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Conv. 2011, 1, 8-29Conveyancer and Property Lawyer
2011Anunjust enrichment claimfor themistaken improverof land
Tang Hang Wu 2014 Sweet & Maxwell and its Contributors
Subject: Restitution. Other Related Subject: Real
propertyKeywords: Improvements; Mistake; Real property;
Unconscionability; Unjust enrichmentCases cited: Appleby v Myers
(1866-67) L.R. 2 C.P. 651 (Ex Chamber)Blue Haven Enterprises Ltd v
Tully [2006] UKPC 17 (PC (Jam))Cobbe v Yeoman's Row Management Ltd
[2008] UKHL 55; [2008] 1 W.L.R. 1752 (HL)JS Bloor Ltd v Pavillion
Developments Ltd [2008] EWHC 724 (TCC); [2008] 2 E.G.L.R.85 (QBD
(TCC))Reynolds v Ashby & Son Ltd [1904] A.C. 466 (HL)The Master
or Keeper, Fellows and Scholars of Clare Hall v Harding (1848) 6
Hare 273(Ct of Chancery)*8 In recent years, the law of unjust
enrichment especially in the context of restitution formistake has
developed at an unprecedented pace.The modern jurisprudence of the
law ofrestitution for mistake is exemplified by the causative
mistake approach, i.e. if theclaimant's mistaken beliefcausesthe
claimant to enrich the defendant, the claimant is primafacie
entitled to succeed.The principal research question in this paper
is whether thecausative mistake approach is applicable to a
claimant who mistakenly improves the landof the defendant.Recent
case law and the most prominent academic treatise in this
areasuggest that a mistaken improver of land maynotsucceed pursuant
to a causativemistake.Instead, the authorities (borrowing from
proprietary estoppel jurisprudence)suggest that the claimant must
prove that the land owner acted unconscionably before he orshe is
entitled to relief.This paper investigates whether this restrictive
interpretation of thelaw of unjust enrichment in relation to a
mistaken improvement of land is justified.IntroductionIn recent
years, the law of unjust enrichment especially in the context of
restitution formistake has developed at an unprecedented pace.While
previously the law of restitution formistake was inhibited by the
so-called rule that such a claim may only be made in respectof an
error as to a supposed liability,1the modern jurisprudence is
encapsulated by Goff J.(as he then was) inBarclays Bank Ltd v WJ
Simms Son & Cooke (Southern) Ltd2who saidthat: [i]f a person
pays money to another under a mistake of fact whichcauseshim to
makepayment, he is prima facie entitled to recover it as money paid
under a mistake of
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fact(emphasis added).*9 This reasoning has been termed as the
causative mistake approach.3The causativemistake approach used to
be limited to mistakes of facts.However, the House of Lordsfamously
removed the mistake of law bar to a restitutionary claim
inKleinwort Benson vLincoln City Council.4Thus, the position at
present seems to be, that as long as the payorcan show that a
mistake, factual or legal,causedthe payment, the payor has a prima
facieright to recover the money subject to defences.The development
of the law of unjust enrichment is a source of tension to claims in
otherareas of the law especially when concurrent claims may be
maintained on the same set offacts.This tension has been especially
acute in the field of equity.5For example, much inkhas been (and
continues to be) spilt on the precise relationship between unjust
enrichmentand the equitable claim of knowing receipt.6In this
paper, the author considers a similarproblem--the relationship
between anunjust enrichment claimand proprietary estoppel inthe
context of amistaken improverof land.The principal research
question is whether thecausative mistake approach is applicable to
a claimant whomistakenly improvesthe land ofthe defendant.In other
words, if the claimant can establish that theimprovementto
thedefendant's land was caused by the claimant's own mistake, will
this entitle the claimant torelief if the relevantunjust
enrichmentdefences are not applicable?Of course, in order
tosuccessfully maintain anunjust enrichment claim, the claimant has
the significant hurdle ofestablishing that theimprovementto the
defendant's land was indeed anenrichmentto thedefendant in the
first place.7This is because amistaken improvementto land is
conceptuallydistinct from amistakenpayment.The latter is an
incontrovertible benefit8because apayment of money is undeniably a
form ofenrichment.9In contrast, amistakenimprovementof land might
not always be characterised as anenrichmentto the defendantbecause
the defendant may subjectively devalue10the benefit of
theimprovement.Subjective devaluation proceeds on the assumption
that liability cannot befoisted on the defendant against his or her
will.As Baron Pollock famously observed inTaylor v Laird,11One
cleans another's shoes, what can another do but to put
themon?However, subjective devaluation does not necessarily
preclude all unjust enrichmentclaims for improvements.Recent case
law demonstrates that the courts have accepted thedoctrine of
incontrovertible benefit12in circumstances where the defendant may
not able todeny that an enrichment had been conferred.An*10
incontrovertible benefit might beestablished by showing that: (i)
the benefit has been realised13; or (ii) the benefit saved
thedefendant a necessary expense14; or (iii) the defendant refused
to return to the claimant areadily returnable benefit.15Thus, the
unresolved question is this: if the claimant is able toprove that
the defendant enjoyed an inconvertible benefit, should the claimant
succeed inan unjust enrichment claim for a mistaken improvement to
the defendant's land?In the case of a mistaken improvement of land,
there is a natural overlap between unjustenrichment and proprietary
estoppel.On the same set of facts, a proprietary estoppel claimand
now increasingly an unjust enrichment action, are concurrently
pleaded.16It isforeseeable that in some instances, an action in
unjust enrichment would prove to be amore attractive option to a
claimant as compared to a proprietary estoppel claim.In thelatter
action, the claimant must establish either a representation by the
defendant oracquiescence on the defendant's part in light of the
claimant's work.17In contrast, an unjustenrichment claim does not
require a representation or acquiescence on the
defendant'spart.Prima facie, all that is required for the claimant
to prove is that the enrichment was
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causedby the claimant's mistake and the defendant enjoyed an
incontrovertiblebenefit.Thus, an unjust enrichment claim may be
successful even where the defendant wasunaware of the claimant's
work.In such a situation, a proprietary estoppel claim will
failwhile there is an arguable case that an unjust enrichment
action might succeed.The answerto the research question is by no
means clear as there appears to be some instability in thelaw both
in terms of the case law and academic literature.While in a recent
House of Lords'decision18a claim in unjust enrichment was allowed
(albeit in circumstances where theunjust factor was not
identified), two other recent cases have dismissed
similarclaims.19The latter two cases proceeded on the premise that
there must be some kind ofunconscionability on the defendant's part
before an unjust enrichment claim may succeed.The insistence on a
finding of unconscionability before liability in unjust
enrichmentattaches essentially ties liability in unjust enrichment
with the elements of proprietaryestoppel.Goff and Jones assert: the
courts are now ready to accept that a restitutionary claim grounded
on mistake,may lie, even in the absence of a free acceptance, if it
can be shown that the defendant hasbeen incontrovertibly benefitted
by the services which have been rendered.It is only inrecent years
that English courts have recognized the principle of
incontrovertiblebenefit.Moreover, it is not, as the law now stands,
of general application.A person whomistakenly improves another's
land cannot claim the benefit of that principle.Historically,the
law of real property has developed very differently from the law of
personal*11property.As will be seen, English law denies the
mistaken improver, whose improvementshave become attached to the
land, any remedy if the land owner has not
actedunconscionably.20This restrictive position has recently been
doubted by two prominent commentators,McFarlane21and Low.22In
particular, Low charges that Goff and Jones have not offered
a:convincing explanation as to why a claimant cannot successfully
claim restitution uponproof of mistake and incontrovertible benefit
without further proof ofunconscionability.23Low argues that the:
[C]ommingling of the principle of unjust enrichment and the
doctrine of proprietaryestoppel does no service to either.Unjust
enrichment cases are sharply but illogicallydistinguished on the
basis of whether the enrichment takes the form of money
orimprovement to land.Proprietary estoppel becomes increasingly
muddled as both itspurpose and its remedial response.24In a similar
vein, McFarlane contends [t]he use of proprietary estoppel as a
means toshow that an enrichment is unjust is questionable.25This
paper investigates whetherGoff and Jones' more restrictive
interpretation or Low's and McFarlane's wider approach tounjust
enrichment to mistaken improvements of land is supported both in
terms of the caselaw and on principle.The recent cases on mistaken
improvement of landAs mentioned above, there are three recent cases
which considered an unjust enrichmentclaim in the context of an
improver of land.InCobbe v Yeoman's Row Management Ltd,
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26the unjust enrichment claim succeeded, whereas, inBlue Haven
Enterprises Ltd v Tully27andJS Bloor Ltd v Pavillion Developments
Ltd28the claim in unjust enrichment failed.*12 Cobbe v Yeoman's Row
