(ii) The Law Reform (Frustrated Contracts) Act 1943

The main purpose of the Law Reform (Frustrated Contracts) Act 1943 was to remove the perceived injustice of the common law, particularly the denial of restitution where the basis had only partially failed. A further injustice of the common law was that, although it was possible for the claimant to bring a restitutionary claim following frustration where the basis had failed totally, it was not possible to take into account any expenditure which had been incurred by the defendant.^[1] Although the 1943 Act provides a solution to both of these difficulties, it is complicated and uncertain in scope. One reason for this complexity results from the difficulty in identifying the Act’s rationale. Whilst it seems tolerably clear that the Act creates a statutory regime which is founded on the reversal of the defendant’s unjust enrichment,^[2] although no reference to restitution or unjust enrichment is included in the Act,^[3] it is equally clear that the Act does not simply operate to ensure that the value of any benefit obtained by the defendant under a contract which is subsequently frustrated is restored to the claimant. This is because the Act also seeks to apportion losses arising from the frustrating event between the parties. The real difficulty in analysing the statutory regime relates to the reconciliation of these two different policies of reversing unjust enrichment and loss apportionment.

There are two key provisions in the Act. The first, section 1(2), applies where the defendant has been enriched by the receipt of money, and the second, section 1(3), applies where the enrichment is a non-money benefit. Before either provision can be applied it must be shown that the contract has been discharged for frustration and that the contract was governed by English law.^[4]

(1) Restitution of Money

Where the claimant has paid money to another party to the contract before it was frustrated the claimant is able to recover such sums ‘as money received by [the other party] for the use of’ the claimant.^[5] The effect of this provision is that the claimant is given a statutory right to obtain restitution from the defendant. Although the claimant does not need to identify specifically the elements of an unjust enrichment action, the statutory right of recovery is consistent with a restitutionary claim to reverse the defendant’s unjust enrichment. It is crucial to the statutory claim that the defendant has received money, an incontrovertible benefit, from the claimant, so the defendant must have been enriched at the claimant’s expense. The ground of restitution can be said to be partial failure of basis, since the right to recovery exists even though the claimant has received some benefit under the contract. This means that if Whincup v Hughes^[6] was decided today, the father would be able to recover part of the advance payment, even though his son had only been apprenticed for a year.

The claimant is able to recover the payment from the defendant under section 1(2) even though this means that the claimant will be escaping from a bad bargain, in that had the contract not been frustrated the claimant would have suffered a loss.^[7] The fact that the contract was a bad bargain ceases to be relevant, because the effect of frustration is to discharge the contract so it no longer affects the restitutionary claim.^[8]

Although section 1(2) appears to create a wide right of recovery it is subject to some significant limitations.

• (1) The claimant will only be able to recover money which was paid before the contract was discharged for frustration. If, however, the claimant had paid the defendant after discharge, he or she would be able to obtain restitution on the ground of mistake.^[9]
• (2) The claimant will only be able to rely on section 1(2) where he or she had paid money to somebody who is party to the contract which was frustrated.
• (3) It is possible for the parties to contract out of the statutory regime,^[10] although the courts will carefully construe the contract to ensure that the parties really did intend to exclude the statutory scheme following the frustration of the contract.^[11]

The claimant’s right to restitution is qualified by the proviso to section 1(2). The effect of this is that, if the defendant had incurred expenses in or for the purpose of the performance of the contract^[12] before the contract was discharged, the court has a discretion to allow the defendant to retain all or part of the money he or she had received from the claimant, if it considers it to be just to do so having considered all the circumstances of the case. Similarly, if the claimant was liable to pay the defendant before the contract was frustrated, the defendant may recover all or some of this amount in respect of the expenditure which he or she had incurred. The burden of proving that the proviso is applicable is borne by the defendant.^[13] The amount which the defendant is allowed to retain or to recover from the claimant is limited in two ways. First, it must not exceed the expenses which the defendant actually incurred. Secondly, it is limited to the amount which the defendant received from the claimant or which the claimant was liable to pay to the defendant. So, for example, if the claimant paid ?10,000 to the defendant and was liable to pay a further ?5,000 to the defendant before the contract was frustrated, and the defendant incurred expenditure of ?18,000 in performance of the contract, the defendant will, subject to the exercise of the court’s discretion, be able to retain the ?10,000 and recover the ?5,000 but will be out of pocket in respect of the remaining ?3,000.

