When money has been paid by the claimant to the defendant as the result of a court judgment it cannot be recovered unless the judgment is set aside, for the judgment constitutes a basis for the payment. The judgment operates as a legally effective basis for the defendant’s receipt, even if the judgment has been obtained by fraud. It is only where the judgment is subsequently set aside that restitution will be awarded. Similarly, where a judgment has been declared for too much money, the claimant is unable to recover the excess money paid to the defendant until the judgment has been rectified.
In Moses v Macferlan Lord Mansfield recognized that where a claimant has discharged an obligation in circumstances where the claimant was not aware that the defendant could not have enforced the obligation, the claimant could not obtain restitution even though the money was technically not due, because the claimant was morally or naturally bound to have paid the money to the defendant. This so-called ‘natural obligation’ would exist where money is claimed from the claimant:
as payable in point of honor and honesty although it could not have been recovered from him by any course of law; as in payment of a debt barred by the Statute of Limitations, or contracted during his infancy, or to the extent of principal and legal interest upon an usurious contract, or for money fairly lost at play: because in all these cases, the defendant may retain it with a safe conscience, though by positive law he was barred from recovering.
If money has been paid in such circumstances it would appear that there is a basis for its receipt and so restitution will not be available.
The relevance of natural obligations today can be assessed with reference to each of Lord Mansfield’s examples. First, if money is paid to discharge a debt where the claim is time barred, the claimant might assert that this was a mistaken payment, in the sense that, but for the mistake about the claim being barred the money would not have been paid. But restitution should be denied in such circumstances because the payment will still be effective to discharge the debt, regardless of the claim being time barred. In other words, there is a legally effective basis for the payment, and the fact that the claim was time barred is irrelevant. The analysis would only be different if the effect of the relevant limitation statute was to discharge the debt, for then the payment would not be legally effective since the debt would not have been discharged. Usually, however, limitation periods ‘bar only the remedy and not the right’, so there is no need to rely on a basis other than the discharge of the debt to bar the restitutionary claim.
Lord Mansfield’s second category of natural obligations is where money is paid pursuant to a contract which is made during infancy. Restitution will be barred in such a case, but not because of some vague concept of ‘natural obligation’, but because the contract operates as a valid legal basis for the transfer. Contracts with minors for necessaries are valid.1 3 Contracts where the minor acquires an interest of a permanent or continuous nature, such as for the acquisition of shares or land, are voidable,  and so remain a basis for the transfer until the contract is avoided. All other contracts with minors are unenforceable, and so constitute a legally effective basis until the contract has been set aside for some reason. So, again, the language of natural obligation is not of use here. The third category, concerning usurious money-lending contracts, no longer raise special issues. If such contracts are void they constitute no legally effective basis. If they are valid, voidable or unenforceable, they provide a legally effective basis for the payment of money. The fourth category concerning gambling contracts is now covered by the Gambling Act 2005, which renders such contracts enforceable. Consequently, payments in respect of such contracts will be barred in the normal way by the existence of a valid contractual basis for payment.
So, if the specific heads of natural obligation identified by Lord Mansfield can now be explained by reference to the existing heads of the legally effective basis bar, is there any need to identify a distinct ‘natural obligations’ head? This will depend on how ‘natural obligations’ should be defined. Sheehan has described such obligations as arising where a claimant fulfils a duty which he or she had voluntarily agreed to undertake, even though the contract under which the claimant undertook the duty is void. But this involves a much wider notion of ‘basis’ than those previously encountered in this chapter, since this would not necessarily constitute a legally effective basis for the payment. Tang has adopted a narrower interpretation of the natural obligations principle, which has regard to ‘whether the policies behind the doctrine or law which avoided the obligation will be furthered by allowing or denying restitution’. But the crucial issue is whether restitution of a benefit which has been transferred pursuant to a void obligation should ever be barred. Application of the legally effective basis bar suggests that it should not be. For, if there is no legally effective basis for the transfer because the contract is void, there is no reason why the restitutionary claim should be defeated, save where the claimant bore the risk of invalidity. Vague references to underlying policies can only cause confusion and uncertainty. Once the unjust enrichment claim has been established, and mistake of law will usually be readily identifiable as the relevant ground of restitution where there is a void obligation, restitution should follow unless there is some other legally effective basis which can be identified for the transfer. Consequently, there is no need to treat ‘natural obligations’ as providing a basis distinct from any of the other bases.
-  Moses v Macferlan (1760) 2 Burr 1005, 1009; 97 ER 676, 678 (Lord Mansfield).
-  See Birks, Unjust Enrichment (2nd edn), 140.
-  De Medina v Grove (1846) 10 QB 152, 116 ER 59; Huffer v Allen (1867) LR 2 Ex 15.
-  De Medina v Grove (1846) 10 QB 152, 116ER 59. 98 Huffer v Allen (1867) LR 2 Ex 15.
-  99 (1760) 2 Burr 1005, 1012; 97 ER 676, 681.
-  100 Referring to a money-lending contract on terms which are immoral or unethical for some reason,
-  typically for excessive rates of interest.
-  See HW Tang, ‘Natural Obligations and the Common Law of Unjust Enrichment’  OUCLJ
-  133, 140. 102 Ibid, 141.
-  See p 384, below. 2 Steinberg v Scala (Leeds) Ltd  2 Ch 452.
-  105 Gambling Act 2005, s 335. 4 See p 144, above.
-  107 D Sheehan, ‘Natural Obligations in English Law’  LMCLQ 172.
-  108 Tang, ‘Natural Obligations and the Common Law of Unjust Enrichment’.
-  109 See p 36, above.
-  110 Birks considered that a transfer which was intended by the claimant to be a gift could not be recovered:
-  Unjust Enrichment (2nd edn), 104.