Management LtdFactsThe owner of a piece of land, Yeoman's Row
Management Ltd (Yeoman's Row) enteredinto protracted negotiations
with Cobbe for the sale of land.29An oral agreement inprinciple was
reached where parties agreed to the following core terms: (i) Cobbe
would,at his own expense, apply for planning permission to demolish
the existing buildings andbuild six houses on the land; (ii) if the
planning permission was approved, Yeoman's Rowwould sell the land
to Cobbe for 12 million; and (iii) Cobbe would then, at his
ownexpense, develop the land and sell-off the residential
units.When gross proceeds exceed24 million, Cobbe would divide
equally the excess proceeds between Cobbe andYeoman's Row.In
reliance on this arrangement, Cobbe spent considerable time and
money applying for thenecessary planning permission which was
subsequently approved.However, Yeoman'sRow reneged on the
arrangement and asked to renegotiate.Cobbe sued Yeoman's Row
toenforce the core terms.Cobbe originally pleaded a breach of
contract and sought specificperformance.The problem with this plea
is that s.2(1) of the Law of Property(Miscellaneous Provisions) Act
1989 provides that a contract for the sale or otherdisposition of
an interest in land can only be made in writing.The contract claim
wassubsequently abandoned.Cobbe's unjust enrichment claim was more
successful ascompared to the proprietary estoppel claim.Lord Scott
said that the value of the propertyhad undoubtedly increased in
value.As such, Yeoman's Row was enriched by the grant ofplanning
permission for which it paid nothing.Since the permission was
obtained at theexpense of Cobbe, Lord Scott held it is very easy to
conclude that the defendant companyhas been enriched at its
expense30and that Yeoman's Row was unjustly enriched.Blue Haven
Enterprises Ltd v TullyFactsIn this case31Mrs Tully was the
executrix of an estate which owned 95 acres of land in theBlue
Mountains region of Jamaica.On November 14, 1985, Mrs Tully
contracted to sell theestate to Mr Robinson for JMD 260,000; Mr
Robinson intended to develop the land as acoffee
plantation.Unfortunately, the contract of sale went awry due to the
fact that in thecontract of sale, the land was described as 130
acres.The resultant discrepancy between 95acres and 130 acres led
to a dispute between Mrs Tully and Mr Robinson.Mr Robinsonargued
that he was entitled to a proportional abatement of the contract
price.Mrs Tullydisputed this and purported to terminate the
contract.Mr Robinson commenced legalproceedings for, inter alia:
(a) a declaration of a pro-rata abatement; and (b) an injunction*13
restraining Mrs Tully from selling the land to anyone else.The
court granted MrRobinson's application in the first instance on
January 11, 1989 and Mrs. Tullyappealed.Eventually Mrs Tully lost
all avenues of appeal on March 10, 1993.Whileproceedings were on
going, Mrs Tully sold the land to Dr White or nominee for
JMD450,000.Dr White used Blue Haven Enterprises Ltd (Blue Haven), a
company which hecontrolled, to purchase the land.At the time of the
purchase, Dr White did not know of Mrs
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Tully's earlier contract with Mr Robinson and the ongoing
litigation.Dr White entered intopossession, cleared the land and
planted 60 acres of coffee plants.He also put in place thenecessary
facilities for a coffee plantation which included building workers'
cottages, acoffee house, offices and a road.As a result, the coffee
plants were sufficiently mature toproduce crops after a few
years.Mr Robinson only found out that someone was developing the
land towards the end ofJanuary 1989 when he visited the land.Mr
Robinson told Dr White's farm manager, MrDillon, what they were
doing was illegal because there was a court order which made
MrRobinson the owner of the land.Mr Robinson tried to find out the
name of Mr Dillon'semployer but the latter refused to tell
him.Since he had no way of contacting Dr White, MrRobinson wrote a
note which included his telephone number and address and asked
MrDillon to give it to his employer.Dr White was tragically
murdered on June 18, 1993.Onthe balance of probabilities, the Privy
Council found that there was evidence to justify theinference that
Mr Dillon had delivered the note to Dr White.After Mrs Tully lost
her appeal, Mr Robinson commenced proceedings for
specificperformance against Mrs Tully and eventually succeeded in
obtaining registration of titleof the land.This meant that Mr
Robinson became the owner of the land together with theplantation
and all the improvements.Blue Haven commenced proceedings against
MrsTully and Mr Robinson.For our present purposes, it is only the
latter action against MrRobinson that concerns us.Blue Haven's
principal claims against Mr Robinson were, interalia, proprietary
estoppel by acquiescence and unjust enrichment.The unjust
enrichment claimIn the Privy Council, Lord Scott who delivered the
joint judgment (with Lord Nicholls,Lord Steyn, Lord Hope and Lord
Brown) said that [i]t is clear that Mr Robinson has
beenenriched.Lord Scott's reasoning proceeded as follows:Mr
Robinson bought the estate in order to develop it as a coffee
plantation.It wasdeveloped by Dr White.Mr Robinson must have
expected to bear the cost of thedevelopment.He has not had to do
so.The enrichment would only be at Dr White/Blue Haven's expense if
Dr White could notrecover from Mrs Tully.On the facts, Mrs Tully
was financially worthless and anydamages would have been
irrecoverable.As such, Mr Robinson was enriched at Dr White/Blue
Haven's expense.However, the Privy Council said that the critical
question was not enrichment but whetherthe circumstances in which
that enrichment came about place Mr Robinson under anequitable
obligation to compensate Blue Haven accordingly.Lord Scott seemed
to implythat in relation to the unjust enrichment claim the*14
principles relied on are the samewith proprietary estoppel by
acquiescence and then proceeded to examine the principlesfound in
the major cases in proprietary estoppel.It is important to note
that counsel forBlue Haven/Dr White accepted that for his client to
succeed it was necessary: [T]o show that Mr. Robinson had done
something, or had just stood by, in circumstanceswhere his actions,
or inaction, would make it unconscionable for him to refuse
toreimburse Dr White for the cost of the development.
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On the facts, the Privy Council held that Blue Haven/Dr White
could not clear this hurdlebecause Mr Robinson did his best to draw
his prior interest to Dr White's attention.Thematerial facts that
led to this conclusion were that Mr Robinson: (i) had requested for
thename of Mr Dillon's employer; and (ii) had provided his own name
and telephone numberto Mr Dillon.As far as Mr Robinson was
concerned he had already issued an appropriatewarning.Since Dr
White ignored the warning, that was not Mr Robinson's fault.JS
Bloor Ltd v Pavillion Developments LtdThe factsIn this case32Bloor
(the claimant) owned land adjoining Orkus Road in
Swindon.Bloorsubdivided the land and sold part of the land to
Pavillion (the defendant) who intended toconstruct a care home on
the land.In the contract of sale, Bloor contracted to construct
orprocure an access road referred to as the yellow road within six
months of Pavillion'scommencing the building of the care home.Upon
completion of the yellow road, Pavillionwas contractually obliged
to build a road which was known as the orange road.In June2005,
Bloor built both the yellow and orange roads by mistake.The unjust
enrichment claimBloor claimed from Pavillion the cost of building
the orange road amounting to 93,072.73on the basis of unjust
enrichment.Bloor did not assert that Pavillion had knowledge of
itsmistake or that there was the necessary acquiescence on
Pavillion's part.Instead, Bloor'scase was based on acceptance by
Pavillion of an incontrovertible benefit.Bloor'scontention was that
it had by mistake discharged Pavillion's contractual obligation.In
reviewing the law, Frances Kirkham J. relied on the Goff and Jones'
assertion that aperson who mistakenly improves another's land
cannot rely on the doctrine of anincontrovertible benefit.33She
also quotedBlue Haven34for the proposition that it wasnecessary to
demonstrate: [T]hat the landowner had done something or just stood
by in circumstances where hisactions or inaction would make it
unconscionable for him to refuse to reimburse theimprover.*15 On
the facts, the learned judge held that there was no instance of
unconscionablebehavior on Pavillion's part.As such the claim fails
on this ground alone.Kirkham J. alsosaid that Bloor had not been
able to prove that it made a mistake in building the orangeroad as
its evidence on this point changed over time.The argument from
authority: an analysis of the three casesThe three cases reviewed
above demonstrate that the answer to the research question,
i.e.whether a mistaken improver may succeed on an unjust enrichment
claim is far fromclear.WhileCobbe35allowed an unjust enrichment
claim in the context of an improvementto the land, there is
difficulty with relying on this case to support an unjust
enrichmentclaim in favour of a mistaken improver.Cobbetechnically
did not deal with amistakenimprovement of land because it would be
difficult to establish a causative mistake.Cobbehad an agreement in
principle with Yeoman's Row to subsequently enter into a
formalagreement--it was in this context that Cobbe applied for
planning permission for the
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land.On the facts, there is the conceptual problem of
characterising Cobbe's expectation ofYeoman's Row future conduct as
a form of causative mistake.Cobbeknewall he had was anagreement in
principle with Yeoman's Row which was simply not binding on
theparties.Some restitution scholars would characterise such a
