Walker, Paul A --- "Change of Position and Restitution for Wrongs: 'Ne'er the Twain Shall Meet'?" [2009] MelbULawRw 8; (2009) 33(1) Melbourne University Law Review 235
[*] BA, LLB (Hons) (UWA). I am grateful to John Tarrant and Elise Bant for their suggestions and comments on an earlier draft of this article. I am also grateful for the support of the Hackett Foundation Alumni Honours Scholarship at The University of Western Australia, which funded much of the research that went towards the writing of this article.
[1] Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1942] UKHL 4; [1943] AC 32, 61–2 (Lord Wright); Deglman v Guaranty Trust Co of Canada [1954] SCR 725, 728–9 (Rand J for Rinfret CJ, Taschereau and Rand JJ), 734 (Cartwright J for Estey, Locke, Cartwright and Fautex JJ); Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221, 256–7 (Deane J) (‘Pavey & Matthews’); Lipkin Gorman (a firm) v Karpnale Ltd [1991] 2 AC 548, 559 (Lord Bridge), 559–60 (Lord Templeman), 572 (Lord Goff) (‘Lipkin Gorman’); David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353, 379 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ) (‘David Securities’). For a discussion of the possible meanings of restitution, see below Part II.
[2] Lipkin Gorman [1991] 2 AC 548; David Securities [1992] HCA 48; (1992) 175 CLR 353.
[3] See, eg, Goss v Chilcott [1996] AC 788, 798–9 (Lord Goff for Lords Goff, Jauncey, Steyn, Hoffmann and Cooke); Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] UKHL 12; [1996] AC 669, 716 (Lord Browne‑Wilkinson).
[4] The only two cases to have commented upon the defence’s applicability beyond unjust enrichment are Lipkin Gorman [1991] 2 AC 548, 579–80 (Lord Goff for Lords Goff, Jauncey, Steyn, Hoffmann and Cooke), discussed in Part III, and Kuwait Airways Corporation v Iraqi Airways Co [Nos 4 and 5] [2002] UKHL 19; [2002] 2 AC 883, 1094–5 (Lord Nicholls) (‘Kuwait Airways’), discussed in Part IV.
[5] See, eg, Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1995] UKPC 54; [1996] AC 514 (breach of fiduciary duty); Seager v Copydex Ltd [No 1] [1967] 2 All ER 415 (breach of confidence); Penarth Dock Engineering Co Ltd v Pounds [1963] 1 Lloyd’s Rep 359 (trespass to land); United Australia Ltd v Barclays Bank Ltd [1941] AC 1 (conversion).
[6] See, eg, Peter Birks, Unjust Enrichment (2nd ed, 2005); James Edelman and Elise Bant, Unjust Enrichment in Australia (2006); James Edelman, Gain‑Based Damages: Contract, Tort, Equity and Intellectual Property (2002). See also Andrew Burrows, The Law of Restitution (2nd ed, 2002) 524–7; Lord Goff and Gareth Jones, The Law of Restitution (6th ed, 2002) 765, 835–7.
[7] On the scope of good faith in this context, see Niru Battery Manufacturing Co v Milestone Trading Ltd [2003] EWCA Civ 1446; [2004] QB 985, 1003–4 (Clarke LJ); Abou‑Rahmah v Abacha [2007] 1 Lloyd’s Rep 115, 124–7 (Rix LJ); cf at 132–3 (Arden LJ), 134–5 (Pill LJ). See also Peter Birks, ‘Change of Position: The Two Central Questions’ (2004) 120 Law Quarterly Review 373, 375–6.
[8] See, eg, David Securities [1992] HCA 48; (1992) 175 CLR 353, 384–6 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ); Palmer v Blue Circle Southern Cement Ltd [1999] NSWSC 697; (1999) 48 NSWLR 318, 322–5 (Bell J); Gertsch v Atsas (1999) 10 BPR 18 431, 18 444 (Foster AJ); K & S Corporation Ltd v Sportingbet Australia [2003] SASC 96; (2003) 86 SASR 312, 348 (Besanko J). See also Edelman and Bant, above n 6, 323–35.
[9] See, eg, Scottish Equitable plc v Derby [2001] EWCA Civ 369; [2001] 3 All ER 818, 827 (Robert Walker LJ); National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211,
228–9 (Thomas J); Credit Suisse (Monaco) SA v Attar [2004] EWHC 374 (Comm) (Unreported, Gross J, 10 March 2004) [98]; Ross Grantham and Charles Rickett, ‘A Normative Account of Defences to Restitutionary Liability’ (2008) 67 Cambridge Law Journal 92, 118–24; Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 512–17.
[10] Birks, Unjust Enrichment, above n 6, 208.
[11] Specifically in regard to the tort of conversion and the equitable wrong of breach of fiduciary duty.
[12] See Pavey & Matthews [1987] HCA 5; (1987) 162 CLR 221; Lipkin Gorman [1991] 2 AC 548. The notion of a category of unjust enrichment is not, however, without its critics: see, eg, Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516, 543–4 (Gummow J).
[13] Pavey & Matthews [1987] HCA 5; (1987) 162 CLR 221, 256–7 (Deane J); Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635, 665 (Gummow, Hayne, Crennan and Kiefel JJ). See also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, chs 4–13; Edelman and Bant, above n 6,
chs 8–13; Birks, Unjust Enrichment, above n 6, ch 2.
[14] See Robert Goff and Gareth Jones, The Law of Restitution (1st ed, 1966) 14; Peter Birks, An Introduction to the Law of Restitution (1st revised ed, 1989) 20–1. Some cases adopting this approach are: Banque Financière de la Cité v Parc (Battersea) Ltd [1998] UKHL 7; [1999] AC 221, 227 (Lord Steyn), 238–9 (Lord Hutton), 234 (Lord Hoffmann); see also at 228 (Lord Griffiths), 237–8 (Lord Clyde); Portman Building Society v Hamlyn Taylor Neck (a firm) [1998] EWCA Civ 686; [1998] 4 All ER 202, 206 (Millett LJ). Cf Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635, 661–3 (Gummow, Hayne, Crennan and Kiefel JJ).
[15] See Goff and Jones, The Law of Restitution (1st ed, 1966), above n 14, 14–26; Birks, An Introduction to the Law of Restitution (1st revised ed, 1989), above n 14, 18.
[16] See Birks, Unjust Enrichment, above n 6, 21–8; Peter Millett, ‘Proprietary Restitution’ in Simone Degeling and James Edelman (eds), Equity in Commercial Law (2005) 309, 312; Edelman and Bant, above n 6, 5.
