncommunicated conditions in the minds of claimants should not suffice for a
claim.

9. Change of position

The claims made so far have many implications, one is for the defence of change of position.
   
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On the "balance sheet" or "consequential gain" view of "enrichment", there should be no such
defence. Why, on this model, should it suffice to establish a claim that the defendant was
factually better off as a result of a payment or service at some point in the past? Why is it not
the factual improvement in the defendant’s position today that matters? If it is for the
claimant to establish that the defendant is still enriched now there is no room or need for a
defence of "disenrichment".

One answer is to suggest that we shift the onus of proof onto the defendant because in a better
position than the claimant to establish what has happened after the initial "enrichment". If I
pay you £100,000 on 1 December 2016, you are in a better position to establish how your
overall wealth position has subsequently altered than I am. However, this explanation would
merely justify the shifting of the evidential burden on to the defendant, as where found in a
locked room with *L.Q.R. 587  a stabbed victim and a knife in the hand. It would not justify
the existence of any freestanding defence.

If the account that the enrichment is constituted by the performance rendered is accepted, the
time for the establishment of "enrichment" is explained: it is when the performance is made.
The existence of any defence of change of position then poses a puzzle. The defence cannot
be based upon any notion of "disenrichment". 46 The "enrichment" was the performance, not
its consequences. It cannot be lost. The position that there is no such defence is one a
reasonable legal system could adopt, and that English law once did.47

It can be argued, however, that we should not leave innocent defendants worse off. The
blameless defendant who spends £1,000 on a holiday in reliance upon receipt, or who is left
no better off by work done on a car because of its subsequent destruction, may be thought
sufficiently deserving to be given an excuse.

One difficulty with this argument is that it seems too broad. If we thought that ensuring the
innocent are left no worse off is sufficient to excuse them, there seems to be no necessary
reason to confine its operation to claims for restitution. Someone who honestly and
reasonably converts another’s umbrella may be left worse off than they otherwise would be if
we require them to pay damages.48

It may be that we can confine the defence to claims for restitution on the basis that the
normative justification for the claim is relatively weak. The defendant violates no right of the
claimant, and is often not the party primarily responsible for the situation that needs
correction.

Where however the claim is for restitution of a performance that it had been agreed was
conditional, there is no scope for the operation of the defence. An example: D agrees to
install a kitchen in C ’s house, payment in advance. C pays £5,000. D intending to do the
work, spends an equivalent sum on a holiday that D would not otherwise be able to afford.

If D does not do the work, C is entitled to restitution of the £5,000 paid. It does not matter
whether the reason for non-performance by D is frustration or D ’s own breach. To deny
   
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restitution would be to treat D ’s entitlement to the payment as being conditional on D either

doing the work or spending an equivalent sum on a holiday. A defence of change of position
is, in such circumstances, inconsistent with the agreement made, and incompatible with the
reason for the claim.

IV. Discharge of Another’s Obligation

Once the centrality of a requirement of performance from claimant to defendant as part of the
justificatory reason for restitution in many cases has been accepted, the enquiry may begin
for the search for the explanations for restitution in other kinds of case.

An example: *L.Q.R. 588  Premises owned by D are in an insanitary condition creating a

nuisance. C, a tenant of D, is served with a notice by the relevant public body requiring the
abatement of the nuisance. C does the necessary work to abate the nuisance, but discovers
that it was D ’s responsibility and not C ’s.

Here there has been no performance rendered and received between C and D. D may be
wholly unaware of what C has done. However, the law imposed the duty on D, not C. If C is
allowed no claim over against D, the burden of the obligation will fall on the incorrect party.
To correct for this, the law allows C a claim for reimbursement against D. The "enrichment"
is the cost of discharging the obligation that ought to fall on the defendant.

There is no requirement of acceptance in such cases as the response is to do no more than

require the defendant to do what they were already obliged to do. Where the obligation
discharged is to pay a sum of money, the common law sometimes achieves this result by
reviving the obligation D originally owed, and requiring that it now be paid to C, by way of
subrogation, as this is the most perfect way of achieving the desired result of imposing the
burden of the obligation where it should fall.

Some English commentators have sought to explain recovery in such cases by focusing not
on the obligation discharged, but the state of mind of the person performing. So, it has been
claimed that such cases can be explained based upon the "legal compulsion" of the
claimant.49

In principle, however, it should not, and as a matter of positive law does not, matter why the
claimant has discharged an obligation that ought properly to be borne by the defendant. If the
tenant had abated the nuisance because they had mistakenly thought they were obliged to do
so a claim should succeed.

The same are cases where the claimant has been morally compelled to perform an obligation
that ought to be shouldered by another. So if someone buries a corpse, where the expense
ought to be borne by another,50 or cared for the sick and incapable when the obligation to do
so is imposed on another,51 or accepts a bill of exchange for the honour of the drawee,
reimbursement is allowed.
   
Page16

This category of case is, however, restricted, as the circumstances in which another’s
obligations can be discharged are limited.52

Obligations may be discharged either through performing them, or because they are
conditional upon a state of affairs that ceases to exist. If, for example, the insanitary nuisance
had abated because of a natural event, it had fortuitously drained away, the landlord’s duty of
abatement would have been discharged. It would not, however, have been performed.

All obligations are personal to us, in the sense that only the person subject to a duty can
perform it. Often, however, they are capable of being performed through the agency of
another. If I authorise in advance another to act on my behalf, or I ratify subsequently what
they have done for me, their actions are attributed to me. A small class of obligations are
personal to us in the sense that they cannot be performed through the agency of another. My
obligations as an employee owed *L.Q.R. 589  to the University of Oxford are of this kind.
By contrast, the obligation of the University to me to pay me my salary can be performed
through its authorised agent (or through the ratification of an unauthorised payment made by
someone acting on its behalf).

The abatement of the nuisance by a party not subject to the duty to do so discharges the
obligation by ending a necessary condition of the obligation, not through its performance.
Sometime the net effect is to leave the claimant worse off than they otherwise would be.
Consider: D agrees to repair X ’s bridge for £1,000 payable upon completion. C, mistakenly
thinking that they own the bridge, repairs it before D has the opportunity to do so.

