(i) Subjective Over-Valuation

It might be considered to follow logically from the recognition of the subjective devaluation principle that a principle of subjective over-valuation[1] should also be recognized, such that the value of the enrichment should be increased above its objective value if the defendant valued it more highly. However, none of the Justices in Benedetti v Sawiris[2] recognized this principle, although Lord Clarke, with whom Lords Kerr and Wilson agreed, did reserve the possibility of recognizing it in exceptional circumstances, but without identifying what they might be.[3] Subjective over-valuation was not considered to be necessary to protect the defendant’s autonomy to choose and value the benefit,[4] it being sufficient that the defendant restored to the claimant no more than the objective value of the benefit, for then the enrichment would be considered no longer to be unjust.[5] So, for example, if the defendant asked the claimant to decorate his house in execrable taste, the enrichment would be the objective value of the claimant’s service, which will not be increased by reference to the fact that the defendant valued this service more than the reasonable person would do.2 1 It followed, on the facts of Benedetti, that the defendant was not liable to pay the claimant more than the objective market value of the services provided by the claimant, even though the defendant had offered the claimant a larger sum to settle the proceedings. Even if this offer reflected the defendant’s perception that the services were worth more than their objective value, and it is doubtful whether an offer made to settle proceedings really can be regarded as evidence of the defendant’s personal valuation of the service, it was not relevant to the valuation of the enrichment.

The crucial consequence of the decision of the Supreme Court in Benedetti is that, whilst the objective value of an enrichment may be reduced by the defendant’s personal valuation, it cannot be increased by reference to the defendant’s valuation.

  • [1] Garner, ‘The Role of Subjective Benefit in the Law of Unjust Enrichment’, 43 called this ‘subjectiverevaluation’, but ‘over-valuation’ better reflects the nature of the principle.
  • [2] [2013] UKSC 50, [2014] AC 938, [29] (Lord Clarke), [115] (Lord Reed), [195] (Lord Neuberger).
  • [3] Lord Neuberger, ibid, [199], also contemplated that the defendant might be liable for the additionalvalue above the objective market value where the defendant led the claimant to believe that he was willing topay more for the benefit and the claimant reasonably and foreseeably relied on this representation. Heconsidered that the subjective revaluation would be relevant by virtue of estoppel (see p 90, above), but it isjust as likely to be covered by a contractual claim.
  • [4] Ibid, [29] (Lord Clarke). 5 Ibid, [196] (Lord Neuberger). 231 Ibid, [121] (Lord Reed).
  • [5] 232 See Sopov v Kane Constructions Pty Ltd (No 2) [2009] VSCA 141.
< Prev   CONTENTS   Source   Next >