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For what its worth, I think that the result reached by Rimer J is wrong even though I agree with Dr Lionel Smith that the crucial point is determining what the payment was for. Was the payment to purchase an easement notwithstanding my dispute that it is yours to sell? Or was the payment to purchase certainty because of the dispute? The latter scenario can either be considered a case where there is no unjust factor in the enrichment (it is impossible to allege failure of basis) or if one can be found (mistake etc.), a case where the settlement defence applies.

In the absence of evidence pointing either way, I am not sure that the fact that certainty was achieved by the payment should necessarily lead the court to analyse the facts as falling within the latter scenario. It is well within the payee's power to clarify that he is willing to accept payment only on the basis that it will be irrecoverable. If nothing is said about that, I think that it is unlikely that a payor intended the payment should be irrecoverable if the dispute is resolved in his favour. This is especially so if the dispute continues to be litigated because continued litigation would be pointless should the payment be irrecoverable and it would be pointless to litigate a dispute should the payor and payee be buying and selling certainty.

Kelvin Low
Faculty of Law
National University of Singapore

-----Original Message-----
From: Enrichment - Restitution & Unjust Enrichment Legal Issues on behalf of Lionel Smith
Sent: Tue 20/07/2004 21:52
Cc:
Subject: Re: [RDG:] failure of consideration - or not?

I tend to agree with Simon. Andrew said:

But on failure of consideration / purpose? If I pay you for something (i.e. access) that isn't yours to give, surely there's a failure of purpose: the fact that I'm buying certainty is irrelevant, and there's no indication that I intend to compromise my rights.

I think it is possible that there is no FOB even where something is paid for that cannot be given. Eg at a sheriff's sale, the sheriff makes no warranty of title and everyone knows it. If I buy goods and it turns out someone else owns them, there is no FOB. In Andrew's case and in the sheriff's sale, the seller always has something to give in the sense of binding himself to a contract, whether or not he has the proprietary right which the parties may think and hope he has.

I think the heart of it must be the last part of what Andrew says. I make the payment saying "this payment is conditional on its being the case that I have to buy this right of access from you." You either say "OK" or "forget it, I will only sell unconditionally like a sheriff." If you say "OK" there will be FOB if the HL overrules the CA. If you say "forget it", then I have to decide whether I want to take this risk myself, and of course you are also taking a risk, that I do not want to buy on those terms.

Of course it will often be unclear which of the two deals the parties have made, but that is just a question of fact I think, even if a difficult one. There is a line of this in Woolwich where the facts pointed to "forget it." In Andrew's case there was no agreement between the parties which seems clearly a case of "forget it" and suggests Rimer J got it right.

I think it is a separate question whether the time limit in the compulsory purchase legislation should be such as to allow for suspension of the running of time where there is litigation (or whether some general jurisdiction could allow the court to suspend it). That looks like the best solution to me.