(B) THE DEPRIVATION OF BENEFITS FROM A WRONGDOER
(i) The Nature of Restitution for Wrongs
In certain cases the victim of a wrong may be able to bring a restitutionary claim to recover the value of the benefit obtained by the defendant as a result of the wrongdoing.[1] For example, where the defendant commits a tort against the claimant, the remedial response is not necessarily assessed by reference to the claimant’s loss, but may be assessed by reference to the defendant’s gain.42 A similar response may also arise in respect of benefits accruing to the defendant as a result of a breach of contract,43 the commission of equitable wrongs such as breach of fiduciary duty,44 and even the commission of criminal offences.45
Although some commentators have argued that the restitutionary response in such circumstances arises because the defendant has been unjustly enriched at the claimant’s expense,[2] this is only correct to the extent that unjust enrichment is used in its descriptive and not its substantive sense. But, where the defendant has received a benefit as a result of the commission of a wrong, it is not possible to say that the defendant has been unjustly enriched in any substantive sense for two reasons.[3] First, because the claimant’s restitutionary claim will succeed even though the defendant’s benefit was not obtained from the claimant, so it is not possible to show that the defendant has been enriched at the claimant’s expense, save in the most artificial sense that the benefit was obtained from the commission of a wrong against the claimant. Secondly, because it is not necessary to show that the restitutionary claim falls within one of the recognized grounds of restitution. It is sufficient that the defendant has committed a wrong against the claimant, and that this wrong is of a type which has been recognized as triggering a restitutionary response. It is this wrongdoing, and not unjust enrichment on a particular ground, which constitutes the cause of action for which the relevant remedy may be restitutionary.[4]
(ii) The Nature of the Restitutionary Remedy
Where the claimant seeks a restitutionary remedy in respect of a wrong committed by the defendant, that remedy will usually be personal. There are, however, cases where the defendant has been awarded a proprietary restitutionary remedy and where the event which triggered this was a wrong, invariably an equitable wrong.[5] In such cases there is clearly an overlap between the principle of restitution for wrongs and the principle of vindicating property rights. It is preferable, however, to treat such claims as ultimately founded on the wrong, since it is the commission of the wrong which triggers the recognition of the claimant’s proprietary right.
The justification for the award of restitutionary remedies where the defendant has committed a wrong is the fundamental principle that wrongdoers should not be allowed to profit from their wrongdoing.[6]
- [1] 43 See Chapter 18. 44 See Chapter 19. 45 See Chapter 20.
- [2] See Burrows, The Law of Restitution (3rd edn), 12, where he considers restitution for wrongs to befounded on the principle against unjust enrichment. See also the report of the Law Commission, Aggravated,Exemplary and Restitutionary Damages (Law Com No 247, 1997), 51. Birks at one time shared this view (PBHBirks, An Introduction to the Law of Restitution (rev edn, Oxford: Clarendon Press, 1989), 26) but hesubsequently changed his mind: Birks, ‘Misnomer’, 14.
- [3] See LD Smith, ‘The Province of the Law of Restitution’ (1992) 71 CBR 672, 683.
- [4] Although Burrows stills clings to the theory which awards restitutionary remedies only where thedefendant is unjustly enriched, he acknowledges that, for restitution for wrongs, the underlying cause ofaction is the wrong rather than unjust enrichment: The Law of Restitution (3rd edn), 12.
- [5] See Chapter 19. 50 See Chapter 16.
- [6] 51 Foskett v McKeown [2001] 1 AC 102, 129 (Lord Millett).
