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Property, Subsidiarity, and Unjust Enrichment(5) |
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IV. Understanding Subsidiarity.1. A Model of Subsidiarity.The preceding comparative study suggests that subsidiarity is a general feature of the law of unjust enrichment, although the strength of the subsidiarity principle varies widely from system to system and even within each system. This section is an attempt to understand what might justify this subsidiarity. I am not primarily concerned here with the way in which subsidiarity is worked out in doctrinal terms. In those terms, a claim may be denied in one system due to a recognised principle of subsidiarity; in another system, it may be denied because the defendant's enrichment is said not to be at the plaintiff's expense. The concern here is with making sense of the results, in terms of principle.
It does not appear that strong subsidiarity can be justified by a desire for orderliness in our legal categories. If claims exist, it is presumably to meet the demands of justice, and therefore any principle which will deny an otherwise existing claim must be one with more normative weight than this.86 It might be possible to understand weak subsidiarity in this way, since weak subsidiarity only orders claims and cannot exclude them. Even here, however, substantive rights are affected and one would hope for a better justification.87
Another possible justification might be the general principle that the specific overrides the general. This certainly comes to mind when we consider how codified systems make the general unjustified enrichment claim strongly subsidiary to a more specific regime. This result can be seen to derive directly from the implied intention of the legislature; but the same principle could be deployed in a wider way, if unjustified enrichment claims could somehow be understood as more general in their application than such things as the terms of a specific contract. A well-known feature of the French legal tradition is its refusal to allow concurrent liability in contract and in delict, which may be understood as based on a philosophy that the specific terms of a particular contract should govern in preference to a general law of fault, especially one so general as is usual in the French tradition. But this understanding would explain too much and too little at the same time. It would explain too little, because there are elements of strong subsidiarity for unjustified enrichment claims even in systems, like German law and the common law, which have no general aversion to concurrent liability. It would explain too little, because in the French legal tradition unjustified enrichment claims are subsidiary (albeit weakly so) even to delictual claims, and it is difficult to see how this could be explained on the basis that the delictual claim is somehow more specific than the claim in unjustified enrichment.
What seems to be needed is a conviction that unjustified enrichment claims serve a corrective role.88 In the common law, some parts of unjust enrichment come from Equity, such as the resulting trust. But even those parts of the law which are rooted solely in the common law can be said to be derived not from Equity, but from equity. So said the great common law judge, Lord Mansfield;89 and civilian lawyers, who have nothing to do with Equity, also view unjustified enrichment as based on equity. In both France and Quebec, the need for this corrective was so strongly felt that a whole head of liability was created by the courts outside of the civil code, and the basis for this step was équité.90 The impetus for the inclusion of a general enrichment action in the BGB came from von Gierke, who viewed it as equitable in nature.91 This only means that it is a corrective.
The idea of one part of the law operating so as to correct other parts of the law is a slightly curious one. It makes sense in relation to laws which are of different orders, as where a statute is declared void due to its inconsistency with some constitutional principle. This may be why some German jurists have, in the past, viewed unjustified enrichment as a kind of higher law.92 But paradoxically, to the extent that it is subsidiary, it is a kind of lower law. In fact, "correction" by a disposition of a higher legal order is just the natural outcome of that hierarchical structure; the higher order governs the lower. It is when the parts of the law in question are of the same order that correction is more difficult to conceptualise.
What follows from the conceptualization of unjustified enrichment as corrective of other parts of the law, while yet being of the same order as those other parts? We can find a parallel in that other great corrective system, Equity. One of the "maxims of Equity" was (or is, depending on one's view of such things) that "Equity supplements but does not contradict the common law." This is, at the same time, fundamentally important and completely false. It is false inasmuch as any supplementation amounts to a kind of contradiction. There is no point in having a second, supplementary set of rules unless it changes the outcome which the first set would give. On the other hand, the maxim is fundamentally important in the sense that it was the whole basis for the creation of Equity. When the first Chancellors enforced the first uses against legal title holders, the suggestion that they were contradicting the common law would have appalled them. They were merely requiring those people to behave according to good conscience (and telling them what good conscience required). Of course Equity developed into a set of legal rules, but the same reasoning holds: having a second set of rules only makes sense if the second set "supplements but does not contradict" the first set. If you wanted to contradict the first set, you would just change it. How can the circle be squared? For one legal regime to correct another, without possessing the authority of belonging to a higher legal order, it must in a sense go to a lower level; it must defer, at least nominally, to that which it corrects. Equity corrects the common law, but it cannot correct too much, or too obviously; the correction cannot lay itself open to the charge of being a contradiction.93 So, down the centuries to the present day, there are those who want Equity to do more, and those who want it to do less. Among the latter, there are concerns about containing it. Another consequence of the corrective nature of Equity is that it is very difficult to define it in any positive way: you cannot understand what it is without understanding that it is a corrective, and without having at least some grasp of that which it corrects.94
The parallels with unjustified enrichment are striking. It is a corrective, and just as in the case of Equity, this makes it difficult to define positively.95 It can only be understood in the light of that which it corrects. Furthermore, since this corrective regime does not stand higher in the legal order than which it corrects, it must not correct so much as to contradict. Moreover, the concerns with containing unjust enrichment liability are always to the fore.96 So the question becomes, what are the limits? When will correction amount to contradiction? The main difficulty here (and this is a problem in the relationship between the common law and Equity as well) is what might be called "negative implication." This name is borrowed from a doctrine (its status now uncertain) of Canadian constitutional law.97 Sometimes it is possible for a provincial legislature and the federal Parliament to both pass legislation which overlaps in its effects, each level of government being able to point to one of its jurisdictional powers to justify the act which it has passed. If the two pieces of legislation conflict, the federal legislation prevails under another doctrine called "paramountcy."98 But do they conflict? This is where negative implication might have a role to play. Here is a simple example.99 The federal Parliament, under its power over banking, passed legislation which provided rules for taking and enforcing a kind of security interest. The provincial legislation, under its power over property and civil rights in the province, passed legislation which required formal notice to the debtor before property subject to a security interest could be seized. The two regimes did not conflict in the sense suggested by many other cases, because it was perfectly possible for a bank to comply with both the federal and the provincial rules. But the doctrine of paramountcy was held to apply. In passing its legislation, the federal Parliament implied certain things, including that seizure could not be made more difficult by a notice requirement. The provincial legislature must avoid conflict not only with what the federal act says, but with what it implies is not to have anything said about it. It is as though the federal act casts a shadow beyond its express provisions, which the province must not enter. One expression sometimes used is that the federal Parliament has "occupied the field."
If this framework can be used to understand subsidiarity, then we can say that to different extents, corresponding to different conceptions of subsidiarity, the law of unjustified enrichment is not supposed to contradict the effects of other legal institutions. Weak subsidiarity sees a contradiction only where another recourse actually exists. Strong subsidiarity incorporates the idea of "negative implication," so that in assessing whether or not there is a contradiction, we must determine the extent to which other legal institutions cast shadows which unjustified enrichment cannot enter. Unjustified enrichment must yield to the positive dispositions and also to the negative implications of those other legal institutions.
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