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Unjust enrichment
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Writing - s2 of 1989 Act

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Unjust enrichment


Unjust enrichment � estoppel by acquiesence

V sold land in Jamaica to P1, which P1 intended to develop as a coffee plantation. A dispute arose between V and P1 and V purported to terminate the contract. P1 obtained an injunction preventing V from selling to anyone else but before the order was made V agreed to sell the land to P2. P2 entered into possession and spent large sums of money on developing the land into a coffee plantation. P1 eventually obtained possession of the land from P2 � which he took with the benefit of the development that P2 had carried out. P2 therefore suffered a substantial loss and P1 obtained a valuable benefit. The money he would have spent on developing the estate into a coffee plantation was spent P2. P2 therefore sought to recover these sums. V was insolvent and there was no practical possibility of obtaining damages from her. P2 therefore claimed money from P1 under the principles of unjust enrichment.

The Privy Council considered the earlier authorities on this topic, in particular Ramsden v Dyson (1866), Willmott v Barber (1880) and Tayor Fashions Ltd v Liverpool Victoria Trustees Co Ltd(1982). In Willmott Fry J �famously stated the five so-called probanda that a claimant should endeavour to establish�. They were as follows:
    "A man is not to be deprived of his legal rights unless he has acted in such a way that would make it fraudulent for him to set up those rights. What then are the elements or requisites necessary to constitute fraud of that description? In the first place the plaintiff must have made a mistake as to his legal rights. Secondly the plaintiff must have expended some money or must have done some act (not necessarily on the defendant's land) on the faith of his mistaken belief. Thirdly, the defendant, the possessor of the legal right, must know of the existence of his own right which is inconsistent with the right claimed by the plaintiff. It he does not know of it he is in the same position as the plaintiff, and the doctrine of acquiescence is founded upon conduct with a knowledge of your legal rights. Fourthly, the defendant, the possessor of the legal right, must know of the plaintiff's mistaken belief of his rights. If he does not, there is nothing which calls upon him to assert his own rights. Lastly, the defendant, the possessor of the legal right, must have encouraged the plaintiff in his expenditure of money or in the other acts which he has done, either directly or by abstaining from asserting his legal right. Where all these elements exist, there is fraud of such a nature as will entitle the court to restrain the possessor of the legal right from exercising it, but, in my judgment, nothing short of this will do."
Their Lordships in the present case were of the view that �Fry J�s five probanda remain a highly convenient and authoritative yardstick for identifying the presence, or absence, of unconscionable behavour on the part of a defendant to require an equitable remedy, but they are not necessarily determinative.� (Lord Scott, para 23). The principle is wider and is based on �unconscionable behaviour� as stated by Oliver J in Tayor Fashions. In that case Oliver J said this:
    "�the more recent cases indicate, in my judgment, that the application of the Ramsden v Dyson � principle � whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial � requires a much broader approach which is directed at ascertaining whether, in particular circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour." (See para 24 of Lord Scott�s judgment).
In the present case P2 had tried to contact P1 when he first discovered what was happening but had been unable to do so. He had gone to the coffee plantation and left a note with the person in charge asking him to hand it to P. However, he had not heard back. He had gone back to the site on further occasions subsequently and seen the site develop but this not sufficient to make him liable.

Comment: This case is important as it gives authoritative approval to the wider statement of principle made by Oliver J in the Taylor Fashions case.

Blue Haven Enterprises Ltd v Tully [2006] UKPC 17

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