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Sutton, R --- "Valedictory Lecture - "We Just Mislaid It": The Great Project and the Problem of Order in Private Law" [2005] OtaLawRw 6; (2005) 11 Otago Law Review 97

“We Just Mislaid It”: The Great Project and the Problem of Order in Private Law

Richard Sutton*

* Professor of Law, Faculty of Law, University of Otago.

1. Introduction

I look back with fondness to the time, over twenty years ago, when I was the Guest Memorial Lecturer in this very room.[1] My audience then, made up of people like yourselves, gave me a sympathetic and charitable reception. I offer this lecture as some kind of accounting for the marvellous time that you as taxpayers have given me in the intervening years. So too have my delightful students, my dedicated and stimulating University and Law Commission colleagues, and our energetic and resourceful library and support staff. [2]

During those years, I have travelled the world, talking with many of the great experts in my field. I have had the constant stimulation of New Zealand scholars.

I have bounced ideas off gifted lawyers, judges and civil servants. What have those experiences done for my understanding of the law? I fear that I will once more need to call upon your charity. The truth I wish to uncover is such that you may end up wishing that I had kept my accounting to myself.

What I would like to suggest is that order in law is to be found in pictures[3] rather than words. These pictures use symbols to convey meaning. Symbols are fundamentally different from ordinary legal concepts. They work in a looser pattern of logic.[4]

My symbols appear to be connected with ancient understandings of the human condition. Some will say that I am playing with superstitions. But I am not saying that law has a religious or mystical base. What I am saying is that the law picked up these things and now harnesses their emotive power to its own purposes.

Others will say that such symbols should be used only to speak about the deepest personal experiences, to help people work through inner states and feelings. My answer is this. What can be deeper than the fundamentals of our relationship with the society in which we live? Here we are going beyond legal rules, to the foundations of our legal order. Should we not rather expect the law to behave in the same way as the human psyche does?

2. Restitution and the Great Project

In this section of my talk, I want to pick my way through the title I have chosen, beginning with something that I have call, whimsically, “the Great Project”.[5] To me, the “Great Project” filled the air in the 1960’s and 1970’s. The presumptuous idea was this. Up until that enlightened era, our laws were based upon an archaic common law system. Either that, or the laws were poured out in Acts of Parliament. The latter were the product of ad hoc policies rather than sustained rational thought. We could do better. This was an upsurge of the old rationalist tradition of seventeen and eighteenth century philosophers. The major difference was that the Project would be worked out, not in grand theories, but in the detailed way in which New Zealand law is expressed.[6]

I don’t know how many of my contemporaries were inspired – or led astray – by that vision. Looking back over those years, I have to say that the benefits and results are now very indistinct. But it clearly served to justify such enterprises as the law reform movement, in which I was involved first in the 1980’s, and then again in the 1990’s. Perhaps it is significant that my efforts were attended with much better “score” (in terms of new legislation) in the first period than in the second.

What is the link between the Great Project and the Problem of Order? It lies, I think, in a claim that lawyers often make on their own behalf. Others may know more about society, and social outcomes. But the lawyer discerns the Order which lies behind it. The lawyer knows which measures will conform with that Order, and which will not. Without such conformity, the Great Project will fail.

A sweeping claim indeed. Now, at the turn of the century, we are in an age of scepticism. We need to articulate and demonstrate the ground on which we claim our privilege. The supposed Order may just be a muddle. How can we explain it to some sceptical treasury official? Paradoxically, the answer lies, I suggest, in searching a strange part of the law which at first appears less rather than more rational than the rest.

My own search has been made in the context of New Zealand’s private law. Private law is the law that governs the relationships that ordinary citizens have with each other – things like:

– the property that citizens can own – the contracts (or agreements) they can make with each other, and – the wrongs they commit against one another.

How is private law to be ordered?

3. Where does legal order come from?

I have mentioned already that I am describing work in progress. Many people work in restitution – the area of private law I am concerned with – and the end product is a combined effort. I wish I could explain why the law, which consists only of those rules which happen to be approved by an appropriate legal authority, should conjure up the ideas I will describe. But that is a matter for experts in jurisprudence. I wish I could trace back the ideas I will talk about to show how they got into the law, but I have to leave that to historians. I wish I could show you how, when some moral precept is brought into the law, it brings with it an inherent order which spills over into the rest of the law, but that is for legal philosophers to tell us, if they can.

All I can do is take you along paths I myself have followed. We look at the text of the law and try to make sense of what lies behind it.

In my wilder fantasies about order in the law, I try to draw it in pictures. I suppose most of us legal academics do, only to throw the picture away when we start writing. I wonder whether we are right so to conceal our thought processes. The author of a recent article in a law librarians’ journal reminds us that in the future, “greater use of graphics instead of volumes of data will occur. Representing information visually will make it easier to see trends or gauge the relative significance of pieces of information, [and] to identify indirect relationships between pieces of information”.[7]

This lecture will now consist mainly of pictures and diagrams, along with commentary on the significance they have for me.

4. The field of private law

My first diagram looks at private law as a whole.

Diagram 1

The Field of Private Law 600.jpg

This diagram contrasts (at the upper level) the two major institutions of private law, the institution of contract and the institution of property, with (at the lower level) the three main heads of personal obligation in private law. These heads are contract (box 1), tort (box 2) and unjust enrichment or restitution (box 3).

An institution is an established social custom or practice. Here the practices are the social habit of making agreements, and of holding assets as one’s own. Such institutions may or may not be supported or regulated by laws – the institutions of property and contract most certainly are. They are therefore “legal” institutions.[8]

A head of personal obligation is a legally recognised category of obligation. Members of each category are legal rules that share broadly similar characteristics within the category. All the rules in private law share one common feature. When they do apply to a particular fact situation, they impose legal obligations on one person, to act in a certain way towards another.

The background square is a “field” which is designed to be a host to all legal rules of “private” law. That is to say, the field is capable of containing and organising all the rules in private law. These establish all the obligations that can be enforced by one individual[9] against another. In this particular diagram, I have not taken into account legal rules that protect a person’s physical integrity or personality – eg rules about assault, or libel. It is simpler for my purposes to concentrate on protection of a person’s property and commercial interests.[10]

The usual outcome when these interests are unlawfully infringed is usually that one person – the defendant – has to pay money to another – the claimant.

A question that many academic commentators have found difficult in the last twenty or so years is this. What is the relationship between the institutions in the upper part of the diagram, and the heads of law in the lower part of the diagram? There are two of the first, and three of the second. Three into two won’t go.

A simple example will help lead us into the conundrum.

You own a car worth $3000. You promise (contract) to sell it to me for $2500. I pay you a cheque for $500 as deposit. Flushed with the “success” of your deal, you spend the $500 on a birthday party for your sister. Then someone tells you the value of the car. Realising you have bungled, you refuse to go on with the deal.

So both legal institutions are in play here - contract (because of the bargain we have made) and property (because you own the property and I want it, or at least I want compensation for not getting it).

In this example, all three heads of legal obligation are also in play. I have three ways of framing my claim against you:

You have promised me a car for a certain price, and had you carried out that promise, I would have been $500 better off. As it is, I’ve lost my $500 deposit. So I can sue you under the head of “breach of contract”, asking the Court to put me into the position I would have been in had the contract been carried out as it should have been. Result: You must pay me $1000.[11]

As a result of your wrongful act in breaking off the contract, I have lost the $500 I paid you and got nothing in return. You must compensate me for that loss. Result: You must pay me $500.[12]

As a result of the collapse of the agreement (whether you were in the wrong, or for some other reason, I was) not only have I lost the money, but you also gained it. So you are enriched by $500, which you must return to me. Result: You must pay me $500.[13]

So in our illustrative example, both the private law legal institutions, and all three heads of law – contract, wrongs and unjust enrichment – are in play. As it happens on these facts, I as an aggrieved party can rely on any one of the heads of law. So I will pick the first one, because it gives me the result that is most favourable to me. Who would opt for $500 if they can get $1000?

But that is not always the case. Sometimes only one institution is involved, as for example where we make a contract to do something, but not in relation to the property which one of us owns. We have contract but not property. And sometimes I have only one remedy, as for example where you are enriched, but you have done nothing wrong – a claim in unjust enrichment is my only choice.

I can’t then sue “in” contract or tort.[14]

So that is how we get to the question mark in the middle of the diagram. How are the laws that relate to the institutions of private law, to be related to the laws that relate to the heads of private law? If it were possible to detect a steady pattern of inter-action between the two, there would be no problem. Nor would it be a problem if there were no relationship at all, the institutions and the heads of obligation having their own distinct sets of criteria which were applied without regard to each other. It seems, however, that neither of these propositions is true.

5. What the argument is – and isn’t - about

Confronted with this question, the theorists take different views.

