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TABLE OF CONTENTSCommon law forms of actionsAction for money had and received – this form of action was used where the plaintiff sought to recovermoney received by the defendant.Action for money paid – this form of action was used where P paid money to a third party, but D benefitedby this exercise....

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Common law forms of actions Action for money had and received – this form of action was used where the plaintiff sought to recover money received by the defendant. Action for money paid – this form of action was used where P paid money to a third party, but D benefited by this exercise. For example, where the plaintiff paid off one of the defendant’s debts, or where P paid a plumber to repair D’s burst water pipe. Quantum Meruit and Quantum Valebat: The claim for a quantum meruit (meaning ‘as much as was merited’) was used to recover reasonable remuneration for services rendered. Quantum valebat (meaning ‘as much it was worth’) was used to recover a reasonable price for chattels supplied to the defendant. Example: X pays Y $100 in the mistaken belief that X owes the money to Y and X can claim it back. X has always been able to do this. (The ability to recover this money is centuries old). We would bring a claim for the cause of action known as money hadn't received. So, it was always the case that the mistaken payer could get the money back (well not always but for a long time it's been the case), but what wasn't clear was why. Why was it that the mistaken payer can get the money back? First explanation: quasi-contract – quasi means “as if”, so the law of quasi-contract was the law of as if contract or the law of sort of contract. Y would have to return the money back to X because there was a quasicontract, on the basis that Y had promised (fiction), as if there were a contract. Second explanation: equitable analysis – Y would have to pay the money back because it would be unconscionable if they didn’t. Problem with this… Where is the unconscionability here? ‘receipt’ of the money is unconscionable. However, Y did not do anything unconscionable/wrong when X had transferred the money by mistake. Y has knowledge that X had transferred it by mistake, it would be unconscionable for Y to retain the money. Question: Why is it unconscionable to retain the money? Why should Y return the money? 1. Because X paid Y mistakenly and therefore, it is unconscionable for Y to retain the money.

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2.

Because X paid Y under a mistake and it looks like unconscionability is unnecessary – it doesn’t add anything to the analysis.

Most people are convinced that unconscionability fails as an explanation for the reasons above. It is unconscionable for someone to retain the money, but only because of the mistake and the mistake is actually doing the explaining here, not the unconscionability. In the High Court of Australia, Gummow J has been very keen on the idea that unconscionability is actually the key to understanding this area of the law. (Allan believes this view is fading and losing support. He thinks Playboy Club London is his victory case). The basic understanding is that the reason the money has to be returned is because Y has been unjustly enriched, it’s not whether there’s unconscionability or not, the reason is it’s unconscionable for Y to retain the money because they have been unjustly enriched. The returning of the money to X is restitution, NOT compensation. X is not being compensated for loss, although X in a sense, has suffered a loss. However, that is not how we conceptualise the award. It is a restitutionary award which is the remedy for unjust enrichment. Events and Responses: Early dominant view (perfect quadration thesis) The problem is that we want a name for an area of the law that goes along with the other areas of the private, like law of tort, law of contract, the law of property. So, the way we started was we had the law of tort, law of contract, the law of property, the law of restitution & what people noticed, or in particular this guy Peter Birks (who Allan will introduce soon), is that there's something wrong with these categories. There's something wrong with that list - tort, contract & restitution. There's something wrong with that list & what's wrong with that list is that they name different kinds of things. Allan will explain what that's all about. Question is, what's wrong with this list (tort, contract, restitution)? Peter Birk suggests that you can conceptualise the law in many ways; one useful way is to make a distinction between what we might call events and responses. Event is a legally significant happening, something that happens in the world that’s of legal significant. Responses, for example in a case of battery, the law will respond (ACC aside) by making the assailant compensate the victim for their injury. Restitution? That’s a response. Early dominant view graph: Event

