Unjust Enrichment Claims

Unjust Enrichment Claims: A Comparative Overview
Author(s): Brice Dickson

Source: The Cambridge Law Journal , Mar., 1995, Vol. 54, No. 1 (Mar., 1995), pp. 100-126
Published by: Cambridge University Press on behalf of Editorial Committee of the
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Cambridge Law Journal. 54(1), March 1995, pp. 100-126
Printed in Great Britain
UNJUST ENRICHMENT CLAIMS:

A COMPARATIVE OVERVIEW
Brice Dickson*
Introduction
This article examines a variety of legal systems with a view to ass

the role currently played within each of them by the principle of
enrichment. By focusing on the characteristic features of u
enrichment claims it seeks to demonstrate that, although th
significant differences between the ways in which different coun
handle such claims, there is also much that those systems h
common. While under the common law the principle of
enrichment has endured a long struggle for recognition, in c
systems it has been acknowledged for centuries. This may be
in civil law countries the principle has been expected to play
residual, and therefore non-threatening, role in the law of obliga
while in common law countries it has been called upon, if at
serve as the basis for the whole of the law of restitution. We should
not assume, however, that all common law systems share one set of
characteristics while all civil law systems share another. In som
respects there is more in common between systems drawn from each
category than there is between systems drawn from the same category.
Mixed legal systems, as one might expect, tend to display characteristics
drawn from both.
What follows is an analysis not of the specific tools available for
the redress of unjust enrichment claims but of the "structure" of such
claims. As previous analyses reveal,1 the search for a structure has two
* Professor of Law, University of Ulster. An earlier draft of this article was presented as a paper at
the UK National Colloquium on Comparative Law held at Queen Mary and Westfield College,
University of London, in September 1993.1 am grateful to delegates for the constructive comments
made durine the course of that Colloouium.
Gutteridge and David, "The Doctrine of Unjustified Enrichment" (1934) 5 C.L.J. 204; J.P
Dawson, Unjust Enrichment: A Comparative Analysis (Boston 1951); D.P. O'Connell, "Unjust
Enrichment" (1956) 5 Am. J. Comp. L. 2.; K. Zweigert and H. Kotz (trans. Weir), An Introduction
to Comparative Law, 2nd ed. (Oxford 1987), vol. 2, pp. 229-287; P. Gallo, "Unjust Enrichment: A
Comparative Analysis" (1992) 40 Am. J. Comp. L. 431; Mr. Justice van Zyl, "The Genera
Enrichment Action is Alive and Well" [1992] Acta Juridica 115; W.J. Swadling, "Restitution and
Unjust Enrichment" in Towards a European Civil Code (eds. A.S. Hartkamp et al.; The Netherlands
1994) at p. 267. See too the International Encyclopaedia of Comparative Law, vol. 10, Restitution
(ed. P. Schlechtriem); ch. 3, G.E. Palmer, History of Restitution in Anglo-American Law (1989
ch. 5,1. Englard, Restitution of Benefits Conferred Without Obligation (1991); ch. 10, D. Friedmann
and N. Cohen, Payment of Another's Debt (1991); ch. 11, D. Friedmann and N. Cohen, Adjustment
Among Multiple Debtors(\99\); ch. 17, S. Stoljar, Negotiorum Gestio (1984).
100

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C.L.J. Unjlest Enrichnzent Claines 101
dimensions, since every building has both an exterior and an interior.

The external features of unjust enrichment show us where this principle
is located in relation to other sets of legal principles, while the internal
features reveal the nature of the principle itself.2 The article concludes
that it is inappropriate to expect to detect in any legal system rigid
rules which are to be applied uniformly in all unjust enrichment
situations -- there will always be a variable structure depending on the
context. What needs to be proved or disproved-before a claim in
unjust enrichment is successful will differ according to the circum-
stances surrounding each type of case.
COMMON LAW SYSTEMS
T/le Development of Restitution Laxv
Much of the difficulty encountered when comparing the structure of

unjust enrichment claims in common law systems with their structure
in civil law systems derives from the simple fact that in common law
systems the principle of unjust enrichment operates at a different level.
Rather than being a particular head of recovery with a small part to
play in the law of obligations it is supposedly a great unifying
principle underlying the whole range of restitutionary remedies.3 Some
commentators magnify the principle's role to such an extent that they
see it as a third "branch" of the law of obligations, to be categorised
alongside contracl and tort.4
A more mundane way of depicting restitution law is as merely one
set of principles which have as their objective the satisfying of a legal
claim. The principles overlap and interweave with principles in other
sets. What the basis might be for grouping principles into particular
sets does not really matter, except for purposes of pedagogy. Occasion-
ally law-makers have to classify restitutionary claims for specific legal
ends, such as the application of limitation periods,S the measurement
of damages or the use of choice-of-law rules, 6 but such classifications
should not be allowed to enclose restitution (or any other set of legal
principles) within a particular straightjacket for all time and for all
purposes. The challenge for judges and legislators is to decide which
principles from whichever set-are to prevail in new circumstances.
2 Cf. Birks's talk of "the uncertain anatomy of restitulion" and his attempt to reveal its "skeleton
of principle"; infrs note 12, at pp. 1-3.
3 More than a note of caulion has been expressed by at ieast one commentator: S. Hedley, "Unjust
Enrichment as the Basis of Restitution-an Overworked Concept" (1985) 5 Leg! Studies 56.
4 See, e.g., A. Burrows, "Contract, Tort and Restitution-A Satisfactory Division or Not?" (1983)
99 L.Q.R. 217.
5 This was one of the issues in the recent cases on swap transactions: see A. Burrows (1993) 1
New L.J. 480 at p. 481.
6 See T.W. Bennett, "Choice of Law Rules in Claims of Unjust Enrichment" (1990) 39 I.C.L.Q.
136.

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102 The Cambridge Law Journal [1995]
In view of the fact that in common law system

such a late start in life,7 the speed of developments
been quite remarkable. An important milestone w
by the American Law Institute of its Restateme
Restitution in 1937.8 Section 1 memorably assert
who has been unjustly enriched at the expense of
to make restitution to the other". For almost 60 y
been little doubt that restitution is a subject in it
United States and that the main principle underlying
of unjust enrichment. A sophisticated body of law
requiring particular features to be proved in eac
recovery will be allowed.9 In addition most Ame
have adapted the notion of a constructive trust in or
effective remedy in situations where common law
otherwise fail to ground restitution.
In other common law systems there was no such
that supplied by the Restatement. It was not un
pioneering work of Goff and Jones lit a candle in
since spread its light, and not an inconsiderable a
many parts ofthe English-speaking world.10 Particul
Australia many important books, law reform rep
articles have since been published1 * and English
enjoyed a florescence in its own right.12 Almost sim
seminal cases have been decided by the highest court
has had Woolwich Equitable Building Society v. I
Gorman v. Karpnale Ltd,XA so Canada has had P
7 See Palmer, op. cit. note I above.

s Birks says this publication "liberated restitution from the fringes
Independence of Restitutionary Causes of Action" (1990) 16 U. Queensi
9 The most authoritative work is by G.E. Palmer, The Law of Restitutio
10 The Law of Restitution, 4th ed. (London 1993). Robert Goff, of cour
judge and is now a Law Lord.
11 See, e.g., G. Klippert, Unjust Enrichment (Toronto 1983); P. Madd
Law of Restitution (Aurora, Ontario 1990); G.H.L. Fridman, Restitutio
P. Finn (ed.), Essays on Restitution (Canberra 1990), especially K
Australian Law" at pp. 20-46; Law Reform Commission of British Colu
under a Mistake ofLaw (1981); J. McCamus, "Restitution and the Supre
Progress ofthe Unjust Enrichment Principle" (1991) 2 Sup. Ct. L. R
"The Province of the Law of Restitution" (1992) 71 Can. Bar Rev. 6
Reform Committee Report No. 53, Restitution of Benefits Conferred u
12 P. Birks, An Introduction to the Law of Restitution (Oxford 1985, r
Use and Abuse of Unjust Enrichment (Oxford 1991); A. Burrows (
Restitution (Oxford 1991); A. Burrows, The Law of Restitution (Lon
Law of Restitution (London 1993). The catalogues of specialist legal boo
restitution in the sections devoted to contract.
13 [1993] A.C. 70; J. Beatson (1993) 109 L.Q.R. 1 and 401; S. Arrowsmith
14 [1991] 2 A.C. 548. For a note on the Court of Appeal decision see
L.Q.R. 526.
15 (1981) 117 D.L.R. (3d) 257. See also, most recently, Peel (Regional Municipality) v. Canada
(1993) D.L.R. (4th) 140; M. Mclnnes, "Restitutionary Relief for Incontrovertible Benefits"
(1993) 109 L.Q.R. 521.

