RESTITUTION: SOME HISTORICAL REMARKS
			Forbes Society Lecture 4 November 2015

Introduction
1	I have framed the title in the way that I have because of the debates about the scope of the subject, about appropriate terminology and taxonomy, and about the true sources of the subject.  My comments are just that: comments.  My aim is to give you some historical and contemporary foundation for your understanding of an important branch of private law which has the capacity to inform and guide the future inter-relationship of law and Equity.
2	The coherent modern development of the principles of restitution and unjust enrichment in Australia, as in England, has taken place only in the last 30 to 40 years.  This is to be contrasted with the law of restitution in the United States – which had an earlier coherent doctrinal foundation; and also with the strong cognate bodies of principle in European systems of law of both German and French lineage (which in turn have strong roots in Roman law).
3	In order to ensure a degree of coherence and utility in a short historical paper and lecture such as this, it is necessary to simplify, and undertake one’s own organisational framework.  That said, I hope what follows reveals the richness of the jurisprudential content of the subject, how its roots can be found in principles as well as rules, and how fascinating (often in its unruly and mistaken inconsistency) the process of doctrinal development in the use of historical and contemporary sources can be.
4	Any thorough-going history of restitution must first begin with Roman law which recognised unjust enrichment as a foundation for obligations alongside contract and delict.  The remedies of the condiction and negotiorum gestio framed relief in a variety of circumstances that tended to conceal the underlying operating principles.  In the classical period of Roman law, it began to be described as an obligation quasi ex contractu (as though from a contract).  In one text it was said:
For this by nature is equitable, that no one be made richer through another’s loss.
5	This language, attributed to the jurist Pomponius in the 2nd century CE, resonates with the language of Lord Mansfield, 15 centuries later in Moses v Macferlan in passages that have been seminal in the development of Australian, English and American legal doctrine on the subject:
If the defendant be under an obligation, from the ties of natural justice to refund; the law implies a debt, and given this action, founded in the equity of the plaintiff’s case, as it were upon a contract (‘quasi ex contractu’ as the Roman law expresses it).  

This species of assumpsit (‘for money had and received to the plaintiff’s use’) lies in numberless instances...
…
This kind of equitable action, to recover back money, which ought not in justice to be kept, is very beneficial, and therefore much encouraged.  It lies only for money which, ex aequo et bono, the defendant ought to refund: it does not lie for money paid by the plaintiff, which is claimed of him as payable in point of honour and honesty, although it could not have been recovered from him by any course of law; as in payment of a debt barred by the Statute of Limitations, or contracted during his infancy, or to the extent of principal and legal interest upon an usurious contract, or, for money fairly lost at play: because in all these cases, the defendant may retain it with a safe conscience, though by positive law he was barred from recovering.  But it lies for money paid by mistake; or upon a consideration that happens to fail; or for money got through imposition, (express, or implied); or extortion; or oppression; or an undue advantage taken of the plaintiff’s situation, contrary to laws made for the protection of persons under those circumstances.

