(A) THE REVERSAL OF UNJUST ENRICHMENT
The reversal of the defendant’s unjust enrichment is the most important principle in the law of restitution, since it underlies the award of restitutionary relief in a wide variety of cases. It is therefore crucial to determine exactly what unjust enrichment means. Two different senses of the phrase can be identified and it is the failure to distinguish between them that has resulted in the assumption by many that the reversal of unjust enrichment is the only principle on which the award of restitutionary remedies is dependent.
(i) The Descriptive Sense of Unjust Enrichment
Unjust enrichment may be relied upon simply to describe a state of affairs where the defendant can be said to have been enriched in circumstances of injustice. Since restitutionary remedies will only be awarded where the defendant has received some sort of benefit in circumstances where he or she is required to transfer that benefit or its value to the claimant, this descriptive notion of unjust enrichment can be treated as underlying the whole of the law of restitution. Indeed, it is this idea of unjust enrichment which was recognized by Lord Wright in the Fibrosa case, who equated it with what ‘conscience’ demands,[1] and which had earlier been adopted by Lord Mansfield in Moses v Macferlan,[2] who recognized that ‘the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money’. This descriptive sense of unjust enrichment was also acknowledged by Lord Clyde, who said that the unjust enrichment principle ‘is equitable in the sense that it seeks to secure a fair and just determination of the rights of the parties concerned in the case’.[3]
Whilst the award of restitutionary remedies can be justified after the event on the ground that it is fair and just to require the defendant to make restitution, unjust enrichment in this descriptive sense can hardly be considered to be a legal principle which is sufficiently certain to determine when restitutionary remedies should be awarded. Indeed, the assumption in a number of cases that the award of restitutionary remedies was dependent simply on whether or not the defendant had been enriched in circumstances of injustice was one of the main obstacles to the recognition of the law of restitution as an independent body of law. This is illustrated by the dictum of Hamilton LJ in Baylis v Bishop of London[4] that the judges ‘are not now free in the twentieth century to administer that vague jurisprudence which is sometimes attractively styled “justice as between man and man”’.
- [1] Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32, 61. See p 47, below.
- [2] (1760) 2 Burr 1005, 1012; 97 ER 676, 681.
- [3] Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221, 237.
- [4] [1913] 1 Ch 127, 140. See also Holt v Markham [1923] 1 KB 504, 513 where Scrutton LJ described thehistory of restitution as a ‘history of well-meaning sloppiness of thought’.
