AG Retail Num (6) Limited v Andron Contract Services Limited

In a claim for unjust enrichment, the four questions are signposts to distinct legal requirements, not a substitute for careful analysis. Enrichment is at the claimant’s expense only where the law treats the benefit as directly transferred, or as equivalent to a direct transfer in a limited recognised situation. A contractual debt owed by a third party is not converted into enrichment at the claimant’s expense merely because a purchaser receives a price allowance from that third party, even with knowledge of the debt. An unjust factor must be identified; it is not supplied by general judicial discretion. Where those elements have no real prospect of being established, summary judgment may be granted without a trial.

Andron Contract Services Limited provided facilities-management services at a shopping centre under a contract with the leasehold owner and receivers. The defendant later bought the lease, receiving allowances against the purchase price for service-charge matters. The claimant sought £333,948.76 in unjust enrichment, alternatively seeking subrogation as a remedy. The defendant applied to strike out under CPR 3.4(2)(a) and for summary judgment under CPR 24.2 and 24.3.

The court accepted that the enrichment issue alone had a real prospect of success, but held that the pleaded case could not establish enrichment at the claimant’s expense or an unjust factor. It granted summary judgment and dismissed the claim; it therefore did not decide the strike-out application.

Summary judgment was granted to the defendant and the claim was dismissed. The court did not determine the alternative strike-out application.

1. Under CPR 24.2 and 24.3, the court considered whether the claim had a realistic rather than fanciful prospect of success and whether any compelling reason required a trial. It applied the approach in Easyair Ltd v Opal Telecom [2009] EWHC 339 (Ch), approved in AC Ward & Sons Ltd v Catlin (Five) Ltd [2009] EWCA Civ 1098. The court could evaluate the evidence, but had to avoid a mini-trial and consider evidence reasonably expected at trial. Complexity did not itself prevent summary judgment. On enrichment alone, the claimant had just established a real prospect of success.
2. The unjust-enrichment analysis required careful application of the four questions identified in Menelaou v Bank of Cyprus Ltd [2015] UKSC 66. Following Investment Trust Companies v Revenue & Customs Commissioners [2017] UKSC 29, those questions were treated as signposts to distinct legal requirements, rather than freestanding legal tests.
3. The claimant had no direct dealings with the defendant. Under Investment Trust Companies v Revenue & Customs Commissioners [2017] UKSC 29, indirect provision can suffice only in limited circumstances treated by law as equivalent to a direct transfer. No agency, assignment, sham, tracing, discharge of debt or coordinated single transaction was established. The claimant’s service contract with Alaska and the receivers was separate from the defendant’s purchase of the lease. Any benefit from the allowances was conferred by Alaska or the receivers, not by the claimant.
4. The claimant’s alleged contractual debt against Alaska or the receivers remained a debt claim against them. It could not be transformed into enrichment of the defendant at the claimant’s expense. The defendant’s possible knowledge of the unpaid liability would not alter that analysis.
5. An unjust factor was required and was not a matter of general judicial discretion. Applying Swynson Ltd v Lowick Rose LLP [2017] UKSC 32 and Dargamo Holdings Ltd v Avonwick Holdings Ltd [2021] EWCA Civ 1149, the court held that the only suggested factor, mistake, was not the claimant’s mistake. There was no authority supporting a sufficient third-party mistake in these circumstances. The negotiated allowances, made under an agreement to which the claimant was not party and which excluded third-party enforcement, were not unjust on the pleaded case.

The claim therefore had no real prospect of success on the expense and unjust-factor requirements, and there was no other compelling reason for a trial. The parties were invited to draw up an order reflecting the judgment.

not stated in the judgment.