In one word, the gist of this kind of action is, that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money.
6	One is struck by the attempt to bind together instances of recovery by rules, with sweeping, simple underlying principles: an attempt to create coherence out of detail.  To appreciate the importance of this task, one needs to examine the forms of action and common law writs in which recovery for contractual and quasi-contractual claims were made, at the time.  It is also proper, at the outset, to recognise the place of Equity, and equitable notions and principles, in the content of the law of restitution. The contribution of Equity to the development of the common law in this field is a subject of debate to which I will return, but the words “nature” and “equitable” (as used by Pomponius), and “natural justice”, “equity”, “equitable action”, and “conscience” (as used by Lord Mansfield) inspirit the debate. But also, the concurrent developments of equitable principle acting in personam on conscience and having an in rem character also, can be seen to have unjust enrichment as an informing value. 
The forms of action
7	No account of legal history provides any systematic or satisfying doctrinal analysis of the forms of action at common law.  Put simply, the law developed in a pragmatic way around the various writs and forms of action: of debt, detinue, covenant, account, and assumpsit.  These developments can often be ascribed to avoiding or circumventing unpopular (with plaintiffs) procedure, or to one court seeking to develop or protect its jurisdiction, and the resultant flow of business, from another. The energy for pragmatic reform by the court of King’s Bench was often supplied by the ever willingness of the Chancellor to supply a remedy when common-sense and justice dictated. The importance of procedure at this time to the development of the substantive law was expressed by Sir Henry Maine when he said:
That substantive law has first the look of being gradually secreted in the interstices of procedure.
8	Before turning to the specifics of this history, two basic points of Mason and Carter about this history should be noted: first, that the law of quasi-contract emerged during the development and growth of the action in assumpsit; and secondly, that the modern law of restitution includes (but is not limited to) all claims traditionally described as “quasi-contractual”.  Perhaps another basic point can added to these: that the remedy for breach of promise in a simple contract (not a deed) – and, from that, the remedy for implied contract, and then non-consensual restitutionary claims (quasi-contract) – grew out of the development of the law of torts, in a process demonstrating what Ames has described as “the flexibility and power of self-development of the Common Law.”
9	Turning back to the history. The various forms of action grew out of the development of the jurisdiction of the King’s courts over local courts with the increasingly influential ideas regarding the King’s peace from the 12th century, and that the King’s courts were open to all by the 13th century.
10	One needs not to get too far lost in the mists of time; nevertheless, some historical outline is necessary.  The broad legal developments of the 12th century under the reign of Henry II were remarkable.  His reign followed a destructive and chaotic civil war in which the competing claims of Queen Matilda and King Stephen and their supporters fractured the benefit of the Conquest for the new Norman elite and interfered with, and undermined, what had been the continuing, relatively sophisticated Anglo-Saxon legal system which had great respect for lawful process.  The challenge for Henry II, as a strong, reforming Angevin king, was to build royal authority in a fractured, violent society, still working through the consequences of a complete conquest of the now-displaced Anglo-Saxon elite.  It is not surprising that, in those circumstances, at least in civil law, status, land and its control, and tenurial entitlements were the primary concerns of the King and his courts, not private promises and the consequences of breach thereof, nor non-tenurial unjust enrichment.
11	It is also to be understood that by the 12th century there was a blooming legal renaissance in Europe, as part of a broader Western European intellectual renaissance in which the foundation of most modern civil and political ideas, including the division of Church and State, were laid down.  During the reign of the exceptionally able Henry II, personal actions on contract or tort remained largely in the local courts, though the action of debt was known in the King’s courts.  In the 13th century, personal actions made their appearance in the King’s courts: debt, detinue, replevin for chattels distrained, covenant, account against bailiffs, and trespass.  Importantly, trial by jury was becoming common, but wager of law survived in debt and debt-detinue.  Hence, the unpopularity of the action of debt for plaintiffs.  
12	The action of covenant was brought upon instruments that were enforceable by virtue of their form.  The form was sealing.  The person was bound, not because the sealed writing evidenced an agreement, but because it was itself conclusive proof that the defendant had come under a liability to the plaintiff.
13	The action of debt was also used to enforce a deed when the deed evidenced an executed transaction – money handed over, chattels bailed – that had created a debt.  The deed was evidence (irrebuttable) that a debt was owed; so the action was debt or detinue.
14	It was a short step to view the deed, not as irrebuttable evidence, but as an instrument with operative force of its own.  As this step was taken, the scope of the action of covenant was enlarged.  By the 15th century, it was a general remedy for executory contracts and agreements under seal.  By it alone, at that time, unliquidated damages could be got for breach of an executory contract.
15	Covenant, as an action in contract, but only for instruments under seal, began to familiarise English lawyers with the idea of contract; though, it was not the agreement that was enforced, but the seal or formal instrument under seal.  It was thus an inadequate general remedy for the enforcement of contracts.
16	Debt and detinue were originally barely distinguishable; but debt became somewhat more contractual in nature, and detinue more proprietary or delictual. 
17	In debt, the defendant was conceived of as having something in his possession that should be surrendered.  So if goods were sold, lent, or deposited for a fixed sum and payment was required, debt would lie.  But the transaction had to be executed: the goods had to be handed over.  Thus, such contracts could be enforced, if partly executed:  the genesis of quid pro quo.
18	But the action in debt was inconvenient: wager of law was possible, and in such cases, the action did not lie against the legal personal representative of the defendant. The action of debt was returnable only in the Court of Common Pleas where the serjeants’ monopoly helped make litigation expensive.  The plaintiff also had to prove the exact sum in liquidated damages, often with requirements of great particularity.  Unliquidated damages for breach of executory contracts could not be enforced.
19	The inconvenience of the lack of a mechanism to enforce simple contracts not under seal was mitigated by the jurisdiction of local and borough courts enforcing such, and the ad hoc “pie powder” courts of the towns holding commercial fairs.  But as royal courts began to develop private civil law, the rigidity of the common law had to be overcome.
20	This development had to be done through the forms of action of the common law, although Equity and the ecclesiastical courts lurked in the shadows to the side, often giving relief where it was obviously just, but without principled foundation.  
21	A related development (and the one the focus of this paper) was the enforcement of obligations that, as Holdsworth said, “hover on the border line of contracts” – so-called quasi-contracts.  Some were real contracts, though implied or tacit, reflecting true agreement; others were imposed, where the law treated the parties as consenting to found liability.  As Holdsworth beautifully put it:
The manner in which at different periods the common law has treated these various obligations has tended to obscure their real nature.  Their shape has been determined by the remedies by which at different periods they have been enforced; and either because the courts have attended rather to the form and development of the remedy than to the nature of the right protected, or because they have allowed some of these remedies to be extended to rights of very various natures by fictitious averments, the law relating to them is somewhat heterogeneous and confused.  We shall see that the first of these causes is plainly apparent in the mediaeval development of this branch of the law; and that the second is equally plainly apparent in its modern development, owing to the shifts resorted to, to make some form of assumpsit applicable to those miscellaneous obligations.
22	It was this heterogeneity and confusion to which Mansfield was seeking to bring underlying coherence and binding principle.
23	The two actions important for the early development of quasi-contract were debt and account.
24	Debt could be used to enforce a variety of obligations, including, but also remote from, contract, as long as a debt were created.  Debts arising otherwise than consensually included: statutory penalties, forfeitures under bye-laws, judgments, bailment of goods.  By the 1270s, there is a record of one authority where debt lay at the suit of a beneficiary for whose benefit money had been given to the defendant, there being no contract between the beneficiary and the defendant recipient; by 1457, the rule that debt would lie at the suit of someone if money had been given to a third party for his benefit was established.
25	Account at common law was a regular cause of action by the early 13th century.  It was founded on the proprietary writs as an adjunct to the management of land and estates and on a relationship between the parties. However, in practice, it was not so limited and quickly became a quasi-contractual remedy based on the receipt of property, including money of another to be applied in a particular way, and the resultant obligations of giving an account of its stewardship.  This was the beginning of the recognition of the remedy (in law) for holding to the use of another.  The parallel development in the Chancellor’s jurisdiction concerned the holding of land to the use of another.  In the end, Equity’s superior remedies in its action of account won the day; but in common law, account helped develop quasi-contract.
26	By the 14th century, account was being used for a variety of circumstances where an obligation was imposed to pay: money entrusted for the payer’s benefit or use – such as to a bailiff or factor (implicitly contractual); money paid for the benefit or use of a third party (not implicitly contractual, but similar in point of duty to the entrusting for one’s own benefit or use).  It was not a long step to extend the circumstances creating the duty to those such as money paid under a mistake or in consequence of false or fraudulent representations.  This extension took place in the common law by the end of the 16th century, principally through the action of account, based on the recognition of the principle that one person should not unjustly enrich himself at the expense of another.  The principle of a just response of the law forged the changes to the rules to give expression to recovery by a common law writ.
27	But whilst this principle first manifested itself through the action of account, it later developed in the 15th to 17th centuries, as we shall see, through the action of assumpsit.
The development of assumpsit
28	It is to assumpsit, in its different forms, that one must turn in order to see how the law came to supply an adequate remedy for the enforcement, first, of simple executory contracts, and then also for implied contracts and quasi-contracts.
29	Assumpsit developed as the general form by which contracts not under seal could be enforced by an action for damages.  It developed in the second half of the 14th century as an action of case, that is trespass or deceit on the case – an action in tort.  Precedents developed in which the allegation was made that the defendant undertook (assumpsit) to do something and injured the plaintiff by doing it badly.  Then, gradually, the line between misfeasance and non-feasance was crossed.  The defendant undertook to do something and failed to do it – an action in tort had become an action for a contractual undertaking.  By the beginning of the 16th century, with its separate existence from case, assumpsit began to take over the work of debt, and to extend its operation to remedy the breach of executory contracts.  
30	Early examples of the action as an action in case were: a ferryman undertook to carry the plaintiff’s cattle over the river, but overloaded the boat which sank, the cattle being lost; the defendant undertook to cure the plaintiff’s sick horse and by his negligence killed the animal; a carpenter undertook to build a strong house of a certain form, but constructed a weak house of another form.  One can see the contractual as well as the tortious element, though there was, in essence, a tort – damage to person or property or a fraudulent injury to rights from active misconduct.  The ground of the action was the damage from the wrongful act.  The act was wrongful because it was against the undertaking.  What was a mere covenant (not under seal, and so not actionable) becomes a deceit if broken by action.  Its conceptual relationship with agreement or contract is (and was) obvious, but the form of action was trespass on the case (in tort).
31	The action, by the mid-15th century, extended to certain types of non-feasance.  The principle was expressed broadly by some of the judges, but too general a proposition of the equivalence of non-feasance and misfeasance in assumpsit would have, in one blow, created a cause of action for the enforcement of executory contracts.  The test first used was based on causation and change of position: was the damage caused merely by the undertaking not being performed, or, was it caused, at least in part, by a change of position on the faith of the undertaking.  In the latter circumstances, assumpsit would lie.  The best example was where there was a contract to sell land and the purchaser paid the price and the vendor conveyed land to another.  The purchaser could sue the vendor in an action of deceit on the case.  This developed into the proposition that if money were paid in pursuance of any contract, an action on the case lay against the other party who did not perform.  These developments warded off the challenge of the Chancellor who would require the vendor to stand seised of the land to the use of the purchaser who had paid the contract price.
32	From this rule requiring payment of money for there to be relief, grew the recognition of any detriment on the faith of the promise for relief to lie.  A person who supplied goods to a third party, on the promise that the party who requested he do so would pay if the third party did not, could recover under assumpsit – effectively a parole guarantee.  
33	The law (common law) did not stop here.  At the end of the 16th century, the Chancery jurisdiction was expanding and was always looking to fill every inconvenient “hole” in the common law jurisdiction.  One “hole” was that debt (where the defendant could wage his law) lay for a sum granted; and assumpsit did not lie for purely executory agreements.  The mere making of an agreement did not give rise to an undertaking or assumpsit, unless and until it was performed on one side.  The further developments in the 16th and 17th centuries saw assumpsit take over debt and provide a remedy for the enforcement of executory agreements.
34	The next stage of the process of the development of assumpsit, and its movement to take over the work of debt completely, involved, first, basing assumpsit upon an express promise to pay the existing debt.  The existing debt was not so much a promise, as a grant.  The new promise saw the debtor charged in assumpsit.
35	Next, the King’s Bench began to allow a debt without a later express promise to found assumpsit.  It implied the promise from the existence of the debt.  The Court of Common Pleas refused to take this step.  The Court of Exchequer Chamber refused to countenance the development, reversing decisions of the King’s Bench, which persisted with the development.  The dispute was resolved in 1602, in Slade’s Case when all the Justices of England and the Barons of the Exchequer sat and vindicated the development of the King’s Bench.  Thus, assumpsit could be brought wherever debt lay.  As a result assumpsit became dominant in the recovery of liquidated sums.  But Slade’s Case had wider significance for the enforcement of executory agreements, by the process of implication.
36	This assumpsit, indebitatus assumpsit, was not a huge departure from assumpsit brought for non-feasance (the failure to perform an undertaking) by the person who had changed his position on the faith of the undertaking.  Why should it not also lie for a promise given for (on the faith of) another promise?  This development, built on the making of indebitatus assumpsit coterminous with debt (to the extent that it was based on agreement) began to place the promise as the gist of the action.  Cases from the 16th century, some of which were referred to in Slade’s Case, saw every “contract executory” as an assumpsit in itself.  Thus, in Slade’s Case it was stated:
…every contract executory imports in itself an assumpsit, for when one agrees to pay money, or to deliver any thing, thereby he assumes or promises to pay, or deliver it, and therefore when one sells any goods to another, and agrees to deliver them at a day to come, and the other in consideration thereof agrees to pay so much money at such a day, in that case both parties may have an action of debt, or an action on the case on assumpsit, for the mutual executory agreement of both parties imports in itself reciprocal actions upon the case, as well as actions of debt, ….
37	In time, indebitatus assumpsit for debt created by performance, and special or express assumpsit on an executory contract, became separate forms of action.  Both, however, were now grounded in promise, in contract, and not merely on an undertaking or assumpsit for an action in tort, where their lineage began.
38	Given the importance of implying a (later) promise to pay upon an express bargain, it is unsurprising that within a short time of Slade’s Case, the action of indebitatus assumpsit was extended from express executory contract to cases where the original bargain was an implied contract, the implication of the contract arising from the facts, such as a quantum meruit for work done upon request. Thus, an innkeeper came to be able to sue for services which he provided without a price having been struck, or a tailor for clothes or services supplied. The principle was extended to others providing goods and services on request without a price being set: carriers, factors, bailiffs, vendors of goods, sureties.  With this, the Chancery jurisdiction that had grown up retreated.
39	Finally, towards the end of the 17th century (when first suggested) and the beginning of the 18th century (when sanctioned) indebitatus assumpsit was extended to actions upon quasi-contracts where the element of implied contract was purely fictitious. To this development it is now necessary to turn.
40	As discussed earlier ([24]-[27] above) debt or account lay for cases where there was no implication of agreement possible: the field of quasi-contract.  These actions, in this respect, insinuated the notion of unjust enrichment into the common law.  It was inevitable that indebitatus assumpsit would be extended to this field.  But it was a true extension, because indebitatus assumpsit pre-supposed some agreement, express or implied.  
41	As an aside, the influence of mistake (that is, judicial error) in the making of legal doctrine should not be ignored.  In 1816, the judges of the King’s Bench declared that previous dicta that distinguished between a party such as a tailor or miller having a lien when the contract had no express price and not having a lien when a price was agreed in the contract, were wrong.  The rule that provided a lien when no price was fixed had been developed to provide protection to a person to whom the law gave no personal remedy.  When the development of assumpsit to cover implied quantum meruit occurred, this new remedy did not displace the old remedy of lien.
42	The expansion of the use of indebitatus assumpsit to recover money in cases of quasi-contract (in circumstances when there was no true implication of a contract available) took place in the 17th and early 18th centuries, though not without opposition.  The extension was to enforce statutory or customary duties (otherwise enforceable in debt), and to enforce a duty to pay that arose for some identifiable reason.
43	The latter half of the 17th century saw cases for the recovery of money due by some custom, as a penalty for breach of a bye-law and other customary fees.
44	Chief Justice Holt began, however, to resist – strongly.  His resistance was based on the lack of any consent and on the fact that indebitatus assumpsit was then based on, at least since Slade’s Case, implied (but real) consent.  In Starke v Cheeseman he said:
The notion of promises in law was a metaphysical notion, for the law makes no promise, but where there is a promise of the party.

