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CHOICE OF LAW FOR UNJUST ENRICHMENT/RESTITUTION AND THE ROME II REGULATION

Published online by Cambridge University Press:  18 November 2008

Adeline Chong
Adeline Chong
Affiliation:
Assistant Professor of Law, Singapore Management University.
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International & Comparative Law Quarterly , Volume 57 , Issue 4 , October 2008 , pp. 863 - 898
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Copyright © 2008 British Institute of International and Comparative Law

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References

1 Examples of the older literature include: JG Collier, ‘The Draft Convention and Restitution or Quasi-Contract’ in K Lipstein, Harmonisation of Private International Law by the EEC (Institute of Advanced Legal Studies, London, 1978); K Zweigert and D Müller-Gindullis, ‘Quasi-Contract’ in K Lipstein (ed), International Encyclopaedia of Comparative Law (Tübingen, The Hague, 1974) Vol III; S Cohen, ‘Quasi Contract and the Conflict of Laws’ (1956) 31 LA Bar Bull 71; A Ehrenzweig, ‘Restitution in the Conflict of Laws: Law and Reason Versus the Restatement Second’ (1961) 36 NYLR 1298, HC Gutteridge and K Lipstein, ‘Conflict of Law in Matters of Unjustifiable Enrichment’ (1939) 7 Camb LJ 80.

2 eg G Panagopoulos, Restitution in Private International Law (Hart Publishing, Oxford, 2000); F Rose (ed), Restitution and the Conflict of Laws (Mansfield Press, Oxford, 1995); TW Bennett, ‘Choice of Law Rules in Claims of Unjust Enrichment’ (1990) 39 ICLQ 136; J Blaikie, ‘Unjust Enrichment in the Conflict of Laws’ [1984] Jur Rev 112; S Lee, ‘Choice of Law for Claims in Unjust Enrichment’ (2002) 26 MULR 192; S Lee, ‘Restitution, Public Policy and the Conflict of Laws’ (1998) 20 UQLJ 1; R Leslie, ‘Unjustified Enrichment in the Conflict of Laws’ (1998) 2 Edinburgh LR 233; R Stevens, ‘Restitution and the Rome Convention’ (1997) 113 LQR 249; A Dickinson, ‘Restitution and Incapacity: A Choice of Law Solution?’ (1997) 5 RLR 66; A Dickinson, ‘Restitution and the Conflict of Laws’ [1996] LMCLQ 556, J Bird, ‘Choice of Law and Restitution of Benefits Conferred Under a Void Contract’ [1997] LMCLQ 182; J Bird, ‘Choice of Law Rule for Priority Disputes in Relation to Shares’ [1996] LMCLQ 57; J Bird, ‘Bribes, Restitution and the Conflict of Laws’ [1995] LMCLQ 198.

3 A new ground for service out of jurisdiction was introduced for restitutionary claims in CPR Rule 6.20(15). However, the Brussels I Regulation on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters [2001] OJ L12/1 does not contain a rule dealing specifically with restitution.

4 The restitutionary choice of law rule set out in editions of Dicey, Morris and Collins has always been prefaced with the word semble; cf Scotland: Baring Brothers v Cunninghame District Council [1997] CLC 108.

5 [2007] OJ L199/40.

6 Especially German law (which is known to have a well-established domestic law of unjustified enrichment); Swiss law (which was looked at when the unjust enrichment choice of law provision in Rome II was being drafted; see Explanatory Memorandum, COM (2003) 427 final, 22); and US law (which clarifies the common law approach.

7 L Collins (ed), Dicey, Morris and Collins: The Conflict of Laws (14th edn, Sweet & Maxwell, London) (hereafter Dicey, Morris and Collins).

8 § 221(2).

9 Re Bonacina [1912] 2 Ch 394.

10 This must necessarily be a gross simplification of the complicated debates taking place between restitutionary scholars.

11 A misunderstanding that the word ‘quasi’ meant ‘sort of contractual’ (instead of ‘not contractual’) led to restitutionary actions being thought as based on an implied promise of the recipient to return the enrichment: P Millett, ‘Proprietary Restitution’ in S Degeling and J Edelman, Equity in Commercial Law (Lawbook Co, Sydney, 2005) 313.

12 Lipkin Gorman v Karpnale [1991] AC 548.

13 In relation to Rule 230, the commentary in Dicey, Morris and Collins states that: ‘In some ways, the definition of the territory governed by this Rule is the most difficult aspect of choice of law for restitution’ (n 7) 1865, para 34-005.

14 A claim for reasonable payment for goods supplied or services rendered.

15 Some go further and question whether there is even a category of proprietary restitution: Lord Goff and G Jones, Goff & Jones: The Law of Restitution (7th edn, Sweet & Maxwell, London, 2007) 12, para 1-011; 92, para 2-007; cf NABB Brothers Ltd v Lloyd's Bank International (Guernsey) Ltd [2005] EWHC 405, [2005] ILPr 506, paras 76–77.

16 Disparate views on the taxonomy of the law of restitution and the role to be played by the unjust enrichment principle can be found in, eg P Birks, Unjust Enrichment (2nd edn, OUP, Oxford, 2005); A Burrows, The Law of Restitution (2nd edn, Butterworths, 2002); S Hedley, A Critical Introduction to Restitution (Butterworths, London, 2001); G Virgo, The Principles of the Law of Restitution (2nd edn, OUP, Oxford, 2006); J Edelman, Gain-Based Damages (Hart Publishing, Oxford, 2002).