Response

Consent

Recognition of contract or like obligations

Wrong

Compensation Injunctive relief

UE

Restitution

Other

Miscellaneous

Above is the view promoted by leading scholars in the early days (around 2000). No one believes in it anymore. Another example: to a consent, the response would be the recognition of a contract or contract-like obligation. One of the things that is important about consent is that indeed the reason that it’s called consent and not contract because everything that’s based on consent would go into this category. Then, the event of unjust enrichment, the response is restitution. Things to notice about the graph: 1. The first is that, on this view, whenever we have the response of restitution, that has to be because there's been an unjust enrichment. According to this picture, we'll never get the response of restitution unless we have an unjust enrichment. That's the first thing to notice. 2. The second thing to notice is that there is no category that corresponds to equity here & that's because equity is understood, on this analysis, to be distributable amongst the other categories. What Allan means by that is, sometimes equity is about consent, sometimes it's about wrongdoing & sometimes it's about unjust enrichment. Perhaps, even sometimes it's about this other category, but equity exists on this view. There's no attack on equity. It's just that the right way to understand equity is falling under one of these events. Sometimes equity deals with consent, sometimes it deals with wrongdoing & sometimes it deals with unjust enrichment.

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The third thing to notice about this is that there's no property on this list. That's no accident. It was believed that property is never an event. Property doesn't come under this list because property is never a legal event. Of course, property can feature here indirect, so for example, if X trespass on Y’s property, that's legally significant but it's legally significant because it's a wrong. If X transfers property to Y (conveyance), that's legally significant but only because it's a consent. So, on this view, property itself is not legally significant. The creation of property rights is not legally significant event. It falls under one of these other categories.

Current dominant view After Lipkin Gorman, people really wanted this work, but many people were saying that they did not want to do this, that it is the wrong way to go and they did not want to rewrite the entirety of the private law – it was just wrong. This is why this area of the law has become very controversial to this day. Standard example: X steals Y’s car and uses it as a taxi. HE makes money as a result of using Y’s car as a taxi, but the position of the law is that Y can sue X for compensation for the use of the car. Any loss the Y has suffered, but whether or not know they know that they can also sue X to get the profit X made. The money that X made from using Y’s car as a taxi, they can get the money and that is a restitutionary award. X has to give up their gain – it’s not compensation. When X has to give up the money, he made by using Y’s car as a taxi, X is not compensating Y for any loss. The reason for this is because X made a gain using Y’s property and the features of their property. Another example of this is if Y has an apple tree and produces apples, Y owns those apples – in this case, it’s Y’s car. Event

Response

Consent

Recognition of contract or like obligations

Wrong

Compensation Injunctive relief Restitution (disgorgement – wrongdoing)

UE

Restitution

Other

Miscellaneous

Restitution now comes as a response to two events: to wrongdoing or unjust enrichment. In the area of wrongdoing, there’s a tendency to call it disgorgement. Sometimes unjust enrichment is called subtractive unjust enrichment, which means unjust enrichment at P’s expense. Example, where X pays Y money by mistake. Y realises the gain there, but the gain was at X’s expense. Not like the taxi case where the gain X made was not at Y’s expense. The money is not coming out of their bank account, it's by using Y’s car but they’re not paying that money to X in any way. However, in the mistaken payment case, X is paying that money to Y. The money is coming from X’s bank account to Y. This is why it is called subtractive unjust enrichment – the money is subtracted from X and given to Y. Prof Peter Birks, Lord Robert Godd, Prof Gareth Jones Prof Peter Birks: Professor of civil law at Oxford. He wrote a book called “The Law of Restitution”, in the early days of this area of the law, it had a significantly large influence. Lord Robert Goff: Judge who ended up on HL. Prof Gareth Jones: Professor at Oxford. Goff and Jones wrote a textbook originally called “The Law of Restitution”, now called the “The Law of Unjust Enrichment”. Historical Causes of Action We cannot just go to court and say the defendant has been unjustly enriched at the plaintiff’s expense and they want their money back; this is because there is no cause of action recognised by the courts called unjust enrichment. Older forms of action were still spoken about and they were:  3

Money had and received – X pays Y money and wants it back.

