Defences for Unjust EnrichmentRitika Nanda2022-05-10T21:15:22+00:00
What Is Unjust Enrichment?
Unjust enrichment is an equitable cause of action. It happens when one person receives a benefit, and the retention of the benefit is inequitable. The law will impose a duty on the person unjustly enriched to pay compensation to the other. This is done in an effort to offset the enrichment. This only applies so long as there was no expectation of compensation, or the compensation does not unreasonably exceed the anticipated compensation. The remedy to unjust enrichment is restitution (restoration).
3 Elements For A Successful Unjust Enrichment Claim:
The defendant was enriched;
The plaintiff suffered a corresponding deprivation; and
The defendant’s enrichment and the plaintiff’s corresponding deprivation took place in the absence of a juristic reason.
How Does A Party Experience Enrichment?
Canadian courts have indicated that the receipt of a benefit, or the relief from loss can constitute as enrichment. Usually, one party receiving services from another without compensation is a benefit. If the service is done at no cost, it is not a cause for concern. However, if the receiving party refuses to pay for the services, the lack of payment can also constitute relief from loss.
What Is Considered To Be A Corresponding Deprivation?
The person claiming unjust enrichment must have suffered some for of loss that can be quantified. Oftentimes, failure of the party to receive appropriate or equitable payment for their services can equate to a deprivation.
When Is There An Absence Of Juristic Reason?
Juristic reason means that there should be some legal reason that the claim cannot succeed. One example of such a reason is that the contract may be invalid. If a contract is not as detailed, vague, or ambiguous, the court may decide that the contract is void. Thus allowing for a claim of unjust enrichment. If there is a valid contract, but you feel that you have not been appropriately compensated for the services, you can still make a claim for unjust enrichment.
Defences To Unjust Enrichment Actions
Reasons To Deny The Recovery Of The Benefit
There are two reasons to deny the recovery of the unjust enrichment.
An example of when public policy denies recovery of the benefit is when a criminal cannot keep the proceeds of their crime.
This is more subjective. The decision to deny recovery based on reasonable expectation is made on a case-by-case basis. The courts will consider the nature of the benefit received, the circumstances under which it was given, and the potential existence of a contract. However, due to the subjective nature of this category, the court is often adding new categories for reasonable expectations.
Categories For Unjust Enrichment Established In Case Law
In the process of addressing absence of juristic reason, the courts have created categories under which you can make a defence for unjust enrichment. While these categories are constantly changing with new cases, the current established categories are:
The intention of giving it as a gift;
The existence of a contract;
Disposition of law;
Unclean Hands – those seeking a remedy must do so with clean hands and good intentions;
And many more.
Change Of Position
This defense is available when it would be inequitable to force the defendant to make a restitution. Through this defence, the defendant can try to reduce the extent of their liability as their reliance on the benefits, changed the circumstances of the defendant in good faith. An example of this is if the bank accidentally provides you with a investment return of $40,000 instead of the $20,000 you should have been given. Being unaware of the error, you spend the extra money to pay off your mortgage as you are currently close to being destitute. The courts may decide that due to the error being on part of the bank and your good faith belief that the money was yours, you may not have to pay the rest of the fees.
The aim of estoppel is to stop an individual from benefitting from the actions of another. An example of this would be if a person is promised the home in exchange for doing work on the property. If the house is later not provided to the person, then estoppel will step in and prevent the person who promised the home from benefitting from the work the other person put into maintaining the home.
Laches And Acquiescence
This defense is available when the plaintiff has been unreasonably late in bringing the action and delay has been to such an extent that it prejudices the defendant. As such, the plaintiff must acquiesce to the unjust enrichment as it would be unfair to defendant to have to provide restitution after such a length of time.
Impossibility Of Counter-Restitution
With unjust enrichment, the plaintiff making the claim does so over the deprivation they have suffered. However, if both parties have received some form of benefit in an exchange, and the plaintiff is unable to return the benefit they received, then their claim will be denied. This is because there must be a deprivation corresponding to the other’s benefit. Not an exchange of benefits.
Let Kahane Law Help!
If you feel you have been wrongfully deprived or are being accused of wrongful deprivation of another, please contact Kahane Law Office. Our legal team is here to help you navigate the claim of unjust enrichment and provide you with the knowledge you need to address the claim! To schedule a meeting with one of our lawyers, please contact our experienced team at Kahane Law Office. CONNECT NOW. Call us now at 403-225-8810 or toll-free at 1-877-225-8817, or email us directly here.