The proviso is a very important limitation on the claimant’s right to obtain restitution, but it is a limitation which does not appear to be consistent with the analysis of section 1(2) as a provision which creates a statutory right of restitution to reverse the defendant’s unjust enrichment. In BP v Hunt^[14] Robert Goff J tried to rationalize the proviso in restitutionary terms by concluding that it embodied a statutory form of the defence of change of position.^[15] Whilst the proviso certainly shares some characteristics of that defence, it does not embody all its features, particularly the requirement that the change of position must be extraordinary and that the change of position was caused by the receipt of the benefit.^[16]

The proviso is, in fact, subject to a qualification which provides an important clue to its purpose. According to the proviso, expenditure incurred by the defendant will only be relevant if it was incurred in or for the purpose of the performance of the contract. It follows that the purpose of the proviso is simply to enable the defendant to retain or recover those expenses which were incurred in the expectation that the contract would be performed. This is perfectly justifiable. If the claimant is able to recover the payment which he or she had made to the defendant under the contract, it is surely only fair that the defendant can reclaim his or her expenditure which had been incurred with reference to the contract. So the real function of the proviso is to enable the courts to allocate losses which have arisen as a result of the contract being frustrated.

That the proviso should be interpreted in this way was acknowledged by Garland J in the only case to have considered the application of section 1(2). In Gamerco SA v ICM/ Fair Warning (Agency) Ltd^[17] the claimant had agreed to promote a concert in Madrid involving the band ‘Guns N’Roses’. Four days before the concert was due to be held, the local authority banned the use of the stadium which had been booked because of fears that it was not safe. The claimant was unable to find an alternative venue and so the concert was cancelled, frustrating the contract. The claimant had paid the defendant $412,500 pursuant to the contract and wished to recover this sum under section 1(2). The defendant had, however, incurred expenditure in relation to the performance of the contract of about $50,000 and wanted to retain this amount. Garland J accepted that the court was obliged ‘to do justice in a situation which the parties had neither contemplated nor provided for, and to mitigate the possible harshness of allowing all loss to lie where it has fallen’.^[18] This did not, however, mean that the court was obliged to apportion the losses equally between the parties or that the defendant could recoup all of its expenditure. The court sought instead to apportion the losses having regard to all of the circumstances of the case. One of the circumstances which the judge considered to be relevant was that the claimant had incurred expenditure of $450,000.^[19] Consequently, its loss was much greater than that of the defendant and so the judge decided not to allow the defendant to retain any amount in respect of the expenditure which it had incurred.

Although the effect of section 1(2) and its proviso is to enable losses to be apportioned between the parties, it is only partially effective in this regard. For example, the defendant will only be able to recover expenditure to the extent that the claimant has paid money, or is liable to pay money, to the defendant before the contract was frustrated. Also, if the claimant incurred expenditure in or for the performance of the contract, and this did not involve the payment of money to the defendant or the defendant receiving a valuable benefit, the claimant is unable to recoup this money specifically from the defendant. Whether section 1(2) should be replaced by a provision which enables the court to apportion all the losses between the parties, as occurs in other countries,^[20] will be examined after the operation of section 1(3) is considered.

(2) Restitution of Non-Money Benefits

The restitution of non-money benefits which have been obtained by the defendant before the contract was frustrated is governed by section 1(3) of the 1943 Act. This is a complex provision but essentially it applies whenever the defendant, who was a party to the contract with the claimant, has received a valuable benefit other than money by reason of anything which was done by the claimant in, or for the purpose of, the performance of the contract. A defendant who has received such a benefit before the contract was frustrated is liable to pay the claimant such sum as the court considers to be just having regard to all the circumstances of the case. This sum must not exceed the value of the benefit to the defendant who obtained it. Section 1(3) requires the examination of three separate matters. First, the identification of the valuable benefit. Secondly, the valuation of this benefit. Thirdly, the assessment of the sum which it would be just for the defendant to pay to the claimant. These three matters will be considered in turn and then their application will be examined with reference to the difficult case of BP Exploration Co (Libya) Ltd vHunt (No 2).^[21] But it is first necessary to consider the rationale of section 1(3).