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Money paid – X paid money to third party that benefits Y and X wants the money back. Quantum meruit – payment for services rendered, e.g. if X offers to clean Y’s shoes and Y didn’t ask for it and doesn’t pay X back. Can X claim from Y the cost of cleaning? Quantum valebat – payment for chattels received, e.g. if X has not given Y money but has given them something i.e. car, book and wants payment for that.

Structure of an Unjust Enrichment Claim Four steps to ascertain an unjust enrichment claim: 1. Was the defendant enriched? If yes, maybe D is liable. If no, no liability. 2. Was the enrichment at the plaintiff’s expense? If yes, then maybe liability. If no, there’s no liability. 3. Was the enrichment unjust? If yes, liability. If no, no liability. 4. Are there any defence? The onus is on the plaintiff to prove the first three elements, then the onus shifts to the defendant to make out a defence for the fourth element. Not a legal test but a signpost towards areas of inquiry. Was D enriched? Standard example: if X mistakenly pays Y some money that they believe they owe to them – no problem when dealing with money, however it can be the saving of the expense, too. For example, if X discharges the debt that Y will be liable for, i.e. if they are flatmates and take turns paying the water rates. If X thinks it’s their turn and pays the water company when in fact it’s Y’s turn, that might be a case where X could claim restitution from Y. Portman Building Society Plaintiff loans £92,100 to the borrower to purchase the property. In condition of the loan, the house will be used as a residential property only. The plaintiff pays the money into the borrower’s solicitor’s trust account, then the money is transferred to the vendor. The borrower is going to use this property as a guest house, which is inconsistent with the agreement between the plaintiff and the borrower. On the face of it, they will be able to sue the borrower for breach of contract. Plaintiff doesn’t want to sue the borrow, they go after the solicitor (defendant) and their claim is the restitution claim – law of unjust enrichment. Court holds that there is no liability. Why? Because the defendant is not enriched, never was. What’s going on here is that the defendant was just the conduit through which the money passed. The defendant was a pipe, the money just passed through the defendant, they never actually had the money in the sense that is relevant here. Lord Justice Million states that the defendant never had any claims to the money, they were only ever holding onto the money on trust for other parties. They held the money for the borrower, then they transferred the money to the vendor. So, though the defendant did receive the money, they received the money subject to the trust and the money was never the defendant’s use. Therefore, the defendant was not enriched. Port of Brisbane v ANZ Theft was a director of a company called Windermere. They stole $4.25m from the plaintiff’s port corporation and paid into an account that Windermere held as stockbrokers. The stockbrokers in good faith paid out all the money into an overseas account in accordance with instruction from Windermere. So, we have the port corporation’s money paid to the thief and invested the money with the stockbrokers then they pay that out overseas in accordance with instructions provided by Windermere. Plaintiff wants to sue the defendant. On the face of it, plaintiff would be able to sue the overseas company, however it may have been easier to trace/locate the money with the stockbrokers. Plaintiff was unsuccessful. The same reason was because they were in conduit which the money passed through, they were never the beneficial owners of the money. They held the money on trust for a third party (Windermere). Yes, the stockbroker obtained the legal title of the money and sometimes that shows the action, but they never obtained the beneficial title. What we notice here is when the defendant holds money on trust for a third party, the general position would be that the defendant is not enriched. The reason because of this is that the enrichment, the benefit, belongs to somebody else, it belongs to the beneficiaries of the trust. In this case, no enrichment despite the fact that the defendant did literally receive the money. Types of Benefit

