[2025] EWHC 2477 (Ch)

Unjust enrichment claims are conventionally approached under four headings: (1) Has a party been enriched? (2) Was the enrichment at the expense of another party? (3) Was the enrichment unjust? (4) Are there are any defences? (Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221 per Lord Steyn at 227) although this is only the basis for a structured approach rather than a series of legal tests (Investment Trust Companies v Revenue and Customs Commissioners [2018] AC 275 per Lord Reed at para 41).

It is agreed that the claimant landlords (defendants to the counterclaims) were enriched by the payment of rent, and that this was at the expense of the defendants who paid the rent and now counterclaim for its repayment. There is an issue about whether the enrichment was unjust.

In this connection, one of the things we have been asked to examine is whether it is in accordance with the statutory purpose, or contrary to the statutory purpose, for a person whose statutory right to receive an ECR has been breached not to be able to counterclaim for repayment of rent that person paid when not required to do so. We addressed the statutory purpose in para 205 of the First Judgment:

“The statutory purpose is, not only that dwellings should be fit for human habitation, but that there should be regular testing and reporting, including reporting to the contract-holders as the persons most affected by electrical hazards and other matters affecting or potentially affecting fitness for human habitation. The statutory purpose is, not only to give contract-holders rights when their property is objectively unfit for human habitation, but to give them also information rights so that they have assurance (when it is not unfit) and details of what is required (when it is, or may be, or is at risk of becoming, unfit). The statutory purpose is to incentivise landlords to honour these rights by linking compliance directly with their right to receive rent. We consider the construction we have adopted to be consonant with the statutory purpose. The claimants’ construction, which we have rejected, is less consonant with the statutory purpose as a whole, relating, as it does, only to a part of it and freeing landlords of any risk to their rent if they do not comply with the information requirements of the Act and its associated regulations.”

We do not think it is necessary or in accordance with the statutory purpose that a person who was not required to pay rent, but who did in fact pay rent, should be entitled to counterclaim for repayment of the rent after the ECR has been provided.

The statutory purpose is to incentivise landlords to comply with their ECR obligations. The knowledge that a contract-holder will not be required to pay rent if the ECR is not provided when it is due is a powerful incentive. However, once the ECR has been provided, the statutory purpose has been met. The statutory purpose is not served by allowing contract-holders to reclaim their rent after the event, if they have in fact paid it. That would go further than is necessary to achieve the statutory purpose.

It was possible for the legislature to specify, not only that rent did not have to be paid, but that, if it were to be paid, it could subsequently be reclaimed. The legislature did not do that. That supports the view that it was not part of the statutory intention that such a right should exist.

In all these cases, the defendants expected to be housed in return for their payment of rent, and they received exactly the housing that they were expecting. They received all the benefits of the contract, except the physical receipt of the ECR. They also, in these cases, received the benefit of property which had been inspected and found to be safe from an electrical point of view, and in respect of which an ECR was already in existence and available on request.

We do not think it is unjust for the landlord to retain the benefit of the rent paid by the defendants, notwithstanding the subsequent discovery that a statutory duty physically to give the ECR to the defendants had not been complied with. As we said in paragraph ‎26 above, it was not complied with because of a mistake on the part of the claimants which was understandable in the circumstances. No-one (neither the landlord nor the defendants) had any concerns about the ECR until the point when the ECR was provided, which was as soon as the landlords had spotted their oversight, and after the rent had been paid. We do not think it is unjust for the landlords to retain the rent which was paid to them in this situation, although it was not required to be paid at the time it was paid. We do not think that the landlords, although enriched, were unjustly enriched.

It is not unjust for the landlords to retain the rent paid to them in consequence of a breach of duty which has caused the defendants no loss. The landlords have conferred substantial benefits upon the defendants in exchange for the rent. The defendants have suffered no loss as a result of the non-provision of the ECR (hence the abandonment of their damages claims). The defendants did not care about physical receipt of the ECR although they would no doubt care about the electrics being safe (which they were). They only became aware of the non-provision issue when the landlords themselves became aware of it and set about putting the position right. If the defendants are allowed to reclaim the rent in full, despite not having suffered any loss, it is they and not the landlords who will be unjustly enriched.