Restitution Summary14/11/18 at 8:12
1.Paradigm Case of UE
There are two organising bases of civil liability in these cases: Tort and UE.
Unjust enrichment
- What’s unjust is the non-consensual transfer of wealth.
- Traditional legal doctrines are organised around remedies, which doesn’t make much sense.
- Makes more sense to organise doctrines around sources. K, UE or T.
- Don’t talk about remedies at all at civil law but rather flows out of what gives rise to the claim.
1.1.Basic Measures of Recovery
1.1.1.Basic Rule: Capital Value
Coversion
- Given a tort of conversion the is entitled to get the capital value at the date of conversion of the chattel back and any consequential damages.
- The has no right to get the chattel itself back, and this may be retained and returned as the wishes.
- The lack of right to get the chattel back means that the remedy is based traditionally in personalty.
- Historically used “writ of trover on the case” where the wrong was the conversion.
- A bona fide purchaser or value can commit tort of conversion (e.g. auctioneer) even though the conversion was innocent.
Detinue
- Every case of conversion is also a case of detinue.
- Traditionally this was a precipae writ, either sur Bailment (promise to return) or sur Trover (where not having the thing in question is a defence).
- Basically tell to give the chattel back, if he doesn’t then conversion.
Replevin
- Remedy to obtain immediate possession basically to safeguard the chattels pending action.
- “Writ of replevin”, interim recourse.
1.1.1.1.Steiman v. Steiman
Facts
takes jewellery which belongs to (Husband and Wife).
Issues
How are the damages in conversion measured versus those of detinue?
Holding
See below.
Ratio
Hall, JA. “A person who finds his goods taken may continue to regard the goods as his own and sue in detinue for their return but if he elects to claim damages for conversion his damages must be based on the supposition that he has replaced the missing goods at market prices.”
“…where there is a wrongful taking the victim may have the alternative of claiming in detinue, where the unsuccessful defendant must replace the goods or pay the value at the time of trial.”
“…in simple cases of conversion there is no right to be awarded as consequential damages the difference between the market value at the time when it would have been reasonable to replace the converted goods and either their value at the time of trial or their highest value at some intermediate point.”
He goes on to quote Lord Goddard in Sachs v. Miklos who found “…damages should be calculated with reference to the price of the shares when he was notified of the conversion. There is no doubt that he could at the time have purchased other shares in their place and have claimed from the appellant the cost of such replacement purchase.”
Stevens, Prof. Every case of detinue is also a case of conversion. The value of the jewellery changed over time. can sue for the tort of conversion at the date of trial or theft.
In a rising market, sue in detinue, in a falling market sue in conversion. The Court says basically is entitled to value at conversion (and a reasonable time) plus interest. However, this case involves an heirloom and in this case there is a good argument for specific return.
Recourse in Detinue or Conversion
- A may continue to regard the goods as his own and sue in detinue for their return, or
- he may elect to claim damages for conversion but his damages must be based on the supposition that he has replaced the missing goods at market prices.
1.1.1.2.Dominion Securities
Facts
, a stockbroker, sues for payment due on a block of shares he purchased for the .
3 days before settlement sells the shares (at their market value which was below the cost price), which he was not authorised to do, and transfers the proceeds to the .
then sues for the outstanding balance.
counter claims on the basis of conversion.
Issues
What is the correct conversion date?
Holding
See below.
Ratio
O’Sullivan, JA. “…the date upon which to assess damages in conversion was that date, subsequent to the conversion, when its victim became aware of his loss, and might reasonably be expected to procure replacements. It [is] not appropriate to select some subsequent date, prior to trial, when the value of comparable items contained its highest level.”
Date of Conversion
- Date subsequent to the conversion when the became aware of his loss and might reasonably be expected to procure replacements
1.1.1.3.Lister v. Dayton Tire
Facts
, franchisor, seizes and disposes of the assets of a , franchisee, on the basis of a debenture.
The seizure is unlawful given that the was not given adequate time to repay the loan and that certain items seized were not covered by the debenture.
Issues
Is the entitled to the cost price or selling price of the converted goods?
Holding
Cost price.
Ratio
Morden, JA. “The basic principle is that the plaintiff is to be compensated for its loss resulting from the conversion. A result that furnishes the plaintiff with the total cost to it of the inventory seized, in the particular circumstances of this case, comes close to accomplishing this result. I think that it is open to the plaintiff to say that regardless of the difficulties it may have had selling the inventory it is at least entitled to the cost of replacing what was taken.” He goes on to find, however, that he was unsure of what the normal selling price would be and that the would be better off with this (the business was running at a loss).