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C.L.J. Unjust Ettrichment Claims
103
while Australia has had Pavey and Mattllews Pty. Ltd v. Paul'6 and
David Securities Ptn. Ltd. v. Common"ealth of Aastralia. 17 There can
be little doubt that the recently launched Restitution Law Review will
contribute greatly to the sharing of ideas and the development of
principles; it is noticeable that the first two volumes have had much to
say about restitution cases in both Ireland'8 and New Zealand.'9
The Variefy of Unjust Enrichment Claims
Without falling into the trap of portraying restitution as a peripheral

sub-set of contract law, it cannot be denied that pride of place in any
exposition of unjust enrichment in common law systems must still be
given to claims arising in the aftermath of a faiJed agreement. That is
the context in which the majority of restitutionary claims arise, where
something transferred to the defendant by the plaintiff is sought to be
recovered.2° But this does not mean that the restitutionary principles
recognised by the law must to this extent be viewed as part and parcel
of the law of contract. They should, rather, be seen as an autonomous
set of principles which interact with established contractual principles.
This, it is submitted, is also the way in which equitable principles such
as promissory estoppel, undue influence and specific performance
should be viewed, even if in many lawyers' eyes those principles have
been subsumed within the larger mass of contractual principles and
have thereby had their patently non-contractual elements distorted.
One of the tasks facing lawyers in the common law world is to preserve
the integrity of discrete legal principles so that they can serve a useful
function in helping judges to arrive at just solutions for new types of
dispute.
The books on restitution law devote much space to the applicability
of restitutionary principles in situations where a contract has been
16 (1987) 162 C.L.R. 221; J. Beatson (1988) 104 L.Q.R. 13.

'' (1992) 109 A.L.R. 57; P. Birks (1993) 109 L.Q.R. 164. Thisdecision allows even mistakes of law
to be a basis for restitution.
}8 E. O'Dell shows that 'many of the advances recently made in England were made quite some
time ago in the Irish courts" [19931 Reslilution LauX ftevie" at p. 140. Of particular note is Murphy
v. A ttorney-General [ 1982] 1. R . 241 s where the Supreme Court held that the government was prima
facie liable to make reslitution of taxes paid under an unconstitutional tax provision. The facts
and result of Texaco (Ireland) Lrd v. MIJrphy (No. 2) [1992] l l.R. 399 and (No. 3) 11992] 2 I.R.
300 are remarkably similar to those in Wool)vich v. I.R.C., though the judicial analysis is jejune
by comparison.
9 Until recently the taw of restitution in New Zealand was bedevilled by the infamous dictum of
Mahon J. in Carl v. Farrell} [19751 l N.Z.L.R. 356 at 357: "[Unjust enrichment] is not only
vague in its oulline but ... must disqualify itself from acceptance as a valid principle of
jurisprudence by its lotal uncertainty of application and result ... No stable syslem of
jurisprudence could permit a litigant's claim to be consigned to the formless void of individual
moral opinion." See too the same Judge in A vonAle Printers and Srtioners Ltd. v. Haggie [ l 979]
2 N.Z.L.R. 124.
20 See the excellenl work by Engl;rd, International Enc!clopaedia c)f Comprative La"". vol. 10*
ch. 5 (1991).

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l04 The Cambridge Law Journal [1995]
discharged by breach or by frustration, where it has been rescinded by

one party because of the other party's misrepresentation, mistake,
duress or undue influence, and where the performance of a contract is
deemed to be illegal.2' Yet in each of these areas there is still
considerable legal uncertainty, especially in English law, as to the
occasions upon which restitution can reliably be claimed. Restitution
following a breach is undertnined by the demon notion of"total failure
of consideration". Parties who are themselves in breach are barred
from recovering because they are presumed to be disqualified from
access to justice.22 Even when recovery is permitted it is usually
restricted to the contract price or a ratWable proportion thereof.23 In
the area of mistake, some common law systems still require the
mistaken party to have been "fundamentally" in error before allowing
recovery and a mistake of law is still a bar in English law though not
in most other common law systems.24 England, on the other hand,
does not have regard to the negligence of a mistaken party, whereas
the United States, like civil law systems, does take this into account
(as part of the defence of change of circumstances).25 Statutory
attempts to confer a restitutionary remedy in the wake of a frustrated
contract have not been totally problem-free26 and the rationale for
allowing recovery in cases where a contract is illegal has yet to be fully
worked out.27
Claims based on unjust enrichment obviously arise in contexts
other than failed agreements. Most notably they can occur in what are
otherwise actions in the law of tort or actions for breach of fiduciary
obligation. And just as the law of contract has not always been a
benign influence on the development of restitutionary principles when
they arise in a contractual setting, so the laws on torts and trusts have
not always helped to create an autonomous body of principles
concerned with the prevention of unjust enrichment. In English law
there is an obstructive rule that restitution following a tort is possible
only if the victim 'waives" the right to sue for tortious compensation.
' For a search for principles governing the last two categories see S. Arrowsmith, "Ineffective
Transactions and Unjust Enrichment: a Framework for Analysis" ( 1989) 9 Legcal Studies 121.
22 Despite the English Law Commission's proposals in Report No. l21, Pecxniar> Restitution on
Breach oJContrsst (1983).
23 This seems to be the clearly prevailing view in America: Perillo "Restitution in the Second
Restatement of Contracts" (1981) 8I Col. L R. 37. Arrowsmith, Op. Cit. at p. 129, favours
retention of the ceiling principle. For consideration of alternative principles see S.N. Ball, "Work
Carried Out in Pursuance of Letters of Intentontract or Restitution?" (1983) 99 L.Q.R. 572.
24 But again see Law Commission Working Paper No. 120, Restitution of Payments Made under a
Mislake of Law (1991). For comparisons between common law and civil law approaches to
mistakes of law see Zweigert and Kotz, An Introduetion to Compartive La", op. cit. note 1 above
al pp. 260 268 and Englard, op. cit. note I above at pp. 18-21.
25 See Englard, op. cil. note I above at pp. 1>11.
26 See BP Exploration Co. (Libwa) Ltd. v. Bunt (No. 2) 11983] 2 A.C. 352; (1983) 34 N.l.L.Q. 106.
21 "Restitution and Illegal Transuctions", in A. Burrows (ed.), Essajts on the Law of Reslitution.
ch. 7.

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C.L.J. Unjust Enrichment Claims 105
In cases of breach of trust a restitutionary remedy is usually allowed

only if some fiduciary duty can be conjured out of the circumstances,28
though the recent case of Tinsley v. Milligan29 shows that the
presumption of a resulting trust can help avoid this difficulty. Tllere
are, however, some restitutionary claims which are not burdened by
baggage associated wsth well-established areas of law. A claim to
deprive a criminal of ill-gotten gains is autonomous in this sense, as is
an action in contribution or subrogation. In the same category are a
claim by someone who intervenes in an emergency to perform a service
for the defendant, a claim by a person who suffers loss in anticipation
of a contract which he or she expects to conclude with the defendant
and a claim by the rightful heirs of an estate against defendants to
whom personal representatives have paid money which they were not
entitled to receive.
The Prerequisites for a Re.stitutionary Claim
Until recently most scholars of the English law of restitution admitted

that it was impossible to predict when a restitutionary claim would be
allowed, precisely because there was no unifying principle linking the
claims already recognised. With the acceptance by the House of Lords
in Lipkin Gorman v. Karpnale Ltd. that the principle of unjust
enrichment does have a distinct role to play, scholars need no longer
be so pessimistic.30 ln that case the employers of a fraudulent solicitor
who gambled away clients' money were allowed to reclaim most of the
money from the owners of the gaming club in question. Likewises in
his judgment in the equally important case of Woolwich v. I.R. C. Lord
Goff more than once refers to the "structure" of the law of restitution,
thereby implying that the subject has a distinct existence and its own
framework.3' The plaintiffs in the Woolwich case successfully sought
reimbursement of taxes which they had reluctantly paid to the Inland
Revenue on the basis of what was subsequently adjudged by the House
of Lords to be an ultra vires claim.32 The truth remains, though, that
controversy still rages over whether the first three elements traditionally
viewed as triggering the operation of the unjust enrichment principle-
28 See, e.g., Chase Manhattu Bunk v. Israel-British Bcznk [1981] Ch. 105, A. Tettenborn 11980] C.L.J.
272; Westdeutsche Lundesbank Giro entrale v. Islingron L. B. C., [ 1994] 4 All E. R . 890; A. Burrows
( 1993) 143 New L.J . 480 at p. 482.
'9 [1993] 3 All E.R. 65. Here the House of Lords allowed a claim by one woman that she wasentitled
to share ownership of a house registered in the sole name of another woman even though the
purpose of so registering ownership was to allow the first woman to make fraudulent claims for
welfare benefils from the Department of Social Security. See B. Council, "Clean Hands Need not
be Spotless" (1993) 143 New L.J. 1577 and cf: Ro"un v. Dann [1992] 64 P. & C.R. 202.
[19911 2 A.C. 548; P. Watts (1991) 107 L.Q.R. 521.
31 [1992] 3 All E.R. 737 at pp. 752g and 759h; S. Arrowsmith (1992) 142 New L.J. 1726.
32 R. v. 1. R. C., ex parte [F00161!iCh EquilnSle Building Societ)! [ 1990] I W. L.R. 1400.

