Midterm v2 - Restitutionary Remedies

Question 1

Summarize Restitution as a Remedy

Answer 1

Purpose – prevent unjust enrichment  BUT D’s gain could be positive or negative, and D’s conduct need not be actionable (only unfairness)

Damages – What P would have reasonably demanded in exchange, had parties negotiated

Elements – 1) ENRICHMENT, 2) DETRIMENT to P, 3) Retained by D WITHOUT JURISTIC REASON (prima facie if not established category)

Defences – 1) Change of position, 2) Estoppel, 3) Laches and acquiescence, 4) Statutory defences, 5) Equitable considerations

CAN claim for: economic torts, trespass to property, breach of fiduciary duty, etc
Generally CAN’T claim for breach of K (EXCEPT, to prevent unfairness, P confers benefit on D in anticipation of contract)

Measuring the Enrichment – will consider 1) Nature of D’s conduct, 2) position of the parties -> will pick approach that most favors P (ICAM)

1) Net Profit, 2) Apportionment, 3) Savings Comparison, 4) Opportunity Costs, 5) Constructive Trust

Question 2

What is the purpose of restitutionary remedies? What is the basis (ie the essential elements for this kind of claim)?

Answer 2

Purpose – prevent unjust enrichment by stripping D of benefit obtained at P’s expense

D’s conduct NEED NOT CONSTITUTE AN ACTIONABLE WRONG  Merely needs to be UNFAIR for D to retain benefit

Basis – 1) D gained something from P, 2) benefit received and kept by D WITHOUT JURISTIC REASON (Kerr v Baranow)

Question 3

True or false: To claim unjust enrichment, D must have gained something at P’s expense (ie P must have suffered a loss)

Answer 3

False. P need no have suffered a LOSS. It merely needs to be a benefit retained by D, without juristic reason (unfairness is sufficient)

Question 4

How are damages assessed/what is the measure of damages for restitutionary remedies?

Answer 4

Damages are assessed based on the HYPOTHETICAL question – If P and D had NEGOTIATED for the benefit, what would P have reasonably demanded?

Question 5

How is a claim for unjust enrichment established? Explain.

Answer 5

1) ENRICHMENT - D gained something from P through wrongdoing,
2) DETRIMENT to P  P must ID a DETRIMENT, also must identify a CAUSAL LINK (eg loss of opportunity to bargain, money, uncompensated services)
3) benefit received and kept by D WITHOUT JURISTIC REASON (Kerr v Baranow) – enrichment is PRIMA FACIE UNJUST if not within established categories, but rebuttable (Garland; Wilson; Kerr)

Question 6

What defences are available for an unjust enrichment claim? Briefly summarize.

Answer 6

1. Change of Position (EXTREMELY hard to use) – where D substantially altered position due to INNOCENT receipt of benefit (but in GOOD FAITH and no wrongdoing); must be UNJUST to take back benefit (Garland)
2. Estoppel – D received benefit but P’s conduct led D to believe it was ok to retain benefit
3. Laches and Acquiescence (Wrotham Park) – delay in asserting claim or acquiescence such that it becomes unfair for P to claim benefit; can also REDUCE damages
4. Statutory defences – where claim based in statute, need to consider statutory defences/justification (Garland)
5. Equitable Considerations – would be UNFAIR to take back (eg spent on food, impossible to trace benefit, etc)

Question 7

What cases are restitution generally available in? When is it generally unavailable? Any exceptions?

Answer 7

Available for: economic torts, trespass to land, breach of fiduciary duty, etc
Unavailable for: breach of contract (Surrey)  BUT exceptions for preventing injustice (Blake), P conferring benefit in anticipation of K (RND)

Question 8

What methods exist for measuring unjust enrichment? Briefly describe each

Answer 8

1) NET Profit (accounting) – award net profits D made from wrongdoing
2) APPORTIONMENT – P recovers profit attributable to infringement
3) SAVINGS Comparison - amount that D saved
4) OPPORTUNITY Cost – what willing seller would have demanded, and willing buyer would have paid
5) Constructive TRUST - SHARE of D’s property

Question 9

1) Describe NET Profit (accounting) approach (for unjust enrichment)

