(D) TOTAL FAILURE OF BASIS
Usually failure of basis will only be applicable as a ground of restitution where the basis for the claimant’s payment has totally failed.[1] This ground will consequently generally be of no relevance in the context of recovery of ultra vires payments, since often the basis on which the claimant made the payment will not have failed totally. This is illustrated by Westdeutsche Landesbank Girozentrale v Islington LBC52 where the claimant bank had paid the defendant local authority pursuant to a number of ultra vires interest rate swaps transactions. As regards most of these transactions the claimant could not show that the basis for its payments had totally failed because it had also received money from the defendant. Restitutionary relief was, however, awarded in respect of two of the transactions on the ground of total failure of basis, since the claimant had not received any money from the defendant in respect of these transactions. Depending on how the apportionment principle is applied, there might be scope to apportion the benefits which the claimant has received in return.[2] [3]
