McDonald v Coys of Kensington

This is a case about a personalised (or “cherished”) car registration number, TAC 1, with a value, as found by the judge, of £15,000. The Part 20 defendant, Mr McDonald, appeals in respect of a judgment for that sum given against him by HHJ Simpson in the Mayor’s and City of London Court on 3^rd April 2003. The judgment was in favour of the defendant (the Part 20 claimant), Coys of Kensington (Sales) Limited (“Coys”), who recovered the sum in two parts and on two bases: (i) £1,391.88 pursuant to a claim assigned to Coys by the original claimants in the action, Mr and Mrs Cressman, and (ii) £13,608.12 by way of contribution under the Civil Liability (Contribution) Act 1978. Coys also recovered their costs of the Part 20 claim from Mr McDonald on an indemnity basis.

The late Mr T. A. Cressman owned a Mercedes 280SL car carrying the registration TAC 1. Mr and Mrs Cressman are his executors. Coys are car auctioneers. Mr Cressman, no doubt for Mrs Cressman also, instructed Coys on or about 17^th November 2000 to sell the car without its personalised registration mark. Mr McDonald was the successful bidder when Coys auctioned the car on 11^th December 2000. These proceedings arise from Coys’ failure to retain the mark, when the car was paid for by and delivered to Mr McDonald on 12^th December 2000, and from Mr McDonald’s subsequent refusal to re-transfer the mark.

A registration mark is assigned by the Secretary of State to any vehicle registered in the United Kingdom under s.21 of the Vehicle Excise and Registration Act 1994 (“the 1994 Act”), and features on its number plate. Specific marks can therefore have significant value to vehicle owners. A vehicle owner wishing to have one may be prepared to pay, and a vehicle owner having one may be able to realise, substantial sums. The legal machinery by which a vehicle owner may either (a) make an immediate transfer of a mark to another vehicle or (b) hold a mark back with a view to having it assigned to another vehicle at a later date is contained in ss.23-27 of the 1994 Act and The Retention of Registration Marks Regulations 1993 SI No. 987 as amended by The Retention of Registration Marks (Amendment) Regulations 1994 SI No. 2976. Different forms have evolved to cover situations (a) and (b), but both situations fall within the Regulations.

S.23 of the 1994 Act provides

The 1993 Regulations (as amended) provide inter alia:

Under Regulations 3 and 4, if a seller is to sell a car but retain the right under the legislative scheme to its personalised registration mark, the seller needs to apply for and obtain a right of retention while still owner of the car. Coys failed to do this on behalf of the Cressmans. On 8^th December 2000 they sent to the DVLA a defective application for retention, which the DVLA rejected and returned on 14^th December 2000. Meanwhile on 11^th December 2000, Coys had auctioned the car. Mr McDonald bid by telephone and it was knocked down to him for £17,250.00 plus a buyer’s premium of £3,040.31 inclusive of VAT. However, Coys had made clear prior to the auction that the vehicle was being sold without its existing registration number. Mr McDonald had prior to the auction carefully inspected the car. He admitted that he observed that the car had no number plates. The judge found, contrary to Mr McDonald’s case, that the windscreen also bore a notice dated 10^th December 2000 which stated:

On 12^th December 2000, Mr McDonald paid for and, under the relevant auction conditions, obtained title to the car. He collected it by trailer, still without any number plate, and unusable for this reason (and it appears probably also on other grounds) on a public road. The judge held, again rejecting Mr McDonald’s evidence, that there was at that point a conversation during which Mr Brownlee of Coys said words to the effect:

The consequence of Coys’ failure to obtain for the Cressmans a right of retention in respect of the registration mark was that, under the legislative scheme: (i) the mark remained assigned to the car upon and after its sale to Mr McDonald, and (ii) Mr McDonald was (unless he applied for its “retention” with a view to transferring it to another car) entitled to have the car registered in his name with that mark. However, as between the Cressmans and Mr McDonald, both these consequences were, on the judge’s findings, contrary to an express term of the contract made by Coys on behalf of the Cressmans, whereby it was agreed that the mark would be retained by the Cressmans as the car’s sellers.

