Restitution for Unjust Enrichment

Restitution for Unjust Enrichment

Outline

  • Historical development from quasi-contract to unjust enrichment.
  • Theoretical basis and the Australian position.
  • Elements of restitutionary claims.
  • Money had and received.
  • Quantum meruit.
  • Defences to restitutionary claims.
  • Assessment and quantum of recovery.
  • Relationship with other remedies.

Introduction

  • Focuses on reversing defendant's gain, as opposed to compensating for the plaintiff's loss.
  • It has significantly developed in recent decades.
  • Addresses situations where a party receives a benefit at another's expense.
  • The central question is whether it would be unjust for the benefit to be retained.

The Implied Contract Theory

  • Courts used to impose an "implied promise" to justify relief.
  • Derived from the action of assumpsit (meaning "he promised").
  • Moses v Macferlan (1760) established that if the defendant is obligated by natural justice to refund, the law implies a debt.
  • Lord Mansfield stated: "If the defendant be under an obligation, from the ties of natural justice, to refund; the law implies a debt…"
  • This was a legal fiction that persisted despite the abolition of forms of action.

Theoretical Basis of Modern Restitution

  • Unjust enrichment emerged as the unifying concept.
  • Pioneered by Lord Goff and Professor Gareth Jones.
  • Three elements are derived from BP Exploration Co (Libya) Ltd v Hunt (No 2):
    • Receipt of a benefit by the defendant.
    • At the plaintiff's expense.
    • In circumstances making retention unjust.

Unjust Enrichment in Australian Law

  • Pavey & Matthews Pty Ltd v Paul (1987): the High Court rejected the implied contract theory.
  • Recognized quantum meruit claims as based on preventing unjust enrichment.
  • Followed by ANZ Banking Group Ltd v Westpac Banking Corporation (1988).

The Evolving Australian Position

  • A distinct Australian approach has developed.
  • Roxborough v Rothmans (2001): Justice Gummow drew a distinction with equitable notions.
  • Australian Financial Services and Leasing v Hills Industries (2014):
    • "The concept of unjust enrichment is not the basis of restitutionary relief in Australian law”.
  • In Australia, unjust enrichment serves a