25
The Surfing Ninjas
In association with
Arnold – Guest Productions
Present
Restitution – Spring 2005
Prof. “Mad-dog” Maddaugh
Table of Contents:
0.0 Index 01
Restitution at Common Law
1.0 Introduction 07
1.1 Historical Background 07
Restatement of the Law of Restitution: Underlying Principles 07
English History of Restitution 07
Slade’s Case 08
Common Counts 08
Moses v. Macferlan 08
Sinclair v. Brougham 08
Recent English Law on Restitution 08
Canadian History of Restitution 09
Deglman v. Guaranty Trust Co. of Canada 09
Petkus v. Becker 09
2.0 General / Tripartite Principle 09
Traditional v. General Principle Approach 09
Peel (Regional Municipality) v. Ontario 10
Unjust Enrichment, Benefits & Subjective Devaluation 10
Planche v. Colburn 10
William Lacey Ltd. v. Davis 11
Corresponding Deprivation 11
Absence of Juristic Reason 11
Gidney v. Shank 11
Mack v. Canada (Attorney General) 11
Garland v. Consumers’ Gas Co. 11
3.0 Mistake of Fact 12
Royal Bank v. The King 12
Royal Bank v. The King 4 Essentials Analysis 12
Kelly v. Solari 12
Chambers v. Miller 13
Jones v. Waring & Gillow Ltd. 13
Larner v. London County Council 13
Hood of Avalon (Lady) v. Mackinnon 13
Patterson Motors v. Reily 14
Krebs v. World Finance Co. Ltd. 14
Change of Position 14
Storthoaks (Rural Municipality) v. Mobil Oil Canada Ltd. 14
RBC Dominion Securities Inc. v. Dawson 14
Garland v. Consumers’ Gas Co. 15
Improvements Made to Another’s Land 15
Montroya v. Ontario Asphalt 15
Nicholson v. St. Denis 15
Greenwood v. Bennett 16
Olchowy v. McKay 16
Central Guarantee Trust Co. v. Dixdale Mortgage Investment Corp. 16
4.0 Mistake of Law 16
Origins to Mistake at Law Bar 17
Bilbie v. Lumley 17
Eadie v. Township of Brantford 17
Kelly v. Solari 17
Township of Nepean v. Ontario Hydro 17
Exceptions to the Traditional Rule 17
George (Porky) Jacobs Enterprises Ltd. v. City of Regina 18
Mistakes as to Private Rights 18
Cooper v. Phipps 18
Payment to Public Authorities Under Duress 18
Eadie v. Township of Brantford 18
Payments Under Ultra Vires Legislation 18
Air Canada v. British Columbia 18
Canadian Pacific Airways v. British Columbia 19
5.0 The Nature of the Operative Mistake 19
Ignorance of the Law 19
David Securities Property Ltd. v. Commonwealth Bank of Australia 19
Failure to Predict Overruling of Doctrine 19
Kleinwort Benson Ltd. v. Lincoln City Council 19
Statute that Retroactively Repeals a Tax that was Payable 20
Commissioner of State Revenue v. Royal Insurance Australia Ltd. 20
Limitations on the Right to Recover 20
6.0 Public Authorities 20
Colore Officii 20
Compulsion 20
Air Canada v. British Columbia 20
Woolwich Equitable Building Society v. Inland Revenue Commissioners 21
Re Eurig Estate 21
Passing On Defence 21
Air Canada v. British Columbia 21
Canadian Pacific Airlines v. British Columbia 21
Allied Air Conditioning v. British Columbia 22
7.0 Ineffective Transactions 22
Lack of Capacity (Mental) 22
Lack of Capacity (Minors) 22
Ultra Vires Contracts 22
Hammersmith 22
Westdeutsche Landesbank Girozentrale v. Islington L.C.B. 22
Illegality 23
Holman v. Johnson 23
St. John Shipping Corp. v. Joseph Rank Ltd. 23
Kiriri Cotton Co. Ltd. v. Dewani 23
Kingshott v. Brunskill 24
Still v. Minister of National Revenue 24
Illegality Exceptions 24
Want of Authority 24
Hazelwood v. West Coast Securities Ltd. 25
Mistake in Assumption 25
Smith v. Hughes 25
Bell v. Lever Bros. 25
Solle v. Butcher 26