17 See Birks, ‘Unjust Enrichment and Wrongful Enrichment’ (2001) 79 Texas LR 1767 for a useful exposition on the schism between these two camps.

18 eg Burrows (n 16) 5–7. Birks was originally of this view too but later changed his mind: see An Introduction to the Law of Restitution (revised edn, Clarendon Press, Oxford, 1989) 26 and later, ‘Misnomer’ in WR Cornish, R Nolan, J O'Sullivan and G Virgo (eds), Restitution: Past, Present and Future 14–15 and Unjust Enrichment (n 16) 12–16.

19 eg Virgo (n 16) 9–10, 425–428.

20 B Dickson, ‘Unjust Enrichment Claims: A Comparative Overview (1995) 54 CLJ 100.

21 Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548. Although see Virgo (n 16) 13 and in ‘Reconstructing the Law of Restitution’ (1996) 10 Trust Law International 20, 23–24, who argues that the case paradoxically was not truly concerned with unjust enrichment.

22 See Chapter 5. Note that the drafters prefer the term ‘unjustified enrichment’ as being the more accurate label for enrichment that lacks a legal basis than the open-ended connotations of ‘unjust enrichment’: § 1, comment b. All references to the draft Restatement (Third) of Restitution and Unjust Enrichment are based on the draft that is current through March 2008 and can be found on Westlaw.

23 See § 4, comment and provisional (and informal) reporter's note.

24 US law recognises the remedial constructive trust which could arise in response to unjust enrichment. See § 160 of the Restatement of the Law of Restitution (1937). (Although the remedial constructive trust could be imposed even where there has been no unjust enrichment: Korkontzilas v Soulos (1997) 146 DLR (4th) 214.) English law has yet to adopt this type of constructive trust: Re Polly Peck International plc (in administration) (No 2) [1998] 3 All ER 812.

25 K Zweigert and H Kötz, An Introduction to Comparative Law, Vol II: The Institutions of Private Law (North-Holland Publishing Co, Oxford, 1977) 235.

26 K Zweigert and H Kötz, An Introduction to Comparative Law (3rd edn, Clarendon Press, Oxford, 1998) 551.

27 Some German scholars put forward more than two categories: see R Zimmermann and J du Plessis, ‘Basic Features of the German Law of Unjustified Enrichment’ (1994) 2 RLR 14 at 25; Dickson (n 20) 121.

28 Zweigert and Kötz (n 26) 541.

29 ibid 544.

30 Dickson (n 20) 120.

31 Panagopoulos (n 2) 14, 61; G Gretton, ‘Proprietary issues’ in D Johnston and R Zimmermann, Unjustified Enrichment: Key Issues in Comparative Perspective (Cambridge University Press, 2002) 571.

32 P Schlechtriem, C Coen and R Hornung, ‘Restitution and Unjust Enrichment in Europe’ [2001] European Rev of Pri Law 377.

33 Zweigert and Kötz (n 26) 542.

34 A ius in personam ad rem acquirendam: Gretton (n 31) 579.

35 Although there is debate as to whether that interest must be a pre-existing interest or one which arose to prevent unjust enrichment. See, eg W Swadling, ‘A Claim in Restitution?’ [1996] LMCLQ 63; A Burrows, ‘Proprietary Restitution: Unmasking Unjust Enrichment’ (2001) 117 LQR 412; RB Grantham and CEF Rickett, ‘Restitution, Property and Ignorance—A Reply to Mr Swadling’ [1996] LMCLQ 463; Birks, ‘Misnomer’ (n 18); Virgo (n 16) Chapter 20.

36 J Bell, S Boyron and S Whittaker, Principles of French Law (OUP, Oxford, 1998) 402–403.

37 Such as § 985 of the BGB which allows an owner who has lost possession of his property to demand the property back from the possessor.

38 T Krebs, Restitution at the Crossroads: A Comparative Study (Cavendish, 2001) 229; Schlechtriem et al (n 32) 388; BS Markesinis, W Lorenz, G Dannemann, The German Law of Obligations, Volume I (Clarendon Press, Oxford, 1997) 742.

39 Birks (n 16) 4.

40 ALI website: http://www.ali.org/index.cfm?fuseaction=publications.ppage&node_id=46 (as on 4 August 2008).

41 Virgo (n 16) 3. See also J Walker, Castel & Walker: Canadian Conflict of Laws (6th edn, LexisNexis Butterworths, Ontario, 2005) para 32-1.

42 Phrantzes v Argenti [1960] 2 QB 19.

43 That ‘restitution’ is more of a ‘term of art’ is also recognised by the draft Restatement (Third) of Restitution and Unjust Enrichment, § 1, comment c: ‘most of what is covered by the law of restitution might more helpfully be called the law of unjust or unjustified enrichment.’

44 Bell et al (n 36) 403. English courts have also used the word ‘restitution’ when referring to compensatory remedies: Target Holdings Ltd v Redferns (a firm) [1996] AC 421 (HL); Swindle v Harrison [1997] 4 All ER 705 (CA); see Virgo (n 16) 429.