Some prefer to take it from the top. They argue that the institutions should be predominant in whatever law the courts and legislatures make. We must have strong protection for property ownership, and we must see to it that contracts are carried out. Otherwise, the world of commerce will suffer. So we say that the institutional divide between contract and property is the primary legal division in private law. The further differences between the groups of rules at the bottom of Diagram 1 are interesting, but they have to do with remedies rather than substance. They don’t deserve nearly the amount of attention they have been given in recent years. Most of the difficult issues can be mopped up by using well established principles of equity – most of which, as it happens, are designed to protect contract and property interests.[15]

Another group of theorists work the other way. The institutions of property and contract are merely the context in which the law happens to work. True, textbook law subjects are often framed in terms of that contextual reality. But then they become incoherent miscellanies of rules, gathered together by happenstance rather than by their intrinsic characteristics. These characteristics can only be understood by working from a broad, non-contextual frame of reference, based on the distinction between wrongs, breach of contract and unjust enrichment.[16]

There is a third group of theorists who refuse to commit themselves either way. Indeed, they have questions about the whole enterprise of dividing up private law into a series of Balkan states.[17] For myself, I have often found this view attractive as I have tried to grapple with my subject. So too, I believe, do New Zealand judges, who have been slow to come to grips with the fierce issues which have engaged English academics and more recently, English judges too.

In New Zealand, I suspect that technical distinctions between the three heads of obligation tend to be relegated to become part of the general run of competing considerations that jostle for attention in arguments about remedies.[18] Only very occasionally will the matter assume theoretical significance.[19]

And yet our problem is that we can become just too submerged in detail. We omit to take into account genuine differences in emphasis and approach, which are to be found in the legal material with which we are entrusted. My own personal vision of this came to me when I was on leave in Cape Town. We went to see an exhibition of the works of Russian French artist, Marc Chagall. Among the works on show was an extraordinary tapestry which he had designed, called Profil en Jaune et Bleu.[20]

I can remember sitting in front of this work for half an hour or so, transfixed both by its striking beauty, and by what it was telling me about my subject. On one side of the picture, in yellow, a man plays some sort of musical instrument amidst a profusion of vegetables and plants. This spoke to me of the fertility of property – and the fertility of property law, too, with its many forms of ownership and its diverse, inter-twining rules.

On the other side, in various shades of blue, two contemplative female faces, the gaze of the one apparently resting on the profile of the other. Everything was austere, thoughtful, generalised,[21] self-reflective and intense. My thoughts ran to the law of contract, as that wonderful, reflective scholar, Professor Brian Coote taught it to me.

But then, in the middle, as a blue wandering line between these two huge forces, I thought I saw my own subject, the law of unjust enrichment. And it reached its most prominent point right in the middle of the diagram. My subject was the navel of private law. My researches and reflections upon it could perhaps help to bring some order to the endless debate that was going on around me. Indeed, what I had seen made that debate look something like an argument about the end of a boiled egg where you must open it. Or so I thought at the time – I’m afraid that order and perspective has been a long time coming, and I am still waiting!

6. Bringing order to the field

I want to go back now to Diagram 1, and re-arrange the field so that it can be a little more informative about the way in which the institutions, the heads of law and the remedies given for breach of the law all connect together. In the middle, I placed the heads of law, as intermediaries between institutions and the relevant rules of the law of obligations. The institutions remained where they were; and the specific rules and remedies left to fit in at the bottom.

As far as placement was concerned, I reflected on my own rather limited knowledge of legal history. The institution of property, I recalled, was dominant in English law for a long time, before being overshadowed in the legal mind by the institution of contract.[22] But it had no very coherent theory. Property interests were multifarious and seemingly haphazard. Property rights were protected largely through a series of named torts or wrongs, which could be traced back to early forms of action and various procedural limitations confronted by the early court system.

The legal institution of contract, on the other hand, was something of a latecomer. [23] While the general notion of a contract is easily discernible, in early law the rights and remedies of contracting parties were fragmented and unschematised.[24] As a legal subject, the law of contract is generally seen to have begun its rise to greatness in the mid-eighteenth and the early nineteenth centuries.[25] It generalised some broad propositions of principle quite early on in this process. It appears that in English law, no similar generalisation occurred in the law of tort until the House of Lords restated the law of negligence, in broad terms, in 1932.[26]

In the meantime, the law of unjust enrichment was the “sleeping partner”. It was known to canon (church) lawyers.[27] From there it descended to continental jurisprudence, being first explicitly advanced as a separate division of law by Grotius in the early 1600’s.[28] But in England it had little overt influence until Lord Mansfield expressed it, almost as a fully-organised theory, in 1760.[29] He drew it up from a number of previous cases reposing in the sludge of the forms of action. Subsequent generations of judges, however, down-played Lord Mansfield’s rationalisation of these cases. It was not until the subject engaged the attention of jurists, first in the USA[30] and much later in England,[31] that this head of law became more fully theorised.

Typically, the modern law of unjust enrichment comprises the following things, among others:

(1) Making people give back money or property they should never have received – eg, money paid to them under a mistake.[32]

(2) Making people give back the benefits they have gained through a contract they have made with another person, if the contract has failed, or if it should never have been entered into in the first place.[33]

(3) Making people give back windfall gains, eg where someone innocently builds their house the land of another, who becomes entitled to it as owner of the land; that person may be required to recompense the disappointed builder.[34]

Although the law of unjust enrichment is now fairly well ordered and its ambit understood, for a long period of time that was not true of the case law falling under this head. Recognisable examples of cases in category (1) go back to very early times, indeed to the Yearbooks and earlier. [35]

Looking at the diagram with that in mind, I would naturally place (on the side of the diagram allocated to the institution contract) that head of law which is based on obligations consensually assumed. I would place it fairly high up on the page, to show its closeness to the institution of contract. Conversely, while I would place the head of law “wrongs” on the same side of the diagram as the institution of property, I would separate them more because there is not the same logical closeness, and the law of torts was that much further way from its property antecedents when it was theorised.

That leaves the head of law “unjust enrichment” with nowhere to go but the middle of the line, and the middle of the page. But I think there is more to it than that. The law of unjust enrichment is the only head of law to assign liability where the defendant has not done anything wrong, and has not personally assumed the obligation to do anything at all. The person who, for example, receives money that has been paid to her under a mistake, must nevertheless pay the money back. In symbolic terms, this type of law must be a prehensile form of legal obligation, an irreducible core of law from which everything else (being justified by special circumstances arising out of the defendant’s conduct) is an a fortiori case. It is at once the legal absolute and the legal minimum.[36]

Diagram 2A


Before moving on to the rest of the diagram, I want to say a little more about the emotive force of these three ideas “consent”, “unjust enrichment” and “wrong”, returning to an argument I have advanced elsewhere.[37] It so happens that that these ideas coincide, approximately at least, with a series of symbols that were critical in the history of Judaeo-Christian thought, and which were identified by a distinguished scholar of philosophy and symbols, Paul Ricouer.[38]

The most ancient symbol is that of the stain. This is the mark of transgression (knowing or unknowing) into the divinely forbidden. A person who is stained must get rid of the stain, perhaps by some form of ritual expiation or washing (think of Lady Macbeth) or by exile (as in the case of King Oedipus) or even death. The concept of unjust enrichment has much in common with the image of the stain. You cannot hope to gain reconciliation with the claimant, no matter how much you regret the incident, while you are still holding on to the benefits it has conferred on you. The stain remains.

That symbol was superseded by the idea of covenant or contract – such as the covenant (contract) made between God and the descendants of Noah. They consented to act obediently, and God agreed not to visit them with inexplicable disasters. But the people’s promises to God became more and more numerous and impossible to fulfil. So the notion of consent was in turn superseded by the notion of guilt (wrong). Though superseded, none of the earlier ideas were altogether dispelled; all three symbols remained layered in the religious tradition. While they too are all displaced by the New Covenant, they are still part of our religious or spiritual inheritance.

It is perhaps not fanciful, then, to see the same layering effect on our own law. Perhaps these ideas have little influence on the way particular laws are framed, now that most rules of law are fairly well established and their formulation settled. But they can still have a powerful emotional impact on the way in which lawyers see their law, and align their own personalities and judgment with what they find in the written legal word.

In putting this line of symbols in the middle of our diagram, however, we must be careful not to take too little or too much from it. We may be tempted to dismiss it as religious clap-trap which should be quickly consigned to the dustbin of history.[39] But lawyers need some way of getting their minds around the mindless complexities of the detail of the law; if we don’t have these symbols, we will have to find other ones.[40]

On the other hand, while we can use these symbols to guide our path, they do not dictate it. There is some virtue in following well-worn ways of doing things, but often it is best to come at a problem afresh. The symbols will serve their purpose just as well if they are not thought to hold an answer for every problem we face.

7. A zig-zag through the field

Now that we have discerned a central principle of order that the field expresses, we can start looking at the diagram as a whole, to see what it tells us. Let’s begin with the top part of the field, where the emphasis now is more on social ordering than on a legal structure.