Answer 9

Award - net profits D made from wrongdoing (appropriate where D’s profits outweigh P’s losses) (Peter Pan; Pro Arts)  Preferable for PLAINTIFF

Appropriate for – infringement of IP, breach of fiduciary duty

Notes – P only needs to prove D’s profit from infringement (proof of loss not req’d) (Patt’s Offroad), D can show COSTS incurred to make profits and deduct from award (Pro Arts)

Question 10

2) Describe APPORTIONMENT approach (for unjust enrichment)

Answer 10

Award – P recovers profit attributable to infringement of their property  Pre for DEFENDANT

Appropriate for – where D misappropriates P’s property and combines with own to produce something (eg stealing a concept then improving it)

Notes – P only entitled to profit CAUSALLY LINKED to infringement -> therefore, D can defend by showing profit attributable to D’s work/property (essentially used as a defence to net profit)

Question 11

3) Describe SAVINGS Comparison approach (for unjust enrichment)

Answer 11

Award - P claims amount that D saved

Appropriate for – where no LOSS to P, but NEGATIVE BENEFIT (ie savings or advantage) for D

Notes – focus is on SAVINGS TO DO, not profits  therefore useful for where NO PROFIT directly from wrongdoing

Question 12

4) Describe OPPORTUNITY Cost approach (for unjust enrichment)

Answer 12

Award – damages based on what willing seller would have demanded, and willing buyer would have paid

Appropriate for – after P already wronged (remedy for Wrongful Use of Land or Chattles)

Notes – can be awarded even if P suffered no loss (Whitham), and where P couldn’t have made profit (Strand Electric; ICAM)

Question 13

5) Describe Constructive TRUST approach (for unjust enrichment)

Answer 13

Award - SHARE of D’s property

Appropriate for – where P’s contributions (monetary and non-monetary) have helped D acquire, maintain, preserve, or improve property (e.g. family law, business partnership)

Notes – relevant factors include (LAC Minerals): 1) Nature of D’s conduct, 2) Substantial link b/t P’s contribution and acquisition, maintenance, or preservation of the property

Question 14

When is restitution available in the family law context? What is the analysis based upon?

Answer 14

Available for where D was UNJUSTLY ENRICHED by P’s contributions

Analysis is focused on TOTALITY/mutuality OF BENEFITS between parties  benefit that D confers upon P may be reason for D retaining enrichment (Wilson); Also, cohabitation in itself is NOT evidence of unjust enrichment (Kerr)

Question 15

What is the default remedy for unjust enrichment in the family law context?

Answer 15

DEFAULT approach is MONETARY AWARD, but approach will be based on nature of the parties’ relationship (Kerr)

The court CAN award proprietary remedy instead where monetary remedy would be inappropriate/inadequate to prevent unjust enrichment and there is a SUFFICEINTLY SUBSTANTIAL AND DIRECT connection btwn contribution and acquisition of wealth (Kerr)

For monetary award – Court can award based on Value SURVIVED (Net increase in value of asset from P’s contribution) OR Value RECEIVED (monetary value of services provided by P); Value SURVIVED is preferred approach

Question 16

What is the value SURVIVED approach? Briefly summarize.

Answer 16

PREFFERED approach to measuring enrichment in family law context b/c consistent with reality of peoples’ lives and expectations re accumulation of wealth over time (Kerr)

Based on NET INCREASE in value of asset from P’s contribution. Award will be PROPORTIONATE to P’s CONTRIBUTION  therefore, will factor in set-off and fairness to D (Kerr)

Question 17

What is the value RECEIVED approach? Briefly summarize.

Answer 17

Award – monetary award for value of SERVICES PROVIDED (reflecting extent of P’s contribution)  quantum meruit (fee-for-service) based on reasonable MARKET VALUE

Mainly for where there was a DECLINE in property value (so, value-survived would not adequately account for P’s contribution)

Court will consider 1) benefits D conferred on P (Kerr) and 2) ANNUAL earnings of COMPARABLE PROFESSION (Herman v Smith), or HOURLY wages for equivalent workers (where relationship not long enough) (Chrispen)