![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |
England and Wales High Court (King's Bench Division) Decisions |
||
You are here: BAILII >> Databases >> England and Wales High Court (King's Bench Division) Decisions >> Jones v Griffiths & Anor [2025] EWHC 797 (KB) (09 April 2025) URL: https://www.bailii.org/ew/cases/EWHC/KB/2025/797.html Cite as: [2025] EWHC 797 (KB) |
[New search] [Printable PDF version] [Help]
KING'S BENCH DIVISION
HIGH COURT APPEAL CENTRE, CARDIFF
ON APPEAL FROAM CAERNARFON COUNTY COURT
HHJ JARMAN KC
B e f o r e :
____________________
DAVID JOHN JONES |
Appellant |
|
#- and – |
|
|
(1) HAULWEN GRIFFITHS (2) NEIL STANLEY JAMESON |
Respondents |
____________________
Mr Emyr Jones (instructed by Gamlin Law Ltd)) for the second respondent
The first respondent did not appear and was not represented
Hearing date: 4 March 2025
____________________
Crown Copyright ©
The judgment was handed down remotely at 10.30am on 9 April 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
THE JUDGMENT
"23. ... Ms Griffiths accepted that she picked up her grandson from the property occasionally and spent four days recouping there after surgery during this time. However, she also spent time away, visiting her son in Australia two or three times and on cruises and she says she didn't see the works being carried out. Mr Jameson accepted that he saw re-rendering taking place and heard building noise, but says that [he] was working away during much of this period and was not able to see everything that was going on there from his property. In 2016 Mr Jones obtained planning permission for alterations at the property, including building an extension on top of the kitchen extension built by his brother, but not all of these permitted works have been carried out. I accept the evidence of Ms Griffiths and Mr Jameson as to the extent of the knowledge of these works."
"28. The question arises as to why Mr Jones should carry out work on the property, albeit mostly through his company, unless he had been given an assurance that he could buy the property. In my judgment the answer to this is that the situation evolved so that such works were carried out over a number of years after he and his family moved in, much of which was to accommodate their particular tastes. One small but telling example is that the works relied upon include the installation of a copper bath. It is also telling in my judgment that expert evidence adduced by him as to these works details the value of these works, but not the extent to which, if any, they have improved the value of the property".
"32. In my judgment, it is likely that the lets in 2009 were then seen by all concerned as a short term solution at a time when the market had slumped and Ms Griffiths and Mr Jameson were struggling to keep up the mortgage repayments and bills. Once Ms Owens was repaid £20,000 I accept that she no longer had a great deal of interest in the property. It is also likely that Mr Jones saw an opportunity to move into the property when his then landlord wanted to take possession of the dwelling where he was then living. The events after 2009 are more likely to be part of an evolutionary process which he took upon himself than consequent to an agreement to sell as relied upon by Mr Jones."
"38. It is submitted on behalf of Mr Jones that had he known the assurances were false, he would not have made payments in respect of the equity in the property, nor paid the monthly mortgage sums nor carried out works to the property. Instead, he would have bought another home for his family subject to a fixed rate mortgage. He claims equitable damages as against his brother and mother on a joint and severable basis in respect of the repayment of his mother's contribution to the purchase of the property, the value of the works, and a sum for his time managing the works and the mortgage interest payments in the region of £58,000. He also claims against his mother 28 monthly payments of £470. As to the latter, his claim was that he made those on the basis that his mother told him she was going to retire, which she did not do for this period. To his credit, he accepted in cross-examination that he probably would have made these payments even if his mother had not told him this.
THE APPEAL
FAILURE OF BASIS
FREE ACCEPTANCE
ASCERTAINING THE BENEFIT
"15. In my view, the starting point in valuing the enrichment is the objective market value, or market price, of the services performed by Mr Benedetti. That is consistent with the view taken by Professor Graham Virgo in The Principles of the Law of Restitution, 2nd ed (2006) ("Virgo"):
"Much of the uncertainty concerning the definition of enrichment stems from the lack of consensus about where the analysis should start. Essentially there are two options available. Either we start with an objective test, ascertained by asking whether reasonable people would consider the defendant to have received something of value, or we start with a subjective test, by considering whether the defendant considers that he or she has received something of value. Whilst both the objective and subjective tests are relevant to the identification of an enrichment, the better view is that the objective test should always be considered first . . . : p 64.