Diagram 2B


This part of the diagram too has symbolic resonance. Imagine a system of property over which one person – let’s call him the owner, or God – has complete control over everything that goes on in the garden.[41] We have a kind of legal Garden of Eden, as was painted by an American painter in the nineteenth century.[42] And then imagine a gradual descent of this system to the point where there are no gardens, no cool and ordered private space. The owner has no property, only his power to serve others. He must negotiate for everything that is done; he never sees the whole expanse of nature, only the things that his employer wants him to do. This sense of confined purpose is admirably captured by the English painter, Stanley Spencer, in his picture of ship-workers during the Second World War. [43]

This is a fallen state, in the view of some at least, and I think I am justified in drawing my line so that it falls from the right (the institution of property) to the left (the institution of contract).

I come now to the last line, in the bottom part of the diagram. The line declines back into the detail of the law, as individual rules of law are framed, and legal remedies established. From right to left, it moves from the compensatory awards Diagram 2C

603.jpg often associated with the law of torts, through the various restitutionary liabilities, to the great variety of remedies associated with contracts and failed contracts.

This all looks fairly straightforward and non-symbolical. But if you think that, I’d invite you to look at the bottom line a bit more closely. In the next diagram, which is a “close up” of Diagram 2C, I show it so that the detailed legal rules are below the line, each of them having strong attachments to symbolic or mythological images. You will see a small army of mythological figures, enough to stock several Shakespearean plays!

Diagram 3

Images and Legal Rules 604.jpg

Let’s now go back a step and take a look at the complete picture, combining the three lines we have considered:

Diagram 2

Base Symbols of the Field 605.jpg

8. How current theory fits on the map

What I have said so far does not, I believe, offer anything significantly different from modern private law theory, at least as it has been developed by those working in the law of unjust enrichment. What it does is provide a more in- depth background, on which existing theory can be mapped. [44]

I want now to take one theory of private law ordering, and map it on to the zig-zag pattern I have described. The very influential theory I have chosen emphasises the law of unjust enrichment, and its relationship to the law of contract, the law of property, and the law of wrongs. It emphasises the internal logic of the law of unjust enrichment, and the logical relationship between that “law”, and the other three “laws”. It proceeds largely by way of generalisation and classification (“taxonomy”). It is the theory advanced and popularised by Professor Peter Birks, though many others have also been involved in the enterprise.

Sadly, Professor Birks died on 6 July 2004, after the oral version of this lecture was given. His passing will be a great loss for all those to whose acquaintance the law of unjust enrichment is more than a passing one, and indeed to legal education as a whole. It is difficult to imagine the way in which subject will develop, now that we can no longer hear his voice, and feel his ever watchful presence, except through memory. Few academics can have so greatly enriched any subject that they have cared for. Few can have had such widespread academic influence throughout the British Commonwealth, spanning over more than 30 years. We will never erase the effects of his thinking on our work.

The basic tenet of Professor Birks’ theory (which was still far from being completely expounded at date of his untimely death) is that each head of law can be identified by its own “generic proposition”. This, it seems to me, is best conceived as a kind of template for all subordinate laws grouped under that head of law. The only head of law[45] where serious work has been done to establish what a generic proposition is and does, is the law of unjust enrichment. [46]

The process of ascertaining the generic proposition for the law of unjust enrichment goes something like this.[47] Classification of the law requires a division to be made between (1) the events occurring in the “real” world; and (2) the responses that the law makes to those events. The particular response with which the law of unjust enrichment is concerned is that “response which consists in causing one person to give up to another an enrichment received at his expense or its value in money”.[48] This response is called “restitution”.

Sound classification depends, however, not on the responses that the law gives, but on the events that the courts see as sufficient to trigger those responses. The fact that the response is restitution, points to the strong possibility that we are in the law of unjust enrichment, but that does not necessarily follow. Only certain sets of events that give rise to the response “restitution” belong to the category “unjust enrichment”.

Professor Birks used to think to the contrary that there was a “perfect quadration”[49] between the event “unjust enrichment” and the response “restitution”, That is to say, wherever there is unjust enrichment, there courts will respond by ordering restitution; and wherever restitution is ordered, the relevant events will be found to constitute an “unjust enrichment”. Recently, however, he abandoned that view.

To find out whether a set of events constitutes “unjust enrichment”, we must now ask five questions:[50]

(i) Was the defendant enriched?

(ii) Was it at the expense of this particular claimant?

(iii) Was it unjust?[51]

(iv) What kind of right did the claimant acquire? - it may be a right that can only be acquired under some other head of law - and (v) Does the defendant have a defence?

None of these questions is left in this broad indeterminate form; each must be answered by reference to much more specific criteria. I need not go into those criteria here. It is sufficient here to notice that once • an affirmative answer is given to the first three questions, and • the facts are not excluded from consideration by the answer to the fourth, and • a negative answer is given to the fifth, there will be a legal response based on “unjust enrichment”. That response will usually (but not always) be “restitution”.

I return now to general theory. As we consider each head of “law” (property, contract, wrongs, unjust enrichment) it seems that we must look for its own peculiar intrinsic template, from which many more specific rules/responses take their form. Each “law” forms a “triangle” comprising the template at the top, and the individual legal rules or responses in the lower sector, ordered according to the events that bring those rules into play. (The triangle or pyramid metaphor is suggested by Professor Birks himself.[52] ) We can therefore draw our triangles from each of the critical points on our diagram. With the exception of the property triangle, all triangles stretch downwards to the bottom (enforcement) line, where they cover all known events which can lead to legal responses.[53] Each such relationship has a unique identifier, which is placed in one (and only one) triangle.[54]

Now we can map these ideas on to our basic field, with a result which looks something like this:

Diagram 4

A Taxonomical Approach 606.jpg

Why does the triangle “Property Law” not extend to the bottom of the diagram? This is a good question, and certainly critics of the taxonomical theory have pressed an equivalent question to effect.[55] I have no intention of trying to resolve that debate, so I shall give a fairly facile answer. The normal response to a claim brought under the heading “property law” is that the court will either confirm or deny that you have a “property right” in something. It will be very rarely that such a response is more than declaratory. It will not of itself give rise to some more substantial remedial response. To get that you will need to conjoin the declaratory statement of right, with a series of other events.

So for example you will have your ownership declared in proceedings which allege trespass against the defendant; the trespass is a wrong, for which there will be a separate legal response. Or the matter will arise in a case of alleged breach of contract, where your buyer says you can’t establish your title. You do establish your title, and then (under the law of contract) you are entitled to an order that the contract be carried out. The legal right of ownership in these cases is perceived behind the scenes; the action on the stage is developed through the law of contract or tort.

Of course, to those who believe that divisions of private law founded on the institutions of property and contract are much more important than those founded on legal analysis of the rules governing legal liability, this is not much of an answer. But it is entirely consistent with the more “bottom up” approach favoured by the taxonomical theory I am describing. It has, moreover, provided a wonderfully useful discipline.

9. Some Problems in the Taxonomical Garden of Eden

The taxonomical theory has survived many attempts to defeat or modify it. Such efforts have been outnumbered by well-meaning attempts to sustain it. These might be expected to be an even greater threat to its stability, but it seems to have survived them also. It continues to offer a persuasive ideal picture of what a complete law of unjust enrichment will ultimately look like. It is certainly not my intention in these comments to refute it.

But it does have its limitations, which in my view have to do with the dynamic process by which lawyers and judges develop and expand case law around a coherent theoretical whole. At the beginning of this lecture, I suggested that this process may be assisted by recognising that the so-called “heads of law” are a set of symbols. They are not necessarily the foundation for a system of tight logical classification, but rather constitute a looser system of points of reference.

I followed this up later on by identifying what I thought were the critical symbols in private law. I offered them, not as the generic templates for classification, but rather as beacons around which the process of finding and developing law takes place.

I want now to look at a number of issues where I think the limitations of the taxonomical theory are evident. It is not that it is difficult to provide any convincing response to these issues (though it usually is). It is rather to ask this: are such issues worth raising in the way that the taxonomical theory poses them?

A theory has limitations, I would suggest, if it leads to unhelpful questions being asked, or poses potentially helpful questions in an unhelpful way.

But first, I need to offer a brief explanation of where my observations are coming from. From the point of view of a lawyer, judge or academic who is immersed in developing or expounding a fluctuating law, a coherent system of headings or categorisation is important, not just for its own sake, but because it shows you where to look for analogous cases and legal principles. It steers you away from apparently similar cases and principles that are, when properly understood, too distant from your current problem to be helpful.

However difficult the mapping process may be, therefore, it simply has to be attempted. Analogies shade away from you, from the close and helpful, through the marginal and interesting, and eventually to the remote and useless. It is essential for you to find robust headings by which to locate yourself. You can then make the necessary connections to the other material you need.

From this perspective, any given set of headings will not be robust if important and wide-ranging topics could as easily fall under one heading as another, the question being resolved by complex and seemingly counter-intuitive arguments. This is especially so if you cannot site the difference along a spectrum on which the choice is based on degrees of similarity and degrees of difference. Matters are even worse if not two, but three or more, possible categorisations fall for consideration. I will now offer illustrations of where this has been happening as a result of taxonomical theory.

A further issue arises in the dynamic process, if those involved in it regularly move in a series of sub-propositions, each drawn from a different heading of law. A theory that sharply separates these areas of law will cause difficulties if the linking of sub-propositions is not theorised too.

