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(A) Panag. Prelims RESTITUTION IN PRIVATE INTERNATIONAL LAW Restitution in Private International Law GEORGE PANAGOPOULOS B. A., LL.B (hons.) (Mon.) B.C.L., D.Phil. (Oxon) Barrister and Solicitor of Victoria, Australia Solicitor, England and Wales OXFORD – PORTLAND OREGON 2000 Hart Publishing Oxford and Portland, Oregon Published in North America (US and Canada) by Hart Publishing c/o International Specialized Book Services 5804 NE Hassalo Street Portland, Oregon 97213-3644 USA Distributed in the Netherlands, Belgium and Luxembourg by Intersentia, Churchillaan 108 B2900 Schoten Antwerpen Belgium © George Panagopoulos 2000 The author has asserted his right under the Copyright, Designs and Patents Act 1988, to be identified as the authors of this work Hart Publishing Ltd is a specialist legal publisher based in Oxford, England. To order further copies of this book or to request a list of other publications please write to: Hart Publishing Ltd, Salter’s Boatyard, Oxford OX1 4LB Telephone: +44 (0)1865 245533 or Fax: +44 (0)1865 794882 e-mail: [email protected] www.hartpub.co.uk British Library Cataloguing in Publication Data Data Available ISBN 1 84113–142–3 (cloth) Typeset by Hope Services (Abingdon) Ltd. Printed in Great Britain on acid-free paper by Biddles Ltd, Guildford and King’s Lynn. “λλ πειρ ται τ ζημ α σζειν, φαιρν τ κρδο . στε τ πανορθωτικν δκαιον "ν ε#η τ μσον ζημα κα$ κρδου” &Αριστοτλη, &Ηθικ Νικομχεια, V 4 1132α 9–10, 18–19 “but (the judge) tries to equalize things by the penalty he imposes, taking away the gain . therefore the restitutionary justice is the mean between loss and gain” Aristotle, Nicomachean Ethics V 4 1132a 9–10, 18–19 Preface This book is based on my doctoral thesis, which was submitted at the University of Oxford in July 1999. It has since been revised and updated. The subject matter of this book involves the marriage of two areas of law, restitution and private international law. These are areas which first attracted my attention as an undergraduate at Monash University. This interest became more intense, something more like a passion, whilst studying for the B.C.L. at Oxford. My greatest thank you and debt is to Adrian Briggs (of St Edmund Hall, Oxford) and Lionel Smith (of St Hugh’s College, Oxford). I was in the very for- tunate position of having two supervisors, each one a leading light in his respec- tive field: private international law and restitution respectively. Their supervision and generous assistance can not be overstated. Having two supervi- sors always kept me on my toes, as each one had a different perspective. Their different perspectives greatly assisted my ability to synthesise these two difficult areas of law. Their influence can be seen throughout the book. Many thanks must also go to my doctoral examiners, Professors Peter Birks and Jonathan Hill. Their comments and views during the examination process were of particular assistance in converting the thesis into a book. During my years of graduate study at Oxford I had the benefit of the views and assistance of a number of people to whom I am also indebted. Directly, or indirectly, they helped me with this work. They include Professor Martin Davies, Professor Francis Reynolds, Edwin Peel, Professor Francis Rose, William Swadling, Dirk Verse, Simone Degeling, Robert Stevens, Francesco Giglio, Søren Schonberg, James Edelman, Alexandros Stratakis and Dionysios Flambouras. A warm thank you to Virginia Mavrika for her assistance and sup- port, both whilst working on the thesis and whilst writing this book. Finally, I wish to also thank my parents, Konstantinos and Maria Panagopoulos, for their continued love and support. London G.C.P. St George’s Day, 2000 Table of Contents Table of Cases xv Table of Statutes xxix Works Frequently Cited xxv INTRODUCTION 1 PART I A MAP THROUGH THE LAW OF RESTITUTION 1. A MAP THROUGH THE LAW OF RESTITUTION 5 1. The Existence of a Separate Law of Restitution 5 2. The Elements of a Restitutionary Claim 7 2.1 Enrichment 7 2.2 At the Plaintiff’s expense 9 2.3 Unjust Receipt of the Value of the Benefit 9 3. Personal and Proprietary Remedies—Proprietary Restitution 11 3.1 The Nature of Proprietary Restitution 13 3.2 Proprietary Claims and Proprietary Restitution 13 3.3 Circumstances giving rise to Proprietary Restitution 14 4. Restitution for Wrongs 15 4.1 Availability of Restitution for Wrongs 15 4.2 Taxonomic Location of Restitution for Wrongs 16 5. Tracing 17 5.1 What is Tracing? 17 5.2 Why do we Trace? 