(A) NO EXPLANATORY BASIS
Birks explored the meaning of ‘basis’ in some detail. He drew a key distinction between situations where the claimant participated in the transfer of the enrichment and where he or she had no control over the transfer. Where the claimant did participate, two distinct explanatory bases for the transfer might be identified. First, where the claimant transferred the enrichment to discharge an obligation, such as a contractual or other liability, including a court judgment. If the obligation was valid, an explanatory basis for the transfer could be identified. If there was no valid obligation, there would be no explanatory basis for the enrichment. Secondly, where the claimant voluntarily transferred the enrichment to achieve a purpose, such as to make a contract, constitute a trust or as a gift. If this purpose was not fulfilled, there would be an absence of basis for the transfer. So, for example, if the claimant transferred a benefit with a view to make a contract but no contract was made, there would be no explanatory basis for the transfer, although in such circumstances the restitutionary claim would probably be defeated because the claimant was a risk-taker.65
Alternatively, where the enrichment has been transferred involuntarily,66 such as where it has been stolen or the claimant is powerless to prevent the transfer, there would be no explanatory basis for the transfer, save where the defendant had legal authority to acquire the enrichment.
Although Birks described the absence of basis principle as having a ‘surgical simpli- city’,67 it is neither as simple nor as radical as might first be thought. This is because he accepted that many of the traditional grounds of restitution remain relevant when identifying whether there is an absence of basis. Birks adopted a pyramidal structure to his analysis of the ‘unjust factor’ part of the unjust enrichment principle. At the base of the pyramid are the existing grounds of restitution which identify whether the claimant intended the defendant to be enriched, as well as other considerations which identify that the transfer of the enrichment was invalid, such as the invalidity of a contract. Establishing any of these grounds or considerations will determine whether there was an absence of basis for the transfer, which is at the second level of the pyramid, and, once this absence of basis has been identified, it can be concluded that the enrichment was unjust; which is at the top of the pyramid. Birks’s shift of focus from positive grounds of restitution to absence of basis remains significant, however, since, once the claimant has established the absence of a basis for the transfer of a benefit to the defendant, the unjust element has been established and the burden would then shift to the defendant to show that there was no valid basis for the transfer. It follows from Birks’s thesis that much of the work which is normally done within the law of unjust enrichment would be done outside of it. Often there would need to be a prior determination of whether there was a legal basis for the transfer of the enrichment, within the law of contract or gift for example, and only once it has been decided that there is no such basis would the law of unjust enrichment be engaged.
-  64 Ibid, 140. Birks considered that the vast majority of cases would be of this type: ibid, 130.
-  65 See p 36, above. 66 Birks, Unjust Enrichment (2nd edn), 154. 67 Ibid, 160.
-  Ibid, 104. 2 But not ‘policy-motivated’ grounds of restitution.
-  70 This is preferably analysed as a denial rather than as a defence, see p 60, above, because absence of basis
-  would constitute an essential component of the cause of action.
-  RB Grantham, ‘Absence of Juristic Reason in the Supreme Court of Canada’  13 RLR 102, 105; ASBurrows, ‘Absence of Basis: The New Birksian Scheme’ in AS Burrows and Lord Rodgers (eds), Mapping theLaw: Essays in Memory of Peter Birks (Oxford: Oxford University Press, 2006), 36.