A modern legal discipline

Restitution is now well established as a modern legal discipline. It has it own texts, a substantial journal literature, even a modicum of recognition from the courts. Yet the nature of restitution eludes consensus. The pioneers of the subject, eager to promote their vision of 'restitution as unjust enrichment', rely primarily on clarity of exposition, though also with occasional asides against the many they see as their enemies (see for example Birks 1985a, p 6; Burrows 1993, pp 2-6; Tettenborn 1996, pp 2-8).

Their ultimate argument against all criticisms is through progressive refinement and redefinition of their 'unjust enrichment' theory, a strategy which has resulted in more and more precise notions, but also in a smaller and smaller ambit for their subject, as unpromising material is excluded. In this paper we will discuss many important structural and taxonomic matters. Mentioned in passing is Prof Birks' recanting of the perfect quadration of restitution and unjust enrichment, his conversion to the multi-causal nature of the response of restitution, and his consequent espousal of unjust enrichment as an appropriate for the subject.

This branch of the law had first been brought to the attention of English lawyers in 1966 by Robert Goff, later to be a law lord, and Gareth Jones, in their book, The Law of Restitution. They had shown that a mass of English legal decisions, both at common law and in equity, were alike in being concerned with the reversal of unjust enrichments. If Goff and Jones could thereby be said to have 'created' the subject of restitution in England, it was to be Birks's book that triggered the huge modern academic interest in it.

He argued, with the clarity and rigour and dramatic turn of phrase that were the hallmarks of his unique style of prose, that an elegant and illuminating conceptual structure underpinned the cases granting restitution of an unjust enrichment at the claimant's expense. The law was therefore revealed to have a transparent rationality, with the judges being guided by coherent principles that ensured that like cases were treated alike.

In the Birksian world there was no place for labels and fictions that were misleading or obscure. They were replaced by modern language that was precise and clear, and rendered the law and legal decision-making open and intelligible. Birks followed the publication of his book with a torrent of articles on various aspects of the law of restitution. By now his work was inspiring not only other academics but was also influencing practitioners and judges.

He came to be held in great esteem by many senior judges who admired the power of his analysis in pointing the way to a principled decision. The respect afforded to his views reached the point where, in one case, even a mere footnote in a Birks article proved to be the subject of several paragraphs of reasoning in the speeches of the law lords. Throughout his career Birks was a passionate believer in the value of Roman law as a means of introducing students to refined legal concepts such as rights in rem and rights in personam.

He was a great admirer of the work done by Gaius and Justinian in classifying Roman law in their Institutes and this was to be the underpinning of his approach to modern English law. It was the Roman law of quasi-contract that led Birks to the English law of restitution. Just as the courts have rejected the implied contract fiction and begun to coalesce around a vision of a law of restitution founded upon the principle against unjust enrichment, academic debate has, almost inevitably, begun to call it into question.

Birks, whose work was so influential in the developments sketched above, was once of the view that "Restitution and unjust enrichment identify exactly the same area of law. The one term quadrates with the other". That is, if the cause of action is the unjust enrichment of the defendant at the expense of the plaintiff, the remedy is restitution to the plaintiff from the defendant of the amount of that unjust enrichment. However, he has since recanted of this quadration.

He now believes that restitution in the sense of giving back can be a response to an obligation arising not only from an unjust enrichment but also from consent (as where the defendant agreed to the return), and from a wrong (because restitution for the wrong is a consequence of the law relating to the wrong itself), so that to confine the meaning of the word 'restitution' to a response to unjust enrichment is to ignore that the natural meaning of the word restitution can include the other responses he identifies.

For him, the remedy for this instability is to adopt 'unjust enrichment' as a more appropriate title for the subject than restitution. This, unfortunately, doesn't clarify the situation.

