WHEN WILL RESTITUTIONARY REMEDIES BE AWARDED?

Although the policy of corrective justice can be relied on to justify the award of restitutionary remedies, it is too uncertain to operate as an underlying principle on which the law of restitution can be built. For, if the question of whether restitutionary remedies can be awarded depended simply on whether it was just to require the defendant to give back or give up to the claimant what the defendant had gained, the law of restitution would be unpredictable and unworkable such that it would effectively be void for uncertainty. Consequently, it is necessary to identify more specific principles which provide the basis for determining whether the claimant may obtain restitutionary relief. It is important to recognize that, for the purposes of this book, a principle (as distinct from a policy or a value) is a generalized rule of law which has explanatory force in synthesizing complex policies and doctrines in a simple pithy statement.^[1]

The key question concerns when the law will recognize that the claimant has a right which can be vindicated by means of restitutionary remedies. Orthodox learning suggests that there is only one principle on which the law of restitution is dependent, namely the principle of unjust enrichment.^[2] This equation of the law of restitution with the principle of reversing the defendant’s unjust enrichment has been recognized by the judiciary.^{[3] [4] [5]} But it was not until the decisions of the House of Lords, first in Lipkin Gorman (a firm) v Karpnale Ltd²² and then in Woolwich Equitable Building Society v IRC,²³ that we could be certain that there is a body of law which exists to secure the reversal of unjust enrich- ment.^[6] Probably the most important dictum of the modern law of restitution is that of Lord Goff in Lipkin Gorman, who recognized that:

The recovery of money in restitution is not, as a general rule, a matter of discretion for the court. A claim to recover money at common law is made as a matter of right; and even though the underlying principle of recovery is the principle of unjust enrichment, nevertheless, where recovery is denied, it is denied on the basis of legal principle.^[7]

Despite the recognition by the House of Lords that the law of restitution equates with the reversal of the defendant’s unjust enrichment, such an interpretation of the law is in fact too simplistic and does not accurately reflect the true operation of the law of restitution.^[8] Careful analysis of the case law suggests that the law of restitution is not founded upon one principle but rather is founded on three different principles, namely:

• (1) the reversal of unjust enrichment;
• (2) the prevention of a wrongdoer from profiting from his or her wrong; and
• (3) the vindication of property rights with which the defendant has interfered.

Restitutionary remedies are available in respect of each of these three principles, but it is vital that they are kept separate and are not brought together within one general principle of unjust enrichment, for the award of restitutionary remedies involves very different considerations depending on which principle the claimant relies. Each of these three principles requires careful description at the outset.

• [1] For a jurisprudential analysis of ‘principle’ see J Gardner, ‘Ashworth on Principles’ in L Zedner andJ Roberts (eds), Principles and Values in Criminal law and Criminal Justice: Essays in Honour of AndrewAshworth (Oxford: Oxford University Press, 2012), 25.
• [2] See C Mitchell, P Mitchell, and S Watterson (eds), Goff and Jones: The Law of Unjust Enrichment(8th edn, London: Sweet and Maxwell, 2011), 5; AS Burrows, The Law of Restitution (3rd edn, Oxford: OxfordUniversity Press, 2011), 4.
• [3] Notably by Lord Wright in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC32, 61. See further p 47, below.
• [4] [1991] 2 AC 548. See in particular Lord Bridge, 558, Lord Templeman, 559, and Lord Goff, 578.
• [5] [1993] AC 70, 197 (Lord Browne-Wilkinson).
• [6] See also Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669, 710 (Lord Browne-Wilkinson); Kleinwort Benson Ltd v Glasgow CC [1999] 1 AC 153, 167 (Lord Goff) and 185 (Lord Clyde);Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221; Kleinwort Benson Ltd v Lincoln CC [1999]2 AC 349, 373 (Lord Goff), 406 (Lord Hope); Foskett v McKeown [2001] 1 AC 102; Deutsche Morgan GrenfellGroup plc v IRC [2006] UKHL 49, [2007] 1 AC 558; Sempra Metals Ltd v IRC [2007] UKHL 34, [2008] 1 AC561; Yeoman’s Row Management Ltd v Cobbe [2008] UKHL 55, [2008] 1 WLR 1752; Test Claimants in theFII Group Litigation v HMRC [2012] UKSC 19, [2012] 2 AC 337; Pitt v Holt [2013] UKSC 26, [2013] 2 AC 108;Benedetti v Sawiris [2013] UKSC 50, [2014] AC 938.
• [7] Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548, 578.
• [8] That the law of restitution should not be equated solely with the unjust enrichment principle was alsorecognized by Birks: PBH Birks, ‘Misnomer’ in W Cornish, R Nolan, J O’Sullivan, and G Virgo (eds),Restitution: Past, Present and Future (Oxford: Hart Publishing, 1998), 7. See also PBH Birks, Unjust Enrichment (2nd edn, Oxford: Oxford University Press, 2005), 4.