It was common ground before us that the judge’s findings as to subsequent events were not complete or wholly accurate. The documents and Mr McDonald’s own evidence show that on 13^th December 2000 he spoke twice to a Mr Elliot Brown of the DVLA. During the first conversation, Mr McDonald either knew already from the file of documents with the car (cf his evidence at I33E) or was told by Mr Brown and subsequently confirmed from the file (cf his earlier evidence at I8B and his statement at C24) that the car’s registration mark was TAC 1. Mr McDonald wrote on the copy Vehicle Registration Document V5 which was in the file “V62. Spoke Elliot Brown. Sale of Mark. Cherished transfer”. A V62 is the form which Mr Brown told Mr McDonald that he would need to submit to register the car in his name (since he had not received any form of registration document from the sellers). On the same day, again as recorded on the V5, Mr McDonald sent a completed V62 to DVLA in Swansea, entering in it the registration mark TAC 1.

On 3^rd January 2001 Mr McDonald, not having received a new V5, spoke to a Miss Sarah Martin of the DVLA, who informed him that, as he had not sent in an original V5, the DVLA had tried to contact the original owner, but that the registration document was now due to be sent to him on 10^th January 2001. Mr McDonald’s note on this conversation on his copy of the old V5 further refers to “no retention being in place”. In due course on or about 10^th January 2001, and despite representations by Coys’ solicitors by letter dated 5^th January 2001, the DVLA sent the new V5 to Mr McDonald, as they had promised and as the statutory scheme provided.

According to Mr McDonald’s evidence, it was not for some 18 months thereafter that he obtained an MOT certificate, or could therefore presumably use the car. The judge in fact concluded that the vehicle had an MOT certificate when auctioned, although the only one before the court had expired some nine months previously. The judge thought that this conclusion followed from the fact that the DVLA rejected the application for retention on grounds other than lack of an MOT certificate. But, as note F to form V778/1 indicates with its warning about using a vehicle without a valid MOT certificate on public roads, an application to retain a mark may relate to a vehicle which (even if of sufficient age) does not require a valid MOT certificate. So the judge’s reasoning on this point does not appear cogent.

On 4^th January 2001 Mr Brownlee of Coys contacted Mr McDonald by telephone and by letter to say that he was not entitled to the original registration. Solicitors for the Cressmans also wrote on the next day asking Mr McDonald to confirm his agreement with Coys’ position. The judge found that Mr McDonald took offence at what he thought was Coys’ aggressive tone and that his subsequent stance stemmed from his perception of how Coys dealt with the matter, bearing in mind that it was they who had clearly made a mistake.

Mr McDonald’s subsequent stance is indicated by a letter from his solicitors dated 22 January 2001 in reply to the Cressmans’ solicitors’ letter dated 5^th January 2001:

Also on 22^nd January 2001 Coys wrote direct to Mr McDonald, referring to the contractual position, and imploring him to cooperate and to contact them to discuss the matter, failing which legal action would be taken. Mr McDonald’s solicitors’ response dated 25^th January 2001 repeated Mr McDonald’s stance, that he had had no notice that the registration number TAC 1 was not to be sold with the vehicle, and that it belonged to the vehicle as he had purchased it.

On 30^th January 2001 solicitors for Coys wrote to Mr McDonald’s solicitors, saying that he was trying to take advantage of an administrative error, and would not be allowed to do so. Mr McDonald’s solicitors replied as follows on 8^th February 2001:

The present proceedings were begun by Mr and Mrs Cressman in May 2001 to recover from Coys loss consisting in the value of the personalised number plate. On 26^th March 2002 the Cressmans assigned to Coys all and any causes of action which the Cressmans might have against Mr McDonald arising out of or in connection with the sale of the car registration number TAC 1, on terms that Coys would hold any recoveries on trust for the Cressmans in diminution of any claim that the Cressmans might have against Coys. On 24^th May 2002 Coys then joined Mr McDonald as Part 20 defendant. In March 2003, Coys settled the Cressmans’ claim against Coys by a payment of £12,000 together with interest, making in all (it appears) £13,608.12. Coys’ contribution claim was introduced thereafter.

The judge held that Mr McDonald had been unjustly enriched, by receiving, at the expense of Mr T. A. Cressman’s estate, a benefit in the form of the personalised number plate valued at £15,000 which he knew or ought to have known that he was not (contractually) to have. In so far as the estate had not been compensated by the settlement with Coys, Coys as assignees of the estate’s causes of action were entitled to recover damages (the £1,391.88 mentioned in paragraph 1 of this judgment). The remaining sum of £13,608.12 awarded to Coys was awarded as contribution on the basis that both Coys and Mr McDonald had been liable to the Cressmans in respect of the same damage, within the meaning of s.1 of the Civil Liability (Contribution) Act 1978, and that it was under s.2(1) “just and equitable having regard to the extent of [Mr McDonald’s] responsibility for the damage in question” that he should make a full 100% contribution in respect of Coys’ liability to the Cressmans, calculated as £13,608.12.