(a) The problem of overlap when contracts are set aside

It not infrequently happens that someone enters into an agreement or contract, and later complains that there was something wrong with the contract. For example, the parties may have been fundamentally mistaken; or one of them may have been coerced into agreeing to the contract, by the other ’s unfair threats; or one contracting party may simply not have delivered what the other was entitled to expect. In such cases, the contract may be set aside, or otherwise held not to be part of the obligations governing the parties’ rights and liabilities.

For example, let us suppose that I’ve bought your car, but now I realise that there’s something wrong with it and I want to get out of the contract. The Court upholds my claim. It will say that because you failed in a fundamental way to carry out the contract, you can no longer rely on it. The money I have paid under the failed contract is therefore recoverable, and the former contract no longer provides you with a justification for keeping the money.

Now most contract textbooks deal with this very large topic as part of the “law of contract”. But the taxonomical theory forces us to be more discerning, because we are obliged to say whether the substance of the claim lies under the head of consensual obligation, or under some other head. [56] The fact that the context of the problem is the initial undertaking of a consensual obligation is by no means decisive.

Those who have entered into the taxonomical debate have advanced differing views about where the law of setting aside a contract should be placed. Some maintain that the entire matter is still governed by the law of contract.[57] Others, to the contrary, argue that both the setting aside of the contract, and the remedies that follow from that, are part of the law of unjust enrichment.[58] And others still opt for an ungainly compromise: setting aside the contract is a matter for the law of contract, but the way the remedies are then framed is a matter for the law of unjust enrichment.[59]

My question would be, what’s wrong with an overlap? Would it not be more helpful to say that the problem comes under the sway of both consent-oriented law, and also unjust-enrichment oriented law?[60] That on the facts of the particular case, the court may be justified in giving either • a consent-oriented remedy (you must sue for damages for breach of the original agreement); or • an unjust enrichment remedy (the whole deal is called off and both parties must give back what they have received).

Since the problem has arisen in the context of an initial consensual obligation, that is the first place that the Court will look for an answer. It may require special circumstances to take the case outside of that framework. But when those circumstances exist, the Court is free to draw from the entire learning found in the law of unjust enrichment, and not just that part of it that relates to contracts which have been set aside.

This issue can be mapped on to our field as the marshy area marked in the this diagram:

Diagram 5A

Overlap between Contract and Unjust Enrichment 607.jpg

The point is that the taxonomical theory requires us to make a sharp differentiation; but for the purpose of comparing and analogising, the choice “contract or unjust enrichment” is demonstrably unhelpful.[61]

(b) The problem of excluded territory (enrichment by wrongdoing)

Sometimes, a wrong has been committed against you, but the remedy you are seeking is not compensation for the loss you have suffered, but rather restitution of a gain that the wrongdoer has made as a result of the wrong. In the early days of the taxonomical theory, when the concept of “perfect quadration” held sway, Professor Birks considered that this was an illustration of the law of restitution/ unjust enrichment. But even then he had difficulties in reaching that conclusion.[62]

Later on he abandoned it.[63] The law of unjust enrichment requires that an enrichment has been made “at the expense of” the claimant. So it comes into play only where something has been subtracted, without justification, from the claimant. For example, if someone steals my purse, I can sue that person either for the wrong they have committed, or else in unjust enrichment, based on their having received the money without just cause. But, to take a contrary example, suppose my agent takes a bribe from one of my suppliers, in return for giving them a contract. Here there has been no “subtraction” from my wealth, so the agent is not unjustly enriched. My remedy is to sue for the wrong of corruption. On that claim, I may well recover the amount of the bribe the agent has received, but the relevant head of law will be restitution for a wrong, not restitution for an unjust enrichment.

Some influential followers of the taxonomical theory, though in a minority it seems, were not prepared to follow Professor Birks down this path.[64] It meant abandoning the attractive concept of “perfect quadration”. The making of a restitutionary award would no longer necessarily imply that the basis for the award was unjust enrichment. The key concept of “subtraction” has also been criticised.[65] Two of the principal attractions of the taxonomical theory – simplicity and intelligibility – have been weakened by the step Professor Birks has taken.

Strong views are held for and against Professor Birks’ later position. It is not easy to see the criteria on which a decisive answer to the issue could be based. Moreover, considerations that apply in unjust enrichment cases, are likely to migrate across the border. Judges will call them in aid in order to reach similar conclusions, without regard to formal classification.[66] So, in terms of the process of decision-making, does anything of importance turn on the theoretical distinction? Why should we be required to exclude unjust enrichment for wrongs from the law of unjust enrichment, when the discerning mind sees only a spectrum of possibilities?[67]

(c) The problem of positional inelegance

As I suggested at the beginning, symbols are powerful visual aids when navigating through complex law. While some people are comfortable with the sound and feel of words, many of us prefer to map out our course visually in two-dimensional space. We can then distinguish major from inessential differences, and discern the spectrum of facts along which choices can reasonably be made either way. But if a taxonomical scheme is so devised that it cannot easily be converted into that linear space, it loses both its intuitive feel and its helpfulness as a guide.

In this connection, I would like to consider a case of overlap between all three of unjust enrichment, contract and wrongs. It comes about in these facts:

I promise to build you a house. But then I discover that the pickings are better in Queenstown, so I refuse to go ahead with my contract with you. The profit I make in Queenstown is twice as much as I would have made in Dunedin. You manage to get the house built anyway, by another local builder, for the same price. You have lost nothing. But you want the extra profit I have made through breaking my contract with you.

Looking at this problem purely contextually, it began with a contract, so it is a matter of consensual obligation. You have suffered no loss, so compensation for wrong doesn’t come into it. Intuitively, this case belongs (like our first example) on the borderline between contract and unjust enrichment. The law does occasionally allow a claimant to obtain a restitutionary award for the defendant’s breach of contract, but this is a matter for judicial discretion. It is rarely exercised in a claimant’s favour.[68]

So our visual approach conceives the law of unjust enrichment and the law of contract as sitting alongside each other. We scan both, looking for some special consideration which we can exemplify in the law of contract (eg, some special propensity to enforce particular types of contract by an award of specific performance) or in the law of unjust enrichment (eg, some special propensity to make restitutionary awards against “conscious wrongdoers”).

The taxonomical theory, it seems, requires us to take a much more complex route. As soon as we bring in an action for breach of contract, we call into play the law of wrongs.[69] This is so even though (especially in New Zealand law) the measure of damages for breach of contract rests on a different principle from that applicable in the law of torts. The one conceives of the broken contract actually being performed, and gives the wronged party an award to put them in the position they would have been if that had happened. The other conceives of the wrongful event as not having happened at all. The victim is placed where they would have been if nothing wrong had occurred.

On one taxonomical view at least, the true legal site of this set of facts is on the borderline between wrongs (including miscellaneous torts) and unjust enrichment. But we can’t ignore the law of contract either, since it may also offer considerations we must take into account – the nature of the contract, for example, or the general policy of “efficient breach”. So we can no longer conveniently visualise what is happening and how we should go about our task.

Now if what I am concerned to do is to classify a legal decision that has already been reached, all of this is not much of a problem. But if my concern is to make a principled analysis of a new situation, consistent with general legal patterns in related areas, unnecessary confusion and cross-referencing should be avoided. This is equally true if I am a lawyer arguing a case, a judge deciding it, or a law teacher commenting on the decision.

Let’s now map this and our previous concern into our field. They show an excluded triangle between the law of unjust enrichment and the law of wrongs; and an apparently misplaced site for the convergence between contractual and unjust enrichment considerations.

Diagram 5B

Contract, Unjust Enrichment and Tort 608.jpg

(d) The problem of transfer of information

The last problem I wish to discuss is the form in which legal information passes out of one “law” and into the purview of another. As I have said, this is a well known and frequently encountered dynamic of the law. For example, suppose I wish to make a claim that you have been unjustly enriched by using my motor car to help get you to an important meeting. I must first show, of course, that the car really was “mine”. To do that, I must resort to the law of property. A message is sent to the law of property; and is answered by the proposition I need to sustain my case in unjust enrichment.

This linking of propositions across a series of different sources of information is a commonplace in law, as it is in many other disciplines. Lawyers do it every day and it’s hard to imagine why it should be problematical. For example, proof of ownership may well be an essential element (if it is put in question) not only in actions for unjust enrichment, but also in actions on a contract (eg, the vendor must prove title), and in actions for wrongful damage to goods. So too an action for a wrong (eg, for recovery of a bribe), breach of contract (eg, action for specific performance) or unjust enrichment (order tracing an enrichment into a specific asset) can lead to an order which confers property rights on the claimant.

