GIFTS
Where the receipt of a benefit can be characterized as a gift, this should constitute a legally effective basis for the transfer and restitution should be denied, because a gift is a legal transaction which, if valid, should not be undermined by the law of unjust enrichment.110
The donee should be secure in the validity of the receipt of the gift and the law of restitution should not be used to unsettle this security.
It is consequently important to be able to identify when a transfer can be considered to be a gift. But this is not straightforward because the key test turns on the nature of the claimant’s mental state at the time of the transfer. Clearly, if the claimant intended the transfer to be gratuitous, this will be a gift. Birks considered that the notion of oblique intent will suffice, so that if the claimant foresaw that the defendant might receive a benefit as a virtually certain consequence without the claimant receiving anything in return, this could be considered to be gratuitous. Birks even considered that knowingly taking a risk that the claimant might not be paid for the provision of a benefit could mean that the claimant had made a gift to the defendant.[1] So, for example, the busker who wants to be paid for his music was considered by Birks to have made a gift of his services to those who chose not to pay. But it is artificial to describe the busker as a donor of his services. The real problem with buskers is that they are taking a risk as to whether anybody will pay money for the music. Risk-taking should not be treated as an implicit part of the identification of a legally effective basis, but should be a separate consideration when determining whether restitution should be awarded, albeit one that often forms part of the identification of a ground of restitution.[2] Consequently, gift as a legally effective basis for the transfer of a benefit should be interpreted restrictively to encompass only a purpose on the part of the claimant to benefit the defendant gratuitously. Where the benefit has been provided recklessly, whether restitution should be awarded should depend on the application of the different principle of risk-taking.
Where the claimant has purported to make a gift to the defendant there will not be a valid basis for the transfer where there are particular circumstances which undermine the validity of the gift, such as where the claimant was mistaken[3] or had been compelled to make the gift to the defendant.[4]