The had relied on Strand Electric. He finds that in this case it should not be applied as the had not had any benefit from the property converted and therefore the should not be compensated for more than his proven loss (which Stand Electric tends to do by forcing the to pay the rental price for the goods in question).
Stevens, Prof. There are two choices as to the value, retail or cost. is entitled to the loss calculated from ‘s point of view. This is calculated at the date of default. If other losses flowing from the fault can be shown the consequential losses can also be recovered. also has an obligation to mitigate.
In respect to UE, if the loss > UE then only the UE can be recovered. If loss < UE then only the loss can be recovered. To get more than compensation one needs a reason. In detinue you don’t have to subjectively evaluate the ‘s loss as the chattel can be given back.
- The basic principle is that the plaintiff is to be compensated for its loss resulting from the conversion.
1.1.2.Recovery of Use Value
Tort Rule:
- is entitled to loss caused by ‘s Negligence from ‘s point of view at time of tort.
Unjust Enrichment Rule:
- shows a non consensual receipt and holding of value on behalf of the , taken from the ’s point of view.
In respect to land there are two possibilities:
1.Assumpsit, use & occupation rent
2.Tort/Trespass, mesne profits or way leave rent.
Phillips v. Homfray
Can the proceed with the action in trespass even though has died (estate cannot be made to pay for trespass)? Bowen, LJ says you cannot recover for saved expense. The doctrine says that something of value has to be pointed to in the estate before the action in trespass will be allowed (and can have the property in question, e.g. takes timber from and timber is still available, can demand it returned). There is no legal or equitable property, therefore the action has to be based in K or Q-K.
When can the tort be waived and the sued in assumpsit? Bowen, LJ says:
- When it is capable of being independent from the tort (in this case not so as was a thief).
- Can’t imply a K in law if one cannot be implied in fact. As was a thief, this is the case.
Morris v. Tarrant
- Lane, J. says he cannot sue in QK as was a thief (remember, the implied K must also be capable of being a K in fact to be one in law) but he can be sued in tort for the mesne profits.
Recovery for Use Value: Conclusion
Somebody steals a rental bicycle for 2 hours, must he pay?
- Is there a loss? Yes (Denning says no), the rental value.
- Is there an enrichment in the s patrimony (can the saved expense be identified)?
- Can always sue in tort for the use value.
- Should rental value be reduced by that probability that it could be rented? (Strand Electric says no).
Bankruptcy Test
- The way to test this is to ask if the would have priority in a bankruptcy (see Phillips v. Homfray, p482). Basically what you do is pretend the has gone bankrupt and then ask if the would still have a right to something from the trustee. Stevens calls the bankruptcy test a “critical litmus test” to determine where a certain fact pattern falls.
Summary
- The Tort argument is based on fault causing loss and
- the UE argument on that’s mine, give it back.
- UE=non-consenual receipt and detention.
1.1.2.1.General
1.1.2.1.1.Strand Electric v. Bisford Entertainment
Facts
lends equipment to 3rd and eventually begins to rent it to them.
takes over premises of 3rd along with the equipment and refuses to pay rent or return it.
Issues
Are the s entitled to damages for the equipment?
Holding
Yes.
Ratio
Denning, LJ. Draws a parallel to land detention cases where the has to pay a reasonable rent regardless of the fact that the could not have rented it or used it himself. “If the wrong doer has made use of goods for his own purposes, then he must pay a reasonable hire for them, even though the owner has in fact suffered no loss.”
“The damages for detention recoverable against a carrier or warehouseman have never been measured by a hiring charge. They are measured by the loss actually sustained by the plaintiff… The claim for a hiring charge is therefore not based on the loss to the plaintiff, but on the fact that the defendant has used the goods for his own purposes. It is an action against him because he has had the benefit of the goods. It resembles, therefore, an action for restitution rather than an action of tort.”
Swan, Prof. To use it lawfully, s would have had to have rented the equipment from the . argued that had the equipment in inventory and could not have rented it out. The court says no, he who uses pays (the court basically constructs a K for to pay so much per month & looks at what the parties would have done had they negotiated a K).
Stevens, Prof. Somerville says its an action in detinue and negligence cases do not apply. (which stops the damages from being discounted). Denning says that although loss is usually a limit it isn’t always so.
- If the wrong doer has made use of goods for his own purposes, then he must pay a reasonable hire for them, even though the owner has in fact suffered no loss.
1.1.2.1.2.Owel v. Nye
Facts
sells his half interest in an egg packing plant to but reserves ownership in an egg washing machine.
The machine is stored close to the plant and one day the decides that, given the lack of employees, it will be put into use.
The does not know about this and only finds it out 3 years later when he is visiting the plant and hears the sound of it operating.