D ’s obligation to repair the bridge has been discharged: there is no longer a bridge wanting
repair. However, neither D nor any agent of D has done the work. The obligation has been
discharged by frustration, not performance, and D is not entitled to be paid the sum that
would have been earned. C should have no claim against D.

Where claimant and defendant are jointly legally obliged to perform the same action (usually
to pay a sum of money), performance by one party will discharge the other. It is in the nature
of joint obligations that the continued existence of each is dependent upon the non-
performance of the other. Where the parties are concurrently liable, ensuring that the burden
of obligations falls upon the correct parties may require a claim over so that each takes an
appropriate share.

V. Quid Pro Quo Claims

English law does not ordinarily impose duties, that are not voluntarily assumed, to confer
benefits upon other people. The rights at common law that we have one against another are
those required by a system of equal freedom: I may not punch you on the nose, burn down
your crops, publish that you are an axe murderer, detain you against your will, and so on. I
am not required to repair your broken bicycle, cure your illness, speak well of you to others,
or free you when you get stuck in a lavatory.
   
Page17

The mere fact that I feel an overwhelming moral compulsion to make a gift to you is not a
good reason for restitution. Oxfam is not and should not be vulnerable to claims for recovery
from those who, in an emergency, donate large sums for those in desperate need.

Sometimes however, the law requires us to confer benefits upon others, and as a quid pro quo
allows us to recoup the expenditure we have been forced to expend on their behalf. So: C
agrees to stable D ’s horse Dobbin for six months. After the expiry of six months D does not
return to collect the horse and cannot be contacted. C provides stabling for another three
months, and now seeks reimbursement.

C, unlike a stranger, was not free to leave the horse to roam the streets unfed but was required
to care for it or face a claim for wrongdoing. We ameliorate the burden that we have imposed
upon the bailee by giving a claim for recompense *L.Q.R. 590  against the party for whose
benefit the obligation is imposed.53 The scope for claims of this kind will, of course, vary
according to the positive duties of assistance that a legal system imposes.54 Again, the claim
for restitution is not founded upon there being no reason or basis for the defendant’s
enrichment. There is a perfectly good reason: this is what the claimant was legally required to
do. Indeed, it is very doubtful whether this claim is anything to do with an "enrichment" by
the defendant in any meaningful sense. The claim is not to the value of Dobbin, or to what it
would have cost D to stable the horse, but to the expenses incurred by C.

VI. Rights

So far, no claim has depended upon any pre-existing right of the claimant, and if we accept
the viability of the reasons given, we do not need to resort to any rights-based or proprietary
analysis. Some claims are so dependent, however. X steals C ’s motorcycle. X gives the
motorcycle to D. C seeks recovery of the motorcycle from D.

There has been no performance from C to D to reverse. The basis for C ’s claim against D,
either to specific return of the thing or to its value, is C ’s right to exclude all others from the
motorcycle (a right that may arise for a number of different reasons). Some legal systems
have claims of the form "that is my motorcycle, return it". Common law systems do not
recognise direct vindicatory actions of this kind but require the claimant to put the claim in
the form of a wrong, "I have an immediate right to possess that motorcycle, you are
committing a wrong by failing to return it." In both cases the claim is based upon the pre-
existing right to the thing.

Rights to cash operate in a slightly different way both because title may generally be lost
where it has been acquired bona fide for value, and because cash has no earmark. One note of
a particular denomination is the same as any other, and the claimant can have no interest in
any particular note rather than another. So: X steals £100 cash from C. X gives the cash to D.
C seeks recovery of the cash from D.

Although we have an exclusive right to possess a bank note as much as we do a motorcycle,

   
Page18

once D has returned £100 to C, D has fulfilled the obligations to C. Once D has returned that
sum, D ’s obligations have been perfectly complied with. C cannot complain of not having
had back the very notes lost. Obligations of payment (as opposed to obligations to pay at a
particular time) cannot be breached as they are always capable of being fulfilled. The end
result is that C ’s claim for restitution from D is based upon the right to the notes, which
creates a duty to repay the sum received, but that, once repayment is made, no wrong has
been suffered.

The "enrichment" in such cases is the receipt of a thing to which C has a superior right.
*L.Q.R. 591 

VII. Problematic English Ultimate Appellate Court Cases

1. Lipkin Gorman v Karpnale

In England:

"authoritative blessing was finally given to the law of unjust enrichment by the House of
Lords in the momentous decision of Lipkin Gorman v Karpnale Ltd [55]". 56

This has always been somewhat embarrassing as the result in the case itself is so difficult to
explain.57

Cass, a partner in a firm of solicitors drew down on a client account of which he was an
authorised signatory to subsidise his gambling. The firm brought an action for money had and
received against the club where Cass had gambled the withdrawals away, the claimants
eschewing any equitable claim.

Clearly there was no performance by the firm to the club, as although Cass was a partner, he
was gambling for his own purposes. Further, the Privy Council had been taken to have
established that where a partner who is an authorised signatory withdraws cash from their
firm’s account the partner acquires good title to the cash.58 The cash Cass spent at the club
was therefore his own.

Although the House of Lords accepted that Cass had title to the cash, Lord Goff argued that,
as the cash was the traceable substitute for the right to a credit balance that the firm had
against the bank, it was possible as a result for the firm to establish a proprietary right at
common law to the cash received by the club.

This cannot be correct. It is not possible, at common law, to become automatically entitled to
a right for which your right is substituted.

So: D steals C ’s mobile phone and exchanges it with X for a knife.

X intended to convey title to the knife to D, and has done so. X does not intend to convey
anything to C who never has possession of the knife. C has no title to the knife.
   
Page19

Lord Goff’s reliance on Taylor v Plumer 59 as permitting a claim to a traceable substitute at

common law has long been shown to be a mistake, the relevant right in that case arising
under a trust, to which the common law court was not blind.60

What is the nature of the proprietary right at common law that Lord Goff thought there was?
Birks initially sought to argue that it was a power, analogous to the ability to revest title in
themselves that the seller of a chattel has if a contract under *L.Q.R. 592  which title has
been transferred can be avoided.61 It is, however, difficult to understand how such a power
would arise in this case, or why it would suffice for the purposes of bringing a claim because,
as unexercised, the cash was not the firm’s.

