In Scotland, the statutory remedies available to cohabitants to seek financial provision on the breakdown of their relationship are enshrined in the Family Law (Scotland) Act 2006 ("the 2006 Act"), although the anticipated reform of that legislation is now long overdue following the report on cohabitation of the Scottish Law Commission. Prior to the coming into force of the 2006 Act, there were remedies at common law upon which cohabitants could rely - and upon which they have continued to rely in certain cases - by seeking recompense through a claim for unjustified enrichment.
The question of whether, and how, these two different types of claims can co-exist in cohabitant separation cases was considered recently by Sheriff McLachlan in McGunnigal v Pollock SC FAL 15. Following a debate, Sheriff McLachlan dismissed the action on the basis that the pursuer's claims under the 2006 Act were time barred, and that she had not properly made out her case for unjustified enrichment. The decision (albeit one at sheriff court level) confirmed previous Inner House authority that unjustified enrichment cannot be used as a direct alternative remedy to a claim under section 28 of the 2006 Act, and it also provides guidance to future claimants with regard to how a separate claim for unjustified enrichment should be made.
Section 28 of the 2006 Act
Section 28 of the 2006 Act allows parties to claim financial provision from their former cohabitant where their cohabitation has ended otherwise than by death of either party. The claiming cohabitant must establish that they have suffered economic disadvantage in the interests of the other cohabitant or a child of the family, which disadvantage is not offset by any advantage they have gained from the contributions of the other cohabitant. Subsection 28(2)(a) allows the court to make an order for payment of a specified capital sum payment by one former cohabitant to the other, and subsection 28(2)(b)2b allows the court to make an order for payment in respect of the ongoing economic burden of caring for a child or children after the cohabitation has ended. Importantly, a cohabitant has one year from the date of their separation to make a claim for financial provision against their former cohabitant.
The facts
In McGunnigal v Pollock, the parties had cohabited for a lengthy period and had three children together. Following their separation, the pursuer made claims under both 28(2)(a) and (b) of the 2006 Act. She also pled an esto or fallback position at common law to the effect that, should she be unsuccessful in her primary claims under section 28, she should be entitled to recompense on the basis of unjustified enrichment.
Following a preliminary proof, the pursuer's statutory claim was found to be time barred but she maintained her esto position that the defender had been unjustifiably enriched by her efforts during their cohabitation. In support of her section 28 claim, the pursuer argued that she had suffered losses in the interests of the defender and their family. She averred that she had reduced her income and worked for the defender without payment during their relationship and that that she had been involved in the building of various properties on land which the defender owned. The pursuer claimed the works were paid for from joint savings and that the defender had as a consequence been unjustifiably enriched by her efforts and the application of her funds. The pursuer did not put forward additional pleadings or differing circumstances in respect of her claim for unjustified enrichment.
The parties respective positions at debate
The Inner House decision in Pert v McCaffrey 2020 SC 259 was relied upon by both parties. In Pert, the pursuer was time barred in terms of section 28 on the 2006 Act, so she raised a claim for unjustified enrichment at common law. The sheriff at first instance had dismissed the claim, determining that Ms Pert could not seek recompense for unjustified enrichment because she had declined to exercise a statutory remedy available to her i.e by failing to make a timeous claim under section 28. Ms Pert then appealed to the court of session. In dismissing her appeal, the court confirmed that the pursuer's claim for unjustified enrichment could not proceed where she had an alternative remedy available to her - in Ms Pert's case, the common law remedies of damages or specific implement. It was the availability of those remedies, rather than the failure to seek an award under section 28 that had scuppered her claim for unjustified enrichment. The court of session clarified that section 28 must not be viewed as an alternative remedy to an action of recompense, but rather as an additional remedy to those available at common law. Accordingly, failure to make a claim under section 28 within the statutory time limit did not prelude the making of an application for a common law remedy.
In McGunnigal v Pollock, the defender submitted that, in line with Pert, the failure of the cohabitation claim did not preclude the pursuer from seeking recompense under unjustified enrichment, but argued that the pursuer's pleadings in support of the cohabitation claim and the unjustified enrichment claim should have been distinct from one another. Instead, the pursuer had simply recast her cohabitation claim as an unjustified enrichment claim. It was further argued that no actual loss had occurred, and that the pursuer's pleadings on unjustified enrichment were so lacking in specification that her losses, if any, could not be calculated. In addition, the defender challenged the competency of including a crave for unjustified enrichment within the context of family proceedings, arguing that a claim for unjustified enrichment would require to be raised as a separate ordinary action, rather than within an existing family action.
The pursuer argued that Pert was authority for seeking financial provision once a cohabitation claim had time barred. With regard to the relevancy of her pleadings, the pursuer argued that the essential elements of an action for unjustified enrichment claim had been pled, that she had set out the losses suffered, and that the case could be remitted to the ordinary court to proceed under the ordinary rules, should the court so require it.
The decision
It was held that unjustified enrichment could be craved within the context of a family action, provided that the section 28 claim(s) and unjustified enrichment remedies were distinct from one another and pled accordingly. In following the decision in Pert, Sheriff McLachlan also confirmed a failure to pursue one, does not prevent a claimant from relying upon the other.
Nonetheless, the sheriff's decision reiterates that a claim for unjustified enrichment cannot be relied upon as a direct alternative to an order under section 28 of the 2006 Act, on the basis that unjustified enrichment can only be sought when no alternative remedy is available. The pursuer could, therefore, only rely on a claim for unjustified enrichment if that claim was distinct from her statutory claim.
It was held that the purpose of the unjustified enrichment remedy is to reverse any enrichment of the defender and the purpose of a s28 claim is compensatory in nature – making it clear that the two remedies are distinct and so must be sought and pled on that basis. The pursuer did not have any supporting averments on record in respect of unjustified enrichment and merely relied upon her pleadings in respect of the s28 claim. There were no distinct averments setting out the basis for an unjustified enrichment claim.
The sheriff relied upon the House of Lords decision Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1998 SC (HL) 90, in which it was held that the three elements required to establish unjustified enrichment are:
- the enrichment of the defender
- that the enrichment was at the pursuer's expense, and
- that there is no legal justification for the enrichment.
Further, the court referred to Exchange Telegraph Co Ltd v Guilianotti 1959 SC 19 in which the Lord Ordinary held that that the party putting forward a claim for unjustified enrichment must be able to demonstrate their losses and in Gray v Johnson 1928 SLT 499 the claim was rejected on the basis that the calculations were speculative and not properly vouched.
Having regard to these authorities, Sheriff McLachlan considered that in order to award recompense it must be possible to reverse a quantifiable loss. Without the relevant pleadings demonstrating that quantifiable and tangible loss, separate to those in support of the statutory cohabitation claim, the court was unable to allow the pursuer's claim for unjustified enrichment to proceed.
Comment
The decision is consistent with the line of authorities following Pert v McCaffrey on how the courts are to approach the interaction between unjustified enrichment and the statutory remedies available to former cohabitants in terms of the 2006 Act. An action for unjustified enrichment is only permissible where no other remedy is available to the claimant and as such, cannot be relied upon as a direct alternative remedy to a claim under section 28 of the 2006 Act. That does not, however, preclude a party from making a separate and distinct claim for unjustified enrichment with pleadings which specify a tangible loss. Otherwise, there can be no award of recompense. It is therefore imperative that claims for unjustified enrichment are properly pled, adequately vouched, and entirely distinct from a statutory claim.
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