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Obvious benefit is money. What the defendant received was money, and the idea is you can use the money to purchase whatever you happen to value. For example: what happens if the defendant is a hermit (lives in woods and does not use money) and you accidentally give him $50? This is a problematic case, but if the hermit really doesn’t care about the money, he can return that the $50. However, if he refuses to give it back, then it seems to be evident that he does actually care about it. No problem with money. Services In principle, you can get restitution for services in the idea that X performs a service for Y, then Y would have to pay X for the value of the service. It is obvious that you cannot return the service, Y would have to pay X for the value of the service. There’s a problem which is there is something called pure services that is services with no marketable product. For example, if X and Y go to dinner and Z is playing music. At the end of the night, Z asks everyone to pay for his services. Problem on one hand is that X and Y have been enriched, because you have this music playing in the background, they are entertained. However, there is no marketable product there, there is nothing you could sell as the benefit you received. Another example, X is building a house on their land. Y thinks that X requested them to do do some electric work on the house, but X never did. Y continues to do some electric work. It seems that Y has benefitted X. If X sold the house, then no doubt part of the price the they have received from the house would reflect the fact that Y has done some of that work. So, if X sells the house, they could give some of the money to Y. If X does not sell the house, is it right for Y to demand the value of their services? Law has not come out with a satisfactory position on this regards. ‘ Brenner v First Artists’ Management case Defendant was a 1970’s popstar. He hired the plaintiff’s firm to do some management work for him. There were various broadly speaking agreements but none of them can really be called a contract. There were discussions but nothing concrete to say there is a contract between the parties. The plaintiff conducted some work for the defendant. Problem is, none of these seems had benefited the defendant because the combat doesn’t go anywhere. So, it doesn’t seem to be any benefit. On one hand the plaintiff actually done some of the work that the defendant asked for, but it is hard to say that the defendant benefited from any of these. Court held that the defendant was liable. “Where the person requests another to do something, it is not unreasonable for the law to conclude that the former see some benefit in its performance, however honest view be on the objective basis, and for the law to act on the perception recipient”. The point here is, the work the plaintiff did for the defendant must have been requested by the defendant and because it is requested by the defendant, it is very different for the defendant to say that wasn’t a benefit. The idea is that if you ask for something, even that asking can’t amount to contract, if you ask something and you get it, on the face of it, that is a benefit. Requested service and the plaintiff performs that service, then the plaintiff is entitled to quantum meruit, to the restitution for that value of the service. Exall v Partridge Partridge is a coach builder and Exall left his carriage on Partridge’s land for a repair. The land was not owned by the defendant, it was owned by a third party and the defendant was supposed to be paying rent for the land. The defendant didn’t pay rent at all. The landlord seized the land and the chattels on the land, and that was legally justified at the time. Now, the plaintiff wants his carriage back, he pays the landlord the defendant’s rent. Once the landlord received the defendant’s rent, then he releases the carriage. The plaintiff gets the carriage back, but not happy about having to pay the defendant’s rent. He uses the defendant to get restitution of the money he paid to the landlord for the rent. Notice that in this case, no money is paid by the plaintiff, to the defendant. The money is paid by the plaintiff to the landlord, a third party. Nevertheless, the plaintiff succeeds. Reason is because in playing the landlord, the plaintiff discharges defendant’s debts. The defendant had a duty to pay the landlord and the plaintiff was taking care of that duty. The idea is that although the defendant received no money from the plaintiff, the plaintiff nevertheless enriched the defendant by paying off the defendant’s debt. This is a good example, where there is no direct transfer between the plaintiff and the defendant. There is the transfer between the plaintiff and a third party; but the transfer, enriches the defendant. It makes the defendant better off. He had a debt, and now he does not have it anymore. So, that is an enrichment. Ford v Perpetual Trustees of Victoria Ltd Defendant was significantly disabled, mentally. He couldn’t read, he couldn’t understand what was happening in this case. His son manipulated him to borrow $200,000 for the plaintiff to invest on a cleaning business. So, the 5

defendant contracts with the plaintiff in order to borrow the money to invest in the business, but the reason the defendant does this, is not because he understands it, it was because he had absolutely no idea. He was manipulated by his son. Possibly, the son could be sued in torts, but not what happened here. Son made the plaintiff think that the defendant was the one acting but really, it’s the son sending all the emails and texts. The plaintiff believes that he is dealing with the defendant. The plaintiff lent $200,000, most of this he invested in the cleaning company, but $24,857 is invested in the account. The cleaning company later f...