Private Law in Theory and Practice Private Law in Theory and Practice explores important theoretical issues in tort law, the law of contract and the law of unjust enrichment, and relates the theory to judicial decision making in these areas of private law. Topics covered include the politics and philosophy of tort law reform, the role of good faith in contract law, comparative perspectives on setting aside con- tracts for mistake, and the theory and practice of proprietary remedies in the law of unjust enrichment. Contributors to the book bring a variety of theoretical perspectives to bear on the analysis of private law. They include: economic analysis, corrective justice theory, comparative analysis of law, socio-legal inquiry, social history, political theory as well as doctrinal analysis of the law. In all cases the theor- etical approaches are applied to recent case law developments in England, Australia and Canada, and, in the case of tort law, proposals in all these jurisdictions to reform the law. The book aims to present the theory of private law, and the application of theory to practical legal problems in an accessible form to teachers and students of tort, contract and the law of unjust enrichment, legal researchers and law reformers. Michael Bryan is Professor of Law at the University of Melbourne. He has researched and published extensively in the areas of equity, trusts and restitu- tion, including The Law of Non-Disclosure (with A. Duggan and F. Hanks: Longman, 1995) and contributed a chapter to The Law of Obligations: Connections and Boundaries (UCL Press, 2003). Private Law in Theory and Practice Edited by Michael Bryan First published 2007 by Routledge-Cavendish 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge-Cavendish 270 Madison Ave, New York, NY 10016 Routledge-Cavendish is an imprint of the Taylor & Francis Group, an informa business © 2007 Michael Bryan This edition published in the Taylor & Francis e-Library, 2007. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Bryan, Michael. Private law in theory and practice / Michael Bryan. p. cm. ISBN 1–84472–140–X (hardback) 1. Civil law – England. 2. Civil law – Australia. 3. Civil law – Canada. I. Title. K623.B79 2006 346 – dc22 2006021366 ISBN 0–203–94546–8 Master e-book ISBN ISBN10: 1–84472–140–X (hbk) ISBN13: 978–1–84472–140–5 (hbk) This book is dedicated to the memory of Peter Birks who by precept and practice demonstrated why private law scholarship matters. Contents List of Contributors ix Introduction xi PART I Principle and policy 1 1 Private right and public interest 3 STEPHEN WADDAMS PART II Tort law policy 25 2 Taking disagreement seriously: courts, legislatures and the reform of tort law 27 PETER CANE 3 The use of policy in negligence cases in the High Court of Australia 55 HAROLD LUNTZ 4 The High Court and social facts: a negligence case study 85 KYLIE BURNS PART III Issues in contract law 117 5 Reconfiguring mistake in contract formation 119 DAVID CAPPER viii Contents 6 The standard of good faith performance: reasonable expectations or community standards? 153 JEANNIE MARIE PATERSON 7 Some thoughts on the comparative jurisprudence of mistakes in assumption 167 CATHERINE VALCKE PART IV Certainty and discretion in property, equity and unjust enrichment 179 8 Estoppel, discretion and the nature of the estoppel equity 189 ELIZABETH COOKE 9 Unconscionability, constructive trusts and proprietary estoppel 199 NICHOLAS HOPKINS 10 Constructive trusts from a law and economics perspective 235 ANTHONY DUGGAN 11 The criteria for the award of proprietary remedies: rethinking the proprietary base 271 MICHAEL BRYAN 12 Change of position, good faith and unconscionability 289 SUSAN BARKEHALL-THOMAS Index 315 List of Contributors Susan Barkehall-Thomas is a Senior Lecturer in Law at Monash University. Michael Bryan is a Professor of Law at the University of Melbourne. Kylie Burns is a Lecturer in Law at Griffith University. Peter Cane is a Professor of Law in the Research School of Social Sciences, Australian National University. David Capper is a Reader in Law at Queen’s University, Belfast. Elizabeth Cooke is a Professor of Law at Reading University. Tony Duggan holds the Frank Iacobucci Chair in Capital Markets Regulation at the University of Toronto. Nick Hopkins is a Senior Lecturer at the University of Southampton. Harold Luntz is a Professorial Fellow at the University of Melbourne. Jeannie Paterson is a Senior Lecturer in Law at Monash University. Catherine Valcke is an Associate Professor of Law at the University of Toronto. Stephen Waddams holds the Goodman-Schipper Chair of Law at the University of Toronto. Introduction