Banque Financiere De La Cite v Parc (Battersea) Ltd and Others: HL 16 Apr 1998

The making of an order for restitution after finding an unjust enrichment by subrogation, is not dependant upon having found any common or unilateral intention of the parties. The House distinguished between contractual subrogation of the kind most commonly encountered in connection with contracts of insurance and subrogation in equity. The former is founded on the common intention of the parties whereas the latter is an equitable remedy designed to reverse or prevent unjust enrichment. It does not depend on agreement between the party enriched and the party deprived but upon principles of restitution. The principles governing the availability of the equitable remedy are that this is a restitutionary remedy and that the appropriate questions are therefore, first, whether the defendant would be enriched at the plaintiff’s expense; secondly, whether such enrichment would be unjust; and thirdly, whether there are nevertheless reasons of policy for denying a remedy.
A court must first ask itself four questions when faced with a claim for unjust enrichment as follows. (1) Has the defendant been enriched? (2) Was the enrichment at the claimant’s expense? (3) Was the enrichment unjust? (4) Are there any defences available to the defendant?
Lord Hoffmann summarised the position: ‘Lord Diplock, for example, was of the view that the doctrine of subrogation in contracts of insurance operated entirely by virtue of an implied term of the contract of insurance (Hobbs v Marlowe [1978] AC 16, 39) and although in Lord Napier and Ettrick v Hunter [1993] AC 713 your Lordships rejected the exclusivity of this claim for the common law and assigned a larger role to equitable principles, there was no dispute that the doctrine of subrogation in insurance rests upon the common intention of the parties and gives effect to the principle of indemnity embodied in the contract. . . Subrogation in this sense is a contractual arrangement for the transfer of rights against third parties and is founded upon the common intention of the parties.’
The principle of unjust enrichment: ‘requires at least that the plaintiff should have sustained a loss through the provision of something for the benefit of some other person with no intention of making a gift, that the defendant should have received some form of enrichment, and that the enrichment has come about because of the loss.’ (Lord Clyde)
Lord Hoffmann, Lord Hutton, Lord Clyde
Times 02-Mar-1998, Gazette 16-Apr-1998, [1998] 1 All ER 737, [1998] 2 WLR 475, [1998] UKHL 7, [1999] 1 AC 221
House of Lords, Bailii
England and Wales
Appeal fromBanque Financiere De La Cite v Parc (Battersea) Limited Omnicorp Overseas Limited CA 29-Nov-1996
. .
ApprovedPaul v Speirway Ltd (in liquidation) 1976
The plaintiff had made a loan to a company in which he had a joint interest in order to enable it to pay the price due under a contract for the purchase of development land. The company failed, and he now claimed to be a secured creditor by . .

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Lists of cited by and citing cases may be incomplete.
Updated: 10 August 2021; Ref: scu.78177