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V GENERAL DEFENCES TO RESTITUTIONARY CLAIMS

FUNDAMENTAL PRINCIPLES

THE FUNCTION AND AMBIT OF GENERAL DEFENCES

During the examination of the three different types of restitutionary claim in Parts II, III, and IV certain specific defences were considered.[1] These defences are, however, only of limited application. There are a number of other defences which are of general application to all, or almost all, restitutionary claims. These are called the general defences and they will be examined in this Part.

(A) THE DISTINCTION BETWEEN DEFENCES AND DENIALS

In determining the nature of restitutionary defences it is useful to distinguish between defences and denials.[2] A denial is an assertion by the defendant that an element of the cause of action is not established, whereas defences only arise once the cause of action has been established to indicate a reason why the defendant should not be liable or the liability should be reduced in some way. So, for example, in a claim grounded on unjust enrichment, if the defendant argues that there was a legal basis for the receipt of an enrichment, this is denial of the claim, because the claimant must prove that there was no legal basis for the enrichment.[3] If, however, the defendant argues that his or her position has changed after the enrichment has been received, this is a defence which the defendant bears the burden of proving, because the change of position is only considered to be relevant after the cause of action has been established.[4]

The line between defences and denials is not always clear. For example, when the definition of enrichment was considered[5] it was noted that the defendant could subjectively devalue an objective enrichment.6 If the defendant relies on subjective devaluation, this appears to be construed by the courts as a denial of an element of the unjust enrichment claim. Subjective devaluation could, however, be formulated as a defence7 such that it does not relate to the identification of the elements of the cause of action, but constitutes a particular reason why the defendant should not make restitution, from respect of his or her autonomy. Similarly, whilst the presence of a basis appears to be properly characterized as a denial, it could easily be formulated as a defence if the existence of a lawful basis for receipt is not considered to constitute an element of the cause of action. Whether a particular rule is characterized as a denial or a defence is only of practical significance in determining who bears the burden of proof or disproof, with the burden allocated to the defendant if it is a defence and to the claimant if it is a denial. As a matter of principle, when determining the appropriate characterization it is necessary to consider whether the particular rule constitutes a component part of the cause of action. As a matter of policy it is important to consider who is in the best position to establish whether the rule does or does not apply. That might, for example, be a reason why subjective devaluation should properly be characterized as a defence, since the defendant is in the best position to establish that he or she did not value the enrichment which had been received.

  • [1] Such as the defence of good consideration in Chapter 9 (see p 189, above) and the defence of bona fidepurchase in Chapter 23.
  • [2] A distinction recognized by C Mitchell and J Goudkamp, ‘Denials and Defences in the Law of UnjustEnrichment’ in C Mitchell and W Swadling (eds), The Restatement Third: Restitution and Unjust Enrichment(Oxford: Hart Publishing, 2013), ch 6. See p 60, above.
  • [3] See Chapter 7. 4 See Chapter 25. 5 See Chapter 4. 6 See p 69, above.
  • [4] 7 Lord Reed came close to construing it in this way in Benedetti v Sawiris [2013] UKSC 50, [2014] AC 938.
  • [5] See p 70, above.
 
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