situation as a mis-predictionrather than a mistake.36Therefore, as
a matter of precedent value,Cobbecould bedistinguished.Cobbeis more
properly classified as belonging to the group of casesinvolving
work done in anticipation of a contract.37The case ofBlue
Haven38also does not fully resolve the issues related to an
unjustenrichment claim in the context of a mistaken improvement of
land.The interesting thingabout this case is that the Privy Council
was convinced that the defendant was enriched atthe claimant's
expense because the defendant bought the land in order to develop
it as acoffee plantation.39Despite the finding of an enrichment,
the claim was dismissed becausethe Privy Council assumed that the
defendant must be shown to have behavedunconscionably--a point
accepted by the claimant's counsel.With respect, this analysis
pre-supposing unconscionability appears to be a conflation of
principles of proprietaryestoppel with the law of unjust
enrichment.As Low correctly points out the claimantcounsel's
concession diminishes the authority of this decision.40This
concession has alsoled the Privy Council not to explore the
research question considered in this paper, i.e.whether mistake as
an unjust factor could be the basis of an unjust enrichment claim
on thepresent facts.The entire premise of theBlue Havendecision
rests on the*16 propositionadvanced by Goff and Jones--that for a
mistaken improvement of land, the claimant maynot succeed without
proof of unconscionability even if there was an
incontrovertiblebenefit conferred on the defendant.Counsel's
concession inBlue Havenalso affected the decision
ofBloor.41LikeCobbeandBlue Haven,the reasoning in this judgment on
the relationship between the law of unjustenrichment and
unconscionability was very terse.His Honour Judge Frances
Kirkhamsimply said:It is very clear from the analysis in paragraphs
6-001 and 6-002 of Goff and Jones thatimprovements to land fall
into a different category from other restitutionary claims Equity
will offer relief to a mistaken improver only where the land owner
has actedunconscionably.The decision inBlue Havenassists
determination of this case.It is apparent that the authority
ofBloorrests entirely on Goff and Jones' argument andBlueHaven.As
demonstrated above, the authority ofBlue Havenis very much weakened
bycounsel's concession.If we takeBlue Havenout of the equation,
then the main foundationfor the insistence inBloorthat
unconscionability is an essential component of the claim isthe
reliance on Goff and Jones' argument.As a conclusion, the three
cases above do not provide a definitive answer to the
researchquestion.WhileCobbearguably keeps the possibility of an
unjust enrichment claim alive fora mistaken improver, this case
does not really deal with a situation of amistakenimprovement of
land.Rather,Cobbeis better seen as a case of work done in a
situationwhere parties anticipated the conclusion of a
contract.Blue Havenis arguably more relevantas compared
toCobbe.However, as demonstrated above,Blue Havenwas influenced by
aconcession by the claimant's counsel.Bloorrelied onBlue Havenand
as such the weight ofits authority may be attacked on the same
basis.Thus, the main plank of the reasoning inbothBlue
HavenandBlooris the passage in Goff and Jones'.Unfortunately in
both these
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cases, this proposition was not examined in detail.Examining
Goff and Jones' argument: the argument from authorityOn a close
reading of Goff and Jones, the argument is not fleshed out in
detail except forthis terse assertion: English law denies the
mistaken improver, whose improvements have become attachedto the
land, any remedy, if the land owner has not acted
unconscionably.42The footnote to the passage above states:The
leading cases includeAppleby v Myers(1867) LR 2 CP 651, 659 --
660,perBlackburnJ. andReynolds v Ashby & Son[1904] AC 466,
475,perLord Atkinson .*17 Goff and Jones also cite43Master or
Keeper, Fellows and Scholars of Clare Hall vHarding44as support of
this argument.Since Goff and Jones' assertion is based on
thesethree decisions, it is important to investigate whether these
cases actually support thisproposition.Appleby v MyersIn this
case,45the claimants contracted to build machinery on the
defendant's premiseswith the purchase price not payable until
completion.Unfortunately before completion, thepremises together
with all the machinery were destroyed by an accidental fire.The
claimwas for the work done prior to the fire.It was contended that
since there was an absolutepromise or warranty by the defendant
that the premises would be fit for purposes ofinstallation of the
machines and the premises were not fit to receive the work, the
claimanthad the option to sue for breach and sue for quantum
meruit.Blackburn J. rejected thisargument saying that this was a
misfortune affecting both parties which excused
furtherperformance.The parties had no cause of action against one
another.The second argument inApplebywas slightly more nuanced and
relevant to the discussionat hand.The claimant argued that this was
a contract of work, labour and materials and notone of bargain and
sale of the machinery.Since the labour and materials became
theproperty of the defendant once they were worked into the
premises, the claimant arguedthat the machines were at the
defendant's risk.Blackburn J. rejected this argument on
twogrounds.First, as a matter of fact, it was incorrect to
characterise the materials as becomingthe property of the
defendant.The contract provided for the claimant to keep the
machinesin repair for two years.As such, the claimant had the right
to change and substitute themachines during the relevant period
without consulting or asking the defendant.Secondly,even if the
materials had become part of the defendant's property, the contract
provided forthe work and materials to be paid when the entire work
was completed.Since this was anentire contract, the claimant could
not recover unless all the work was done.Reynolds v Ashby &
Sons LtdIn this case46Reynolds supplied machines to Holdway, the
lessee of a factory, pursuant toa hire-purchase agreement.It was
provided that the machines were to remain the propertyof Reynolds
until the machines were fully paid for.Reynolds was also given the
right toremove the machines upon default of payment.The machines
were affixed to concrete beds
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in the floor of the factory by bolts and nuts.Holdway defaulted
and Reynolds sought torecover the machines or their value from the
mortgagee of the premises who had takenpossession of the
premises.The question was whether the machines are now regarded
aspart of the premises and therefore passed to the mortgagee as
part of the land.*18 Lord Lindley considered the following to be
relevant: (i) the title of chattels may belost if they are affixed
to real property by a person who is not the owner of the chattels;
(ii)Reynolds knew what Holdway wanted to do with the machines and
that the machines wereto be affixed to the premises; and (iii)
Reynolds knew that the factory was mortgaged andhence ran the risk
of the machines being treated as fixtures.Lord Lindley held
thatHoldway was authorised by Reynolds to convert the chattels into
fixtures subject toReynolds' right to enter and repossess the
machines if Holdway defaulted in the paying forthem.However, this
right ceased when the mortgagee took possession of the premises
sincethe machines were now regarded as fixtures.The Master or
Keeper, Fellows and Scholars and Clare Hall v HardingIn this
case47the claimant, Clare Hall (the college) and Henry Harding
(Harding) bothclaimed to be entitled to the property in Newborough
Street, Scarborough.The controversyover the entitlement of the
college and Harding was not resolved in this case.Instead,
thedispute centred on a lease which Harding granted to Stickney and
Rowney.During thelease Stickney and Rowntree heard about the
college's claim and applied to the college fora lease.Both the
college and Harding claimed for the rent from Stickney
andRowntree.Eventually, the lessees treated the college as the
party rightfully entitled to theproperty.Stickney and Rowntree then
agreed with the college whereby in consideration ofa forty year
lease to spend money restoring the property.The college agreed to
indemnifythe lessees should they be evicted from the
property.Pursuant to the agreement, Rowntreespent 1,600.Harding was
aware of this expenditure.Subsequently, Harding commenced an action
of ejectment against the lessees.Theejectment action was successful
because Harding put in evidence the original lease ratherthan the
dispute of title between Harding and the college.The college sued
Harding forrelief in equity in respect of the lessees' expenditure
for which the college had agreed toindemnify the lessees.Sir Wigram
V.C. rejected this argument as follows:If a party in the possession
of an estate, knowing that another claims the property, will,with
his eyes open, spend money upon it, I know of no case in which it
has been held thathe can, in the absence of special circumstances,
keep the lawful owner out of possession,unless he will reimburse
the party in possession the expenditure he has made It wassaid,
indeed, that Henry Harding, seeing the expenditure going on, ought
in fairness tohave reasserted his claim, but that as a question of
law I cannot accede to.48*19 Analysis of the casesOn close
examination, none of the cases cited by Goff and Jones really
support theproposition that unconscionability is a pre-condition to
an unjust enrichment claim in thecontext of a mistaken improver of
land.Appleby49essentially deals with issues relating tofrustration
and entire contracts.50The principal question in issue was who did
the risk fallon in the event of a frustrating event?Blackburn J.
