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The ECJ are neutral. Clearly the Advocate General thought the appropriate claim was for restitution. The Court was careful not to say this: they leave it open to the domestic court to characterize the claim. Just so long as there is a claim, European law is complied with.

There is a claim: a claim in tort.

One last example.

A induces B to enter into a contract by deceit. B pays a substantial sum under the contract.

If B does not want to rescind he cannot get back his money by way of unjust enrichment but he can still claim for the loss caused by the deceit.

Similarly, in DMG v IRC the presence of a valid obligation to pay provides an insuperable hurdle for the claim in unjust enrichment but is irrelevant to the claim in tort.

R

-----Original Message-----
From: Enrichment - Restitution & Unjust Enrichment Legal Issues On Behalf Of Monica Chowdry
Sent: 17 May 2005 09:47
Subject: Re: [RDG] IRC v DMG

Two points:

First -

What is left is a tax due under English law but also due under EU law, unless EU law says that the consequence of unlawfully failing to offer the election to some taxpayers is that they shall be allowed to exercise it retroactively.

I think this is exactly what the ECJ is saying.

In Metallgesellschaft, the ECJ was asked the specific question whether or not a claim could be denied on the basis that no election was made (see paras 98-107).

The ECJ held that the UK could not reject a claim for payment of the loss of the use of money on the sole ground that an election was not made. Essentially, this is on the basis that it is unreasonable to expect taxpayers to have made a claim when they would have had such a claim rejected.

Second -

support for allowing a restitutionary claim comes from both the ECJ and the AG's opinion. Whilst the ECJ said that it is open for the UK to decide whether to allow a claim for damages or restitution, they did say that in deciding which cause of action to allow, the rules mustn’t make it practically impossible or excessively difficult to exercise Community rights - there is at least an argument (although I haven't quite made up my mind on this yet) that by not allowing a compensation claim due to the limitation period, where there seems to be an option of allowing a claim in unjust enrichment due to a longer limitation period, the exercise of community rights is made excessively difficult (particularly bearing in mind the fact that the ECJ seems to say that retrospective claims should be allowed as described above, yet for the case to come to the ECJ and to get judgment takes a considerable period of time).

Stronger support comes from the AG's opinion - see in particular paras 51-52.

He rejects the submission that a restitutionary claim should be denied on the basis that no election was made.