16. I agree. Although Professor Virgo is there considering the approach to the question whether a benefit has been conferred on the defendant at all, as opposed to the question how such a benefit should be valued, it is clear that he takes the same view in relation to valuation: see Virgo, at p98, where he says that the general test of valuation which should be adopted is an objective test. Both the editors of Goff & Jones (eg at para 4-08) and Professor Andrew Burrows in The Law of Restitution, 3rd ed (2011) ("Burrows"), (at p 61) also take this view. The approach is supported by, eg: BP Exploration v Hunt [1979] 1 WLR 783, 840, per Robert Goff J; Cressman v Coys of Kensington (Sales) Ltd [2004] 1 WLR 2775, para40, per Mance LJ; Cobbe v Yeoman's Row, para 42, per Lord Scott; and Sempra Metals Ltd (formerly Metallgesellschaft Ltd) v Inland Revenue Comrs [2008] AC 561, paras 116—119, per Lord Nicholls of Birkenhead. It is to be noted that Professor Virgo, in the passage quoted above, does not list as an available option the value which the claimant considers that he conferred on the defendant. That is because, as he puts it at p 69, it is not the function of the law of restitution to assess relief by reference to the claimant's loss . . . compensation is not a function of the law of restitution. It is to my mind for this reason that Mr Benedetti's request for E200—300m in June 2005 has little or no relevance. For these reasons I agree with Lord Neuberger of Abbotsbury PSC and Lord Reed JSC (whose judgments I have read in draft) that the general test, or prima facie position, is that the court should apply an objective test to the issue of market value.
17. There is a question as to exactly what the objective approach entails. Professor Virgo states the test (at p 98) as the identification of the market value, namely the sum a willing supplier and buyer would have agreed upon. However I agree with Etherton LJ [2010] EWCA Civ 1427 at [140], that the test is the price which a reasonable person in the defendant's position would have had to pay for the services. On that approach, although a court must ignore a defendant's generous or parsimonious personality, it can take into account conditions increasing or decreasing the objective value of the benefit to any reasonable person in the same (unusual) position as the defendant: para 145. The editors of Goff & Jones note that such conditions would seem to include the defendant's buying power in a market
"so that a defendant who can invariably negotiate a better price for a product than any other buyer will be allowed to say that this price reflects the objective value of the product to him, or, in effect, that there is one market for him and another for everyone else": para 4-10.
Thus far, I detect no difference between my approach and that of Lord Neuberger PSC or Lord Reed JSC.
18. The question then arises whether it is permissible to reduce the objective market value in order to reflect the subjective value of the services to the defendant. In my opinion, it is. The present case does not, of course, concern subjective devaluation, but that is the hook on which Mr Howard seeks to hang the principle of subjective revaluation. It is on the possibility of subjective devaluation that my approach and that of Lord Reed JSC is I think somewhat different. A defendant, in my view, is entitled to prove that he valued the relevant services (or goods) provided by the claimant at less than the market value. That principle is widely accepted by academic commentators and is based on the fundamental need to protect a defendant's autonomy. It is important to note that subjective devaluation is not about the defendant's intentions or expectations but is an ex post facto analysis of the subjective value of the services to the defendant at the relevant time. The editors of Goff &Jones put it thus at para 4-06:
"People have different means and spending priorities, and they value benefits differently according to their personal tastes. Consequently, as Lord Nicholls said in Sempra, a benefit is not always worth its market value to a particular defendant, and when it is not it may be unjust to treat the defendant as having received a benefit possessing the value it has to others . The common law 'places a premium on the right to choose how to spend ones money' [see Peel v Ontario [1992] 3 SCR 762, para 25, per McLachlin J], and this right might be unfairly compromised if a defendant were forced to make restitution of the market value of a benefit which he would only have bought for himself at a lower price, or which he would not have bought at all. To avoid this, the court may therefore assess the value of the benefit by reference to the defendant's personal value system rather than the market."
Professor Andrew Burrows makes the same point at Burrows, p44:
"The question of whether the defendant has been benefited/has received value is not straightforward because of the need to respect freedom of choice and individuality of value. Even if the defendant has been objectively benefited (ie a reasonable man could regard himself as benefited by what has occurred or, put another way, the claimant's performance has a market value) he or she may validly argue that benefit has been of no value to him or her."
19. It is clear (from p 61) that Professor Burrows takes the view that subjective devaluation applies to both the identification and the value of a benefit. See also, to the same effect, Virgo, at pp 67 and 68, where he noted that, even if the defendant used what had been received it does not necessarily follow that he or she valued it because, as Pollock CB said in his well-known dictum in Taylor v Laird (1856) 25 LJ Ex 329, 332, [if the claimant] cleans another's shoes; what can the other do but put them on? As Mance LJ said in Cressman v Coys, at para 28, "The law's general concern is with benefit to the particular defendant, or so-called 'subjective devaluation'".