The stability which Birks requires of the phrase 'unjust enrichment' is illusory, because, though Birks would deny this, the phrase 'unjust enrichment' can be used in the law in manners which are neither pejorative nor as substantively precise as he would insist; indeed, there is a spectrum along which lie various visions of unjust enrichment, from the very technical descriptive principle advocated by Birks and adopted by the Irish, English and Australian courts, through the slightly more open-textured prescriptive principle adopted by the Canadian courts, and the related but less technical understandings of the principle, often expressed in equitable terms, to much looser senses and ultimately to pejorative dismissals of unfettered palm tree justice or worse. If the word 'restitution' is, as Birks puts it, multi-causal, then the phrase 'unjust enrichment' is equally multi-faceted. In both cases, there are many possible meanings, and the law seems to have chosen one meaning in each case; so that the phrase 'unjust enrichment' describes a cause of action for which the word 'restitution' describes its remedy. In so doing, it would simply be another example of the law ascribing to words stable legal definitions which differ in some way either from their meanings in ordinary speech or from other legally plausible meanings.

Though the natural meaning of restitution might extend beyond unjust enrichment, and the possible usage of unjust enrichment might in its turn extend beyond restitution, nevertheless, their overlap indisputably defines a relatively stable field of the law of obligations. It is not now necessary to undo what has only recently been done, and done well. In fact, Birks argues that as a matter of taxonomy, the law of obligations divides into four: those obligations which arise from consent, wrongs, and unjust enrichment, and those which fall into a fourth miscellany; for him, the doctrines which protect the reliance interest at common law identified at various points in this comment provide an example within this fourth category.

Consistently with his view that restitution can be a response to an obligation arising not only from an unjust enrichment but also from consent and from a wrong, he also argues that it can be a response to events in the miscellany: see, for example, his discussion of Macmillan v Bishopsgate Investment Trust (No 3) [1996] 1 All ER 585 (CA) in Birks "Property and Unjust Enrichment: Categorical Truths" [1997] NZLR 623. Turning to the detail of the 'unjust enrichment' theory, we have a problem not merely in assessing what has been introduced, but also of determining what it is reasonable to expect. No theory of liability is perfect, and it is unreasonable to criticise a theory merely for failing to achieve perfection.

And generalisation about liability may often be valuable and useful even where it is only partially true, or admits of major exceptions. On the other hand, where particular deficiencies in a theory are significant and have persisted over a period, despite concentrated attempts to resolve them, they certainly detract from the merits of the theory, and may even constitute grounds for rejecting it entirely. In this spirit, it may be suggested that certain difficulties in 'unjust enrichment' theory have become more than mere anomalies, and should make reasonable people doubt the utility of the theory. Birks admits that the clarity of theory to which 'unjust enrichment' aspires is not the norm.

Most subjects make no such attempts; they are 'contextual' subjects with no high theory. "There is nothing wrong with categories of that kind … It is the function and virtue of these contextual categories that they collect together bits and pieces which are kept apart in other ways of dividing up the law" (Birks 1985a, p. 74). There can therefore be no pretence that a theory of the sort urged is essential for a legal discipline. If restitution is based on such a theory, it is pretty unusual. The question is, whether there is any precedent for a subject so distant from society, and endowed with so fine a theory, that it can get by with only the latter. Do many such subjects exist? They are rare.

Tort hardly fits the bill, for tort too is very diverse; what little theory the various torts share is small (really only some common rules about damages and about limitation, most of which apply also to contract and to breach of trust). Tort, indeed, is a rather good example of a 'miscellaneous' subject, the bounds of which are set by evolution and convention rather than a precise theory. That really only leaves Contract. Is Contract a worth-while model for restitution to emulate? Contract is not without its critics. Are all the critics wrong? Or are their criticisms irrelevant in the case of restitution? These are questions which 'unjust enrichment' theorists should attempt an answer.

In 1985 Peter Birks expressed the view that not only were contract and unjustified enrichment quite distinct areas of the law of obligations but also that "these involuntary obligations [of unjustified enrichment] ought to be treated entirely separately from contract". While this proposition seems reasonable for initial exposition of the two subjects, there are a number of qualifications which ought to be entered. It would be a poor lawyer who was not fully aware of the interaction between contract and unjustified enrichment, and it is absolutely necessary for these advanced purposes to treat the two together at some stage. For confirmation of this, one need only look at some of the recent attempts to produce 'codes' embodying internationally acceptable principles of contract law all of which have to deal with enrichment or restitutionary issues at various points.