Defences to restitutionary claims

Published by a LexisNexis Dispute Resolution expert
Practice notes

Defences to restitutionary claims

Published by a LexisNexis Dispute Resolution expert

Practice notes
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This Practice Note considers defences to a claim for restitution for unjust enrichment. For guidance on establishing such a claim, see Practice Note: Restitution for unjust enrichment—elements of the claim.

There are a number of defences that should be considered when faced with a restitutionary claim for unjust enrichment. Essentially, these defences are available where it is either impossible to restore the claimant to the original position prior to the enrichment, or it would be unjust to do so. They are:

  1. change of position renders restitution inequitable

  2. ministerial receipt

  3. bona fide purchaser for value

  4. estoppel to defeat a claim of unjust enrichment

  5. impossibility of counter-restitution can defeat a claim for unjust enrichment

  6. loss suffered is passed on

  7. illegality and incapacity of the underlying transaction (public policy)

  8. limitation

Change of position renders restitution inequitable

A defendant may avoid liability if they can show that their position 'has so changed that it would be inequitable in all the circumstances to require them to make restitution' (Lipkin Gorman v Karpnale).

In Westdeutsche

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Key definition:
Estoppel definition
What does Estoppel mean?

The basic concept of an estoppel is that where a person (A) has caused another (B) to act on the basis of a particular state of affairs, A is prevented from going back on the words or conduct which led B to act on that basis, if certain conditions are satisfied.

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