20. I would not accept Mr Rabinowitz's submission that a distinction is to be drawn between the identification of a benefit and the value of the benefit to a defendant and that, while the former can be subjective, the latter is to be objective. He relied upon the approach adopted by Justice James Edelman as to "The Meaning of Loss and Enrichment" in Philosophical Foundations of the Law of Unjust Enrichment (eds Chambers, Mitchell and Penner) (2008), pp 211—241. In my opinion Professor Burrows is correct to conclude (Burrows, at p 61) that "a sharp distinction between choice and valuation may. . .be artificial because a person may choose something but only at a particular price or even on the basis that it is gratuitously rendered."
21. After the claimant has adduced evidence of the objective value of the benefit which the defendant received, the burden of proof falls upon the defendant to prove that he did not subjectively value the benefit at all, or that he valued it at less than the market price: Goff & Jones, para 4-08; Virgo, pp 64, 66—67. That principle was established by the majority of the House of Lords in Sempra Metals [2008] AC 561: see para 48, per Lord Hope of Craighead, para 116, per Lord Nicholls of Birkenhead and para 180, per Lord Walker of Gestingthorpe. The minority took a different view, namely that it was for the claimant to establish the actual benefit obtained by the defendant: see especially per Lord Mance, at paras 231—232, and Lord Scott of Foscote, at para 147. As I see it, the difference between them is really no more than a different approach to the burden of proof. In each case the question is what was the value to the defendant.
22. When I first drafted this judgment I thought that Sempra was an example of subjective devaluation in practice. It was held that the claimant could not recover the market interest rate on the sums it had paid to the Revenue by way of unlawfully levied advance corporation tax because the Government was able to borrow money at lower rates than the market rate. The amount saved by the Government was thus less than that which would have been saved by a commercial entity borrowing the same sums of money: see Goff & Jones at para 4-07. However, having read Lord Reed JSC's judgment I can now see that it may be an example of the objective value of the money to a person in the position of the defendant, namely the Government. This perhaps shows the narrowness of the difference between our two approaches. This can I think be seen from an important passage in the speech of Lord Nicholls at para119:
"What is ultimately important in the law of restitution is whether, and to what extent, the particular defendant has been benefited: see Burrows, The Law of Restitution, 2nd ed (2002), p 18. A benefit is not always worth its market value to a particular defendant. When it is not it may be unjust to treat the defendant as having received a benefit possessing the value it has to others. In Professor Birks's language, a benefit received by a defendant may sometimes be subject to subjective devaluation: An Introduction to the Law of Restitution (1985), p 413."
23. Recognising the principle of subjective devaluation raises the question of what a defendant relying on that principle must prove. A defendant can always simply assert that he valued a benefit at less than the market value. However, a court will be very unlikely to accept such an assertion unless there has been some objective manifestation of the defendant's subjective views. In principle, this can occur before or after a transaction, although conduct after the transaction is likely to carry little weight. Goff & Jones put it thus at para 4-09:
"A defendant is unlikely to persuade a court that he attached a low value to a benefit simply by relying on self-serving testimony that he has a (previously unexpressed) personal value system that attributes a low value to such benefits, particularly if this testimony is not borne out by his previous conduct. If a defendant can produce stronger evidence of his personal spending preferences, however, then we believe that he should be able to rely on this evidence, consistently with the view expressed in the foregoing authorities that the law is concerned to protect his freedom to make his own spending choices."
24. An example of subjective devaluation in practice is perhaps Ministry of Defence v Ashman (1993) 25 HLR 513, although caution is needed because that was a case about restitution for a wrong (trespass). The Ministry of Defence in that case were awarded, not the market rent for the property, but a rent equivalent to what would have been charged for suitable local authority accommodation because
"Mr and Mrs Ashman would probably never have occupied the premises in the first place if they had to pay £472 a month [ie the market rate] instead of the concessionary licence fee of £95": see p 520, per Hoffmann LJ.
See also Ministry of Defence v Thompson (1993) 25 HLR 552, 554, where, in a differently constituted Court of Appeal, Hoffmann LJ, with whom Glidewell LJ and Sir John Megaw agreed, said:
"The principles in Ashman may, in my judgment, be summarised as follows: first, an owner of land which is occupied without his consent may elect whether to claim damages for the loss which he has been caused or restitution of the value of the benefit which the defendant has received. Secondly, the fact that the owner if he had obtained possession would have let the premises at a concessionary rent, or even would not have let them at all, is irrelevant to the calculation of the benefit for the purposes of a restitutionary claim. What matters is the benefit the defendant has received. Thirdly, a benefit may be worth less to an involuntary recipient than to one who has a free choice as to whether to remain in occupation or move elsewhere. Fourthly, the value of the right of occupation to a former licensee who has occupied at a concessionary rent and who has remained in possession only because she could not be rehoused by the local authority until a possession order has been made, would ordinarily be whichever is the higher of the former concessionary rent and what she would have paid for local authority housing suitable for her needs if she had been rehoused at the time when the notice expired."
