A Shift in the Objective Measure of the Time Value of Money

[2015] 23 Restitution Law Review 92-105.

16 Pages Posted: 3 Apr 2017 Last revised: 7 Apr 2017

Date Written: December 31, 2015


As a fact of commercial reality, the time value of money in the common law restitutionary claim is assumed to be reflected by compound interest. Such assumption is a misperception, as compound interest is a value that is independent from money. The user principle, in measuring the time value, has failed to recognise this. However, that principle and time value are not mutually exclusive. The user principle should take into account the independent factor of time value. When money is contextualised in a functional approach, money could be treated for its internal value (use value) or it could be held as wealth (exchange value). According to what will be described as the “narrow version of the division of ideologies of property”, the thing is unique and is possessed and held for its own quality, while what will be described as the “broad version” treats the thing as having an exchange value and as being held as a representation of wealth. In contextualising money under the broad version, the user principle, as in Sempra Metal Ltd v IRC, failed to recognise the time value as an independent factor from money itself. This paper explains how the subsequent case Benedetti v. Sawiris prefers the “benefit choice” that embraces the user principle and offers a more holistic approach for the common law restitutionary claim to be aligned with the financial model of the time value of money.

Keywords: Use Value, Exchange Value, Money, Time Value, Restitutionary Claim, Overpaid Tax

Suggested Citation

Hsiao, Mark W. H., A Shift in the Objective Measure of the Time Value of Money (December 31, 2015). [2015] 23 Restitution Law Review 92-105., Available at SSRN: https://ssrn.com/abstract=2944160

Mark W. H. Hsiao (Contact Author)

City University of Hong Kong ( email )

Rm6346 6F Li Dak Sum Yip Yio Chin Bldg
Tat Chee Avenue
Hong Kong

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