AT THE EXPENSE OF THE CLAIMANT

GENERAL PRINCIPLES

Where the claimant wishes to obtain restitution from the defendant on the ground of unjust enrichment it is not enough simply to show that the defendant has been enriched in circumstances which fall within one of the grounds of restitution; the claimant must also establish that this enrichment was obtained at the claimant’s expense. This requires the claimant to establish a connection or nexus between the receipt of an enrichment by the defendant and the claimant’s loss, so as to justify the restitutionary claim against the defendant.^[1] This essentially requires proof of some form of causative link between the defendant’s gain and the claimant’s loss,^[2] and is justified by the corrective justice principle, by which liability in unjust enrichment is imposed to correct the injustice of the claimant losing a benefit and the defendant gaining it.^[3] This requirement is usually easily established, especially where the defendant’s enrichment involves money paid by the claimant. For example, if the claimant pays ?1,000 directly to the defendant by mistake, it is obvious that the defendant was enriched at the claimant’s expense, because the money was obtained directly from the claimant and the defendant’s gain mirrors the claimant’s loss exactly. There are, however, certain categories of case in which the question whether the benefit was obtained at the claimant’s expense is much more difficult to answer and raises some fundamentally important questions about the ambit of the unjust enrichment principle. The most important questions are, first, whether the benefit obtained by the defendant must have been obtained directly from the claimant or can be obtained indirectly via a third party, and, secondly, whether the benefit gained by the defendant must be reflected exactly by a corresponding loss suffered by the claimant.

[1] See Chase Manhattan NA v Israel British Bank (London) Ltd [1981] Ch 105, 125 (Goulding J); BanqueFinanciere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221, 237 (Lord Clyde); Uren v First National HomeFinance Ltd [2005] EWHC 2529 (Ch), [23] (Mann J); Investment Trust Companies v HMRC [2012] EWHC458 (Ch), [2012] STC 1150, [71] (Henderson J). In Haugesund Kommune v Depfa ACS Bank [2011] EWCACiv 33, [2011] 3 All ER 655 Rix LJ recognized, [70], that loss for the purposes of a claim in unjustenrichment does not necessarily equate with loss for the purposes of a claim for breach of contract orin tort.
[2] See generally GJ Virgo, ‘Causation and Remoteness in the Law of Restitution’ in S Degeling and J Edelman(eds), Unjust Enrichment in Commercial Law (Sydney: Lawbook Co, 2008), ch 8.
[3] See p 4, above.