But taxonomical theory makes a sharp distinction between “events” and “responses”. Every proposition, it seems, must be one or the other. Good taxonomy requires us to introduce “events-based” orders of classification as high up in our system as we can.[70] We shouldn’t, therefore, admit a “response” as one of the “events” on which our principal, and most abstract, orders of classification depends. But now we have a paradox. How could the proposition “I own this motor car” be a legal “response” in the law of property, but an non- legal “event” which invites a further legal response when it is moved to the law of unjust enrichment?[71]

The issue is more important for taxonomical and dynamic processes than one might expect. If (as I suspect) the “events” in one part of the law, can take the form of “responses” in another, this means that any event may already have been mediated through a process of law-finding. Although the law of unjust enrichment may put these events into a generic form, in substance the law of unjust enrichment contains propositions drawn from other laws, such as property and wrongs. But that means that the substance of the law of unjust enrichment (the content of its “events”) will inevitably contain, and be influenced by, legal concerns from outside that law. These may well be the dominant consideration in some cases of unjust enrichment. An example that we have discussed is unjust enrichment occasioned by the defendant’s wrongful conduct. It is not an objection, as has been supposed, that this will bring too much of the law of wrongs into the law of unjust enrichment. It is just a natural consequence of the way that laws are applied as part of an integrated legal system.

If on the other hand, the same proposition that is a “response” in one law cannot be an “event” in another, then when we use statements like “X was enriched by unlawfully taking Ys property” we are not stating the position completely accurately. The term “Y’s property” is loaded with law, which has to be taken out and something else put in its place by the law of unjust enrichment. So a “shadow” law of property must be created, which is like it (indeed, there will be severe problems of legal consistency if it isn’t) but isn’t “really” the law of property.[72]

One area where this shadow has caused considerable difficulty is unjust enrichment arising from the defendant’s unlawfully taking the property of another.[73]

I am not at all sure what Professor Birks’ answer would have been to the question I have posed. In his latest book, his general tendency is still towards the latter view. He says that all rights arise from “some event which happens in the real world”.[74] Unless we are to convict him of tautology, we must presumably add the words “and not the world of law”. He also observes, “Unjust enrichment is an independent causative event which straddles the line between the analytical distinction between property and obligations.”[75] Yet at the same time he concedes that property rights are just like other rights: they are “responses” arising from a set of events recognised in property law.[76] So the event, “X owns Blackacre” in the law of unjust enrichment, has to be a response in the law of property.

We are told, further, that the “receipt of a mistaken payment” (a form of unjust enrichment) is a causative event. That is, it seems, a pure, non-legal event. But the same is also said to be true of a “contract of sale” and “the tort of defamation”.[77] While the terms “agreement” and “damaging statement” can make sense without a legal system, the same is not true of the terms “contract” and “statement which is defamatory”. Both are responses whose accuracy must be verified by applying rules of law. [78]

In the end, though, the issue is how you view the legal system. If you do not make a sharp distinction between various laws, but see private law as a field in which information is frequently passing from one player to another, there seems to be no problem. But when you posit the existence of separate “laws”, each with its own legal template, then you need a theory to explain the status of propositions that pass from one to the other.

I want now (as a precursor to the next and final step in my argument) to map all these various limitations together into our field of private law. The passing of information from one “law” to another is marked with black spots between parallel lines.

Diagram 5

Taxonomical Issues 609.jpg

10. Another way – the path of the snail

When the last diagram is looked at from a dynamic perspective, it begins to look cluttered and complex. Is there a better way of displaying the same information, taking into account its dynamic complexity? Our zig-zag pattern, though it is useful in “siting” the various headings of private law, may not be the best way of portraying the way that the law is held together, and how one moves from one heading to the other (shown by the black ovals and arrows in the last diagram).

That is not to say that the taxonomical theory is open to criticism, still less that drawing a diagram in this way can refute it. The point is rather this. If we wish to visualise the dynamic process by which law is created, adjusted and applied – rather than the end result of classifying a static legal world – we may need a different, though complementary, image of the field of private law. In that picture, the headings may have a different function from those in the taxonomical system. They are symbols or beacons that illuminate the path, rather than defined categories of meaning. The path itself winds around them, showing in stylised form the natural progression once a particular beacon has been reached.

At this point, I am much more hesitant to go further now that what I have to say will appear in print, than I was in the first flush of discovery just before the valedictory lecture. The alternative picture that came to my mind is untested, and may on fuller examination prove no more trustworthy than the one I have discarded. I offer it here, then, simply as an illustration of how, if we transform our mental images, we can open up new and more helpful ways of conceiving what we are doing.

The diagram I have in mind is organised around a spiral. At the centre of the spiral (the navel as it were) the concept of private law emerges from the notion of collective endeavour, with the symbol of the stain. This represents absolute liability, without regard to criteria of fault or assumed obligation. At the outside of the spiral, it returns to the collective, as an ultimate test of the efficacy of private law – does a particular law serve society as a whole? So modern economics and law thinking asks, of the law of wrongs, whether it results in the most useful allocation of the risk of loss; of the law of contract, whether it results in the most efficient allocation of work, so as to meet the needs of all members of society; and of ownership of property, whether it results in the most effective use of the owned asset. The centre of the spiral is the genesis of private law, and the outside of the spiral is its justification.

Within this range the institution of private law is allowed to flourish in the space between its genesis and its justification. But it changes character as it moves out towards the edge. For example the law of wrongs, in its early stages, was about absolute liability. Take for example the law governing the infringement of property rights. But as it becomes more expansive, it looks to notions of conscious fault, and then negligence, to justify its extended reach. Finally, at the outer reaches, it relies on sophisticated analysis of allocation of risk.[79]

So too, the law of contract begins as an absolute liability derived from the fact of the promise. We are concerned with the morality of that promise, the legal principles that relate to its enforcement and whether there are excuses for not carrying it out. But as we move further out, extending and solidifying the idea of legal liability for breach, we start to justify the move by talking about reliance, and then the need for third parties, and the general community, to be able to rely on the expectations engendered by promises, or even pieces of paper on which promises are apparently written.

The position of unjust enrichment in the diagram is interesting. Though ostensibly a “new” subject, it has fitted comfortably and unobtrusively alongside more traditional heads of contract and tort. Even today it has retained its basic characteristic of imposing absolute liability, without regard to the agreement of the parties. Considerations of fault seldom enter into the equation.[80] Nor is law and economics reasoning frequently encountered here. The relevant policies in the subject, it seems to me, are often drawn from other parts of the law. It too has undergone a process of expansion in recent years. But that has been achieved largely through the recognition of a very broadly articulated principle of unjust enrichment. So it is at once a developing subject in its own right, and a throwback to the earliest foundations of private law.

The diagram that represents the “path of the snail” may be drawn like this:

Diagram 6

The Image of the Spiral 610.jpg

How might this spiral appear in our law? What I would suggest is that every situation where a legal response is called for can be conceived as following the spiral path. Analysis begins in the centre, where the initial relationship of two parties is considered. Then the path moves out, as the respective radials of “property”, “contract”, “unjust enrichment” and “wrong” are encountered – possibly more than once, in a complex case. These add, cumulatively, to the information needed to reach a legal conclusion. Finally, when all relevant information and legal analysis has been completed, the spiral path continues on to the relevant legal rights on which any remedy will be based.[81] Having disposed of the case legally, we can continue along the path (if we need to) into the realm of social evaluation of the result and its implication for future actions.

11. What are the advantages of a spiral image of private law?

This spiral approach to imagery is not an original thought on my part. The idea was given to me by Dr Manuka Henare, a distinguished student of imagery and symbolism in Maori ways of thinking.[82] Maori know the image as the “koru”

– the unfolding core of the fern, that represents the path of growth. It also represents dynamic process, with movement either outward to the circumference, or inward to the core. [83]

Applied as part of legal imagery, the spiral pattern integrates current heads of law with their history (the core) and with their value to society (the circumference). Legal questions about property, contract and wrong have a central conceptual idea, but the law which falls under these heads can eventually be shaped in ways most conducive to the best use of property, sustainable use of resources and reduction of the risk of loss. The image reflects their history, and their development from fairly primitive origins to the sophisticated attitudes of modern legal reasoning. The institutions of property and contract, and their associated set of legal rights and liabilities, are seen in the centre as a core of irreducible legal concepts. But at the edge, they appear as a bundle of distinct entitlements whose value lies in the fact that others can rely on them when performing useful social functions.

In this way the image can be used not only to follow a path of analysis in individual legal cases, but also to map out significant shifts in the way private law looks at itself. The “heads of law” are seen as part of an integrated whole, not an array of separate entities. They do not correspond to generic conceptions which are static – they have varying characters depending partly on historical development and partly on the particular subject matter. Nor do they relate to each other by means of a new, problematical form of legal proposition. They influence, either solely or in conjunction with other heads of law, the path of any cases that pass between them, and influence the shape of the law as it develops.

How does this imagery make a difference when we consider the problems that arise with the taxonomical theory?

(a) The problem of overlap when contracts are set aside

The path drawn in the diagram passes in between various heads of law, such as contract and unjust enrichment. There is no need to regard the path as coming, at this point, exclusively under one head rather than the other. It is more like crossing a frontier without a marked boundary. Developing law can draw inspiration from both sides of the frontier.