Great Peace Shipping Ltd. v. Tsavliris Salvage (International) Ltd. 26
Mistake of Terms 26
Mistake of Terms (Lack of Privity) 27
Bolton v. Jones 27
Mistake of Terms (Non Est Factum) 27
Marvco Color v. Harris 27
Mistake of Terms (Mistake of Identity) 27
Ingram v. Little 27
Lewis v. Avery 28
Mistake of Terms (Ambiguity) 28
Raffles v. Wichelhaus 28
Hobbs v. Esquimalt & Nanaimo Railway 28
Frustration (Discharge for Breach) 28
Fibrosa Spolka Akcyjna v. Fairbain Lawson Combe Barbour Ltd. 29
Frustration (Recovery of Other Benefits) 29
Parsons Bros. Ltd. v. Shea 29
Frustration (British Columbia Frustrated Contracts Act) 29
8.0 Criminal Acts 29
Restitutionary Approach 29
Attorney General v. Guardian Newspapers Ltd. 29
Murder & Denial of Benefits 30
Re Johnson 30
Murder & Denial of Benefits (Life Insurance) 30
Demeter 30
Brissette Estate v. Westbury Life Insurance Co. 30
Irwin Estate v. Cumis Life Insurance Co. 30
Oldfield v. Transamerica Life Insurance Co. of Canada 30
Murder & Denial of Benefits (Joint Tenancy) 31
Schobelt v. Barber 31
Principle of Intent 31
Leggatte v. Smith 31
OMERS v. Young 31
Gray v. Barr 31
Canadian Indemnity Co. v. Walken Machinery & Equipment Ltd. 32
Co-operative Fire & Casualty v. Saindon 32
Mutual of Omaha Insurance Co. v. Stats 32
Straight Profit from Crime 32
Rosenfeldt v. Olson 32
Attorney General v. Blake 33
Wrotham Park Estate Co. Ltd v. Parkside Homes Ltd. 33
Surrey County Council v. Bredero Homes 33
Arbutus Park Estates Ltd. v. Fuller 33
9.0 Waiver of Tort 34
Lamine v. Dorell 34
United Australia Ltd. v. Barclays Bank Ltd. 34
Interference with Contractual Relations 34
Federal Sugar Refining v. United States Sugar Equalization Board 34
Trespass to Property 34
Phillips v. Homfray 35
Daniel v. O’Leary 35
Strand Electric & Engineering Co. Ltd. v. Brisford Entertainments Ltd. 35
Restitution v. Punitive Damages 35
Olwell v. Nye & Nisson Co. 35
Edwards v. Lee’s Administration 36
10.0 Compulsion 36
Duress 36
Duress (Threat of Violence) 36
Duress of Goods 36
Maskell v. Horner 37
Skeate v. Beale 37
Abuse of Process 37
Stoltz v. Fuller 37
Practical Compulsion 37
Knutson v. Bourkes Syndicate 37
Peter Cuat v. Ilkens Construction 37
Morton Construction Ltd. v. Hamilton 38
Municipal Spraying & Contracting Ltd. v. Newfoundland 38
Colore Officii 38
George (Porky) Jacobs Enterprises Ltd. v. City of Regina 38
Eadie v. Township of Brantford 38
Economic Duress 39
D&C Builders v. Rees 39
The Siboen & The Sibotre 39
The Atlantic Baron 39
Pau Onu v. Lao Yiu Long 39
Director of Public Prosecution v. Lynch 40
Universal Sentinel 40
Euig Luck 40
Economic Duress in Canada 40
Lister v. Dunlop 40
Stott v. Merit Investment Corp. 40
Restitution in Equity
11.0 Undue Influence 40
Allcard v. Skinner 40
Public Trustee v. Skoretz 41
O’Sullivan v. Management & Music Agency 41
Royal Bank of Scotland v. Ettridge 41
Geffen v. Goodman Estate 41
12.0 Breach of Fiduciary Duty 42
The Fiduciary Relationship 42
Pre-Cam Exploration v. MacTavish 42
Standard Investments v. C.I.B.C. 42
International Corona Resources Ltd. v. Lac Minerals Ltd. 43
Hodgkinson v. Simms 43
Scope of Fiduciary Duty 43
Courtwright v. C.P.R. 43
Schaeffer v. Chodoes 44
McLeod & More v. Sweezey 44
Duty of Loyalty 44
Guerin v. Canada 44
Conflict Rule 44
Bray v. Ford 44
Reading v. Attorney General 45
Profit Rule 45
Regal (Hastings) Ltd. v. Gulliver 45
Peso Silver Mines v. Cropper 45
Canadian Aero Services v. O’Malley 45
Fiduciary Liability 45