45	Holt CJ failed in his opposition.  A variety of claims for fees, penalties and customary payments, including the enforcement of a foreign judgment, fell under indebitatus assumpsit.
46	The action was further extended to circumstances where account had provided a remedy for circumstances that bespoke unjust enrichment.  The three main classes of case were: where money had been paid for a purpose or reason or consideration that failed; where money had been paid to someone to whom it was not due; and where money had been wrongfully taken. 
47	During the 17th century, indebitatus assumpsit began to be allowed (as well as case) for recovery of money paid to someone when it was not due, where the payee had no right to retain it, whether because of a mistaken overpayment, or because of payment to the wrong person, or to a stakeholder who was bound to disgorge, or because of payment under a void judgment, or payment through fraud or duress, or under an illegal contract (unless the payer was a participant).
48	By the latter half of the 17th century, indebitatus assumpsit was available against a wrongful taker of money.  Holt CJ in Lamine v Dorrell spoke of these actions creeping in by degrees.
49	By the early 18th century, it was also well established that money paid under a contract, the consideration for which failed or which was for a purpose that could no longer be effected, could be allowed in indebitatus assumpsit.  
50	By the late 18th and 19th centuries, the pleading of indebitatus assumpsit was in various forms: for money lent, for money due for an account stated, for money due as interest, for money paid by the plaintiff to the use of the defendant, for money had and received by the defendant to the use of the plaintiff, for work done, for goods bargained and sold, and for goods sold and delivered.  The pleading was in general, short terms – as a common money count; details of the claim were left to the evidence.
51	Over a period of centuries, and latterly over some objections by Holt CJ as to non-consensual quasi-contracts, the action of indebitatus assumpsit had come to be the action to enforce express and implied contracts where consent and agreement was real, even if implied, and as the proper remedy for a mass of miscellaneous duties imposed by law.  The form of action implied a contract or agreement – for many examples this was demonstrably false.  Blackstone attempted to rationalise the agreement as a societal one:
…an implied original contract to submit to the rules of the community whereof we are members.