The judge also dealt with an unpleaded point that was raised in the light of Mr McDonald’s evidence. This was that Mr McDonald had given the car to his partner. At the trial, Mr McDonald said that he was no longer the owner of the car, but precisely when and how it became his partner’s was not directly addressed. The judge said :

Before us, similar submissions were pursued on Mr McDonald’s behalf based on his gift of the car to his partner, and it was submitted that the judge ought to have made still further and more favourable findings than he did in this regard. Reliance was placed on a passage in Mr McDonald’s evidence, to the effect that his partner had given him a “brief” and he had gone on a “mission” to buy the car for her; and that, when he had shown her the car on the evening of 13^th December 2000, she knew it was being bought for her and it was her car and “she sat in the car and was happy for both of us”. It was submitted that the judge ought on this basis to have found that the car was the partner’s at least from the evening of 13^th December 2000. There are however other passages in the evidence where Mr McDonald spoke of the car as something for both of them to have and share, and at one point he also said that “At the end of the day, we have no intention, or she has no intention of selling the car ….”. Further, the car was registered by Mr McDonald in his own name, in which it remained so far as appears at all material times thereafter.

Had Mr McDonald raised any question of transfer of the car to his partner in the pleadings or witness statement, both the facts and the implications of the point would no doubt have been fully and much more precisely investigated before and at the trial. It is regrettable that points based on the transfer of title to the partner were raised at trial without prior notice. But, since no formal objection appears to have been taken to this occurring, I deal with them on their merits as the judge did. Nonetheless, I regard it as of considerable evidential significance that such points were never mooted prior to trial. Had Mr McDonald parted with the car and put it beyond his power to restore any benefit relating to the mark, in circumstances where he had no knowledge that he had received a mark for which he had not contracted, he would have been expected to raise this forceful objection to the Cressmans’ and Coys’ claims from the outset. There is nothing of that kind. Instead, there are Mr McDonald’s solicitors’ letters of 22^nd and 25^th January and 8^th February 2001, written on his instructions. Their references to the car as his and the statement in the latter that he “does not intend to sell the car” are impossible to reconcile with any idea that Mr McDonald had by then parted with the car, still less with control over the mark. One is left with Mr McDonald’s statements in evidence (which are all that the judge expressly accepted) that at the time of trial both the car and therefore the mark belonged not to him but his partner. But these statements must be taken to refer to some transfer at some date after 8^th February 2001, and so after Mr McDonald knew of all relevant facts and knew that both the Cressmans and Coys would be pursuing claims against him relating to the mark.

I add that, even if I had concluded that Mr McDonald transferred the car with its mark to his partner on the evening of 13^th December 2000, he can only have done so knowing (from the absence of registration plates on the car when he saw it, from his conversation with Mr Brownlee on 12^th December 2000, from the copy V5 in the file and from his conversations with the DVLA on 13^th December 2000) that the car had brought with it, through some mistake, the right to a “cherished” mark TAC 1 which was not part of the auction bargain. The judge also said this (immediately after referring to the gift to the partner and to Mr McDonald as receiving a benefit as soon as he paid for and collected the car):

The issue which is basic to all aspects of this appeal is whether the circumstances gave the Cressmans any claim against Mr McDonald based on unjust enrichment. It is common ground that four questions arise when considering a claim for unjust enrichment: (1) Has the defendant benefited or been enriched? (2) Was the enrichment at the expense of the claimant? (3) Was the enrichment unjust? (4) Is there any specific defence available to the defendant (such as change of position)? See Banque Financière de la Cité v. Parc (Battersea) Ltd. [1999] 1 AC 221, 227A per Lord Steyn and The Queen on the application of Charles Rowe v. Vale of White Horse DC [2003] EWHC 388 (Admin.), paras. 10-11 per Lightman J.

The first proposition advanced on Mr McDonald’s behalf is that Mr McDonald’s acquisition of the registration mark was a consequence of the statutory scheme, and of his performance of his contractual obligations in ignorance of any problem about the mark, and that “it would be wrong, and it is submitted contrary to public policy, to hold an individual liable for the consequences, which he did not seek, of the administration of the vehicle registration scheme”.