45 Influenced by multi-causalist arguments in domestic law.

46 Panagopoulos (n 2) 81–94; J Bird, ‘Choice of Law’ in Rose (n 2) 71–76; R Stevens, ‘The Choice of Law Rules of Restitutionary Obligations’ in Rose (n 2) 187–191; TM Yeo, Choice of Law for Equitable Doctrines (OUP, Oxford, 2004) 319–320.

47 R Stevens, ‘Resulting Trusts in the Conflict of Laws’ in P Birks and F Rose (eds), Restitution and Equity, Vol 1, Resulting Trusts and Equitable Compensation (Mansfield Press, London, 2000) 154; A Chong, ‘The Common Law Choice of Law Rules for Resulting and Constructive Trusts’ (2005) 54 ICLQ 855, 873–880.

48 S Pitel, ‘Characterisation of Unjust Enrichment in the Conflict of Laws’ in J Neyers, M McInnes and S Pitel (eds), Understanding Unjust Enrichment (Hart, Oxford and Portland, Oregon, 2004) 338.

49 Most self-evidently since choice of law rules are divided up into different actions, such as contact, tort and property.

50 Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1996] 1 WLR 387.

51 C Forsyth, ‘Characterisation Revisited: An Essay in the Theory of the English Conflict of Laws’ (1998) 114 LQR 141.

52 In Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1996] 1 WLR 387, Staughton LJ sought to characterise the ‘issue’ and ‘question in this action’ (391H and 393G); Auld LJ spoke of charactering ‘the true issue or issues’ and ‘relevant rule of law’ (at 407B–C).

53 This same flexibility would not at the same time be able to accommodate the problem of ‘restitution’ being considered as remedial because of the well-established rule that remedies are procedural in nature and therefore governed by the lex fori.

54 Read v Brown (1889) 22 QBD 702 (CA) 131; Coburn v Colledge [1897] 1 WB 702 (CA); Central Electricity Board v Halifax Corporation [1963] AC 785 (HL), 800 (Lord Reid).

55 Although there might have an element of the truth in this in the early days of the law of restitution. In Moses v Macferlan (1760) 2 Burr 1005, 1012; 97 ER 676, 681, Lord Mansfield said: ‘… the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.’ See also R Goff and G Jones, The Law of Restitution (1st edn, Sweet & Maxwell, London, 1966) 11–12.

56 Under Canadian law, the third element is the absence of any juristic reason for the enrichment: Pettkus v Becker [1980] 2 SCR 834, (1980) 117 DLR (3d) 257 (SCC).

57 See in general, Pitel (n 48) 341–344.

58 Foskett v McKeown [2001] 1 AC 102, 129 (Lord Millett); Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 375, 379 (Deane and Dawson JJ).

59 See Pitel (n 48) 338–339.

60 PS Atiyah, Essays on Contract (Clarendon Press, Oxford, 1990) 48–56; PS Atiyah, The Rise and Fall of Freedom of Contract (Clarendon Press, Oxford, 1979) 767–768; S Hedley, Restitution: Its Division and Ordering (Sweet & Maxwell, London, 2001) 224–228, 231–232.

61 [1999] 1 AC 221, 227.

62 Especially continental ones with a Roman law heritage; see Schlechtriem et al (n 32) 378.

63 § 1, comment h.

64 Markesinis et al (n 38) 711.

65 Schlechtriem et al (n 32) 379.

66 A notable restitution scholar has said that that he is unaware of any legal system which has no law of unjust enrichment: R Stevens, ‘Choice of Law for Equity: Is it Possible?’ in S Degeling and J Edelman (eds), Equity in Commercial Law (Lawbook Co, Sydney, 2005) 177.

67 eg § 46 of the Austrian Federal Statute on Private International Law; Art 38 of the Introductory Law to the German Code of Civil Procedure (hereafter EGBGB); § 35 of the Hungarian Decree on Private International Law; Art 128 of the Swiss Federal Statute on Private International Law; Art 3125 of the Quebec Civil Code; Art 14 of the Japanese Horei 2007. Austria, Germany and Hungary will now be subject to the Rome II Regulation.

68 However, claims falling under such an ‘unjust enrichment’ choice of law rule can still be termed as ‘restitutionary’ claims or claims concerning a ‘restitutionary’ obligation. The latter phrases will therefore be used below.

69 B Dickson, ‘The Law of Restitution in the Federal Republic of Germany: A Comparison with English Law’ (1987) 36 ICLQ 751, 776–777.

70 See the Torts (Interference With Goods) Act 1977.

71 A Briggs, ‘Restitution Meets the Conflict of Laws’ [1995] RLR 94, 97; cited by Auld LJ in Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1996] 1 WLR 387, 407. The quotation was in relation with whether a proprietary claim should be classified as restitutionary in nature.

72 Lord Chancellor's Department, Consultation Response: Preliminary draft proposal for a Council Regulation on the Law Applicable to Non-Contractual Obligations (Response of the Government of the United Kingdom), paras 20–21; European Union Committee, The Rome II Regulation—Report with Evidence (8th Report of Session 2003–04) (HL Paper 66) (The Stationery Office Ltd, London, 2004). The Eighth Report is accessible online at: http://www.publications.parliament.uk/pa/ld200304/ldselect/ldeucom/66/6602.htm (as on 4 August 2008).

73 ibid paras 144, 199.