In BP Exploration Co (Libya) Ltd v Hunt (No 2)^[22] Robert Goff J assumed that the rationale of section 1(3) was to ensure that the defendant was not unjustly enriched as a result of the contract being frustrated. Others have argued that section 1(3) should be interpreted simply as a mechanism to allocate losses between the parties.^[23] The better view is that section 1(3), like section 1(2), exists both to reverse the defendant’s unjust enrichment and to allocate losses suffered as a result of the frustration. This is because section 1(3) involves two distinct elements. The first concerns the identification of the valuable benefit, which constitutes the ceiling on the claimant’s award. This element is concerned with the reversal of the defendant’s unjust enrichment, since it must be shown that the defendant had received a valuable benefit at the claimant’s expense. As with section 1(2), the ground ofrestitution can be considered to be partial failure ofbasis. Once this valuable enrichment has been identified it is necessary to identify the just sum which should be awarded. This cannot be greater than the value of the benefit received by the defendant, but it could be less. This second aspect of section 1(3) is concerned with the allocation of losses arising from the frustration of the contract. Failure to identify this composite approach to section 1(3) has made its interpretation unnecessarily complex.

To establish a claim under section 1(3) the claimant must first show that the defendant had received a valuable non-money benefit under the contract. The statute does not define benefit for these purposes, so the common law definition is presumably applicable. This means that we are only concerned with those benefits which have been received by the defendant and that an objective test ofbenefit should be adopted.^[24] However, as section 1(3) specifically recognizes, whether this benefit can be considered to be valuable should be determined with reference to whether the recipient valued it. This constitutes a recognition of the principle of subjective devaluation. So, if the defendant received an objective benefit but did not value it at all, he or she should not be considered to have received a valuable benefit. But if this principle of subjective devaluation is applicable under the Act, it should be possible to defeat the defendant’s reliance on that principle by showing that the benefit was incontrovertibly beneficial or that the defendant had freely accepted or requested it.^[25] Unlike the general analysis of enrichment for purposes of unjust enrichment, for the purposes of section 1(3) if the defendant had received something to which he or she attaches a value, but which the reasonable person would not regard as valuable, the defendant should still be regarded as having received a benefit.^[26]

Where the defendant has received goods, the identification of the valuable benefit will not usually cause any difficulty. Where the alleged benefit takes the form of services, the identification of the benefit is more complex. In BP v Hunt Robert Goff J accepted that pure services, namely services which do not produce an end product, could constitute a valuable benefit,^[27] though obviously such services should only be treated as beneficial where they have been received by the defendant.^[28] He also held that where the service results in a valuable end product the relevant benefit for the purposes of the Act is the end product and not the provision of the service. Consequently, it will be the end product which must be valued and which will provide the ceiling on the award of the just sum, even though the value of the service may be greater than the value of the end product. This interpretation of the Act is inconsistent with the common law of enrichment,^[29] and Robert Goff J himself objected to it, but felt bound by the terms of the statute to interpret the phrase ‘valuable benefit’ in this way.

Although the claimant’s expenditure in providing the service may exceed the value of the benefit received by the defendant, this is an irrelevant consideration at this stage of the analysis, since we are simply concerned to identify the defendant’s enrichment. The claimant’s expenditure will be a relevant consideration when determining the award of the just sum. However, and this is the real drawback of section 1(3), the award of the just sum is limited by the value of the defendant’s valuable benefit, so if the claimant’s expenditure exceeds the value of this benefit the claimant will not be able to recover all of his or her expenditure. This may be considered to be unjust, but it follows logically from the treatment of section 1(3) as operating to reverse the defendant’s unjust enrichment. If we are concerned, as well we may be, that the claimant’s expenditure in providing the service is not being taken into account when identifying the valuable benefit, that is an argument to the effect that the restitutionary response which underlies section 1(3) is inappropriate where a contract has been frustrated. Instead, we should adopt a scheme which is more concerned with the allocation of losses.

