BL-2020-001417 - [2025] EWHC 2487 (Ch)

In the submissions of Musst, it is appropriate to consider limitation first. The reason given by Musst is because if the claim in unjust enrichment is statute barred, then that is the end of the case. It obviates the need to consider further whether each of the ingredients of unjust enrichment are satisfied or whether there is a defence or the value of the enrichment. I start with limitation in part because it focuses on the nature of the benefit, if any, arising from the expense of Matrix.

Musst submits that the claim in unjust enrichment is time barred pursuant to section 5 of the Limitation Act 1980 which is applicable to such claims and which provides that time expires six years from the date on which the cause of action accrued.

Section 5 of the Limitation Act 1980 reads as follows:

“Time limit for actions founded on simple contract.

An action founded on simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued.”

It is common ground that the relevant law is that this section applies also to claims in unjust enrichment, that is a six-year period from the time when the cause of action accrued: see Aspects Contracts (Asbestos) Ltd v Higgins Construction plc [2015] 1 WLR 2561 at [25]. The battleground was when the cause of action accrued. The relevant law was summarised by Musst as follows in their opening at paras. 97 as follows:

“... A right accrues to bring a claim in unjust enrichment upon receipt of an incontrovertible benefit, see Surrey CC v NHS Lincolnshire Clinical Commissioning Group [2020] EWHC 3550 at [89], per Thornton J, and the decisions of Peter MacDonald Eggers QC, sitting as a Deputy Judge of the High Court, in Sixteenth Ocean GmbH and Co KG v Societe Generale [2018] EWHC1731 (Comm) at [106] and in Moorgate Capital Corporate Finance Limited v Sun European Partners LLP [2020] EWHC 593 at [145] in which he held “The cause of action for a quantum meruit accrued when all the elements of a claim for unjust enrichment had materialised, namely the enrichment of the defendant at the claimant’s expense and the rendering of that enrichment unjust...”, and the extracts from Christopher Clark J’s decision in Dalman v 2 Toobz at [2020] EWHC 291 (Comm) at [33] (cf [42]).”

Musst’s case is that the unjust enrichment occurred, or at least first occurred, when the anticipated contract on the basis of which MRL says it gave its assistance in introducing The Observatory/2B and LGT/Crown did not materialise, that is after Musst had acquired the rights to be paid for the introductions under the Octave contract made on 18 April 2013. It is said that the basis on which Matrix had provided its assistance in introducing investors failed, namely that Musst would in turn enter into a corresponding agreement with Matrix to pay for its work. On this way of putting Musst’s case, the incontrovertible benefit to Musst was the fact that work had been done in respect of introductions of customers, Musst had been able to monetise this by entering into the Octave contract and there was the failure of basis. In these circumstances, from this point of 18 April 2013, Matrix had a claim in unjust enrichment and so it became statute barred by 18 April 2019 and in any event by the time of the issue of proceedings on 4 September 2020.

Alternatively, Musst submitted that if the benefit which Musst received from the Octave Contract was not incontrovertible until sums were received by Musst, then the cause of action accrued on the dates when Musst received its first payment from each investor. That was in the case of 2B on 13 May 2013 and in the case of Crown on 8 November 2013. On this basis, the claim is said to have been statute barred by May 2019 and November 2019 respectively on the basis that incontrovertible benefit had been received in relation to Crown and 2B respectively and there was a failure of basis because Musst had not entered into a corresponding agreement with Matrix. Even analysing the case on the basis of an end-product for the services, it was submitted that the right to an income stream had accrued by the time of the first payments as above.

The analysis of Musst is that nature of the claim and/or the policy of the Limitation Act 1980 is to allow for a single sum for damages or compensation or restitution to remedy once and for all the injustice. By reference to cases in nuisance (Jolla v Shell [2024] AC 595) and negligence (Nykredit Mortgage Bank plc v Edward Erdman Group Ltd (No.2) [1997] 1 WLR 1625 at 1633), Musst submitted that the claim should be brought from when the damage first occurred, and not from when it can more easily be ascertained or from each incidence of damage thereafter.

