Restitution upon Rescission for Breach of Contract, Mutuality, and Unjustified Enrichment: Lyle v Webster
| Author | |
| Pages | 278-283 |
| Published date | 01 May 2019 |
| DOI | 10.3366/elr.2019.0558 |
| Date | 01 May 2019 |
This case arose from cohabitation arrangements between a married couple and a widow. The cohabitation to which the arrangements led lasted for not quite a year. The widow contributed financially to improvements made to the couple's house to facilitate her moving in. The proceeds of the sale of her own home plus money from her late husband's estate were used for the purpose. She also claimed to have purchased two cars for the couple to be used to provide her with transport services (in effect free taxi services), paid some of their personal unsecured debts, and loaned the wife in the couple money to buy jewellery. The widow sought the return of her money by way of alternative claims: first, as damages for breach of three separate verbal (rather than implied) contracts in relation to, respectively, the accommodation, the transport services and the loan arrangement; second, if the contract claims failed, by way of unjustified enrichment.
The judgment of Sheriff S G Collins QC is concerned first to sort out the relevancy of the pursuer's pleadings, which had fallen into some confusion in the course of three years in court prior to his consideration of the case. This note will not consider the bulk of these points but focus rather on a single issue which led the sheriff into detailed discussion of a point of law of general importance, namely, whether the law on breach of contract allows the innocent party a remedy of restitution against the contract-breaker as well as damages. But, as Sheriff Collins points out, the case is also of general significance as an illustration of the continued importance of, not only unjustified enrichment, but also contract, in cohabitation cases falling outside the scope of sections 25 to 28 of the Family Law (Scotland) Act 2006.
The main issue addressed in this note is that of rights of restitution upon breach of contract, which arose with the alleged transport services contract. The widow claimed that, in breach of contract, the couple had never provided these services, and she was therefore entitled to restitution of the money she had expended on the two cars by which the services were to be provided. In rejecting this argument, Sheriff Collins analysed the authorities which had persuaded Lord Tyre in an earlier case to state obiter that such claims were permissible in contract (rather than unjustified enrichment) as an aspect of the principle of mutuality of contract.
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