OPINION OF THE LORD PRESIDENT

in

APPEAL

From the Sheriffdom of Tayside Central
and Fife at Perth

in the cause

MRS. ISOBEL HELEN McLEOD or
SHILLIDAY
Pursuer and Respondent;

against

WILLIAM SMITH
Defender and Appellant:




2 April 1998

In September 1988 Mrs. Isobel Shilliday, the pursuer, began to associate with Mr. William Smith, the defender, and about July of the following year they started to live together in the pursuer's cottage. About two months after that, the defender bought a house known as "Lauriston" and the parties discussed getting married. In about August 1990 they became engaged, after which they continued to live together as man and wife in the pursuer's cottage. The pursuer was, however, aware that her son was due to move into the cottage in the course of 1991.

When the defender bought Lauriston it was in a state of disrepair. From about the beginning of 1990 various works were carried out: in particular, doors, wood fittings and skirting boards were replaced; central heating was installed; the bathroom was fitted out and the window replaced; a conservatory was added and a garden wall was put up. In September 1991 the parties moved to Lauriston where they continued to live together. The work on the house went on and was almost complete by Christmas 1992, but unfortunately by that time the defender had become aggressive towards the pursuer and one evening she came home from work to find that he had locked her out of the house. As a result she was homeless for six months.

The dispute between the parties concerns payments by the pursuer in connexion with the works on Lauriston. Using funds from a legacy, she made what amounted to a substantial contribution to the repair work. In some cases she made payments to suppliers of materials while in others she paid those who worked on the house. All told, for materials and work she paid £7,018.38 to various people, including her son. The pursuer also paid sums totalling £1,880 to the defender who then used them to pay for materials and work. In addition she bought a number of items, worth in total £756.33, which she put into the house and garden and which she had to leave behind when she was put out of the house.

The pursuer sued the defender for recovery of her total expenditure of £9,654.71 and after a proof the Sheriff pronounced decree for that sum. The Sheriff Principal having dismissed his appeal, the defender appealed to this court. Before us his counsel did not dispute the quantification of any of the elements in the pursuer's claim, but argued, rather, that he should not have been held liable at all.

Some indication of the nature of the pursuer's case is to be found in her first plea-in-law:

"The pursuer having paid the monies condescended upon to or for the benefit of the defender and having installed the various items condescended upon at the defender's said dwellinghouse at 'Lauriston' all on condition that the defender and she would get married and the said condition having failed to materialise the defender should make payment as craved."

Although, quite properly, this is not spelled out in her plea-in-law, at the most general level the pursuer's case depends on the defender's alleged unjust enrichment at her expense. Discussions of unjust enrichment are bedevilled by language which is often almost impenetrable. Anyone who tries to glimpse the underlying realities must start from the work of Professor Peter Birks, the Regius Professor of Civil Law at Oxford - in particular his book An Introduction to the Law of Restitution (paperback edition, 1989) and his two ground-breaking articles on Scots Law, "Restitution: a View of the Scots Law" (1985) 38 Current Legal Problems 57 and "Six Questions in Search of a Subject - Unjust Enrichment in a Crisis of Identity" 1985 Juridical Review 227. Professor Birks (Introduction, pp. 9-27) and many others have pondered what is meant by unjust enrichment. While recognising that it may well not cover all cases, for present purposes I am content to adopt the brief explanation which Lord Cullen gave in Dollar Land (Cumbernauld) Ltd. v. CIN Properties Ltd. 1996 S.C. 331 at pages 348 - 349: a person may be said to be unjustly enriched at another's expense when he has obtained a benefit from the other's actings or expenditure, without there being a legal ground which would justify him in retaining that benefit. The significance of one person being unjustly enriched at the expense of another is that it constitutes an event which triggers a right in that other person to have the enrichment reversed.

As the law has developed, it has identified various situations where persons are to be regarded as having been unjustly enriched at another's expense and where the other person may accordingly seek to have the enrichment reversed. The authorities show that some of these situations fall into recognisable groups or categories. Since these situations correspond, if only somewhat loosely, to situations where remedies were granted in Roman Law, in referring to the relevant categories our law tends to use the terminology which is found in the Digest and Code. The terms include condictio indebiti, condictio causa data causa non secuta and - to a lesser extent - condictio sine causa. It is unnecessary in this case to examine all the groups and it is sufficient to note that the term condictio causa data causa non secuta covers situations where A is enriched because B has paid him money or transferred property to him in the expectation of receiving a consideration from A, but A does not provide that consideration. The relevant situations in this group also include cases where B paid the money or transferred the property to A on a particular basis which fails to materialise - for example, in contemplation of a marriage which does not take place. The pursuer in this action contends that the defender should be regarded as having been unjustly enriched in a manner which falls within this general category and that his enrichment should therefore be reversed.

Once he has satisfied himself that he has a relevant case, anyone contemplating bringing an action must then determine how the court is to reverse the defender's enrichment if it decides in the pursuer's favour. This will depend on the particular circumstances. The person framing the pleadings must consider how the defender's enrichment has come about and then search among the usual range of remedies to find a remedy or combination of remedies which will achieve his purpose of having that enrichment reversed.