thought that the risk remained with thebuilder and not the land
owner because: (i) the builder had a continuing obligation to
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maintain the machines, and; (ii) the contract in question was an
entire contract.Therefore,the builder did not have a claim for work
done prior to the frustrating event.51It is a stretchto argue
thatApplebyis an authority which precludes an unjust enrichment
claim to amistaken improver of land in a situation where issues of
frustration and entire contracts arenot present.Goff and Jones also
appear to have readReynolds52in an unduly wide manner.The casewas
primarily concerned with the ancient rule of the circumstances when
a chattel accedesto realty.53In other words, the main issue was
whether the machines supplied by theclaimant, had by reason of
annexation to the premises, become part of the building.Thiswas
relevant because the premises were mortgaged.If the machines were
classified asfixtures, then the claimant did not have the right to
remove the machines.It is likely thatthe debtor was insolvent and
the claimant's contractual claim against the debtor wouldhave been
worthless.As such, it was important for the claimant to maintain a
proprietaryinterest over the machines.It is also not possible for
the claimant to maintain an unjustenrichment claim against the
mortgagee because there is difficulty in showing both a validunjust
factor and that the enrichment was at the expense of the
claimant.Since themachines were transferred pursuant to a contract
between the claimant and the debtor,there does not seem to be a
valid unjust factor.Furthermore, the element that theenrichment was
at the expense of the mortgagee may arguably not be established
inReynolds.This is because the enrichment was not technically
derived from theclaimant.The source of the mortgagee's right to the
land was derived from the mortgagee'scontractual relationship with
the debtor.In other words, there are two contracts here--thehire
purchase contract between the claimant and the debtor and the
mortgage agreementbetween the mortgagee and debtor.Thus, the
claimant cannot leapfrog over the contractwith the debtor and
assert an unjust enrichment claim against the
mortgagee.54Theclaimant's primary remedy is the contractual remedy
against the debtor.Although it is possible to
distinguishReynolds,the question remains whether the generalland
law principle expressed in the Latin maxims,quicquid plantatur
solo, solo cedit(whatever is attached to the ground becomes part of
it) and*20 superficies solo cedit(abuilding becomes part of the
ground), should be interpreted to bar an unjust
enrichmentclaim.Prima facie, if this rule is applied strictly, then
any improvement to the land willaccede to the realty because the
improvement will become a fixture to the land.It couldthen be
argued that this would mean that the land owner will have a defence
to an unjustenrichment claim based on this principle.This could be
one of the reasons why Goff andJones assert that the law of real
property has developed very differently from the law ofpersonal
property.55On reflection, it is suggested that this land law
principle should notbe construed in this manner.As Gray and Gray
note, the relevance of fixture/chattelclassification primarily
concerns: (i) effect on title of the object; (ii) effect on
conveyancesand transfers; (iii) effect on mortgage securities; and
(iv) circumstances in which objectmay be removed from the
land.56Scenario (i) usually arises when the claimant attempts
toassert the benefit of a retention of title clause over the object
annexed to the land.57Withregard to situation (ii), the dispute
typically involves a determination of what precisely wasconveyed to
the purchaser.58Category (iii) is illustrated byReynoldsand
category (iv)normally arises in relation to a landlord/tenant
situation.All these examples are very farremoved from the situation
where a person mistakenly improves the land of another.AsRichard
Sutton observed:
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[T]he extension of the English law on removal of fixturesis
neither a satisfactory, noran irremovable, barrier to the sensible
development of the existing principles of thelaw.59Therefore, the
land law principle on fixtures should not be interpreted as barring
anunjustenrichment claim.Harding60also does not necessarily
preclude anunjust enrichment claim.First,thisclaimarose in a very
different context, i.e. a dispute of title between the college
andHarding.Thus, the remark of Sir Wigram V.C. was understandable
because aclaimforreimbursement cannot keep the true legal owner out
of possession.Secondly, this decisiondid not really explore
theunjust enrichment claim.This is understandable because this
casewas decided in the 19th century before the development ofunjust
enrichmentlaw.It mayvery well be that the restoration work done by
the lessees did not constituteanenrichmentto Harding because
Harding could subjectively devalue the work.Hardingisat most a very
slender authority that amistaken improverof land is barred from
assertinganunjust enrichment claim.*21 Interrogating Goff and
Jones' argument: the argument from principleThere are several
recurrent themes as to why themistaken improveris
deniedaclaiminunjust enrichment.61First, relief inunjust
enrichmentis precluded to a claimantwho is characterised as an
officious intermeddler.62It is said to be [A] fundamental principle
of the law of restitution that, where the claimant has
actedofficiously in transferring a benefit to the defendant, any
restitutionary claim must fail.63Thus, the improver of land may not
succeed because the improver is seen to haveconferred the benefit
officiously to the defendant.Secondly, there is the practical
difficultyof establishing that the defendant valued the improvement
to his or her land.This difficultywith valuation is especially
acute where the defendant was not aware of theimprovements.If the
defendant is forced to pay for the unwanted benefits, the
defendantwill be left in a worse off position.The third point is
closely related to the second point--ifthe defendant is compelled
to pay for the benefits, the defendant may be forced to sell hisor
her land to meet the claim.Since the defendant was unaware of the
claimant'simprovements made to his or her property, it is unfair to
force the defendant to part withthe property.Such a move would be
inconsistent with traditional common law philosophywhich stresses
individual freedom and liberty.Furthermore, a remedy which results
in aforced sale is inconsistent with the common law and equity's
general jurisprudence whereland ownership is regarded as sacrosanct
and a unique institution.64Finally, an unjustenrichment claim may
undermine the system of registration of land title.This
argumentproceeds on the premise that a person who is the registered
owner of land ought to have hisor her title guaranteed by the
system of land registration.A successful unjust enrichmentclaim is
said to be inconsistent with this guarantee and hence will
undermine the system ofland registration.65The arguments on
principle against providing relief to a mistakenimprover are
certainly legitimate concerns.In the past, it was not possible to
deal withthese concerns adequately because the law of unjust
enrichment was under-developed.Writing in 1968, Robert Casad
observed that in: Anglo-American law, however, unjust enrichment
doctrine is still in a rather primitive
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state of development.Instead of a general unifying principle
with its logical extensions andelaborations, our law of unjust
enrichment remains largely an enumeration of the kinds ofcases in
which courts will*22 fictitiously imply quasi contracts or
construct constructivetrusts. In fact, it probably served to impede
development in the area of relief for themistaken
improver.66However, it is suggested that this view of unjust
enrichment law no longer represents thestate of the law today.The
courts have articulated a workable general framework and manyof the
concerns raised may now properly be accommodated within modern
unjustenrichment jurisprudence.Taking the first argument against
granting relief to the officious intermeddler, it iscontended that
the concept of officiousness should not be interpreted in an overly
broadmanner to preclude an unjust enrichment claim in all
circumstances.As Stoljar points out: an improver, acting under a
mistake and, as we now suppose, under a not unreasonablemistake,
cannot be accused of acting officiously .67For example, inBlue
Haven,68the improver did the work due to an erroneous assumptionof
title and not because he was a meddlesome intervener.The important
point to note is thatthe improver inBlue Haveninitially did not
know of the competing claim on the land--itwas only in 1989, when
the planting of the coffee had commenced that the true
landownertried to inform the improver of the situation.Thus, the
improvements made pre-1989 oughtto properly be subject to an unjust
enrichment claim.For improvements made post-1989,the unjust
enrichment claim should fail.69There are several ways to explain
thisconclusion.First, the improver was not labouring under a
mistake after 1989 because heknew of the competing claim after he
was informed by the true landowner.Secondly, theimprover may be
characterised as a risk-taker in carrying out the work despite
thecompeting claim.70It is therefore possible to develop the law in
a manner which issensitive to the particular facts rather than
insisting on a blanket rule against restitutionaryrecovery.The
latter approach is over-inclusive and does not do justice between
the parties.The second and third arguments against an unjust
enrichment claim based on valuationdifficulties and the possibility
of a forced sale are very real problems though ultimatelythey are
not insurmountable hurdles.These complexities may be dealt with
through acareful application of the doctrines pertaining to: (i)
the valuation of an enrichment; (ii) thechange of position defence;
or (iii) the grant of appropriate remedies.These aspects will
bedeveloped in the section below.The final argument based on the
land registration system isalso not an impediment to an unjust
enrichment claim.An unjust enrichment claim is an inpersonam claim
as opposed to a title based claim.An in personam claim is not
inevitablyinconsistent with the registration of title
system.71While it is conceded that some*23unjust enrichment claims
may either directly or indirectly threaten the guarantee of
titleprovided by the registration of land title,72it is contended
that an unjust enrichment in thecontext of a mistaken improver of
land is not one such instance.This is because theimprover's unjust
enrichment claim is premised on establishing an incontrovertible
benefitto the defendant and also making sure that the defendant is
not put in a situation where heor she is subject to an involuntary
sale to meet the claim.Hence, the unjust enrichmentclaim does not
threaten the defendant's security of title.In order to ensure that
there is noinvoluntary sale, the question of valuation and remedies
again assume great significanceand must be worked out
carefully.This will be discussed in the following section.