Further, Lord Goff’s reasoning is based upon the account with the bank being in credit. If we
change the facts, to make the firm’s account overdrawn, when further drawings are made by
Cass, the firm has no right at the start that the cash given to Cass is now the traceable
substitute for. It would seem absurd that the result should change according to whether the
account is or is not in credit.

Despite this, Lipkin Gorman v Karpnale Ltd is rightly decided, at least in holding that there
was prima facie a claim. The key to understanding is that the claimant was a partnership.
Save where legislation stipulates to the contrary,62 a partnership has no separate legal
personality. If a number of partners buy a racehorse together, each individual will own it
jointly. Each of them has title to the horse, albeit a joint one. Similarly, if office furniture is
bought for and on behalf of an unincorporated solicitor’s firm, the furniture will be owned
under a joint tenancy by all of the partners. Sometimes an asset that is intended to be a
partnership asset will be transferred into the name of one partner alone, requiring the
utilisation of a trust for the benefit of the others, but frequently this will be unnecessary

Where a bank account is opened in the name of a partnership, all the partners will have a joint
title to any credit balance. If the bank pays out cash to the partnership, all will be entitled to
the cash under a joint tenancy. When Cass withdrew the money he did therefore have good
title to it. However, when he gambled with it at the Playboy Club he was not spending money
that he had sole title to. The bank intended to pay him the cash in his capacity as partner. He
held it under a joint tenancy with his other partners. The cheques Cass signed were made out
to cash, not to Cass personally. The cheques were in fact cashed by the firm’s cashier, one
Chapman, who then took the notes to Cass. The case was not the same as that considered by
the Privy Council, where the bank issued drafts payable by itself to named payees. In Lipkin
Gorman the unauthorised payment out of partnership assets should have been, and was, a
sufficient basis for a claim by the firm (i.e. all the other partners) against the club.63

2. Banque Financière de la Cité v Parc (Battersea) Ltd64

The next step was the authoritative recognition of the four stage test.

Banque Financière de la Cité (BFC) agreed to lend money to Parc (Battersea) Ltd (Parc) in
   
Page20

reliance on a "postponement letter" saying claims by companies in the same group as Parc
would be subordinate to BFC’s loan. BFC was mistaken in making the loan on this basis as
this letter was not binding on OOL, a company in the same group as Parc, as given without
authority of that company. OOL were owed a large sum by Parc secured by a second charge
over Parc’s main asset, a *L.Q.R. 593  plot of land. Parc used the money BFC had paid it to
pay off a bank with a first charge over the land. Parc subsequently went into insolvency.65

BFC successfully argued that its mistake in making the loan had left OOL unjustly enriched.
If the loan had never been made, OOL would have had only a second charge over the land,
but the discharge of the first secured loan had improved their position. To prevent this, the
House of Lords allowed BFC to be subrogated, as against OOL, to the first charge over the
land that the money it lent had been used to discharge.

There was no performance rendered by BFC to OOL, no money in relation to which BFC had
any entitlement was used to discharge the secured loan to the bank, and no obligation that
ought to have been borne by OOL was discharged.

If the contract of loan had been induced by misrepresentation then it could have been set
aside. There would then have been a claim based upon an equitable entitlement to the
proceeds paid over, which would have been used to discharge a secured loan, which BFC
should then be subrogated to.66 However, the contract under which the money was lent was
never set aside. Further, it was not a condition of the loan to Parc that there was a valid
subordination agreement with other lenders, the "postponement letter" being collateral to the
loan. No trust over the proceeds paid could possibly therefore have arisen as the money was
paid under a valid loan agreement.

This decision cannot be supported, and has been doubted by the High Court of Australia.67 It
should not be enough that a mistake in making an unsecured loan to X that leads to D being
left better off, entails D being susceptible to a claim.68 If C ’s money is used to discharge X
’s debt, the law may allow C to be subrogated to the debt. Here however, the money used to
pay off the secured loan was Parc’s, not the claimant’s.69

Lord Sumption in Swynson sought to explain BFC as part of a larger category of cases
where the claimant paid money on the basis of an expectation that has failed. This
expectation was unilateral, and never agreed to by the defendant. In principle this cannot be
supported, and describing it as operating by way of subrogation adds nothing to the analysis.

3. Deutsche Morgan Grenfell v Inland Revenue Commissioners70

The Income and Corporation Taxes Act 1988 s.247 provided that, where a subsidiary
company paid dividends to its parent company, a "group income election" could be made. If
an election was made and accepted the dividend could be paid without the subsidiary having
to pay advance corporation tax (ACT). If the election was made, the ACT remained payable
but was set off against the later liability to pay mainstream corporation tax. The right to make
   
Page21

an election was confined under the legislation to situations where the subsidiary and parent
companies were "both bodies corporate resident in the United Kingdom". The ECJ held that
it was unlawful for UK law to deny the right to make an election where *L.Q.R. 594  the
parent company was resident in a Member State other than the UK.71 Such discrimination
contravened freedom of establishment.

The claimant had a German parent company and was part of a group of companies which
would have made a group income election if the legislation had allowed them to do so. The
effect was that the taxation was paid at an earlier point than it would otherwise have been
paid. The claim was for the interest representing this early payment.

The claimant argued that its claim for restitution could be based upon the mistake of law
made in paying the tax.72 If it were correct that their claim could properly be so
characterised, this had advantages so far as the applicable limitation period was concerned.
The period of limitation is, usually, six years. Time would normally begin to run from the
moment at which payment is made. If, however, the claim is for "relief from the
consequences of a mistake" time starts to run only from the moment when the mistake could,
with reasonable diligence, have been discovered.73 The claimant argued that the mistake was
discoverable only from the moment of the decision of the ECJ, thereby allowing payments
which had been made more than six years before the commencement of proceedings to be
recovered. The defendant commissioners argued that a claim based upon mistake could not
be brought, although importantly it was conceded74 that a claim for restitution was possible.
The defendant argued that the only ground of restitution available was that based upon the
principle that taxes paid following an ultra vires demand were recoverable. This principle was
recognised by the House of Lords in Woolwich Equitable Building Society v Inland Revenue
Commissioners .75 It was argued that the availability of recovery on this basis excluded
recovery on the basis of mistake. If this was correct, payments made more than six years
before the commencement of proceedings were irrecoverable.

