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(B) THE RATIONALE OF THE AGENT’S DEFENCE

The rationale of the agent’s defence is a matter of some uncertainty. A number of explanations of the defence can be identified.

(i) The Defendant is No Longer Enriched

In Continental Caoutuc and Gutta Percha Co v Kleinwort Sons and Co83 Collins MR said that the reason for the defence is that the agent ‘is a mere conduit-pipe [who] had not had the benefit of the windfall’. In other words, the defence operates because, as a result of events subsequent to the receipt of the enrichment by the agent, he or she is no longer enriched. Whilst this is certainly true of most cases where the agent’s defence has succeeded, it cannot explain all of them, because there is no requirement that the agent suffered any detriment in transferring the benefit to the principal. Also, if the operation of the defence simply depended on whether or not the defendant had retained an enrichment, it would not be possible to justify the limitation on the operation of the defence that it only applies if the principal is disclosed. In addition, because of the recognition of the defence of change of position, if the rationale of the agent’s defence was simply that the agent was no longer enriched, it would be very difficult to distinguish between the two defences, with the probable result that the agent’s defence would be assimilated into the change of position defence.84 There is no reason to think that this is the case.

 
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