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Home arrow Law arrow The principles of the law of restitution
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(i) Contractual

The first type of subrogation arises by virtue of the express or implied intentions of the parties, as occurs in contracts of insurance where a term is implied that insurers are subrogated to the rights of the assured against the party who caused loss.[1] Since this right to subrogation arises by virtue of contract, it has nothing to do with the law of restitution.[2]

(ii) Restitutionary

The other type of subrogation is the equitable restitutionary remedy which is available by operation oflaw specifically to reverse the defendant’s unjust enrichment.[3] It may also be used to prevent the defendant’s unjust enrichment.[4] Although the matter was not discussed by the House of Lords, subrogation should also be available where the claimant’s restitutionary claim is founded on the vindication of property rights, and is in fact most likely to arise in such circumstances.[5] Whilst the remedy is in principle available where the claim is founded on the commission of a wrong, there are no cases where such a remedy has been awarded, and it is difficult to conceive of a case where such a remedy would be appropriate.

  • [1] See, for example, Lord Napier and Ettrick v Hunter [1993] AC 713.
  • [2] Hobbs v Marlowe [1978] AC 16, 39 (Lord Diplock).
  • [3] Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221, 231 (Lord Hoffmann); Filby vMortgage Express (No 2) Ltd [2004] EWCA Civ 759; Menelaou v Bank of Cyprus plc [2013] EWCA Civ 1960,[2014] 1 WLR854.
  • [4] Banque Financiere de la Cite v Parc (Battersea) Ltd [1999] 1 AC 221, 231 (Lord Hoffmann).
  • [5] Halifax plc v Omar [2002] EWCA Civ 21, [2002] 2 P and CR 377; Eagle Star Insurance Co Ltd vKarasiewicz [2002] EWCA Civ 940. See also Bofinger v Kingsway Group Ltd [2009] HCA 44. See Chapter 22.
 
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