The argument that the only possible claim for restitution was one based upon Woolwich ,
although it was accepted by the Court of Appeal, was solely based upon a literalist
construction of certain statements of Lord Goff in Kleinwort Benson v Lincoln City Council .
76 When put in context, these clearly could not bear the weight placed upon them, and the
House of Lords overturned that court.

Unfortunately, the concession by the Revenue that a claim for restitution based upon the
Woolwich principle was available, was incorrectly made. Park J. at first instance had
concluded that the effect of the decision of the ECJ, that it was unlawful to deny the claimant
the ability to make a group income election, did not prevent the obligation to pay arising. The
election was like a lever which, when pulled, could prevent liability from arising. The
wrongful denial of the opportunity to elect did not mean that the effect of the ECJ’s decision
was that the claimant should be treated as having done so. He concluded that even though the
liability to pay arose, this did not prevent recovery on the basis of the mistake made by the
*L.Q.R. 595  claimant in not opting to defer. This analysis was explicitly accepted by Lord
   
Page22

Hope.77

If the legislation under which the tax was collected was, to the extent that it contravened EU
law, a nullity the UK committed no euro-tort, but a claim for restitution would be possible. If
however the statute was valid under UK domestic law, but wrongful under EU law, then a
claim for damages for a euro-tort was available,78 but no claim for restitution The two ways
of putting the claim are mutually inconsistent one with another: either the Act was wrongful
or it was a nullity, it could not be both. The EU is not a federal state, and UK statutes are not
invalidated by EU law, but can be wrongful.

It is necessary to draw a distinction between legality and validity. An example: C agrees to

buy D ’s car as a result of C ’s fraudulent misrepresentation.

If C decides to affirm the contract with D, there can be no restitution of any payment made.
D ’s conduct is unlawful, and C will have a claim for compensation suffered as a result of D
’s tort, but unless the contract is set aside, payments made under it cannot be reversed.

The result reached that there was a current obligation to pay the tax under domestic law, but
that the mistake made justified recovery cannot be correct. What if a UK company with a UK
parent company had failed to read s.247 correctly and thought that it could not elect to defer?
After paying, could it obtain restitution after realising its mistake? No. Although the money
would not have been paid absent the mistake, it was due and, therefore, not recoverable.

Lord Hoffmann described Park J.’s interpretation of the tax statute as "rather sophisticated".
He continued that the "mistake was about whether DMG were liable [to pay the tax]" and that
"the election provisions were purely machinery, which DMG would undoubtedly have used,
by which it could enforce its right to exemption from liability". 79 This is no doubt correct,
but does not meet the objection to recovery. It is one thing for a claimant to pay mistakenly
thinking that they are liable to do so when that is not so. It is quite another mistakenly to fail
to take steps to prevent a liability from arising. Both may be loosely described as "liability
mistakes", but in the latter situation there is an obligation to pay, which should bar a claim for
restitution to get payment back. Payments made under a mistake as to liability suffice to
justify recovery not because the claimant’s consent was vitiated, but because they show that
there was no reason for the payment made: which was not the case in Deutsche Morgan
Grenfell .

Lord Walker and Lord Brown did not address the issue of whether the tax was still due,
unsurprisingly given that counsel had not argued the point. Lord Scott dissented. He accepted
Park J.’s interpretation of the tax legislation, and found that whilst the tax had been
wrongfully demanded it was still due and payable. As a result, he correctly concluded that the
claim for restitution ought to have failed. *L.Q.R. 596 

4. Sempra Metals v Inland Revenue Commissioners80

If a claim arises on 1 May 2016 for damages for £1 million for losses suffered, and comes for
   
Page23

trial on 1 June 2018, interest must be awarded in order to ensure that the claim is correctly
valued. A right to be paid £1 million in 2016 is worth more than a right to be paid the same
notional figure in 2018. In order correctly to value the claim at today’s prices, the notional
figure must be revalued to take into account the time value of money. This is nothing to do
with any loss suffered by the claimant. If the defendant can prove beyond peradventure that
the claimant would have squandered the money, as with all of the claimant’s other wealth, if
the money had been paid when the claim arose, this will be of no avail. Similarly, it is not
dependent upon any gain made by the defendant as a result of not having been paid
immediately.

Unfortunately, the English legislation for the award of interest does so on a simple, and not a
compound basis.81 It may be that the rationale for this is that we are seeking to revalue the
capital sum, not ascertain how much the claimant would now have if the money paid had
been invested. However, this seems an uncommercial way of determining the time value of
money, and in Sempra Metals a majority of the House of Lords succumbed to the temptation
to circumvent the unacceptable statutory rule.

If a debtor fails to pay a creditor, can the creditor bring a claim against the debtor for the
benefit made from the non-performance? There is no reason for the debtor’s "enrichment",
and the creditor may have made a mistake in not pressing for payment earlier. The debtor
may have made a gain from use of the money, and this may correlate with a loss that is
caused to the creditor by the failure to repay. However, without a performance between
claimant and defendant that requires reversal, there should be no possibility of a claim.

The decision of the House of Lords in Sempra Metals Ltd v Inland Revenue Commissioners
82 is difficult to reconcile with this. The claim was to interest payable upon corporation tax
prematurely paid. The majority awarded the claimant compound interest on the basis that the
defendant was unjustly enriched through having had the opportunity to use the unjustifiably
paid money during the period of prematurity. Title to the money paid had passed; there was
no question of the claimants establishing any proprietary right to anything the defendant
retained. No argument for a duty to hold the money paid on trust that could have potentially
justified an award of compound interest was made.

The majority took the view that it was unnecessary to show that the claimant had suffered a
loss that correlated with a gain of the defendant in order to establish a claim.83 They also
accepted that if the defendant had made profits from the use of the money mistakenly paid
this could not have been recovered.84 Compound interest based on a freestanding claim in
unjust enrichment was awarded. Why was the use of the money over time "at the expense of"
the claimant at all? How *L.Q.R. 597  did this case differ from the standard one of a debtor
who does not fulfil his obligations and is thereby better off?