52	Holt’s resistance was rooted, to a degree, in a desire for coherence – indebitatus assumpsit had developed through Slade’s Case as founded on agreement or consent that was real, even if it was to be implied.  The allowing of the use of a form of action so founded to recover sums in a non-consensual way through a fiction of a promise or consent disguised the true basis of the recovery.  As Holt CJ had said in Starke v Cheeseman, the notion of promises in law was metaphysical; and as he said in City of York v Toun:
How can there be any privity or assent implied when a fine is imposed on a man against his will?
 
Lord Mansfield and Moses v Macferlan
53	Enter Lord Mansfield.  He found a less than coherent set of rules in many heterogeneous cases.  What lay at their root was the legal response that had inspired the Chancellor to give monetary relief in cases such as that involving the executrix of an unpaid tailor: because it was obviously just and equitable to afford a convenient remedy.  He sought to create a principled basis for order out of heterogenous detailed rules 
54	From the time of Moses v Macferlan the road was clear, if it were to be taken: to remove the fiction of implied contract and to place the law on the foundation of restitutionary recovery based upon a coherent principle, such as unjust enrichment; or, to take another path and to maintain the contractual fiction in a taxonomy of tort and contract, extruding from the taxonomy restitution and any broad unifying principle such as unjust enrichment. The 250 years since Moses v Macferlan have seen the struggle waged for the control of this direction of the law in England, the United States and Australia.
55	The course advocated by Lord Mansfield can be seen to be based on principles of fused law and Equity, or at least the expression of principle in a form of action at law by reference to language of an equitable character.  In Clarke v Shee, Sadler v Evans and Jestons v Brooke Lord Mansfield described the action as respectively:
A liberal action in the nature of a bill in equity; and if, under the circumstances of the case, it appears that the defendant cannot in conscience retain what is the subject-matter of it, the plaintiff may well support this action. [98 ER 1041 at 1042]

It is a liberal action, founded upon large principles of equity, where the defendant can not conscientiously hold the money. The defence is any equity that will rebut the action. [98 ER 34 at 35]