(b) The problem of excluded territory (enrichment by wrongdoing)

Taxonomical theory’s critical distinction between enrichments obtained at the expense of another person, and enrichments gained as a result of a wrong committed against another person, begins to appear artificial. The wrong itself is, after all, a subtraction from the enjoyment of the legal rights the claimant possesses, even if it does not involve a subtraction of actual money value or wealth. Therefore it is difficult to believe that analogies drawn from the law of unjust enrichment will have nothing to tell us. The imagery used here allows us once more to see a path passing between the two heads of law, each of which may have a bearing on the eventual decision in unsettled cases.

(c) The problem of positional inelegance

The problem here is the way that the taxonomical theory assumes that any form of “wrong” (whether it be a tort, or a breach of contract) falls into the “wrongs” category. This is inevitable if one tests the “heads” of law by reference to the formal quality of the adjudication (“X has done Y to Z, which X should not have; X must therefore make compensation to Z; rule A, which achieves this, is therefore part of the law of wrongs”.) But greater regard is needed for the deeper symbolic attachments of the underlying obligation that has been breached. That is second nature for most lawyers, who have long been taught of the difference between breach of contract, and the commission of a tort. The imagery I have used emphasises those deeper symbolic and historical associations. It unhesitatingly locates the question “Is X liable for enrichments gained as a result of X’s breach of X’s contract with Z”, on a path running between the head of contract and the head of enrichment. Inelegant and unhelpful juxtapositions are avoided.

(d) The problem of transfer of information

With the imagery I have suggested, the transmission of information from one “head of law” to another is not problematical. It is inherent in the whole system, which expands as propositions validated in one sector of the law are passed on to help deal with issues arising in another. Indeed this is so frequent an occurrence that one might expect it to become, in many cases, a regular pattern essential to understanding particular areas of law. An example would be the way in which certain contracts, which are “specifically enforced” by the courts, come to have recognised consequences in the law of property. (The purchaser of land, for example, becomes the equitable owner of the land before settlement of the transaction and the transfer of legal title.) Not only that, but as changes (usually expansions) occur in one area of law, a corresponding expansion will occur in another area of law to which there is a regular connection.

There are grounds to believe, therefore, that when the law is viewed dynamically these images will prove a more helpful way of discerning the underlying scheme of the law, than a strictly taxonomy of established laws. Strict taxonomy, moreover, does not need to drive us to conclusions that do not make dynamic sense.

12. Conclusion

I want to end by coming back to my title “We Just Mislaid It: The Great Project and the Problem of Order in Private Law”. The Great Project sought, ambitiously, to subject the making of laws to a programme of intensely reasoned speculation. We assumed that the vision of simple order and logical analysis, along the lines of a scientific, taxonomical model, would be enough.

We needed to have an Order, to put legal ideas into a morally neutral yet intellectually and emotively meaningful structure. When the task proved beyond us, we saw the Great Project as an illusion. We engaged our skills in keeping at bay the sprawling and disorganised product of the legislature and judges.

Yet I hope that the time is upon us when we resume the struggle to hold the law in our minds as a coherent whole. We will choose our pictures wisely. We will also understand the principles that govern the use of images in law, and what we can and cannot do with them. We will be able to picture the structure in our minds well enough to present it to the general public in graphic as well as literary form.

I’m sure that the pictures used then will be very different from those I have shown you today. But for the present, it is enough to have pointed out the path.

I am most grateful for your companionship as I have stumbled, half-seeing, just a little part of the way.

[1] Sutton, “Unjust Enrichment” [1982] OtaLawRw 1; (1982) 5 Otago L Rev 187.

[2] I owe thanks to many people for this occasion, and the support and encouragement I have received in putting this valedictory lecture together. I would especially thank Professor Henaghan, the Dean, for sponsoring the events of these two days, and my colleagues Nicola Peart, Struan Scott and Peter Skegg for their contributions to its organization. Just as heart-felt special thanks are due to members of our support staff, Marie-Louise Nielsen, Tracy Thompson and Theresa Forbes, for the many arrangements they had to make. Theresa Forbes also gave me tremendous secretarial support with diagrams and pictures, and lent a kindly ear as I fumbled my way through earlier versions of this lecture.

My thanks are also due, for reasons which will appear in section 11, to Te Matahauariki Institute at the University of Waikato. Members of the Institute have kindly involved me in their thinking, as a member of the Institute’s Advisory Panel.

[3] Sadly, the three works of art, copies of which – thanks to Theresa Forbes – adorned my lecture, cannot be reproduced with this text. But they may be found at web- sites referred to in the footnotes to this paper.

[4] I am basing my comments on observation of private law, and my perception of what may be needed for lawyers to find their way around a voluminous and increasingly technical subject. While I am aware of a substantial literature, outside of law, on the process I am engaged in, it is my intention to offer a practical rather than theorised view. Not much of this thinking has found its way into the law journals, though for a New Zealand source, I refer with admiration to Associate- Professor Bernard Brown’s pioneering study, Shibboleths of Law: Reification, Plain-

English and Popular Legal Symbolism, Legal Research Foundation Publication No 27, Auckland (1987). My own ventures into the territory, unlike his, are eclectic rather than systematic in character, and concentrate on foundational legal symbols and the systems they support.

[5] For a light-hearted view of the “Great Project”, see Sutton, “The Law Faculties – A Reminiscence”, in Law Stories: Essays on the New Zealand Legal Profession 1969-2003, Sir Ian Barker and G Wear eds, (Butterworths, Wellington, 2003), 325, at pp 326- 327, 348. The basic purpose of these comments was serious, however, and grew out of a study of the work and judicial method of Lord Cooke. See Sutton, “Lord Cooke and the Academy: A View from the Law Schools”, in The Struggle for Simplicity in the Law: Essays for Lord Cooke of Thorndon, P Rishworth ed (Butterworths, Wellington, 1997), 13.

[6] Readers of Professor Ronald Dworkin’s works, eg Taking Rights Seriously (Harvard UP, Cambridge, 1977) Ch 4, will not be unfamiliar with this theme.

[7] Wilkinson, “Coping with ‘Data Fog’” (2003) 11 Australian Law Librarian 297.

[8] On the legal institutions “Property” and “Contract”, and their history, see Schreiber, “Introduction” in The State and Freedom of Contract, H Schreiber ed (Stanford UP, Stanford, 2001), 1.

[9] Or, of course, by the Crown, relying on the general laws that apply as between private individuals. Public law duties, that is duties owed peculiarly by or against the Crown or State, are excluded.

[10] My interest is in the dynamic features of law, and is not compromised by this narrowing of ambit. “There is no branch of the law which is as sensitive and susceptible to changes of economic and social nature as commercial law.” C Schmitthoff, Commercial Law in a Changing Economic Climate (Sweet and Maxwell, London, 1977), 13.

[11] This result will be found in the textbooks on the law of contracts; it is the standard measure of damages for a breach of contract, though there is authority for the view that, in the event of breach of contract, “the plaintiff has a free choice as to the basis for quantifying the losses that has been suffered”. See Burrows, Finn and Todd, Law of Contract in New Zealand (2d ed, Butterworths, Wellington, 2002), 744-746.

[12] This result may perhaps be more difficult to achieve under the law of contract.

But if there is something other than a breach of contract (eg, you never intended to carry out the contract, so you committed a fraud on me) then the law of “torts” or wrongs, or its modern statutory equivalent, would apply. The claimant’s loss, not the claimant’s anticipated profit would then be the appropriate measure: Cox & Coxon Ltd v Leipst [1998] NZCA 202; [1999] 2 NZLR 15 (CA).

[13] See eg Martin v Pont [1993] NZCA 672; [1993] 3 NZLR 25 (CA). This principle is discussed in the contract textbooks, but also in books on unjust enrichment and restitution, where it is said to be the result of law which applies to contractual and non-contractual cases alike – if A (you) is unjustly enriched at the expense of Y (me), then A must return the amount of the enrichment. See eg R Goff and G Jones, Law of Restitution (6th ed, Sweet and Maxwell, London, 2002), Ch 20. (On the facts given, however, there could perhaps be some argument whether you are really enriched, since you have already spent the money. Such a question could not arise if I based my claim on a breach of contract, or a wrongful act, on your part.)

[14] Eg Goss v Chilcott [1996] 3 NZLR 385 (PC).

[15] See eg S Hedley, A Critical Introduction to Restitution (Butterworths, London, 2001);

S Hedley, Restitution: Its Division and Ordering (Sweet and Maxwell, London, 2001); Gummow, “Equity – All Too Successful” (2003) 77 ALJ 30; and judicially, Roxborough v Rothmans of Pall Mall Australia [2001] HCA 68; (2001) 208 CLR 516, 539-558, per Gummow J. C Rickett and R Grantham, Enrichment and Restitution in New Zealand (Hart, Oxford 2000) tends in this direction too. Compare, however, Burrows, “Where Do We Go From Here” (1997) 50 Curr Leg Probs 94.

[16] Foremost among these is Professor Birks, whose seminal Introduction to the Law of Restitution (Clarendon Press, Oxford, 1985) set the agenda for a long and vigorous academic debate. See also Birks, “Definition and Division: A Meditation on Institutes 3.13”, in P Birks (ed), The Classification of Obligations (Clarendon, Oxford, 1997) ch 1.