It was the statutory scheme that meant that Mr McDonald acquired the registration mark. That does not mean that there was no enrichment or no unjust enrichment. On the contrary, it is the reason why there may have been. His potential enrichment consisted in his acquisition of a car carrying with it a potentially valuable registration mark. Any such enrichment must have been at the expense of the estate of Mr T. A. Cressman. Mr Swirsky, who appears for Mr McDonald, does not seriously dispute that.

Further, it was legally unjust for Mr McDonald to keep the registration mark, since it was an express term of the auction contract that he would not receive the vehicle’s existing mark (whatever that might be), but would instead get an age-related mark, and he only obtained the old, cherished mark as the result of a mistaken failure by Coys to operate the statutory scheme correctly on behalf of the estate, about which mistake Mr McDonald soon became aware. Subject to any points arising from any transfer to his partner, Mr McDonald could easily have cooperated with the Cressmans and Coys as they invited, and could have arranged for the mark TAC 1 to be re-transferred, in which connection Coys would no doubt have been only too pleased to resolve the matter by meeting any re-transfer costs, and Mr McDonald would have received instead from the DVLA the age-related mark which he had expected. There is nothing in the suggestion that the statutory scheme means that principles of unjust enrichment can have no application.

On this basis, the next submission advanced on Mr McDonald’s behalf is that his receipt of the mark was insufficient to amount to a benefit or enrichment. What was necessary was either realisation of its value or at the least proof of an intention to benefit by realising its value. Our attention was drawn to the discussion on the nature of the benefit required in leading academic works, particularly An Introduction to the Law of Restitution by Professor Peter Birks at pp.114-128, The Law of Restitution (6^th Ed.) by Goff and Jones at paras. 1-017 to 1-032 and The Law of Restitution (2^nd Ed.) by Professor Andrew Burrows at pp.16-25.

Arguments about the respective merits of the differing approaches taken in these works were not very fully developed before us, and we were not shown the articles to which I refer in the next paragraph of this judgment. So far as possible, I shall therefore avoid expressing positive conclusions favouring any one of the approaches. But they contain much common ground and give considerable guidance as to the type of factors which are likely to be relevant when determining whether a defendant has received a sufficient benefit to enable a claimant to assert that he has been enriched for the purposes of a claim for unjust enrichment. It seems to me, however, that the parties’ submissions failed generally to give due weight to the fact that the academic debate in the passages cited about ‘free acceptance’ and ‘indisputable benefit’ relates primarily to situations (typically the supply of services) where any benefit is not readily returnable.

The law’s general concern is with benefit to the particular defendant, or so-called ‘subjective devaluation’. Mr McDonald has not actually realised or received any monetary benefit from the mark. Professor Birks and Goff & Jones both identify (a) free acceptance and (b) incontrovertible benefit as two main categories of case in which a defendant who has not realised any actual monetary benefit may be treated as unjustly enriched. Professor Birks (in response to a critique by Professor Burrows) has stressed that ‘free acceptance’ should not be understood as meaning that the recipient values the thing in question, but as unconscientious conduct precluding him or her from exercising the usual right to assert that he or she was not subjectively benefited: see In Defence of Free Acceptance in Essays on the Law of Restitution (ed. Burrows) (1991) pp. 105-146. Professor Burrows disagrees about the possibility of free acceptance - cf Free Acceptance and the Law of Restitution (1988) 104 LQR 576 and The Law of Restitution pp. 20-23 - basically because free acceptance may amount to “nothing more than indifference to the objective benefit being rendered”. Consistently with that objection, he suggests that ‘reprehensible seeking-out’ (where a recipient’s conduct clearly shows that he wants the benefit, but also that he is unwilling to pay for it) should suffice as a test of benefit (pp. 24-25). Citing some extreme examples (holding a pistol to a doctor’s head and demanding medical treatment, stealing goods and intentionally using another’s land without permission), he goes on:

