Delict and Unjustified Enrichment

• General principle of unjustified enrichment


  An enrichment will be 'unjustified' if: (1) The defender (D) was enriched; (2) D's enrichment was at the expense of the pursuer (P); (3) D has no legal ground/basis on which to retain the enrichment; (4) It is equitable to compel D to surrender his/her enrichment
• Unjustified enrichment is a relatively new area of law in Scotland
• Unjustified enrichment is part of the law of non-contractual (and, more specifically, quasi-contractual) obligations
• Modern Scots law recognises the following general principle: an enrichment is 'unjustified', hence reversible, if it is retained without a 'legal ground'
• To make this general principle more intelligible, unjustified enrichment is subdivided according to the manner of the defender's enrichment
• Condictio indebiti


  A claim for the recovery of an enrichment that was undue and which was conferred in error as to legal liability
• Example of condictio indebiti

  • P borrows £100 from his friend, D. Several months later, P pays D £120 because he thinks mistakenly that that was the value of the loan. P can reclaim the excess of £20 under the condictio indebiti
• Nature of the defender's enrichment in condictio indebiti

  • Undue payments
  • Undue things
  • Undue services
• Examples of 'undue-ness'


  • Overpayment of a valid obligation
  • Payment under a valid obligation but to the wrong person
  • Payment under a valid obligation but by the wrong person
• Error in condictio indebiti

  • The error must be one as to legal liability
  • The error can relate to a fact or to the law
  • The onus of proof of error lies on the pursuer
  • There is no need for the pursuer to prove that the error was excusable
• Examples where condictio indebiti does not apply


  • A life insurance payment was made to the deceased's daughter-in-law, who was not owed the money - in fact, the money was owed to the deceased's son. This payment was made on the basis of a mere misprediction rather than an error as to legal liability
  • A gift was made as a result of an erroneous belief (i.e. the belief that the recipient's husband was dead when he was actually still alive). However, because this error was not an error as to legal liability, the gift was irrecoverable under the condictio indebiti
• Traditional Position in Scots Law: no 'error of law' rule
• Adoption of 'error of law' rule: Glasgow Corporation v Lord Advocate 1959 SC 203
• Abandonment of 'error of law' rule: Morgan Guaranty Trust Company of New York v Lothian Regional Council 1995 SC 151
• Onus of proof in condictio indebiti

  Pursuer must prove error
• Excusability in condictio indebiti

  The pursuer does not have to show that the error was excusable but if it is shown that the error resulted from gross negligence, this may serve as a defence to the pursuer's claim
• The condictio indebiti is one of the key causes of action under the law of unjustified enrichment
• Condictio causa data causa non secuta

  A claim for the recovery of an enrichment that was conferred for an agreed lawful future purpose outwith contract that failed
• Example of condictio causa data causa non secuta

  • P gives D an engagement ring. D later decides not to marry P. P is entitled to recover the ring under the condictio causa data causa non secuta
• In Roman law, the condictio causa data causa non secuta allowed P to recover a payment from D if D refused to perform a non-contractual agreement
• Examples of non-contractual agreements covered by condictio causa data causa non secuta

  • An agreement to improve D's house in anticipation of marriage
  • An agreement to continue cohabiting rather than an agreement to marry
  • An agreement to go to university or to pursue a certain type of career
  • Informal arrangements between family/friends/relatives
• The condictio causa data causa non secuta does not apply to unlawful agreements

  
• Contrasting cases on condictio causa data causa non secuta

  • Virdee v Stewart [2011] CSOH 50: P built a house on her brother (D)'s land in 1994 with an informal understanding that P would be allowed to live in the house. The claim was held to have prescribed
  • Thomson v Mooney [2013] CSIH 115: P conferred a benefit on D in anticipation of a marriage that did not take place. The claim was held to have arisen only when there was a breakdown in the parties' relationship, so it had not prescribed
• There has to be an agreement or an agreed understanding for the condictio causa data causa non secuta to operate. A mere unilateral motive is not sufficient
• The condictio causa data causa non secuta has traditionally regulated agreements that do not constitute contracts, but it has sometimes been applied within the domain of a valid contract, as in the case of frustration of contract

  
• Condictio ob turpem vel iniustam causam


  The claim to recover something given for an immoral or illegal purpose
• Scots law recognises the condictio ob turpem but it is not as relevant as it was in Roman law
• Illegal/immoral transactions can raise special considerations if the pursuer was also in the wrong
• The condictio ob turpem vel iniustam causam is the claim to recover something given for an immoral or illegal purpose that succeeded
• The 'without legal ground' principle

  A person may be said to be unjustly enriched at another's expense when he has obtained a benefit from another's actings or expenditure, without there being a legal ground which would justify him in retaining that benefit
• Meaning of the general principle

  P transfers a benefit to D deliberately for a certain purpose. If P's purpose succeeds, D retains the benefit with a legal ground. If P's purpose fails, D retains the benefit without a legal ground (sine causa)
• Reasons why you might enrich someone

  • To discharge a legal obligation
  • For a non-contractual future purpose (e.g. marriage)
  • To create a gift
• The condictiones as a system


  Each condictio tends to describe a purpose that failed
• Examples of condictio donandi causa and condictio ob causam finitam

  • Findlay v Monro (1698) - A gift (consisting of an ox) failed because it was delivered to the wrong person
  • A cleaner loses his client's clothes. He is sued under the contract. The clothes turn up. The client is obliged to repay the money to the cleaner
• Some commentators have suggested that the condictio ob causam finitam, as opposed to the condictio causa data causa non secuta, was the appropriate cause of action in Satchwell v McIntosh 2006 SLT (Sh Ct) 117 and Virdee v Stewart [2011] CSOH 50

  
• Benefits of the general 'without legal ground' principle

  • It gives the law clarity and stability
  • It allows us to deal with unusual cases
• Example where lack of understanding of the general 'without legal ground' principle resulted in a flawed decision

  • Virdee v Stewart [2011] CSOH 50, contrasted with Thomson v Mooney [2013] CSIH 115

  
• Sine causa


  • Means 'without legal ground'
  • Has two different roles: (1) as a term for unusual condictio claims, and (2) as a general principle describing all of the condictiones
• Consequence of the difference between Scots and English law: The English law of 'unjust enrichment' is less principled than the Scots law of unjustified enrichment
• Sine causa


  Without legal ground