The German Law of Unjustified Enrichment and Restitution: A Comparative Introduction

334 Pages·2009·1.319 MB·English

by  Gerhard Dannemann

THE GERMAN LAW OF UNJUSTIFIED
ENRICHMENT AND RESTITUTION
A Comparative Introduction
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The German Law of
Unjustifi ed
Enrichment and
Restitution
A Comparative Introduction
GERHARD DANNEMANN
1
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1
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British Library Cataloguing in Publication Data
Data available
Library of Congress Cataloging in Publication Data
Dannemann, Gerhard.
The German law of unjustifi ed enrichment and
restitution : a comparative introduction / Gerhard Dannemann.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-19-953311-4
1. Unjust enrichment—Germany. I. Title.
KK1907.D36 2009
346.4302’9—dc22
2009021123
Typeset by Cepha Imaging Private Ltd, Bangalore, India
Printed in Great Britain
on acid-free paper by
CPI Antony Rowe
ISBN 978–0–19–953311–4
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Preface
The story of this book goes back fi fteen years. In summer 1994, when
I was about to join the Oxford law faculty, I met the Regius Professor
of English Law, Peter Birks, to discuss my tasks. He asked me to join
his restitution course and to give a series of lectures on the German
law of unjustifi ed enrichment. I ended up giving those lectures for
the eight years which followed, and with a lasting fascination for the
comparative law in this area.
An early version of my lecture notes was published in 1997.1 The
present book draws on the latest version as well as a number of articles
which have resulted from my encounter with unjust(ifi ed) enrichment.2
It owes much to all students and fellow convenors who contributed to
the discussion in the Oxford BCL Restitution Seminar, arguably the
best testing ground for any ideas one might have on this subject.
The book is divided into three parts. Part I (Chapters 1–7) explains
the German law of unjustifi ed enrichment in the context of other mod-
els of restitutionary liability. Part II (Chapters 8 and 9) looks at the wider
comparative perspective. Chapter 8 discusses issues of scope, taxonomy,
and approach towards unjust(ifi ed) enrichment, and explains why
English and German law have much more in common than fi rst meets
the eye. Chapter 9 looks at lessons which German and English law
might learn from each other. Particular attention is paid to the sugges-
tion by the late Peter Birks that English law should switch from an unjust
factor approach to a German style absence of basis approach.3 Part III
contains translations of leading German cases (Chapter 10) and of pro-
visions of the German Civil Code (Chapter 11) which relate to unjusti-
fi ed enrichment and restitution. These should enable readers without
1 Basil Markesinis, Werner Lorenz, and Gerhard Dannemann, The German Law of
Obligations, Vol. I: The Law of Contracts and Restitution: a Comparative Introduction (1997),
710–816.
2 ‘Restitution for Termination of Contract in German Law’, in: Failure of Contracts:
Contractual, Restitutionary and Proprietary Consequences, ed. by Francis Rose (1997), 129–
153; ‘Illegality as a Defence’ (2000) Oxford U Comparative Law Forum 4; ‘Unjust
Enrichment by Transfer: Some Comparative Remarks’, in: 79 Texas Law Review (2001),
1837–1867; ‘Unjust Enrichment as Absence of Basis: Can English Law Cope?’, in: Mapping
the Law, 363–377. For the use of ‘unjust’ or ‘unjustifi ed’, see p. 37.
3 Birks, Unjust Enrichment, Ch 5.
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vi Preface
knowledge of the German language to familiarize themselves with the
primary sources, and allow them to draw their own comparisons.
This reliance on primary sources is also a methodological feature of
the book. While it engages in Part I in an asymmetrical comparison by
using English law as a contrast foil or point of reference for explaining
German law (rather than presenting German and English law in the
same detail), it nevertheless treats both on an equal footing in terms
of using legal sources. The book seeks to keep an equal distance from
the strong focus on restating existing case law which is traditional for
English textbooks (although not for most of the recent English litera-
ture on unjust enrichment) and the equally strong focus on doctrinal
issues which is traditional for German textbooks. As a consequence,
primary sources take pride of place when it comes to stating what the
law is, and scholarly writing is given more prominence when it comes
to explaining how the law functions and what it should look like.