‘Free acceptance’ and ‘reprehensible seeking out’ represent tests focusing on the circumstances under which Mr McDonald came to have a car carrying the registration mark TAC 1, while ‘incontrovertible benefit’ focuses on the subjective value to him of the mark once acquired, regardless of those circumstances. Here, because of Coys’ mistake, Mr McDonald acquired a car on 12^th December 2000 which had, under the statutory scheme, a right to the mark TAC 1. His acquisition of the car on that date cannot have involved any ‘free acceptance’ of either the mark or the right to it. Mr Brownlee of Coys had reminded or told him and he knew on 12^th December that he was not to get the old mark. But the process by which Mr McDonald came to have a car carrying that mark can, I think, be regarded as extending beyond 12^th December 2000. In order to register himself as keeper he applied for a registration document, entering on the form V62 the mark TAC 1 in the knowledge that this would lead to the car being registered in his name with that mark. Notes B, C and E to the form Retention of Vehicle Registration Number V778/1 (trial document E14) indicate that Mr McDonald could, even on 13^th December 2000, have applied to retain the mark, with a view to re-transferring it to the estate or its order. But he made, so far as appears, no enquiry and certainly did not pursue the obvious possibility that such a step could be taken.

Further, on 3^rd January 2001, it is clear that his discussion with the DVLA covered the possibility of retention by the sellers, and he must have been aware that this was also a course open to him. By 5^th January 2001, Mr McDonald was aware that the estate and Coys would be pursuing claims against him in relation to the mark. Notwithstanding that, he still did not make any application to retain the mark, with a view to its re-transfer to the estate. Only on or about 10^th January 2001 did the DVLA register him as the keeper of the car with the mark TAC 1, so that he had every opportunity to correct the position before the mistake made in his favour was consolidated.

It is a salient feature of this case that Mr McDonald could have exercised a right of “retention” so as to re-transfer the registration mark to the Cressmans’ order, and would then in lieu have received from the DVLA the age-related mark which he had expected; he could have done this at any stage after his acquisition of the car - at least until its gift to his partner which, as I have said, cannot have been before 8^th February 2001; and he refused to do this knowing that he had received the mark by mistake contrary to the auction bargain. The mark was here not just realisable, but easily returnable. The case lies outside the scope of Pollock CJ’s aphorism in Taylor v. Laird (1856) 25 L.J. Exch. 329, 332: “One man cleans another’s shoes. What can the other do but put them on?”.

If the case turned on whether there was ‘free acceptance’ or ‘reprehensible seeking-out’, it would be borderline. Bearing in mind the circumstances in which Mr McDonald came to register in his name a car carrying the mark TAC 1, it could, I think, be regarded as falling within the general principle of free acceptance advocated by Professor Birks and Goff & Jones. On and after 13^th December 2000 Mr McDonald was acting unconscientiously in seeking and in insisting upon such registration, in the knowledge that this was not in accordance with the bargain made and that there had been an obvious mistake. Professor Burrows’ test of “reprehensible seeking-out” is on its face more stringent. But it is designed to overcome any suggestion of indifference, and it could be consistent with this rationale if the test were, if necessary, given a slightly wider re-formulation to cover circumstances such as the present. The qualification “reprehensible” derives from what Professor Burrows himself describes as “the stronger case” where the defendant shows a ‘disregard for the bargaining process”. Mere ‘seeking-out’ might in his view suffice. Here, there was positive conduct aimed at the registration in his name of his car with the old cherished mark contrary to the known bargain. What happened involved sufficient elements of knowledge, choice and action to overcome any suggestion of indifference, and can once again be seen as reprehensible in so far as it was in conscious disregard of the prior bargain. However, the case does not need to turn on whether or not its facts can be brought within a concept of ‘free acceptance’ or ‘[reprehensible] seeking-out’.

The alternative basis of restitutionary recovery on which Coys rely is “incontrovertible benefit”. This does not depend on analysis of the circumstances in which the benefit came to be acquired and fully enjoyed. It depends on the nature and value of the benefit as and when acquired. This basis of recovery was approved in principle by Hirst J in a dictum in Procter & Gamble Philippine Manufacturing Corpn. v. Peter Cremer GmbH (The Manila) [1988] 3 AER 843. In BP Exploration Co. (Libya) Ltd. v. Hunt (No. 2) [1979] 1 WLR 783, Robert Goff J used a similar phrase at p.805D in relation to the Law Reform (Frustrated Contracts) Act 1943, which he explained at p.799D as grounded on principles of unjust enrichment. Professor Birks suggests as the test of incontrovertible benefit whether “no reasonable man would say that the defendant was not enriched”. However he emphasises the major difference, in his view, between this and “the adoption of a straightforward objective standard of value” (p.116), and identifies two main cases in which the test should, in his view, be satisfied. They are cases of necessary expenditure (not here in issue) and cases of realised benefit. While he also identifies, under a third heading of “(c) others”, some cases in which courts “simply took the view that the benefit was ‘obvious’” (page 124), he evidently regards them as incompletely explained and exceptional cases of recourse to an objective standard.