25. If the principle of subjective devaluation is accepted, it can be defeated by a claimant proving that: (i) the defendant received an incontrovertible benefit (eg if the services saved the defendant necessary expense), or (ii) the defendant requested or freely accepted the benefit: see Goff & Jones, paras 4-12—4-33 and (as to free acceptance) ch 17; Virgo, pp 72—88; Burrows, pp 47—60). These sources show that many different problems may arise, but it is fortunately not necessary in this case to define the circumstances in which the principle of subjective devaluation can be defeated. I agree with Lord Neuberger PSC that the difference between my approach and that of Lord Reed JSC is not likely to lead to a different result in more than very few cases.
26. The only real difference may be this. We agree that in the case where services have been rendered which, viewed objectively, confer a benefit on the defendant, but a benefit which the defendant did not and does not want and would not have paid for, as in the examples of Pollock CB's cleaned shoes or Professor Virgo's cleaned windows (Virgo, p67), the claimant is not entitled to payment for the services because failure to pay would not unjustly enrich the defendant. The question is whether, in such circumstances, where there was no free acceptance of the services before or at the time they are rendered, but the defendant has accepted that he has received some benefit but not that the value of the benefit is as much as its market value, the defendant's figure should be accepted. In my opinion it should be open to the court so to conclude on the basis, on the one hand there would be unjust enrichment if the defendant paid nothing but, on the other hand, that it would not be just to award more than the benefit conferred on the defendant so calculated. Such an approach seems to me to respect the principle of freedom of choice or autonomy and to meet the case where the defendant sees the value of the benefit but would not have ordered the services save perhaps at a substantial discount to the market rate. I see no reason why a court should not take into account a defendant's subjective opinion of the value of the claimant's services in order to reduce the value of them to him, provided of course that the court is satisfied that it is his genuine opinion. If Lord Reed JSC's approach would produce a choice between a nil award and an award of the market value of the services, I would respectfully disagree. I prefer a nuanced approach, which seems to me to be more consistent with principle. However, given Lord Reed JSC's conclusions in para 138 of his judgment, there may be little, if anything, between us, especially since we both recognise the importance of respect for the defendant's autonomy or freedom of choice. It is not necessary to reach a final conclusion on these questions on the facts of this case. I certainly agree with Lord Reed JSC that the expression "subjective devaluation" is somewhat misleading."
MATE V MATE
GRAY V SMITH
"440. According to Benedetti (at [15]-[16]), whether the defendant has been enriched is an objective test, ascertained by asking whether the reasonable person would consider the defendant to have received something of value. As Goff & Jones notes (at [5-39]), where the provision of services is in issue, considerable debate can arise as to whether the 'enrichment' is properly characterised as the services themselves or their 'end-product'. In this case, the Defendants contend for the latter, saying that the purpose of Mr Gray's involvement in Blackmoor was the raising of capital. Goff & Jones suggests (at [5-39]) that, in deciding the proper characterisation of the relevant benefit:-
"The best approach is for the court to keep an open mind, and to take all the circumstances into account, including whether the parties themselves thought that the benefit being transferred was the services or their end-product."
441. The value of any enrichment is also to be determined, in the first instance, by an objective test, namely "the price which a reasonable person in the defendant's position would have had to pay for the services" (Benedetti (at [17])). The authorities show that such "price" may take different forms. So, in Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221, a 'pure services' case concerning the provision of management services to a pop group, the Court considered it would be appropriate in many cases to assess the value of the services by applying an hourly rate to the time spent, making a "global assessment" where an itemisation of the hours spent or of the precise services is not possible. However, in other cases, the Court has adopted a different approach to valuation where, for example, a commission, fee, royalty or some other basis reflects industry practice or the parties' own understanding of the value of the claimant's services (see Goff & Jones (at [5-45]-[5-46])). Finally, if the defendant can show that he or she valued the enrichment less than its market value, that market value may be reduced to reflect the defendant's 'subjective devaluation' (Benedetti (at [18])).
442. Applying these principles here, the Claimant says that it would be wrong simply to look at the end-product rather than taking into account "all the circumstances", consistent with the approach suggested in Goff & Jones (noted at [440]). I was also referred further to Brenner, including for the proposition that "where the services were requested and accepted, the law will not stop to enquire whether they were, on any other basis, of benefit to the party requesting and accepting them". However, this did not seem to advance matters much beyond it being well established that the provision of 'pure services' can constitute enrichment for the purpose of a claim in restitution."
DISCUSSION