[17] Birks’s taxonomy consists of four broad categories of events — consent, wrongs, unjust enrichment and a fourth ‘other’ or ‘miscellaneous’ category: Peter Birks, ‘Misnomer’ in W R Cornish et al (eds), Restitution: Past, Present and Future — Essays in Honour of Gareth Jones (1998) 1; Peter Birks, ‘Unjust Enrichment and Wrongful Enrichment’ (2001) 79 Texas Law Review 1767, 1768–77; Birks, Unjust Enrichment, above n 6, 21–8. For a critique of Birks’s taxonomy, see Steve Hedley, ‘Rival Taxonomies within Obligations: Is There a Problem?’ in Simone Degeling and James Edelman (eds), Equity in Commercial Law (2005) 77.
[18] Birks, An Introduction to the Law of Restitution (1st revised ed, 1989), above n 14, 313; Peter Birks, ‘The Concept of a Civil Wrong’ in David G Owen (ed), Philosophical Foundations of Tort Law (1995) 31; Edelman, Gain‑Based Damages, above n 6, ch 2. See also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 457–8.
[19] For a discussion of other wrongs, see Edelman, Gain‑Based Damages, above n 6, 62, 209–11.
[20] See Livingstone v Rawyards Coal Co [1880] UKHL 3; (1880) 5 App Cas 25, 39 (Lord Blackburn);
A‑G (UK) v Blake [2000] UKHL 45; [2001] 1 AC 268, 278–9, 282 (Lord Nicholls); Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561, 613 (Lord Scott).
[21] See Birks, Unjust Enrichment, above n 6, 3; Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561, 585–6 (Lord Hope). It is true that restitution will often necessarily result from a corresponding loss to or subtraction from another party, but in Anglo‑Australian law this does not appear to be a strict requirement: see Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51, 74 (Mason CJ); Kleinwort Benson Ltd v Birmingham City Council [1997] QB 380, 400 (Morritt LJ). Compare this to the position in Canada, where corresponding loss seems essential: Regional Municipality of Peel v Canada [1992] 3 SCR 762, 788 (McLachlin J for La Forest, Sopinka, Gonthier, Cory, McLachlin and Iacobucci JJ); Air Canada v British Columbia [1989] 1 SCR 1161, 1202–3 (La Forest J for Lamer, La Forest and L’Heureux‑Dubé JJ).
[22] See Birks, Unjust Enrichment, above n 6, 281–2. See also Douglas Laycock, ‘The Scope and Significance of Restitution’ (1989) 67 Texas Law Review 1277, 1279–83.
[23] See Edelman and Bant, above n 6, 36, 45–8.
[24] This is the approach favoured by Edelman and Bant: see ibid 46–8; Edelman, Gain-Based Damages, above n 6, 65–80.
[25] That is, if A’s wealth is viewed as an abstract fund, there has been a net reduction of $400.
[26] See Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516, 529 (Gleeson CJ, Gaudron and Hayne JJ); Kleinwort Benson Ltd v Birmingham City Council [1997] QB 380, 400 (Morritt LJ). See also ABB Power Generation Ltd v Chapple [2001] WASCA 412; (2001) 25 WAR 158; Andrew Shelton & Co Pty Ltd v Alpha Healthcare Ltd [2002] VSC 248; (2002) 5 VR 577, 608 (Warren J).
[27] See, eg, Edelman and Bant, above n 6, 46–8.
[28] Edelman, Gain‑Based Damages, above n 6, 83.
[29] See generally ibid ch 3; Lionel D Smith, ‘The Province of the Law of Restitution’ (1992) 71 Canadian Bar Review 672, 695–6. Note, however, that Smith uses disgorgement as a single term to refer to all gain‑based damages for wrongdoing: at 696–9.
[30] One benefit of this approach is the clarity of structure it injects into this area of law.
[31] See, eg, Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 461–2, 466–8; Birks, Unjust Enrichment, above n 6, 12–13, 167–8, 281–3; Keith Mason and J W Carter, Restitution Law in Australia (1st ed, 1995) 606–7. See also Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561, 585–6 (Lord Hope).
[32] See, eg, Lac Minerals Ltd v International Corona Resources Ltd [1989] 2 SCR 574, 618 (McIntyre and Sopinka JJ), 669–71 (La Forest J); A‑G (UK) v Observer Ltd [1990] 1 AC 109, 286 (Lord Goff). Cf Green v Bestobell Industries Pty Ltd [No 2] [1984] WAR 32, 38 (Brinsden J).
[33] Chase Manhattan NA v Israel‑British Bank (London) Ltd [1981] Ch 105, 119–20 (Goulding J). Cf Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] UKHL 12; [1996] AC 669, 715 (Lord Browne‑Wilkinson). See also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 60–75.
[34] See Edelman and Bant, above n 6, 323.
[35] [1991] 2 AC 548. Lord Goff was a highly influential jurist in the area of restitution. He co‑authored the first definitive legal text on the law of restitution in 1966 with Gareth Jones: Goff and Jones, The Law of Restitution (1st ed, 1966), above n 14. The effect of its publication on legal scholarship has been profound. Edelman and Bant describe it, along with Peter Birks’s An Introduction to the Law of Restitution (1st ed, 1985), as ‘the bedrock upon which the modern law of unjust enrichment developed’: ibid 2. In his time on the House of Lords, Lord Goff was involved in a number of key cases that entrenched and developed the concept of unjust enrichment in English law: see, eg, Lipkin Gorman [1991] 2 AC 548; Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] UKHL 12; [1996] AC 669; Kleinwort Benson Ltd v Lincoln City Council [1998] UKHL 38; [1999] 2 AC 349. It is perhaps no surprise, then, that his views on the change of position defence have been regarded almost as ‘gospel’: see below n 71 and accompanying text.
[36] It will be recalled that this term is used to describe a defendant who can satisfy the elements of the change of position defence, with particular emphasis on the defendant’s bona fides.
[37] [1991] 2 AC 548, 580 (emphasis added).
[38] See, eg, Andrew Burrows, The Law of Restitution (1st ed, 1993) 431. Burrows does not repeat this view in the second edition of his work.
[39] See Paul Key, ‘Change of Position’ (1995) 58 Modern Law Review 505, 515; Elise Bant and Peter Creighton, ‘The Australian Change of Position Defence’ (2002) 30 University of Western Australia Law Review 208, 226.