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The mistaken improver of land: a framework of an unjust
enrichment claimIn this section, the author attempts to construct a
framework of the principles governing anunjust enrichment claim
which: (i) takes on board all the concerns identified in
theprevious section; and (ii) is consistent with the doctrinal
rules.As a preliminary point, twocaveats need to be mentioned at
the outset.First, this framework will not be applicable to
asituation where the improvement was done in the anticipation of
the conclusion of acontract between the parties.73Unjust enrichment
law cannot possibly provide thecomplete solution to the very
difficult issue of pre-contractual
liability.74Pre-contractualliability deals with a myriad of complex
issues such as meeting the commercial needs ofthe parties, risk
taking, fault, bargaining, contract, tort, etc. much of which is
beyond thescope of this paper.It would be unduly simplistic to
assume that the law of unjustenrichment is the panacea to resolving
this difficult legal problem.Secondly, proprietaryestoppel remains
the primary doctrine applicable in the disappointed heirs situation
asillustrated by the cases ofGillett v Holt75andThorner v
Major.76This line of cases is trickyand poses its own unique
challenge.In these cases, the claimant is typically a person whohas
done work in reliance on a representation by the defendant.The
relevant representationalleged is that the claimant will inherit
all or part of the defendant's property.Subsequently,the defendant
either reneges on this representation or dies without making a
valid Will inaccordance with the representation.To impose liability
in this context is to indirectlyimpinge on the defendant's
testamentary capacity.Therefore, unless there is some form
ofrepresentation by the defendant to the claimant, the courts
should be slow to find liabilityon the defendant's
part.Doctrinally, this approach may be justified by*24
characterising theclaimant as not labouring under a causative
mistake.While it may be true that the claimanthopesto inherit all
or some of the defendant's property, this can hardly be regarded as
acausative mistake.A hope as to what will happen in future is not a
form of causativemistake.Absent a representation by the defendant,
the risk of non-reciprocation should beseen as an unfortunate but
inherent part of social relations.The salient features of a
proposed framework to an unjust enrichment claim in the contextof a
mistaken improver are as follows: The claimant must demonstrate
that the improvement to the land was made pursuant to acausative
mistake.77In order, to establish the existence of a causative
mistake, the claimantmust not be actively aware of facts which may
negate the allegedmistakenbelief.78 In terms of
establishingenrichment, the claimant must be able to prove that the
worksrepresent an objective benefit to the defendant.Even when an
objective benefit isestablished, the defendant has the right to
subjectively devalue the so-calledimprovementsto the property.To
counter the plea of subjective devaluation, theclaimant must be
able to prove that theimprovementsare a form of incontrovertible
benefit. The overarching principle in this area is that liability
formistaken improvementsshouldneverleave an innocent defendant in a
position where he or she has to sell the land to meettheclaim.79One
of the biggest challenges for a claimant in anunjust
enrichmentaction is to establishthat themistaken
improvementrepresents a form ofenrichmentto the
landowner.Thenormative force of anunjust enrichment claimis derived
from the perspective of thedefendant enjoying a
continuousunjustgain at the expense of the claimant.80As Birks
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observed: [t]he independence and necessity of the law ofunjust
enrichmentderives fromthe peculiar normativity of extant gain.81In
most cases, theenrichmentenquiry does notpose a problem for the
claimant because the defendant has received money from
theclaimant.Money being a universal measure of value is definitely
a formofenrichment.Matters become slightly more complicated when
the defendant receives non-monetary benefits such as the provision
of services or animprovementto his or her land.Inthese cases, the
difficulty is for the claimant to prove that the defendant in fact
did valuethe so-called benefits.If the defendant did not value the
so-called benefits, then*25 liabilityin unjust enrichment would
compromise the defendant's autonomy because it would affecthis or
her control over the allocation of his or her wealth.McInnes
astutely notes: [u]njustenrichment should, at worst, be a zero-sum
event.The defendant should never be requiredto give back more than
he got.82The issue of enrichment must be calibrated
carefully,cautiously balancing the autonomy interests
ofbothparties.83In order to illustrate the point about balancing
the autonomy interests of both parties, let usassume that the
defendant had a very dirty car which was parked in a public
carpark.Without any prompting or encouragement from the defendant,
the claimant washedthe defendant's car.Putting aside the question
of establishing a relevant unjust factor, is thedefendant enriched
at the claimant's expense?In this scenario, the claimant will have
severedifficulties in establishing an enrichment on the defendant's
part.While car washingservices have an objective market value, the
defendant ought to be able to defeat the pleaof enrichment by
asserting that the defendant did not subjectively value a clean
car.In otherwords, the defendant is able tosubjectively devaluethe
services.It might be that thedefendant usually keeps his or her car
dirty--a clean car is simply not valuable to him orher.Furthermore,
the defendant might say that while a clean car is nice to have,
thedefendant would rather prefer to spend his or her money on other
things.Alternatively, thedefendant could show that he or she washes
the car personally during the weekends.84Allthese assertions will
defeat a claim of an enrichment on the defendant's part.The
defendantas an autonomous individual is entitled to make choices
about what he or she values evenif this might seem to be slightly
eccentric to other people.However, the claimant's casewould be
stronger if the claimant can establish that the defendant had made
anappointment later in the afternoon to go to a car wash.Let us
assume that the price chargedat the car wash is 10.In such a
scenario, the claimant would be able to assert that thedefendant
had enjoyed anincontrovertible benefitof 10 because the claimant
had saved thedefendant a factually necessary expense.This simple
illustration demonstrates that the issueof enrichment is best
tackled in three stages: Did the defendant receive an objective
benefit? If so, is the defendant entitled to defeat the assertion
of an objective benefit by pleadingsubjective devaluation?85 To
counter a plea of subjective devaluation, the claimant must show
that the defendanthad enjoyed an incontrovertible benefit.The
reference to subjective devaluation is consistent with orthodox
unjust enrichmentdoctrine.86Subjective devaluation protects the
defendant's autonomy by respecting his orher freedom of choice in
deciding whether to pay for a particular improvement.Adefendant's
right to use subjective devaluation would prevent a situation where
a houseowner comes back from a vacation only to be*26 saddled with
an unjust enrichment claim
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because his or her neighbour built an unauthorized extension to
the home.Let us assumethat the extension objectively increased the
value of the house.In this scenario, quite apartfrom the difficulty
of establishing a causative mistake, the house owner should be able
todefeat the claim by subjectively devaluing the value of the
extension.While the houseowner might use the extension, he or she
would not be willing to pay for it.However, if the claimant can
show that the work constituted an incontrovertible benefitthen this
will defeat a plea of subjective devaluation.As McLachlin J.