Lord Nicholls stated:

"The benefits transferred by Sempra to the Inland Revenue comprised, in short, (1) the
amounts of tax paid to the Inland Revenue and, consequentially, (2) the opportunity for the
   
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Inland Revenue, or the Government of which the Inland Revenue is a department, to use this
money for the period of prematurity". 85

Clearly therefore Lord Nicholls would not (usually?) permit someone owed a debt under a
contract a claim in unjust enrichment for the use value of the money not paid to them, as the
opportunity to use had not been transferred by them. However, even in this case of restitution
of a mistaken payment, it is inaccurate to describe the opportunity to use as having been
transferred by the claimant to the defendant. How long was the use "transferred" for on that
first day?

The relevant performance is the payment of the capital sum. The next day, and every day
thereafter, there is no fresh performance capable of supporting a claim. Whether the recipient
does or does not have the opportunity to use is entirely dependent upon what happens
subsequently. If, delighted by their good fortune, the recipient of a mistaken payment gives
an equivalent sum away to charity they will no longer have the opportunity to use it. The
opportunity to use is not "transferred" with the capital sum, but arises subsequently from
having the money, just as in the simple non-payment of a debt case.

If, therefore, on 1 January C lends £1,000 to D, repayable on 1 April, the failure to repay
subsequently should give rise to no claim to the time value of money as there is no relevant
performance rendered to reverse on 2 April and each following day. The assumption of
earlier House of Lords authority that in order exceptionally to claim compound interest it was
necessary to establish a fiduciary duty to hold the money received under a trust for the
claimant’s benefit is correct,86 and should be followed in jurisdictions unbound by Sempra .
The authorities relied upon by Lord Nicholls as supporting the result all involved claims
based upon wrongdoing.87 Sempra is explicable only as an understandable attempt to
circumvent the statutory entitlement to interest, but in so doing the House of Lords threatened
to undermine the basis of claims for restitution.

5. International Energy Group v Zurich Insurance

Perhaps the most startling example of a modern court ignoring the importance of whether
there is a justifying reason for the performance rendered is the decision of the Supreme Court
in International Energy Group v Zurich Insurance .88 Insurers had insured an employer
against liability for mesothelioma for six years of an employees’ work, out of a total period of
27 years of employment. During the remaining years the employer had "self insured" (i.e. had
no liability insurance). Because of the exceptional rules on proof of injury that had been
created by the *L.Q.R. 598  Fairchild v Glenhaven Funeral Services Ltd 89 exception, the
employer was liable in full for any period of exposure to asbestos that created a risk of
injuring an employee. This, on its face, entailed that the insurer was under a matching
liability under the terms of the insurance policy for the employer’s full liability to the
employee, regardless of length of cover, as the insured would be liable in full for any of the
relevant periods of insurance.90
   
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The insurer sought to recover back from the insured a proportion of the amount it had to pay,
by way of a "contribution". The insured argued, naturally enough, that to allow such a
"contribution" would contradict their right to payment under the contract. The majority,
adopting the analysis of Professor Burrows, allowed this "contribution" on the basis that there
was no hard and fast rule barring recovery back of payments owing under a contract, no
policy was thereby violated, and that it was required to do equity between the parties.

The minority reached the same result by construing the contract as not entitling the insured to
be paid anything more than a proportionate share of the time insured.

If, as the majority concluded, the insured had a contractual right to be paid the money owed,
and no agreed condition for its payment had failed, no claim for restitution should follow.
The authorities relied upon for the proposition that money unconditionally payable could be
deducted from were Deutsche Morgan Grenfell and those of payments made on a conditional
basis, where that condition had failed.91 The reason that there is no "absolute bright-line
principle"92 barring recovery in the latter kind of case is that the justification for restitution is
entirely different. The former is wrong. Allowing further "exceptions" based upon vague
notions of equity does the law no credit. The best that can be said is that the result was an
understandable attempt to escape the logic of the earlier decision in Fairchild .

6. Menelaou v Bank of Cyprus

The decision in Menelaou v Bank of Cyprus 93 has been subject to trenchant criticism, but
the result is at least correct. The case concerned the decision of parents to sell their home,
downsize, and buy a house for their daughter Melissa. The claimant bank had a charge over
the parents’ home. They agreed to the release of their charge on the basis that they would
acquire a charge over the daughter’s property. The instructed solicitors sent the bank a charge
purportedly over the daughter’s property, and the bank agreed to the release of its charge over
the parents’ property. In the event, the second charge was defective as the daughter, although
aware of the purchase of the house for her, had never agreed to the creation of the charge, on
which her signature was forged. The claim was allowed by reviving the lien by way of
subrogation that the seller to the daughter had had before being paid.

The reasoning of Lord Clarke for the majority appears to adopt a straightforwardly causal
analysis: *L.Q.R. 599 

"She was therefore enriched at the expense of the Bank because the value of the property to
Melissa was considerably greater than it would have been but for the avoidance of the charge
and the Bank was left without the security which was central to the whole arrangement". 94

This reasoning both misidentifies the relevant "enrichment" as being the economic
improvement in the defendant’s position, and mistakenly assumes that a correlative loss
suffered by the claimant suffices as a sufficient connection between the parties. If taken
seriously, it would indicate that a claim should be allowed in the example of the two stamps.
   
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In the recent decision of Swynson Lord Sumption identified the relevant injustice in a way
Lord Clarke had suggested in Menelaou :

"The bank’s consent to the use of the proceeds of the family home to buy the daughter a
house had been conditional on it obtaining a charge. That condition had failed and the
daughter had consequently been enriched". 95

This cannot be correct. Uncommunicated conditions in the heads of claimants to which

defendants are not party cannot justify imposing obligations upon them, by subrogation or
otherwise.

