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Property, Corrective Justice, and the Nature of the Cause of Action in Unjust Enrichment

Published online by Cambridge University Press:  13 April 2016

Andrew Botterell
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In this paper I reconsider the relation between property and unjust enrichment and respond to a recent argument that actions in unjust enrichment cannot be actions in corrective justice. I suggest that any analysis that regards actions in unjust enrichment as embodying principles of corrective justice requires supplementation by considerations that are, at bottom, proprietary in nature. I argue that there is no incompatibility in viewing actions in unjust enrichment as actions whose grounds are broadly proprietary in nature; that understanding unjust enrichment in this manner does not threaten its theoretical coherence; and that understanding unjust enrichment in this manner allows us to view actions in unjust enrichment as actions in corrective justice.

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Research Article
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Canadian Journal of Law & Jurisprudence , Volume 20 , Issue 2 , July 2007 , pp. 275 - 295
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Copyright © Canadian Journal of Law and Jurisprudence 2007

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References

I would like to thank Ernest Weinrib, Arthur Ripstein, Dennis Klimchuk, Stephen Pitel, Jason Neyers, and an anonymous referee for this journal for extremely helpful discussion, comments, and advice.

1. While this view is not without precedent, neither is it uncontroversial. Among those who have advocated something like what I am calling a proprietary analysis of unjust enrichment are Stoljar, Samuel, The Law of Quasi-Contract, 2nd ed. (Sydney, AU: The Law Book Company, 1989)Google Scholar and “Unjust Enrichment and Unjust Sacrifice” (1987) 50 Mod. L. Rev. 603; Friedmann, Daniel, “Restitution of Benefits Obtained Through the Appropriation of Property or the Commission of a Wrong” (1980) 80 Colum. L. Rev. 504 CrossRefGoogle Scholar; Brudner, Alan, The Unity of The Common Law (Berkeley: University of California Press, 1995)Google Scholar; and Jaffey, Peter, “Two Theories of Unjust Enrichment” in Neyers, Jason, McInnes, Mitchell & Pitel, Stephen, eds., Understanding Unjust Enrichment (Oxford: Hart, 2004) 139 Google Scholar and The Nature and Scope of Restitution (Oxford: Hart, 2000). See Birks, Peter, An Introduction to the Law of Restitution (Oxford: Clarendon Press, 1989) for criticism of this view.Google Scholar

2. See, for example, Virgo, Graham, “What is the Law of Restitution About?” in Cornish, WR. et al., eds., Restitution: Past, Present, and Future (Oxford: Hart, 1998) 312–18 Google Scholar and The Principles of the Law of Restitution (Oxford: Clarendon Press, 1999); Grantham, R.R. & Rickett, C.E.F., “Property and Unjust Enrichment: Categorical Truths or Unnecessary Complexity?” (1997) N.Z.L. Rev. 668 Google Scholar; Birks, ibid. at 15-16; and Burrows, Andrew, “Proprietary Restitution: Unmasking Unjust Enrichment” (2001) 117 L.Q.R. 412 Google Scholar. For arguments that actions in unjust enrichment give rise to a proprietary remedy as a matter of course, see Chambers, Robert, Resulting Trusts (Oxford: Clarendon Press, 1997 CrossRefGoogle Scholar) and “Resulting Trusts in Canada” (2000) 38 Alta. L.R. 378. For a nice summary of this debate, see Pitel, Stephen, “Characterisation of Unjust Enrichment in the Conflict of Laws” in Neyers, Jason, McInnes, Mitchell & Pitel, Stephen, eds., Understanding Unjust Enrichment (Oxford: Hart, 2004) 331.Google Scholar

3. See, for example, Birks, An Introduction to the Law of Restitution, supra note 1, and “Misnomer” in Cornish, W.R. et al., eds., Restitution: Past, Present, and Future (Oxford: Hart, 1998) 63 Google Scholar; Smith, Lionel, “The Province of the Law of Restitution” (1992) 71 Can. Bar Rev. 672 Google Scholar; McInnes, Mitchell, “Unjust Enrichment: A Reply to Professor Weinrib” (2001) 9 R.L.R. 29 Google Scholar; Klimchuk, Dennis, “Unjust Enrichment and Corrective Justice” in Neyers, Jason, McInnes, Mitchell & Pitel, Stephen, eds., Understanding Unjust Enrichment (Oxford: Hart, 2004) 111 Google Scholar; and Pitel, “Characterisation of Unjust Enrichment in Conflict of Laws”, ibid.