Once the benefit has been identified it must then be valued and this value will constitute the ceiling on the award of the just sum. Presumably, the objective value of the benefit will be used but, since the principle of subjective devaluation is incorporated into section 1(3), it follows that if the defendant would not have valued the benefit so highly, this lower valuation should be adopted unless it was incontrovertibly beneficial or the defendant had freely accepted it.^[30] The pro rata contract price will presumably be an important evidential factor in determining the value the defendant placed on the benefit.

In BP v Hunt^[31] Robert Goff J complicated the question of valuing the benefit received by the defendant by considering section 1(3)(a) and (b) at this stage, when those subsections are properly treated as relevant to determining the award of the just sum.

By section 1(3)(a) the court is to have regard to the expenditure incurred by the defendant in connection with the performance of the contract before it was frustrated. The consequence of Robert Goff J’s conclusion that section 1(3)(a) is relevant to the valuation of the defendant’s benefit is that any such expenditure which was incurred by the defendant can be deducted from the valuable benefit. But this is inconsistent with the clear words of section 1(3) which treats the defendant’s expenditure relating to the contract as relevant to the assessment of the just sum and not the valuable benefit. Also, to treat the defendant’s expenditure as relating to the determination of the valuable benefit, is inconsistent with Robert Goff J’s conclusion that section 1(3)(a) embodies a defence of change of position. If this was correct then section 1(3)(a) should only apply once the benefit has been identified, for the defence of change of position at common law only applies after the claimant has established that the defendant had been enriched. Consequently, the defendant’s expenditure which was incurred in connection with the performance of the contract should only be taken into account when the court is determining the award of the just sum.

By section 1(3)(b) the court is to have regard to the effect of the frustrating event on the benefit which was received by the defendant. The consequence of Robert Goff J’s assumption that section 1(3)(b) is relevant to the valuation of the defendant’s benefit is that, if the benefit which was received by the defendant was destroyed by the frustrating event, the inevitable conclusion must be that the defendant had not received a valuable benefit for the purposes of the 1943 Act. If this is correct, it would mean that Appleby v Myers^[32] would still be decided in the same way today. In that case the claimant had installed machinery which was destroyed in a fire. It was held that the claim for the value of the machinery supplied and the work done failed completely. According to Robert Goff J the effect of section 1(3)(b) in this type of case is that, since any benefit which the defendant had received was destroyed, the defendant cannot be considered to have received a valuable benefit. Consequently, if the ceiling to the award of the just sum is zero, the award of the just sum can only be zero. But this is a highly dubious interpretation of section 1(3)(b) for two reasons. First, because the structure of section 1(3) makes it clear that section 1(3)(b) is only relevant to the determination of the just sum and not the identification of the valuable benefit. Secondly, in the law of restitution the defendant is enriched once a benefit has been received. Subsequent events are only relevant when considering whether the defendant has a defence to the claim, such as the defence of change of position. That this principle is incorporated within section 1(3) is made clear by the requirement that the valuable benefit must have been received before the contract was frustrated. Since we are considering whether the defendant had received a benefit before the contract was frustrated and what its value was, it is not appropriate to consider the events which happened after the benefit was received; subsequent events, such as the effect of the frustrating event on the benefit, should only be considered when the award of the just sum is determined.

Once the court has determined that the defendant has received a valuable benefit, it must then determine the just sum which should be awarded to the claimant, a sum which cannot exceed the value of the defendant’s benefit. The better interpretation of this aspect of section 1(3) is that it is not concerned with the reversal of the defendant’s unjust enrichment, but is simply concerned with the allocation of losses between the parties. This is because section 1(3) specifies that the court must have regard to all the circumstances of the case to determine the just sum. It is at this stage of the claim under section 1(3) that the particular circumstances in subsections (a) and (b) should be taken into account. Consequently, under section 1(3)(a), the court should consider the expenditure which was incurred by the defendant in connection with the contract. Although Robert Goff J assumed in BP v Hunt^[33] that section 1(3)(a), like the proviso to section 1(2), incorporated a defence of change of position, there is again no warrant for such a conclusion. The defence of change of position requires a change in the defendant’s circumstances which was causally linked to the receipt of a benefit from the claimant,^[34] but this requirement is not incorporated into section 1(3)(a). The real function of section 1(3)

(a) is simply to enable the court to take into account any relevant loss which was suffered by the defendant as a result of the contract being frustrated.