Musst also submitted that the enrichment is to be valued at the time that it is received, and they rely upon MacInnes v Gross [2017] EWHC 46 (QB) at 163 per Coulson J (as he then was):

“A claim for unjust enrichment is not a claim for compensation for loss, but for recovery of a benefit unjustly gained by a defendant at the expense of the claimant, which is sometimes referred to as a “transfer of value”: see Boake Allen Limited v MRC [2006] STC 606, CA. The enrichment is valued at the time that it was received by the defendant.”

It is said to be irrelevant that there might be difficulty in assessing the damages just as in the case of a claim for compensation. The Court could make an assessment about future losses or grant a declaration and an order for payment when the money is subsequently received.

Musst also submitted by reference to Reeves v Butcher [1891] 2 QB 609, 611 per Lindley LJ that “the right to bring an action may arise on various events; but it has always been held that the statute runs from the earliest time at which an action could be brought.” That was a case defining when the cause of action had arisen in a loan agreement, and does not advance the analysis.

In the alternative, Musst submitted that Matrix could have brought a claim for a declaration of right and an account of all past and future payments received by Musst from its introduction of The Observatory/2B and LGT/Crown. This does not have any bearing on when the claim arises for unjust enrichment or at least compel a person to bring a claim for a declaration or an account before the relevant benefit has been received. As MRL submitted, the claim is not based simply on the contingency that a management fee was payable but on the further contingency that the performance fee element of what Musst earned in the event of the fund performing so as to turn a profit on the investments. This would in turn lead to either Musst becoming entitled to a commission and thereafter receiving a commission.

Where the ‘end product’ of services is the hoped for accomplishment of an investment, or a return on an investment, or similar contingency, the enrichment does not occur generally until the contingency eventuates. Conversely, if the contingency does not eventuate, there is no enrichment. Thus, in Gray v Smith the Court held that the enrichment lay in the end-product of the claimant’s services, in the form of committed capital, on the basis of the parties’ understanding as to the principal objective of their collaboration and the claimant taking the risk it would be paid only on the occurrence of the end product (para 451).

This illustrates, as MRL observed in its written opening, that where the existence of A’s enrichment in respect of B’s services depends on the occurrence of a contingency, A is not enriched, and time does not start to run for limitation purposes, unless and until that contingency arises. Or, to put it another way: if A and B have operated on the understanding that B will only be compensated for its services if A receives a benefit upon the occurrence of a particular contingency, A’s enrichment will only be unjust if the contingency occurs and A nonetheless fails to compensate B.

In opening, MRL said that it would be submitted that the requisite unjust enrichment of Musst depended on the occurrence of a number of contingencies: the entry into a contract between Astra/Octave and Musst; the accomplishment of investment into the fund by persons introduced by Musst/Matrix; in respect of the performance fee element, the successful performance of the fund so as to generate an entitlement to a performance fee on the part of Astra/Octave and a corresponding entitlement to be paid a commission on that fee on the part of Musst; and the receipt of the commission pursuant to that entitlement by Musst from Astra.

Having identified that this was an end-product case as above, the services do not stand to be valued at the point of the services being conferred or a failure of basis of no agreement having been made between Matrix and Musst. The cause of action is therefore by reference to the end-product of the investment having been not only made, but having led to a benefit being received by Musst.

The case of Musst is that the first sum received is an incontrovertible benefit for all time such as to trigger the limitation period. It is said that time started to run in 2013 on the first payments from Crown and 2B respectively, such that the action was time barred. There are several fallacies in this argument as follows:

If this had been a claim in contract, then the moneys would not have been due upon the receipt of the first share of the management fees, but only upon receipt of the share of the performance fees. There would be nothing objectionable in each performance fee triggering a different cause of action. So by parity of reasoning, there is no reason not to have a separate cause of action for each enrichment. In the circumstances of this case, it is self- evident in that the claim for a share of the performance fee did not accrue more than six years prior to the commencement of this action. Accordingly, the Court rejects the submission that on the first payment being made in respect of an investor that the limitation period accrues for the entirety of what may be received. The benefit is received payment by payment and not through a fiction that an early payment brings about the benefit for all time. There is no assistance from cases about an account: this is not an action for an account.

