Deutsche Morgan Grenfell v Inland Revenue Commissioners

• Author: Ruth Forman
• Position: LLB (Dub), LLM Candidate, University of Cambridge
• Pages: 145-155

DEUTSCHE

MORGAN

GRENFELL

V

INLAND

REVENUE

COMMISSIONERS

RUTH

FORMAN*

Introduction

There

is

currently

a

lively debate

taking

place

regarding

the

intellectual

and

theoretical

foundations

of

the

law

of

restitution,

and

therefore the House

of

Lords

case

of

Deutsche

Morgan

Grenfell

v

Inland

Revenue

Commissioners

1

was

bound

to

provide

much

food

for

thought.

The

House

of

Lords

handed

down

its

decision

on

25

October

2006

and

did

not

disappoint.

The

case

is

important

for

a

number

of

reasons.

First,

it

provides

an

interesting

example

of

restitution being

awarded

for

an

unjust

enrichment

based

on

the

unjust

factor

of

mistake

of

law.

The

judgments

have

clarified

various

aspects

of

the

unjust

factor

of

mistake.

Secondly

and

importantly, the

case

gave the

Lords

the

opportunity

to

consider

the

debate

referred

to

above,

regarding

the

very

basis

of

the

law

of

unjust enrichment.

In

2003,

Peter

Birks

published "Unjust

Enrichment"

2

in

which

he

dramatically

stated

that

English

law

of

unjust enrichment

had

arrived

at

a

crossroads

and "compelled

to

rethink'

3

it

had chosen

a

new

direction.

Birks

claimed

the

law

had

changed

as

follows.

English

law

of

unjust

enrichment

had

always

required

there

to

be

an

"unjust

factor" present

in

each case,

along

with

other elements,

such

that

there

be

an

enrichment

of

the

defendant

and

that

this

enrichment

should

be

at

the

claimant's

expense.

Essentially,

the

unjust

factor

was

the

element

that

rendered

the

enrichment

unjust

in

the

eyes

of

the

law.

Examples

include mistake,

total

failure

of

consideration,

duress

etc.

However,

in

2003

Birks

claimed

that

based

on

various

cases

before the

English

courts

regarding

void contracts,

and

referred

to

as

the

swaps

litigation, English

law

had changed

its

approach

entirely

and

adopted

a

model closer

to

the

civilian

model,

and

known

as

*

LLB

(Dub),

LLM

Candidate,

University

of

Cambridge.

The

author would

like

to

thank

Dr.

Eoin

O'Dell

and

Harry

Ormsby

for

their

helpful comments

on

an

earlier draft

of

this article.

[2006]

UKHL

49; [2007]

All

ER

449.

Hereafter

referred

to

as

'the

DMG

case.'

2

Peter

Birks,

Unjust

Enrichment

(2nd

ed,

Oxford

University

Press,

2003).

3

Ibid,

at

101.

©

2007 Ruth

Forman

and

Dublin University

Law

Society