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Sender:
Kalev Crossland
Date:
Fri, 2 Mar 2007 14:36:51 +1300
Re:
Waiver of tort

 

Here is a response to Lionel’s point about connecting the defendant’s profit to the plaintiff where there is no loss: The rationale for a restitution for wrongs remedy in tort may applies where the claimant’s right is interfered with is proprietary (nuisance and trespass being a property based tort).

Imagine I tunnel under your property without consent to my landlocked gold mine, extract gold and then transport the gold via the tunnel and sell the gold that I could not otherwise extract but for my trespass. Now say instead of trespassing I first ask you "please may I tunnel under your land [for the stated purpose]" – you say you can but I would like a 40% royalty on all gold I sell – and we agree.

By tunneling without consent (trespassing) I have negated your commercial leveraging power to extract a profit from your ownership of land. Now revert to the situation where we have entered into the royalty arrangement and sometime later land on your property subsides due to my tunnel collapsing causing damage to your land. I am liable to you for the value of the damage and for the royalty on gold extracted till the collapse. Go back now to the trespass situation: the land subsides causing you damage after I have made a profit from the gold extracted and transported via the illegal tunnel. Why in this situation can you not recover both compensation for loss plus an award for the unlawful access under your land or maybe for the gold? Having regard to the proprietary nature of the right infringed there is no double recovery here is there? Am I not compensating for the damage to the land and "compensating" for the loss of bargaining over the license to tunnel.

The restitutionary award here is analogous to the equitably remedy of account traditionally invoked for breach of a fiduciary obligation. Recall that the remedy of account is available for breaches of intellectual property rights which are regarded as tortious wrongs (though originally equitable I believe). What is being protected again are proprietary rights by reference to the wrongdoer’s profits from say breach of a patent – regardless of loss.

 

Kalev

 

From: Lionel Smith
Sent: Friday, 2 March 2007 3:18 a.m.
Subject: [RDG] Waiver of tort

Perhaps ironically, these recent Canadian cases are being argued on exactly the distinction between anti-enrichment and anti-harm wrongs. I would be interested to know how many RDG members find this distinction useful?

On a rights-based analysis, if we thought that in some situations (and negligence might be one, perhaps not in England and Wales after Barker) the plaintiff’s right is only infringed if loss is caused, we might well think that a gain-based remedy is not consonant with the extent of the right in question. Eg if loss is $20 and gain is $50, and we think that $20 is not just a measure of loss but actually in some sense constitutes the violation of the right, it is arguably hard to see how the plaintiff connects to the $50.

Does anyone know of a theory of rights that offers an explanation for a distinction between those rights that are properly said to be violated only when a loss is caused, and those that can properly be said to be violated regardless of whether any loss is caused?

My excuse for asking such a general question is that I have been kicked out of my office for over three weeks and all my books are in boxes somewhere ...


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