Aggravated, Exemplary and Restitutionary ... - Law Commission

day market). At first instance, Peter Gibson J granted the plaintiff, from 4 March
1987, a permanent injunction to restrain further infringement of its right. He also
awarded substantial damages, not on the basis that the plaintiff had suffered any
loss of custom, but on the basis of an appropriate licence fee that the plaintiff
could have charged the defendant for lawful operation of its market from 12 April
1984 to 4 March 1987. The defendant company successfully appealed against the
award of substantial damages, the Court of Appeal holding that the plaintiff was
entitled merely to £2 nominal damages.
1.18 On the facts, the plaintiff would not have granted the defendant the right to hold
the market and therefore Peter Gibson J’s award at first instance is better viewed as
restitutionary (stripping away part of the defendant’s wrongfully acquired gains)
rather than compensatory. In the Court of Appeal the whole question was
approached as if only compensatory damages could be awarded. Indeed it was
only at the very end of Nourse LJ’s judgment that there was any reference to
restitution. He said,
It is possible that the English law of tort, more especially of the socalled
‘proprietary torts’ will in due course make a more deliberate
move towards recovery based not on loss suffered by the plaintiff but
on the unjust enrichment of the defendant - see Goff and Jones The
Law of Restitution, 3rd ed (1986), pp 612-614. But I do not think that
that process can begin in this case and I doubt whether it can begin at
all at this level of decision. 206
The approach in Wass has been heavily criticised by commentators. 207
(b) Intellectual property torts
1.19 These are civil wrongs which are now either statutory torts (for example,
infringement of a patent, infringement of copyright, infringement of design right)
or common law torts (for example, infringement of trade mark and passing off).
The reason why it is convenient to treat them separately from other proprietary
torts is that restitution for these torts, through the equitable remedy of an account
of profits, is very well-established and no doubt historically reflects the fact that
these torts started life as equitable wrongs.
1.20 So an account of profits may be ordered for the torts of passing off 208
or
infringement of trade mark, 209
although it appears that dishonesty is here a precondition
of the restitutionary remedy, 210
albeit not of a claim for compensation. 211
206 [1988] 1 WLR 1406, 1415.
207 See, eg, P Birks, Civil Wrongs - A New World (Butterworth Lectures 1990-91) esp pp 57-77;
A Burrows, The Law of Restitution (1993) pp 392-393; Lord Goff of Chieveley and G Jones,
The Law of Restitution (4th ed, 1993) pp 722-723.
208 Lever v Goodwin (1887) 36 ChD 1; My Kinda Town Ltd v Soll [1982] FSR 147, reversed on
liability [1983] RPC 407.
209 Edelsten v Edelsten (1863) 1 De G J & S 185, 46 ER 72; Slazenger & Sons v Spalding & Bros
[1910] 1 Ch 257; Colbeam Palmer Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25 (HCA).
210 See especially the decision of Windeyer J in the High Court of Australia in Colbeam Palmer
Ltd v Stock Affiliates Pty Ltd (1968) 122 CLR 25.
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