74 See Lord Chancellor's Department (n 72); R Fentiman, Written Evidence, paras. 4.2, 9.24–9.29; EB Crawford, Written Evidence; CGJ Morse, Written Evidence, para 2 (all Written Evidence cited here and below are attached to the Eighth Report (n 72)).

75 COM (2003) 427 final.

76 ibid 21.

77 Albeit the hierarchy of the rules may differ.

78 This is more true of the common law than civil law.

79 Article 10(1).

80 Article 10(2).

81 Article 10(3).

82 Article 10(4).

83 Article 3(1) of the Rome Convention on the Law Applicable to Contractual Obligations [1980] OJ L266/1 (hereafter the Rome Convention; enacted into English law by the Contracts (Applicable Law) Act 1990). On party autonomy in contract, see in general P Nygh, Autonomy in International Contracts (Clarendon Press, Oxford, 1999).

84 Gutteridge and Lipstein (n 1) 90; Blaikie (n 2) 123; J Morris, ‘The Choice of Law Clause in Statutes’ (1946) 62 LQR 170 at 183; Cohen (n 1) 74; PM North and JJ Fawcett, Cheshire and North's Private International Law (13th edn, Butterworths, London, 1999) (hereafter Cheshire and North) 685; P North, Essays in Private International Law (Clarendon Press, Oxford, 1993) 43; L Collins (ed), Dicey and Morris on the Conflict of Laws (12th edn, Sweet & Maxwell, London, 1993) 1473 (However, the editors' stance since has considerably softened: (n 7) 1871–72, para 34-016.

85 P Brereton, ‘Restitution and Contract’ in Rose (n 2) 157.

86 The Law Commission and the Scottish Law Commission, Working Paper No 87 and Consultative Memorandum No 62 (HMSO, London, 1984) 265. However, this recommendation was not followed up in either the consequent Report (Law Commission No 193, Scottish Law Commission No 129 (HMSO, London, 990), nor the Private International Law (Miscellaneous Provisions) Act 1995): J Carruthers and E Crawford, ‘Variations on a Theme of Rome II. Reflections on Proposed Choice of Law Rules for Non-Contractual Obligations: Part I’ (2005) 9 Edin LR 65.

87 Explanatory Memorandum, COM (2003) 427, 22; P Hay, ‘From Rule-Orientation to “Approach” in German Conflicts Law: the Effect of the 1986 and 1999 Codifications’ (1999) 47 Am J Comp Law 633, 45; Carruthers and Crawford (n 86) 87–88.

88 Carruthers and Crawford, ibid 88.

89 Article 14 is a general provision covering torts/delicts and unjust enrichment claims. The word ‘damage’ is inappropriate for restitutionary claims as liability is not assessed in terms of ‘damage’, but in terms of the defendant's enrichment. A more neutral term such as ‘non-contractual obligation’, which would cover both torts/delicts and unjust enrichment claims, should have been substituted.

90 Note again the inappropriate use of the word ‘damage’.

91 Note that Article 14(1) does not apply to unfair competition and acts restricting free competition (Article 6(4)) and infringement of intellectual property rights (Article 8(3)).

92 Explanatory Memorandum, COM (2006) 83 final, 4.

93 ibid. Cf A Rushworth and A Scott, ‘Rome II: Choice of Law For Non-Contractual Obligations’ [2008] LMCLQ 274, 293, who are doubtful of the utility of the requirement of ‘free negotiation’.

94 Such as the rules on public policy (Article 16), mandatory rules (Article 7) and specific rules on consumers (Article 5) and employees (Article 6).

95 Previously Article 9(1), COM (2003) 427 final.

96 See A Briggs, Written Evidence, para 9; R Fentiman, Written Evidence, para 9.30; D Wallis, Report on the proposal for a regulation of the European Parliament and of the Council on the law applicable to non-contractual obligations (“Rome II”), A6-0211/2005 (27.6.2005) 17.

97 Art 10(1) of the Rome II Regulation; § 46 of the Austrian Federal Statute on Private International Law; Art 38(1) of the German EGBGB; Art 128(1) of the Swiss Federal Statute on Private International Law; § 221(2)(a) of the Restatement (Second) of Conflict of Laws lists ‘the place where a relationship between the parties was centred, provided that the receipt of the enrichment was substantially related to the relationship’ as a contact which is, ‘as to most issues, is given the greatest weight in determining the state of the applicable law’ (comment d, 730).

98 Zweigert and Müller-Gindullis (n 1) 11, para 20.

99 A Briggs, The Conflict of Laws (OUP, Oxford, 2002) 197.

100 Or alternatively sue for breach of contract.

101 De Bernardy v Harding (1853) 8 Exch 822.

102 Translation found in S Symeonides, ‘The New Swiss Conflicts Codification: An Introduction’ (1989) 37 Am J Comp Law 187 (the ‘LSU Translation’) (emphasis added).

103 Translation found in Hay (n 87) 650.

104 Emphasis added.

105 T Petch, ‘The Rome II Regulation: An Update: Part 2’ (2006) 21 JIBLR 509, 513.

106 Recent cases on what falls within the scope of arbitration and jurisdiction cases have called for a liberal and commonsensical interpretation of phrases used: Fiona Trust & Holding v Privalov [2007] 4 All ER 951; Leo Laboratories v Crompton BV [2005] 2 IR 225.