Elementary examples make this clear. For instance, if A has been unjustly enriched because he has received a sum of money from B, the enrichment can be reversed by ordering A to repay the money to B. B's remedy will be repetition of the sum of money from A. On the other hand, if the unjust enrichment arises out of the transfer of moveable property, the enrichment can be reversed by ordering A to transfer the property back to B. An action of restitution of the property will be appropriate. If A has been unjustly enriched by the transfer from B to him of title in heritable property, then reduction of A's title will be required. The remedy will be an action of reduction. If A is unjustly enriched by having had the benefit of B's services, the enrichment can be reversed by ordering A to pay B a sum representing the value of the benefit which A has enjoyed. An action of recompense will be appropriate. So repetition, restitution, reduction and recompense are simply examples of remedies which the courts grant to reverse an unjust enrichment, depending on the way in which the particular enrichment has arisen. See Morgan Guaranty Trust Company of New York v. Lothian Regional Council 1995 S.C. 151 per Lord President Hope at page 155 B - D. Often, of course, the situation will be complex and the pursuer will require a correspondingly sophisticated set of remedies to reverse the enrichment.

It follows that, despite what was said by both counsel in argument, in Scots law the term condictio causa data causa non secuta is used, not to describe a remedy, but to describe one particular group of situations in which the law may provide a remedy because one party is enriched at the expense of the other. A pursuer whose case falls into that group has a ground of action under our law. That being so, although both parties were agreed that the pursuer's ground of action in the present case fell under the heading of the condictio causa data, it is necessary to identify the remedy which the pursuer seeks. While her crave is simply for payment of the sum of £9,654.71, it really breaks down into two distinct elements.

The larger part of the pursuer's claim is based on the fact that in contemplation of the parties' marriage she paid for repairs and for materials used in repairs to the defender's house and that she installed various items in the house and garden. The defender has benefited from these materials, repairs and items. The pursuer says that the value of the benefit which she conferred on the defender is the cost of the various materials, repairs and items. That would not necessarily be so in all cases, but no point arises here since, as I have noted, the defender does not dispute that the cost to the pursuer is the true measure of the value of the benefit to him. The pursuer asks the court to order the defender to pay her the cost of the various materials, repairs and items for which she paid and which he enjoys. In this aspect of her case the pursuer is therefore seeking payment of a sum of money which will reverse the defender's enrichment by transferring from him to her a sum which represents the value of the benefit enjoyed by him as a result of the outlay which she incurred.

The remainder of the pursuer's claim is different. It is based on the fact that in contemplation of the parties' marriage she paid £1880 to the defender which he used to pay for materials and for work on his house. The pursuer is asking the court to reverse the defender's enrichment by ordering him to repay that sum to her. This part of her claim is therefore one for repetition of the money which she paid to the defender.

Although the two aspects of the pursuer's claim can be distinguished in this way, none the less for each of them she relies on the same ground of action which falls under the rubric of the condictio causa data. On the one hand the pursuer says that she paid money to the defender in contemplation of marriage; on the other she says that she expended money on his house in various ways in contemplation of marriage. Although the usual situations discussed in connexion with the condictio causa data are where money is paid or property transferred on a particular basis, in my view there is no relevant difference between the two aspects of the pursuer's claim. If she is entitled to recover money paid to the defender in contemplation of a marriage which never took place, in principle she must be equally entitled to recompense for the materials and work which she paid for on the same basis.

In summary therefore the pursuer seeks two remedies: recompense for the benefit, valued at £7,774.71,which the defender enjoys as a result of the pursuer's expenditure on various materials, repairs and items; and repetition of the sum of £1880 which she paid to him. The underlying basis upon which the pursuer asks for the two remedies is, however, the same: she paid for the various materials, repairs and items, and she paid him the money, "on condition" - as it is put in the plea-in-law - that the parties would marry; that did not happen; and therefore it is unjust that he should enjoy the benefits for which she paid or keep the money which she paid to him. Although these distinct aspects of the pursuer's claim are not spelled out in her pleadings, counsel for the pursuer adopted that analysis and counsel for the defender made no submissions to the contrary.

I turn to the arguments advanced by the defender at the hearing of the appeal. The crucial finding in fact upon which the Sheriff based his decision was that

"the pursuer, who had benefited from a legacy, made a substantial contribution towards the repair work carried out on the property in contemplation of her prospective marriage to the defender and her relationship with him."

This led him to find in law that:

"The pursuer has paid the monies and installed the items narrated ... on the condition that she and the defender would get married; the condition having failed to materialise she is entitled to payment from the defender."

This finding reflects the terms of the pursuer's first plea-in-law. Mr. Mackie argued that since, on the findings in fact, the pursuer had made her contribution ''in contemplation of her prospective marriage" rather than "on the condition that she and the defender would get married", she had not established the basis upon which she would be entitled to seek repetition or recompense under the heading of the condictio causa data. He said that, before the Sheriff could grant decree, he would have required to find specifically that the pursuer's contribution was conditional on the parties getting married.