This is an action for money had and received; and therefore it is analogous to a bill in equity. The ground of the action is, to recover half of the neat profits arising by the re-sale of certain goods purchased by the defendant…The general question is, ‘whether the plaintiff ought to recover in an action for money had and received?’ That is ‘whether it is against conscience that the defendant should retain the whole profits of the goods in question to himself’?  [98 ER 1356 at 1366]

56	As observed by Gummow J in Roxborough v Rothmans of Pall Mall Australia Ltd: 
It has been suggested that the use by Lord Mansfield in his judgment of the phrase “ex aequo et bono” and his references to the ties of natural justice and equity bespeak the reception of Roman law. However, it must be remembered that Lord Mansfield borrowed ideas from various sources. An example, recently considered by the House of Lords in Manifest Shipping Co Ltd v Uni-Polaris Shipping Co Ltd [[2001] UKHL 1; [2001] 2 WLR 170 at 184-186; [2001] UKHL 1; [2001] 1 All ER 743 at 757-759.], is the concept of good faith in relation to insurance law. Sir Anthony Mason has observed that Lord Mansfield's approach to good faith and to restitution reflects “the spirit of equity rather than what its admirers refer to as the genius of the common law” [Parkinson (ed), The Principles of Equity, (1996), Foreword at vi.]. With varying degrees of success, Lord Mansfield sought to translate equitable principles, doctrines, and procedures into the trial of actions at law [Holdsworth, A History of English Law, (1938), vol 12 at 583-605 and Fifoot, Lord Mansfield, (1936) at 183-197]; this reflected his appreciation of equitable doctrine for its flexibility and adaptability to modern needs, particularly in commercial law [Holdsworth, A History of English Law, (1938), vol 12 at 260, 585]. Then, as today [Waters, "The Reception of Equity in the Supreme Court of Canada (1875-2000)", (2001) 80 Canadian Bar Review 620 at 694], “equity is the spur to new thought and further remedy, and ... provides a means of introducing new policies”.

57	The difficulty with the simply expressed notion of unjust enrichment, as discussed by Dawson, is the formlessness of the expression if it is to act as a rule of recovery, while, at the same time, recognising that the expression contains a useful informing value or norm.
58	Sir William Holdsworth saw Lord Mansfield’s references to equity in Moses v Macferlan as being references to equitable principles.  Mansfield was a Scot; Scotland did not have two separate systems of law and Equity – north of the border lay fusion.   As a Scottish civilian-trained lawyer, Mansfield had the broad frame of mind developed in a legal system built on principle and by logical deduction, not by empirical induction from decided cases.  He looked not for the writ, but for the principle; not to the decision in the decided case, but to the principle underlying the decision.  The references to equity in Moses v Macferlan reflected a wider current of debate (the same debate carried on 200 years later in Australia) between those who would fuse principles of law and Equity, and those who saw the need to keep them as separate substantive streams of law.  Two great fusionists of the 18th century were Mansfield and Blackstone.  The former (Mansfield) lost the contemporary debate in Burgess v Wheate a case which concerned the possible assimilation of the legal and equitable estates upon the death of an intestate cestui que trust without heirs.  The majority said there was no escheat to the Crown: the trustee was alive.  Mansfield looked to substance: the beneficial owner was dead, intestate and without heirs: the land escheated. The latter (Blackstone), proselytised his views in the Commentaries.  Blackstone’s Commentaries were carried to the New World and formed the basis of American legal education in the 19th century.  Little wonder that the American law of restitution has always had a decidedly fused texture and equitable flavour.
59	Blackstone expressed the view that the differences between law and Equity should not be seen as great – not as substantive differences, but as procedural: “in the mode of proof, in the mode of trial, and mode of relief.”  Yet, as Holdsworth said, these matters were critical; common law did not have the machinery for the ascertainment and vindication of personal equities, especially with jury trials.  As Lord Stowell said in The Juliana  quoted by Dixon CJ, McTiernan and Kitto JJ in Jenyns v Public Curator Equity and law worked by very different methods.  
60	The reaction to Lord Mansfield’s views on restitution should, perhaps, be seen in this wider context of the reaction to his views as to the fusion of substantive principles (without legislation).  It is perhaps little wonder that principles of recovery of such proximity to contract – which had, as its principled foundation, conceptions of justice and natural equity (unjust enrichment, if you like) – would struggle in common law courts governed by the writs and forms of action, with Equity playing its important, but often adjectival, role as a separate and distinct partner to the law, exercising jurisdiction as auxiliary, concurrent and exclusive.
The development of restitution: implied contract or restitutionary principle
61	The following 250 years has seen the common law develop from the rejection of Lord Mansfield’s views and the emphatic foundation of the common law of quasi-contract upon implied contract and fictions, to the rejection of that approach and the acceptance of the utility and operation of the informing conception of unjust enrichment and the development of principles and rules of recovery through that acceptance.
62	To a degree, the difference in views can be reconciled as one of emphasis – everyone understood Holt CJ’s point: the implication of contract (except in the Rousseauan sense used by Blackstone) in respect of many counts was fictitious.  Nevertheless, the hard edge of the debate can be seen in some of the expressions of the attempted interment of the ideas of others.  There can be seen to be two distinct approaches: on the one hand, the use of implied contract (real and fictional) as the framework for recovery of heterogeneous claims, having their lineage in the extensions of indebitatus assumpsit in the 17th and 18th centuries (notwithstanding the abolition of the forms of action in the 19th century by the Common Law Procedure Act); and, on the other hand, the expression of the matter by a principle of the remedy for unjust enrichment.
63	The unreality and fictitious nature of the implication of contract could be seen from the circumstances in which it was used: for example, to found recovery against someone declared insane for necessary services.  Lord Justice Cotton described the expression “implied contract” as “erroneous and very unfortunate”.
64	Despite this, a legal taxonomy of civil common law divided into contract and tort in one sense replacing the taxonomical structure of the forms of action, the influence of positivism and the formal structure of legal rules saw the conceptual necessity of an implication of contract.  The clearest manifestation of this was Sinclair v Brougham.  At the winding up of a building society that had been carrying on (ultra vires) the business of banking, there were three groups of claimants: depositors in the ultra vires banking business, shareholders and creditors.  The depositors’ contracts were ultra vires and void as contrary to the terms of the Building Societies Act 1836.  The depositors claimed in quasi-contract, as money had and received to their use.  At first instance and in the Court of Appeal, this claim was rejected and the depositors were held to rank after the creditors and shareholders.  The House of Lords varied the orders below and held the depositors to rank pari passu with the shareholders, after the creditors were paid, not by any recognition of a common law claim (or indeed any personal claim in equity) but by a process of tracing in equity.  In dealing with the action of money had and received, Viscount Haldane LC unequivocally aligned such a claim with the capacity of an enforceable express contract to exist.  All personal actions at common law, he said, were in contract or tort.  Quasi-contract was based on a fictional implication: but “the fiction can only be set up with effect if such a contract would be valid if it really existed.” The Lord Chancellor saw tracing as an in rem remedy. Lord Dunedin (a Scot) after undertaking an examination of Roman Law, saw the fictional implication in the common law as the difficulty; thus he turned to equity, not in rem but as a claim under a “super-eminent equity” competing with claims in contract.  Lord Sumner spent some time discussing Moses v Macferlan, extirpating any influence of Equity in the action in quasi-contract.  The notion of “equity” was to be understood, he said, as describing the width of the common law action: 
There is now no ground left for suggesting as a recognisable “equity” the right to recover money in personam merely because it would be the right and fair thing that it should be refunded to the payer.

