As an aside, does this potentially show that the reason for restitution in the failure of basis cases is not unjust enrichment but rather the breach of contract (followed by reliance/restitution damages) or an implied condition of the contract (if X not true we are not to be bound)? :)

In regards to Mack, perhaps a possible line of attack might be based on the special nature of the government (i.e. as an entity which exists for the sole purpose of promoting the public good as embodied in the Constitution). The argument is as follows: Although there was a juristic reason for the enrichment at the time, it is not open to the government today to argue this juristic reason since to do so would force it to take a position (one can be discriminated on the basis of race) which is now constitutionally impermissible. Such a limitation would be similar to the argument in Jane Doe v. Metropolitan Police (1990 Div Ct.), Roncarelli v. Duplessis (1959 SCR) and City of Kamloops v. Neilsen (1984 SCC) that there are inherent/implicit limits on the exercise of state power such that some lines of defence are impermissible/irrational for the government to take (in Jane Doe's case that women 'overreacted' to fears of sexual assault and thus did not have to be warned by police of rapists in the area). I think support for such a position can be found in the Idea of Private Law (see the discussion surrounding nonfeasance) and in the Weinribs' new article "Constitutional Values and Private Law in Canada" in Human Rights in Private Law (2001 Hart).

What do you think?

My initial analysis of the unjust enrichment claim was that restitution was impossible unless the legislation could be shown to be invalid at the time the tax was paid, either due to inconsistency with some then-existing superior norm, or by the enactment of some later norm with retroactive effect. Both of these arguments were made, but they are very difficult. The former has to be based on international law, and the latter on the Charter. The SCC has held that s. 15 of the Charter, which came into effect in 1985, does not have retroactive effect:

Another argument that might be tried in relation to attacking the validity of the tax would be the implied "bill of rights" theory (i.e., there are certain actions which are ultra vires either level of government even without a Charter) which would count on as a "then-existing superior norm". If I remember correctly the implied "bill of rights" theory was superseded by the Bill of Rights and then the Charter but that does not mean that it could not be resurrected to deal with earlier cases.

Just some thoughts.

Jason

Lionel Smith wrote:

I do not think that the case of Mack v Canada has been mentioned on the RDG yet. This is a potential class action arising out of the imposition, during the years 1885-1923, of a 'head tax' on immigrants to Canada from China. (During the period 1923-1947 Chinese immigrants were effectively excluded from Canada.)

The plaintiffs put forward three causes of action: (a) two violations of s. 15 of the Charter, which prohibits governmental discrimination; (b) a violation of customary international law; (c) unjust enrichment. The Ontario Supreme Court of Justice ((2001), 55 O.R. (3d) 113) and the Court of Appeal ((2002), 60 O.R. (3d) 373 (C.A.)) have struck out the statement of claim as disclosing no reasonable cause of action. Leave to appeal has been sought [2002] S.C.C.A. No. 476.

Some claims are based on argued present (or recent) injustices, particularly a form of discrimination in that the government has made reparations to Japanese Canadians interned during WWII but has not made any reparations in this case. The unjust enrichment claim, however, is based on the head tax payments.

I am giving a paper this weekend at a conference arising out of the litigation. My initial analysis of the unjust enrichment claim was that restitution was impossible unless the legislation could be shown to be invalid at the time the tax was paid, either due to inconsistency with some then-existing superior norm, or by the enactment of some later norm with retroactive effect. Both of these arguments were made, but they are very difficult. The former has to be based on international law, and the latter on the Charter. The SCC has held that s. 15 of the Charter, which came into effect in 1985, does not have retroactive effect: Benner v Canada (Secretary of State), [1997] 1 S.C.R. 358, 143 D.L.R. (4th) 577. It is clear that s. 15 cannot make governments liable for harm caused by pre-1985 discrimination.

However, Benner says that while s. 15 does not work retroactively, it operates against ongoing discrimination which continues in force after 1985, even if some of the crucial facts (in Benner's case, the circumstances of his birth) occurred before 1985. This has led me to consider the following argument. Normally an enrichment and corresponding deprivation are unjust only if the factors which make them so are present at the time of the transfer. However, there is clearly a qualification to this in the case of failure of basis. In that case, there is a kind of seed of injustice in place at the time of the transfer (a mutual understanding as to its basis), which germinates if the basis fails. See A. Burrows, The Law of Restitution, 2 ed., 332-333, commenting on this unusual feature. Following the pattern of failure of basis, I wonder whether it is possible to argue that a transfer based on discriminatory legislation might not be unjustified at the time it is made, but when subsequently a constitutional enactment is passed which forbids governmental discrimination (including by legislation), the seed of injustice germinates and the transfer becomes unjustified. This ends up actually following Benner, because you can say that you are not relying on a retroactive operation of s. 15, but only on a continuing state of affairs which is contrary to s. 15, namely the ongoing enrichment of the state, acquired through overtly discriminatory legislation. This would preserve the result that past harm caused by discrimination is not compensable due to the coming into force of s. 15, since we do not want to make conduct wrongful retroactively; but it would distinguish the case of unjust enrichment, which does not turn on wrongdoing. And just as in the case of failure of basis, an argument that the enrichment has been dissipated between the transfer and the completion of the injustice (or later) would be for the defendant to make (and would not anyway arise on a defendant's striking out motion). Again following the example of failure of basis, the limitation period would not start to run until 1985 (or maybe even from Benner in 1997 on a discoverability basis).

I thought this case might spark some discussion, and in any event I would be grateful for any thoughts on my ideas as outlined above.

The judgments, the legislation, and other related material including pleadings is available on the conference web site, http://www.law.utoronto.ca/conferences/reparations.html

Lionel

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Jason Neyers
Assistant Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435