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(D) RELEASE OF OBLIGATIONS

Where the claimant has secured the release of an obligation owed by the defendant to a third party it is legitimate to consider the defendant to be enriched. So, for example, if the defendant owes money to the third party and the claimant pays off this debt, then, to the extent that this payment discharges the debt,[1] this will constitute an objective benefit to the defendant, since reasonable people would regard this as valuable.[2] So, for example, if the claimant pays ?100 which is credited to the defendant’s bank account, which is overdrawn by ?200, the effect of the payment will be to reduce the defendant’s overdraft owed to the bank and, to that extent, the defendant will be enriched. Such a benefit is a non-money benefit, because it is the effect on the defendant and not the third party which characterizes its nature. This benefit could be regarded as a service,[3] but, since it concerns the payment of money albeit to a third party, it is useful to examine it separately from the provision of services, and it was traditionally kept separate from the provision of services in the common counts. The count for the provision of services was a quantum meruit, whereas that for payments made to third parties fell specifically within the action for money paid. Since this enrichment is characterized as a non-money benefit it may be subjectively devalued by the defendant if, for example, the defendant could have relied on a set off or a counterclaim to negate his or her liability to the third party.

(E) FORGOING A CLAIM

An enrichment has also been held to include where the claimant has forgone a valid claim against the defendant, such as a claim for compensation for unfair dismissal.[4]

  • [1] The question of when a debt is discharged is discussed in Chapter 11.
  • [2] See, for example, Exall v Partridge (1799) 8 TR 303, 101 ER 1405.
  • [3] This was how the benefit was characterized in Procter and Gamble Philippine Manufacturing Corp vPeter Cremer GmbH and Co (The Manila) [1988] 3 All ER 843.
  • [4] Gibb v Maidstone and Tunbridge Wells NHS Trust [2010] EWCA Civ 678, [30] (Laws LJ).
 
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