[40] See Peter Birks, ‘Change of Position and Surviving Enrichment’ in William Swadling (ed), The Limits of Restitutionary Claims: A Comparative Analysis (1997) 36, 41; Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 522–3; Edelman and Bant, above n 6, 336–7; Ross Grantham and Charles Rickett, ‘Change of Position and Balancing the Equities’ (1999) 7 Restitution Law Review 158, 162–3. Contra Elise Bant and Peter Creighton, ‘Mistake of Fact and Change of Position: Sound Advice from the Privy Council? (Dextra Bank & Trust Co Ltd v Bank of Jamaica)’ (2002) 2 Oxford University Commonwealth Law Journal 271, 277–80.
[41] Dextra Bank & Trust Co Ltd v Bank of Jamaica [2001] UKPC 50; [2002] 1 All ER (Comm) 193, 205–7 (Lords Bingham and Goff for Lords Bingham, Goff, Hobhouse, Sir Martin Nourse and Sir Patrick Russell) (‘Dextra’); Port of Brisbane Corporation v ANZ Securities Ltd [No 2] [2002] QCA 158; [2003] 2 Qd R 661, 675 (McPherson JA).
[42] Barros Mattos Junior v MacDaniels Ltd [2004] EWHC 1188; [2005] 1 WLR 247, 253–4 (Laddie J). In reaching this conclusion, Laddie J drew support from Lord Goff’s ‘wrongdoer’ limitation in Lipkin Gorman: at 253.
[43] The concept of ‘illegality’ by its very nature is hard to define, though it is clear from both Tinsley v Milligan [1993] UKHL 3; [1994] 1 AC 340 and Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538 that it relates to claims which would run seriously counter to public policy.
[44] See Andrew Tettenborn, The Law of Restitution in England and Ireland (3rd ed, 2002) 278.
[45] Lipkin Gorman [1991] 2 AC 548, 580. Cf National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211. See also Edelman and Bant, above n 6, 329–30; Bant and Creighton, ‘The Australian Change of Position Defence’, above n 39, 217–19.
[46] See Jessica Palmer, ‘Chasing a Will‑o’‑the‑Wisp? Making Sense of Bad Faith and Wrongdoers in Change of Position’ [2005] Restitution Law Review 53, 76–80; Tettenborn, above n 44, 278.
[47] Tettenborn, above n 44, 278. A defendant with knowledge of their own defective title to a benefit may hold that benefit on constructive or resulting trust, and clearly no change of position defence would be available to them: see Westpac Banking Corporation v Ollis [2007] NSWSC 956 (Unreported, Einstein J, 31 August 2007) [34]–[40].
[48] Tettenborn, above n 44, 278.
[50] Ibid.
[51] Palmer herself explicitly recommends this approach: ibid 76–7.
[52] Restatement of the Law of Restitution § 142(2) (1937).
[53] Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 525; Graham Virgo, The Principles of the Law of Restitution (2nd ed, 2006) 705–6; Edelman, Gain‑Based Damages, above n 6, 96.
[54] See Miller v Aris (1800) 3 Esp 231; 170 ER 598; Townson v Wilson [1808] EngR 299; (1808) 1 Camp 396; 170 ER 997; Ex parte Edwards; Re Chapman [1884] UKLawRpKQB 166; (1884) 13 QBD 747. See also Mason and Carter, above n 31, 848–9.
[55] Lipkin Gorman [1991] 2 AC 548, 578.
[56] See, eg, Smith v Sleap [1844] EngR 210; (1844) 12 M & W 585; 152 ER 1332; Oates v Hudson [1851] EngR 361; (1851) 6 Ex 346; 155 ER 576; D Owen & Co v Cronk [1894] UKLawRpKQB 200; [1895] 1 QB 265.
[57] See Smith v Sleap [1844] EngR 210; (1844) 12 M & W 585, 588; [1844] EngR 210; 152 ER 1332, 1333 (Parke B); Sharland v Mildon [1846] EngR 750; (1846) 5 Hare 469, 474; [1846] EngR 750; 67 ER 997, 999 (Wigram V‑C); Ex parte Edwards; Re Chapman [1884] UKLawRpKQB 166; (1884) 13 QBD 747, 751–2 (Cotton LJ).
[58] See, eg, Ex parte Edwards; Re Chapman [1884] UKLawRpKQB 166; (1884) 13 QBD 747; Miller v Aris (1800) 3 Esp 231; 170 ER 598; Townson v Wilson [1808] EngR 299; (1808) 1 Camp 396; 170 ER 997; Snowdon v Davis [1808] EngR 295; (1808) 1 Taunt 359; 127 ER 872; Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; (1988) 164 CLR 662, 681–2 (Mason CJ, Wilson, Deane, Toohey and Gaudron JJ).
[59] [1894] UKLawRpKQB 200; [1895] 1 QB 265.
[60] Ibid 274 (Lopes LJ); see also at 273–4 (Lord Esher MR), 275 (Rigby LJ).
[61] [1988] HCA 17; (1988) 164 CLR 662, 682 (Mason CJ, Wilson, Deane, Toohey and Gaudron JJ) (emphasis added).
[62] Elise Bant, ‘Payment Over and Change of Position: Lessons from Agency Law’ [2007] Lloyd’s Maritime and Commercial Law Quarterly 225, 240–5.
[63] Ibid 242–4.
[64] Ibid 238–45.
[65] Ibid 240.
[66] Lipkin Gorman [1991] 2 AC 548, 580.
[67] Ibid.
[68] Ibid. See also Virgo, The Principles of the Law of Restitution, above n 53, 705.
[69] See, eg, Lipkin Gorman [1991] 2 AC 548, 558 (Lord Bridge), 568 (Lord Ackner), 580 (Lord Goff).
[70] Ibid 580.
[71] See, eg, Palmer, above n 46; Ross Grantham and Charles Rickett, Enrichment and Restitution in New Zealand (2000) 353–5; Tettenborn, above n 44, 278.
[72] Graham Virgo, ‘Change of Position: The Importance of Being Principled’ [2005] Restitution Law Review 34, 34. See also Edelman and Bant, above n 6, 319.
[73] See, eg, Birks, Unjust Enrichment, above n 6, 208–19; Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 512; Palmer, above n 46, 55–8; Grantham and Rickett, Enrichment and Restitution in New Zealand, above n 71, 334; Richard Nolan, ‘Change of Position’ in Peter Birks (ed), Laundering and Tracing (1995) 135, 136.