The effect of the frustrating event on the valuable benefit should also be taken into account when determining the just sum as a result of the proper interpretation of section 1(3)(b), whether that effect was to destroy the benefit or simply to reduce its value. Again, the true function of section 1(3)(b) is to enable the court to apportion the losses between the parties. So, for example, if the valuable benefit was worth ?50,000 when it was received but it was destroyed by the frustrating event so that the defendant was left with nothing, the justice of the case may require the court to reduce the amount which is awarded to the claimant to take into account the loss suffered by the defendant. Whether the effect of this destruction is that the defendant should not be required to pay the claimant anything or, perhaps more fairly, that the defendant must pay the claimant half the value of the benefit, is something which lies in the discretion of the court.

This analysis of the just sum is simple, although perhaps it leaves too much to the discretion of the court.^[35] But it is at least clear that the purpose of the just sum is to allocate losses between the parties, albeit that this is constrained by the value of the benefit which was received by the defendant. It is most unfortunate therefore that Robert Goff J adopted a very different interpretation of the just sum in BP v Hunt, where he assumed that this was to be determined by the principle of unjust enrichment. In other words, the just sum would be assessed by reference to the value of the benefit which was transferred under the contract.^[36] But, since it is clear that Parliament intended the just sum to be, at least potentially, different from the valuable benefit which constitutes the ceiling to an award, Robert Goff J adopted a different meaning of benefit for the purposes of assessing the just sum, namely the value of the benefit which had been provided by the claimant, rather than the value of the benefit received by the defendant. This is highly artificial and confusing. This artifice stems from a desire to squeeze the square peg of section 1(3) into the round hole of the law of restitution founded on the reversal of the defendant’s unjust enrichment. It would have been so much easier if Robert Goff J had recognized that the function of the just sum is simply to apportion losses between the parties.

When assessing the just sum there are two factors not mentioned in the statute which may be of particular relevance. The first, which was recognized by Robert Goff J, was the terms of the contract. Because of his assumption that the just sum was assessed with reference to the reasonable value of the claimant’s services, it is obvious that Robert Goff J would treat the contract as ‘by far the most useful evidence of a fair remuneration to be awarded in respect of the services rendered’.^[37] But, even if the assessment of the just sum is not restricted to the value of the claimant’s services, the terms of the contract remain a key factor in the equation, but not as important as was envisaged by the judge. For he thought that in most cases the just sum would be limited to a rateable proportion of the contract price so that the claimant would not be able to escape the consequences of a bad bargain.^[38] Whilst the fact that the claimant had entered into a bad bargain should be a relevant consideration, it should not be the prime determinant of the just sum, since the court must have regard to all the circumstances of the case. The second factor which should be considered, a factor which was specifically rejected by Robert Goff J, is the conduct of both parties, particularly whether they had breached the contract before it was frustrated. In BP v Hunt itself the defendant alleged that the claimant had committed certain breaches of the contract and a deduction should be made from the just sum to reflect this. But the trial judge held that, even if it could be shown that the claimant had acted unreasonably, this was of no relevance to the assessment of the just sum.^[39] But surely, if the claimant had the opportunity to minimize his or her loss before the frustrating event occurred and failed to do so, this is a factor which should be relevant to the assessment of the just sum.^[40] The conduct of the defendant should similarly be taken into account when determining the sum which it is just to award.