4. I should note two further things. First, the phrase ‘restitutionary remedy’ or ‘restitutionary duty’ is potentially misleading, and some authors have suggested that it ought to be avoided entirely See, for example, the remarks of Lord Nichols of Birkenhead and Lord Hobhouse of Woodborough in Attorney General v. Blake, [2000] 4 All E.R. 385. Nonetheless, I will, for ease of exposition, talk of a defendant owing a restitutionary duty to a plaintiff.

Second I am not concerned here with the proper characterization of the content of what I am calling the restitutionary duty. On this matter there is room for disagreement. Peter Birks defines ‘restitution’ as follows: “Restitution is the response which consists in causing one person to give up to another an enrichment received at his expense or its value in money.” Birks, An Introduction to the Law of Restitution, supra note 1 at 13. Dennis|Klimchuk, by contrast, means by ‘restitution’ “a remedy requiring the defendant to give back something to the plaintiff (or its value)[.]” Klimchuk, ibid. at 114. Some authors have insisted that a firm distinction ought to be drawn between the remedy of restitution, understood as a giving back, and the remedy of disgorgement, understood as a giving up. Here I have in mind in particular Lionel Smith. See Lionel Smith, “The Province of the Law of Restitution”, ibid. and “Restitution” in Peter Cane & Tushnet, Mark, eds., The Oxford Handbook of Legal Studies (Oxford: Oxford University Press, 2003) 48.Google Scholar The distinction can be challenged: if P mistakenly provides D with services, and then seeks restitution in the form of money, is D being asked to give up the value of something to P or to give back the value of something to P? See, for example, Deglman v. Guaranty Trust Co. and Constantineau [1954] S.C.R. 725, 3 D.L.R. 785. Still, I am inclined to follow Smith in distinguishing between the remedies of restitution and disgorgement.

5. See Birks, ibid. at 23-25.

6. Pettkus v. Becker, [1980] 2 S.C.R. 834, 117 D.L.R. (3d) 257, and Garland v. Consumers’ Gas Co. [2004], 1 S.C.R. 629, 2004 SCC 25. See also the language of Dickson J. (as he then was) in Rathwell v. Rathwell, [1978] 2 S.C.R. 436, 83 D.L.R. (3d) 289.

7. In particular, it is by no means clear what constitutes a ‘juristic reason.’ For a nice discussion of the complexities of this issue, see Smith, Lionel, “The Mystery of ‘Juristic Reason’” (2000) 12 Sup. Court L. Rev. (2d) 211.Google Scholar

8. The classic case is Kelly v. Solari (1841), All E.R. Rep. 320; 9 M. & W. 54; 11 L.J.Ex. 10; 6 Jur. 107; 152 E.R. 24. See also Fibrosa Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [1943] A.C. 32 (H.L.). It is common to distinguish mistaken payments from mistaken gifts. A mistaken payment can be viewed as mistake in relation to one’s liability to pay. A gift, on the other hand, can be viewed as a voluntary transfer of property without any agreed-upon recompense. Although the basis for restitution is debated, it seems clear that the law will sometimes order the recipient of a mistaken gift to return it or make restitution to the donor. The simplest view is that the law will order restitution so long as the donor can prove that the mistake caused the gratuitous transfer, that is, if the donor can prove that she wouldn’t have transferred the property but for the mistake. For a statement of this view see R. Goff & Jones, G., The Law of Restitution (London: Sweet & Maxwell, 2002) at 193.Google Scholar For present purposes, I will not distinguish between mistaken gifts and mistaken payments since it seems to me that the considerations of the present paper apply to both cases. For a thorough discussion of these issues see Tang Wu, Hang, “Restitution for Mistaken Gifts” (2004) 20 J. Contract L. 1 Google Scholar.