Issues
Can the waive the tort of trespass and pursue the value of the benefit the gained by using the machine?
Holding
Yes.
Ratio
Mallery, J. “It is uniformly held that in cases where the defendant tort feasor has benefited by his wrong, the plaintiff may elect to “waive the tort” and bring an action in assumpsit for restitution. Such an action arises out of a duty imposed by law devolving upon the defendant to repay an unjust and unmerited enrichment.”
“It is clear that the saving in labour cost which appellant derived from use of respondent’s machine constituted a benefit.”
“The very essence of the nature of property is the right to its exclusive use. Without it, no beneficial right remains. However plausible, the [] cannot be heard to say that his wrongful invasion of the []’s property right to exclusive use is not a loss compensable in law. To hold otherwise would be subversive of all property rights since his use was admittedly wrongful and without claim of right. The theory of unjust enrichment is applicable in such a case.”
“[] had an election. He chose rather to waive his right of action in tort and to sue in assumpsit on implied contract. Having so elected, he is entitled to the measure of restoration which accompanies the remedy.”
He goes on to award the compensation equal to the benefit enjoyed by the .
Stevens, Prof. Reasoning in this case is more punitive.
Waiver of Tort
- Where the tort feasor has benefited by his wrong, the may elect to waive the tort and bring an action in assumpsit for restitution.
- Such an action arises out of a duty imposed by law devolving upon the to repay an unjust and unmerited enrichment.
- The cannot say that his wrongful invasion of the ‘s property right to exclusive use is not a loss compensable in law.
1.1.2.2.In Respect to Land
1.1.2.2.1.Phillips v. Homfray
Facts
mines a coal seam and use roads which cross ‘s property.
sues and judge orders an accounting.
dies.
Issues
Given that it is an action for trespass, does the action continue after the s death.
Holding
Yes, as the estate was increased in value through the trespass.
Ratio
Bowen, LJ. “That it is in form a claim in the nature of a claim for trespass, the damages for which were to be measured by the amount to wayleave which the Defendants would have had to pay for permission to use the Plaintiffs’ ways and passages, cannot be disputed.”
“The only cases in which, apart from questions of breach of contract, express or implied, a remedy for a wrongful act can be pursued against the estate of a deceased person who has done the act, appear to us to be those in which property, or the proceeds or value of property, belonging to another, have been appropriated by the deceased person and added to his own estate or moneys. In such cases, whatever the original form of action, it is in substance brought to recover property, or its proceeds or value, and by amendment could be made such in form as well as in substance. The property or the proceeds or value which, in the lifetime of the wrongdoer, could have been recovered from him, can be traced after his death to his assets, and recaptured by the rightful owner there.”
Swan, Prof. At the time there was a CL rule that said claims on tort abated at the ‘s death. However, if the tort leads to the state being increased in value then it did not abate. The unjust enrichment principle trumps the abatement principle. There is a twist in that the court says it does not apply to a saving.
“But it is not every wrongful act by which a wrongdoer indirectly benefits that falls under this head, if the benefit does not consist in the acquisition of property, or its proceeds or value.”
Stevens, Prof. Modern lawyers prefer the dissenting judgement.
- A remedy for a wrongful act can be pursued against the estate of a deceased person who has done the act in those cases in which property, or the proceeds or value of property, belonging to another, have been appropriated by the deceased person and added to his own estate or moneys.
- In such cases, whatever the original form of action, it is in substance brought to recover property, or its proceeds or value, and by amendment could be made such in form as well as in substance.
1.1.2.2.2.Morris v. Tarrant
Facts
and live together with their 3 children in a house originally owned by the (and which is now the matrimonial home).
leaves for another man taking along the youngest child.
Soon after requests that give up possession of the house to her.
refuses but later, after their divorce, he offers to purchase the house which the agrees to but no agreement is reached.
wishes to auction the house and wants to sign an undertaking to the effect that he will leave if he does not purchase the house at the auction which does not agree to.
formally demands possession of the house and eventually leaves.
Issues
Is entitled to use and occupation rent from ?
Holding
No, rather mesne profits.
Ratio
Lane, J. “To establish that the occupier of land is a trespasser it must be shown that he has no right, legal, equitable or personal, to be there. As a spouse whom it is sought to eject from the property of the other may apply to the court for what amounts to leave to remain therein … unless and until a court has determined the matter against him, he is not so devoid of a right to remain that he should be treated as a trespasser.”
However, this right ended at the time the divorce and therefore the was entitled to mesne profits after this date.
“…an action for use and occupation will not lie unless there was at least an intention to create a relationship of landlord and tenant.” He goes on to find that there was no such intention and therefore this fails.