Restitution And Remedies - Contract

RESTITUTION AND REMEDIES * * * * Restitution is concerned with preventing unjust enrichment. It is a branch of the law of civil obligations separate from contract and tort. It is subordinate to contract - if there is an effective contract, then the contract will govern the parties' relationship. Recognition of restitution as a separate branch of the law of civil obligations is relatively recent. Aspects of restitution remain unclear and somewhat controversial. The nature of Restitution * Law imposes restitutionary obligations, when one party has been unjustly enriched by the other party. * Unjust enrichment is the unifying element of restitution. * Unjust enrichment can occur in contractual situations, for example: 1. where a contract is proposed but is not concluded, * Brenner v First Artists Management PL [1993] 2 VR 221; or 2. where a contract is terminated before it has been completely performed, or 3. where a contract is not enforceable, * Pavey & Matthews v Paul (1987) 162 CLR 221; or 4. where a contract is held to be void or voidable. Establishing an Entitlement to Restitution: * The law in this area is unclear and unsettled. * Relevant considerations are (approach with caution): 1. Benefit: the defendant must have been enriched; 2. Detriment: that benefit, or enrichment, must have been obtained at the plaintiff's expense; and 3. Unjust factor: the enrichment must be unjust. This is shown by one of the recognised unjust factors which give rise to a right to restitution. 4. Whether the defendant has a recognised defence which permits them to retain the benefit. * Gummow J in Roxborough v Rothmans of Pall Mall Australia Ltd placed cautionary note against the use of an 'all embracing theory of restitutionary rights and remedies founded upon a notion of unjust enrichment'. * Majority in Lumbers warned about 'top--down reasoning': 'The application of a framework for analysis expressed only at the level of abstraction adopted in this case, by reference to 'benefit', 'expense' and 'acceptance', coupled with considerations of unconscionability, creates a serious risk of producing a result that is discordant with accepted principle' at [78]