general principle: anyone made richer by the loss of another must restore
or pay for the benefit received
too wide to give rise in every case to an obligation to restore.
Law attempts to define when recovery allowed
Every legal system recognising the principle has to find some way of
confining it. Scots law has been significantly developed in modern times
by the following cases:
*Morgan Guaranty Trust Co of New York v Lothian Regional Council 1995 SC 151; 1995
SLT 299; 1995 SCLR 225
LRC was a local authority and MG a merchant bank. The parties had entered into a
contract under which MG made payments to LRC which would be repaid in certain
market conditions. Money transferred. It turned out that the contract was void scottish
local authority was ultra vires in entering such contract. Payment made under error of
law, held bankers not entitle to repayment. Banker reclaimed. Held LRC had money from
MG without any legal basis for its retention, i.e. the authority was enriched at the bank’s
expense, and it was found liable to repay the bank. Entitled to repetition under the
condictio indebiti (remedy available for recovery of money paid or property transferred
under an obligation which was void but erroneously though to be valid; (2) the rule that
payment made under error of law not recoverable no foundation, question of court order
recovery is matter for equity and the circumstances of individual case; (3) onus of
demonstrating payment made in error and not intended as donation rested on parties
seeking to recover payment. Pursuer entitled to decree de plano
*Shilliday v Smith, 1998 SC 725; 1998 SLT 976 and
(couple cohabiting in M’s house, with W paying for improvements in anticipation of it
becoming matrimonial home) defender bought house in bad state of disrepair and parties
discussed getting married. Became engaged. Pursuers so due to move into cottage so
she paid for work to be done. man didn’t spend any money on house. Breakup during
festive period. Can she recover money. Sheriff granted decree in pursuers favour,
defender unsuccessful appeal to sheriff principle and appealed to court of session. Held,
pursuers claim mainly based on prospect of marriage and work done increasing value of
property. W could recover as both aspects of claim within Condictio causa data causa
non secuta, she handed over money for purpose; no liability error but purpose was
marriage this was the cause data (reason). Unjustified enrichment basis not contractual
but separate legal duty so no need for contract to rely on, sufficient to prove expendature
is 'in contemplation of marriage' and marriage failed to materialise. Money recoverable.
Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1998 SC (HL) 90 (*Lord Hope’s
speech at 98)
Development corporation entered contract with company 1979 for development and
operation of part of town centre owned by corporation. Arrangement included head lease
(corporation and company) and sublease (back in favour of corporation). 1987 company
assigned its interests as subtenant under sublease to another company for substantial
consideration in 1988 first company irritated the sublease (non-payment of rent). Irritation
upheld by house of lords.
Assignee company raised action against first company for declarator that parties were
partners in joint business venture and payment of sum in respect of their capital
, contribution. Pursuers acrtion dismissed and appealed to house of lords. Held: (1) to
succeed pursuers had to show enrichment of defenders at their expense. (2) defenders
contracted into an irritancy clause which had made it clear that in event of its exercise the
pursuers were to forfeit all right and title under lease, premises would revert to defenders
and it was lawful for defenders to enter into posession, uplift the rents and eject the
subtenants. (3) question whether defenders entitled to enjoy entire developemnt
depended on irritancy clause terms and no room for operation of unjustified enrichment
and appeal dismissed; property owner successful. Appeal dismissed.
Lord hope -
If landlords obtain no more than entitled to under contract as a result of the
exercise of the irritancy, there will be no room for the operation for the law
of unjustified enrichment.
Obligation in UE owed where enrichment cannot be justified on legal basis
arising from the circumstances in which the defender was enriched.
Repetition: Repayment of a sum of money
Restitution: order sought for return of moveable property
Recompense: order for payment of a sum representing the value of the
benefit enjoyed, usually involves process of assessment and requires
value to be places on benefit.
CIN enriched by exercise of irritancy
Appropriate remedy here is recompense
Articulate unjustified enrichment
As a result of these cases, Scots law has now reached a position where in principle an
enrichment is said to be unjustified and one which should be reversed if its
retention is supported by no legal ground.
Examples of “legal grounds” or justifications for enrichments - receipt under a gift or
through performance of a valid contract, as well as gain through lawful competition.
On the other side of the coin, the Roman law condictiones can be seen as descriptions of
situations in which an enrichment of any kind would be seen as unjustified, without
necessarily confining the categorisation of unjustified enrichments. There are other
situations going beyond the condictiones in which enrichments are unjustified.
Repetition (repayment of money), restitution (restoration of property) and recompense
(payment for the service or other enrichment rendered), the three traditional categories of
unjustified enrichment in Scots law, are now simply remedies which the court can grant
once it has decided that an enrichment is unjustified.
Neither the condictiones nor the traditional remedies exhaust the ways in which the
courts may find or reverse unjustified enrichment.
Anyone contemplating bringing an action must determine how the court is to
reverse the defender’s enrichment
Person fraiming pleadings must consider how the defender’s enrichment
occurred and search among usual remedies to find one or combination which will
achieve purpose of having enrichment reversed
B. WHAT IS ENRICHMENT?
• addition of a new asset to a person’s wealth;
• adding value to a person’s already existing asset;
• preserving another’s asset which would otherwise have been lost or reduced in value,
saving that other the expense involved;
• performing an obligation lying upon another, saving that other the expense of
performance.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller nataliefowler. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.79. You're not tied to anything after your purchase.
