Unjust Enrichment: Principle or Cause of Action?

Despite a continuing stream of case law from all levels of Canada’s judiciary, there remain fundamental questions regarding the nature of unjust enrichment in Canada and the relationship between unjust enrichment and other private law causes of action. There is a view that unjust enrichment is a general principle that is expressed in a number of distinct causes of action. And there is a competing view that unjust enrichment is an autonomous unified legal test for recovering benefits conferred on defendants that are not justified in law.

The difference is whether the standard in question is applied directly to the facts proven or admitted in order to determine whether there is liability. If the answer to that question is yes, then we are dealing with a legal test. There are countless Canadian cases that treat unjust enrichment in this way. If the standard is a general principle, perhaps like “promises seriously made are binding in law”, then it is not directly applicable to the facts. Such a principle is rather an explanation for legal tests. In the case of the principle that “promises seriously made are binding in law”, it would explain why we have the law (legal tests) governing offer and acceptance and consideration for parol contracts, and why we have different legal tests governing the formalities required for deeds, in which promises may be binding without offer, acceptance, or consideration.

Justice McLachlin (as she then was) in Peel v. Canada, [1992] 3 SCR 762 (SCC), 786, recognised “the difficult task of mediating between, if not resolving, the conflicting views of the proper scope of the doctrine of unjust enrichment”, and she proposed a way forward through compromise. Almost thirty years later, this middle path remains elusive as conflicting views over the doctrine of unjust enrichment persist in case law and legal scholarship.