[74] In the example, supposing the defendant had received $20 000 and the holiday cost $15 000, the defendant is ultimately enriched only to the value of $5000; the remaining $15 000 is regarded as a disenrichment.
[75] Edelman and Bant, above n 6, 320–1. See also Grantham and Rickett, ‘A Normative Account of Defences to Restitutionary Liability’, above n 9, 120.
[76] It is noteworthy that at least a few of the supporters of disenrichment have been open to the possibility of non‑disenriching changes of position existing: see, eg, Birks, Unjust Enrichment, above n 6, 258–61; Nolan, above n 73, 136, 143, 172.
[77] See, eg, Andrew Burrows, ‘Quadrating Restitution and Unjust Enrichment: A Matter of Principle?’ [2000] Restitution Law Review 257; Andrew Tettenborn, ‘Misnomer — A Response to Professor Birks’ in W R Cornish et al (eds), Restitution: Past, Present and Future — Essays in Honour of Gareth Jones (1998) 31; Mason and Carter, above n 31, 56–7.
[78] See, eg, Birks, ‘Misnomer’, above n 17, 14; Edelman, Gain‑Based Damages, above n 6, 41; James J Edelman, ‘Unjust Enrichment, Restitution, and Wrongs’ (2001) 79 Texas Law Review 1869.
[79] Birks, Unjust Enrichment, above n 6, 209; Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 527; Goff and Jones, The Law of Restitution (6th ed, 2002), above n 6, 821.
[80] See, eg, Edelman and Bant, above n 6, 322.
[81] Birks, Unjust Enrichment, above n 6, 209. Birks does not seem to view security of receipts as the primary rationale of change of position, but rather a concern of the law which serves to bolster the case for recognising the defence. Goff and Jones also appear to view security of receipts in this way: see Goff and Jones, The Law of Restitution (6th ed, 2002), above n 6, 821.
[82] Edelman and Bant, above n 6, 322.
[83] Ibid. Burrows is clearly aware of this view of security of receipts, though he does not express his agreement or otherwise with it: see Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 527.
[84] Mistake, the most common claim in unjust enrichment, was typically actionable only if the mistake was one of fact and not simply a mistake of law: see, eg, Bilbie v Lumley [1802] EngR 245; (1802) 2 East 469; 102 ER 448. This restriction was abolished in Australia by David Securities [1992] HCA 48; (1992) 175 CLR 353, 385 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ).
[85] Lipkin Gorman [1991] 2 AC 548 established the defence of change of position, but it was not until Kleinwort Benson Ltd v Lincoln City Council [1998] UKHL 38; [1999] 2 AC 349 that liability in mistake was widened to include mistakes of law.
[86] Birks seems to support this view, since he describes the liberalisation of the cause of action in mistake as ‘[a] consequential benefit, now that the defence is securely in place’: Birks, Unjust Enrichment, above n 6, 209.
[87] Dextra [2001] UKPC 50; [2002] 1 All ER (Comm) 193, 204–5 (Lords Bingham and Goff for Lords Bingham, Goff, Hobhouse, Sir Martin Nourse and Sir Patrick Russell).
[88] Ibid 205.
[89] Ibid. Similar sentiments were echoed in Commerzbank AG v Price‑Jones [2003] EWCA Civ 1663 (Unreported, Mummery, Sedley LJJ and Munby J, 21 November 2003) [62]–[63] (Munby J).
[90] See Virgo, ‘Change of Position’, above n 72, 35.
[91] See David Securities [1992] HCA 48; (1992) 175 CLR 353, 385 (Mason CJ, Deane, Toohey, Gaudron and McHugh JJ); Niru Battery Manufacturing Co v Milestone Trading Ltd [2003] EWCA Civ 1446; [2004] QB 985, 999–1000 (Clarke LJ); Commerzbank AG v Price‑Jones [2003] EWCA Civ 1663 (Unreported, Mummery, Sedley LJJ and Munby J, 21 November 2003) [40] (Mummery LJ), [53] (Munby J); Dextra [2001] UKPC 50; [2002] 1 All ER (Comm) 193, 204–5 (Lords Bingham and Goff for Lords Bingham, Goff, Hobhouse, Sir Martin Nourse and Sir Patrick Russell); Gertsch v Atsas (1999) 10 BPR 18 431, 18 449 (Foster AJ).
[92] [1760] EngR 713; (1760) 2 Burr 1005, 1010; [1760] EngR 713; 97 ER 676, 679. See also Dominion Bank v Union Bank of Canada (1908) 40 SCR 366, 381–2 (Duff J).
[93] Lipkin Gorman [1991] 2 AC 548, 580.
[94] Dextra [2001] UKPC 50; [2002] 1 All ER (Comm) 193, 205 (Lords Bingham and Goff for Lords Bingham, Goff, Hobhouse, Sir Martin Nourse and Sir Patrick Russell) (emphasis added).
[95] See, eg, Grantham and Rickett, ‘A Normative Account of Defences to Restitutionary Liability’, above n 9, 121–2; Birks, Unjust Enrichment, above n 6, 260–1; Andrew Burrows ‘Clouding the Issues on Change of Position’ (2004) 63 Cambridge Law Journal 276, 278–9; Edelman and Bant, above n 6, 319; Nolan, above n 73, 173. See also Baylis v Bishop of London [1912] UKLawRpCh 126; [1913] 1 Ch 127, 140 (Hamilton LJ).
[96] See Scottish Equitable plc v Derby [2001] EWCA Civ 369; [2001] 3 All ER 818, 832 (Simon Brown LJ).
[97] Lipkin Gorman [1991] 2 AC 548, 578. See also Philip Collins Ltd v Davis [2000] 3 All ER 808, 827 (Jonathan Parker J); Nolan, above n 73, 173.
[98] The US Restatement of the Law of Restitution § 142(1) (1937) makes reference to inequitability as underpinning change of position in similar terms to Lord Goff in Lipkin Gorman. The Supreme Court of Canada, when it recognised the defence in 1975, made reference to the same: Rural Municipality of Storthoaks v Mobil Oil Canada Ltd [1976] 2 SCR 147, 162–3 (Martland J for Laskin CJ, Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ).
[99] See, eg, Edelman and Bant, above n 6, 323–34; Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 510–29.
[100] See Graham Virgo, ‘What Is the Law of Restitution About?’ in W R Cornish et al (eds), Restitution: Past, Present and Future — Essays in Honour of Gareth Jones (1998) 305, 321.
[101] Lipkin Gorman [1991] 2 AC 548, 579 (Lord Goff).