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106 The Cambridge Law Journal
[1995]
receipt of a benefit, enrichment at the pZaintiffs expense and unjust

retentton of the benefit actually exist on the facts of a given case
Careful attention also needs to be paid to the limits of the unjust
enrichment principle, that is, to the defences which can be raised to
thwart it. Some commentators already refer to this as the fourth
element in an unjust enrichment claim.33
The first three prerequisites should inevitably remind common
lawyers of the triumvirate of requirements traditionally underpinning
a claim in tort law-the need for a duty of care, a breach of that duty
and the causation of unremote damage. Yet English case law amply
demonstrates the fragility of that triumvirate, for judges do not always
distinguish between the three requirements in the same way. One judge
might decide on the facts of a given case that there was no duty of
care, another that there was a duty but that it was not broken, and a
third that a duty of care was broken but that the damage caused
was too remote.34 Recent decisions of the House of Lords have
acknowledged this confusion and have tended to substitute a more
general principle, or set of principles, even though this has involved
overruling a decision of barely 10 years' standing.35 Such an experience
in one branch of the law does not augur well for the success of a
similar trichotomy in the law of restitution. Indeed the fluidity of the
three components is already apparent in that sphere too.
Burrows not only freely admits that authors differ among them-
selves as to the precise scope of each of the three requirements, he also
implies that some principles of the law of restitution can fit easily
within more than one of them.36 As regards the "quicksilver" reqllire-
ment37 that an enrichment be unjust, he concedes that "in some areas
the law is best explained as responding to policy constraints on the
pure principle of unjust enrichment". Commenting on the Court of
Appeal's decision in Woolwich v. I.R.C38 Birks says that the unjust
3} Burrows, in The La" of Restitution, at p. 7, refers to the four "fundamental building blocks in the
lheoretical siructure of reslitution". These are, first, the need for the defendant to have received a
benefit; second, the need for this benefit to have been received at the plaintifRs expense; third, the
requirement that it be unjust for the defendant to retain the benefit; fourth (though this is surely
not so much a building block as a feature undermining a claim)* the availability to the defendant
of a range of defences. C7: the language of Birks in "The English Recognition of Unjust
Enrichment" 11991] L.M,C.L.Q. 473 al p. 475: "Taking the principle against unjust enrichment
seriously means asking . .. four questions in every case". He makes the same point in "The
Condition of the English Law of Unjust Enrichment" [1992} Acta Juridica I at p. 4.
34 See e.g. lhe analysis by Lord Denning in Spart(wn Steel & AllosRs Ltd. v. Martin & Co. ( Contractors)
Ltd. 11973] Q.B 27.
35 See Murphot v. Brentepood D.C. 11991] A.C. 398, overruling Ann.s v. Merton L.B.C. [,19783 A.C.
728. See too Caparo Sndustrie.spic v. Dick}1un [1990] 2 A.C. 605 and Alcock v. Chief Constable °f
South Yorkshire Police [19921 1 A.C. 310.
36 The Lalr of Reslittion, pGessirt1.
37 This is Ihe word used by G. Jones in "A Topography Of the Law of Restitution", in P. Finn (ed.).
Essas on ResfiflJ{ionn ch. 1 at p. 12.
38 [1991] 3 W.L.R. 790

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factor in question was "transactional inequality,"39 a phrase he

elaborates in his earlier book.40 Burrows virtually treats the Woolwich
case as sui generis, describing the category it belongs to as ""Itra vires
demands made by public authorities".4' Furthermore, Birks deduces
that the reason why the enrichment in Lipkin Corman was unjust was
that the plaintiffs' wealth had poured out to another while the plaintifEs
were ignorant of this. "Ignorance" is also one of Burrows' 11 unjust
factors42 but he has to concede that "[the courts have never expressly
recognised ignorance as a ground for restitution".43 And because
ignorance "does not sweep up all situations of personal restitution
that are left outside the well-established unjust factors"44 he feels
obliged (like Birks) to add "powerlessness" to the list. Yet it is surely
arguable that a plaintifFs ignorance and powerlessness are worth
protecting only if accompanied by some other ground for awarding
restitution, such as exploitation or retention of another's property
without his or her consent. If the law of property cannot tell us when
money or other forms of property still "belong" in law to the plaintiff,
we should not resort to vague descriptions of the plaintiffes state of
mind to provide an answer within the law of restitution.
There is a comparable lack of precision in relation to the fourth
prerequisite, defences. In Lipkin Gorman the Lords accepted for the first
time that the defence of change of position is available in the English
law of restitution, while in several other contexts, such as ultra vires
contracts, contracts affected by one party's incapacity and contracts
which are procedurally or substantively illegal, a range of defences, often
described as public policy factors, are clearly recognised.45 When
Burrows turns to discuss the first two of his six defences to restitution
claimshange of position and estoppel-he says that they have the
effect of negating the proposition that the defendant has received a
legally recognisable benefit while he describes the other four defences-
limitation, incapacity, illegality and bonafide purchase-as negating the
"unjustness" of an enrichment. Equally, there is a lack of clarity in the
initial response of Birks to Lipkin Gorman.46 When he discusses whether
the defendant club in that case had been enriched by the fraudulent
solicitor's actions, he admits that it is difficult to assess the exact amount
39 [19911 L.M.C.LQ. 473 at p. 506. For his comments on the House Of Lords decision see "When
Meney is paid in Pursuance of a Void Authority . . .-A Duty to Repay?" [1992J P.L. 580. See
too, for a comparative trealment of the law on payment of excessive public charges, Englard,
International Enc!^clopaedia of CotparatisPe 1wtF, vol. 10, ch. 5 at pp. 29-32 and 38-39.
40 An Introduction xo the Latt of Restitution, al pp. 208-216.
41 Op cit.>ch*12
4? Op Cit.. ch. 4.
43 Sbid. al p. 139.
44 ^d at pp. 141-142
45 See e.g. S. Arrowsmith. "Ineffective Transactions, Unjust Enrichment and Problems of Policy
( I 989) 9 Legal Sludies 307.
40 [19911 L.M .C.L.Q. 473.

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108
of that enrichment svithout conflating this first prerequisite for liability

with the second and fourth; when he looks at svhether the enrichment
was at the expense of the solicitor plaintiffs he acknowledges that in a
three-party situation, where the benefit in question has not passed
directly from the plaintiff to the defendant, it is necessary to ask first
whether the plaintiff had locus standi to sue at the beginning of the story
and then whether the benefit received by the defendant was one in whic.h
the plaintiffs interest "sufliciently survived". He speculates whether
there is room for a radically different approach to "at the expense ofs'
and concludes that "much of the work but not all, can be done by the
defences".47 Birks also points out that the defence of change of position
(pace Burrows) does not need to be based on negation of the enrichment:
it could, in theory, be based on the justness of retention of the benefit,
"change of position" being a shorthand way of concealing a multitude of
public pollcy considerations. Birks correctly observes that none of the
Law Lords in Lipkin Corman stated clearly enough this justification for
depriving the Playboy Club of some ofthe "value" it supplied in exchange
for the fraudster's money. Dawe, on the other handz views the defence as
more soundly based on the nature of the defendant's enrichment than on
considerations of equity and fairness between the parties.48
There is room for doubt, though, whether a search for detailed
theory in the area of defences would ever be sufficiently fruitful. The
range of circumstances which can intervene is so wide that st may be
unwise to try to categorise them in advance. It may also be unnecessary.
Would it not suffice if a statute were to be enacted allowing the
defendant a defence if in all the circumstances this was reasonable?
Such a provision would encourage direct examination of the conflicting
policy considerations at play and would allow for a more balanced
decision in each case. It would also avoid demarcation disputes
between sub-principles. Birks, however, guards against proceeding in
this fashion:
little will be gained by approaching the first three enquiries

scientifically, if the newly invigorated fourth-the enquiry into
defences and other countervailing factors is then conducted in
high-sounding but unanalysed terms of fairness, equity or abstract
Justice.
Birks can hardly be a fan of the Unjust Enrichment Law enacted by

Israel in 1979. As we shall see, this consists of a mere seven sections
but uses a test of reasonableness six times and a test of justness twice.50
47 Ibiuf. at p. 481.
4h "The Change of Posilion Defence In Restitution" (1994) 52 (Jnivesrsits} of ToronJo Facultv Las}
Rerie" 275.
49 Jbid. at p. 507.
50 The Israeli Law is considered further below.

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How Restitution Relates to Other Legal S
The coming of age of restitution in the com

inevitably sparked a dispute as to how the subject
established fields. Probably the staunchest adv
restitution is now one of the three branches of t
is Burrows,51 but convincing arguments for op
building tendencies52 and for relegating restituti
been well put by Atiyah:
it seems clear to me that the present "divi
obligations into the three familiar categor
Burrows is designed largely for purpose
pedagogy. It is useful to divide up a lar
unmanageable subject so that we can teach it
it and examine it. But the question then arises w
within each of these three categories has m
material which spills across the boundaries. It
and I remain entirely unpersuaded by Mr B
defend the traditional divisions.53
While acknowledging the importance of the pr

enrichment Atiyah believes that it should not be
legal subject but viewed instead as a principle run
existing subjects such as property law, tort law an
contract law.54 According to Cornish, Atiyah sees
law of restitution as "the erection of undesirable barriers to a
fundamental re-orientation of the law of contract" (whereby
notions of promise and bargain could be replaced by the principl
unjust benefit and detrimental reliance). Cornish continues:
This he claims to be a faith better fitted to an economic and
political world in which legislatures constantly set limits upon t
freedom to contract on market-place terms and courts increasin
intervene to regulate and adapt civil obligation in the light b
of preceding and superseding conditions surrounding a bargain.5
Birks has attempted to refute this position 56 but Atiyah has affirm
his adherence to it, citing cases in property law and family law
illustrative of judicial recognition of "unjust benefits".57 Birks prefe
to distinguish between restitutionary claims arising out of contr
51 (1983) 99 L.Q.R. 217.