107 Panagopoulos (n 2) 150.

108 Although this justification, in itself, does not make a case for having the law governing the relationship govern the restitutionary consequences of that relationship. See A Chong, ‘Choice of Law for Void Contracts and their Restitutionary Aftermath: The Putative Governing Law of the Contract’ in P Giliker (ed), Re-examining Contract and Unjust Enrichment (Martinus Nijhoff, Leiden/Boston, 2007) 178–181.

109 See Section IV(A).

110 See Section IV(B).

111 Burrows (n 16) 6.

112 Arab Monetary Fund v Hashim 15 June 1994 (Chadwick J); Kuwait Oil Tanker SAK v Al Bader (No 3) [2000] 2 All ER (Comm) 271 (CA); BJ McAdams Inc v Winston M Boggs 439 F Supp 738. See also Att-Gen for England and Wales v R [2002] 2 NZLR 91 (CA Wellington) [29]–[30].

113 Virgo (n 16) 9–11, 500–525.

114 Yeo (n 46) 215–235.

115 Articles 3 and 4 of the Rome Convention.

116 Birks (n 16) 32–38, Chapter 8.

117 Burrows (n 16) 60–75 and (n 35).

118 Virgo (n 16) 11–17, Chapter 20.

119 Nelson v Bridport (1846) 8 Beav 547.

120 On the problem of the exclusion of renvoi from the Rome II Regulation, see Section IV(C).

121 It also finds favour in many statutory (see n 97 above) and academic formulations (Dicey, Morris and Collins's Rule 230(2)(a) (law governing the contract) (n 7) 1863, para 34R-001; Bird (n 46) 135, section 1(a) and (b); Brereton (n 85) (law governing the contract); Zweigert and Müller-Gindullis (n 1) 11, para 20).

122 This has its roots in rather parochial 1942 Nazi statute providing for the application of German law to torts committed between German citizens whilst abroad. See M Reimann, ‘Codifying Torts Conflicts: The 1999 German Legislation in Comparative Perspective’ (1999–2000) 60 La L Rev 1297, 1301, fn 18.

123 Switzerland and Germany.

124 Hungary.

125 Comment d, 733.

126 Article 38 EGBGB.

127 A displacement rule in favour of the law of closest connection will be examined separately below; see section III(E).

128 Article 41(2)(2). This covers claims that are not based on performance.

129 Petch (n 105) 455; ‘Editorial comments: Sometimes it takes thirty years and even more …’ (2007) 44 CMLR 1567, 1571.

130 12 NY 2d 473, 191 NE 2d 279, 240 NYS 2d 743(1963). The case is said to be the starting point of the American choice of law revolution: Cheshire and North (n 84) 606.

131 It was conceded by Fuld J that the lex loci delicti might be more appropriate if the issue at stake had been whether the driver exercised due care whilst driving: 12 NY 2d 473, 483.

132 A ‘centre of gravity’-based analysis would be possible under the German EGBGB since the common habitual residence of the parties is only relevant under the displacement rule of closest connection.

133 Although the rule of course has the closer connection to the parties.

134 Reimann (n 122) 1301.

135 Bird (n 46) 108; Zweigert and Müller-Gindullis (n 1) 13–14, para 25.

136 eg Art 31(2) of the Polish Law on Private International Law of 12 November 1965 and earlier versions of the German EGBGB rule; see Hay (n 87) 637.

137 Hay, ibid (in relation to the German EGBGB).

138 Since one can still be a national of a country even after having long left that country. There is also the problem of dual-nationality.

139 See Cohen (n 1) 78; Collier (n 1) 85.

140 See Collier, ibid 83–84; Zweigert and Müller-Gindullis (n 1) 7, para 13; cf Panagopoulos (n 2) 160, 164.

141 Zweigert and Müller-Gindullis (n 1) 5, para 4.

142 Collier (n 1) 83.

143 L Smith, ‘The Province of the Law of Restitution’ (1992) 71 Can Bar Rev 672, 683; Bird (n 46) 72, 112.

144 See Cheshire and North (n 84) 20–22.

145 Cohen (n 1) depends on the (inappropriate) analogy with tort, the fact that the label ‘restitution’ emphasises the person who has suffered the loss, and that the place of loss will seldom have only a casual connection with the transaction giving rise to the restitutionary obligation.

146 Article 9(3), COM (2003) 427 final.

147 Wallis (n 96) 26.

148 COM (2006) 83 final, 17.

149 [2007] L199/40 (31.7.2007). It seems reasonably clear that this means the law of the place of enrichment.

150 This Convention never came to fruition. Attention was thereafter focussed on contractual obligations the result of which was the Rome Convention on the Law Applicable to Contractual Obligations [1980] OJ L266/1. This was enacted into English law by the Contracts (Applicable Law) Act 1990.

151 So too does Canadian law; (n 41) 32-1.

152 § 221(2)(c).

153 § 221(2)(b).

