The claim for recovery of payments made to public authorities which were not lawfully due is formulated in English law as falling within the law of restitution grounded on the unjust enrichment principle.[1] The restitutionary claim need not have been formulated in that way, however. In Canada, for example, the claim for restitution is treated as part of public law and not the private law of restitution.[2] Even in England, however, the unjust enrichment claim has significant public law connotations, which affect its interpretation, although the claim clearly falls within the private law structure of the unjust enrichment claim.[3] It follows that the elements of the unjust enrichment formula need to be established.[4]

Invariably the restitutionary claim will be brought against a public authority where the authority has received money which it was not authorized to receive.[5] These are called ultra vires payments. Where the public authority has received money directly from the claimant, there is no doubt that the authority has been enriched and this was at the claimant’s expense. There have been cases, however, where the defendant received the enrichment from a third party, in which case it may still be possible to establish that the enrichment was received at the claimant’s expense, but only in circumstances where in economic or commercial reality the expense was so received.[6]

The key question, therefore, will be whether a ground of restitution can be identified. In considering this it is important to remember that a claim in unjust enrichment will fail if there was a legitimate legal basis for the defendant’s receipt of an enrichment.[7] That is why it is an essential feature of a claim for restitution against a public authority that the payment received by the public authority was ultra vires, for then there will be no legitimate legal basis for the public authority’s receipt. A payment may be regarded as ultra vires the public authority for three reasons.

  • [1] Deutsche Morgan Grenfell v IRC [2006] UKHL 49, [2007] 1 AC 558.
  • [2] Kingstreet Investment Ltd v New Brunswick (Department of Finance) 2007 SCC 1, [33] and [40] (BastaracheJ). Private law claims against public authorities founded on unjust enrichment are recognized in Canadawhere the claim is for restitution of payments other than tax: Alberta v Elder Advocates of Alberta Society[2011] 2 SCR 261.
  • [3] See R Williams, Unjust Enrichment and Public Law: A Comparative Study of England, France and the EU
  • [4] (Oxford: Hart Publishing, 2010). See further p 400, below. 23 See p 9, above.
  • [5] The claim could involve non-money benefits, but then the test of enrichment will need to be consideredcarefully. See Chapter 4.
  • [6] Investment Trust Companies (in liquidation) v HMRC [2015] EWCA Civ 82. See p 107, above. Seegenerally C Mitchell, ‘Restitutionary Claims by Indirect Taxpayers’ in S Elliott, B Hacker, and C Mitchell (eds),Restitution of Overpaid Tax (Oxford: Hart Publishing, 2013), ch 6.
  • [7] See Chapter 7. 27 Woolwich Equitable Building Society v IRC [1993] AC 70.
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