18 5.3 Tracing at Law and in Equity 19 6. Defences 21 6.1 Change of Position 21 6.2 Defence of Bona Fide Purchaser 22 x Contents PART II CHARACTERISATION OF RESTITUTIONARY CLAIMS 2. CHARACTERISATION IN GENERAL 27 1 The Need for Characterisation 27 2 The Process of Characterisation 29 2.1 Problems Associated with Characterisation 29 2.2 The “Thing” to be Characterised? 31 3. CHARACTERISATION OF RESTITUTIONARY CLAIMS 37 1 One Issue or Several? 37 2 The Arguments in Favour of a Single Characterisation issue 38 2.1 Consistent with the Approach in Relation to Contract and Tort 38 2.2 Permutations of Legal Systems 40 2.3 Consistent with Authority 42 2.4 Macmillan v. Bishopsgate: Which is the Issue? 43 4. SPECIFIC RESTITUTIONARY CHARACTERISATIONS 47 1 Restitution and Contract 47 1.1 Independent Restitutionary Issue 48 1.2 The Scope of the Restitutionary Issue 53 1.3 Restitution for Breach of Contract 57 2 Characterisation of Equitable Rights and Obligations 57 3 Proprietary Restitution 61 3.1 The Proprietary Approach 62 3.1.1 Characterisation of Issues Affecting Property 62 3.1.2 Proprietary Restitution as Part of the Law of Property 65 3.2 The Restitutionary Approach to Characterisation 66 3.2.1 A Pure Restitutionary Characterisation 67 3.3 The “Equity” Aspect of Proprietary Restitution 70 3.3.1 The in personam Nature of Equity 71 3.3.2 In personam Characterisation of Proprietary Restitution 74 3.3.3 Equitable Interests Created via Consensual Transfers 75 3.4 The Hybrid Approach to the Characterisation of Proprietary Restitution 76 3.4.1 The Scope of the Ancillary Proprietary Issue 79 4 Characterisation of Restitution for Wrongs 81 4.1 Characterisation as “Wrongs” 82 4.2 Cases Dealing with International Restitution for Wrongs 84 Contents xi 4.3 Characterisation of Equitable Wrongs 86 4.3.1 Characterisation of Equitable Wrongs as Breaches of Trust 88 4.3.2 Characterisation of Equitable Wrongs as Breaches of Contract 88 4.3.3 Characterisation of Equitable Wrongs as “Wrongs” 90 4.3.4 Claims for “Knowing Receipt” 91 5 A Separate Issue of Tracing? 94 5.1 The Tracing Problem 94 5.2 The Approaches 95 5.2.1 Procedural or Substantive Issue? 96 5.2.2 A Separate Choice of Law Rule? 97 5.2.3 Characterisation of Tracing 99 5.2.4 Interest in the Tracing Process 100 5.3 Ancillary Issues 101 5.3.1 Intermediate Purchases or Acquisitions 101 5.3.2 Tracing in Equity and at Law 102 6 Negotiorum Gestio 103 5 THEORETICAL ISSUES 106 1 Renvoi 106 2 The Incidental Question 107 PART III CHOICE OF LAW RULES FOR RESTITUTIONARY ISSUES 6. THE EXISTING AUTHORITIES 111 1 Introduction 111 2 Dicey and Morris 112 3 U.S. Restatement 115 4 Other Academic Opinion. 120 5 The English Case Law 121 6 Other Common Law Cases 125 7. THE VARIOUS PROPOSED CHOICE OF LAW RULES 133 1 The Place of Enrichment Rule 133 1.1 Arguments in Favour of Place of Enrichment Rule 133 1.2 Arguments Against the Place of Enrichment Rule 134 1.2.1 Unsound Foundation 135 1.2.2 No general “place of enrichment” rule 135 xii Contents 1.2.3 Ignoring other Elements of a Restitutionary Claim 136 1.2.4 Arbitrary Result 137 1.2.5 Meaning of Place of Enrichment 138 2 Lex Fori 141 3 Multiple Choice of Law Rules 143 3.1 Law of the Contract 143 3.2 Law of the Relationship 149 3.3 Lex Situs of Immovables 151 4 Proper Law of the Obligation 153 5 Proposed Convention on the Law Applicable to Non-Contractual Obligations 155 5.1 Scope of the Draft Proposal 155 5.2 Choice of Law Rule 156 8 PREFERRED CHOICE OF LAW RULE 159 1 The Essential Element of the Unjust Factor 159 2 Determining the Proper Law of the Unjust Factor 166 2.1 Mistake 168 2.2 Illegitimate Pressure 169 2.3 Failure of Consideration 171 2.4 Unauthorised Transfer 173 2.5 Restitution for Wrongs 174 2.6 Legal Compulsion 175 2.7 Ultra Vires Payments. 180 2.8 Illegality and Incapacity 180 3 Unjust and Unjustified 181 PART IV JURISDICTION IN RESTITITUTIONARY CLAIMS 9. JURISDICTION UNDER THE BRUSSELS CONVENTION 187 1 Background to the Convention 187 2 Interpreting the Convention 188 3 The Scope of the Convention 189 4 Application of the Convention. 192 4.1 The General Rule 192 4.2 Special Jurisdiction. 194 4.2.1 Article 5(1)—Matters Relating to a Contract 196 4.2.2 Article 5(3)—Matters Relating to Tort, Delict or Quasi-Delict 197 4.3 Particular Types of Restitutionary Claims 205 Contents xiii 4.3.1 Restitutionary Claims Connected with a Contract—Article 5(1) 206 4.3.2 Choice of Court Agreements—Article 17 219 4.3.3 Proprietary Restitutionary Claims in Relation to Land—Article 16(1) 221 4.4 Other Particular Types of Restitutionary Claims 225 4.4.1 Claims in Equity 225 4.4.2 Proprietary Restitution 226 4.4.3 Restitution for Wrongs 228 10.
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