65	Fifteen months earlier, while in the Court of Appeal, Lord Sumner (as Hamilton LJ) had considered the nature of a possible defence to an action for recovery based on a mistake of fact.  A general defence of change of position was rejected and Hamilton LJ, speaking of Lord Mansfield, said:
Whatever may have been the case 146 years ago, we are now not free in the twentieth century to administer that vague jurisprudence which is sometimes attractively styled “justice between man and man.”

66	Condescension became tinged with rudeness a few years later when Scrutton LJ spoke of Lord Mansfield and his contribution as follows:
…since the time when that great judge…with no doubt a praiseworthy desire to free the Court from the fetters of legal rules and enable them to do what they thought to be right in each case, obscured, in my respectful view, the nature of the action for money had and received…the whole history of this particular form of action has been what I may call a history of well-meaning sloppiness of thought.

67	The necessity for the fictional implication to be able to stand as a putative express contract was of central importance.  It associated the whole field of recovery with the law of contract, however artificially, and drove out any sense that the recovery or the defence to recovery was based on an underlying equity.  The theory remained expressed in the 1930s and 1940s by judges of great eminence.
68	Meanwhile, in Australia, in 1910, Barton J in Campbell v Kitchen and Sons Ltd  described the action for return of moneys paid under a mistake of fact as depending “largely on the question whether it is equitable for the plaintiff to demand or for the defendant to retain the money.  Here, I think such a demand distinctly inequitable, and I see no moral or equitable duty in the defendants to repay it”; and in 1912, Griffith CJ in The King v Brown said “the action for money had and received lay whenever the defendant had received money which in justice and equity belonged to the plaintiff…”
69	However, dutiful to precedent, the High Court followed Sinclair v Brougham in 1917 in Hirsch v The Zinc Corporation Ltd and in 1924 in Smith v William Charlick. 
70	Yet, the broader undercurrent of a principle concerned with unjust retention remained in the law.  Money could be recovered on the face of the express contract being unenforceable under the Statute of Frauds if the contract were executed. The implication theory broke down completely with the Statute of Frauds that made the contract merely unenforceable, not void. If the contract was performed, then quasi-contract (as if in assumpsit) would give a remedy. But how could this be by implied contract when there was already (undisturbed but unenforceable) an existing express contract?
71	In England, the views of Lord Denning were becoming influential on the subject.  In 1925 and 1939, Mr Denning (as he then was) wrote two short articles in the Law Quarterly Review dealing with two cases: Scott v Pattison which concerned recovery in quantum meruit when the Statute of Frauds was engaged; and Craven-Ellis v Canons Ltd.  In 1931, Winfield’s Province of the law of Tort appeared, in which there was a substantial chapter devoted to quasi-contractual liability based on unjust enrichment.  A lively debate about this then ensued.
72	The American Restatement of the Law of Restitution appeared in 1937, which Lord Wright and Professor Winfield reviewed in 1937 and 1938.  Lord Wright also re-analysed Sinclair v Brougham in an article in 1938 in a way, by including the tracing rules, and thus equitable principle itself, in the framework of unjust enrichment. He saw restitution as not limited to quasi contract at law, but as including equitable rules and principles when they were based on the informing conception of unjust enrichment. He thus transmogrified one of the cases that had sought to inter Lord Mansfield into an authority consistent with his ideas.   In the 1930s, other English scholars began to explore the place of unjust enrichment in quasi-contract.  
73	The case law of the late 1930s began to reflect an awareness of the unsatisfactory state of the implied contract analysis: Craven v Ellis,  Brook’s Wharf and Bull Wharf Ltd v Goolman Bros,Morgan v Ashcroft and Re Cleadon Trust Ltd.
74	In 1940, Lord Atkin in United Australia Ltd v Barclays Bank Ltd when discussing the imputation of intention in waiver of tort, railed against the ghosts of the past forms of action standing in the path of justice.  Then, in June 1942, in the depths of the war, Lord Wright in Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd, speaking in the context of the remedy available upon frustration, was lucidly defiant about the value of what Lord Mansfield had said in Moses v Macferlan:
Lord Mansfield does not say that the law implies a promise.  The law implies a debt or obligation which is a different thing.  In fact, he denies that there is a contract; the obligation is as efficacious as if it were upon a contract.  The obligation is a creation of the law, just as much as an obligation in tort.  The obligation belongs to a third class, distinct from either contract or tort, though it resembles contract rather than tort.  This statement of Lord Mansfield has been the basis of the modern law of quasi-contract, notwithstanding the criticisms which have been launched against it.  Like all large generalizations, it has needed and received qualifications in practice.  There is, for instance, the qualification that an action for money had and received does not lie for money paid under an erroneous judgment or for moneys paid under an illegal or excessive distress.  The law has provided other remedies as being more convenient.  The standard of what is against conscience in this context has become more or less canalized or defined, but in substance the juristic concept remains as Lord Mansfield left it.
…
…yet serious legal writers have seemed to say that these words of the great judge in Sinclair v. Brougham closed the door to any theory of unjust enrichment in English law.  I do not understand why or how.  It would indeed be a reduction ad absurdum of the doctrine of precedents.  In fact, the common law still employs the action for money had and received as a practical and useful, if not complete or ideally perfect, instrument to prevent unjust enrichment, aided by the various methods of technical equity which are also available, as they were found to be in Sinclair v. Brougham.

