Topic 3: Restitution Flashcards
What is the relevance of unjust enrichment to Restitution?
- Unjust enrichment is NOT a cause of action. It is a causative event which also gives basis for recognising NEW categories of restitutionary claims: Pavey & Matthews’ case
- Gummow J prefers to see unjust enrichment and restitutionary claims as playing an auxilliary role, they are ‘gap filling’ and are last resort claims.
What is the difference between Broad Restitution, Narrow Restitution, and Disgorgement?
- Broad Restitution: ANY remedy measured by reference to a gain that D has made
- Narrow Restitution: remedy which is measured by reference to a gain that the D has made AT THE EXPENSE of the Plaintiff
- Disgorgement - remedy measured by reference to a gain that D has made, NOT NECESSARILY AT THE EXPENSE OF the PLAINTIFF.
What are the types of restitutionary remedies that are for personal claims?
- Moneys had and received
- Quantum Meruit
- Quantum Valebat
What is a claim for Moneys had and received?
- It is where the plaintiff has paid money to the D and that payment gives rise to unjust enrichment (MISTAKE OF PAYMENT).
- The plaintiff brings a claim not for the money itself, but for the amount that has been overpaid.
What is a Quantum Meruit and the most important condition of a claim for this?
- It is where the benefit that has been provided to D consists of a PROVISION OF SERVICE and D does not pay.
- P brings a restitutionary claim for the monetary value of service
- Condition: There must be NO CONTRACTUAL BASIS or a void or unenforceable contract for the P to recover payment of services. (Pavey & Matthews’ case)
What is the relevance of Pavey & Matthews to Quantum Meruit?
- In this case P was builder in NSW and entered into ORAL contract with D to carry out building work.
- Problem was, in NSW at the time, legislation said a builder couldn’t bring an action in relation to contract to carry out building work, unless it was in writing.
Court held:
- Because the contract was not written, the P could bring a Quantum Meruit Claim
What is a quantum valebat claim and what is the important condition?
- It is where the benefit that has been provided to D is goods
- Condition: There must be NO CONTRACTUAL BASIS or a void or unenforceable contract for the P to recover payment of services. (Pavey & Matthews’ case)
What is a proprietary claim that can be brought that is RESTITUTIONARY? What is the case?
A constructive trust.
Cases:
1. Chase Manhattan Bank v Israel British Bank
What is the advantage of arguing a constructive trust?
- Priority against D’s unsecured creditors; and
2. Entitled to the appreciation in value of asset.
What are the facts of Chase Manhattan Bank v Israel British Bank?
- P and D both banks
- Payer bank had mistakenly paid twice electronically
- Clearly can’t give rise to personal claim for many had and received because contract
- Before second payment could be refunded, D went into liquidation
- Brought action for constructive trust.
Court held:
- second payment was held on trust for payer bank.
- Payer bank had a property right in relation to the insolvent payee bank’s assets TO THE EXTENT of the mistaken amount.
- Hence could claim over other creditors.
What are the requirements for P to obtain a restitutionary remedy?
- D must have received a benefit at the expense of P; and
2. Must be able to put a value on the benefit.
What are the cases that discuss the defendant having to gain a BENEFIT?
- Roxborough v Rothman
What are the facts of Roxborough v Rothman’s case?
- D (Rothmans) were sellers of tobacco products. They supplied to the plaintiff retailer (Roxborough).
- NSW legislation imposed a license fee on sellers, so D had to pay license fee.
- D’s contract with P said D had to pay it, which was reflected in their cost.
- It was to be paid in advance
- P then subsequently passed that fee to customers through their sale prices.
- NSW legislation imposing the license fees was repealed.
- D still had the advanced payment of license fees by Plaintiff.
- P sought to recover through moneys had and received.
Courts held:
- Invoices from P and D’s contract showed the payment as a separate figure, and contract provided P was to pay for an increase in interest by gov.
- Once D didn’t have to pay fee, circumstances on which contract between P and D was based on had failed, so failure of consideration on the part of D.
- D therefore had obligation to make restitution to P the amount it had received in anticipation of having to pay license.
- D argued they had obtained benefit not at P’s expense because P had obtained it through consumer.
- Court held, it’s not compensating for loss, it is a claim between D and P and whether the subtraction of it’s (P’s wealth) was passed onto someone else. The loss corresponded to P’s loss.
How to evaluate the benefit?
Depends on whether it has been payment or services provided to D.
How to evaluate benefit if it’s payments of money (had and received)?
Normally quite straightforward: difference between amount due and amount paid.
