LSE: Law of Obligations Exam Paper

Alice, a building contractor, mistakenly builds a conservatory on Bob's land, believing it to be Carol's property due to incorrect survey documents provided by Dave, a surveyor. The conservatory costs £15,000 to build and increases Bob's property value by £8,000. Bob knows of the mistake but says nothing, watching the construction daily. When Alice discovers her error and demands payment, Bob refuses, claiming he never requested the work. Carol, who was meant to receive the conservatory, has already paid Alice the full £15,000. Meanwhile, Dave's surveying company has become insolvent. Advise Alice on her restitutionary claims.

"The defence of change of position has become so broad in scope that it threatens to undermine the very foundations of the law of restitution." Critically evaluate this statement with reference to recent case law developments.

Emma runs a successful restaurant. During the COVID-19 pandemic, she applies for and receives £50,000 in government grants under the Coronavirus Business Interruption Loan Scheme, providing false information about her annual turnover. She uses £30,000 to pay outstanding supplier debts and £20,000 to renovate her restaurant kitchen, increasing the property's value by £25,000. Six months later, the government discovers the fraud and demands full repayment. Emma argues that she has changed her position and that her suppliers, who were facing bankruptcy, would be unfairly prejudiced if she must now recover payments from them. Emma's business has since failed, and she has no remaining assets except the improved restaurant premises, which she has now sold for £100,000 above its original value. Advise the government on its restitutionary claim.

"The distinction between 'failure of consideration' and 'failure of basis' represents more than mere terminology; it reflects a fundamental shift in how English law conceptualises the grounds for restitutionary recovery." Discuss the theoretical and practical implications of this development in the law of unjust enrichment.