[102] Dextra [2001] UKPC 50; [2002] 1 All ER (Comm) 193, 204 (Lords Bingham and Goff for Lords Bingham, Goff, Hobhouse, Sir Martin Nourse and Sir Patrick Russell).
[103] Ibid 204–5.
[104] Ibid.
[105] Ibid.
[106] As Justice Gummow has written extra‑curially, ‘law without support in values is ineffective because it is static rather than dynamic’: see Justice W M C Gummow, ‘Equity: Too Successful?’ (2003) 77 Australian Law Journal 30, 43.
[107] See Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 616 (Deane J).
[108] See, eg, Burrows, ‘Clouding the Issues on Change of Position’, above n 95, 280.
[109] There is general academic concurrence with this sentiment: see, eg, Goff and Jones, The Law of Restitution (6th ed, 2002), above n 6, 765; Virgo, The Principles of the Law of Restitution, above n 53, 708; Tettenborn, above n 44, 278.
[110] The tort of conversion is discussed more fully in Part IV(B).
[111] See Goff and Jones, The Law of Restitution (6th ed, 2002), above n 6, 836. See also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 525.
[112] Charles Harpum criticises the potential for outcomes like this as irrational: Charles Harpum, ‘Knowing Receipt: The Need for a New Landmark — Some Reflections’ in W R Cornish et al (eds), Restitution: Past, Present and Future — Essays in Honour of Gareth Jones (1998) 247, 250.
[113] See Goff and Jones, The Law of Restitution (6th ed, 2002), above n 6, 836. See also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 525; Virgo, The Principles of the Law of Restitution, above n 53, 708; Nolan, above n 73, 153–4.
[114] The maxim often appears in its Latin form: commodum ex iniuria sua nemo habere debet.
[115] See, eg, A‑G (UK) v Observer Ltd [1990] 1 AC 109, 262 (Lord Keith).
[116] Grantham and Rickett, Enrichment and Restitution in New Zealand, above n 71, 354. See also Palmer, above n 46, 77.
[117] [1996] Ch 217. In this case, the plaintiff sought a constructive trust of surplus from the sale of a property which the defendant mortgaged to the plaintiff as a result of the defendant’s fraudulent misrepresentations. The Court of Appeal could find no basis on which the plaintiff could justify its claim for a constructive trust: at 229 (Peter Gibson LJ); see also at 229 (Simon Brown LJ), 229–30 (Glidewell LJ).
[118] Ibid 229 (Glidewell LJ).
[119] Ibid 227 (Peter Gibson LJ). See also Birks, An Introduction to the Law of Restitution (1st revised ed, 1989), above n 14, 24. This case has been criticised by some authors: see, eg, Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 476.
[120] The claim of adverse possession, which permits a trespasser who can prove over a decade’s continuous occupation of land (the precise period is set by statute) to obtain title to that land, would also appear to support the rejection of this maxim as a universal principle: see, eg, Buckinghamshire County Council v Moran [1990] Ch 623.
[121] It is clear that there are instances in which change of position has been invoked despite an indication that the defendant still retains the benefit of the enrichment in some form: see, eg, Gertsch v Atsas (1999) 10 BPR 18 431; RBC Dominion Securities Inc v Dawson (1994) 111 DLR (4th) 230 (‘Dawson’). Indeed, in Dawson there was clear acceptance that the defendant was ultimately benefited, despite a successful defence of change of position: at 239 (Cameron JA).
[122] A-G (UK) v Observer Ltd [1990] 1 AC 109, 286. Lord Nicholls echoed this sentiment in
A-G (UK) v Blake [2000] UKHL 45; [2001] 1 AC 268, 278.
[123] Namely, the protection of personal property and the need to ensure that fiduciaries act with undivided loyalty.
[124] See Edelman, Gain‑Based Damages, above n 6, 96.
[125] Ibid 81. See also Watson, Laidlaw & Co Ltd v Pott, Cassels & Williamson [No 2] [1914] UKHL 238; [1914] SC (HL) 18, 32 (Lord Shaw).
[126] Similarly, it has been noted that the maxim ‘nobody should profit from their own wrong’ cannot be regarded as a universal principle: see above nn 114–19.
[127] Lipkin Gorman [1991] 2 AC 548, 579.
[128] That is, both restitution and restitutionary damages reverse transfers of value: see Edelman, Gain-Based Damages, above n 6, 93.
[129] See ibid 83–6.
[130] See, eg, Banks v Ferrari [2000] NSWSC 874 (Unreported, Dowd J, 7 August 2000) [57]; Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204, 229 (Dixon J). See also Anthony M Dugdale and Michael A Jones (eds), Clerk & Lindsell on Torts (19th ed, 2006) 1008; W V H Rogers (ed), Winfield and Jolowicz on Tort (17th ed, 2006) 752–3.
[131] See, eg, Fouldes v Willoughby [1841] EngR 735; (1841) 8 M & W 540, 547; [1841] EngR 735; 151 ER 1153, 1156 (Lord Abinger CB).
[132] See M’Combie v Davies [1805] EngR 329; (1805) 7 East 5, 6; [1805] EngR 329; 103 ER 3, 4 (Lord Ellenborough CJ); Hollins v Fow-
ler [1875] UKLawRpHL 18; (1875) LR 7 HL 757, 766 (Blackburn J), 782 (Brett J); Lancashire and Yorkshire Railway Co v MacNicoll (1918) 88 LJ KB 601, 605 (Aikin J); Oakley v Lyster [1931] 1 KB 148, 153 (Scrutton LJ), 156 (Slesser LJ); Caxton Publishing Co Ltd v Sutherland Publishing Co [1939] AC 178, 201–2 (Lord Porter); Douglas Valley Finance Co Ltd v S Hughes (Hirers) Ltd [1969] 1 QB 738, 751–2 (McNair J).
[133] Grainger v Hill [1838] EngR 365; (1838) 4 Bing NC 212; 132 ER 769.
[134] Marfani & Co Ltd v Midland Bank Ltd [1968] 2 All ER 573, 577–8 (Diplock LJ).
