Unjust Enrichment As The Basis Of Constructive Trusts

This book is a collection of articles based on Understanding Unjust Enrichment,a symposium held at the University of Western Ontario in January 2003. The articles, written from the perspective of English, Australian, Canadian, German and Jewish law, deal with numerous theoretical and practical issues that surround restitution and unjust enrichment. The articles outline recent developments across the Commonwealth, explain the unjust enrichment principle and its component parts, and address discrete issues such as tracing, choice of law, disgorgement damages for breach of contract, and the use of unjust enrichment in the cohabitation context. The contributors are Kit Barker, Peter Benson, Jeffrey Berryman, Michael Bryan, Andrew Burrows, Robert Chambers, Gerald Fridman, Peter Jaffey, Dennis Klimchuk, Thomas Krebs, John McCamus, Mitchell McInnes, Stephen Pitel, Stephen Waddams and Ernest Weinrib.

This title was first published in 2001. In the Western legal tradition, the history of restitution for unjust enrichment reaches back to pre-classical Roman law. In common law, the roots of unjust enrichment may be said to lie in the fourteenth century; but its history as a subject of academic study is much shorter. The law of restitution has become increasingly important in the courts of the common law world during the last decade. This has generated a great deal of scholarly attention and there has been an explosion of literature as legal academics have addressed the theoretical foundations of the subject, its structure and its underlying principles.

Six public lectures given by Peter Birks when he was the Centennial Visiting Fellow at the Victoria University of Wellington Law School in August and September 1999.

The constructive trust remedy plays an important role in bankruptcy because it places restitution claimants in a position of priority over creditors. According to traditional rules governing constructive trusts, restitution claimants who can identify particular assets in the debtor's hands as products of an unjust enrichment recover in full, to the exclusion of other unsecured creditors. The draft Restatement (Third) of Restitution and Unjust Enrichment endorses this outcome with only minor qualifications. The supposed basis for a constructive trust is unjust enrichment: courts grant the remedy to prevent the defendant from profiting at the claimant's expense. In bankruptcy, the parties who bear the burden of the remedy are the defendant's creditors. Therefore, at least in theory, the relevant question is whether creditors will be enriched by sharing in the assets subject to the claimant's restitution claim. The draft Restatement recognizes this point, but maintains that in almost all circumstances, creditors will be unjustly enriched if allowed to share in assets subject to a constructive trust claim because the constructive trust claimant is the "equitable" owner of those assets. The debtor's obligations to general creditors should not be paid from someone else's assets. In this article, I examine the notion of equitable title and conclude that it does not support the conclusion that priority for constructive trust claimants is necessary to prevent unjust enrichment of creditors. The traditional rule of automatic, or near-automatic, priority may nevertheless be sound, but its justifications lie in administrative simplicity and tradition rather than unjust enrichment.