In 2002 the Faculty of Law at the University of Melbourne celebrated the opening of its new Law School Building by holding a conference on the Law of Obligations. The success of that conference, and of the book of the con- ference proceedings, The Law of Obligations: Connections and Boundaries, 2004 Andrew Robertson, (ed) UCL Press, encouraged the organisers to repeat the venture. The second University of Melbourne Conference on the Law of Obligations demonstrated, if it needed demonstrating, the intellectual vital- ity of scholarly writing in the law of obligations – which was defined broadly, for the purposes of the conference to include tort, contract, unjust enrichment and property law. I am grateful to all the participants for their contribution to the success of the conference. The papers benefited from the lively discussion which was a feature of all the conference sessions. I am particularly grateful to Dr Andrew Robertson who co-organised the conference, with his unfailing attention to significant detail, and who has given me wise advice at every stage of the production process of this book. Finally, I am indebted to Anna Severin for her invaluable editorial assistance which helped to pull the book together at a critical juncture. The papers by Peter Cane and Tony Duggan have appeared in the Oxford Journal of Legal Studies and the Toronto Law Journal, respectively. The publishers of these journals have kindly consented to the inclusion of the papers in this volume. Michael Bryan January 2007 University of Melbourne Part I Principle and policy Chapter 1 Private right and public interest Stephen Waddams It is common for writers to relate legal concepts to each other in terms of such metaphors as maps and organisational or taxonomic schemes. Distinctions are drawn among contract, tort, and unjust enrichment, and between obliga- tions and property, and, at a higher level of generality, between private rights and public policy. These distinctions are then commonly depicted as dis- tinct areas on a map, or as separate classes, orders, genera, and species in a taxonomic scheme. Metaphors may illuminate a complex subject, but any metaphor, if pressed too far, is apt to distort. The ideas of mapping and taxonomy in law owe their attraction partly to their indeterminacy and vari- ability. Mapping, as applied to law, is not a single metaphor, but multiple metaphors: the idea of a political map is not the same metaphor as the idea of a map of physical geography, and the idea of an urban map differs from the idea of a global map of seas and continents. Any set of ideas may claim its map, but different writers have used the word in different ways. Blackstone spoke of a map,1 and his map (rights of persons, rights of things, private wrongs, public wrongs) was useful for his purpose but plainly did not seek to set out mutually exclusive categories. Many private law obligations might fall simultaneously into all of his first three books. Modern writers, by contrast, have often envisaged a map that separates obligations rather as a map of physical geography separates places (Ottawa is in Canada, and therefore not in Europe) or as a taxonomical scheme separates biological specimens (an animal is either an insect or a mammal, but cannot be both). Some maps and taxonomic schemes claim, expressly or by implication, to be descriptive of the past. In that case the accuracy of the map or scheme can be assessed by historical evidence, as a geographical map may be compared with the terrain it depicts, or a taxonomic scheme may be tested by whether it includes all known specimens; in case of discrepancy, of course, it must be the map or scheme, not the terrain or collection of specimens, that is amended. 1 Blackstone, W, Commentaries on the Laws of England, 1765–69, Oxford: Clarendon Press, i, 35. 4 Stephen Waddams Actual assertions about the past should be tested and if they turn out to be false, should be contradicted. So, if it were asserted that every legal obligation has been derived from one only of three or four discrete concepts, this asser- tion could be contradicted by evidence that some legal obligations have been derived from the concurrent and cumulative operation of several concepts. It is true of many rules of private law that they have not been derived exclusively from a single concept. The law of vicarious liability cannot be derived entirely from the concept of fault, nor can the law of agency be derived entirely from the idea of consent, and so a map or scheme with fault, consent, and unjust enrichment as primary and mutually exclusive categories would not accur- ately describe the past.