Incapacity, Non Est Factum and Unjust Enrichment
![handle is hein.journals/mulr33 and id is 376 raw text is: INCAPACITY, NON EST FACTUM AND UNJUST
ENRICHMENT
ELISE BANT*
[Although the concept of enrichment is fundamental to the law of unjust enrichment, there is
relatively little case law on this issue. This is because most cases involve the receipt of money and, in
general, money is regarded as incontrovertibly beneficial. Against this backdrop, the recent
unanimous New South Wales Court of Appeal decision of Ford v Perpetual Trustees Victoria Ltd
stands out as a singular opportunity for reflection on the nature of enrichment. The case concerned,
inter alia, the restitutionary liability of a borrower who so lacked mental capacity at the time of
entering into the impugned loan transaction that the transaction was void for non estfactum. The
Court of Appeal found that the borrower was not in fact benefited by his receipt of the loan and
restricted his restitutionary liability to a small sum retained in his account. This article explores the
doctrinal foundations that support this conclusion. It explains that findings of incapacity and non est
factum have significant ramifications for the issue of enrichment, even in cases where the putative
enrichment is money. Such findings may also affect the availability of the change of position defence.
This is because the law requires that the tests generally applicable to resolving those matters be
modified so that they do not undermine or stultify the policies of the law in protecting an incapax or a
defendant whose mind did not go with their deed]
CONTENTS
I Introduction ............................................................................................................ 368
II The Claim in Unjust Enrichm ent ............................................................................ 371
A E nrichm ent ................................................................................................. 373
B Autonomy-Based Enrichment Principles ................................................... 374
C The Principles A pplied ............................................................................... 376
III Enrichm ent and Incapacity ..................................................................................... 378
A Enrichm ent and M inors ............................................................................. 379
B Enrichment and the Mentally Incapable .................................................... 384
C Enrichm ent and Non Est Factum ............................................................... 385
IV C hange of Position ................................................................................................. 387
A A Defendant-Instigated Change of Position .............................................. 387
B An Independent Change in the Defendant's Position ................................ 388
V O ther A pproaches ................................................................................................... 389
V I C onclusion .............................................................................................................. 389
I INTRODUCTION
In Ford v Perpetual Trustees Victoria Ltd ('Ford')1 the appellant (Ford) had
taken out a loan with the respondent ('Bank') for the purchase of a cleaning
BA, LLB (Hons) (UWA), BCL, DPhil (Oxon); Associate Professor, Melbourne Law School, The
University of Melbourne; Honorary Fellow, The University of Western Australia. My grateful
thanks to Michael Bryan for his comments on earlier drafts of this article.
1 (2009) 257 ALR 658, on appeal from Perpetual Trustees Victoria Ltd v Ford (2008) 70 NSWLR
611 ('Perpetual Trustees').](ViewImageLocal?handle=hein.journals/mulr33&div=19&collection=&method=preview&ext=.png&size=3)
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Incapacity, Non Est Factum and Unjust Enrichment
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