52 The term is that of Birks, (1990) 16 V. Queensland LJ. \ at p. 2, citing J. Beatson, "Ben
Reliance and the Structure of Unjust Enrichment" [1987] C.L.P. 71.
53 Essays on Contract at pp. 52-56. An attempt to refute Atiyah's arguments has in turn been
by Birks: "Restitution and the Freedom of Contract" [1983] C.L.P. 141.
54 The Rise and Fall of Freedom of Contract (Oxford 1979) at pp. 767-768.
55 "Colour of Office: Restitutionary Redress against Public Authority" (1987) 14 Journa
Malaysian and Comparative Law 41 at p. 56.
56 [1983JC.L.P. 141. Burrows is convinced by Birks's refutation: The LawofRestitution atp. 3,n.6.
57 Op. cit., atpp. 47-52.

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110 The Cambridge Law Journal Ll99s]
those arising from "wrongs", those based on "subtractive" unjust

enrichment and those derived from other causes of action.58
Other attempts in the common law world to expand, or at least to
redraw, the boundaries of restitution law (and therefore of the unjust
enrichment principle) include those by Stoljar and Stevens. Stoljar pre-
fers to portray restitution law as a part of the law of property,59 while
Stevens has an even more ambitious project a fundamental re-think of
the whole of the law of restitution so that the cause of action in unjust
enrichment (which he refers to as "non-consensual receipt and retention
of vallle'') can become the third organising idea besides tort and
contract-for private common law.60 Another recent study which looks
primarily at Canadian law argues that "gain-based remedies for wrongs
are not the same as the response of restitution for the cause of action in
unjust enrichment" and concludes that restitution arises in cases where
compensation of the plaintiff s loss is combined with "disgorgement" of
the defendant's gain.6' In earlier days Friedmann reminded us that the
principle of unjust enrichment has repeatedly been cited as a principle
of international law62 and more recently Beatson has argued that the
greatesl remaining chal}enge in the law of restitution is the integration of
equitable principles.63 Cornish, in the influential article which un-
doubtedls affected the outcome ofthe Woolwich litigation in England,64
puts a persuasive case for the elevation of unjust enrichment to the pllblic
as well as lhe private legal stage, as has already occurred in France.65 The
principle has certainly been recognised by the European Court of Justice
in a public law context.66
The Future
How should law-makers in common law systems proceed in the face

of tlais uncertainty as to both the internal and external structure of
S8 "The Independence of Restitutionary Causes of Actions" (1990) 16 U. QueensAand L:J I at p. 22;

see too An Introduction to the Law of Restituton, al pp. 99-108.
S9 See the succinct account, and refutation, in A Burrows, The La" of Restitution, at p. 4.
60 "Restitution, Property and the Cause of Action in Unjust Enrichment: Getting by with Fewer
Things" (1989) 39 Universiry of Toronto Law Journal 258 and 325. Stevens' thesis is that the
failure of English common lawyers to adopt the }dea of "non-consensual receipt and retention of
value", and their adoption instead of historical ideas and ad hoc solutions, including the
anachronistic division of private law rules into the rllles of equity and the rules of common law,
"has resulted in a growing incoherence on the part of Canadian judges and lawyers who attempt
to articulate justifications in the law of restitution" (at p. 352).
61 I.D. Smith, "The Province of the Law of Restitution" (0992) 71 Can. Bar Rev. 672.
62 "The Principle of Unjust Enrichment in English Law" (1938) 16 Can. Bar Rev. 243 and 365 at
p. 244.
63 The Laz1 Of Restit"tion ch. 9.
64 Op cit. note 5t above. 1t was cited in the judgment of Lord Goff.
65 See below. Also G. Jones, Restitution in P"blic and Private Law (London 1992).
66 The SfJn Ciorgio case, [1983] E.C.R. 3S95, cited in Woolwich v I R C The ECJ accepted that
restitution could be denied by a member state if, because the plaintiff has already passed on the
loss to tl2ird parties (here, consumers), the plaintiff would him- or herself be unjustly enriched as
a result.

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unjust enrichment claims? Because the potent

wide, and the possible defences so varied, su
principles can be laid down beyond some gene
lines that recovery is to be permitted if in all th
case, having regard (say) to the need to dete
the law or to protect shareholders in a compa
just? It might be contended, especially by no
legal principle is not law at all because it is s
But the principle need not be quite as bare as th
fleshed out by a fuller list of factors to whic
and over time a body of precedents would
guidance for lawyers on how to advise clients
Law Reform (Frustrated Contracts) Act 1943,
least had the effect of emptying the courts of c
the wake ofa frustrated contract. Similarly the
Act 1977, with its frequent resort to a test of "r
in some instances by the "guidelines" set out
have reduced the number of court cases in Engla
over exclusion clauses. These statutes appear t
certainty into the law and there is no cause t
would not be true if a statute were passed
enrichment. There is every reason to support Be
It is also worth repeating O'Connell's warn
casuistry:
The analytical character of English jurisprudence has caused
undue emphasis to be placed on accumulation of decisions and
dicta, so that in many aspects the common law would seem to be
an amalgam of factual data rather than an epitome of values.68
This is an eloquent plea for a more principled approach to law-making

and for greater reliance to be placed on general statements than on
detailed rules.
Civil Law Systems
What, then, of the structure of unjust enrichment claims in civ

countries, always bearing in mind that it is wrong to treat all
systems as exactly alike? Do they indeed constitute a different worl
"Should there be Legislative Development of the Law of Restitution?", in A. Burrows

Essays on the Law of Restitution, ch. 11. See too his "Restitution of Taxes, Levies and
Imposts: Defining the Extent ofthe Woolwich Principle" (1993) 109 L.Q.R. 401.
(1956) 5 Am. J. Comp. L. 2 at p. 3.
Zweigert and Kotz, An Introduction to Comparative Law, at p. 257: "When one moves from
enrichment law of the Continental systems to what is now called the 'law of restitution', e
England, namely that area ofthe Common Law which contains all the rules which seem to A
American lawyers to rest on the idea of preventing unjust enrichment, one might be ente
another world."

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112 The Cambridge Law Journal [ 1995]
The starting point for most of them is the well-k

Pomponius: "Jure naturae aequum est neminem cum alt
et iniuria fieri locupletiorem"70 Although this gene
been criticised as one of those false abstractions f
compilers of the last title of Justinian's Digest, toda
finds a place in many of the modern civil law c
generalised right to restitution on the basis of unju
expressly recognised in the Civil Codes of Austria, G
Italy, Japan, the Netherlands and Switzerland.
France
In France, however, there has been no general recognition. Dawson's

excellent account of the history of unjust enrichment in that country
since Roman times lays the blame for this omission largely at the door
of Pothier. Describing Pothier as "a man of inferior talent, with a gift
for simplification", he accuses him of reducing the scope of unjust
enrichment remedies to much less than was known in classical Rome
and of treating Pomponius's adage as nothing more than a general
moral rule.71 France's Code civil confers a right to restitution only in
very particular circumstances,72 such as when a person builds on
someone else's land (art. 555), spends money preserving property
belonging to someone else (art. 2080, on agents), uses part of joint
matrimonial property to acquire a personal benefit (art. 1416), pays
someone money which was not owed (repetition de Vindu: arts. 1235
and 1376-1381) or steps in to manage another's affairs (gestion
d'affaires: art. 1375). One might also cite the provisions dealing with
ineffective contracts.73 Clearly these heads of recovery do not cover all
deserving cases.74
During the nineteenth century some attempts were made by French
academics to create a general theory of unjust enrichment,75 but
none of the suggestions captured the imagination of the judges. A
breakthrough came only in 1892, when the Cour de cassation decided
70 D.50.17.206. For a comparison between Roman law and modern common law systems see
W.W. Buckland and A.D. McNair, Roman Law and Common Law; A Comparison in Outline (2nd
ed. by F.H. Lawson; Cambridge 1965), ch. 9. See too Mr. Justice van Zyl, [1992] Acta Juridica
115 at 115-118.
71 J.P. Dawson, Unjust Enrichment; A Comparative Analysis, at pp. 95-96. O'Connell, op. cit., at
pp. 5-9 and 15, speaks up for Pothier and blames instead the framers of the Code civil.
72 J.P. Dawson, op. cit., identifies 15 of these.
73 See B. Nicholas, The French Law of Contract (2nd ed., Oxford 1992), passim.
74 Zweigert and Kotz point out that the provisions on repetition de I'indu do not allow reimbursement
for services rendered without legal grounds or restitution of property transferred for a purpose
which fails: op. cit., at p. 240.
75 The work of the leading writers is summarised inH.de Page, Traite Elementaire de Droit Civil
Belge, vol. III (Brussels 1967), at pp. 36-37. The Belgian law on unjust enrichment is to all intents
and purposes the same as French law (ibid. at pp. 31-64).