154 Comment d, 732–733.

155 Collier (n 1) 86; Zweigert and Müller-Gindullis (n 1) 7, para 13.

156 Bird (n 46) 111.

157 Bennett (n 2) 148.

158 Zweigert and Müller-Gindullis (n 1) 7, para 14.

159 Briggs (n 99) 198.

160 Chase Manhattan Bank NA v Israel-British Bank [1981] Ch 105; Re Jogia [1988] 1 WLR 484; [1988] 2 All ER 328; El Ajou v Dollar Land Holdings [1993] 3 All ER 717, reversed on other grounds [1994] 2 All ER 685 (CA); Kuwait Oil Tanker Co SAK v Al Bader (unreported, 16 November 1998) affirmed [2000] All ER (Comm) 271; Hong Kong and Shanghai Banking Corp Ltd v United Overseas Bank [1992] 2 Sing LR 495; Cofacredit v morris [2007] 2 BCLC 99.

161 Burrows (n 16) 617.

162 Barros Mattos Junior v MacDaniels Ltd [2005] EWHC 1323 (Ch D), [2005] ILPr 630, at [117]. See also [86]–[105].

163 Bird (n 46) 114; Blaikie (n 2) 120; Brereton (n 85) 152; Zweigert and Müller-Gindullis (n 1) 7, para 14; Morris (n 84) 182; Wallis (n 96) 26.

164 Bennett (n 2) 149; Bird (n 46) 114; Zweigert and Müller-Gindullis (n 1) 7, para 14.

165 Bird (n 46) 110; Briggs (n 99) 198. In Arab Monetary Fund v Hashim [1993] 1 Lloyd's Rep 543, 566, the plaintiff suggested that the defendant had deliberately arranged the place of enrichment to be outside Abu Dhabi.

166 Bird (n 46) 114.

167 Dicey, Morris and Collins (n 7) 1889, para 34-052.

168 Panagopoulos (n 2) 137–138. This is also one of the reasons why Briggs, n 99 above, p. 198, rejects a place of enrichment choice of law rule: ‘a rule which is based on this matter of happenstance is hard to promote.’

169 Hongkong and Shanghai Banking Corp v United Overseas Bank [1992] 2 SLR 495, 500–501.

170 Bowling v Cox [1926] AC 751 (PC); cf Hongkong and Shanghai Banking Corp v United Overseas Bank [1992] 2 SLR 495, where Singaporean law as the law of the place of ultimate enrichment was applied based on the interpretation that Dicey, Morris and Collins's Rule 230(2)(c) referred to the place of ultimate enrichment. However, it must be noted that Hwang JC observed (501) that on one view, Singapore could be regarded as being the only place of enrichment, in which case no choice was made between the places of ultimate or immediate enrichment.

171 Dumez France and Tracoba v Hessische Landesbank Case 220/88 [1990] ECR 49; Marinari v Lloyds Bank plc (Zubaidi Trading Co Intervener) Case C-364/93 [1996] QB 217.

172 In the case of electronic transfers of money, the recipient is enriched by acquiring a chose in action in the nature of a debt owed to him by the bank. This is obviously the case if title passed in the transaction, as will normally be the case with money (as title to money passes on delivery). In these circumstances, the recipient is clearly benefited by the bank's crediting of his account.

173 J Fawcett, J Harris and M Bridge, International Sale of Goods in the Conflict of Laws (OUP, Oxford, 2005) 1313. They also argue that where a service provider has supplied digitized products to the wrong person, the state where the recipient downloads the product is the place of enrichment: 1313–1314.

174 So, given that the defendant (secondary recipient) in Barros Mattos Junior v MacDaniels Ltd [2005] EWHC 1323 (Ch D), [2005] ILPr 630, would have been immediately enriched in Switzerland when the disputed funds were credited into his bank account there, Swiss law should straightforwardly have been identified as the applicable law of the restitutionary claim notwithstanding the defendant's residence in Nigeria or the fact that the transactions between the primary recipient and the defendant took place in Nigeria. This conclusion is supported by the fact that the cause of action would have arisen immediately once the defendant's bank account in Switzerland was credited. That said, the factual ties with Nigeria were thought to be important by Collins J and it may be Nigerian law would be of relevance in establishing the defendant's degree of knowledge. But the extent of the role to be played by Nigerian law would be something for Swiss law to decide (in the sense of establishing the threshold of knowledge and not in the sense of a renvoi by Swiss law to Nigerian law).

175 The example given in Dicey, Morris and Collins of a situation where the law of the place of ultimate enrichment applies instead of the law of the place of immediate enrichment is where payment in made at the Paris branch of an English bank to be credited to the account of X at the London branch of the same bank. The proper law here is English law, which is identified as the law of the place of ultimate enrichment: 1889, para 34-052. However, surely English law is actually the law of the place of immediate enrichment given that X's enrichment only arises when the money is actually credited to his account in England?

176 El Ajou v Dollar Land Holdings [1993] 3 All ER 717, reversed on other grounds [1994] 2 All ER 685 (CA); Kuwait Oil Tanker Co SAK v Al Bader (unreported, 16 November 1998) affirmed [2000] All ER (Comm) 271; Hong Kong and Shanghai Banking Corp Ltd v United Overseas Bank [1992] 2 Sing LR 495.

177 Christopher v Zimmerman (2001) 192 DLR (4th) 476 (BCCA).

178 Although, in relation to proprietary restitutionary claims involving title to land, the place of enrichment would be synonymous with the lex situs which is the preferred choice of law rule.