It therefore follows that in respect of the management fees, this is a case where the right accrued upon receipt of management fees by Musst. For reasons explained in more detail below, I reject the notion that the claim for management fees of Matrix against Musst accrued at the earlier stage of the same being received by Octave/Astra. The reason for this is that there was not an incontrovertible benefit for Musst until the moneys were received by Musst. The fact that Musst could have brought an action against Astra is not a benefit, unless and until the money was received whether paid voluntarily or paid pursuant to a judgment debt. Insofar as moneys had been received referable to The Observatory/2B and LGT/Crown prior to 4 September 2014, the claim is statute barred.

In respect of performance fees, the claim is not statute barred whether it was by reference to moneys received by Octave or, as I hold, by Musst, the claim had not accrued more than six years before the action, that is before 4 September 2014. Accordingly, the claim is not statute barred.

Before leaving limitation, it is necessary to draw attention to a subtle change in the submissions of MRL in respect of the incontrovertible benefit. The way in which it was expressed in the opening at [43] was as follows:

“…the requisite unjust enrichment of Musst depended on the occurrence of a number of contingencies: the entry into a contract between Astra/Octave and Musst; the accomplishment of investment into the fund by persons introduced by Musst/Matrix; in respect of the performance fee element, the successful performance of the fund so as to generate an entitlement to a performance fee on the part of Astra/Octave and a corresponding entitlement to be paid a commission on that fee on the part of Musst; and the receipt of the commission pursuant to that entitlement by Musst from Astra. At least in respect of the performance fees, these contingencies were not accomplished until some time after 4 September 2014. (Emphasis added)”

In the closing argument of MRL at [126], it was expressed as follows:

“In the present case the relevant enrichment plainly did not occur when the services were provided by Matrix. At that stage, Musst had received no benefit from those services and might never have received any. Rather, the accrual of any benefit remained dependent on a number of contingencies: the entering into between Musst and Astra/Octave of a contract for the payment of a commission; the making of an investment in the fund by an investor in respect of whom Matrix and Musst had assisted; and, in relation to the performance fee, the fund making a profit on such investor’s investment. (emphasis added)”

The difference is that a contingency mentioned in the opening is “the receipt of the commission pursuant to that entitlement by Musst from Astra”, whereas in the closing the contingency in relation to the performance fee is “the fund making a profit on such investor’s investment.” In the closing, the fund is Octave/Astra and the contingency is the receipt of the profit by Octave/Astra rather than the receipt by Musst from Astra is not mentioned.

For the purpose of responding to the limitation defence, this makes no difference on the facts of this case, at least as regards the performance fees received by Musst from Astra referable to The Observatory/2B and LGT/Crown. That is because the action was brought within 6 years of the performance fees being received by Astra and in fact prior to the moneys being received by Musst. Accordingly, there is no limitation defence in respect of performance fees.

There may be a distinction in respect of management fees between the time when these fees were received gross by Octave/Astra and the time when the appropriate percentage was received by Musst. In my judgment, the benefit conferred on Musst was only at the point of its receipt by Musst. If there had been an insolvency of Octave/Astra, no benefit would arise. If it had been necessary to bring an action for the receipt of the moneys and Musst was not prepared to bring the action, say because of the risk of the action or inability to fund the action, then here too no benefit would arise. The formulation of MRL at the commencement of the case was the appropriate one, namely that the benefit was not received until the fees were received by Musst.

For the purpose of completeness and clarity, it should be reiterated in this section on limitation that the pleaded concealment case was withdrawn at latest following the evidence at trial.

Although there is no limitation defence in respect of performance fees, the time when the benefit was received is significant to other aspects of this claim, notably (i) whether there was a causal connection between the truncated services provided in 2012 and the judgment proceeds received in about 2022 as opposed to the time of the receipt by Astra in say 2016, and (ii) other considerations which might go to the question of defences or overall justice in considering any obstacles to recovery by Musst. This will be considered below.