(C) THE ESSENCE OF ENRICHMENT
The essential feature of a factual enrichment is that it must be capable of being measured in money. The need to value the enrichment is vital since, as the remedy for unjust enrichment is personal, the claimant will only be able to recover the value of the enrichment from the defendant and this remedy can only be expressed in monetary terms. Resorting to value as the indicator of enrichment does not mean that Beatson’s notion of exchange value is being recognized. This is because something may be regarded as valuable without necessarily having an exchange value. For example, a pure service may be valuable, in that reasonable people would pay for it, even though the defendant is left with nothing of any exchange value. It follows, however, that benefits which cannot be valued, such as happiness, will not count for purposes of the law of unjust enrichment.
Much of the uncertainty concerning the definition of enrichment has stemmed from lack of consensus about where the analysis should start. Essentially, there are two options available. Either we start with an objective test, ascertained by asking whether reasonable people would consider the defendant to have received something of value, or we start with a subjective test, by considering whether the defendant considers that he or she has received something of value. Whilst the use of the words ‘objective’ and ‘subjective’ might be considered to be ambiguous, they are useful shorthand for complex ideas. Subjective notions of value involve focusing on the particular value of the enrichment to the defendant. Lodder has called this ‘idiosyncratic value’.[1] He calls the other notion of value ‘relational value’, this being an abstract value which enables the value of different things to be compared in relation to each other. An example of this relational value is the market value of goods.
Whilst both objective and subjective tests are relevant to the identification of an enrichment, the better view is that it is the objective test which should always be considered first,1 for four reasons.
- (1) It makes practical sense for the claimant to establish that the defendant has received an objective benefit and then for the burden to shift to the defendant to disprove this, by arguing that he or she did not subjectively value what had been received. To require the claimant at the outset to show that the defendant actually valued what was received is difficult and illogical.
- (2) The emphasis on the objective test is justified by the fact that the subjective test of enrichment has usually been formulated in terms of the principle of subjective devaluation,1 whereby the defendant is allowed to show that he or she did not value the benefit which had been received. But, for the principle of subjective devaluation to work, the defendant must first be shown to have received an objective benefit; otherwise there is nothing to devalue.
- (3) The objective test is generally relied on when valuing the enrichment and so, for consistency, that test should also be adopted, at least initially, when identifying the
enrichment.19
(4) Finally, the objective test is adopted in practice as the starting point to identify an enrichment. So, for example, it is the objective test which is adopted for the purposes of determining whether the defendant has received a valuable benefit under a frustrated contract.20 It has now been adopted explicitly by the Supreme Court in Benedetti v Sawiris.21
- [1] Lodder, Enrichment in the Law of Unjust Enrichment and Restitution, 15.
