Qualifying for Restitution fo Unjust Enrichment

808 Words4 Pages
Upon fulfillment of the four criteria, namely that the defendant has been unjustly enriched at the claimant’s expense and there are no defenses available for the defendant, a claimant may qualify for restitution of unjust enrichment as established in Banque Financiere de la Cite v Parc (Battersea) Ltd. Change of position is one of the possible defences which may be used in occasions where it would be excessive to allow a claimant to claim restitution at the defendant’s expense. This essay will evaluate the defence of change of position and reinforce the fact that it is largely ineffective in protecting a defendant from hardship.
The purpose of restitution is to prevent unjust enrichment, and to deny the defence of change of position will contradict this fundamental principle and function. The purpose of change of position is to balance out the hardships between the claimant and defendant. For instance, in the landmark case of Lipkin Gorman v Karpnale, it states that, "If the plaintiff pays money to the defendant under a mistake of fact, and the defendant then, acting in good faith, pays the money or part of it to charity, it is unjust to require the defendant to make restitution to the extent that he has so changed his position.’ In such cases, Lord Goff stated change of position is a good defence when performed in good faith. This solidified the status of change of position as an accepted choice of defence.
Change of position is not up to the court’s discretion and there are principles guiding them in their judgments. However, in Lipkin Gorman, Lord Goff stated that the development of change of position should be dealt with on a case to case basis , leading to much uncertainty in the Law of Restitution today. A failure in cr...

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...nts to list out every item bought using the money. It was stated in the Canadian case of RBC Dominion Securities Inc v Dawson that detailed evidence of spending was not required by the courts in order to prove extraordinary expenditure. The rationale behind this is that a recipient should be allowed to spend their own money in whichever way they choose to do so, without fears of suddenly having to repay back the benefit gained, provided it was done in good faith.
Despite the relaxed approach taken by the courts concerning extraordinary expenses, it is still unclear whether it has to be something out of the ordinary like a special holiday package taken due to the acquired sum, or buying slightly more expensive food from the grocers. Hence change of position is ineffective due to the lack of clarity in each of the individual principles in application of the defence.
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