The application of section 1(3) may be excluded by the contract, but the court will only consider the statutory scheme to have been excluded where the parties, being aware of the risks of frustration, had clearly intended such exclusion, as was recognized by the House of Lords in BP v Hunt.^[41] Also, as with section 1(2), there is no scope under section 1(3) for including an interest element in respect of the period during which the defendant had received the benefit of the claimant’s services. The question of the award of interest can only be considered once the just sum has been assessed.^[42]

The application of the principles which underlie section 1(3) can be illustrated by analysing the decision of Robert Goff J in BP v Hunt itself. The facts of the case were complicated, but essentially the dispute related to an oil concession which had been granted to Hunt by the Libyan government. Hunt was unable to develop the concession himself and so he entered into a joint venture with BP, whereby he agreed to grant BP half of the concession and to allow it to explore for oil and to develop the concession if oil was found. BP was to pay for the cost of exploration and development but, once the oil came on stream, it was to receive half of the oil and additional ‘reimbursement oil’ to reimburse it for its contributions to the exploration and development of the concession. BP spent millions of pounds exploring for oil, and it eventually found a large oilfield and began to extract oil. The contract was frustrated when the Libyan government expropriated BP’s share of the concession and two years later Hunt’s share was also expropriated. When the contract was frustrated BP had only been reimbursed one third of the oil which was due to it. Consequently, BP sued Hunt under section 1(3) in respect of the valuable benefit which Hunt had received. This was the first case to consider the 1943 Act and, whilst the case went on to be heard by the Court of Appeal^[43] and the House of Lords,^[44] these appeals related to specific matters and did not concern the general principles underlying the Act. Hence Robert Goff J’s judgment continues to be the most important analysis of the operation of section 1(3).

Robert Goff J approached the case in the following way. First, he identified the valuable benefit obtained by Hunt before the contract was frustrated as the end product of BP’s services, namely the enhancement in the value of Hunt’s oil concession rather than the value of BP’s work in finding and extracting the oil. This is dubious as a matter of the law of enrichment, since Hunt already had the oil concession so the only benefit which was obtained at BP’s expense was its service. That service unlocked the concession but did not create it.³³¹ Secondly, in determining the value of this benefit, the judge considered the effect of the frustrating event, by virtue of section 1(3)(b). Since the expropriation of BP’s interest had dramatically reduced the value of Hunt’s interest, the judge considered that this had reduced the value of the benefit which Hunt had received to half the oil he had obtained from the oilfield plus the compensation he had obtained from the Libyan government. But this confuses what factors it is appropriate to take into account at this stage. All the judge should have been concerned with was the identification and valuation of the benefit which had been received; subsequent events should only have been relevant to the assessment of the just sum. The judge valued the benefit at $85 million, so this constituted the ceiling on the award. Finally, the judge assessed the just sum by reference to restitutionary principles. Since he assumed that the benefit for these purposes was the services provided by the claimant rather than the end product received by the defendant, he valued the just sum at $35 million and, since this was less than the value of the valuable benefit, this was the amount which he ordered Hunt to pay to BP. This just sum was effectively made up of the expenses incurred by BP on behalf of Hunt, as evidenced by the terms of the contract, plus the amount of money and oil which had been paid by BP to Hunt with a deduction for the amount which Hunt had reimbursed BP before the contract was frustrated. Perhaps the award of $35 million was entirely appropriate, but it is clear that the basis for assessing this sum was not. The judge should have considered all of the circumstances of the case, not just the value of the services provided.