9. Again, I do not want to enter into a discussion of the nature of a juristic reason. On some views, to say that there is no juristic reason for the enrichment is to say that there is no reason why the plaintiff should have conferred the benefit on the defendant in the first place, while on other views to say that there is no juristic reason for the enrichment is to say that there is no reason why the defendant should retain the benefit already conferred. In Garland v. Consumers’ Gas Co., [2004] 1 S.C.R. 629, 2004 SCC 25, the Supreme Court of Canada seemed to adopt a position on juristic reason that incorporates both of these views.

10. See McBride, Nicholas J. & McGrath, Paul, “The Nature of Restitution” (1995) 15 Oxford J. Legal Stud. 33 CrossRefGoogle Scholar for an explanation of the defence of ignorance. For an opposing view, see Ho, Lusina, “The Nature of Restitution-A Reply” (1996) 16 jOxford J. Legal Stud. 517.CrossRefGoogle Scholar

11. Rural Municipality of Storthoaks v. Mobil Oil Canada Ltd., [1976] 2 S.C.R. 147, 55 D.L.R. (3d) 1.

12. Air Canada v. British|Columbia, [1989] 1 S.C.R. 1161, 59 D.L.R. (4th) 161. See also Lipkin Gorman v. Karpnale, [1992] 4 All E.R. 512 (H.L.).

13. There might be a question as to whether the restitutionary duty arises when P mistakenly pays the $100 to D, or whether it arises instead only after P mistakenly pays the $100 to D andD becomes aware of the mistake. I take no stand on this issue here. For more on this issue see McBride & McGrath, supra note 10, and Ho, supra note 10.

14. My reading of Aristotle on this matter owes much to Dennis Klimchuk, supra note 4; to James Gordley, “Tort Law in The Aristotelian Tradition” in David Owen, ed., Philosophical Foundations of Tort Law (Oxford: Clarendon Press, 1995) 131; and, most obviously, to the work of Ernest Weinrib. See in particular Ernest Weinrib, “Corrective Justice” (1991-2) 77 Iowa L. Rev. 403; “The Gains and Losses of Corrective Justice” (1994) 44 Duke L. J. 277; The Idea of Private Law (Cambridge, MA: Harvard University Press, 1995); and “Corrective Justice in a Nutshell” (2002) 52 U.T.L.J. 349.

15. Aristotle, , Nicomachean Ethics, trans. by Irwin, Terence (Indianapolis, ID: Hackett, 1985)Google Scholar. Although this variety of justice is sometimes called ‘rectificatory justice’ or ‘commutative justice’, I will label it ‘corrective justice’ in what follows.

16. Ibid. at 1131a.

17. Ibid.

18. Ibid. at 1132b. Brackets in original translation.

19. Weinrib, “Corrective Justice in a Nutshell,” supra note 14 at 350.

20. Ibid.

21. Aristotle, supra note 15 at 1132a. Brackets in original translation.

22. St. Aquinas, Thomas, Commentary on the Nicomachean Ethics, trans. by Litzenger, C.I. (Chicago, IL: Henry Regnery Company, 1993) at 411.Google Scholar

23. M’Alister (or Donoghue) v. Stevenson, [1932] A.C. 562 (H.L.).

24. Weinrib, “Corrective Justice in a Nutshell,” supra note 14 at 354.

25. For this sort of interpretation, see Weinrib, “The Gains and Losses of Corrective Justice,” supra note 14.

26. Weinrib, “Corrective Justice in a Nutshell,” supra note 14 at 354-55.

27. But see Benson, Peter, “The Basis of Corrective Justice and its Relation to Distributive Justice.” (1992) 77 Iowa L. Rev. 515 Google Scholar; Neyers, Jason, “The Inconsistencies of Aristotle’s Theory of Corrective Justice” (1998) 11 Can. J. L. & Jur. 311 Google Scholar; and Klimchuk, Dennis, “On the Autonomy of Corrective Justice” (2003) 23 Oxford J. Legal Stud. 49.CrossRefGoogle Scholar

28. Aristotle, supra note 15 at 1132a. Brackets in original translation.

29. James Gordley, “Tort Law in the Aristotelian Tradition” supra note 14 at 138. For similar interpretations see, among others, Weinrib, supra note 14; Klimchuk, supra note 3; and Stone, Martin, “The Significance of Doing and Suffering” in Postema, Gerald, ed., Philosophy and the Law of Torts (Cambridge: Cambridge University Press, 2001) 131.CrossRefGoogle Scholar For criticism of this idea, see Kenneth|Simons’ review of The Idea of Private Law (1996) 81 Cornell L. J. 698.