[17] Eg P Atiyah, The Rise and Fall of Freedom of Contract (Clarendon, Oxford 1979), Ch 22, and An Introduction to the Law of Contract (5th ed, Clarendon Press, Oxford, 1995, 1-7; Waddams, The Relation of Unjust Enrichment to Other Concepts” in E Schrage (ed), Unjust Enrichment and the Law of Contract (Kluwer, The Hague, 2001), 411.

[18] For a thoughtful and direct judicial description of the legal approaches in New Zealand, see Fisher, “New Zealand Legal Method: Influences and Consequences” in R Bigwood (ed), Legal Method in New Zealand: Essays and Commentaries (Butterworths, Wellington, 2001), 25. The other judicial comments in this book offer confirmation, and yet a concern for balance and caution. For an example of a nuanced approach, see Newmans Tours Ltd v Ranier Investments Ltd [1992] 2 NZLR 68, 88-94 (H Ct); Thomas v Rankin [1993] 1 NZLR 410 (CA) (exercising a private law statutory jurisdiction).

[19] Eg Cox & Coxon v Leipst, above note 12.

[20] Profil en bleu et jaune, 1973: Wool tapestry by Yvette Cauquil-Prince: gallery/chagall/chagall1.htm.

[21] Cf Burrrows Finn and Todd, above note 11, 29-31.

[22] D Ibbetson, A Historical Introduction to the Law of Obligations (OUP, Oxford, 1999) Ch 14; Simpson, “Land Ownership and Economic Freedom”, in H Schreiber (ed), above note 8, 13. On its displacement by the institution of contract, see Orth, “Contract and the Common Law”, in H Schreiber (ed), ibid 44.

[23] Anson’s Law of Contract (27th ed, J Beatson, OUP, Oxford, 1998), 9-18; Liebermann, “Contract before Freedom of Contract” in Schreiber (ed), above note 8, 89. See Simpson, “The Penal Bond with Conditional Defeasance” (1966) 82 L Q Rev 392, for a description of its predecessor, which functioned “in a topsy-turvy way” (at 411).

[24] D Ibbetson, above note 22, 11-38.

[25] See ibid, pp 202-244, for a closer look at this assumption.

[26] Donoghue v Stevenson [1932] AC 562, especially at 579 per Lord Atkin. See P Winfield, The Province of the Law of Tort (Cambridge UP, London, 1931), Ch 2 (who notes, nevertheless, a classification attempt made as early as 1613).

[27] D Ibbetson, above note 22, 265-268; D Ibbetson, “Unjust Enrichment in England Before 1600”, in E Schrage (ed) Unjust Enrichment: The Comparative Legal History of the Law of Restitution (Duncker & Humboldt, Berlin, 1995) 139; Feenstra, “Grotius’ Doctrine of Unjust Enrichment as a Source of Obligation: Its Origin and Influence in Roman-Dutch Law”, Unjust Enrichment, ibid 197.

[28] Grotius, The Jurisprudence of Holland (R Lee trans, Clarendon Press, Oxford, 1953) 448-455.

[29] Moses v Macferlan [1760] EngR 713; (1760) 2 Burr 1005, 97 ER 676 (KB).

[30] W Keener, A Treatise on the Law of Quasi-Contracts (Baker Voorhis, New York, 1893).

[31] R Goff and G Jones, Law of Restitution (1st ed, Sweet and Maxwell, London, 1966) marks the first stage of a thirty-year process. See generally Ibbetson, “Unjust Enrichment in English Law”, in E Schrage (ed), Unjust Enrichment and the Law of Contract (Kluwer, The Hague, 2001), 33.

[32] Eg Thomas v Houston Corbett & Co [1969] NZLR 151 (CA).

[33] Eg Contractual Mistakes Act 1977. There is an important distinction between (1) and (2) which is often blurred: see Friedmann, “Reversible Transfers - The Two Categories” (2003) 11 Restitution Law Rev 1.

[34] Eg Property Law Act 1952, s129A.

[35] See Ibbetson, above, note 22, 265-268.

[36] Sometimes commentators seem to be concerned about the “absolute” nature of liability in unjust enrichment, feeling that they must specially justify this. This is the type of illusion which a sound systemic imagery would cure.

[37] Sutton, “Mistake: Symbol, Metaphor and Unfolding” [2002] Restitution Law Rev 9, 15-18.

[38] P Ricouer, The Symbolism of Evil, E Buchanan (trans), (Beacon Press, Boston, 1969), Chs 1-3.

[39] On the contrary, scholars of post-modern thought may not find it surprising to see lawyers dusting off the debris and recovering old, pre-logical symbols. The editor ’s introduction to G Ward (ed), The Post-Modern God (Blackwell, Oxford, 1997) can be read with profit in this connection. Professor Ward quotes, at p xxix, the following passage from F Nietzsche, Daybreak Thoughts on the Prejudices of Morality, R Hollingdale (trans), (Cambridge UP, Cambridge, 1982), p 9: “All things that live long are gradually saturated with reason that their origin in unreason thereby becomes improbable. Does not almost every precise history of an origination impress our feelings as paradoxical and wantonly offensive?”

[40] The interweaving and contraposition of church structures and the law, at the earliest stages of legal professionalism, is well known, and has been further investigated recently: see Reynolds, “The Emergence of Professional Law in the Long Twelfth Century”, (2003) 21 Law and History Rev 347; Uelmen, “A View of the Legal Profession from a Mid-Twelfth Century Monastery” (2003) 71 Fordham L Rev 1517.

[41] See Simpson, above note 22, 13.

[42] Erastus Salisbury Field, The Garden of Eden, erastus_salisbury_field.htm.

[43] Sir Stanley Spencer, Shipbuilding on the Clyde, lj/warslj/ art_welders.shtml (Located at Imperial War Museum, London,

[44] In what follows, I am very conscious of the limitations of “map-making”, as applied to legal categories. The topic is well discussed in S Waddams, Dimensions of Private Law: Categories ands Concepts in Anglo-American Legal Reasoning (Cambridge UP, Cambridge, 2003) (“Dimensions”), especially chapters 1 and 11. This work is replete with warnings about the dangers of the path, which is littered with the bones of past failures. My only excuse for embarking on it is that I am intrigued by the possibility of a “dynamic” map, as opposed to a “categorical” one.

[45] Compare the law of torts: Winfield, above note 26. But current views are discouraging: see eg Fleming, The Law of Torts (9th ed, LBC Information Services, Sydney, 1998), 7-8. The generic concept in the law of contract is presumably, pacta sunt servanda. Theoretical explanations of the law of contract are legion. See S Smith, Contract Theory (Oxford UP, Oxford, 2004).

[46] Professor Birks’ first sustained treatment of this subject was An Introduction to the Law of Restitution (Clarendon, Oxford, 1985) (“Introduction”). His last, in which he made some significant reformulations, was Unjust Enrichment (Oxford UP, Oxford, 2003) (“Unjust Enrichment”). He wrote many significant articles and commentaries in between.

[47] For a fuller account of the elements of his classification system, see Birks, “Rights, Wrongs and Remedies” (2000) 20 Oxford J L S 1 (distinguishing rights from remedies).

[48] Introduction, above note 46, 13.

[49] Ibid, 18.

[50] Unjust Enrichment, above note 46, 34.

[51] Earlier versions of the theory saw “injustice” as arising largely because the will of the claimant did not go with the impugned transaction, on account of mistake, duress and the like. This occurred either at the time of the transaction itself (“vitiated intent”) or later on, when the claimant did not get what was originally promised (“qualified intent”): Introduction, above note 46, chs V, VI and VIII. Professor Birks later modified the theory so as to focus more on the defendant’s not having any valid reason to keep the benefit gained from the transaction: Unjust Enrichment, Ch 5. In this, he moved closer to Canadian law: see eg Pettkus v Becker (1980) 117 DLR (3d) 257, 273-274 (Sup Ct Can). For criticisms of the Canadian approach, see McInnes, “The Canadian Principle of Unjust Enrichment: Comparative Thoughts Into the Law of Restitution” (1999) 37 Alberta L Rev 1, 9- 31.

[52] Unjust Enrichment, above note 46, 101.

[53] Or nearly all – there is another category called “other causative events”, which is a miscellaneous, untheorised category of private law. Ibid, 23-26.

[54] Clearly there can be factual overlaps, where the same set of facts can give rise to responses appropriate to different laws. But analysed more precisely, it will usually be found that the critical events which lead to the different responses, are not precisely the same. This is has been called the process of “alternative analysis”. See Birks, Introduction, above note 46, 44-47.

[55] Professor Birks’ position is set out in “Property and Unjust Enrichment: Categorical Truths” [1997] NZ L Rev 623, and Unjust Enrichment, above note 46, 30-34. For contrary views, see Grantham and Ricketts, above note 15, 24-41; Watts, “Restitution – A Property Principle and a Service Principle” [1995] Restitution L Rev 49, 51. Watts, “Property and ‘Unjust Enrichment”: Cognate Conservators”

[1998] NZ L Rev 151, questions whether the issues are very significant, but stakes out a somewhat different position on the classification issues from that of Birks. On the difficulties inherent in such debates, see Waddams, Dimensions, above note 44, Ch 9. Professor Waddams accepts that the two concepts are distinct, but “[i]nsistence on a sharp demarcation cannot be made consistent with the actual history of Anglo-American law, however desirable it might be on other grounds.”

