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Surely the answer to Rafal's point must be Yes. For the purpose of tort and breach of contract the incurring of a liability is a sufficient loss to enable you to claim damages: the fact that you haven't paid it (or even that some fairy godmother comes in and subs up for you) is irrelevant. There's no reason to think the rule in restitution should be different.

You might think that this went against cases like Stirling [1911] 2 Ch 418 (holding that a surety can't sue the principal debtor till he's actually paid the debt): but it doesn't really. If someone owes X a sum of money, he's simply not benefited at all unless and until X is actually paid off.

Equally I can't see why in the Pavey & Matthews counterfactual the release of the debt by your sub-contractor should make any difference. Your charm, merit and/or sweet-talking ability that caused the sub to release you should enure to your benefit, not some grasping householder's.

Andrew Tettenborn

Date: Sun, 22 Nov 1998 22:32:44 +1100
To: restitution@maillist.ox.ac.uk
Subject: RDG: "at the expense of"
Precedence: bulk

Hi all,

I have a question for the group.

Generally, before a claim in restitution may be brought the defendant must be unjustly enriched "at the expense of" the plaintiff. This is usually taken to require that the defendant's enrichment must have caused a diminution in the plaintiff's wealth. The purpose of this requirement is to identify the proper plaintiff.

I am wondering whether the incurring of a liability by the plaintiff will suffice or whether the plaintiff's wealth must "actually" be reduced before an action may be brought.

To put the question in context, consider a variation of the situation considered in the Australian High Court case of Pavey & Mathews v Paul (1987) 162 CLR 221. Say a builder constructs a house under an ineffective contract and then sues the owner of the land for reasonable remuneration (ie. on a quantum meruit basis). If the builder did not perform the work personally but contracted with subcontractors who performed the work, would the builder have a claim against the owner for the value of all the work done BEFORE he expended any of his own funds by paying for the work?

Does anyone know of any decisions in which this issue has been considered?

The second question is whether there would still be a valid claim if the subcontractors released the builder from liability. Since the "passing on defence" has been rejected, I would assume that the builder's position vis-a-vis third parties would be irrelevant to his claim for the reasonable value of the benefit conferred on the owner.

Regards

Rafal