English and German law are also given equal attention in the more
comprehensive comparative analysis in Part II.
The book thus aims to represent German law in such a way that it
can be more easily understood by readers trained in the common law,
but not less accurately than a classical German textbook. It seeks to
explain authentic rather than anglicized German law. I hope that it
may provide new insights not only to common law readers, but also to
those from other jurisdictions, perhaps even German lawyers.
Next to those who have been mentioned above, I owe thanks to
the Texas Law Review and Hart Publishing for their kind permis-
sion to reproduce or otherwise draw on materials in which they have
copyright,4 to Joy Ruskin-Tompkins for her careful editing of the
manuscript, to Corinna Radke, Irene Maier, and Nico Köppel for
their painstaking editorial work on Chapter 10, to Nico Köppel also
for having compiled the table of cases, and to all student assistants at
the Centre for British Studies, Humboldt-Universität for their help in
borrowing books and copying articles.
The law is stated as of 1 January 2009.
Gerhard Dannemann
Berlin, February 2009
4 Gerhard Dannemann, ‘Unjust Enrichment by Transfer: Some Comparative Remarks’,
in: 79 Texas Law Review (2001), 1837–1867. Chapter 10 contains English translations of
three cases which were fi rst published in Cases, Materials and Texts on Unjustifi ed Enrichment,
ed. by Jack Beatson and Eltjo Schrage.
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Table of Cases
COMMONWEALTH AND UK
Actionstrength Ltd v International Glass Engineering Ltd [2003]
UKHL 17, [2003] 2 AC 541 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
Aiken v Short (1856) 1 H&N 210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116, 174
Attorney-General v Blake [2001] 1 AC 268 (HL). . . . . . . . . . . . . . . . . . . . . . . . . 92, 100
Attorney-General for Hong Kong v Reid [1994] 1 AC 324 (PC, NZ). . . . . . . . . . . . . . 100
Bank of Credit and Commerce International SA v Aboody [1990] 1 QB 923 (CA) . . . . 167
Banque Belge pour l’Etranger v Hambrouck [1921] 1 KB 321 (CA). . . . . . . . . . . 130, 145
Barclays Bank Ltd v WJ Simms, Son & Cooke (Southern) Ltd [1980]
QB 677 (QBD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32, 55, 174, 198
Barclays Bank plc v O’Brien [1994] 1 AC 180 (HL) . . . . . . . . . . . . . . . . . . . . . . . 4, 167
Barton v Armstrong [1976] AC 104 (PC, Australia). . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Bolton v Mahadeva [1972] 1 WLR 1009 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Bradford & Bingley plc v Rashid [2006] UKHL 37. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Brennan v Burdon and others [2004] EWCA Civ 1017, [2005] QB 303 . . . . . . . . . . 203
Carslogie Steamship Co v Royal Norwegian Government [1952] AC 292 (HL). . . . . . . 144
Cheese v Thomas [1994] 1 WLR 129 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Coggs v Barnard (1703) 2 Ld Raym 909 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191, 194
Corpe v Overton (1833) 10 Bing 252 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
CTN Cash & Carry v Gallaher [1994] 4 All ER 714 (CA). . . . . . . . . . . . . . 78, 200, 202
Deutsche Morgan Grenfell Group Plc v Her Majesty’s Commissioners
of Inland Revenue [2006] UKHL 49. . . . . . . . . . . . . . . . . . . . . . .4, 36, 163, 167, 211
Dextra Bank Trust v Bank of Jamaica [2001] UKPC 50 (Jamaica) . . . . . . . . . . . . 57, 141
Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd [1998] UKHL 53 . . . . . . . . . . . 36
Earl Grey v Attorney-General [1900–1903] All ER 268 (HL). . . . . . . . . . . . . . . 193, 197
Foskett v McKeown [2001] (HL) 1 AC 102 (HL). . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
Goss v Chilcott [1996] AC 788 (PC, NZ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Great Peace Shipping v Tsavliris Salvage [2002] EWCA Civ 1407. . . . . . . . . . . . . . . . 182
Greenwood v Bennett [1973] 1 QB 195 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Guinness Mahon & Co Ltd v Council of the Royal Borough of Kensington
