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Property, Subsidiarity, and Unjust Enrichment(7) |
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(b) Unjust Enrichment and Property Law.We now turn to the interaction between the law of unjustified enrichment and actions which vindicate property rights. The earlier analysis suggested that enrichment claims are subsidiary to the rei vindicatio in German and Quebec law. As was mentioned above, unjustified enrichment, in the widest sense, is about the reversal of defective transfers of value. Some such transfers are by way of services, but many are by way of transfers of property. So it seems justifiable to say that one function of unjustified enrichment is as a corrective of property transfers, which would suggest that unjustified enrichment would be subsidiary to actions which vindicate property rights. As was mentioned above, this has been suggested as the common law position, but the matter is far from clear.116 It is complicated by the absence of any rei vindicatio for movables in the common law system. Property in movables is protected by the law of wrongs, and it is not suggested that unjust enrichment is subsidiary to the law of wrongs. On the other hand, there is a rei vindicatio for immovables, and it may well be that a claim in unjust enrichment, measured by the value of ownership of an immovable, would not lie where the plaintiff still held ownership of the immovable.117 Similarly, Equity can provide the equivalent of a rei vindicatio in the form of a declaration of trust and consequential orders, and it has been held that no claim in unjust enrichment lies where the plaintiff retains its Equitable ownership of the transferred asset.118 In other words, wherever a rei vindicatio is potentially available, its actual availability seems to preclude unjust enrichment.
We may ask whether the subsidiarity is strong or weak. Even though unjustified enrichment can be understood as corrective of property dispositions, their interaction does not seem to generate the same concerns about "negative implication" as does the interaction of unjustified enrichment and contracts. The presence of a rei vindicatio may exclude an enrichment claim--this is weak subsidiarity--but the absence of any claim which vindicates property will not generally do the same. In other words, the fact that property has passed to the defendant does not, by itself, generally exclude an enrichment claim. While a contract creates a regime for the consensual transfer of benefits, a property transfer is not so much a regime as it is an event, albeit one which may occur within a contractual regime. As a result, a transfer of property does not in itself cast a shadow which excludes unjustified enrichment; any such shadow is cast by the context in which the transfer is made. A transfer of property made outside of any contractual context is indeed commonly the very occasion for an unjustified enrichment claim, aimed at the recovery of the property or its value.
If unjustified enrichment is generally only weakly subsidiary to property transfers, there is one apparent exception. Assume that the plaintiff transfers possession of a thing to another party, X, while retaining ownership. X then transfers possession to the defendant, in circumstances which give the defendant ownership of the thing, without the plaintiff's consent. Here we find that the plaintiff has lost ownership, and the defendant has acquired it; but any claim in unjustified enrichment will be excluded.119 The rule by which the defendant acquired ownership here casts a shadow which negatively implies that there may be no enrichment claim. But this exception is more apparent than real. The acquisition of ownership by the defendant in such a case is not merely an event; it is also part of a transaction between the defendant and X. This activates the considerations discussed in the previous section. The rule which gives ownership to the defendant is designed to protect the transaction between the defendant and X, and this protection ousts the plaintiff's enrichment claim.
The position in the common law (understood broadly so as to include Equity) is also complicated by the existence of trusts raised to reverse unjustified enrichment. On its face, this phenomenon seems clearly inconsistent with any relationship of subsidiarity between unjust enrichment and claims protecting property. But on further examination, this does not appear to be the case. If an asset is transferred at common law in circumstances which amount to an unjustified enrichment of the defendant, the common law will allow a personal claim to recover the value. The common law, viewed on its own, is like a civilian system in this regard; the law of unjust enrichment may step in to correct (but not to contradict) the property transfer, by creating an obligation. There is no difficulty about subsidiarity, because there is no rei vindicatio. Equity, however, adds another layer of correction to the analysis. It has long been established that the principle of non-contradiction which operates between common law and Equity does not prohibit interfering with common law ownership; that is the basis of all uses and trusts. Nor does it prohibit the addition of Equitable proprietary rights to common law personal rights. Unjust enrichment as it operates through Equity has different tools at its disposal than unjust enrichment operating through common law.
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