In contrast, Goff & Jones in addressing incontrovertible benefits submit that it should be sufficient “that the benefit is realisable” and that it should not be necessary to show that it has been realised (para. 1-023). They comment:

Professor Burrows advocates an approach lying midway between realisation and realisability. He suggests as the test of benefit whether it is reasonably certain that the defendant will realise the positive benefit in the future. He puts the position at p.19 as follows:

Here, Mr McDonald received the mark. He did not realise any financial benefit from it, so if one were to treat Professor Birks’ suggested requirement of actual realisation as relevant, it would not be met. However, Mr McDonald could easily have arranged for re-transfer of the mark to any car nominated by the estate and its financial value was easily realisable on the market, if he had so wished. If the test suggested by Goff & Jones were accepted, there would of course be no difficulty in concluding that Mr McDonald received a readily realisable benefit. That he subsequently gave it away to his partner could go at most to a possible defence of change of position. Professor Burrows’ modified approach, requiring us to consider whether it was also reasonably certain that Mr McDonald would realise the financial benefit, would seem difficult to apply in or adapt to the present situation. It would fit a case where the defendant retains the alleged benefit at trial, not a case where he has apparently chosen to give it away, in knowledge of the relevant facts and claims (unless perhaps one could treat the gift away as the realisation of a benefit). Even if one were to attempt to ignore the gift away, it would be difficult, if not impossible, to consider what a defendant’s intention would have been regarding realisation, if he had not given the benefit away, when giving it away is what he actually chose to do.

Looking at the matter generally, I have no doubt that justice requires that a person, who (as a result of some mistake which it becomes evident has been made in the execution of an agreed bargain) has a benefit or the right to a benefit for which he knows that he has not bargained or paid, should reimburse the value of that benefit to the other party if it is readily returnable without substantial difficulty or detriment and he chooses to retain it (or give it away to a third party) rather than to re-transfer it on request. Even if realisable benefit alone is not generally sufficient, the law should recognise, as a distinct category of enrichment, cases where a benefit is readily returnable. A person who receives another’s chattel must either return it or pay damages, commonly measured by reference to its value. The mark is not a chattel, and it was not suggested before us that its return could at any stage (even before the gift to the partner) have been enforced, or that its non-return could sound in damages. (There were allegations below of implied duties to co-operate in the return of the mark, but the judge did not accept them, and there is no appeal in that respect.) However, Mr McDonald’s insistence on keeping the mark and the absence of any obvious means of compelling its re-transfer are reasons for analysing this case in terms of unjust enrichment. Mr McDonald knew that he had not bargained or paid for the mark. The mark or its benefit was in practice easily returnable. If Mr McDonald chose to keep it, then I see every reason for treating him as benefited.

It also seems to me unrealistic to suppose that Mr McDonald did not in the circumstances himself attach value to the mark. By refusing to effect a re-transfer, and by later giving the car with its mark away to his partner, Mr McDonald was exercising a deliberate preference to give himself and/or his partner the practical enjoyment of the mark for the meantime and the possibility of realising its monetary value in the longer term. Before giving the car to his partner, he could have re-transferred the mark to the estate’s order, or he could have given her the car on the understanding that she would re-transfer the mark to the estate’s order, if he so required. Further, although I would not go as far as the judge did in equating Mr McDonald and his partner for all purposes, the practical effect of their relationship and of Mr McDonald’s evidence about it cannot be ignored. They were living together with a young family, and the car was for their joint use. The expectation would have been that both would continue to benefit both by the supposed cachet and by any future sale of the mark.

Mr McDonald’s responses under cross-examination were to the general effect that the registration mark was a matter of indifference to him and to his partner (cf transcript pp.9-10 and judgment p.11F). If that had been so, then, as the judge said, it would be difficult to understand why he took the attitude he did and did not co-operate in a re-transfer to the estate. To my mind, Mr McDonald’s attitude in and after December 2000, and his conduct in giving his partner the mark with the car, show that he attached and attaches a value to the mark. Whatever their motives, numbers of car-owners pay good money to have a personalised plate. The inference is that Mr McDonald, despite his denials, attached real value to the mark, and determined that it should be retained for that reason.

