Unjust Enrichment

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The objective of this essay is to evaluate the effectiveness of the defence of change of position in protecting a defendant from hardship. The defence of change of position is made available to a defendant who has been unjustly enriched, but in good faith of the receipt of the enrichment, later suffers some changes in their personal circumstances. Unjust enrichment is not based on a wrong. Its imposition of strict liability is merited so long as an innocent defendant is not required to ‘put its hands in its pockets’. This makes sense so long as the defendant is overall no worse off by having received the initial enrichment. The defence of change of position is one that is concerned with a loss of benefit, also known as disenrichment and not with the general hardship of the defendant. It can be viewed as the same as estoppel minus the representation. The defendant must have detrimentally relied on the benefit being his to keep. Birks wrote that the defendant succeeds if he can show that he acted to his detriment on the faith of the receipt. It will not apply in circumstances where a defendant is initially enriched and subsequently encounters a loss or detriment so that overall the defendant had not been enriched. For example, a defendant, unjustly enriched, receives a sum of money and later loses the money due to unavoidable circumstances, cannot be made to pay the claimant for the initial unjust enrichment. The defendant would face a hardship or difficulty to pay the claimant, however, this does not constitute a defence to restitution. The defence ensures that the defendant is no worse off by having to make restitution. While disenrichment is to some extent dealt with by the traditional estoppel defence, that defence does not go...

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...the correctness of the wide view, provided that the need for a sufficient causal link is clearly recognized.. In my view, Mr Moriarty was right to make that concession. Taking a wide view of the defence, facilitates ‘a more generous approach.. To the recognition of the right to restitution.”

National Bank of New Zealand Ltd v. Waitaki International Processing (NI) Ltd. D had had told the bank of the mistake and, despite the bank’s insistence, believed throughout that it was not entitled to the money. The defendant then lost the money by investing it, without security, in a company that become insolvent. Given the defendant’s belief that he was not entitled to the money he could not be said to have ‘altered his position in reliance on the validity of the payment’. In contrast, the defendant could rely on the non-statutory change of position defence put up forward

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