75	These passages reinforced his view, expressed at the commencement of his speech, that:
It is clear that any civilized system of law is bound to provide remedies for cases of what has been called unjust enrichment or unjust benefit, that is to prevent a man from retaining the money of or some benefit derived from another which it is against conscience that he should keep.  Such remedies in English law are generically different from remedies in contract or in tort, and are now recognized to fall within a third category of the common law which has been called quasi-contract or restitution.

76	The other members of the House did not express themselves in like recognition.  The views of Lord Wright were adopted by the Full Court of the Supreme Court of New South Wales in 1954 in Watney v Mass.
77	In 1951, the High Court (Williams, Fullagar and Kitto JJ) in Turner v Bladin expressly endorsed the two articles by Mr Denning, as well as Denning LJ’s restatement of the matter in James v Thomas H. Kent & Co.  There, Denning LJ had made clear the confusion that could flow from analysing the question from the point of view of implied contract. 
78	The language of restitution and unjust enrichment was used in Australia in a number of cases: in 1952 in Murdock v Kennedy: “restitution”; in 1955 in Matthes v Carter: “restitution”; in 1959 in Mason v New South Wales: “unjust enrichment”; in 1962 in Deposit Investment Co v Kaye: “unjust benefit”.
79	1966 saw the publication of one of the great works of scholarship: The Law of Restitution by Professor Goff (later Lord Goff) and Professor Jones.  The authors placed unjust enrichment as a legal concept, a unifying legal concept explaining why the law recognises an obligation to make restitution.
80	1985 saw the publication of the next great influence on the scholarship of restitution: An Introduction to the Law of Restitution by Peter Birks.  Before his untimely death at 62 in 2004, he had mapped and remapped the law of restitution entering the lists to do battle of a theoretical and taxonomical kind with those who would oppose the re-ordering or re-classification of the law of obligations with restitution and unjust enrichment at its centre.  He was an inspiring teacher who was unafraid to reconsider this view.   His views rejected the equitable influence implicit in the language of Moses v Macferlan and taken up in the United States and Australia.  He preferred a structure based on strict liability, subject to specific defences articulated without a penumbra of discretion.  Birks’ influence has been strong in England, but the High Court has preferred a more flexible approach influenced by equitable principles.  Nevertheless, together with Goff and Jones, Birks was one of the modern British pioneers in this scholarship.  He influenced the first great Australian work on the subject: Mason and Carter: Restitution Law in Australia published in 1995.
81	In 1986 in Australia, Gibbs CJ in National Commercial Banking Corporation of Australia v Batty placed the foundation of money had and received on the justice and equity of repayment, citing Moses v Macferlan, Barton J in Campbell v Kitchen & Sons, Griffith CJ in The King v Brown, Lord Wright in Fibrosa, the Full Court in Watney v Mass, and Lord Denning in Fischler v Administration of Roumanian Property.
82	The dam was about to burst in Australia.  To appreciate the force and clarity of the change in 1987, one should appreciate that only nine years previously, in 1978, Lord Diplock had denied in Orakpo v Manson Investment Ltd the separate existence of a doctrine of unjust enrichment. The difficulty and complexity of recovery in quasi-contract can be appreciated by a reading of the learned and intricate judgments of four of the finest judges ever to sit on the New South Wales Court of Appeal in the two appeals reversed by the High Court in Pavey & Matthews Pty Ltd v Paul. 
83	In Pavey & Matthews, the High Court rejected the implied contract theory of quasi-contract and ushered in a new era in restitutionary recovery in Australia. Before turning to that Australian development a digression is necessary to see how the law had developed in the United States; and to reflect on the place of Equity in all this.
A digression: restitutionary recovery in the United States
84	By the mid-19th century in the United States, courts were moving away from the implied contract theory.  Some of those decisions revealed the influence of the thinking of Henry Maine who, in Ancient Law, had rejected the proposition that contract had anything to do with quasi-contract.  That influence of Maine extended to the Indian Contract Act 1872 which reflected this sentiment.  Maine was a member of the Governor’s Council in India.
85	In the late 19th century, two American scholars, Professor Ames of Harvard and Professor Keener of Columbia wrote influential works on quasi-contract.  Keener’s structure of quasi-contract had three species: the obligation to perform a legal judgment; the obligation to perform a duty imposed by statute, custom or office; and obligations arising out of “unjust enrichment”.  The source of the language and structure was from the work of Ames, and Ames’ use of unjust retention:
…fundamental principle of justice that no-one ought unjustly to enrich himself at the expense of another.
That was taken from Pomponius.
86	In 1913, Professor Woodward of Stanford published The Law of Quasi-Contracts.  It focused on Keener’s third species: unjust enrichment.
87	During the 19th century, the courts of the United States recognised the equitable notions that underlay the action for moneys had and received and the defences thereto.  The Supreme Court, in a number of cases in the 20th century, recognised that the origin and function of the action was in equitable conceptions, even if the action was strictly at law.  In one of those Supreme Court cases, the Court set out with approval the expression of the matter in 1838 by the Supreme Judicial Court of Massachusetts in Claflin v Godfrey.
The action is assumpsit for money had and received by the defendant to the plaintiff’s use, and for money paid by the plaintiff for the defendant’s benefit.  This is often called an equitable action and is less restricted and fettered by technical rules and formalities than any other form of action.  It aims at the abstract justice of the case, and looks solely to the inquiry, whether the defendant holds money, which ex aequo et bono belongs to the plaintiff.  It was encouraged and, to a great extent, brought into use by that great and just judge, Lord Mansfield, and from his day to the present, has been constantly resorted to in all cases coming within its broad principles.  It approaches nearer to a bill of equity than any other common law action.

