Unjustified Enrichment

February 21st, 2020 by James Goudie KC

In Vodaphone v OFCOM (2020) EWCA Civ 183,  the Court of Appeal has held that assessment of a claim for restitution, under the principle in Woolwich Equitable BS v IRC (1993) AC 70, that a public authority could not retain a fee collected without lawful authority, did not involve consideration of any counterfactual situation.

Ofcom had been enriched by the payment of the fees insofar as they had exceeded the amounts payable under the existing Regulations. It had received a benefit from the Respondents, and they had suffered a loss through providing that benefit.  The factor that made the enrichment unjust was that money paid by a citizen to a public authority in the form of levies paid pursuant to an ultra vires demand by the authority was prima facie recoverable by the citizen as of right. It was a fundamental principle of law that monies should not be levied without the authority of Parliament, and full effect could only be given to that principle if the return of taxes exacted under an unlawful demand could be enforced as a matter of right. The cases relied on by Ofcom did not show that the courts had ever hypothesised any counterfactual steps in a Woolwich case, or ever said expressly or impliedly that the Court could reduce a Woolwich claim by hypothesising new and unenacted legislation.   Such an exercise would be uncharted speculation and would undermine the Woolwich principle itself. However, in evaluating the quantum of enrichment, it was open to the Court to identify the sum that was in excess of what could lawfully have been charged under the existing legislation.


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