The correct analysis of the decision is that the proceeds of the parents’ property were not at
their free disposition after that property was sold. They were not free, for example, to take the
proceeds of sale and place bets on the horses. They were not so free until the bank had been
repaid what they were owed.96 In other words, it had been agreed that the proceeds of sale
were still subject to the charge in favour of the bank. It is entirely orthodox that where an
asset is subject to a charge, and that asset is used to buy a property in the name of a donee,
the charge continues to bind the purchased property. If, unbelievably, the bank had
mistakenly agreed to release their charge completely, so that the parents had been free to use
the proceeds as they saw fit, a purchase by them of a property in their daughter’s name should
entail no claim against her.

This reasoning is reflected in the explanation for Menelaou of Lord Reed in the Investment
Trust Companies case:

"[The Bank] had mistakenly authorised the use of the proceeds of sale of the first property
(which it could otherwise have required to be applied to discharge the debt owed to itself) to
purchase the second property, thereby providing the defendant with a benefit at its expense".
97

7. Revenue and Customs Commissioners v Investment Trust Companies98

The simplified facts were that the claimants were charged VAT for the provision of services.
The service provider then made periodic VAT returns to HMRC. It *L.Q.R. 600  then
transpired that the services were exempt from tax under EU law. The claimants sought a
claim over against HMRC.

The claim was correctly denied. The claimants did not pay HMRC anything; they had paid
the service provider, not HMRC. They had paid this money on the basis of the contract of
service. Under this contract the payment had been conditional on the VAT being payable, so
that they should be entitled to restitution from the provider of that sum. The transfer of the
right to the money was not so conditional, and so no trust could arise, so that no claim against
HMRC could be brought even if the provider had used the very money they had been paid to
pay the supposed tax to HMRC.
   
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Lord Reed’s leading speech deserves a warm welcome as marking an end to the
expansionism that had gone before. However, some problems remain.

The first problem is the continued use of the unified concept of unjust enrichment and the
four stage test. So, the issue of whether the defendant was "enriched" was treated as separate
from that of whether it was "at the claimant’s expense". So, the sums actually paid over by
the service provider to HMRC were in fact lower than they had received from their customer
in respect of VAT because they were entitled to deduct certain sums as input tax that they had
paid third parties for the provision of services to them. Were HMRC "enriched" only to the
amount actually paid, or to the notional full VAT charged by the service provider?

The correct answer is that the relevant "enrichment" is the performance rendered, i.e. the
money actually paid, but this is inseparable from how this is "at the expense of" the claimant.

A second problem is that Lord Reed stated that it is a necessary condition of recovery that the
claimant has suffered a loss. This may mislead, as in ordinary language, and other contexts
(i.e. damages), to suffer a loss is to be factually worse off. If I render a service to you I may
not be left factually worse off as a result. Even a payment of a sum of money may not, as
things turn out, leave the payor worse off as the payment may be reimbursed by a third party.
However, it is clear that Lord Reed is using "loss" in a different sense, one that is intended to
capture the idea of someone who has rendered a performance to the defendant. Importantly
he states:

"the purpose of restitution is not to compensate for loss, but to reverse the defective transfer.
Looking to see who has suffered an economic loss is therefore not, in principle, the correct
way of identifying the appropriate claimant". 99

8. Lowick Rose LLP v Swynson Ltd100

Swynson Ltd lent a large sum of money to another company (EMSL) on the basis of a
negligent accountants’ report. The claimant (Hunt) was the controlling owner of Swynson,
who lent the debtor company money with which to repay the loan, which they did. The debtor
company then went into insolvent liquidation. Swynson brought a claim against the negligent
accountants, who argued (successfully) that Swynson had no recoverable loss as the loan had
been (luckily for them) repaid. *L.Q.R. 601  The claimant argued that this left the
accountants unjustly enriched at his expense, and that he should have a claim by way of
equitable subrogation to the value of the liability discharged.

The correct answer should be that Hunt’s money was never used to discharge any liability of
the defendants. He lent money to EMSL, and they then used their money to pay Swynson,
which relieved the defendants of their liability. Assuming that the money he paid them was
subject to a trust, as paid on the condition that it only be used to discharge the loan, this
equitable interest was intended to come to an end upon that purpose being fulfilled, which it
was. He never rendered any performance to the defendants. He made a mistake, that had left
   
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the defendants better off and himself worse off, but that is not enough.

The Supreme Court correctly overruled the Court of Appeal, and rejected the claim. They did
so on the basis that Swynson got precisely what he intended to get: discharge of the loan and
a right to repayment from EMSL.101 The factual benefit to the defendants did not to suffice.
However these features appear to be equally true of Banque Financière de la Cité v Parc
(Battersea) Ltd ,102 a case that was not challenged.

VIII. Conclusion: Taking Comparative Law Seriously

It is sometimes said that "English law does not have a universal theory to explain all the cases
in which restitution is available",103 implying that other legal systems do. Those familiar
with German law will notice similarities with it and the reasons I have sought to identify.104
So, German law has long distinguished between enrichment by performance
(Leistungskondiktion) and enrichment in other ways. The recovery back of a performance
rendered conditionally under an agreement is treated quite separately, as are claims based
upon the discharge of another’s obligation. Claims to recover expenses incurred on behalf of
another under the actio negotiorum gestio contraria have never been seen as part of a unified
law of unjust enrichment in civilian systems.

Within the common law world, the resistance of the High Court of Australia to reasoning
employing the omnibus unjust enrichment framework105 has not led it into the errors that the
UK’s Supreme Court has made.

Whether English law can now retrace its steps remains to be seen.

Robert Stevens

Herbert Smith Freehills Professor of Private Law

University of Oxford

L.Q.R. 2018, 134(Oct), 574-601

____________________________________________________________________________

1. [2017] UKSC 29; [2018] A.C. 275 .

2. [2017] UKSC 32; [2018] A.C. 313 .
3. [1991] 2 A.C. 548; [1992] 4 All E.R. 512 .
4. [2015] UKSC 66; [2016] A.C. 176 .
5. [2015] UKSC 33; [2016] A.C. 509 .
6. [1999] 1 A.C. 221; [1998] 1 All E.R. 737 .
7. [2006] UKHL 49; [2007] 1 A.C. 558 .
   
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8. [2007] UKHL 34; [2008] 1 A.C. 561 .