179 Sections IV(A) and (B).

180 Such as the rules contained in the Swiss Federal Statute on Private International Law, Austrian Federal Statute of Private International Law (made explicit in §1(2)) and Restatement (Second) of Conflict of Laws (which generally tries to identify the state with which the parties and transaction have the ‘most significant relationship’). See S McCaffrey, ‘The Swiss Draft Conflicts Law’ (1980) 28 Am J Comp Law 235, 249–250.

181 Or at least, the only choice of law rule outside relational unjust enrichment: Briggs (n 99) 198.

182 [1997] CLC 108, 127; rejecting Dicey and Morris's formulation and preferring the approach taken by Blaikie (n 2). See also Arab Monetary Fund v Hashim [1993] 1 Lloyd's Rep 543, 565–566, reversed on other grounds [1996] 1 Lloyd's Rep 589, at 597 (CA) and Cheshire and North (n 84) 687–692.

183 These displacement rules generally do not apply when parties have exercised their autonomy to choose the applicable law of the non-contractual obligation.

184 Emphasis added.

185 The English courts favour a more liberal application of Article 4(5) in comparison with the Scottish and Dutch courts. See Bank of Baroda v Vysya Bank [1994] 2 Lloyd's Rep 87; Definitely Maybe (Touring) Ltd v Marek Lieberberg Konzertagentur GmbH [2001] 4 All ER 283; cf Caledonia Subsea Ltd v Micoperi Srl (First Division, Inner House, Court of Session) 2001 SC 716 (OH), 2003 SC 70; Société Nouvelle des Papeteries de l'Aa v Machinefabriek BOA, 25 September, NJ (1992) No 750, RvdW (1992) No 207 (Dutch Supreme Court). The Rome I Regulation [2008] OJL 177/6 which modernised and transposed the Rome Convention into Regulation form, has dealt with this problem by replacing the series of presumptions with fixed rules; Article 4(1) sets out choice of law rules in favour of the law of the habitual residence of the characteristic performer of the contract for different categories of contracts.

186 Virgo (n 16) 425–428; Birks (n 16) 12–16, 74; Edelman (n 16) 34, 36, 41.

187 [1993] 3 All ER 717 at 736. See also Grupo Torras SA v Al-Sabah [2001] Lloyd's Rep Bank 36, para 122.

188 Then Rule 203(2)(c) (11th edn, 1987).

189 [2000] EWCA Civ 150 (9/5/2000).

190 [2004] EWHC 49.

191 ibid para 64. This alternative liability would be based on Articles 301 and 303 of the Civil Code of Iran (set out in para 7 of the judgment). The principles elucidated therein appear to be analogous to a ‘knowing receipt’ claim.

192 Kartika Ratna Thahir v PT Pertambangan Minyak dan Gas Bumi Negara (Pertamina) [1994] 3 SLR 257; Hongkong and Shanghai Banking Corp Ltd v United Overseas Bank Ltd [1992] 2 SLR 495.

193 [2000] 2 All ER Comm 271 (CA).

194 cf Base Metal Trading Ltd v Shamurin [2004] EWCA Civ 1316, [2005] 1 WLR 1157, [2005] 1 All ER (Comm) 17, where the Court of Appeal applied the law of place of incorporation of the company for the breach of an equitable duty of care owed by a company director. For a commentary of this case, see Yeo, ‘Choice of Law for Director's Equitable Duty of Care and Concurrence’ [2005] LMCLQ 144.

195 [2006] QB 125.

196 ibid 160.

197 Barros Mattos Junior v MacDaniels Ltd [2005] EWHC 1323 (Ch D), [2005] ILPr 630, at [117].

198 J Bird, ‘Bribes, Restitution and the Conflict of Laws: Thahir v Pertamina’ [1995] LMCLQ 198, 199; Virgo (n 21) 22.

199 Stevens (n 46) 187–188.

200 Yeo (n 46) 315.

201 ibid Chapters 1 and 2.

202 ibid Chapter 8.

203 ibid 234. See Rickshaw Investments Ltd v Nicolai Baron von Uexkull [2007] 1 Sing LR 377. TM Yeo (2007) 9 Yrbk of Pri Int Law 459; W Tong [2007] SJLS 405. Cf Base metal Trading v Shamyrin [2005] 1 WLR 1157; WPP Holdings Italy Sr l v Benatti [2007] 1 WLR 2316.

204 ibid 320; cf P Millett (in the context of domestic law): ‘… it is misleading, and potentially dangerous, to equate a breach of trust or fiduciary obligation as if it were the equitable counterpart of breach of contract at common law …’ (n 11) 310.

205 Yeo (n 46) 320. In Arab Monetary Fund v Hashim (No 9), The Times (11 October 1994), Chadwick J held that a compensatory claim for dishonest assistance was to be governed by the rule of double actionability for torts.205 However, for three possible interpretations of Chadwick J's judgment, see Yeo (n 46) 276–278.

206 See also nn 111–115.

207 It does not matter if the law specified by the Regulation is not the law of a Member State: Article 3.

208 Eighth Report (n 72) para 86.

209 Wallis (n 96) 15.

210 COM (2006) 83 final, 4.

211 Although Contracting States have the option of extending the scope of the Convention to ‘trusts declared by judicial decisions’: Article 20.

212 eg Trustor AB v Smallbone [2000] EWCA Civ 150 (9/5/2000); Kuwait Oil Tanker Co SAK v Al Bader (No 3) (unreported, 17 December 1998); [2000] 2 All ER (Comm) 271 (CA).