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C.L.3. Unjust Enrichment Claims 113
the Boudier case.76 Here the plaintiff had sold fertiliser to a tenant-
farmer but after it had been applied to the land the tenant became
bankrupt and the land was returned to the landlord. The court held
that the supplier of the fertiliser had a direct cause of action against
the landlord for the price of the goods supplied. Initially this decision
caused quite a stir, illustrating as it did the new approach to judscial
law-making advocated by Geny,'7 but because the court reasoned in
very general terms (saying that the remedy was not subject to any
preconditions ".soumis a auclme condition determinee") it was left to
subsequent French courts, surreptitiously guided by leading academics
such as Aubry and Rau, to set limits to the principle. Today the
princip]e against unjust enrichment is so much a part of the French
legal environment that it is recognised in administrative law as well as
in private law78 and it has been accorded legislative affirmation in, for
instance, agricultural betterment statutes.79 But no effort has been
made to extend the principle's field of operation so that it can embrace
other related areas of law which in common law systems would be
labelled restitutionary. A recent prize-winning thesis on the law of
restitution in France makes no claim that unjust enrichment is the
great unifying idea underlying all of restitution's manifestations.8°
Modern French textbooks mostly agree that to be successful a
claim for unjust enrichment must now satisfy five conditions:
1. the plaintiff's loss must be a direct or indirect consequence of
the defendant's enrichment, though the defendant can be
required to pay only the lesser of the plaintiffYs loss or the
defendant'g own enrichment;
2. the plaintiff must not have been at fault;
3. the plaintiff must not have acted in his or her own
4. neither the enrichment nor the related impoverishme
be legally justifiable (ne doit pas avoir une cause legitim
5. no other remedy than the action de isl rem verso8} m
available in law for the kind of loss in question (la co
de subsidiarite).
76 Dawson, Op. ciJ. at p. I00, says the Cour de ca.v.Wation '4suddenly took a long junp i
water". In a case in 1864 the Cotfr de cusstion had allowed a person who had supplie
tenant-farmer to recover its value from the owner of the land where it had been so
was largely because art. 2012 of the Code civiJ granted compensation in very similar circ
Of the 1892 case Dawson writes: "From seeds to fertilizer may be a short step acros
it was a high dive for the Court of Cassation" ihid. at p. 101.
17 "To many the decision of 1892 was dramatic proof of the influence of elhical
exposition and correction of positive law ": Dawson, ibid. at p. 103. At pp. 104
sharply criticises French judges and writers for being unable to rationalise the sub
law.
78 b1-F. Furet, "L 'enrichissement suns ccluse d spres la jurisprudence ulln2inistrutive" D. 1
79 Art. L.411-69 of lhe Code rural (inserted in 1983). These provisis)ns are "d'or(tres p
means that lhey cannot be altered by any private contractual clause.
80 M. Malaurie, Les restitutions en droit civiJ (Paris 1991 )^ reviewed by Cadiet in [1992
dr. comp. 548.
81 This terrn had a much narrower meaning in Roman law, being confined to siluati
defendant W;3S a father or the owner of a slave.

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Some comment is required on each of these conditi

which is known in common law systems in exactly the
An important difference between Anglo-American
law on the one hand and French (and Italian) law on t
the latter require proof ofan impoverishment suffered
as well as proof of an enrichment enjoyed by the
systems naturally require a causal connection between
and the plaintiffs interest but France goes further
actual correlation between the enrichment and the p
Gallo has observed, this creates gaps in the law.8
person exploits for his or her own benefit an asset o
which would otherwise have lain idle do not give rise
France. On the other hand, while it might be thou
demanding stance concerning benefit and loss would
less willing to tolerate claims for indirect enrichmen
actually more generous to plaintiffs in such a posit
Anglo-American or German law.
The justification for the rule that the defendant need
lesser of the two amounts by which he or she has b
the plaintiff impoverished is that any other solution w
plaintiff being over-compensated and thereby in turn u
This method of measuring the defendant's liability d
used in cases of gestion d'affaires (negotiorum gest
common with most other civil law systems, France allow
to recover all the expenses usefully and necessarily e
management of someone else's affairs. It is, in effect, a
the defence of change of circumstances and brings Fren
that of Germany, where the Saldotheorie prevails.8
Cour de cassation has so far set its face against perm
in unjust enrichment cases to calculate his or her monet
terms as of the date of the judgment, even though a
this sort is permissible under the specific provisions
mentioned above.85
The second of the five conditions in French law
noteworthy because the notion of "faute" is wider th
negligence in English law. It embraces intentional a
careless conduct, though of course not every minor act
will disqualify a plaintiffs claim. In one case a gr
82 See the account in F.H. Lawson, A.E. Anton and L.N. Brown, Amos and
to French Law (3rd ed., Oxford 1967) at pp. 197-9. Also B. Dickson, Introdu
(London 1994), at pp. 164-6.
83 (1992) 40 Am. J. Comp. L. 431 at p. 449.
84 Englard, International Encyclopaedia of Comparative Law, vol. 10, ch. 5 at
85 See also B. Starck, Droit civil: Obligations, vol. 2, by H. Roland and L.
1986), atpp. 642-643.

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denied restitution ofthe money she spent bri

because she had ignored an order of a cou
custody ofthe children to their father.86 Sim
restitution from one of its account-holders af
out on a cheque drawn by the account-h
cancelled in good time.87
It is also within this context that French la
arising whenever a plaintiff takes advantag
conduct to press home a restitutionary clai
breach of contract cannot therefore claim res
contracting party and a plaintiff who com
cannot later try to get out of the arrangemen
of benefits conferred. There is a link here wi
for a valid claim in French law, according
undertakes work for his or her own benefit cannot claim restitution
from a defendant who also happens, whether accidentally or not, to
benefit from that work.
The fourth requirement looks at first glance as if it is stipulating
the same as the requirement in English law that the enrichment in
question be unjust. Although not mentioned in the Boudier case itself,
today there is almost a presumption that restitution will be granted
unless the defendant can show there was "une cause legitime" for the
enrichment. This is not as demanding a task as showing in English law
that valuable consideration has been given in exchange for the
enrichment, but it means that the emphasis in French law is upon
looking for a reason why restitution should not occur rather than, as
in English law, looking for a reason why it should. This approach has
much to commend it, even though some eommentators in France are
still suspicious of a legal principle which seems a little vague, not to
say dangerous.89
In looking for a legitimate reason for an enrichment ("une raison
juridique") the French rely upon two main justifications: where there
has been a valid legal contract (itself a more generous notion in France
than in England90) and where there is a legal rule legitimising the
enrichment, such as when a debt becomes statute-barred. In 1892 the
Cour de cassation would not permit the owner ofthe land fertilised by
the merchant's manure to plead in defence his right to the benefit o
86 D.1953.609.
87 D.1985, Flash du n' 35. See too A-M. Romani, "Lafaute de iappauvri dans I'enrichissement sans
cause et dans la repetition de lindu", D. 1983 .Chr. 127.
88 Zweigert and Kdtz, An Introduction to Comparative Law, at pp. 268-274. This is the principle ex
turpi causa non oritur actio.
89 Elle est susceptible defaire naitre I'idee que l'action est donee lorsque I'enrichissement est contraire
a I'equite": Mazeaud, Lecons de droit civil (6th ed., Paris 1978), vol. 2(1), at p. 806.
90 Nicholas, The French Law of Contract. esp. at pp. 29-47.

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116 The CamPridge Law Journal [1995]
the fertilisation under the contract he had with his tenant. The court
has since reversed lts position on this point, just when English law,
through the technique of reservation of title clauses, is recognising a
supplier's right to restitution regardless of the contractual arrange-
ments between the recipient and a third party. The reduction of unjust
enrichment claims to an inquiry into whether there is a "cause" for the
enrichment also means that French law can employ the principle in a
wide variety of situations, albeit in a subsidiary capacity. There are
many cases where a spouse or cohabitee has successfully sued a partner
for recompense for work carried out on the partner's behalf9' and it is
in this context that France handles claims which in England fall under
the Inheritance (Provision for Family and Dependants) Act 1975. ln
one recent English case the judge seemed to adopt the French approach
by allowing restitution because the transaction in question was based
on no consideration; however sensible such as an approach may be it
is certainly out of step with prevailing common law attitudes.92
The fifth requirement was inserted into French law by a decision
of the Cour de casscztion in 1914, though 20 years later Gutteridge and
David still denied it.93 The court held, using a phrase that has been
repeated in many subsequent cases, that the action de in rem verso is
available only if a plaintiff "ne jouissaitX pour obtenir ce qui est du,
d'aucune action naissant d'un contrat, d'un quasi-contrat, d'un delitJ ou
d'un quasi-delit". Despite some assertions that the French system
allows for more subtle remedies,94 English law is surely to be preferred
on this point because it makes restitution freely available as an
alternative to other claims. In France the action may not even be
invoked to supplement an action which cannot be used because it is
time-barred. Nor does French law permit waiver of tort to the same
extent as English law. Only in cases where property is stolen from a
plaintiff can he or she maintain a restitutionary action for the value of
the property against a person who, having come innocently into
possession of it, has re-sold it.95
Nevertheless, where a statute prescribes certain conditions for a

