Principles of Private Law The Melbourne JD Trimester 2, 2005 Dr. Paul Vout

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout Lecture 10 – Restitution for Unjust Enrichment The role of restitution for unjust enrichment The role of restitution for unjust enrichment The demise of ‘quasi-contract’ and implied assumpsit The demise of ‘quasi-contract’ and implied assumpsit Elements Elements What is ‘unjust’? What is ‘unjust’? Defences Defences

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout Lecture Objectives By the end of this lecture you should: By the end of this lecture you should: Understand the concept of unjust enrichment and its remedy Understand the concept of unjust enrichment and its remedy Understand where unjust enrichment fits into the matrix of private law (the law of ‘snot?) Understand where unjust enrichment fits into the matrix of private law (the law of ‘snot?) Be aware of the terms ‘quasi-contract’ and ‘implied assumpsit’ Be aware of the terms ‘quasi-contract’ and ‘implied assumpsit’

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout A Third Force? Seen by some as the third force in a trinity of private law: contract, tort - and unjust enrichment Seen by some as the third force in a trinity of private law: contract, tort - and unjust enrichment Legal relief in contract is based on compensation for a failure to perform or complete an exchange – breach of voluntarily assumed obligation Legal relief in contract is based on compensation for a failure to perform or complete an exchange – breach of voluntarily assumed obligation Legal relief in tort is based upon compensation for the harm flowing from a legal wrong – breach of an imposed obligation Legal relief in tort is based upon compensation for the harm flowing from a legal wrong – breach of an imposed obligation Legal relief in unjust enrichment involves neither the requirement of a wrong, nor relief by way of compensation Legal relief in unjust enrichment involves neither the requirement of a wrong, nor relief by way of compensation It is the restitution or restoration of a benefit gained in specific circumstances which are regarded in law as unjust It is the restitution or restoration of a benefit gained in specific circumstances which are regarded in law as unjust

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout Demise of Quasi-contract and Implied Assumpsit Courts traditionally looked for some implied agreement that if the intention behind a payment was vitiated, the payment could be recovered Courts traditionally looked for some implied agreement that if the intention behind a payment was vitiated, the payment could be recovered Referred to as quasi-contract, which in turn arose from implied assumpsit – an implied undertaking by a party Referred to as quasi-contract, which in turn arose from implied assumpsit – an implied undertaking by a party This basis for restitution in a range of circumstances was rejected in favour of the doctrine of restitution for unjust enrichment in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 per Mason, Wilson and Deane JJ This basis for restitution in a range of circumstances was rejected in favour of the doctrine of restitution for unjust enrichment in Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 per Mason, Wilson and Deane JJ

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout Elements See United States Restatement of Restitution See United States Restatement of Restitution A benefit which has been unjustly received (the “enrichment”) A benefit which has been unjustly received (the “enrichment”) A loss or detriment suffered, usually by the plaintiff A loss or detriment suffered, usually by the plaintiff A rule of law which deems the enrichment (or the retention of it) “unjust” A rule of law which deems the enrichment (or the retention of it) “unjust” A prima facie duty to make restitution A prima facie duty to make restitution Absence of a valid legal basis for the payment or transaction (including voluntariness or election) Absence of a valid legal basis for the payment or transaction (including voluntariness or election) Absence of a defence Absence of a defence

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout “Unjust” The doctrine seeks to unify the principles upon which restitution has been required in diverse causes of action The doctrine seeks to unify the principles upon which restitution has been required in diverse causes of action These have in Australia included payments made by mistake (of law or fact); and These have in Australia included payments made by mistake (of law or fact); and Payments or benefits received under a contract made invalid or unenforceable by statute – money had and received, and quantum meruit Payments or benefits received under a contract made invalid or unenforceable by statute – money had and received, and quantum meruit Other possibilities: - compulsion; - unconscionable conduct? Other possibilities: - compulsion; - unconscionable conduct? Must vitiate the intention to enrich the defendant. Must vitiate the intention to enrich the defendant.

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout Restitution Implies the giving up of something Implies the giving up of something Is the same process as discussed in the case of rescission of contracts Is the same process as discussed in the case of rescission of contracts Involves giving up the benefit or its value in money Involves giving up the benefit or its value in money Does not involve the payment of an expected price or the compensation of a loss Does not involve the payment of an expected price or the compensation of a loss Is the restoration of the items or the payment of what is fair and reasonable in lieu thereof Is the restoration of the items or the payment of what is fair and reasonable in lieu thereof

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout Defences Payer intends that the payee should have the payment in all events (voluntary payment and/or election) Payer intends that the payee should have the payment in all events (voluntary payment and/or election) Payment is made for good consideration Payment is made for good consideration Payee acted to its detriment in reliance on the payment and in good faith – probably must point to expenditure which can be ascribed to the mistaken payment – see David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 385 Payee acted to its detriment in reliance on the payment and in good faith – probably must point to expenditure which can be ascribed to the mistaken payment – see David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at 385

Trimester 2, Introduction to Private Law - The Melbourne JD - Dr. Paul Vout Resulting or Implied Trusts Included? Imperfect gifts, purchase in another’s name, failure of an express trust, surplus after fulfillment of purpose Imperfect gifts, purchase in another’s name, failure of an express trust, surplus after fulfillment of purpose Recipient holds the intended gift on trust for the donor Recipient holds the intended gift on trust for the donor Similar traits as unjust enrichment, though different genesis Similar traits as unjust enrichment, though different genesis Involves a rebuttable presumption that the resulting trust was intended Involves a rebuttable presumption that the resulting trust was intended