explained inRegionalMunicipality of Peel v Her Majesty the Queen in
Right of Canada87an incontrovertiblebenefit is an unquestioned
benefit, a benefit which is demonstrably apparent and notsubject to
debate and conjecture.There are several ways in showing that the
defendantenjoyed an incontrovertible benefit.The most obvious way
of establishing anincontrovertible benefit is if the land was sold
at a higher price and the increase in valuewas solely attributable
to the improvement.This will constitute an incontrovertible
benefitbecause the benefit has been realised in monetary
terms.88Quite apart from realisedbenefits, if the improvements
resulted in the defendant having saved a necessary expense,then
this will also constitute an incontrovertible benefit.89It is
suggested that in bothBlueHaven90andBloor,91the landowner enjoyed
an incontrovertible benefit.InBlue Haven,thetrue landowner
purchased the land in order to develop it as a coffee plantation
and theclaimantdidso develop the land.Hence, the true landowner
saved a factually necessaryexpense in terms of development
cost.InBloor,the defendant was contractually obligated tobuild the
road which the claimant constructed.As such, it may be argued this
led to thesavings of a legally necessary expense.92Even though
incontrovertible benefit mayarguably be established, the question
of valuation remains a tricky issue.If the defendantsinBlue
HavenandBloorcan prove that they could have done the work in a more
costeffective manner, then this should be regarded as the proper
valuation of the amount ofexpenses saved.Furthermore, the
defendants should be given the opportunity to reduce thequantum if
they can establishquantifiabledisadvantages in having the claimant
do thework.For example, inBloorone of the complaints was that since
the claimant did the work,the defendant was deprived of collateral
warranties from the builder.It is suggested thatthis is not a valid
complaint because there is no reason to assume that the
collateralwarranties could not be validly assigned to the
defendant.If this is not possible then thevaluation of the benefit
should be reduced accordingly.However, it is suggested inconducting
this exercise, the judge should not take into account unrealistic
and fancifuldisadvantages.InBloor,it is unlikely that the
corresponding disadvantages would haveresulted in the conclusion
that the road was of no value to the defendant whatsoever.93*27
Another method of establishing an incontrovertible benefit is the
defendant's conductin refusing to give back a readily returnable
benefit.This was established inCressman vCoys of Kensington (Sales)
Ltd94where the defendant recipient of a number plate whichwas
erroneously given to him refused to give it back.Instead, the
defendant transferred thenumber plate to his partner
gratuitously.Mance L.J. held that the defendant was liable topay
for the number plate because an incontrovertible benefit was
established.The learnedjudge reasoned that the number plate was
readily returnable to the claimant and yet thedefendant refused to
give the number plate back.This suggested that the defendant
didvalue the number plate.Is a similar principle applicable in the
context of a mistakenimprovement of land?It is suggested that where
the improvements might be removedwithout undue damage to the land
owner's property, then this option should remain open asa remedial
possibility.95There are some American cases which support this
position.96For
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example, inJensen v Probert97the Supreme Court of Oregon issued
a mandatory injunctionrequiring the improver to remove the building
within a reasonable time and to restore theland to its former
condition.Of course, this remedy will only rarely be available and
isconfined to exceptional facts.The building inJensenwas a
relatively small building with nobasement and hence removable
without much difficulty.It is quite unlikely that a similarremedy
would be available inBlue HavenorBloor.The advantage of this remedy
is that itwill certainly promote private bargaining between the
parties.If the defendant wishes tokeep the improvements, he or she
will probably strike up a private bargain with theclaimant not to
remove the improvements.The question of valuation of the
improvements also needs to be considered carefully.As ageneral rule
if an incontrovertible benefit is established, the amount awarded
to theclaimant should be either the market value of the costs of
the improvements or the costswhich the defendant could have
reasonably procured to carry out the work, whichever islower.98In
cases where the land had been sold, the enrichment should not be
valued as theincrease in value of the land due to the
improvement.In order to illustrate this principle, itis better to
resort to a hypothetical situation.Let us assume that the
claimant's cost incarrying out the improvements was $10,000.The
defendant has a long term relationshipwith a builder who could have
done the work at $5,000.After the improvement was done,the
defendant sold the land for $20,000.In this case, the proper sum to
be awarded is$5,000 because this was the amount the defendant saved
as a necessary expense.The awardshould not be $20,000 because the
rise in value was not solely attributable to theimprovement but due
to a combination of the improvement and the inherent nature of
theland.99Finally, the over-arching principle in this area should
be that liability in unjustenrichment should never result in a
defendant*28 being forced to sell his or her land.100Ifthe
defendant can establish that liability would result in a forced
sale, it is suggested thatthe courts should be slow to make an
order for a money judgment.Instead, the courts couldconsider
granting the claimant a charge over the land to the extent of the
value of theimprovements.Such a charge could be developed using the
jurisprudence on rights of co-owners with regard to improvements to
jointly owned property.InBrickwood v Young101ithas been held that
between co-owners the right to a reimbursement for the cost
ofimprovements and repairs from another co-owner is a passive right
which cannot beenforced until appropriate proceedings are brought
to terminate the co-ownershiparrangement between parties.It is
suggested that a similar rule be developed in the contextof a
mistaken improver of land.If liability would result in a forced
sale of land, theclaimant's right of recovery should be postponed
until the time in which the defendantchooses to sell the
property.This remedy would represent a balance between protecting
theinterest of the defendant and recognising the value of the
claimant's work.If ever the landwas sold, the claimant would be
able to realise the value of his or her improvements to theland.The
final point that liability for unjust enrichment in the context of
a mistaken improver ofland shouldneverleave an innocent land owner
in a position where he or she has to sell theland to meet the claim
also needs to be developed.This proposed requirement may
bejustified on the either of the following grounds (i) that this
protects the landowner'sautonomy or, (ii) a forced sale will
constitute a change of position.With regard to the firstpoint,
Professor Hanoch Dagan has forcefully argued that in unjust
enrichment claims, therecipient's autonomy is impinged because:
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[i]f recipients were required to hold themselves always ready to
give back any benefitsthey received, the security and stability of
their affairs would be severely threatened.102A forced sale of land
represents a severe disruption of the affairs of the defendant
andhence should be avoided especially where the defendant is a
passive recipient.Thisproposed requirement is consistent with the
philosophy that land is usually treated asunique and that damages
are regarded as an inadequate remedy to compensate a claimantfor a
breach of a contract for a sale of land.Arguing by analogy, if the
defendant iscompelled to sell his or her land, then this would
cause the defendant to lose a uniqueproperty.Alternatively, the
defendant should be able to rely on the change of positiondefence
if liability would result in a forced sale of land.Elise Bant has
recently veryhelpfully rationalised the defence as a situation
where the defendant has changed his or herposition irreversibly for
the worse.103It is suggested that when liability results in a
forcedsale of land, this constitutes an instance where the
defendant is placed in a situation wherehe or she has to change his
or her position irreversibly.Hence, the law should strive toavoid
putting the defendant in such a position.An unresolved issue with
this suggestedproposal is whether this requirement applies equally
to a mistaken*29 improvement of achattel.This would depend on the
chattel concerned.If the chattel is generic and fungible,then there
is no reason for this proposal to apply.However, if the chattel is
unique such as afamily heirloom then it is suggested that the
courts should also take the position thatanunjust enrichment
claimshould not lead to a forced sale of the
chattel.ConclusionThemistaken improverof land is an old problem.As
Professor John Dawson observed in1951, this question has lain on
the consciences of lawyers during the eighteen hundredyears since
the Roman jurist Julian declared that amistaken improverof land did
not havea cause of action against the landowner and it lies on our
consciences still.104Theargument advanced in this paper is
thatunjust enrichmentlaw ought to be able to providesome relief to
amistaken improverif an incontrovertible benefit to the landowner
isestablished.It is suggested that the current case law has wrongly
co-mingled elements ofproprietary estoppel with that ofunjust
enrichmentby erroneously insisting on proof of thelandowner's
unconscionable behaviour.Such a strict approach to aclaimby
amistakenimproverwas due to the fear that anunjust enrichment
claimmight unduly prejudice alandowner.However, such fears are
unfounded with the modern development of the lawofunjust
enrichment.Theunjust enrichmentframework proposed in this paper is
that adefendant: (i) will be able to rely on concepts of subjective
devaluation to negate anyunwanted benefits and; (ii) will never be
put in a position where he or she will be forced tosell the land to
meet a claim.Also, in valuing an incontrovertible benefit to the
defendant,the enrichment should either be the market value of the
costs of the improvements or thecosts which the defendant could
have reasonably procured to carry out the work,whichever is
lower.In summary, save for cases involving pre-contractual
liability anddisappointed heirs, it is suggested that a mistaken
improver of land ought to be able tomaintain an unjust enrichment
claim if he or she can demonstrate that the improvementsconstituted
an incontrovertible benefit to the defendant.This paper was first
presented at the 2nd NUS-Sydney Law Symposium,
NegotiatingDichotomies: Public/Private, Present/Future, Rights,
Responsibilities (July 15-16, 2010)and the author is grateful to
the participants of the symposium for fieldingquestions.Thanks are
also due to Tan Choog Ing and the anonymous referees for their
very
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helpful comments.The usual caveats apply.
1. Aiken v Short156 ER 1180; (1856) 1 Hurl. & N. 210.2.
Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd[1980]
Q.B. 677; [1980] 2W.L.R. 218 at 695.Applied in the following
casesLloyds Bank Plc v IndependentInsurance Co Ltd[2000] Q.B. 110;
[1999] 2 W.L.R. 986 CA (Civ Div);Kleinwort BensonLtd v Lincoln City
Council[1999] 2 A.C. 349; [1983] 3 W.L.R. 1095 HL at 372,
399,407-408;Nurdin & Peacock Plc v DB Ramsden & Co
Ltd[1999] 1 W.L.R. 1249; [1999] 1All E.R. 941 Ch D;Dextra Bank
& Trust Co Ltd v Bank of Jamaica[2002] 1 All E.R.(Comm) 193 PC
at 202.3. See, e.g. G. Virgo,The Principles of the Law of
Restitution,(Oxford: Oxford UniversityPress, 2006), pp.154-169.4.
Kleinwort Benson[1999] 2 A.C. 349; [1983] 3 W.L.R. 1095 HL.5. For
valuable work done in this area see N. Hopkins, Estoppel and
Restitution: Drawinga Divide in E. Cooke (ed.),Modern Studies in
Property Law Volume II,(Oxford: HartPublishing, 2003), p.145.6. The
literature on this topic is vast.See, e.g. Lord Nicholls Knowing
Receipt: The Needfor a New Landmark in W.R. Cornish
(ed.),Restitution Past Present and Future(Oxford:Hart Publishing,
1998), p.231; J. Edelman, A principled approach to unauthorised
receiptof trust property (2006) 122 L.Q.R. 174; B. Strahorn, The
end of knowing receipt? ariposte tounjust enrichment (2006) 80
A.L.J. 765; K. Low, Recipient liability in equity:resisting the
siren's lure [2008] R.L.R. 96.7. See, e.g. M. McInnes,
Enrichmentrevisited in J. Neyers, M. McInnes and S.