[56] See Waddams, Dimensions, above note 44, 164-169.

[57] I Jackman, The Varieties of Restitution (Federation Press, Sydney, 1998) 1, 23-28, 177-180 (admittedly a minority view). Cf P Jaffey, The Nature and Scope of Restitution: Vitiated Transfers, Imputed Contracts and Disgorgement (Hart, Oxford, 2000), 105- 110 (prima facie restitutionary right, but with a strong contractual overlay).

[58] See A Burrows, Law of Restitution (2d ed, Butterworths, London, 2002) 56-60; and cf 1-2 (theory of “perfect quadration” retained in all cases of restitutionary response). Professor Burrows concedes that the setting aside of the contract may also be contractual in nature, in some classes of case at least. See also G McMeel, The Modern Law of Restitution (Blackstone, London, 2000), 32-33.

[59] See eg G Virgo, The Principles of the Law of Restitution (Clarendon, Oxford, 1999), 28-30. Mr Virgo goes on to say that, where rescission has the effect of revesting property in the claimant, the relevant law is the law of property, not unjust enrichment.

[60] See Waddams, “Restitution as Part of Contract Law”, in A Burrows (ed) Essays on the Law of Restitution (Clarendon Press, Oxford, 1991), 197. At 213, Professor Waddams concludes, after a wide-ranging review of issues in contract law, that “restitution values are well esconced within the structure of contract law … almost every aspect of contract law proves, on examination, to be imbued with restitution.” See also Dimensions, above note 44, Ch 8.

[61] Another area of overlap that causes debate is where property that originally belonged to the claimant is found in the hands of the defendant, who is made to return it or hold it upon trust for return to the claimant. Is this the law of unjust enrichment or the law of property at work? Some favour the former view, eg A Burrows, The Law of Restitution (2d ed, Butterworths, London, 2002) 75-77. Others favour the latter: eg G Virgo, The Principles of the Law of Restitution (Clarendon, Oxford, 1999) 11-17, 592-606. In Unjust Enrichment, above note 46, 30-34, Professor Birks takes a middle view. If the order is to the effect that the claimant remains the legal owner of the property, that is property law; but if a new equitable right is conferred on the claimant, that is (or at least, can be) unjust enrichment. The latter part of the equation is elaborated by A Burrows, “Proprietary Restitution: Unmasking Unjust Enrichment” (2001) 117 L Q Rev 412.

[62] Birks, Introduction, above note 46, Ch 10.

[63] Birks, “Misnomer”, in W Cornish, R Nolan, J O’Sullivan and G Virgo eds, Restitution Past, Present and Future: Essays in Honour of Gareth Jones (Hart, Oxford, 1998) Ch 1; Unjust Enrichment, above note 46, 63.

[64] Eg Burrows, Law of Restitution, above note 58, 25-31; Friedmann, “Restitution for Wrongs: The Basis of Liability, in Restitution Past, Present and Future, above note 63, Ch 9.

[65] L Smith, “Three-Party Restitution: A Critique of Birks’ Theory of Interceptive Subtraction” (1991) 11 Oxford J L S 481.

[66] Eg AG for Hong Kong v Reid [1994] AC 324, 332-333 (PC) (analogy drawn between unjustly acquiring trust property - which in Birks’ view is part of the law of unjust enrichment – and taking bribes – which is not).

[67] See Waddams, Dimensions, above note 44, Ch 6.

[68] AG v Blake [2000] UKHL 45; [2001] 1 AC 268 (HL). At 284, Lord Nicholls refers to the award of an “account of profits”, rejecting the expression “restitutionary damages”; and considers this a “just response to a breach of contract”, not a remedial response to a wrong. This suggests that, in his view, there is a right to an account (not just a restitutionary remedy) and it is sited in or close to the law of contract. See also at 291, per Lord Steyn.

[69] See Birks, Unjust Enrichment, above note 46, 12, 63. Compare Waddams, “Dimensions”, above note 44, 142-150.

[70] Birks, “Definition and Division”, above note 16, 31-32.

[71] This point is made, in a somewhat different form, in Grantham and Rickett, “Property or Unjust Enrichment”, above note 55, 673 ff.

[72] Birks offers a good example of this process in Introduction, above note 46, 40-41, where he removes the “wrong” from propositions about unlawful taking, where those propositions are designed for use within the law of unjust enrichment. The word “subtraction” is used instead. But that postpones the problem; the subtraction must be from the plaintiff’s wealth, ie what they own according to property law.

[73] See eg Smith, “Unjust Enrichment, Property and the Structure of Trusts” (2000) 116 LQR 412. Compare Birks, “Misdirected funds: restitution from the recipient”

[1989] Lloyds M C L Q 296.

[74] Unjust Enrichment, above note 46, 20.

[75] Unjust Enrichment, above note 46, 34.

[76] Ibid, 26-30.

[77] Ibid, 9.

[78] The comments he makes in Chapters 5 and 6 of Unjust Enjrichment, ibid, seem to me to be very important in this regard, but this is not the time or place to go into them in detail. Basically, Birks concedes that an enrichment is “unjust” if it is received without a sufficient basis. He accepts that this element of unjust enrichment can sometimes be established simply by applying the law of contract, to see whether the claimed basis is valid or not. The main example he gives of this is payment under a contract that turns out to be ultra vires one of the parties (as in the so-called “swaps” cases). So here, what is “unjust” no longer depends on what is in the mind of the parties (mistake, ignorance, coercion etc), that being an “event” cognisable by the law of unjust enrichment. It depends more on the validity of the contract, which is a “response” taken from the law of contract – depending upon the existence of a further set of events, not otherwise cognisable in the law of unjust enrichment.

[79] The tide seems to be turning against a law of negligence with such extended reach, in preference to more predictable justice: see Smillie, “Formalism, Fairness and Efficiency” [1996] NZ Law Rev 254, 262, 269-273. The same view has informed the development of the law of unjust enrichment: see eg Birks, “Misdirected funds”, above note 73, 296, 327 ff.

[80] An exception is the law of change of circumstance as it is understood in New Zealand: Thomas v Houston Corbett & Co; above note 32, at 165 per North P, 170-171 per Tuner J, and 177-178 per McGregor J; National Bank of NZ Ltd v Waitaki. International Processing (NI) Ltd [1999] 2 NZLR 211 (CA), at 220-222 per Henry J, 230-231 per Thomas J, and 232-233 per Tipping J. In this, New Zealand law departs from both standard theory, and the general approach taken in other jurisdictions.

It may be far-sighted in doing so, because it implicitly acknowledges that while there must be reasonable limitations to an extended law of unjust enrichment, these are not driven solely by dogmatic considerations.

[81] A relevant example is Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, which might be analysed thus: 1. Relationship: Cass is a partner in the legal firm of Lipkin Gorman. 2. Property radial: Cass misappropriates money belonging to the firm, and becomes legal owner of the proceeds (cheques and cash), Lipking Gorman having residual rights in the money. 3. Contract radial: Cass enters into gambling arrangements with the casino operators, Karpnale Ltd. This does not establish a legal contract (or “consideration”, “bona fide purchase”), and therefore Lipkin Gorman continues to have, undisplaced, its residual rights to the misappropriated money. 4. Unjust enrichment radial: Cass uses the misappropriated money at the casino, thereby enriching Karpnale Ltd to the extent of Cass’s gaming losses, at the expense of Lipkin Gorman’s residual rights in the money.

The analysis concludes at this point; there is enough, according to the House of Lords, to justify Lipkin Gorman’s right to restitution from Karpnale Ltd, which must pay a sum equivalent to the amount of its enrichment.

But let us now suppose that Karpnale Ltd goes into liquidation, and Cass’s betting money is still identifiable in Karpnale Ltd’s assets. Analysis then moves on again to: 5. (Hypothetical) Property radial 2: The question becomes, does Lipkin Gorman’s restitutionary claim, coupled with its initial residual interest in the misappropriated money, entitle it to a proprietary claim, which will put it ahead of the other creditors of Karpnale Ltd?

And perhaps even further, through Contract 2 (has the proprietary claim been displaced by Karpnale Ltd’s contract with someone else) to Unjust enrichment 2 (will the general creditors of Karpnale Ltd be unjustly enriched if Lipkin Gorman’s proprietary claim is not recognised?)

[82] Our discussions arose in our role as members of the Advisory Panel of Te Matahauariki Institute, University of Waikato. The Institute undertakes (among other things) studies on the relationship between laws sourced from or based on the English legal system, and laws framed within the Maori tradition. Part of this work – closely linked with the subject matter of this lecture – is to find out what each tradition has to say to each other. I have been very much the beneficiary in this exchange!

[83] See M Henare, Brief of Evidence for Waitangi Tribunal (Foreshore and Seabed Claims), 12 January 2004, paras 80-86.

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