30. Thus, it seems to me to be a mistake to place too much emphasis on Aristotle’s talk of gains. A better way of conceiving of things is to think of corrective justice as being concerned with resources or means, and the variety of ways in which those resources and means can be appropriated or misappropriated. Thus, for example, if you have a right to your means—which may include your property, your body, or your capacities—then you have a right to have those means intact as against your neighbour’s use of her means, as well as a right to set the terms on which others may use those means. It is permissible for me to build up my chimney even if doing so would cause your fire to smoke whenever you light it. For in doing so I do not interfere with anything to which you have a right. See, for example, Bryant v. Lefever (1879), 4 CPD 172. It is permissible for you to loan me your car; but it is not permissible for me to take your car without your consent. It is permissible for you to allow me to punch you in the nose; but it is not permissible for me to punch you in the nose without your consent. On this view, I misappropriate your means if I use them without your consent. I don’t misappropriate (merely) by damaging, I misappropriate by violating your right. That is why Aristotle’s talk of gains and losses is potentially misleading, since it encourages the search for a gain in every case, where what we really ought to be looking for is the misappropriation of resources or means, which may or may not correspond to a material gain. I am indebted to discussion with Arthur Ripstein here.

31. See, in particular, Weinrib, The Idea of Private Law, supra note 14.

32. It could be, of course, that both tort actions in negligence and actions in unjust enrichment are paradigmatic examples of actions in corrective justice. (An apple and an orange could both be paradigmatic instances of the more general k in d fruit; a dog and a cat could both be paradigmatic instances of the more general kind pet.) However, it seems that the parties to the debate do not view things in this manner. Mitchell McInnes certainly does not. See McInnes, Mitchell, “The Measure of Restitution” (2002) 52 U.T.L.J. 163 at 194.CrossRefGoogle Scholar

33. McInnes, ibid. See also McInnes, “Unjust Enrichment: A Reply to Professor Weinrib,” supra note 3.

34. See Klimchuk, supra note 14.

35. Throughout, Klimchuk is interested in the case of mistaken payment since, for him, this is a paradigm case of autonomous unjust enrichment. See Klimchuk, ibid. at 112.

36. I am prepared to grant it because, as with Klimchuk, I think it is very probably true. Among Klimchuk’s reasons for accepting this premise are, first, that most scholars writing on corrective justice have the Aristotelian account in mind, and second, that liability for unjust enrichment seems to be precisely the sort of liability that Aristotle had in mind in his presentation of corrective justice. See Klimchuk, ibid. at 113-14.

37. Ibid. at 120.

38. Ibid.

39. Ibid.

40. McInnes, “Unjust Enrichment: A Reply to Professor Weinrib,” supra note 3 at 40.

41. Restatement of Restitution (1937), Section 1(a).

42. See Peel (Regional Municipality) v. Canada, [1992] 3 S.C.R. 762, 98 D.L.R. (4th) 140.

43. Depue v. Flatau et al. 111 NW 1 (Minn. SC 1907).

44. Horsley v. MacLaren (1971), 22 D.L.R. (3d) 545 (SCC).

45. The court disagreed on the outcome of the case, however. Justice Laskin, in dissent, held that MacLaren had negligently handled his boat during the course of the rescue, and should be found liable. Justice Ritchie held on the other hand that MacLaren’s handling of the boat was not negligent given the nature of the emergency. Both agreed that MacLaren was under a legal duty to provide for the safety of his passengers.

46. For a more searching discussion of this issue, see Weinrib, Ernest, “The Case for a Duty to Rescue” (1980) 90 Yale L. J. 247 CrossRefGoogle Scholar; and Benson, Peter, “The Basis for Excluding Liability for Economic Loss in Tort Law” in Owen, David, ed., Philosophical Foundations of Tort Law (Oxford: Clarendon Press, 1995) 427.Google Scholar

47. See Weinrib, The Idea of Private Law, supra note 14, and Ernest Weinrib, “Right and Advantage in Private Law” (1989) 10 Cardozo L. Rev. 1283.

