Peter Birks

Recovering Value Transferred Under an Illegal Contract

The theory of this article is that the attitude to illegality has so dramatically changed that it is no longer possible, except in extreme cases, to say that illegality as such is a defense to restitutionary claims arising under illegal contracts. The objection to an otherwise good action in unjust enrichment is not illegality but stultification: to recognize an entitlement to restitution would make nonsense of the refusal to enforce the contract. It is true that the restitutionary action nearly always does prima facie have this stultifying tendency, for it will often operate as a safety net reducing the risks of illegal dealing or as a lever indirectly enforcing the illegal contract. However, this stultifying tendency can be neutralized by restricting the class of plaintiffs able to bring the restitutionary action and can be overridden if the effect of denying the restitutionary action would be to perpetrate a greater evil, as for instance by inflicting a wholly disproportionate penalty for the illegality. A stultification is an inexplicable contradiction. In cases such as these the seeming stultification is explained away. Restitution can then be allowed.

A Letter to America: The New Restatement of Restitution

The aim of this paper is to advocate the taking of three steps which the American Law Institutex92s successor to the 1937 Restatement of Restitution seems at the moment rather unlikely to take. All three aim at the elimination of ambiguities which, for seventy years, have gone far towards wrecking Scott and Seaveyx92s restitution project begun in 1933. The first is to ensure with ruthless clarity that x91restitutionx92 in this context always means x91gain-based recoveryx92 and is a synonym for x91disgorgementx92. The second is to narrow the meaning of x91unjust enrichmentx92 so that that phrase is never engaged except where the event which generates a right to restitution is not a contract or a wrong. The law of unjust enrichment has nothing whatever to say about situations in which the reason why an enrichment at the expense of another has to be given up is a contract or a wrong. Such cases belong to the law of those familiar causative events. Unjust enrichment is a causative event of a third kind. The last is that the new restatement should either become the Restatement of Unjust Enrichment (in that narrowed sense) or, if it remains the Restatement of Restitution, must make perfectly clear that unjust enrichment is only one of several causative events which generate rights to restitution. Many claims are made for the law of restitution which can only be made of the law of unjust enrichment. Only by following these three precepts will the Anglo-American common law finally discover the territory which Scott and Seavey thought that they had found, namely its law of unjust enrichment.

Failure of Consideration and its Place on the Map

Roxborough v Rothmans of Pall Mall Australia Ltd1 is a fascinating case, on two levels. On the lower level it is reasonably straightforward but contains one very difficult point. The majority judgments slip round that obstacle without successfully explaining how they get past it. Only the single dissenting judgment confronts it. The crucial question so far as the result is concerned is, therefore, whether the difficult point necessitated the dissent. It did not. The majority’s conclusion is right and can be properly explained. At the higher level there is a question of disputed taxonomy which will be more important in the long run than any issue arising from this particular story.