Boardman v. Phipps 46
Guinness Plc v. Saunders 46
Proprietary Remedies 46
Lister v. Stubbs 46
Attorney-General for Hong Kong v. Reid 46
13.0 Breach of Confidence 46
Prince Albert v. Strange 46
Coco v. A.N. Clark (Engineers) Ltd. 47
International Corona Resources Ltd. v. Lac Minerals Ltd. 47
Attorney General v. Guardian Newspapers Ltd. 47
Mixed Inventions 47
Seager v. Copydex 47
Right of Privacy 48
Douglas v. Hello! Ltd. 48
Campbell v. MNG Ltd. 48
Breach of Confidence Remedies 48
Cadbury Schweppes Inc. v. FBI Foods Ltd. 48
Just Cause (Excuse) Defence 49
Church of Scientology v. Kaufman 49
Woodward v. Hutchins 49
14.0 Unconscionable Transactions 49
Waters v. Donnelly 49
Harry v. Kreutziger 50
Griesshammer v. Ungerer & Miami Studios of Dancing 50
Gaertner v. Fiesta Dance Studios Ltd. 50
Lloyds Bank Ltd. v. Bundy 50
Schroeder Music Publishing v. Mccaulay 51
Osorio v. Cardona 51
15.0 Officiousness 51
Necessitous Intermeddling 52
Great Northern Railway v. Swaffield 52
Hastings v. Semans Village 52
Matheson v. Smiley 52
Re. Rhodes 52
Preservation of Property 53
Nicholson v. Chapman 53
Re. Pike 53
Sherrin v. Haggerty 53
Maccelsfield Corps. v. Great Central Railway 53
Preservation of Credit 53
Fulfillment of Another’s Duty 54
Self-Serving Intermeddling 54
Norton v. Haggett 54
Self-Serving Intermeddling (Law Profession) 54
Felton v. Finley 54
16.0 Compulsory Discharge 54
Moule v. Garrett 55
Legal Compulsion Arising at Common Law 55
Legal Compulsion Arising by Statute 55
Brook’s Wharf & Bull Wharf Ltd. v. Goodman Bros. 55
Peel (Regional Municipality) v. Ontario 55
Practical Compulsion 56
Harris v. Carnegie 56
Limitations of Recovery 56
Carleton (County) v. City of Ottawa 56
Owen v. Tate 56
Canada (Attorney General) v. Becker 57
Gifts 57
J.B.C. Consulting Inc. v. Gray 57
Remedies
17.0 Constructive Trusts & Equitable Liens 57
The Constructive Trust 57
English Law and Constructive Trust 58
Keech v. Sanford 58
Hussey v. Palmer 58
Canadian Use of Constructive Trust 58
Schobelt v. Barber 58
Petkus v. Becker 59
International Corona Resources Ltd. v. Lac Minerals Ltd. 59
Creditor in Invitum 59
Chase Manhattan Bank N.A. v. Israel-British Bank (London) Ltd. 60
Ellingsen (Trustee of) v. Hallmark Ford Sales Ltd. 60
Constructive Trust & Profit from Wrongdoing 60
Soulos v. Korkontzilas 60
Attorney-General for Hong Kong v. Reid 60
When does the Constructive Trust Arise 60
Rawluk v. Rawluk 61
The Equitable Lien 61
Glavasky v. Stadnick 61
International Corona Resources Ltd. v. Lac Minerals Ltd. 61
18.0 Equitable Compensation 62
Nocton v. Lord Ashburton 62
Guerin v. Canada 62
Hodgkinson v. Simms 62
Canson Enterprises Ltd. v. Boughton & Co. 62
Tort v. Equitable Compensation in a Fiduciary Relationship 63
Norberg v. Wynrib 63
M (K) v. M (H) 63
19.0 Tracing 63
Tracing at Law 63
Tracing at Law (Money) 63
Taylor v. Plummer 64
Banque Belge pour L’Etranger v. Hambrouke 64
Lipkin Gorman (a firm) v. Karpnale 64
Tracing in Equity 64
Re. Diplock 65
Chase Manhattan Bank N.A. v. Israel-British Bank (London) Ltd. 65
Lowest Intermediate Balance Rule 65
Clayton’s Case 65
Hallet’s Case 65
Re. Oatway 66
James Roscoe (Bolton) Ltd. v. Winder 66
Competing Beneficial Owners 66
Re. Walter J. Schmidt 66
Ontario Securities Com’n v. Greymac Credit Corp. 66
Law Society of Upper Canada v. T.D. Bank 66
20.0 Subrogation, Contribution, & Indemnity 67
Subrogation 67
Traders Realty Ltd. v. Huron Heights Shopping Plaza Ltd. 67