9. P. Birks, Unjust Enrichment, 2nd edn (Oxford; Oxford University Press, 2005).
10. C. Mitchell, P. Mitchell and S. Watterson (eds), Goff and Jones: The Law of Unjust
Enrichment, 9th edn (London: Sweet & Maxwell, 2016).
11. e.g. Lowick Rose LLP v Swynson Ltd [2018] A.C. 313 at [22] per Lord Sumption.
12. Birks, Unjust Enrichment (2005), at p.21.
13. Goff and Jones: The Law of Unjust Enrichment (2016), at para.1-08 (footnotes
omitted).
14. Goff and Jones: The Law of Unjust Enrichment (2016), at para.1-09; Banque
Financière de la Cité v Parc (Battersea) Ltd [1999] 1 A.C. 221 at 227 per Lord Steyn.
15. See R. Goff and G. Jones, The Law of Restitution, 1st edn (London: Sweet & Maxwell,
1966).
16. e.g. Goff and Jones: The Law of Unjust Enrichment (2016), at para.6-07.
17. e.g. A. Burrows, The Law of Restitution, 3rd edn (Oxford: Oxford University Press,
2011), at p.544.
18. P. Birks, An Introduction to the Law of Restitution, revised edn (Oxford: Clarendon
Press, 1989), at p.147; Lowick Rose LLP v Swynson Ltd [2018] A.C. 313 at [22] per
Lord Sumption.
19. P. Birks, Restitution: The Future (Annandale, Australia: The Federation Press, 1992),
at p.27.
20. cf. D. Friedmann, "Restitution of Benefits Acquired Through the Appropriation of
Property or the Commission of a Wrong" (1980) 80 Colum. L. Rev. 504 at 532, fn.144.
21. Birks, Unjust Enrichment (2005), Ch.4; C. Mitchell, P. Mitchell and S. Watterson (eds),
Goff and Jones, The Law of Unjust Enrichment, 8th edn (London: Sweet & Maxwell,
2011), Chs 6–7; but see now their 9th edn, at paras 6-09 and 6-26 to 6-29.
22. A. Burrows, A Restatement of the English Law of Unjust Enrichment (Oxford: Oxford
University Press, 2011), at p.54–55.
23. Revenue and Customs Commissioners v Investment Trust Companies [2018] A.C. 275
at [52] per Lord Reed.
24. Lipkin Gorman v Karpnale Ltd [1991] 2 A.C. 548 . Most cases of discharge of
another’s obligation are similarly problematic.
25. e.g. Burrows, The Law of Restitution (2011), at pp.47–50.
26. e.g. Menelaou v Bank of Cyprus [2016] A.C. 176 at [24] per Lord Clarke.
   
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27. J. Beatson, The Use and Abuse of Unjust Enrichment (Oxford: Clarendon Press, 1991),
at p.33.
28. e.g. Lamb v Bunce (1815) 4 M. & S. 275; 105 E.R. 836 .
29. Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55; [2008] 1 W.L.R. 1752 at
[41] per Lord Scott; Benedetti v Sawaris [2013] UKSC 50; [2014] A.C. 938 at [122] per
Lord Reed.
30. Ignoring the possibility that C may argue that any proceeds of the money paid are held
on trust.
31. Revenue and Customs Commissioners v Investment Trust Companies [2018] A.C. 275
at [51] per Lord Reed.
32. Taylor v Laird (1856) 25 L.J. Ex. 329 at 333.
33. Revenue and Customs Commissioners v Investment Trust Companies [2018] A.C. 275
at [48] per Lord Reed.
34. For discussion see J. Hill, "The Role of the Donee’s Consent in the Law of Gift" (2001)
117 L.Q.R. 127 at 133–135.
35. J. Penner, "Value, Property, and Unjust Enrichment: Trusts of Traceable Proceeds" in
R. Chambers, C. Mitchell and J. Penner (eds), Philosophical Foundations of the Law of
Unjust Enrichment (Oxford: Oxford University Press, 2009), at pp.306–312.
36. e.g. Revenue and Customs Commissioners v Investment Trust Companies [2018] A.C.
275 at [42] per Lord Reed.
37. Aiken v Short (1856) 1 Hurl. & N. 210; 156 E.R. 1180 ; MacDonald Dickens &
Macklin v Costello [2011] EWCA Civ 930; [2012] Q.B. 244 .
38. [1973] Q.B. 195; [1972] 3 All E.R. 586 .
39. [1904] 1 K.B. 493 . Disapproved in Fibrosa Spolka Akcyjna v Fairbairn Lawson
Combe Barbour Ltd [1943] A.C. 32; [1942] 2 All E.R. 122 HL .
40. [1904] 1 K.B. 493 at 499 per Collins M.R.
41. [1904] 1 K.B. 493 at 501 per Romer L.J.
42. Birks, Unjust Enrichment (2005), at p.125.
43. Gibb v Maidstone & Tunbridge Wells NHS Trust [2010] EWCA Civ 678; [2010]
I.R.L.R. 786 .
44. Birks, An Introduction to the Law of Restitution (1989), Ch.7.
45. e.g. Burrows, The Law of Restitution (2011), at p.220.
46. Contra Birks, Unjust Enrichment (2005), at pp.207–209.
   
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47. Baylis v Bishop of London [1913] 1 Ch. 127 .

