Menu
Home
Log in / Register
 
Home arrow Law arrow The principles of the law of restitution
Source

ELECTION BETWEEN PRINCIPLES

Where the claimant is ignorant that his or her property has been taken by the defendant so that the claimant retains legal title in it, it is clear that the claimant can bring a claim for restitution grounded on the vindication of this legal title. But can the claimant alternatively bring a claim grounded on the defendant’s unjust enrichment, even though the claimant has legal title in the property? It is difficult to conceive of reasons why the claimant would wish to bring such a claim when a proprietary claim is available, save where the property has fallen in value or the claimant might simply be poorly advised and think that the only claim available is one grounded on unjust enrichment. The issue is essentially whether the claim in unjust enrichment will be barred by the fact that the claimant has retained legal title.

A number of commentators have concluded that, where the claimant does retain legal title to the property, a claim grounded on unjust enrichment is barred.[1] One suggested reason is that, where the claimant has retained title in the property he or she will not be able to establish that the defendant has been enriched.[2] This argument assumes that the notion of whether or not the defendant has been enriched is a question of law rather than fact.[3] The consequence of this is that, if the claimant continues to own the property which the defendant has received, it is not possible to conclude that the defendant has been enriched because the property does not belong to the defendant. In other words, the claimant has not lost anything. Birks, on the other hand, considered that the notion of enrichment is a factual test.[4] Consequently, it is sufficient for the claimant to establish that the defendant has received a factual benefit, which is assessed by showing that value has passed from the claimant to the defendant. If the defendant steals the claimant’s car it is clear that the defendant is now in possession of a car, a valuable benefit, which he or she did not have before. It follows that the defendant should be considered to be enriched by the value of the car and this enrichment should be considered to derive from the claimant, even though the claimant has retained title to the car. The question whether the defendant is legally enriched should be of no significance to the question whether the defendant has been unjustly enriched at the expense of the claimant; it is only of significance when determining whether the claimant has title to property as a matter of law for purposes of bringing a claim to vindicate his or her property rights.

If it is possible to show that the defendant has received a factual enrichment, even though the claimant has retained title in the property received by the defendant, and it can be shown that the defendant had obtained this benefit directly from the claimant, it should be possible to bring a restitutionary claim founded on the reversal of the defendant’s unjust enrichment so long as it can be shown that the claimant was ignorant of the transfer. It is no bar to a restitutionary claim founded on unjust enrichment that the claimant could have brought a claim founded on the commission of a wrong,18 and neither should it matter that the claim could alternatively have been founded on the vindication of proprietary rights.

THE ROLE OF IGNORANCE AS A GROUND OF RESTITUTION

It follows from this analysis that there is no reason of principle or law which should prevent the claimant from bringing a claim in unjust enrichment where the ground of restitution is ignorance. But, as has been seen in this chapter, such a claim will be highly exceptional. It is no wonder that ignorance has not yet been formally recognized as a ground of restitution in its own right, simply because, where the claimant was ignorant that a benefit was transferred to the defendant, a proprietary restitutionary claim has many advantages over a claim founded on the reversal of the defendant’s unjust enrichment and will typically be available as a consequence of the claimant’s ignorance of the transfer.

18

See Chapter 16.

  • [1] ment: Categorical Truth or Unnecessary Complexity?’ [1997] NZ Law Rev 668, 682-3.
  • [2] RB Grantham and CEF Rickett, ‘Restitution, Property and Mistaken Payments’ [1997] RLR 83, 87.
  • [3] See RB Grantham and CEF Rickett, ‘Trust Money as an Unjust Enrichment: A Misconception’ [1998]LMCLQ 514, 517-18. See also Ilich (1987) 162 CLR 110, 140-1 (Brennan J).
  • [4] PBH Birks, ‘Property and Unjust Enrichment: Categorical Truths’ [1997] NZ Law Rev 623, 654; PBHBirks, ‘On Taking Seriously the Difference Between Tracing and Claiming’ (1997) 11 TLI 2, 7-8.
 
Source
Found a mistake? Please highlight the word and press Shift + Enter  
< Prev   CONTENTS   Next >
 
Subjects
Accounting
Business & Finance
Communication
Computer Science
Economics
Education
Engineering
Environment
Geography
Health
History
Language & Literature
Law
Management
Marketing
Mathematics
Political science
Philosophy
Psychology
Religion
Sociology
Travel