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Sender:
Duncan Sheehan
Date:
Wed, 12 Jul 2000 20:27:10 +0100
Re:
Questions on Prof. Birks' "Equity, Conscience, and Unjust Enrichment"

 

Dear all

I have several comments that may be of some interest, The first is that as I understand Peter's classification property is a response. That means that it can be created by in theory any one of the three causative events consent, wrongs, unjust enrichment, as well as any other ones that exist that I cannot off the top of my head remember. I imagine that in English law title is most obviously generated by consent. I give my sister her birthday. Property passes because I consent to it doing so. Property rights may also be generated by wrongs; the wrong of accepting bribes seemed to generate property rights in the Hong Kong Govt in AG HK v Reid.

As for breach of contract I'd put that in wrongs.

Secondly the concept of an unjust factor may admittedly be on the way out now after Kleinwort Benson v Lincoln City Council, given that I can count on the fingers of one hand the number of people who agree with me that the bank was mistaken and deserved relief on that basis. I see no reason why it ought to go out of the door. Each of the unjust factors protects a different interest of the claimant. Mistake for instance protects the interest of the claimant in being able to rest his decision making on a stable and flaw-free basis. Peter likes to say that the mistaken party's intention is vitiated; I'm not entirely sure that I like that. Depending on how you ask the question you might be able to say both that it is and is not vitiated. If I drive north out of Oxford to reach Abingdon which is actually to the south and then discover it is to the south is my intention to drive north vitiated. I think not, certainly not before I find somewhere to turn round, though my intention to drive to Abingdon buy going north might be. It certainly does not vitiate my intention to drive.

And in a sense it does not matter whether or not the unjust factors have anything in common other than that they each protect a separate interest. Wrongs protect different interests, why should unjust factors not do so as well. Why should we care if the list of unjust factors look a little heterogenous if we don't care that our list of wrongs looks heterogeneous as well? If there is no interest to protect why should there be restitution?

Nonetheless I have no objection in principle to a civilian model where it is the lack of 'juristic reason' or the lack of 'Rechtsgrund' that grounds restitution, though for English law to embrace such a view would force us to look at gifts in a different light to we do now for instance. It seems to me at least that the idea of non-consensual transfers demanding restitution add nothing to the unjust factors of mistake and ignorance (possibly also failure of consideration though I have doubts about that). I'd be interested to know if there is anything covered by the Canadian civilian approach that is not covered by a traditional English unjust factor.

As a small side point I am not myself impressed by the term unjustified enrichment. To me it seems to suggest that our system is the civilian system, that where an enrichment is liable to be restored where it is unjustified suggest that there needs to be justification in the form of a 'juristic reason'. That I think is why the German Civil Code calls its section on UE ungerechtfertige Bereicherung rather than ungerechte Bereicherung, though those who know more German law than me may correct me.

My problem is that I don't think that that is or ought to be English law. It is unquestionably true that where there is a contract or other existing obligation that there is a bar but that does not mean that where there is no such 'juristic reason' that there ought to be restitution. Void contracts for instance do not attract relief simply because they are void. The fact that the contract is void is entirely neutral as to the result that ought to follow. An example of this must be the passage of property. Cundy v Lindsay would seem to tell us that where a contract is void for common mistake property does not pass; yet we know property can pass under illegal contracts which are void as well. The fact that it is void tells us nothing. There is no interest that always needs protecting. We need an extra factor to justify relief. In most cases that will be mistake, either of fact or law, but not necessarily. If we were to run down this route we might find ourselves undertaking the task of defining not where we do obtain relief but where we do not. This is what German law seems to do where for instance in the civil code's article on illegal contracts it in effect pronounces that all illegal contracts are void except when they're not. This is simply to evade the bite of the general restitution article, number 812, which bites on all void contracts. I see no reason for English law to twist round and start doing things backwards.

 

Duncan Sheehan


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