& Chelsea [1999] QB 215 (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
Holman v Johnson (1775) 1 Cowp 341. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Hussey v Palmer [1972] 1 WLR 1286 (CA). . . . . . . . . . . . . . . . . . . . . . . . 115, 128, 169
In Re Poelemis [1921] 3 KB 560 (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Kelly v Solari (1841) 9 M&W 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34, 78, 158
Kiriri Cotton v Dewani [1960] AC 192 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349 (HL) . . . . . . . . .4, 10, 78,
167, 170, 172, 182, 203, 211
Lamine v Dorrell (1701) 2 Ld Raym 1216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 (HL) . . . . . . . . . . . . 4, 8, 34, 131, 139,
145, 156, 167, 187
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xvi Table of Cases
Macclesfi eld Corptn v Gt Central Railway [1911] 2 KB 528 (CA). . . . . . . . . . . . . . . .112f
Manchester Airport plc v Dutton [2000] 1 QB 133 (CA) . . . . . . . . . . . . . . . . . . . . . . 192
Maskell v Horner [1915] 3 KB 106 (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200–202
McQuire v Western Morning News Company Ltd [1903] 2 KB 100 (CA) . . . . . . . . . . 158
Morris v Tarrant [1971] 2 QB 143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Moses v Macferlan (1760) 2 Burr 1005 . . . . . . . . . . . . . . .3, 79, 160, 162, 164, 171, 182
Napier and Ettrick v Hunter [1993] AC 713 (HL). . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Norwich Union Fire Insurance Society Ltd v W H Price Ltd [1934]
AC 455 (PC, Australia) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Nurdin & Peacock v D B Ramsden & Co [1999] 1 WLR 1249 (Ch),
1 All ER 941 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78, 176, 202–204, 211
Orakpo v Manson Investments Ltd [1978] AC 95 (HL) . . . . . . . . . . . . . . . . . . . . 10, 163
Overseas Tankship (UK) v Morts Dock and Engineering Co
(The Wagon Mound), [1961] AC 388 (PC, Australia) . . . . . . . . . . . . . . . . . . . . . . . 34
Parkinson v College of Ambulance Ltd and Harrison [1925] 2 KB 1. . . . . . . . . . . . . . . . 85
Pavey and Matthews Proprietary Ltd v Paul (1987) 162 CLR 221 (HCA). . . . . . . . . . 187
Pearce v Brain [1929] 2 KB 310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187, 189
Peter v Beblow [1993] 1 SCR 980 (Canada) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Pettkus v Becker [1980] 2 SCR 824 (Canada) . . . . . . . . . . . . . . . . . . . . . . . . 23, 48, 197
Ramnarace v Lutchman [2001] UKPC 25 (Trinidad and Tobago) . . . . . . . . . . . . . . . 192
Reading v Attorney-General [1951] AC 507 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Rover International Ltd v Cannon Film Sales Ltd [1989] 1 WLR 912 (CA). . . . . . . . . 167
Royal Bank of Scotland v Etridge [2001] UKHL 44 . . . . . . . . . . . . . . . . . . . . . . . . 4, 167
Shilliday v Smith 1998 SLT 976 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36, 48
Sinclair v Brougham [1914] AC 398 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 60
Slade’s Case (1602) 4 Coke Rep 9; 76 ER 1074 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 8
Spencer v Hemmerde [1922] 2 AC 507 (HL). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
St John Shipping Corp v Joseph Rank Ltd [1957] 1 QB 267. . . . . . . . . . . . . . . . . . . . . . 76
Steinberg v Scala (Leeds) Ltd [1923] 2 Ch 452 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . 189
Strand Electric and Engineering Co Ltd v Brisford Entertainments Ltd [1952]
2 QB 246 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69, 91
Sumpter v Hedges [1898] 1 QB 673 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Thomas v Brown (1876) 1 QBD 714 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
Tikiri Banda Dullewet v Padma Rukmani Dullewe [1969]
2 AC 313 (PC, Ceylon). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193, 197
Tinsley v Milligan [1994] 1 AC 340 (HL). . . . . . . . . . . . . . . . . . . . . . . . . . . 48, 80, 170
Tootal Clothing v Guinea Properties (1992) 64 P&CR 452 (CA) . . . . . . . . . . . . . . . . 185
Tribe v Tribe [1995] 3 WLR 913 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83, 170