213 R Chambers, Resulting Trusts (Clarendon Press, Oxford, 1997; P Millett, ‘Restitution and Constructive Trusts’ (1998) 114 LQR 399; Burrows (n 35); Birks (n 16) Chapter 8.

214 Stevens (n 46) 182–185, 216; Chong (n 47) 873–882; cf Panagopoulos (n 2) 67.

215 Under English law, this would be done by invoking the rule in Saunders v Vautier (1841) 4 Beav 115.

216 Webb v Webb (Case No. C-294/92) [1994] I ECR 1717; [1994] QB 696.

217 Certain intangibles such as the assignment of debts are treated as contractual in nature and governed by the applicable law of the contract (Article 12 of the Rome Convention). See Raiffeisen Zentralbank v Five Star Trading LLC [2001] EWCA Civ 68; [2001] QB 825; [2001] 2 WLR 1344.

218 For movables, this would be the lex situs of the last relevant transaction (Cammell v Sewell (1860) 5 H&N 728; Winkworth v Christie [1980] Ch 496) which should coincide with the lex situs at the time of enrichment.

219 See nn 116–120.

220 Albeit this justification is less strong where movable property is concerned.

221 Dicey, Morris and Collins (n 7) 1863, para 34R-001.

222 ibid 1877, para 34-029.

223 (1887) 36 Ch D 269. The case, which is also cited in the commentary to the Restatement (Second) of Conflict of Laws, concerned a claim for payment for permissive waste, an action which Dicey, Morris and Collins note may today be more naturally classified as tortious: ibid 877, fn 96.

224 § 221(2)(e) and see comment d (733).

225 ibid Comment d.

226 These justifications have admittedly less force if the property concerned is a movable. In Christopher v Zimmerman (2001) 192 DLR (4th) 476 (BCCA) British Columbia Court of Appeal applied Dicey, Morris and Collins's sub-rule (2)(c) to a claim of constructive trust over movable property.

227 cf Article 42 of the German EGBGB which is a general provision allowing a post ante party choice but does not apply to property law: Hay (n 87) 645.

228 This can be found in, eg Cheshire and North (n 84) Chapter 5; O Kahn-Freund, General Problems of Private International Law (Sijthoff & Noordhoff, Alpena an den Rijn, 1980) 285–291; WW Cook, The Logical and Legal Bases of the Conflict of Laws, Chapter IX (Harvard University Press, Cambridge, Massachusetts, 1942); A Briggs, ‘In Praise and Defence of Renvoi’ (1998) 47 ICLQ 877.

229 Article 4(1).

230 Article 35(1).

231 Article 4(2).

232 Article 38(1) points towards the law governing the relationship.

233 Article 32(1) includes ‘the consequences of invalidity of the contract’ within the scope of the governing law of the contract.

234 Hay (n 87) 646.

235 The Swiss Federal Statute on Private International Law generally rejects renvoi apart from certain limited situations such as succession (Art 91(2)) and personal status (if the reference from a foreign law leads to Swiss law: Art 14(2)). The limited scope for renvoi can be explained as the Code generally seeks to apply the law of the state of closest connection: McCaffrey (n 180) 256.

236 § 221 refers to the ‘local law of the state’.

237 Article 24.

238 Carruthers and Crawford (n 86) 89.

239 In Barros Mattos Junior v MacDaniels Ltd [2005] EWHC 1323 (Ch D), [2005] ILPr 630, [121], Collins J stated that: ‘the claim to the application of renvoi in restitution claims is weak …’.

240 eg Collier v Rivaz (1841) 2 Curt 855. See also The Islamic Republic of Iran v Berend [2007] EWHC 132 (QB), [2007] 2 All ER (Comm) 132, [2007] Bus LR D65 at [20]; R Mortensen, ‘“Troublesome and Obscure”: The Renewal of Renvoi in Australia’ (2006) 2 Journal of Pri Int Law 1, 24–25 (in relation to Australian High Court decision in Neilson v Overseas Projects Corp of Victoria Ltd [2005] HCA 54, where six of the judges accepted that the doctrine of renvoi was applicable in foreign tort claims).

241 The Islamic Republic of Iran v Berend [2007] EWHC 132 (QB), [2007] 2 All ER (Comm) 132, [2007] Bus LR D65 at [20].

242 Re Ross [1930] 1 Ch 377; Re Duke of Wellington [1947] Ch 506.

243 Winkworth v Christie, Mason & Woods Ltd [1980] Ch 496, 514; Glencore International AG v Metro Trading International Inc [2001] 1 Lloyd's Rep 284, para 38; Cheshire and North (n 84) 66; Dicey, Morris and Collins (n 7) 84, para 4-025; cf Macmillan Inc v Bishopsgate Investment Trust plc (No 3) [1995] 1 WLR 978 at 1008; The Islamic Republic of Iran v Berend [2007] EWHC 132 (QB), [2007] 2 All ER (Comm) 132, [2007] Bus LR D65 [19]–[31].

244 There does not seem a way around this. One could possibly attempt to interpret the law of closest connection under Article 10(4) to mean not the lex situs but the domestic system of law which is identified by the choice of law rules of the situs for claims for proprietary restitution. However, this, apart from being unattractively complicated, would directly contravene Article 24.