Restitution and unjust enrichment

Restitution and unjust enrichment is the field of law relating to gains-based recovery. In contrast with damages (the law of compensation), restitution is a claim or remedy requiring a defendant to give up benefits wrongfully obtained. Liability for restitution is primarily governed by the "principle of unjust enrichment": A person who has been unjustly enriched at the expense of another is required to make restitution.^[1]

This principle derives from late Roman law, as stated in the Latin maxim attributed to Sextus Pomponius, Jure naturae aequum est neminem cum alterius detrimentum et injuria fieri locupletiorem^[2] ("By natural law it is just that no one should be enriched by another's loss or injury"). In civil law systems, it is also referred to as enrichment without cause or unjustified enrichment.

In pre-modern English common law, restitutionary claims were often brought in an action for assumpsit and later in a claim for money had and received. The seminal case giving a general theory for when restitution would be available is Lord Mansfield's decision in Moses v Macferlan (1760), which imported into the common law notions of conscience from English chancery.^[a] Blackstone's Commentaries also endorsed this approach, citing Moses.^[3]

Where an individual is unjustly enriched, modern common law imposes an obligation upon the recipient to make restitution, subject to defences such as change of position and the protection of bona fide purchasers from contrary equitable title. Liability for an unjust enrichment arises irrespective of wrongdoing on the part of the recipient, though it may affect available remedies. And restitution can also be ordered for wrongs (also called "waiver of tort" because election of remedies historically occurred when first filing a suit). This may be treated as a distinct basis for restitution, or it may be treated as a subset of unjust enrichment.

Unjust enrichment is not to be confused with illicit enrichment, which is a legal concept referring to the enjoyment of an amount of wealth by a person that is not justified by reference to their lawful income.

^ See generally: Mitchell et al, Goff & Jones Law of Unjust Enrichment (Sweet & Maxwell, 8th ed, 2011); Graham Virgo, The Principles of the Law of Restitution (3rd ed, 2015); Andrew Burrows, The Law of Restitution (3rd ed, 2011); Mason, Carter, and Tolhurst, Mason & Carter's Restitution Law in Australia (LexisNexis, 2nd ed, 2008). On unjust enrichment as a 'unifying legal concept', see the judgment of Deane J in Pavey & Mathews v Paul (1987) 162 CLR 221.
^ Digest of Justinian, 50.17.206; see also id. at 12.6.14 ("Nam hoc natura aequum est neminem cum alterius detrimento fieri locupletiorem").
^ William Blackstone, Commentaries on the Laws of England, Vol. 3, *162 ("A third species of implied assumpsits is when one has had and received money of another's, without any valuable consideration given on the receiver's part: for the law construes this to be money had and received for the use of the owner only; and implies that the person so receiving promised and undertook to account for it to the true proprietor. And, if he unjustly detains it, an action on the case lies against him for the breach of such implied promise and undertaking; and he will be made to repair the owner in damages, equivalent to what he has detained in such violation of his promise. This is a very extensive and beneficial remedy, applicable to almost every case where the defendant has received money which ex aequo et bono he ought to refund. It lies for money paid by mistake, or on a consideration which happens to fail, or through imposition, extortion, or oppression, or where undue advantage is taken of the plaintiff's situation. [Footnote:] 4 Burr. 1012").

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[1] See generally: Mitchell et al, Goff & Jones Law of Unjust Enrichment (Sweet & Maxwell, 8th ed, 2011); Graham Virgo, The Principles of the Law of Restitution (3rd ed, 2015); Andrew Burrows, The Law of Restitution (3rd ed, 2011); Mason, Carter, and Tolhurst, Mason & Carter's Restitution Law in Australia (LexisNexis, 2nd ed, 2008). On unjust enrichment as a 'unifying legal concept', see the judgment of Deane J in Pavey & Mathews v Paul (1987) 162 CLR 221.

[2] Digest of Justinian, 50.17.206; see also id. at 12.6.14 ("Nam hoc natura aequum est neminem cum alterius detrimento fieri locupletiorem").

[4] William Blackstone, Commentaries on the Laws of England, Vol. 3, *162 ("A third species of implied assumpsits is when one has had and received money of another's, without any valuable consideration given on the receiver's part: for the law construes this to be money had and received for the use of the owner only; and implies that the person so receiving promised and undertook to account for it to the true proprietor. And, if he unjustly detains it, an action on the case lies against him for the breach of such implied promise and undertaking; and he will be made to repair the owner in damages, equivalent to what he has detained in such violation of his promise. This is a very extensive and beneficial remedy, applicable to almost every case where the defendant has received money which ex aequo et bono he ought to refund. It lies for money paid by mistake, or on a consideration which happens to fail, or through imposition, extortion, or oppression, or where undue advantage is taken of the plaintiff's situation. [Footnote:] 4 Burr. 1012").

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