88	In another of those Supreme Court cases, Cardozo J referred to Moses v Macferlan and the action for money had and received as being “equitable in origin and function”, and said:
The claimant to prevail must show that the money was received in such circumstances that the possessor will give offense to equity and good conscience if permitted to retain it.

89	In 1937, the American Law Institute published the Restatement of the Law of Restitution.  The work whose reporters were Professors Seavey and Scott, was comprehensive in its scope, dealing in part 1 with the right to restitution, in quasi-contract and kindred equitable relief, and in part 2, with constructive trusts and analogous equitable remedies.  It was marked, as Lord Wright said, by “elaborate organisation” and “exact analysis”.
90	The underlying principle set out in black letter para 1 was entitled “unjust enrichment”:
A person who has been unjustly enriched at the expense of another is required to make restitution to the other.

91	This is not the place to examine in detail the content of the American law, in 1937, or thereafter.  I do, however, wish to make some remarks on the place of Equity that was recognised by the Restatement.
92	First, one should not look at quasi-contract or restitution only as a common law action spurred into incremental development by an ad hoc equitable jurisdiction that receded once the common law courts provided a remedy.  Aspects of Equity’s jurisdiction can be seen as coherently founded on the remedying of unjust enrichment: the reconveyance of property conveyed by mistake or pursuant to fraud or duress or oppression, often, but not always concerned with land; the development of the resulting trust when property was purchased with funds of another or conveyed without consideration or after the disposition of only a legal interest; breach of confidence or duty in holding funds as agent; the restoration of property where the purpose for its transfer had failed; relief against undue influence and unconscionable bargains; contribution, subrogation and marshalling.  These were some of the core areas of Equity.
93	The paradigm analysis for many these remedies was trust; hence the development of the constructive trust.  The 19th century saw the development, not always coherently, of implied, resulting and constructive trusts, and rules of tracing, often dealing with claims for restitution or payment or disgorgement that had similar or analogous remedies at law.
94	Often ignored in taxonomical analysis of law is admiralty and maritime law.  Its separate maritime, international and civilian sources were (and are) important for its doctrinal coherence.  Concepts of general average and salvage familiar to maritime law had as a significant informing principle the prevention of unjust enrichment.
95	It is the recognition of common informing notions in quasi-contract (in law) and in Equity that has led to controversies and passions when theoretical re-organisation of a large part of the law of obligations has been sought to be undertaken around the framework of unjust enrichment.
The direction of restitutionary recovery in Australia since 1987
96	The end of an historical survey such as this is not the place for a detailed conspectus of the Australian law of restitution for unjust enrichment.  A brief outline is, however, necessary.
97	In 1987, the High Court recognised the principle of unjust enrichment in Pavey v Matthews, a case which concerned a builder’s claim to recover restitution for the fair value of work done under a contract rendered unenforceable by statute.  The Court emphasised that the requirement for injustice did not involve judicial discretion.
98	At least three features govern the Australian law of restitution for unjust enrichment as it has developed.  First, the notion of unjust enrichment is not the statement of a premise or principle of recovery, rather it is an informing principle or unifying or organising concept.  Secondly, Australian law recognises a two-stage approach: first, the identification of an unjust or qualifying or vitiating factor that causes enrichment such as mistake, duress, conditionality of payment, request, failure of consideration; and secondly, that the defendant has no juristic reason entitling retention of the enrichment.  
99	The third feature of Australian law is the explicit recognition of the influence of the equitable character of the action by the place of equitable principles in ascertaining who should properly bear the loss and why.  This aspect of approach in Australia rejects strict notions of dis-enrichment especially in working out the, now accepted, broad defence of change of position.
100	The action of restitution as the descendant of the common law action for “money had and received” has matured in Australia, based on the informing principle of the prevention and reversal of unjust enrichment. The defences to an order that may prima facie lie from the existence of a vitiating or unjust factor reflect that development. A broad defence of change of position on the faith of the receipt has been developed. The defence of the recipient being a purchaser for value, such as the discharge of an existing debt, can be made out in some circumstances. Whether that defence has the width that it has in the United States is an open question.
101	The available defences of change of position and purchase for value merge with the question of the existence of a juristic reason to retain the enrichment, such as payment under an extant contract, an unrescinded gift and the existence of a statutory right to retain.
102	There remains some controversy as to the proper way to organise and doctrinally develop parts of the law of obligations that have their historical roots in law and Equity.  Equitable principles and notions inform the law of restitution; but the extent to which the concept of unjust enrichment is to be equated with good conscience and how that affects equitable principles and remedies based on unconscionability or other related equitable notions remains to be seen.
103	Thus it remains to be seen how the various actions for payment of money in equity which have the common informing principle of unjust enrichment will develop: actions such as accounting as a constructive trustee for participation in an equitable wrong; the remedying of undue influence, unconscionable bargains and other improper influence; and the recovery of funds for purposes that have failed.
104	To finish, and not wishing to become embroiled in a doctrinal battle that has killed and wounded many, it may be worth revisiting Blackstone’s proposition, and Holdworth’s criticism of it, in an age now when procedure has been unified; juries in civil dispute have, with limited exceptions, been abolished; statute has assumed such over-arching and inter-lineal importance; when statutes are expressing rules by reference to notions in use in courts of law and of Equity; and when restitution is developing as a body of doctrine for the remedying of wrongfully retained funds using vitiating factors used historically in both common law and Chancery courts and applying equitable principles to ascertain liability.  In light of such changes, it is difficult to maintain, as a proposition that is universally defensible, that principles of common law and equity must, at all times, remain as separate streams in separate river beds.
Sydney
4 November 2015