Pitel(eds),UnderstandingUnjust Enrichment,(Oxford: Hart Publishing,
2004), p.165; J.Edelman, The meaning of loss andenrichment in R.
Chambers, C. Mitchell and J. Penner(eds)Philosophical Foundations
of the Law ofUnjust Enrichment,(Oxford: OxfordUniversity Press,
2009), p.211.8. Rural Municipality of Peel v Her Majesty the Queen
in Right of Canada(1993) 98D.L.R. (4th) 140 at 159.9. BP
Exploration Co (Libya) Ltd v Hunt (No.2)[1979] 1 W.L.R. 783 QBD at
789.10. On subjective devaluation seeSempra Metals Ltd (formerly
Metallgesellschaft Ltd) vInland Revenue Commissioners[2007] UKHL
34; [2007] 3 W.L.R. 354;Cressman v Coysof Kensington (Sales)
Ltd[2004] EWCA Civ 47; [2004] 1 W.L.R. 2775;Ministry ofDefence v
Ashman[1993] 40 E.G. 144; [1993] N.P.C. 70 CA (Civ Div).11. Taylor
v Laird156 E.R. 1203; (1856) 25 L.J. Ex. 329 at 332.12. See,
e.g.Cressman[2004] EWCA Civ 47; [2004] 1 W.L.R. 2775.13. Greenwood
v Bennett[1973] Q.B. 195; [1972] 3 W.L.R. 691 CA (Civ Div).14. See,
e.g.Exall v Patridge101 E.R. 1405; (1799) 8 Term Rep. 308.15.
Cressman[2004] EWCA Civ 47; [2004] 1 W.L.R. 2775.16. See, e.g.Blue
Haven Enterprises Ltd v Tully[2006] UKPC 17.17. Jones v
Stones[1999] 1 W.L.R. 1739; [1999] 3 E.G.L.R. 81 CA (Civ Div) at
1745.18. Cobbe v Yeoman's Row Management Ltd[2008] UKHL 55; [2008]
1 W.L.R. 1752.Itwill be argued that this decision is ultimately not
a case where there was a mistakenimprovement of land because it is
difficult to demonstrate a mistake in this context.In fact,the work
was done by the claimant pursuant to a request by the defendant.See
text aroundfn.35. This case is better analysed as a situation
involving pre-contractual liability.See textat fn.73.19. Blue
Haven[2006] UKPC 17;JS Bloor Ltd v Pavillion Developments Ltd[2008]
EWHC
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724 (TCC); [2008] 32 E.G. 84.20. R. Goff and G. Jones,The Law of
Restitution,7th edn, (London: Sweet & Maxwell,2007),
para.6-001.21. B. McFarlane, Case Note: Blue Haven Enterprises v
Tully & Another (2006) 1Journal of Equity156.22. K.F.K. Low,
Unjust enrichment and proprietary estoppel: two sides of the same
coin[2007] L.M.C.L.Q. 14, 18.23. Low, Unjust enrichment and
proprietary estoppel: two sides of the same coin [2007]L.M.C.L.Q.
14, 18.24. Low, Unjust enrichment and proprietary estoppel: two
sides of the same coin [2007]L.M.C.L.Q. 14, 18.25. McFarlane, Case
Note: Blue Haven Enterprises v Tully & Another (2006)
1Journalof Equity156, 158.26. Cobbe[2008] UKHL 55; [2008] 1 W.L.R.
1752.27. Blue Haven[2006] UKPC 17.28. Bloor[2008] EWHC 724 (TCC);
[2008] 32 E.G. 84.29. Cobbe[2008] UKHL 55; [2008] 1 W.L.R. 1752
(noted B. McFarlane and A. Robertson,Death of proprietary estoppel
[2008] L.M.C.L.Q. 449; A. Goymour, Cobbling togetherclaims where a
contract fails to materialise (2009) 68 C.L.J. 37; J. Getzler,
QuantumMeruit, estoppel and the primacy of contract (2009) 95
L.Q.R. 196; G. Griffiths,Proprietary estoppel--the pendulum swings
again? [2009] 73 Conv. 141).30. Cobbe[2008] UKHL 55; [2008] 1
W.L.R. 1752 at [40].31. Blue Haven[2006] UKPC 17 (noted P. Watts,
Unrequested improvements to land(2006) 122 L.Q.R. 553; D. Salmons,
Claims for non-monetary benefits: unjust enrichmentor estoppel
[2008] 72 Conv. 173).32. Bloor[2008] EWHC 724 (TCC); [2008] 32 E.G.
84.33. Goff and Jones,The Law of Restitution,7th edn, (2007),
para.6-001.34. Blue Haven[2006] UKPC 17.35. Cobbe[2008] UKHL 55;
[2008] 1 W.L.R. 1752.36. P. Birks,An Introduction to the Law of
Restitution(Oxford: Clarendon, 1989),pp.147-148; P. Birks, Mistakes
of law (2000) 53 C.L.P. 205, 226.See alsoDextra Bank[2002] 1 All
E.R. (Comm) 193 PC at 202 (noted D. Fox, Allocating risk and loss
inmistaken payment (2002) 61 C.L.J. 276).37. See generally E.
McKendrick, Work done in anticipation of a contract which does
notmaterialise in W. Cornish et al. (eds),Restitution Past, Present
and Future: Essays inHonour of Gareth Jones,(Oxford: Hart
Publishing, 1998), p.163 followed by a comment byS. Hedley, Work
done in anticipation of a contract which does not materialise:
aresponse in Cornish et al. (eds),Restitution Past, Present and
Future: Essays in Honour ofGareth Jones,(1998), p.195; K. Barker,
Coping with failure--reappraising pre-contractualremuneration
(2003) J.C.L. 105.38. Blue Haven[2006] UKPC 17.39. See, McFarlane,
Case Note: Blue Haven Enterprises v Tully & Another (2006)
1Journal of Equity156, 160 which suggest that more should have been
done with regard tothe inquiry on enrichment.40. Low, Unjust
enrichment and proprietary estoppel: two sides of the same coin
[2007]L.M.C.L.Q. 14.41. Bloor[2008] EWHC 724 (TCC); [2008] 32 E.G.
84.42. Goff and Jones,The Law of Restitution,7th edn, (2007),
para.6-001.43. Goff and Jones,The Law of Restitution,7th edn,
(2007), para.6-001.
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44. Master or Keeper Fellows and Scholars of Clare Hall v
Harding(1846) 6 Hare 273 at296-297.45. Appleby v Myers (1866-67)
L.R. 2 C.P. 651.46. Reynolds v Ashby & Sons Ltd[1904] A.C. 466
HL.47. Harding(1846) 6 Hare 273 at 296-297.48. This passage has
also been cited by Goff and Jones,The Law of Restitution,7th
edn,(2007), para.6-001 andBlue Haven[2006] UKPC 17.49.
Appleby(1866-67) L.R. 2 C.P. 651.50. On entire contracts see, B.
McFarlane and R. Stevens, In defence of Sumpter vHedges (2002) 118
L.Q.R. 569.51. The result has been criticised as
unsatisfactory.See, e.g. G.H. Treitel and E. Peel,Treitel on the
Law of Contract,12th edn, (London: Sweet & Maxwell, 2007),
para.19-099.52. Reynolds[1904] A.C. 466 HL.53. For a comprehensive
background to the rule see K. Gray and S.F. Gray,Elements ofLand
Law,(Oxford: Oxford University Press, 2009), pp.28-41; P. Luther,
Fixtures andchattels: a question of more or less (2004) 24 O.J.L.S.
597.See alsoElitestone Ltd vMorris[1997] 1 W.L.R. 687; [1997] 2 All
E.R. 513 HL.54. On leapfrogging see P. Birks,Unjust Enrichment,2nd
edn, (Oxford: Clarendon, 2005),pp.89-98.55. Goff and Jones,The Law
of Restitution,7th edn, (2007), para.6-001.56. Gray and
Gray,Elements of Land Law,(2009), pp.29-33.57. See, e.g.Gebrueder
Buehler AG v Chi Man Kwong Peter[1988] 1 S.L.R.(R.) 185.58. Hamp v
Bygrave(1983) 266 E.G. 720 QBD.59. R.J. Sutton, What should be done
for mistaken improvers in P.D. Finn (ed.),Essayson
Restitution,(Sydney: Law Book Co, 1990), pp.240, 279.See alsoPull v
Barnes142 Colo272; 350 P 2d 828.60. Harding(1846) 6 Hare 273 at
296-297.61. For an overview of these themes see R.C. Casad,
Themistaken improver--acomparative study (1967-1968) 19Hastings Law
Journal1039; S.J Stoljar, Mistakenimprovementsof another's property
(1979-1982) 14University of Western AustralianReview199; S.J
Stoljar, Mistaken improversof real estate (1985-1986) 64North
CarolinaReview37; Sutton, What should be done formistaken improvers
in Finn (ed.),Essays onRestitution,(1990), pp.240; S. Degeling and
B. Edgeworth, Improvementsto landbelonging to another in L.B. Moses
(ed.),Property and Security,(Sydney: ThomsonReuters, 2010),
p.277.62. On officiousness see Virgo,The Principles of the Law of
Restitution,(2006) pp.39-40.63. Virgo,The Principles of the Law of
Restitution,(2006) pp.39.64. H. Dagan,The Law and Ethics of
Restitution,(Cambridge: Cambridge University Press,2004), p.83.65.