48. "[P]ersons deal with the property in chattels or exercise acts of ownership over them at
their peril": Fowler v Hollins (1872) L.R. 7 Q.B. 616 at 639 per Cleasby B.; affirmed
(1875) L.R. 7 H.L. 757.
49. e.g. Burrows, The Law of Restitution (2011), Ch.17.
50. e.g. Jenkins v Tucker (1788) 1 H. Bl. 90; 126 E.R. 55 .
51. e.g. Simmons v Wilmott (1800) 3 Esp. 91; 170 E.R. 549 .
52. Crantrave Ltd v Lloyds Bank Plc [2000] Q.B. 917; [2000] 4 All E.R. 473 .
53. Great Northern Railway Co v Swaffield (1874) L.R. 9 Ex. 132.
54. See Mattheson v Smiley (1932) 2 D.L.R. 787 at 789 and 791.
55. [1991] 2 A.C. 548 .
56. Burrows, The Law of Restitution (2011), at p.4.
57. Another foundational case embarrassing for the same reason is Moses v Macferlan
(1760) 2 Burr. 1005; 97 E.R. 676 .
58. Union Bank of Australia Ltd v McClintock & Co [1922] 1 A.C. 240 ; Commercial
Banking Co of Sydney Ltd v Mann [1961] A.C. 1; [1960] 3 All E.R. 482 . The cases
concerned bank cheques obtained by a fraudulent agent in exchange for cheques drawn
on his principal, the claimants. A claim in conversion was brought against the defendant
bank where the agent had cashed the bank cheques. The claim was doomed either
because the claimants had no title to the cheques cashed because they had not been
obtained with their authority, or if they ratified what had been done so as to acquire title
they also ratified the agent’s subsequent dealing with them by deposit ( [1961] A.C. 1 at
11 per Viscount Simonds).
59. (1815) 3 M. & S. 562; 105 E.R. 721 .
60. L. Smith, "Tracing in Taylor v Plumer: Equity in the Court of King’s Bench" [1995]
L.M.C.L.Q. 240.
61. P. Birks, "The English Recognition of Unjust Enrichment" [1991] L.M.C.L.Q. 472.
62. e.g. Limited Liability Partnership Act 2000 .
63. A similar argument is made by P. Watts, "Unjust Enrichment and Misdirected Funds"
(1991) 107 L.Q.R. 521.
64. [1999] 1 A.C. 221 .
65. The money was lent using an intermediary, but this complication can be ignored.
66. Chetwynd v Allen [1899] 1 Ch. 353 ; Butler v Rice [1910] 2 Ch. 277 .
   
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67. Bofinger v Kingsway Group Ltd [2009] HCA 44; (2009) 239 C.L.R. 269.
68. Paul v Speirway Ltd [1976] Ch. 220; [1976] 2 All E.R. 587 .
69. But see Lowick Rose LLP v Swynson Ltd [2018] A.C. 313 at [23] per Lord Sumption.
70. [2007] 1 A.C. 558 .
71. Metallgesellschaft Ltd v Inland Revenue Commissioners; Hoechst AG v Inland
Revenue Commissioners (C-397/98 & C-410/98) EU:C:2001:134; [2001] E.C.R. I-
1727 .
72. Kleinwort Benson v Lincoln City Council [1999] 2 A.C. 349; [1998] 4 All E.R. 513
HL .
73. Limitation Act 1980 s.32(1)(c) .
74. Deutsche Morgan Grenfell v Inland Revenue Commissioners [2007] 1 A.C. 558 at [7],
[107] and [135].
75. [1993] A.C. 70; [1992] 3 All E.R. 737 .
76. [1999] 2 A.C. 349 .
77. Deutsche Morgan Grenfell v Inland Revenue Commissioners [2007] A.C. 558 at [62].
78. Factortame Ltd v Secretary of State for Transport (No.2) [1991] 1 A.C. 603; [1991] 1
All E.R.70 HL .
79. Deutsche Morgan Grenfell v Inland Revenue Commissioners [2007] A.C. 558 at [32].
80. [2008] 1 A.C. 561 . This article went to press before the important decision in
Prudential Assurance v HMRC [2018] UKSC 39 , departing from Sempra Metals for
the reasons given here (see [2018] UKSC 39 at [71]), was handed down by the Supreme
Court, and so takes no account thereof.
81. Supreme Court Act 1981 s.35A(1) .
82. [2008] 1 A.C. 561 .
83. Sempra Metals Ltd [2008] 1 A.C. 561 at [30]–[31] per Lord Hope and at [66] and
[126]–129] per Lord Nicholls.
84. Sempra Metals Ltd [2008] 1 A.C. 561 at [32] per Lord Hope and at [117] per Lord
Nicholls.
85. Sempra Metals Ltd [2008] 1 A.C. 561 at [102] (emphasis added). See also Lord Hope
at [32].
86. Westdeutsche Landesbank Girozentrale v Islington LBC [1996] A.C. 669; [1996] 2 All
E.R. 961 .
87. Sempra Metals Ltd v Commissioners of Inland Revenue [2008] 1 A.C. 561 at [230] per
   
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Lord Mance, dissenting.

88. [2016] A.C. 509 .
89. [2003] 1 A.C. 32; [2002] 3 All E.R. 305 .
90. Durham v BAI (Run-Off) Ltd [2012] UKSC 14; [2012] 1 W.L.R. 867 .
91. International Energy Group v Zurich Insurance [2016] A.C. 509 at [69].
92. Zurich Insurance [2016] A.C. 509 at [68].
93. [2016] A.C. 176 .
94. Menelaou [2016] A.C. 176 at [24].
95. Menelaou [2016] A.C. 176 at [29].
96. An equitable interest that is defeasible upon the secured obligation being fulfilled is a
charge, not as Lord Carnwath supposed (see Menelaou [2016] A.C. 176 at [133]–
[135]), a trust.
97. Revenue and Customs Commissioners v Investment Trust Companies [2018] A.C. 275
at [65] (emphasis added).
98. [2018] A.C. 275 .
99. Revenue and Customs Commissioners v Investment Trust Companies [2018] A.C. 275
at [60].
100. [2018] A.C. 313 .
101. Lowick Rose LLP v Swynson Ltd [2018] A.C. 313 at [32]–[35] per Lord Sumption, at
[87] per Lord Mance and at [119] per Lord Neuberger.
102. [1999] 1 A.C. 221 .
103. Lowick Rose LLP v Swynson Ltd [2018] A.C. 313 at [22] per Lord Sumption.
104. See N. Jansen, "Farewell to Unjust Enrichment" (2016) 20 Edin. L. Rev. 123; G.
Dannemann, The German Law of Unjust Enrichment (Oxford: Oxford University Press,
2009).
105. Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 C.L.R. 89;
Lumbers v W Cook Builders Pty Ltd [2008] HCA 27; (2008) 232 C.L.R 635; Bofinger
v Kingsway Group Ltd [2009] HCA 44; (2009) 239 C.L.R. 269.

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