• [1] As was recognized by Viscount Simon LC in the Fibrosa case [1943] AC 32, 49.
• [2] BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 799 (Robert Goff J). Cf AM Haycroftand DM Waksman, ‘Restitution and Frustration’ [1984] JBL 207, 225 who argue that the function of the Act isto apportion losses rather than to reverse unjust enrichment.
• [3] Lawton LJ in BP Exploration Co (Libya) Ltd v Hunt (No 2) [1981] 1 WLR 232, 243 emphasized that thecourt was not assisted in its interpretation of the Act by words which did not appear in it.
• [4] Law Reform (Frustrated Contracts) Act 1943, s 1(1).
• [5] Ibid, s 1(2). The provision also states that the claimant will cease to be liable to pay money to thedefendant under the discharged contract.
• [6] (1871) LR6CP 78.
• [7] BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 800 (Robert Goff J).
• [8] A similar rule applies where a contract is discharged for breach. See p 332, above.
• [9] See Oomv Bruce (1810) 12East225, 104 ER87.
• [10] Law Reform (Frustrated Contracts) Act 1943, s 2(3).
• [11] BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 829 (Robert Goff J).
• [12] This expenditure is also deemed to include reasonable sums in respect of overhead expenses or work orservices personally performed by the defendant: s 1(4).
• [13] Gamerco SA v ICM/Fair Warning (Agency) Ltd [1995] 1 WLR 1226, 1235 (Garland J).
• [14] [1979] 1 WLR783, 800.
• [15] See also E Bant, The Change of Position Defence (Oxford: Hart Publishing, 2009), 245.
• [16] See p 682, below.
• [17] [1995] 1 WLR 1226. See P Clark, ‘Frustration, Restitution and the Law Reform (Frustrated Contracts)Act 1943’ [1996] LMCLQ 170.
• [18] Gamerco SA v ICM/Fair Warning (Agency) Ltd [1995] 1 WLR 1226, 1237.
• [19] Presumably the claimant could not recover this expenditure from the defendant under s 1(3) becausethere was no evidence that the defendant had received a valuable benefit as a consequence.
• [20] Such as the British Columbian Frustrated Contracts Act 1974, the New South Wales FrustratedContracts Act 1978, and the South Australian Frustrated Contracts Act 1988.
• [21] [1979] 1 WLR 783. 3 Ibid, 799.
• [22] 308 See, for example, E McKendrick, ‘Frustration, Restitution and Loss Apportionment’ in AS Burrows (ed),
• [23] Essays on the Law of Restitution (Oxford: Clarendon Press, 1991), 147.
• [24] See p 65, above. 310 See p 78, above.
• [25] 311 As recognized by Robert Goff J in BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR783,802.
• [26] 312 Ibid.
• [27] 313 This notion that the benefit must have been received by the defendant before it can constitute a valuable
• [28] benefit was recognized in Parsons Bros Ltd v Shea (1968) 53 DLR (2d) 86 concerning the interpretation of theNewfoundland Frustrated Contracts Act 1956, which is similar to the 1943 Act.
• [29] See p 76, above. 315 BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 802.
• [30] See Stewart and Carter, ‘Frustrated Contracts and Statutory Adjustments’, 92.
• [31] BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 802-5.
• [32] (1867) LR 2 CP 651.
• [33] [1979] 1 WLR 783, 806. See also Bant, The Change of Position Defence, 248 . 2 See p 682, below.
• [34] 321 The Court of Appeal in BP Exploration Co (Libya) Ltd v Hunt (No 2) [1981] 1 WLR 232, 238 held that
• [35] the determination of the just sum lies in the discretion of the trial judge and an appellate court would onlyintervene with the trial judge’s decision if it was plainly wrong or unjust.
• [36] The Court of Appeal was not prepared to interfere with this method for assessing the just sum, althoughthe Court emphasized that it gained no help in interpreting the statute from the use of words which were notincluded in it, presumably such as ‘unjust enrichment’: BP Exploration Co (Libya) Ltd v Hunt (No 2) [1981] 1WLR 232, 243.
• [37] BP Exploration Co (Libya) Ltd v Hunt (No 2) [1979] 1 WLR 783, 822. 324 Ibid, 806.
• [38] 325 Though if the impossibility of performance of the contract was self-induced the claimant will not be able
• [39] to argue that it had been frustrated. See p 356, above.
• [40] See B Dickson, ‘An Action for Unjust Enrichment’ (1983) 34 NILQ 106, 122 and Haycroft andWaksman, ‘Restitution and Frustration’, 222.
• [41] BP Exploration Co (Libya) v Hunt (No 2) [1983] 2 AC 352 (HL).
• [42] BP Exploration Co (Libya) v Hunt (No 2) [1981] 1 WLR 232, 244 (CA).
• [43] Ibid. 2 BP Exploration Co (Libya) v Hunt (No 2) [1983] 2 AC 352 (HL).
• [44] 331 See p 76, above.