Unjust Enrichment Legal Definition:

Benefiting from the action or property of another without legal justification.

Related Terms: Quantum Meruit , Constructive Trust , Nemo Debet Locupletari Ex Aliena Jactura

A unique species of constructive trust and although presently in vogue in family law to allow the court to split assets between unmarried spouses, unjust enrichment has been raised successfully in many commercial cases.

Maddaugh & McCamus suggest that the concept has civil law roots, premised on the Latin principle nemo debet locupletari ex aliena jactura.

In Smith v Versanyi, Justice Andrekson of the Court of Queen's bench adopted these words:

"The doctrine of unjust enrichment is an equitable concept created to remedy injustices that occur where one person makes a substantial contribution to the property of another person without compensation.

"... unjust enrichment arises when three elements are satisfied: an enrichment; a corresponding deprivation; and an absence of juristic reason for the enrichment. When a claimant is under no obligation contractual, statutory or otherwise to provide the work and services to the recipient, there will be an absence of juristic reasons for the enrichment.

"... personal as well as proprietary remedies are available to remedy unjust enrichment.

"Two remedies are possible: an award of money on the basis of the value of the services rendered, i.e. quantum meruit, and the one the trial judge awarded, title to the house based on a constructive trust."

Thus, there are said to be three conditions which must be met before you can get a court to force reimbursement or compensation based on unjust enrichment: (1) an actual enrichment or benefit to the defendant, (2) a corresponding deprivation to the plaintiff, and (3) the absence of a legal reason for the defendant’s enrichment. Seward v Seward:

"Unjust enrichment results where facts display an enrichment, and a corresponding deprivation in the absence of any juristic reason for the enrichment.

"The Court should consider two matters in determining whether there is an absence of juristic reason for the enrichment. First, the Court should consider whether there are any contractual or statutory obligations existing between the parties that would justify the enrichment. If the parties contracted to undertake certain activities, the fact that one of them greatly benefits from the contractual arrangement will not lead to a successful suit in unjust enrichment.

"The second matter into which the Court should inquire is whether the enrichment and the deprivation are unjust in the circumstances. In this regard, the ... requirement is met where a party prejudices himself or herself with reasonable expectation of receiving something in return, and the recipient party freely accepts the benefits conferred by the conferring party in circumstances where the recipient party knows, or ought to have known, of that reasonable expectation."

For example (and only theoretically as many countries have laws which have modified equity law in some situations), if you found somebody else’s cash and spent it, you might be sued for reimbursement under unjust enrichment.

The legal theory behind unjust enrichment is the constructive trust, which the court imposes upon the circumstances to hold the person unjustly enriched as the trustee for the person who should properly get the property back, held to be the beneficiary of the constructive trust.

Not just any collateral enrichment will suffice to ground an action based on unjust enrichment. In 2008 (Lovsin v Hodgins Estate), the Ontario Court of Appeal rejected an alleged constructive trust via unjust enrichment  adopting these words, although it must be noted that unjust enrichment is not a creation of the common law; it is an offspring of equity:

"The common law has never been willing to compensate a plaintiff on the sole basis that his actions have benefited another.

"To show that the enrichment was unjust, the provider of the benefits (here Ms. Lovsin) must reasonably expect to be compensated, and the recipients of the benefits (here Jack and Meryl Hodgins) must know or ought to have known of that reasonable expectation.

"(W)here one person in a relationship tantamount to spousal prejudices herself in a reasonable expectation of receiving an interest in property and the other person in the relationship freely accepts benefits conferred by the first person in circumstances where he knows or ought to have known of that reasonable expectation, it would be unjust to allow the recipient of the benefit to retain it."

REFERENCES

Categories & Topics:

Unless otherwise noted, this page was written by of Duhaime.org

Always looking up definitions? Save time with our search provider (modern browsers only)

If you find an error or omission in Duhaime's Law Dictionary, or if you have suggestion for a legal term, we'd love to hear from you!