successful action a French court can examine the policy underlying
91 See e.g. D. 1979. I.R .495. Such cases are discussed in C. Jaurfret-Spinosi, "The Domain of Contract
in French Law", in D. Harris and D. Tallon (eds.), ContracJ Law Today (Oxford 1989) at
pp. 115-7. For other cases illusiraling the concept of cause legitime see Zweigert and Kotz, op
cit at pp. 241-3 and for a comparative discussion Or claims denied on the basis that P's payment
was morally due see Englard, /nternalioncil Encycil)paedia of Comparafive Law, vOI. 1O, ch. 5 at
pp. 14-18. For the posilion in English law see Tinsle3} v Milligan [1993] 3 All E.R. 65.
92 A. Burrows, "Restitution of Payments made under Swap Transactions" ( 1993) 143 New L.J. 480;
W. Swadling, "Reslitution for No Consideration" [1994] Restitution Law Review 73
93 (1934) 5 C.L.J. 204 at pp. 218-221.
94 "Ces regles permeworenJ Ics soJations nuancees qxe le lr<)it de l'enrichissement n'est pas en mesnre de
donner" E von Caemmerer, "Prol5Semesfondaelentaux de l'enrichissement sans cause" (1966)
18Rev inr dedr comp 574atp.580.
95 /bidatp SSl

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the statute to see whether it precludes a restit

The legal rules on contractual capacity have bee
a restitutionary claim against, or by, a minor
granted greater protection than an adult when th
enrichment has survived in his or her hands. I
but less far-reaching indulgence is extended t
minors: the claim is denied if to allow it would b
the policy underlying the protective rules on con
Nor does the subsidiarity rule prevent a plain
defendant if he or she is equally liable with a f
insolvent. In a case in 1984 a man who had paid
a child until another man's paternity ofthe chi
able to claim restitution of his expenses not just
was insolvent, but also from the real father,97 In
the Cour de cassation did not baulk at allowin
fertiliser to recover from a third party even
contract was with someone else who had becom
The Netherlands"
Until recently Dutch law on unjust enrichmen

to French law, Articles 1390-1393 in the old Dutch Civil Code of 1838
(Burgerlijk Wetboek) corresponded to articles 1372-1375 in the French
Civil Code on gestion d'affaires; likewise articles 1395-1400 of the
Dutch Code corresponded to articles 1235 and 1376-1381 of the
French Code on repetition de I'indu. Neither Code recognised the
principle nemo auditur suam turpitudinem nor contained a genera
prohibition against unjust enrichment.
The new Dutch Civil Code, however, most of which came into
force in 1992, does contain a more general provision. In an early draft
prepared by Professor Meijers this was formulated as follows:
A person who has been enriched without justification at the
expense of another is obliged, as far as this is reasonable, to
compensate for the damage, to the extent of his enrichment.100
The Code which was finally enacted is, in Article 6-212, almost
identical and the provision has been described as the most striking in
96 A. Burrows, The Law of Restitution, at pp. 450-456.

97 D.1984.I.R.315.
98 And even though article 1165 ofthe Code civil unambiguously states that "agreements have efTect
only on the contracting parties".
99 For an exposition of the development of Dutch law 1600-1800, see Mr. Justice van Zyl, [19921
Acta Juridica 115 at pp. 120-128. For more modern analyses see D.C. Fokkema et ai, Introduction
to Dutch Law for Foreign Lawyers (Deventer 1978) at pp. 113 and 144; also van Zyl, op.cit., at
pp. 129-130.
100 Art. 6.4.3.1.

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the whole of Book 6 (the part of the Code dealing wi

general).101 It is supplemented, moreover, by Artic
primarily governs claims concerning unjustified transfe
other property:
1. A person who has given property to another

grounds for doing so is entitled to reclaim it from
as having been paid unduly.
2. Where the undue payment consists of a sum o
claim is for that amount.
3. A person who, without legal grounds, has performed a
prestation other than those mentioned above also has the
right to demand from the recipient that this prestation be
undone.102
By "prestation" para. 3 presumably intends to refer to any transfer

not expressly covered by paras. 1 and 2 but it remains to be seen how
wide an interpretation is given to the term by the Dutch courts. It is
remarkable that the new Code goes so far in providing a catch-all
measure, for as recently as 1959 the Dutch Supreme Court (the Hoge
Raad) expressly decided not to recognise a general principle of unjust
enrichment. The court held that unjust enrichment claims could
succeed only if they were analogous to claims allowed by statute.
Italy
For an enrichment to be recognised by Italian law (arrichimento

senza causa) there must be a causal nexus between the plaintiffs
impoverishment and the defendant's enrichment, as well as an absence
of any good legal reason for either phenomenon. A plaintiff can bring
a claim only if no other remedy is available and the defendant must
pay the lesser of the impoverishment suffered by the plaintiff or the
enrichment enjoyed by the defendant: only if the defendant has acted
in bad faith is the defendant fully liable. The defendant cannot claim
an allowance for payments he or she has had to make by virtue of
receiving the enrichment, nor can the defendant claim compensation
for improvements.103 The defendant is liable even if he or she is an
indirect beneficiary of an enrichment (say a bonafide purchaser ofthe
plaintiffs property from someone who has stolen it104) and even if the
plaintiff, in paying money that was not due to the defendant, made no
B. Wessels, "Civil Code Revision in the Netherlands: System, Contents and Future" (1994)
41 Netherlands International Law Review 163 at p. 182.
I am indebted to Professor Winkel, of Erasmus University, Rotterdam, for this translation.
K.-H. Schindler, Review of Trimarchi, L'arrichimento senza causa (Milan 1962) in (1965)
RabelsZ. 792 at p. 793.
Ibid. at p. 794. Gallo claims that Italian law is less generous towards indirect enrichment claims
than it used to be: supra. note 1, at pp. 456-7.

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mistake.'05 A mistake has to be proved only if the plaintiff has paid

another's debt. The Italian Civil Code of 1942 has provisions on
improvements to property (arts. 934 et seq. and 1592) and on payment
of what is not due (arts. 2033-2040). It goes further than the French
Code in including two separate articles on unjust enrichment (arts.
2041-2042), though the second of these exactly mirrors the position of
non-codified French law:
2041. General cause of action for unjust enrichment. A person who

has enriched him- or herself without cause at the expense of
another shall, to the extent of the enrichment, indemnify the other
for his or her correlative financial loss. If the enrichment consists
of a specified thing, the person who received it is bound to return
it in kind if it is still in existence at the time of the demand.
2042. Ancillary c/aracter oaction. An action for unjust enrich-

ment cannot be instituted if the person injured can exercise
another action to obtain compensation for the injury suffered.
This action for unjust enrichment can avail a third party who performs
another's obligations under a contract.l°6
Germany'07
Of all civil law systems the one which is closest to the Anglo-American
model in the realm of unjust enrichment is the German.'08 The
analogies are particularly strong in cases of enrichment by wrongdoing
and ineffective contracts, the latter because in both systems the delivery
of goods frequently transfers the ownership of them even if the contract
is for some reason invalid. The general features of the German law of
restitution have been explained elsewhere'09 and will only be briefly
p Gallo, (1992) 40 Am. J. Comp. L. 431 at pp. 442-3.

G. Criscuoli and D. Pugsley, lialian Law of Contract (1991) at p. 194. See too M. Whincup,
Contract LXn and Prartice: The Engli.sh Spsstenrt and Conrinental Comparisons (Deventer 1990) at
para. 13.65.
07 Modern Greek law appears to be identical to lhe German; see K.D. Kerameus and P.J. Kozyris
(eds.), fntroduction lo CreeA Law (Deventer 1988) at p. 95 (explaining arts. 904 913 of the 1940
Ci^,fil Code). The position in Austria and Switzerland is very Germanic: Zweigert and Kozz, An
Introduction to Comp,rative Labt} at pp. 232-7, and the Gesrrnan Code also seems to have been
the most influential on Japanese law, where arl. 703 of the 1896 Civil Code, still in force, provides
that those who benefit from another's assets or service without any legal ground, causing loss lo
this other person, are liable for restitution in so far as the benefit remains; see H. Oda, Japanese
LauP (London 1992) at pp. 205-6. Oda cites one Supreme Court decision from 1970 where P
repaired a bulldozer for X, who had rented it from D X went bankrupt and the bulldozer was
returned to D. P recovered the fee for repair from D on the basis of unjust enrichment.
IQ8 p. Gallo, op.rit., at p. 465. For an older account of German law see Friedmann, (1938) 16 Can.
Bar Rev. 243, esp. at pp. 253-261. A modern account is provided in N. Foster, Germn LuFw an(i'
Ihe Lebgal Szstem (London 1993) at pp. 229-231 and there are scholarly explanations of the
German legal position in R. Z,immermann, The l,al1 otr Obi'igutions-Roman Foundations of the
Ciltilian Tradition (Cape Town 1990) at pp. 887-891 and 895-6.
"The Law of Restitution in the Federal Republic of Germany: A Comparison with English Law"
(1987) 36 I.C.L.Q. 751; R. Zimmerman and J. du Plessis, "Basic Features of the German Law of
Unjustified Enrichment" [1994] Reslitution 1m1s Reviez} 14.