[135] United Australia Ltd v Barclays Bank Ltd [1941] AC 1, 17–18 (Viscount Simon LC), 29 (Lord Atkin), 34 (Lord Romer). Cf Lamine v Dorrell [1790] EngR 1050; (1701) 2 Ld Raym 1216; 92 ER 303; Chesworth v Farrar [1967] 1 QB 407. The fiction that was rejected was the idea that a plaintiff suing for conversion could either claim compensation for the plaintiff’s loss of the goods or ‘waive the tort’ and claim the defendant’s gain or profit from the conversion. The assumption was that the defendant’s gain from the conversion could not be recovered in a tort action, but only through ‘waiving’ the tort and suing in assumpsit. The House of Lords recognised that the tort was never actually waived in this situation; instead, the plaintiff relied on the tort and sued for the resulting gain as an action in tort. This is a classic recognition of restitution for wrongs: see also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 462–3.
[136] Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1995] UKPC 54; [1996] AC 514, 523–4 (Lord Nicholls for Lords Keith, Lloyd, Nicholls, Steyn and Hardie Boys J); A‑G (UK) v Blake [2000] UKHL 45; [2001] 1 AC 268, 280 (Lord Nicholls). See also Kuwait Airways [2002] UKHL 19; [2002] 2 AC 883, 1094–5 (Lord Nicholls).
[137] See Edelman, Gain‑Based Damages, above n 6, 139–41.
[138] Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561, 585–6 (Lord Hope), 606 (Lord Nicholls); Kuwait Airways [2002] UKHL 19; [2002] 2 AC 883, 1094 (Lord Nicholls); A‑G (UK) v Blake [2000] UKHL 45; [2001] 1 AC 268, 278–9 (Lord Nicholls). See also Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246; Hillesden Securities Ltd v Ryjak Ltd [1983] 2 All ER 184; Kuwait Airways Corporation v Iraqi Airways Co [2004] EWHC 2603 (Comm) (Unreported, Cresswell J, 12 November 2004) [234].
[139] There is disagreement as to whether disgorgement is a separate remedy or whether restitutionary damages subsumes it by allowing a plaintiff to claim any profit as a transfer of value traced into the ultimate sale value of the goods: see Edelman, Gain‑Based Damages, above n 6, 140–1. This article adopts the disgorgement approach for structural convenience.
[140] In Kuwait Airways [2002] UKHL 19; [2002] 2 AC 883, 1090, 1094, Lord Nicholls confirmed that compensation for loss is the primary method of relief for conversion. Similar sentiments were expressed by the High Court of Australia in Butler v Egg and Egg Pulp Marketing Board [1966] HCA 38; (1966) 114 CLR 185, 191 (Taylor and Owen JJ), 192 (Menzies J). It must be acknowledged, however, that often the proceeds of conversion will be used to measure the plaintiff’s loss from the conversion. This is known as the ‘full value’ rule.
[141] That is, when the amount C initially paid for the car is subtracted ($1400 ‑ $600 = $800).
[142] It was accepted in Part II that disgorgement is at least partially restitutionary in operation.
[143] Marfani & Co Ltd v Midland Bank Ltd [1968] 2 All ER 573, 577–8 (Diplock LJ).
[144] Kuwait Airways [2002] UKHL 19; [2002] 2 AC 883, 1093 (Lord Nicholls).
[145] See J E Penner, The Idea of Property in Law (1997) 29, 139–40.
[146] See Fowler v Hollins (1872) LR 7 Ex 616, 639 (Cleasby B). See also Caxton Publishing Co Ltd v Sutherland Publishing Co [1939] AC 178, 202 (Lord Porter).
[147] D J Ibbetson, A Historical Introduction to the Law of Obligations (1999) 107–12.
[148] Ibid.
[149] See Hambly v Trott [1776] EngR 20; (1776) 1 Cowp 371, 374; [1776] EngR 20; 98 ER 1136, 1137 (Lord Mansfield CJ); Cooper v Chitty [1756] EngR 130; (1756) 1 Burr 20; 97 ER 166; Peter Birks, ‘Property and Unjust Enrichment: Categorical Truths’ [1997] New Zealand Law Review 623, 646–7; J H Baker, An Introduction to English Legal History (4th ed, 2002) 397–8; ibid 111–12.
[150] See Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344, 376 (Deane and Dawson JJ); Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516, 554 (Gummow J).
[151] The aim is often described as being to place the plaintiff in the position they would have been in but for the tort: see, eg, Livingstone v Rawyards Coal Co [1880] UKHL 3; (1880) 5 App Cas 25, 39 (Lord Blackburn); Commissioners for Executing the Office of High Lord Admiral of the United Kingdom v Owners of the Steamship Valeria [1922] 2 AC 242, 248 (Viscount Dunedin).
[152] The hardship being that which would occur if full restitution were required where some gain has been expended.
[153] As in the example involving L and K: see above n 138 and accompanying text. See also Virgo, The Principles of the Law of Restitution, above n 53, 470; Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246; Hillesden Securities Ltd v Ryjak Ltd [1983] 2 All ER 184; Kuwait Airways Corporation v Iraqi Airways Co [2004] EWHC 2603 (Comm) (Unreported, Cresswell J, 12 November 2004) [234]; Experience Hendrix LLC v PPX Enterprises Inc [2003] EWCA Civ 323 (Unreported, Gibson, Mance LLJ and Hooper J, 20 March 2003) [18] (Mance LJ).
[154] According to Lord Nicholls, it may be open to a court to award user damages in conjunction with compensatory relief if there is some loss suffered by the plaintiff in addition to any gain made by the defendant. A user damages award, however, is separate and focuses solely on gain: Kuwait Airways [2002] UKHL 19; [2002] 2 AC 883, 1094 (Lord Nicholls).
[155] This view would also appear to be supported by the dictum of Lord Nicholls in ibid 1098. See below Part IV(B)(4).
[156] In Lightly v Clouston [1808] EngR 36; (1808) 1 Taunt 112, 114; [1808] EngR 36; 127 ER 774, 775, Mansfield CJ accepted that a plaintiff may sue for the ‘produce’ of a sale in an action for conversion, although it has been termed ‘an action for money had and received’ rather than an action for disgorgement of profits. See also Oughton v Seppings [1830] EngR 134; (1830) 1 B & Ad 241; 109 ER 776; Parker v Norton [1796] EngR 2413; (1796) 6 TR 695, 700; 101 ER 779, 779–80 (Kenyon CJ); Club 7 Ltd v EPK Holdings Ltd (1993) 115 Nfld & PEIR 271, 314–16 (Puddester J).
[157] See Greenwood v Bennett [1973] QB 195, 202 (Lord Denning MR). See also Munro v Willmott [1949] 1 KB 295. It is possible for these cases to be reanalysed as not awarding disgorgement but instead restitutionary damages which are traced into the higher value of the chattel: see Edelman, Gain-Based Damages, above n 6, 140–1. Nothing would appear to turn on this classification as regards the availability of change of position.
