A. Introduction

Author:John D. McCamus
Profession:Professor of Law. Osgoode Hall Law School, York University

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The law of contracts and torts adopted its modern shape in the nineteenth century as the law was gradually transformed from its origins in medieval common law and equity into a set of modern categories or subjects of the law recognizable to the contemporary lawyer.1It was not until the twentieth century, however, that a similar process gathered together various doctrines of common law and equity and reshaped them as the modern law of restitution. The invention or recognition of the subject occurred in the United States in the first half of the century. In 1937, the American Law Institute published its ground-breaking Restatement of Restitution.2The subtitle of the volume, Quasi-Contracts and Constructive Trust, signalled to the reader that the Restatement incorporated doctrines of the common law often referred to as the law of quasi-contracts and certain doctrines of equity related to the law of trusts. The organizing premise or thesis of the Restatement was that

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these seemingly disparate materials could be organized and restated on the basis of a common underlying principle, termed the principle against unjust enrichment. The underlying principle was stated boldly in the first section of the Restatement in the following terms: "A person who has been unjustly enriched at the expense of another is required to make restitution to the other."3The work then proceeds to restate, in the manner of the American restatements, the various rules and doctrines of common law and equity that the institute considered to be unified by or explained by that principle. Subsequent chapters of the volume restated the rules relating to the recovery of benefits conferred in an emergency, by mistake, under coercion or under ineffective transactions and of benefits acquired through wrongful conduct of various kinds, including breach of fiduciary obligation.

Recovery of money paid under a mistake provides a simple illustration. Under traditional law, moneys paid under mistake of fact - as where the payor mistakenly believes he is indebted to the payee or mistakenly believes that the payee is some other person - has been considered recoverable. Obviously, such recovery is not grounded on either contract or tort. There is no contract under which the payee is committed to repay the money nor is the receipt of mistaken payment itself tortious. Though the idea had developed that relief could be explained on the basis of an implied undertaking to repay, the institute adopted the view that the implied contract was a mere fiction and that the preferable, indeed coherent, explanation for recovery was that, otherwise, the mistakenly paid party would be unjustly enriched.

In response to the institute’s initiative, recognition of restitution as a separate discipline or subject of the law developed rather quickly in American law.4Recognition came only more slowly, however, in other common law jurisdictions. Thus, as recently as 1978, an English judge stated: "[T]here is no general doctrine of unjust enrichment recognized in English law."5In recent decades, however, the basic approach adopted in the Restatement appears to have been accepted in the older

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commonwealth jurisdictions and lengthy treatises on the subject have appeared in England,6Australia,7New Zealand8and Canada.9Indeed, in Canada, recognition came more quickly than in the other commonwealth jurisdictions. The American approach was essentially adopted by the Supreme Court of Canada in a remarkable series of decisions...

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