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Home arrow Law arrow The principles of the law of restitution
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PARTICULAR TYPES OF ENRICHMENT

Enrichments may take many different forms, but generally they fall into one of four categories, which reflect the historic division between the four common counts, namely the actions for money had and received, quantum valebat (the reasonable value of property), quantum meruit (the reasonable value of services), and money paid to a third party on behalf of the defendant.

(A) MONEY

(i) Exchange Value

Most restitutionary claims involve the claimant seeking to recover money from the defendant to whom the claimant has paid it. In these circumstances the enrichment question is not of critical importance, because money is always regarded as an enrichment. This was recognized by Robert Goff J in BP Exploration Co (Libya) Ltd v Hunt (No 2),70 where he stressed that, because money is the universal medium of exchange, it always constitutes an enrichment.71 Consequently, it is never possible for defendants to rely on the subjective devaluation principle and argue that they do not value the money which has been received. In the vast majority of cases ‘money’ refers to coins and notes which are legal tender. But ‘money’ may also include a sum credited to the account of the defendant. This is deemed to be equivalent to a payment72 and will similarly always be regarded as an enrichment.

In assessing whether the defendant has been enriched by the receipt of money it is necessary to have regard to the net transfer of value. So, where there have been payments between the claimant and the defendant, the net amount will constitute the enrichment. Further, any consequent liabilities which might negate the enrichment also need to be taken into account. So, for example, in Jeremy D Stone Consultants Ltd v National Westminster Bank73 it was recognized that a bank was not enriched by a payment made to it by the claimant for the account of a customer, even though the bank became beneficially entitled to the money, because the increase in the bank’s assets was matched by an immediate balancing liability in the form of the debt which it owed to its customer. In such circumstances the claimant should sue the customer rather than the bank.

In Challinor v Bellis74 it was recognized that, where money is transferred by the claimant to the defendant who holds the money on trust for a third party, the defendant trustee should not be considered to be enriched because the money belonged beneficially to the third party. But this confuses the factual and legal interpretations of enrichment. If the trustee retains the money he or she should be liable to make restitution to the claimant if a ground of restitution can be identified. If the trustee has transferred the money to the beneficiary any claim for restitution against the trustee should be defeated by the defence of change of position.75

 
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