In my view Mr. Mackie stated the position too narrowly. For the pursuer Mr. Howie was quick to acknowledge that the phrase "on the condition that" in the pursuer's first plea-in-law was not particularly apt. It might tend to suggest that her claim was based on some kind of contract between the parties. He submitted that the phrase "in contemplation of" used by the Sheriff had been more apt and he referred to Stair, Institutions 1.7.7:

"The duty of restitution extendeth to those things, quae cadunt in non causam, which coming warrantably to our hands and without any paction of restitution, yet if the cause cease by which they become ours, there superveneth the obligation of restitution of them. Whence are the condictions in law, sine causa and causa data causa non secuta, which have this natural ground; and of which there are innumerable instances. As all things that become in the possession of either party in contemplation of marriage, the marriage (which is the cause) failing to be accomplished, the interest of either party ceaseth, and either must restore."

The passage concerns two situations. The first (described by Stair as "sine causa") is where property comes into someone's hands on a particular basis which then ceases to exist. The second (described as "causa data causa non secuta") is where property comes into the person's hands on the basis of some future event which fails to materialise. In either case the property must be restored. The important thing to notice is that in both cases the duty to restore is said to be based not on agreement (paction), but on a natural ground, i.e. it is a duty imposed by law. This is a useful reminder that, even if in Cantiere San Rocco v. Clyde Shipbuilding and Engineering Co. 1923 S.C. (H.L.) 105 the House of Lords included certain situations relating to the non-performance of a contract under the heading of the condictio causa data, the basis of liability to reverse unjust enrichment is not contractual but rests on this separate duty imposed by law.

Mr. Howie was therefore correct to argue that there was no need for the pursuer to point to any kind of contract between the parties under which the pursuer paid the various sums on condition that they married. Nor need the pursuer prove that her expenditure was conditional in any technical sense. The passage from Stair shows that it would be a relevant ground for saying that the defender was unjustly enriched if the pursuer had expended the sums "in contemplation of" the parties' marriage and the marriage had failed to materialise. That is indeed what the Sheriff has held. The defender knew that the pursuer was expending money on his house which the parties had agreed would be their matrimonial home and the Sheriff has found that all that she did was done in contemplation of the parties' marriage. In these circumstances I reject Mr. Mackie's first argument as being inconsistent with Stair's statement of the law.

Mr. Mackie submitted that in any event the pursuer's case must fail because her actings were done for her own benefit or for her own purposes (in suo). The pursuer was aware that her son would be moving into her cottage. She would be moving into the defender's house. She did move in and lived there from about September 1991 until the end of 1992. It was anticipated that the house would be the parties' matrimonial home. The defender agreed to transfer the title of the house into joint names when the pursuer had enough money to pay the conveyancing fees. He changed his will so that the pursuer, rather than his children, would inherit the house. In that situation the pursuer had really spent money on improving the defender's house in her own interest and, that being so, she was not entitled to recover her expenditure from the defender. Counsel referred to Fernie v. Robertson (1871) 9 M. 437; Buchanan v. Stewart (1874) 2 R. 78; Rankin v. Wither (1886) 13 R. 903 and Newton v. Newton 1925 S.C. 715.

For present purposes the essential point which these cases vouch is that, if a person spends money or otherwise acts in his own interest (in suo), but his expenditure or actings incidentally benefit someone else, the first person cannot seek any payment from the other on the basis that his expenditure or actings have resulted in a benefit to that other person. The cases denying recovery involve situations where the only alleged basis for the pursuer's claim for recompense is that he has expended money or done work from which the defender has derived an incidental benefit. The law rejects the claim: a defender is not regarded as being unjustly enriched just because he enjoys an incidental benefit from expenditure or work which a pursuer has made or carried out for his own purposes.

The pursuer's case is wholly different. She does not argue that the defender should pay her the sum in the crave simply because she paid money to him and spent money on his house from which he has derived benefit. The pursuer points, rather, to a particular factor which makes the defender's enrichment unjust. Where such a relevant factor exists, that factor, rather than the mere fact of expenditure by the pursuer and benefit to the defender, constitutes the ground of action. So, in Newton, the pursuer was allowed to recover from his former wife money which he had spent on a house which actually belonged to her, but which he had mistakenly thought belonged to him. The critical factor in the pursuer's ground of action was his mistake about the title: he recovered because his wife was benefiting from sums which he would not have spent if he had been aware of the true position. In the present case also the pursuer does not simply rely on the fact that she paid money to the defender and spent money on the defender's property from which he has benefited. On the contrary, the critical factor in her ground of action is that she acted as she did in contemplation of the parties' marriage, which did not take place. That is why she asks to be repaid the money which she gave him and to be recompensed for the expenditure. The facts bear out her claim. In evidence which the Sheriff accepted as truthful and reliable, the pursuer said that she would not have done what she did if the parties had not been engaged, with the intention of being married. The Sheriff's findings leave no room for doubt that this was indeed the basis upon which the pursuer paid money to the defender and expended money on his house. That being so, the cases relied on by Mr. Mackie afford no basis for rejecting the pursuer's claim.