48. The emphasis on external compulsion is important, since it is arguable that when we act out of respect for the moral law, we act with internal compulsion.

49. Weinrib, The Idea of Private Law, supra note 14 at 140-41. For further discussion of this and other issues related to mistaken payments, see Abraham Drassinower, “Unrequested Benefits in the Law of Unjust Enrichment” (1998) 48 U.T.L.J. 459, and Tang Hang Wu, “Restitution for Mistaken Gifts,” supra note 8.

50. Nor is it clear how the defendant’s lack of action could constitute an interference with the plaintiff’s autonomy.

51. Bell v. Lever Brothers Ltd., [1932] A.C. 161 (H.L.). See also Solle v. Butcher, [1950] 1 K.B. 671.

52. Another case illustrating this point is R. v. Clarence (1888), 22 Q.B.D. 23 in which the accused, knowing he had gonorrhea, had sex with his wife, who contracted the disease as a result. Although the husband was charged with criminal assault, a majority of the court held that mistake or lack of knowledge was not sufficient to vitiate the wife’s consent.

53. St. Thomas Aquinas, Summa Theologica, Second Part of the Second Part (QQ1-189), Question 62, Art. 6, online: http://wwwccel.org/a/aquinas/summa/SS/SS062.html#SSQ62OUTP1.

54. Gordley, James, “Restitution without Enrichment? Change of position and Wegfall der Bereicherung ” in Johnston, David & Zimmermann, Reinhard, eds., Unjustified Enrichment: Key Issues in Comparative Perspective (Cambridge: Cambridge University Press, 2002) 227 at 228.Google Scholar

55. Goode, Roy, “Proprietary Restitutionary Claims” in Cornish, W.R. et al., eds., Restitution: Past, Present, and Future (Oxford: Hart, 1998) 63 at 64.Google Scholar

56. Birks, supra note 1 at 16.

57. Ibid.

58. Wrotham Park Estate Co. Ltd. v. Parkside Homes Ltd., [1974] 1 W.L.R. 798 (Ch. D.). See also Jagger v. Sawyer, [1995] 2 All E.R. 189 (C.A.) and, more controversially, Phillips v. Homfray (1883), 24 Ch. D. 439.

59. Jaffey, “Two Theories of Unjust Enrichment,” supra note 1 at 147.

60. Ibid.

61. Ibid.

62. Ibid.

63. Stoljar, “Unjust Enrichment and Unjust Sacrifice,” supra note 1 at 603. Stoljar goes on to say that “[a] basic theme running through our private law, perhaps any system of private law, surely is that, apart from assets distributed by public allocation or by operation of law, things or money cannot validly pass from one person to another without the former’s sufficient consent either before or after the event. This is what property essentially means, at least importantly means among other things.” Ibid.

64. Birks, supra note 1 at 15. But of course some restitutionary rights are proprietary in nature, as when a remedy of constructive trust is ordered by the courts. See again Pettkus v. Becker, [1980] 2 S.C.R. 834, 117 D.L.R. (3d) 257.

65. Ibid.

66. There is another objection that should be addressed. It might be objected that the proprietary analysis of unjust enrichment only applies to objects or things transferred, and so cannot be extended to cases in which one person provides another with a service. For in what sense can it be said that A’s doing something for B is susceptible to a proprietary analysis? How can that sort of transaction be captured by the proprietary analysis of unjust enrichment? However, I think that this objection can be dealt with if we view the provision of services as one way in which one person’s means or capacities are transferred to another. In providing another person with a service—by shining his shoes, or walking his dog, or helping out around his house—I am transferring to that person something that is mine, namely my means and capacities. To this extent, mistakenly shining somebody else’s shoes is on a par with mistaken payment, since in both cases there is a transfer from person A to person B of something that is properly thought of as belonging to A. Thus, there would appear to be no bar to extending the proprietary analysis of unjust enrichment to cases in which services rather than goods are transferred from one person to another.

67. Gordley, supra note 54 at 228.

68. Weinrib, “Corrective Justice in a Nutshell,” supra note 14 at 350.

69. This objection was put to me by Stephen Pitel.