[158] See Goff and Jones, The Law of Restitution (6th ed, 2002), above n 6, 835–7; Tettenborn, above n 44, 278. See also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 525–7.
[159] Dart Industries Inc v Decor Corporation Pty Ltd [1993] HCA 54; (1993) 179 CLR 101, 114–15 (Mason CJ, Deane, Dawson and Toohey JJ).
[160] This is also known as ‘money had and received’ in this situation. A similar instance of corresponding loss may arise in a disgorgement context: see above nn 156–9 and accompanying text.
[161] See Marfani & Co Ltd v Midland Bank Ltd [1968] 2 All ER 573, 577 (Diplock LJ).
[162] Edelman considers this a reason to deny any role for change of position in relation to conversion: Edelman, Gain‑Based Damages, above n 6, 96.
[163] Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51, 74 (Mason CJ). His Honour was speaking of restitution in the context of unjust enrichment, but the remedy of restitutionary damages in the law of wrongs appears to operate in exactly the same way.
[164] See, eg, Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516, 529 (Gleeson CJ, Gaudron and Hayne JJ); Kleinwort Benson Ltd v Birmingham City Council [1997] QB 380, 400 (Moritt LJ). In a restitution for wrongs context, similar sentiments have been echoed: see, eg, Dart Industries Inc v Decor Corporation Pty Ltd [1993] HCA 54; (1993) 179 CLR 101, 114 (Mason CJ, Deane, Dawson and Toohey JJ).
[165] This somewhat inelegant proposition may be thought to underlie a number of legal doctrines, for example the rule that a plaintiff must elect between two inconsistent and alternative remedies and cannot obtain both: see, eg, Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50; (1968) 122 CLR 25, 32 (Windeyer J). See also Personal Representatives of Tang Man Sit v Capacious Investments Ltd [1995] UKPC 54; [1996] AC 514, 521–2 (Lord Nicholls for Lords Keith, Lloyd, Nicholls, Steyn and Hardie Boys J).
[166] Kuwait Airways [2002] UKHL 19; [2002] 2 AC 883, 1098.
[167] Ibid 1093 (emphasis altered).
[168] This is possible due to the operation of concurrent liability, which provides that the same facts may give rise to both an action in unjust enrichment and an action in wrongdoing. For a general discussion of concurrent liability, see Henderson v Merrett Syndicates Ltd [1994] UKHL 5; [1995] 2 AC 145.
[169] Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 525.
[170] Kuwait Airways [2002] UKHL 19; [2002] 2 AC 883, 1093.
[171] See Palmer, above n 46, 78.
[172] See, eg, Keech v Sandford [1726] EWHC J76; (1726) Sel Cas T King 61; 25 ER 223.
[173] P D Finn, ‘The Fiduciary Principle’ in T G Youdan (ed), Equity, Fiduciaries and Trusts (1989) 1, 4.
[174] Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178, 198–9 (Deane J). See also ibid 27; R P Meagher, J D Heydon and M J Leeming (eds), Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (4th ed, 2002) 169–82.
[175] Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134; Boardman v Phipps [1966] UKHL 2; [1967] 2 AC 46; Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544.
[176] Bray v Ford [1895] UKLawRpAC 54; [1896] AC 44, 51 (Lord Herschell); Standard Investments Ltd v Canadian Imperial Bank of Commerce (1983) 5 DLR (4th) 452, 481 (Griffiths J); Furs Ltd v Tomkies [1936] HCA 3; (1936) 54 CLR 583, 592–3 (Rich, Dixon and Evatt JJ).
[177] Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134, 137 (Viscount Sankey), 144 (Lord Russell).
[178] Ibid. See also Hospital Products Pty Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 107 (Mason J); Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 560 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).
[179] [1967] 2 AC 134, 158; see also at 137 (Viscount Sankey), 143 (Lord Russell). This decision was approved in Boardman v Phipps [1966] UKHL 2; [1967] 2 AC 46.
[180] Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134, 153 (Lord Macmillan); Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178, 198 (Deane J).
[181] [1995] UKPC 54; [1996] AC 514.
[182] Edelman reached this view because the evidence in the case disclosed that the plaintiff would not have let the properties himself, hence the award could not reasonably be analysed as compensatory: Edelman, Gain‑Based Damages, above n 6, 208.
[183] See Nolan, above n 73, 153.
[184] Birtchnell v Equity Trustees, Executor and Agency Co Ltd [1929] HCA 24; (1929) 42 CLR 384, 409 (Isaacs CJ, Gavan Duffy, Rich, Starke and Dixon JJ); Boardman v Phipps [1966] UKHL 2; [1967] 2 AC 46; Canadian Aero Service Ltd v O’Malley [1974] SCR 592, 617 (Martland, Judson, Ritchie, Spence and Laskin JJ).
[185] Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134, 144–5 (Lord Russell), 159 (Lord Porter).
[186] Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8; (1975) 132 CLR 373, 394 (Gibbs J).
[187] See, eg, Regal (Hastings) Ltd v Gulliver [1967] 2 AC 134.
[188] [1966] UKHL 2; [1967] 2 AC 46.
[189] See New Zealand Netherlands Society ‘Oranje’ Inc v Kuys [1973] 2 All ER 1222, 1227 (Lord Wilberforce for Lords Wilberforce, Hodson, Pearson, Diplock and Simon). See also Boardman v Phipps [1966] UKHL 2; [1967] 2 AC 46, 112 (Lord Hodson), 117 (Lord Guest), 128 (Lord Upjohn).
[190] See Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178, 198–9 (Deane J).
[191] As Cardozo CJ said in Meinhard v Salmon 164 NE 545, 546 (NY, 1928), the rule is designed to ensure fiduciaries conduct themselves ‘at a level higher than that trodden by the crowd’.
[192] Chan v Zacharia [1984] HCA 36; (1984) 154 CLR 178, 198–9 (Deane J); Finn, above n 173, 27.
[193] Virgo, The Principles of the Law of Restitution, above n 53, 705.
[194] In Dart Industries Inc v Decor Corporation Pty Ltd [1993] HCA 54; (1993) 179 CLR 101, 114, Mason CJ, Deane, Dawson and Toohey JJ stressed that the ‘purpose of an account of profits is not to punish the defendant but to prevent its unjust enrichment.’