Banque Financiere de la Cite v. Parc (Battersea) Ltd. 67
Contribution 67
Whitham v. Bullock 68
Re. Wawanesa Insurance Co. 68
Spiers & Son Ltd. v. Troup 68
Schnurch v. Ploeger 68
Indemnity 68
Brook’s Wharf & Bull Wharf Ltd. v. Goodman Bros. 68
Carleton (County) v. City of Ottawa 69
Restitution at Common Law
Introduction
§ Under the ‘General Law of Obligations’, restitution fits in thus…
Common Law / Tort / RestitutionPromises ought to be kept / One ought not injure one’s neighbour / One ought not to be unjustly enriched at the expense of another
Source of the duty is from the parties / Source of duty is imposed by law / Like tort, duty is imposed by law (i.e. law says you may not be unjustly enriched at the expense of another)
Expectation interest being protected (distributive justice as opposed to corrective justice) / Reliance interest is protected (reverse of contract) / Also concerned with Reliance interests, but a particular type: reliance where the benefit has flowed into the defendant’s hands = restitution interest
Look to position of plaintiff to see what the expectation interest is / Again look to plaintiff to see to what degree the plaintiff has been harmed / Look to defendant to see how much the defendant has been benefited and it is this ‘benefit’ that the defendant has to disgorge back to the plaintiff
Historical Background
Restatement of the Law of Restitution: Underlying Principles
§ Two Americans, Scott & Seavey looked around at all the cases for a common thread to bring them all together, what they found, they labelled either ‘quasi-contract’ (common law) or ‘constructive trusts’ (equity) or together as ‘restitution’.
§ From this, they wrote the first definitive work called the “Restatement of Restitution” (1937), from which they set out 3 basic principles…
1 A person unjustly enriched must make restitution to another
Ä Implies there is a ‘benefit’ to the defendant (thus, identify what this is)
Ä That the benefit has been conferred at the expense of the plaintiff, and
Ä That it is ‘unjust’ for the defendant to retain that benefit gained at the expense of the plaintiff.
2. A person who officiously (through assertion of authority or interference) confers a benefit upon another is not entitled to restitution (key is to identify officiousness)
3. A person is not permitted to profit by his own wrongdoing at the expense of another.
English History of Restitution
§ Long ago, actions developed to recover assets lost to unjust enrichment (ex. law of conversion, covenant, debt, detinue, and account) were used in one court only: the Court of Common Pleas
§ At some point, the King’s Bench, in desiring to compete with the Court of Common Pleas for control of debt actions, starting taking on cases in ‘deceit’ from which developed two important principles:
1. Assumpsit: literally meaning “an undertaking”
Ä The defendant promised me something (assumpsit) and didn’t deliver, thus deceiving other party out of their property
Ä Extended to permit the recover of benefits conferred by mistake, under compulsion or under a void K where the consideration had totally failed
2. Indebitatus Assumpsit: “being indebted, he afterwards assumed”
Ä Guy admits he owes the other money, and promises a second time to repay – a promise on a promise.
Slade’s Case (1602) England
Facts: Case on appeal to Exchequer
Held: The assembled judges decide that they will henceforth imply the promise of assumpsit.