Aggravated, Exemplary and Restitutionary ... - Law Commission

account of profits and damages but must choose between them. 278
Similarly, we
have seen that in United Australia Ltd v Barclays Bank Ltd 279
Viscount Simon LC
considered that the plaintiff must at some stage of the proceedings elect between
the remedies, for the tort in question, of restitution (in that case, the action for
money had and received) and compensatory damages. Again, in Mahesan v
Malaysia Government Officers’ Co-op Housing Society Ltd, 280
the agent of a housing
society, in return for a bribe, caused the society to buy land at an overvalue. The
society sued the agent for both the amount of the bribe ($122,000) and damages
for the tort of deceit for the loss sustained by the society (assessed at $443,000).
The Federal Court of Malaysia awarded both the amount of the bribe and the
damages. On appeal, this was overturned by the Privy Council, which held that
the society was bound to elect between its claims under the two heads. Since the
society would obviously have elected to take damages, judgment was entered for
$443,000.
1.66 Perhaps the clearest analysis of this issue is contained in the Privy Council’s
judgment in Tang Min Sit v Capacious Investments Ltd, 281
which concerned a breach
of trust. Lord Nicholls relied on a distinction between alternative and cumulative
remedies and said:
The law frequently affords an injured person more than one remedy
for the wrong he has suffered. Sometimes the two remedies are
alternative and inconsistent. The classic example, indeed, is (1) an
account of the profits made by a defendant in breach of his fiduciary
obligations and (2) damages for the loss suffered by the plaintiff by
reason of the same breach. The former is measured by the
wrongdoer’s gain, the latter by the injured party’s loss ... Faced with
alternative and inconsistent remedies a plaintiff must choose, or elect,
between them. He cannot have both. 282
1.67 It is therefore clear law that a plaintiff cannot be awarded both compensation and
restitution for a wrong; he must elect between them. But the justification for this
is far from obvious. It has been criticised by, for example, Professor Birks 283
and
Professor Tettenborn. 284
In his case note on Tang Min Sit, Professor Birks says:
If a plaintiff is entitled to recover the defendant’s gains when he has
suffered no loss at all, it is not clear why there should be any
inconsistency in his asking, where he has suffered loss, that the
278 Neilson v Betts (1871) LR 5 HL 1; De Vitre v Betts (1873) LR 6 HL 319; Colbeam Palmer Ltd
v Stock Affiliates Pty Ltd (1968) 122 CLR 25; Island Records Ltd v Tring International plc
[1996] 1 WLR 1256. Section 61(2) of the Patents Act 1977 reads: “The court shall not, in
respect of the same infringement, both award the proprietor of a patent damages and order
that he shall be given an account of the profits”.
279 [1941] AC 1, 18-19. See the citation at para 3.6 above. See similarly the citation at para
3.12 above from Ministry of Defence v Ashman (1993) 66 P & CR 195, 200-201.
280 [1979] AC 374.
281 [1996] AC 514.
282 [1996] AC 514, 521B-D.
283 (1996) 112 LQR 375.
284 (1979) 95 LQR 68.
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