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Tl1e Cambridge Lav Journal [1995]
120
summarised here. The principles specifically falling under the heading

unjust enrichment (ungerechtfertigte Bereicherung) are contained in
paras. 812-822 of the Burgerliches Gesetzbuch (the BGB), in force
from 1900, the main principle being embodied in the first sentence of
para. 812(1);
A person w}zo obtains something from another without legal

justification, and at the other's expense, whether through the
other's performance or in a different fashion, is under a duty to
make restitution of the thing to that other. l l°
Initially paras. 812-822 were viewed as a general corrective to injustices

arising from the operation of other parts of the BGB. Today most
commentators agree that there are two main categories of unjust
enrichment claim those based on unlawful interference (Eingriffs-
kondiktionen) and those derived from a performance (Leistungs-
kondiktionen) but they disagree as to what other categories exist.''l
Zweigert and Kotz point out that the main dichotomy is comparable
to that drawn by Goff and Jones between enrichments acquired by the
defendant's own conduct and those obtained from or by the act of the
plaintiff."2 ln fact the German distinction is probably even closer to
that which Birks uses as the basis for his exposition of English
restitution law, the distinction between "unjust enrichment by subtrac-
tion from the plaintifft' and "unjust enrichment by doing wrong to the
plaintifft'. ' 13
The term Leistung is here used in a broad sense; it is certainly not
restricted to contractual performances, though the most usual situation
where a remedy is available is one where a contract is void or voidable.
The operation of the ''Abstraktionsprizlzip'' in German law, whsch
holds that property in goods can pass even though the contract
involved is defective, means that para. 812 rather than the BGB's
provisions on contracts needs to be relied upon in many instances.
The second sentence of para. 812 emphasises that there is a duty to
make restitution even when a legal justification existed for the
enrichment at the time of its occurrence but has later disappeared or
when an anticipated purpose to be fulfilled by the performance does
not materialise. But in both contexts the German courts have shied
away from extending unjust enrichment claims too far. Contrary to
French judges, they have made it clear, for example, that they do not
i} ' Wer darch lic Leisrung eines tJnderesn oUr in sonstiger Wcise altf dessen Kosten etlzas ohne
rechtlicheSn Griad erlungt, ist iAnt ^ nr HercilJsgabe reXrpflichles. "
The leading monograph is that by D. Reuter and M. Martinek, UngerechtSertigte Bereic/erls7g
( I 983).
"' Op. cif.. at p. 248.
An Inirodlwstion to rh} Luls ()f Re.stitution. ch. I and pctssinl. See also his "The Condition of the
English Law Of Unjust Enrichment" [19921 Arra J"ritlic(w 1.

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see an unjust enrichment claim as suitable in the field of family

property law or succession law.
Eingriffskondiktionen differ from Leistungskondiktionen in that they
do not presuppose that the plaintiff has suffered a loss, merely that
the defendant has made a gain. A person who uses another's machine,
which otherwise would have been Iying idle, is therefore liable under
this head. The category also embraces not just defendants who are
directly responsible for interfering with the plaintiiTs property but
also those to whom such an interferer may have passed the property
in return for no value. This is a rare exception to the general German
attitude that an enrichment is recoverable only from the person
who directly receives something at the expense of the plaintiff
( Unmittelbarkeit). Another exception arises when a person pays
another's debt: whereas in English law the payer can obtain restitution
only from the debtor, in German law the payer can sue the payee as
well. In English law the indirect interference which such cases illustrate
has been labelled by Birks as "interceptive subtraction"."4
As regards the remaining categories of unjust enrichment claims in
German law Von Caemmerer talks of Ruckgriffskondiktionen (claims
based on the payment of another's debt) and Yerwendungskondiktionen
(claims based on money spent or services rendered in improving
another's pror)erty). Larenz bases these two categories on a plaintiflts
activities (Hclndlungen) rather than performances (Leistungen)? because
they relate to enrichments which occur entirely without the defendant's
involvement; he adds that a separate status should be accorded to
claims arising out of the loss of ownership resulting from another's
transformation or reworking of the plaintifFs property (Verbindung,
Vermischtng Verarbeitung).l l5 The authors of the most recent mono-
graph on the subject, Reuter and Martinek, label their third category
Abschopfungskondiktionen; this embraces claims lying against third
parties (Durc/?griffskondiktionen) and is based on the idea that an
imbalance in the distribution of resources sometinles arises which must
be corrected. ' 16 The dispute between academics is important in
Germany because there are a number of paragraphs both in the BGB
and other legislation which either expressly cross-refer to paras. 8l2-
822 or are clearly intended to perform the same function.
German law is also noteworthy for the range of defences it makes
available in unjust enrichment cases. A claim based on performance is
barred if, for example, the performer knew all along that he or she
was under no duty to perform, but not simply because he or she was
84 Ibid. at pp. 133-9. See also L.D. Smith, 7-hree-Party Restitution: A Criti4"e of Birks s Theory oJ
Interceptive S"btrscrion ( I 991 ) I 1 O.J . L. S. 481 .
&15 Lehrbuch des Schuldrechts, vol. 11, Be.sonderer Teil.
116 Op Cit.. at pp. 5$62 and 383-384.

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subjected to unfair pressure or made a mistake (ev

where a claim is based on the disappearance of the
plaintiffs performance (Wegfall des rechtlichen Gru
is entitled to argue that, while the plaintiff may
legal duty to render the performance, he or she was
a moral duty. Likewise the defendant can rely upon
of good faith in preventing fulfilment of the p
original performance. More generally, restitutio
plaintiff has contravened a law or good morals,
plaintiff did was to incur an indebtedness which
discharged. This calls to mind the maxims of En
causa non oritur actio and in pari delicto potior est c
while the proviso is reminiscent ofthe locus poeniten
law grants to plaintiffs in the case of some illegal co
still executory. Most importantly of all, German law
defence of change of position, for, according to
duty to make restitution or to restore a thing's valu
extent that the recipient is no longer enriched."
defendant is not excused from making restitution if
the property to save some expenses which would o
incurred (Ersparnisbereicherung) and any loss of the
be deducted from any claim for counter-restitution w
might have against the plaintiff (the Saldotheor
change of position does not avail, moreover, if the p
rescission rather than relying on paras. 812-822.
Mixed Legal Systems
A survey of the approach of different legal systems to claims of unj

enrichment would not be complete without making at least pas
reference to the situation in some ofthe world's mixed systems of la
In Scotland restitution has been an established category in the
of obligations since the first edition of Stair in 1681 and today t
principle against unjust enrichment is seen as underlying at least thr
distinct sets of legal remedies: (1) quasi-contractual remedies (th
Roman condictiones), (2) cases oinegotiorum gestio and (3) mariti
salvage and general average claims.118 None of these remedies h
been infected by the implied contract fallacy which hindered t
"Die Verpftichtung zur Herausgabe oder zum Ersatze des Wertes ist ausgeschlossen, soweit
Empfdnger nicht mehr bereichert ist". See J.P. Dawson, "Erasable Enrichment in German L
(1981) 61 Boston U.L.R. 271 and Zweigert and Kotz, An Introduction to Comparative Law
pp. 275-287.
See W.J. Stewart, The Law of Restitution in Scotland (Edinburgh 1992). On historical aspects see
R. Evans-Jones, "Unjust Enrichment, Contract and the Third Reception of Roman Law in
Scotland" (1993) 109 L.Q.R. 663.