In these circumstances, and in agreement with the judge, I would conclude that Mr McDonald received an incontrovertible benefit in the market value of the mark. Viewing the matter in the terms in which counsel presented it, there could be no difficulty in reaching this conclusion on the simple test of realisability advocated by Goff & Jones. Even if realisability is not alone generally sufficient, the ability to realise the mark in the future, coupled with the enjoyment of its possession and use in the meantime, seem to me considerable arguments in favour of a conclusion that Mr McDonald regarded himself as subjectively benefited by the mark and should be treated as benefited by its value. I would regard Professor Birks’ test of realised benefit, if it were to be applied to this situation, as overly narrow, and Professor Burrows’ test as inappropriate and inapplicable in the present context (unless in each case one were to treat the gift to the partner as a realisation of benefit, which seems artificial). In my view, however, the law must in any event recognise as a distinct category of enrichment cases of readily returnable benefit, of which the present is an example. I therefore conclude that Mr McDonald did obtain a benefit which he should prima facie reimburse, if not in kind then in cash.

To rebut this prima facie conclusion, Mr Swirsky repeated before us the submission advanced below to the effect that Mr McDonald had changed his position and deprived himself of any benefit by giving the car with its mark to his partner. The wide view of the doctrine of change of position is that it “looks to any change of position, causally linked to the mistaken receipt, which makes it inequitable for the recipient to be required to make restitution”: Scottish Equitable plc v. Derby [2001] EWCA 369; [2001] 3 AER 818, paras. 30-31 per Robert Walker LJ. Assuming this to be the correct view, still there can be nothing in the suggested defence in this case, having regard to the findings regarding the factual position set out in paragraphs 18-21 above. By the time Mr McDonald gave the car away, he knew that there had been a mistaken failure to obtain any right of retention under the statutory scheme and that both the estate and Coys would be pursuing him to recover the mark or its value. This negatives both any causal link and any inequity. A gift away made in such circumstances cannot have been made in reliance on the validity of the original receipt of the mark and cannot be regarded as having been made “in good faith”, so there can be no defence of change of position: see Lipkin Gorman v. Karpnale Ltd. [1991] 2 AC 548, 560C per Lord Templeman and 580C per Lord Goff; and Niru Battery Manufacturing Co. v. Milestone Trading Ltd. [2002] EWCA 1425 (Comm.), paras. 134-5 per Moore-Bick J, approved [2003] EWCA (Civ.) 1446. Even if I had found that the gift to the partner took effect on the evening of 13^th December 2000, I would also have considered that Mr McDonald was by then in possession of sufficient knowledge to exclude causal reliance and inequity or good faith: see paragraph 21 above.

It follows that Mr McDonald became liable to the estate for unjust enrichment, to the extent of £15,000. The trial below proceeded on the basis that all but £1,391.88 of that liability was met by Coys’ settlement payment to the estate in March 2003; and that any further recovery by Coys could only be sought by way of contribution under the 1978 Act.

The Civil Liability (Contribution) Act 1978 provides as follows:

No point was taken below regarding the applicability of s.1(1) and 2(1) of the Act to the present case. It was accepted that, if Mr McDonald was liable to the estate, then his liability related to the same damage as that in respect of which Coys were liable to the estate, so that the court would have jurisdiction to order contribution under s.2(1). In his supplemental skeleton argument dated 27^th November 2003 for the present appeal, Mr Purchas representing Coys drew attention to the cases of Royal Brompton Hospital NHS Trust v. Hammond [2002] UKHL 14; [2002] 1 WLR 1397 and Dubai Aluminium Co. Ltd. v. Salaam [2002] UKHL 48; [2003] 2 AC 366, on the question, “although not in issue at first instance or on this appeal”, whether sums recoverable by way of unjust enrichment could be regarded as compensation in respect of the same damage as liability for breach of contract, within the meaning of ss.1(1) and 2(1) of the 1978 Act. He went on to say that, had any such issue been raised, Coys would have argued for contribution in accordance with the doctrine of equitable subrogation pursuant to Banque Financière de la Cité v. Parc (Battersea) Ltd. [1999] 1 AC 221. Mr Purchas’s skeleton was, we understand, served on Friday, 28^th November 2003, but it was not until the hearing of the appeal on Tuesday, 3^rd December 2003 that Mr Swirsky sought for the first time to raise any such issue. It was apparent that, if we permitted the amendment which he sought, Coys would have to be permitted to make amendments along the lines which Mr Purchas’s skeleton suggested, and the appeal would change radically in shape and size. There would have to be an adjournment, with considerable wasted costs, which would be likely to fall either on Coys or, more probably, on the public purse, since Mr McDonald has the benefit of legal aid. We bore in mind the principles stated in Jones v. MBNA International Bank (CA) (30^th June 2000) cited in Civil Procedure Vol. 1 at para. 52.8.2. These apply mutatis mutandis to an attempt by a defendant appellant to raise on an appeal at the last moment points which could and should have been raised below, in circumstances where this would be bound to cause extra cost, work and delay for all concerned. In these circumstances we refused the application to amend. The consequence is that this appeal must proceed on a view of the scope of the Act which may in a subsequent case prove to be incorrect. Our decision should not be taken as any sort of authority on the correct construction of the Act. We are concerned to do justice between these particular parties, having regard to the way in which they by their conduct have conducted the case and committed themselves to arguing this appeal.

