Unjust enrichment
Another cause of action than the contract; it does not depend on any contract, or the existence of a
contract; depends on the existence of unjust enrichment
Should not be looking for contract
May be independently found; therefore, there may be unjust enrichment even if there is no contract
Quasi-contract is misleading:
● old term: look for some sort of contract
● and to establish a cause of action on quasi-contract
Moses v Macferlan:
- one of the earliest cases of the clear pronouncement of unjust enrichment
5 questions to qualify for unjust enrichment:
1. Was the defendant enriched?
2. Was D enriched at the expense of the plaintiff?
3. Was the enrichment unjust?
4. What rights (remedies) (in personam or in rem) [proprietary right to claim title in property,
personal remedy] does P acquire as a result?
5. Does D have a defence?
Question 1: Was the defendant enriched?
1. something of monetary value → enrichment
2. subjective devaluation: someone may value it a lot while it may not so to others; different
people have subjective valuations of a good (property) or service
3. Cressman v Coys:
a. unjustly enriched by obtaining the license plate?
b. can the defendant say that the subject-matter is not of value subjectively and therefore
the claim fails in the first hurdle?
c. give to the girlfriend to prove that the license plate was of no value to him → present
should be of some value; CA was suspicious of the value of the license plate to the
defendant; there was an “incontrovertible benefit” obtained by the fact that the license
plate was given to the girlfriend
d. civil law → objective test
e. try to point to the facts → and say that the defendant is enriched
f. mistake → should not be confused with the concept of mistake of contract
4. Benedetti v Sawiris
a. will normally go for the market value → a starting point; the presumption: the defendant
will be enriched to the extent of the market value of the subject matter
b. but will also consider the subjective valuation of the party
c. any case of subjective revaluation? If the person values higher than the market price,
can the higher valuation be claimed?
5. Cleaning of a car
a. subjective thinking - car cleaned for free and drive off (a free ride)? Can reject the
cleaning? Enriched?
Question 2: Was D’s enrichment at P’s expense?
1. some value was subtracted from the plaintiff
a. Birk - subtraction by interception → a mysterious person intercepted and captured the
benefit destined from the person
2. does the gain equal the loss?
a. if the person further utilizes the benefit for an extra gain → is that part of the expense?
b. FC Jones v Jones
i. it is a fraud to quickly transfer the assets to another person
ii. enrichment of Mrs. Jones at the expense of the creditor
iii. can the creditor lay claim to the amount of money (the fruits or profits) that
Mrs. Jones (with the knowledge and skills in making money through commodity
speculation) make?
iv. [Birks → Yes] because the money made can be traced to the gain at the
plaintiff’s expense
c. Forskett v McKeown
i. investors → entitled to the fruits (dividends) from the insurance which was for
the wife and children of Murphy; Murphy used the money of the investors
ii. any claim of the profit on unjust enrichment?
iii. Lord Millett: when suing for unjust enrichment → only have personal right under
the law of property; unjust enrichment can only be used to claim for a personal
right → no proprietary remedy under unjust enrichment
Question 3: Was enrichment unjust?
1. look for the list of unjust factors - some are controversial, some are more established
2. ignorance/powerlessness (controversial)
3. some of them depend upon public policy
4. some on intent (mistaken or impaired)
a. giving money to the other party based on false assumption: mistake
b. intention impaired because of undue influence
c. failure of consideration: the other side of the bargain have not materialized; the
expected performance is not returned
5. Birks - intellectually unsatisfactory → the theoretical underpinning under the unjust factors
a. one important and real question to determine the “unjustness” of the enrichment: an
absence of basis → conferring a benefit on some sort of basis that is wrong; no good
reason
i. performing the bargain on the basis of the bargain will be completed
ii. given money due to undue influence
b. the three questions that will resolve nearly all cases:
i. was the enrichment perceived to be obligatory (owing an obligation)? Basis will
fail if there is in fact no obligation
ii. performing voluntarily on the basis and understanding that there will be a
counter-performance (any return)[some consideration expected]? If the
outcome did not come about, then the basis of the enrichment will have failed
iii. If the enrichment was acquired without the participation of the claimant or his
agents, was there any legal authority for it acquisition by the defendant? No
legal basis or anything that entitles the defendant to acquire subject-matter →
unjust enrichment
c. Roman law basis of the questions (Roman law in disguise, civil law of unjust enrichment)
i. absence of basis - sine causa (without cause, basis at all) → Roman law writers
suggested but not developed - obligations sine causa
ii. first question: condictio indebiti (you think there is an obligation (a debt) but in
fact there is no obligation)
iii. second question: condictio causa data non secuta (cause having been given not
followed through by the other side, no counter-performance)
iv. third question: condictio causa furtiva (engaging in theft?)
v. three types of demands (condictio) → roman law basis
d. Birks suggested that the interest swap cases - failure of consideration (equals absence of
basis) → upheld his thought
e. Deutsche Morgan Grenfell Group plc v IRC
i. too early to tell that the absence of basis is of law
ii. the English law sticks to the traditional analysis of the list of unjust factors
f. Burrows - it’s all very well to say there is the absence of basis and the three important
questions; high level of generality - what are the situations that fall into the three
questions respectively → still have to evaluate particular circumstances
i. e.g. partial performance contrasted with total failure of consideration
ii. need to deal with the facts of the case
g. German law - apparently enshrined the principle of the absence of basis
i. the German civil code → things similar to unjust enrichment are covered in
other parts of the civil code
ii. similarity with the English and HK law?
Question 4: What rights arise (remedy)?
1. personal right vs. proprietary right
2. the Jones case
3. Birks - not automatically have the proprietary right, it all depends on particular circumstances
a. initial failure of basis
b. the third case -
i. the property is still belonged to the owner → help yourself with the bicycle
ii. no basis ab initio
c. the first case - from the beginning, thought that there was an obligation but in fact there
was not
i. proprietary right arises
ii. an initial failure of basis
d. subsequent failure of basis - the second case
i. may not have a proprietary right
e. the case of undue influence - also subsequent? (void and voidable distinctions) →
interesting propositions
Question 5: Any defences?
1. Focus on one factor - change of position
2. Change of position in good faith (bona fide); thinking that the enrichment is acquired with good
reason
a. then to that extent, there is a defence to unjust enrichment
Plead to all the relevant facts - to succeed in the claim of unjust enrichment
● especially to the unjust factor
