Ahmed Us Samad Chowdhury v Motin Ali

A claim in unjust enrichment requires enrichment, enrichment at the claimant’s expense, and an unjust factor recognised by established categories or incremental development from them. A claim alleging double recovery must account for the parties’ overall net positions. Where joint borrowers and joint owners have not repaid their respective loan shares from personal funds, repayment of one party’s advance does not necessarily enrich that party at the other’s expense. Joint loan instalments paid from partnership funds do not, without more, create an accounting claim between the borrowers. Summary judgment is appropriate where the pleaded claim is legally misconceived and bound to fail, even if the underlying facts appear factually complex.

Mr Ahmed Us Samad Chowdhury and Mr Motin Ali operated restaurants in partnership and jointly owned a property. In earlier proceedings, Mr Ali obtained damages and interest from Mr Chowdhury concerning a £200,000 investment advance, part of which represented Mr Ali’s share of a bank loan for which both parties were jointly and severally liable.

After the property was sold and the bank loan redeemed, Mr Chowdhury claimed £118,758.39 in unjust enrichment. He alleged that Mr Ali had recovered twice by retaining the damages while also receiving his share of the property proceeds and benefiting from loan repayments made from partnership funds. The District Judge refused Mr Ali’s application for summary judgment. The central issue on appeal was whether the claim had any legally sustainable basis.

Mr Justice Zacaroli allowed the appeal and substituted an order dismissing the claim.

1. A claim in unjust enrichment requires: (1) enrichment of the defendant; (2) enrichment at the claimant’s expense; and (3) an unjust factor falling within established categories or an incremental development from them. The pleaded case did not properly address these requirements.

2. The alleged double recovery arose from a failure to compare the parties’ overall net positions. Mr Chowdhury had not repaid from his own funds any part of his share of the jointly incurred loan. Whether Mr Ali used part of the judgment debt to repay his share of the loan or retained it, the parties would reach the same net position after sale of the jointly owned property. Mr Ali therefore had not received more than he was entitled to on a proper accounting.

3. The partnership’s monthly payments under the loan were joint payments by parties jointly and severally liable for the debt. They created no relevant accounting issue between the joint debtors. If the loan had been fully discharged by those payments, Mr Chowdhury could not complain merely because half of the uncharged property’s sale proceeds were then paid to Mr Ali.

4. Although the District Judge identified potential factual and accounting complexities, those matters could not cure the fundamental legal defect. Once the fallacy in the claim was exposed, no factual dispute required resolution and the claim was bound to fail.

• Chancery Appeals: The appeal from District Judge Taylor’s order dated 30 November 2021 was allowed. The order refusing summary judgment was replaced with an order dismissing the claim.
• County Court at Bristol: District Judge Taylor dismissed Mr Ali’s application for summary judgment.