The present appeal therefore proceeds on the basis on which it was argued below, namely that ss.1(1) and 6(1) of the 1978 Act apply in a situation such as the present. The damage which Mr McDonald became liable to reimburse to the estate by way of unjust enrichment as a result of his obtaining the mark was the same as the damage which Coys became liable to pay to the estate for their failure to follow their instructions which led to Mr McDonald obtaining the mark. Mr McDonald’s skeleton before us raises a muted complaint that the judge did not articulate on what basis Coys were liable to the estate. However, there can be no possible doubt about that. Coys are professional car auctioneers, and clearly failed to show the skill, knowledge or competence to be expected of them, by obtaining a right of retention as instructed and by refraining from auctioning and transferring the car until they had done this.

Mr Swirsky sought, before us, to capitalise on the statutory requirement that the amount of the contribution recoverable should be “such as may be found to be just and equitable having regard to the extent of [Mr McDonald’s] responsibility for the damage in question” and pointed out that the same words had, in the predecessor statute, been interpreted to require the court to distribute damages according to the causal responsibility: see Collins v. Hertfordshire C.C. [1947] 1 KB 598, 624 per Hilbery J. Here, he argued, the mark was lost from the moment that Coys sold and passed property in the car without securing from the DVLA a right of retention. Mr McDonald had no causal responsibility for that at all. So the whole causal responsibility must fall on Coys.

This argument comes close to seeking to re-open the points for which we refused permission to amend. Assuming, as we must, that the claims against Mr McDonald by way of unjust enrichment and against Coys by way of damages for breach of contract seek compensation in respect of the same damage, that damage must consist in the estate’s continuing deprivation of the mark, not simply the initial transfer of the right to the mark with the car on 12^th December 2000. That is, in any event, also the realistic view of Coys’ breach of contract. By itself, it would have caused no more than minor irritation and extra costs, had Mr McDonald disgorged the mark, by possession of which he was unjustly enriched, after he became aware that he had by a mistake obtained it along with the car. The real damage lies in the estate’s continuing deprivation of the mark or its value, which was still the result of Coys’ breach, but was, much more directly, the result of Mr McDonald’s determination to retain and refusal to re-transfer the mark.

On the hypothesis on which we must approach this part of the appeal, it was therefore open to the judge to treat both parties as causally responsible for the same damage. Bearing in mind that it is Mr McDonald who received the benefit of the mark, and that the whole proceedings would have been unnecessary had he re-transferred the mark to the estate’s order as he should have done, the judge’s conclusion that Coys should recover 100% contribution from him appears to me unassailable in this court.

Mr Swirsky challenges the judge’s award of indemnity costs in respect of the Part 20 proceedings on the basis that it was insufficient justification for such an order that Mr McDonald had acted “opportunistically” and that there was nothing to take the case out of the norm. However, as the judge made clear during the argument about costs, Mr McDonald had not merely acted opportunistically (“trying to take advantage of someone else’s mistake”), he had conducted the litigation improperly, denying the conversation of 12^th December 2000 from the outset and challenging the truthfulness of Coys’ witnesses in that regard. The judge was evidently and understandably also sceptical about Mr McDonald’s suggestion that he and his partner were not interested in the mark as such. These were factors sufficient to take the case out of any norm. Whether or not to award indemnity costs was very much a matter for the judge’s discretion: see CPR 44.4.2. I can see no basis for this court to interfere with the judge’s decision to award indemnity costs in respect of the Part 20 proceedings.

In my judgment, therefore, this appeal against the judgment summarised in paragraph 1 above fails on all points and must be dismissed.

I agree.

I also agree.