See R. Chambers,An Introduction to Property Law in
Australia,(Lawbook Co, 2008),pp.468-470; H.W. Tang, Beyond the
Torrens Mirror: a framework of the In Personamexception to
indefeasibility (2008) 32 M.U.L.R. 672.66. Casad, The mistaken
improver--a comparative study (1967-1968) 19Hastings
LawJournal1039.67. Stoljar, Mistaken improvements of another's
property (1979-1982) 14University ofWestern Australian Review199,
200.68. Blue Haven[2006] UKPC 17.69. SeeRaab v Casper51 Cal.App. 3d
866; 124 Cal Rptr. 590 (1975).70. See E.A. Farnsworth,Alleviating
Mistakes,(Oxford: Oxford University Press, 2004),
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pp.148-158 on risks and mistakes.71. On in personam claims see
generally P.J. Carruthers, 2007, Taming the unruly inpersonam
exception: an examination of the limits of the in personam
exception toindefeasibility of title Australasian Law Teachers
Association Annual
Conference,http://www.alta.edu.au/2007_published_conference_papers.html[Accessed
January 2,2011]; Tang, Beyond the Torrens Mirror: a framework of
the In Personam exception toindefeasibility (2008) 32 M.U.L.R. 672;
K.F.K. Low, The nature of Torrensindefeasibility: understanding the
limits of personal equities (2009) 33 M.U.L.R. 205.Seealso M.
Conaglen and A. Goymour, Knowing receipt and registered land in C.
Mitchell(ed.),Constructive and Resulting Trusts,(Oxford: Hart
Publishing, 2010), 159.72. See, e.g. categories described in Tang,
Beyond the Torrens Mirror: a framework ofthe In Personam exception
to indefeasibility (2008) 32 M.U.L.R. 672, 684, 695-696.73. See S.
Scott, Mistaken improvers and a recognisable law of unjust
enrichment in C.Rickett and R. Grantham (eds),Structure and
Justification in Private Law: Essays for PeterBirks,(Oxford: Hart
Publishing, 2008), p.245 on the difficulties with using the
unjustenrichment model to analyse pre-contractual liability.74. The
literature on pre-contractual liability is very vast.For an
excellent work in this areasee P. Giliker,Pre-Contractual Liability
in English and French Law,(London: Kluwer,2002).See also B.
McFarlane, The protection of pre-contractual reliance: a way
forward(2010) 9 O.U.C.L.J. 95.75. Gillett v Holt[2001] Ch. 210;
[2000] 3 W.L.R. 815 CA (Civ Div).76. Thorner v Major[2009] UKHL 18;
[2009] 1 W.L.R. 776.See Lord Scott's analysis inthis case (noted
M.J. Dixon, Proprietary estoppel: a return to principle [2009] 73
Conv.260; B. Sloan Estoppel and the importance of straight talking
[2009] 73 Conv. 154).77. On causative mistakes seeBarclays
Bank[1980] Q.B. 677; [1980] 2 W.L.R. 218 at695.Applied in the
following casesLloyds Bank[2000] Q.B. 110; [1999] 2 W.L.R. 986
CA(Civ Div);Kleinwort Benson[1999] 2 A.C. 349; [1983] 3 W.L.R. 1095
HL at 349, 372, 399,407-408;Nurdin & Peacock[1999] 1 W.L.R.
1249; [1999] 1 All E.R. 941 Ch D ;DextraBank[2002] 1 All E.R.
(Comm) 193 PC at 202.78. SeeRaab51 Cal.App. 3d 866; 124 Cal Rptr.
590 (1975).79. A similar rule is proposed inRestatement (Third) of
Restitution andUnjust Enrichment10 (American Law Institute,
Tentative Draft No.1, April 6, 2001).See also A. Kull,Mistaken
improvementsand the restitution calculus in D. Johnston and R.
Zimmermann(eds),UnjustifiedEnrichment: Key Issues in Comparative
Perspective,(Cambridge:Cambridge University Press, 2002), p.369;
D.A. Verse, Improvementsandenrichment: acomparative analysis [1998]
R.L.R. 85.This rule may also apply to amistakenimprovementto
chattels which are considered unique.See text around fn.103.80. For
a comprehensive overview see McInnes, Enrichmentrevisited in J.
Neyers et al.(eds),UnderstandingUnjust Enrichment(2004), p.165.
Edelman, The meaning of lossandenrichment in R. Chambers, C.
Mitchell and J. Penner (eds)PhilosophicalFoundations of the Law
ofUnjust Enrichment,(2009), p.211.81. Birks,Unjust Enrichment,2nd
edn, (2005), p.208.82. McInnes, Enrichment revisited in Neyers et
al. (eds),Understanding UnjustEnrichment(2004), p.170.83. Dagan,The
Law and Ethics of Restitution,(2004), p.46.84. See R. Stevens,
Three enrichment issues in A. Burrows and A. Rodger (eds),Mapping
the Law Essays in Memory of Peter Birks,(Oxford: Oxford University
Press,2006), pp.49, 50 who argues that some people may enjoy
washing their own dirty windowsand therefore are not enriched by
cleaning services.
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85. This was arguably the position adopted by Lord Nicholls
inSempra Metals[2007]UKHL 34; [2007] 3 W.L.R. 354.86. See,
e.g.Ashman[1993] 40 E.G. 144; [1993] N.P.C. 70 CA (Civ Div).87.
Regional Municipality of Peel v Her Majesty the Queen in Right of
Canada(1993) 98D.L.R. (4th) 140 at 159.88. Greenwood[1973] Q.B.
195; [1972] 3 W.L.R. 691 CA (Civ Div).89. See, e.g.Exall101 E.R.
1405; (1799) 8 Term Rep. 308.90. Blue Haven[2006] UKPC 17.91.
Bloor[2008] EWHC 724 (TCC); [2008] 32 E.G. 84.92. See, e.g.Berkeley
Applegate (Investment Consultants) Ltd (No.1), Re[1989] Ch.
32;[1988] 3 W.L.R. 95 Ch D.93. SeeEdinburgh & District Tramways
Co Ltd v Courtenay(1909) S.C. 99; 16 S.L.T. 548CS. This case is
different fromBloorbecause the improvements were made to the
tramwaysbelonging to the claimant.As the Lord President remarked in
the case: [w]hen a persondoes something on somebody's else's
property, in the mistaken idea, it may be, that it is hisown, then
thejacturais obvious enough.He has expended money, or something
else, whichhas passed into other person's property.But here nothing
has passed.94. Cressman v Coys of Kensington (Sales) Ltd[2004] EWCA
Civ 47; [2004] 1 W.L.R.2775.95. See, e.g.Restatement (Third) of
Restitution and Unjust Enrichment10, Comment (f),(American Law
Institute, Tentative Draft No.1, April 6, 2001).Perhaps, this can
be seen asan extension of tenant's fixtures.On tenant's fixtures
see generally Gray and Gray,Elementsof Land Law,(2009),
pp.39-40.96. See, e.g.Jensen v Probert174 Or. 143, 148 P.2d
248;Pull v Barnes142 Colo 272, 350 P2d 828.97. Jensen174 Or. 143,
148 P.2d 248.98. A similar debate exists in the jurisprudence on a
co-owner's right of reimbursementfrom the other co-owner.See Gray
and Gray,Elements of Land Law,(2009), pp.933-936; P.Butt,Land
Law,(Lawbook Co, 2010), pp.235-238.99. Cobbe[2008] UKHL 55; [2008]
1 W.L.R. 1752 at 1773.See also Stevens, Threeenrichment issues in
Burrows and Rodger (eds),Mapping the Law Essays in Memory ofPeter
Birks,(Oxford: Oxford University Press, 2006), pp.49, 50-55.100.
This can be seen as a form of change of position.For a
comprehensive study of thisdefence see E. Bant,The Change of
Position Defence,(Oxford: Hart Publishing, 2009).101. Brickwood v
Young(1905) 2 C.L.R. 387.102. Dagan,The Law and Ethics of
Restitution,(2004), p.45.103. Bant,The Change of Position
Defence,(2009), pp.130-143.104. J.P. Dawson,Unjust Enrichment: A
Comparative Analysis,(Little, Brown & Company,1951), p.160.END
OF DOCUMENT
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