(i) Money

The simplest and most common example of an incontrovertible benefit is the receipt of money, because no reasonable person would ever regard this as anything other than beneficial.[1] It is with the non-money benefits that the greatest difficulties arise. What need to be identified are those non-money benefits which are so unequivocally enriching that their receipt can be treated as equivalent in effect to the receipt of money. It is consequently important to distinguish between the intrinsic value of money and the use value of money, since it is possible to devalue the use of money where the defendant can show that he or she did not rely on it any way.[2]

(ii) Anticipation of Necessary Expenditure

Where the defendant receives a benefit which saves him or her from incurring expenditure which would otherwise necessarily have been incurred, the defendant should be treated as incontrovertibly benefited. Such a defendant cannot convincingly argue that he or she did not value what had been received, since he or she would have paid for the particular benefit anyway had the claimant not provided it. Because of the circumstances of necessity, the defendant has no choice as to whether or not to accept the benefit and therefore treating the defendant as enriched does not infringe the autonomy principle.

The circumstances of necessity may arise in two different ways.

(1) By Operation of Law

The expenditure which the defendant needed to incur may arise by operation of law. For example, in Exall v Partridge114 the claimant’s carriage, which was on the defendant’s premises, was distrained by the defendant’s landlord because the defendant’s rent was in arrears. To recover his carriage, the claimant was compelled to pay the outstanding rent to the landlord. He then successfully recovered this money from the defendant. Clearly the defendant was enriched, since the money paid to the landlord discharged the debt which the defendant owed. The defendant could never argue that he did not value this benefit because, if the claimant had not paid the money, the defendant would have been legally obliged to pay the landlord and so the expenditure would necessarily have been incurred.[3] [4] [5] Similarly, in County ofCarleton v City of Ottawa,116 a decision of the Supreme Court of Canada, the claimant, thinking that a destitute woman was resident within its boundaries, paid for board, lodging, and medical assistance to be provided to her. In fact, the woman was resident within the defendant’s boundaries, so the defendant was liable to make provision for her. It was held that the defendant was liable to repay the claimant. The defendant was incontrovertibly benefited since the claimant had discharged the defendant’s legal liability. If the defendant is to be characterized as incontrovertibly benefited by the discharge of a liability, this must have been a legal rather than a moral liability.[6]

(2) Factually Necessary Expenditure

Alternatively, the expenditure may be factually necessary. This will arise where, although the defendant is not compelled by law to incur the expenditure, he or she would have incurred it had the claimant not provided the benefit. So, for example, if, whilst the defendant is on holiday, burglars break into his house and break a window, the claimant, who is a neighbour, may arrange for the window to be replaced to ensure that the property is protected. When the defendant returns from holiday he will be obliged to reimburse the claimant. The defendant cannot argue that he was not benefited by what the claimant did, because if the claimant had not replaced the window, the defendant would inevitably have done so.[7] [8] This is illustrated by Re Berkeley Applegate (Investment Consultants) Ltd,119 where services provided by a liquidator in administering trust property were held to have been of substantial benefit to the beneficiaries, because ‘if the liquidator had not done this work, it is inevitable that the work, or at all events a great deal of it, would have had to be done by someone else, and on application to the court a receiver would have been appointed whose expenses and fees would necessarily have had to be borne by the trust assets’.

Other examples of factually necessary expenditure being anticipated by the claimant arise in the context of the supply of necessaries to the incapacitated, such as infants and the mentally disturbed.[9] By the very definition of ‘necessaries’, their supply constitutes an incontrovertible benefit. In Rowe v Vale of White Horse DC121 it was recognized that the supply of services by a council to remove sewage from properties was incontrovertibly beneficial, presumably because it was factually necessary.

One specific problem which arises in respect of factually necessary expenditure relates to the determination of what is meant by ‘necessary’ in this context. This is not a problem for legally necessary expenditure, since the law either requires the expenditure to be incurred or it does not. But in the context of factual necessity it might be possible for the defendant to carry on without incurring the expenditure. If so, the benefit received should not be regarded as incontrovertibly beneficial. But, when considering whether the expenditure was necessary, unrealistic or fanciful possibilities of the defendant doing without the enrichment should be ignored; the key test should be whether the expenditure would reasonably have been incurred.[10] [11] [12] For example, in Craven-Ellis v Canons Ltd,123 it was recognized that the services of the managing director of a company were necessary to the company;[13] although it might have been argued that the company could have continued to function without the managing director’s services, this would be unrealistic. As long as it can be shown that, in the ordinary course of events the defendant would have incurred the expenditure, the defendant should be considered to have been incontrovert- ibly benefited.

  • [1] BP Exploration Co (Libya) Ltd v Hunt [1979] 1 WLR 783, 799 (Robert Goff J).
  • [2] See p 73, above.
  • [3] (1799) 8 TR 308; 101 ER 1405. See p 239, below.
  • [4] On the question of the ground for restitution, see Chapter 11. 116 (1965) 52 DLR (2d.) 220.
  • [5] 117 Regional Municipality of Peel v Her Majesty the Queen in Right of Canada (1993) 98 DLR (4th) 140, 156
  • [6] (McLachlin J).
  • [7] See Chapter 12 for consideration of the relevant ground of restitution in such circumstances.
  • [8] [1989] Ch 32, 50 (Edward Nugee QC). See also Craven-Ellis v Canons Ltd [1936] 2 KB 403, 412 (GreerLJ); Re Duke of Norfolk’s Settlement Trusts [1982] Ch 61.
  • [9] See, for example, Re Rhodes (1890) 44 Ch D 94. See also Clarke v The Guardians of the Cuckfield Union(1852) 21 LJ (QB) 349, concerning the supply of toilets to a work-house, which were held to be necessary.
  • [10] [2003] EWHC 388 (Admin), [2003] 1 Lloyd’s Rep 418.
  • [11] Birks, Unjust Enrichment (2nd edn), 60. See Monks v Poynice Pty Ltd (1987) 11 ACLR 637, 640(Supreme Court of New South Wales).
  • [12] [1936] 2 KB 403. 4 Ibid, 412 (Greer LJ).
  • [13] 125 [2004] EWCA Civ 47, [2004] 1 WLR 2775. See also Harrison v Madejski and Coys of Kensington [2014]EWCA Civ 361, p 71, above.
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