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Week 8 Remedies Readings

Restitution Distinguished from Other Remedies


Restitution gives effect to a P’s right to restoration of value that has been transferred
directly to the D from the P’s assets or labour
Available in equity and law, proprietary and personal
Many causes e.g. unjust enrichment, mistake
Must differentiate between restitution in the case of unjust enrichment (infringement
of A’s primary right) and remedy of restitution in cases of wrongdoing (gives rise to
secondary right)
Looking here at the first

Restitution v Compensation
• Said to recognise that receiving a benefit where one trespasses and a fee
should be deemed to be needed to be paid and this fee is restitutionary
• Simon Brown LJ: a restitutionary award is rightly decided not by reference to
what subjectively the landlord would have other done with his property, but
rather by an objective determination of what the wrongful occupation was
worth to the trespasser (Gondal v Dillon Newsagents Ltd)
• (a) Difference between above
• No financial loss to the claimant
• Professor Innes argues that we can look at it not as financial loss, but as a
substitute for the value of the claimant’s rights that have been infringed
o If this were applied generally, then a claimant would rarely seek
restitutionary damages
o Claim for loss would be more preferable
o Would only have to point to a loss of value or right and not have to
show gain obtained by D
o However that is English law, and the starting point in Australia is for
financial loss rather than a substitute for loss of right - damages are
given to compensate the injured party for what he has suffered and will
suffer in mind, body or estate. Compensation is given for financial loss
= starting point
o Where non-financial – find a financial equivalent
o No need to show that the claimant has lost the option to do something
to gain a profit – because usually would not have done so – these are
restitutionary (case of Gondal would be recognised as this)
o Butler v Egg and Egg Pulp Marketing Board
 Assessed as the difference between the financial loss suffered
by the Board (price would have sold the eggs less the amount
which the Board would have has to pay to the appellants)
 Arguing that restitutionary damages should have allowed
recovery of the objective value of the benefit obtained by the D
for the claimant’s assets. Value of the right to sell the eggs.
• (b) mislabelling compensation as restitution
o Restitution in this sense means to restore a P back to the position he or
she was in had something not been committed. This is compensation
damages.
• Disgorgement in common law
o Livingstone v Rawyards Coal
 The one about the cave and trespassing and getting coal
 Was unaware of this – thought had the right to do so
o If the D was consciously tortious in acquiring the benefit, he is also
deprived of any profit derived from his subsequent dealing with it
• Disgorgement in equity
o Account of profits
• Mislabelling disgorgement as restitution
o Restitution should be confined to a description of awards that aim to
reverse a wrongful transfer of value from the claimant’s assets or
labour
o Disgorgement if fundamentally different remedy premised upon the
rationale of deterrence
o Court never allows a man to make a profit by a wrong – Lord
Hatherley LC Jegon
o Example
o Someone gets 1000 through fraud – gambles it and earns 3000.
Disgorgement would give P $4000, while restitution would award
$1000 + interest
o Award of restitution for unjust enrichment focuses on reversing the
enrichment received directly from the P’s assets and disgorgement
focuses on the profits causally made

Restitution for Unjust enrichment compares with other primary rights


• Different from primary rights enforcing expectations arising from agreement
o E.g. under a contract, a say will lend something to b for $10. B doesn’t
pay but has borrowed the thing. Payment of the $10 is expectation and
not restitutionary as not restoring the P’s value that has been
transferred
• Different from primary rights enforcing expectations from trusts
o Trusts is disgorgement remedy – looking to the gain and can award
more than what was deprived of the P
• Different from rights arising from possession of a beneficiary’s asset
o Beneficiary to as the trustee to convey property or assets owed to them
is restitutionary? It is a right to restoration of an asset or its value held
by the trustee but to which the beneficiary is entitled (Prof Birks) and
not based on unjust enrichment
o Based on policy of protection of property rights

Restitution can arise in response to wrongdoing and unjust enrichment and also
possession of an asset to which the P is beneficially entitled