[195] Aquaculture Corporation v New Zealand Green Mussel Co Ltd [1990] NZCA 360; [1990] 3 NZLR 299, 302 (Somers J). See also Hospital Products Pty Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41, 109 (Mason J); Vyse v Foster (1872) LR 8 Ch App 309, 333 (James LJ). For a masterly discussion on the non‑punitive nature of equity, see the judgment of Heydon JA in Harris v Digital Pulse Pty Ltd [2003] NSWCA 10; (2003) 56 NSWLR 298, 341–424.
[196] See, eg, Birks, ‘Unjust Enrichment and Wrongful Enrichment’, above n 17, 1786–8.
[197] Birks, Unjust Enrichment, above n 6, 213.
[198] See, eg, Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 559 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).
[199] See Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218, 1278–9 (Lord Blackburn); Spence v Crawford [1939] 3 All ER 271, 288 (Lord Wright).
[200] See, eg, Cheese v Thomas [1994] 1 All ER 35, 41 (Nicholls V‑C). See also Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102, 114–16 (Deane, Dawson, Toohey, Gaudron and McHugh JJ); Gummow, above n 106, 32.
[201] Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 559 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).
[202] [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244, 251.
[203] [1984] HCA 36; (1984) 154 CLR 178, 204.
[204] [1995] HCA 18; (1995) 182 CLR 544, 561 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ). This use of ‘unjust enrichment’ would appear to be in a non‑technical sense: see James Edelman, ‘Money Had and Received: Modern Pleading of an Old Count’ [2000] Restitution Law Review 547,
562–3.
[205] See, eg, Palmer, above n 46, 77.
[206] See Brown v Litton [1711] EngR 8; (1711) 1 P Wms 140, 142; [1711] EngR 8; 24 ER 329, 329 (Lord Harcourt); Lord Provost v Lord Advocate; Ex parte M’Laren (1879) 4 App Cas 823, 838–9 (Lord Hatherley); O’Sullivan v Management Agency and Music Ltd [1985] QB 428, 467–9 (Fox LJ).
[207] [2003] NSWCA 10; (2003) 56 NSWLR 298, 384. Heydon JA adopted this approach in concluding that a refusal in any given situation to award an allowance was not ‘punitive’ but a matter of the defendant failing to discharge this onus. In doing so, he approved (at 383–4) a comment by the High Court of Australia in Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 562 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).
[208] See Nolan, above n 73, 154; Phillip Hellwege, ‘The Scope of the Application of Change of Position in the Law of Unjust Enrichment: A Comparative Study’ [1999] Restitution Law Review 92, 99.
[209] Bant and Creighton, ‘The Australian Change of Position Defence’, above n 39, 229.
[210] Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344, 348–9 (Mason CJ); see also at 367 (Brennan J), 383 (Toohey J), 387 (Gaudron J). See also Spence v Crawford [1939] 3 All ER 271,
288–9 (Lord Wright); Adam v Newbigging [1888] UKLawRpAC 31; (1888) 13 App Cas 308; Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 539; Edelman and Bant, above n 6, 348–9.
[211] That is, the focus of the inquiry is on the plaintiff, not the defendant.
[212] See Sempra Metals Ltd v Inland Revenue Commissioners [2007] UKHL 34; [2008] 1 AC 561, 590–1 (Lord Hope); Kleinwort Benson Ltd v Lincoln City Council [1998] UKHL 38; [1999] 2 AC 349, 385 (Lord Goff); Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 540–1.
[213] [2003] NSWCA 10; (2003) 56 NSWLR 298, 384. See also Meagher, Heydon and Leeming, above n 174, 206.
[214] Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 562 (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ).
[215] See above n 182 and accompanying text.
[216] Mesne profits in trespass for the use and occupation of land are widely accepted as restitutionary: see Gondal v Dillon Newsagents Ltd [1998] EWCA Civ 1324 (Unreported, Simon Brown, Pill LJJ and Sir John Vinelott, 29 July 1998), reported in [2001] Restitution Law Review 221, 228 (Simon Brown LJ); Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432; Ministry of Defence v Ashman [1993] 2 EGLR 102; Ministry of Defence v Thompson [1993] 2 EGLR 158; Swordheath Properties Ltd v Tabet [1979] 1 All ER 240; Penarth Dock Engineering Co Ltd v Pounds [1963] 1 Lloyd’s Rep 359, 361–2 (Lord Denning MR).
[217] Edelman, Gain‑Based Damages, above n 6, 81.
[218] As we are in the province of equity, this is a universal concern.
[219] As Edelman has said in relation to mesne profits for trespass to land, ‘[v]alue, in the form of the use of the landlord’s premises, has been transferred to the trespassing tenant’: Edelman, Gain‑Based Damages, above n 6, 67.
[220] Ibid.
[221] The need for the courts to adopt a broad‑brush approach to this type of inquiry and to be satisfied with reasonable approximations was acknowledged by Jonathan Parker J in Philip Collins Ltd v Davis [2000] 3 All ER 808, 827 and approved by Robert Walker LJ in Scottish
Equitable plc v Derby [2001] EWCA Civ 369; [2001] 3 All ER 818, 827–8.
[222] See Canadian Aero Service Ltd v O’Malley [1974] SCR 592, 609–10 (Martland, Judson, Ritchie, Spence and Laskin JJ).
[223] Birks, Unjust Enrichment, above n 6, 208. Note that Birks himself used the term ‘disenrichment’ rather than ‘change of position’, as he considered that change of position was better interpreted as an ‘enrichment‑related’ defence with little other application. This statement, therefore, is equally valid in relation to ‘change of position’.
[224] For fuller discussion of Birks’s taxonomy of private law, see above Part II.
[225] Farah Constructions Pty Ltd v Say‑Dee Pty Ltd (2007) 230 CLR 89, 155–6 (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).
[226] The High Court appeared to base much of their criticism on the fact that the first limb in Barnes v Addy [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244, of which the New South Wales Court of Appeal had adopted an ‘unjust enrichment’ analysis, was not shown to be ‘unjust’ so as to warrant its recasting: see ibid 158–9 (Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ).
[227] Notions of remoteness of damage and mitigation address similar concerns in relation to compensation, that is, to what extent the plaintiff’s right to be compensated for losses should be restricted: see Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145; Koufos v C Czarnikow Ltd [1969] 1 AC 350, 393 (Lord Morris); Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64, 91 (Mason CJ and Dawson J).
[228] H L A Hart, The Concept of Law (2nd ed, 1994) 159. See also Burrows, The Law of Restitution (2nd ed, 2002), above n 6, 1–2; Edelman and Bant, above n 6, 1.