Twyford v Manchester Corporation [1946] Ch 236. . . . . . . . . . . . . . . . . . . . . . . . 78, 200
Westdeutsche Landesbank Girozentrale v Islington London Borough
Council [1996] AC 669 (HL). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 34, 167
Wilson v First County Trust Ltd [2003] UKHL 40. . . . . . . . . . . . . . . . . . . . . . . . . . . 186
Woolwich Equitable Building Society v Inland Revenue
Commissioners [1993] AC 70 (HL). . . . . . . . . . . . . . . . . . .36, 78, 163, 167, 169, 202
Yeoman’s Row Management Limited and another v Cobbe [2008]
UKHL 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4, 115, 128, 156, 167
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Table of Cases xvii
GERMANY
Bundesverfassungsgericht
BVerfG 17 April 1991, BVerfGE 84, 34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Reichsgericht
RG 8 June 1895, RGZ 35, 63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
RG 27 February 1912, RGZ 78, 427 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
RG 24 March 1915, RGZ 86, 343. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
RG 20 December 1919, RGZ 97, 310. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
RG 27 April 1920, RGZ 99, 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
RG 16 February 1921, RGZ 101, 389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
RG 8 November 1922, RGZ 105, 270. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
RG 1 December 1922, RGZ 105, 408. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
RG 18 January 1923, Seuff Arch 78 (1924) n. 124. . . . . . . . . . . . . . . . . . . . . . . . . . . 46
RG 4 March 1924, RGZ 108, 110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
RG 3 May 1935, RGZ 147, 396 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
RG 30 June 1939, RGZ 161, 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
RG 8 January 1941, RGZ 165, 358 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Bundesgerichtshof
BGH 19 January 1951, BGHZ 1, 75. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
BGH 27 February 1952, BGHZ 5, 197. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
BGH 25 September 1952, BGHZ 7, 208. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
BGH 21 December 1956, BGHZ 23, 61
(unwanted building; translation) . . . . . . . . . . . . . . . . . . . . . . . . . . . .63, 72, 137, 218
BGH 14 February 1958, BGHZ 26, 249 (gentleman rider case) . . . . . . . . . . . . . . . . . 95
BGH 3 December 1958, BGHZ 29, 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
BGH 21 February 1961, VersR 1961, 465. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
BGH 1 February 1962, BGHZ 36, 321. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
BGH 25 June 1962, BGHZ 37, 258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
BGH 12 July 1962, BGHZ 37, 363. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
BGH 31 January 1963, BGHZ 39, 87 (Strafcharakter). . . . . . . . . . . . . . . . . . . . . . . . 80
BGH 25 March 1963, BGHZ 39, 186 (bombed site;
translation). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91, 109, 221
BGH 20 June 1963, BGHZ 40, 28 (fi re brigade; translation). . . . . . . . . . . . . . 112, 224
BGH 31 October 1963, BGHZ 40, 272
(electrical appliances; translation). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 52, 227
BGH 14 July 1964, NJW 1964, 1898 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
BGH 8 May 1965, BGHZ 20, 345 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
BGH 29 November 1965, BGHZ 44, 321. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
BGH 23 December 1966, BGHZ 46, 260. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
BGH 2 February 1967, NJW 1967, 1128 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
BGH 25 April 1967, BGHZ 47, 393. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
BGH 20 June 1968, BB 1969, 194 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
BGH 7 January 1971, NJW 1971, 609 (underage fl yer;
translation). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28, 112, 135f, 242
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