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Utzjust Enrichment Claims
123
C.L.J.
deveJopment of common law systems, nor, of course, has Scotland

suffered from what has been called the "curse . . . of the dualism of
law and equity''.l'9 The quasi-contractual remedies are themselves
usually sub-divided into repetition and recompense. In the words of
one writer, repetition (i. e. the repayment of money) applies the Roman
condictiones "in much the same way that German legal science has
applied them as a gloss on BGB para. 812" (the payer's mistake of
law is generally no bar)t while recompense (i.e. reimbursement of
outlays) "may be compared with the action de in rem ¢^erso developed
by French jurisprudence in the second half of the last century".'20 In
all these cases the pursuer (i.e the plaintiff) must prove not only that
the defender (i.e. the defendant) has enjoyed a gain (lucrum) but also
that he or she has suffered a loss (iactura). There is also a growing
body of opinion which holds that Scots law permits restitution in cases
of wrongs. 121
In South Africa there is no general enrichment action, only a
collection of discrete remedies in situations such as condictio indebiti,
negotiorum gestio and possession of property belonging to another.l22
It was asserted in Nortje v. Pool N.0.'23 that new claims could be
allowed by the courts only if they were founded on the same principles
as existing claims and this has indeed occurred in the field of service
contracts.'24 South African law also allows recovery in a contractual
setting even though there has not been a total failure of consideration
and it has recently affirmed that mistake of law is no bar to recovery. 12s
"9 The phrase is that of Birks. For this section l have drawn on his paper "Restilution: The View
from Scotland". delivered to the Restitution Group of the Society of Public Teachers of Law at
its 1984 meeting in Edinburgh. See aIso his 'iSix Questions in Search of a Subiect-Unjust
Enrichment in a Crisis of Identity" (1985) 28 Jur. Rev. (N.S.) 227 and "Restitution: a View Of
Scots Law" [1985] C.L.P. 57.
't° D.B. Walters, i'The Restitution of Unjustly Acquired Benefits in English and Scots Law" ( 1980)
3 JeltisS1 Lz} Annuul 84 at pp. 88-89. Walters admits of the existence of a fourth miscellaneous
category of unjust enrichment cases; in Scots law this would include the accountability of a co-
owner for profits accruing while the property remained joint and undivided: ihid. at pp. 9S97.
' J. Blackie, "Enrichment and Wrongs in Scots Laws' [1992] Acls Juridi(u 23.
i7) The Soulh African material is conveniently presented in S. Eiselen and G. Pienaur, Unylesti,fie/
Enrichnzent: A Casebook (Durban 1993).
123 1966 (3) S.A. 96 (Appellate Division). The plaintiffs had entered into a contract with the
defendant whereby the plaintiffs were given the exclusive right to prospect for and extracl kaolin
(china clay) on the defendant's land. The contract was void because of a formal defect but the
plaintiffs sued for the value of the enrichment conferred on the defendant through their discovery
of kaolin on his land. The claim was rejected: no existing head of liability applied and there was
not yet a general action for unjustified enrichment in Soulh African law.
124 See Gibson, Wille s PrincJples of South Afri(n Lal1! (7th ed. 1977), ch. 38 (esp. at p. 492). For a
summary in English of the firss edition of a book in Afrikaans on unjustified enrichmenl see W.
de Vos, "Liability Arising from Unjustified Enrichment in the Law of the Union of South Afric3 '
1960] Jud. Rev. 125 and 226.
'5 [Fillis Faber Entholen (Ptz) Ltd. v. Receiver of Rewenus un(S Another (1992) (4) S.A. 202
(Appellate Division), discussed by G. Jones at [1993] C.L.J. 225 and by D. Visser at (1992) 109
S.A.L.J. 177 and [1993] Restttiltic)l Lul1 Relfiiell 185. The court thought that legal policy now
demanded the abolition of the mistake of law rule but added that only excusuble mistakes should
justify recovery. Jones is of the view that, as in cases of mistake of fact, even grossly negligent
payers should be allowed to recover.

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124 The Cambridge Law Journal [ 1995]
As in German law there is a requirement that

link between the plaintiffs impoverishment an
enrichment, so that in another very recent case,
accepted that a possessor of movables (a truck)
institute an action based on enrichment by improv
possessor of immovables, the defendant bank was
not liable to make restitution to the plaintiff-buy
received a benefit not directly from the plaintiff but v
(the seller's trustee in bankruptcy).126 However, if
sold the property received from the plaintiff he or
to repay the amount obtained on the sale; only if t
acted in bad faith must he or she pay the full value of
this is more). There is a need for clarification and ref
South Africa and to that end a Project Committee ofth
Law Commision has been set up to review the wh
make recommendations for change.127
In Quebec, as one would expect, the law on unjust
traditionally developed along the same lines as in
Civil Code has been in force since 1 January 1994
provision on unjust enrichment which was not in
Code of Lower Canada or in any equivalent French
have been prompted by the Supreme Court's
Immobiliere Viger Ltee v. Laureat Giguere Inc.l2S In f
1493. A person who is enriched at the expense o
to the extent of his enrichment, indemnify th
correlative impoverishment, if there is no justi
enrichment or the impoverishment.
1494. Enrichment or impoverishment is justified
from the performance of an obligation, from t
person impoverished to exercise a right of wh
himself or could have availed himself against the p
or from an act performed by the person impo
personal and exclusive interest or at his own r
with a constant liberal [donative] intention.
1495. An indemnity is due only if the enrichm
exist on the day ofthe demand. Both the value o
and that of the impoverishment are assessed o
demand; however, where circumstances indicate
the person enriched, the enrichment may be ass
the person was enriched.
126 Van der Burgh v. Van Dyk (1993) (3) S.A. 312 (judgment in Afrikaans
[1994] Restitution Law Review 199.
127 The recently enacted Restitution of Land Rights Act will attempt
grievances amongst blacks concerning their forced removal from land
decades.
128 [I977J2S.C.R. 7.

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125
C.L.J. Unjust Enrichment Claims
1496. Where the person enriched disposes of his enrichment

gratuitously, with no intention of defrauding the person impover-
ished, the action of the person impoverished may be taken against
the third party beneficiary if the latter could have known of the
impoversshment .
Perhaps the most interesting of the mixed legal systems in this

connection is that of Israel, largely because in 1979 it went out on a
limb (having already codified much of its contract law) by enacting an
Unjust Enrichment Law.'30 According to section 1:
(a) Where a person obtains any property, service or other

benefit from another person without legal cause (the two persons
hereinafter respectively referred to as "the beneficiary" and
"the benefactor"), the beneficiary shall make restitution to the
benefactor, and if restitution in kind is impossible or unreasonable,
shall pay him the value of the benefit.
(b) It shall be immaterial wheeher the benefit was obtained

through an act of the beneficiary, an act of the benefactor or in
any other way.
Clearly this is the most broadly worded statutory provision on unjust

enrlchment anywhere in the world. It embraces any- benefit obtained
in any way, the touchstone for restitution being the lack of any "legal
cause" for the benefit's transfer. Probably the most innovatory aspect
of the 1979 Law is its rejection of the rule that no duty to make
restitution can arise unless the enrichment of the defendant correlates
with a loss of the plaintiff the position in French law. Instead section
2 grants the court a discretion to exempt the beneficiary from the
whole or part of the duty to make restitution ';if it considers that the
receipt of the benefit did not involve a loss to the benefactor or that
other circumstances render restitution unjust". While this feature of
the Law seems to differentiate the Israeli position from related unjust
enrichment provisions in civil law codes, as does section 6(c), which
says that the 1979 Law is not to derogate from other remedies-
thereby making the remedy not a subsidiary one but a supplementary
one in other respects the Israeli Law appears closer to the civil law
approach. Jackson rightly sees the phrase "without legal cause" as
quite alien to the common law approach, which requires a specific
ground for restitution (one of Burrows' "unjust factors") rather than
029 The translation is taken from [1993] Restitution LX} Revieew at pp. 212-213. See loo L. Smith
ibid. at p. 1 1 5.
3° Descnbed by one distinguished commentator, Bernard Jackson, as "an event Of major
jurisprudential significance" (1980) 3 Jewish Luv Annual 3. The Law is reproduced in English in
tl993] Restitution Lnw Review at p. 213. For a discussion of Israeli law prior to 1979 see
D. Friedmann, "Some Trends in the Development of the Law of llnjust Enrichment in
Israel", Beitrage 2am deutschen tfnd isr(Jelischen Privatrecht (Neue Kolner RecElisuwissenschaftliche
Abhandlangen, feft 81; Cologne 1977).

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the absence ofa recognised ground for the validity of

This leads him to regret that the Israeli Law lost its s
clause while passing through the Knesset: it theref
to article 46 of the Palestine Order in Council of
resort to be had to English common law to fill in the
Conclusion
This article has sought to show that any direct comparison

structure of unjust enrichment claims in common law and ci
systems is bound to be misleading because the principle agains
enrichment serves distinctly different purposes in the two
systems. For common lawyers unjust enrichment is a ration
allowing some claims in restitution; for civil lawyers it is a r
category in the law of obligations which comes into play whe
categories have been exhausted. Moreover, within each set of
unjust enrichment claims perform very different foles and the r
legal rules have not developed at the same pace in all countrie
arguable, consequently, that in some respects there is more in com
between, say, American and German unjust enrichment law than
is between American and English or between German and Fre
more detailed comparison would have to look not just at
enrichment claims per se in the civil law systems but also a
claims which, while not expressly categorised as being based
defendant's unjust enrichment, perform the same function a
which are. That would still leave the problem of deciding pr
which claims in common law systems are in reality based on
enrichment too.
Ibid. There are three other substantive provisions in the 1979 Law. Section 3 allows the
beneficiary, when making restitution, to deduct his or her reasonable expenses incurred in
obtaining the benefit. Section 4 allows restitution in cases of payment of another's debt provided
the debtor had no reasonable cause to object to the payment. Section 5 allows restitution in cases
where a person, in good faith and reasonably, does any act to protect the life, physical integrity,
health, honour or properly of another without being under a duty to do so.
See generally D. Friedmann, "Infusion of the Common Law into the Legal System of
Israel (1975) 10 Israeli Law Review 324. Friedmann has also analysed the effects of recent Israeli
contract legislation on restitutionary claims: "Consequences of Illegality Under the Israeli
Contract Law (General Part) 1973" (1984) 33 I.C.L.Q. 81.

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Unjust Enrichment Claims: A Comparative Overview

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