McDonald v Coys of Kensington [2004] 1 WLR 2775

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  • A car with personalised number plates (TAC 1) is sold at auction.
  • It is clear in the auction that the car does not come with the plates, as the plates were worth $15,000, and the car itself was sold for just over $20,000.
  • However the seller forgot to register the car under another name, and as such they are actually entitled to the plates
  • The person who bought the car gave it to his partner, with the plates, and refused to give them back.
  • Was this unjust enrichment?
  • Mance LJ: The questions were (1) Has the defendant been enriched? (2) Was the enrichment at the expense of the claimant? (3) Was the enrichment unjust? (4) Are there any defences available? [22]
  • The Court held in the seller’s favour and made the purchaser pay the $15,000.
  • The licence was clearly accepted as it could have been returned.
  • It was not so bad that he got the plates, it was that he kept them when he knew that it was an error and he was not entitled to keep them.
  • Thus he had been unjustly enriched and was required to pay compensation.
  • “Looking at the matter generally, I have no doubt that justice requires that a person, who (as a result of some mistake which it becomes evident has been made in the execution of an agreed bargain) has a benefit or the right to a benefit for which he knows that he has not bargained or paid, should reimburse the value of that benefit to the other party if it is readily returnable without substantial difficulty or detriment and he chooses to retain it (or give it away to a third party) rather than to re-transfer it on request. Even if realisable benefit alone is not generally sufficient, the law should recognise, as a distinct category of enrichment, cases where a benefit is readily returnable. A person who receives another’s chattel must either return it or pay damages, commonly measured by reference to its value.” [37]
Full text of judgment

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