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RECONSIDERING “TOTAL” FAILURE

Published online by Cambridge University Press:  02 July 2013

Frederick Wilmot-Smith
Frederick Wilmot-Smith*
Affiliation:
Address for correspondence: Frederick Wilmot-Smith, All Souls College, Oxford OX1 4AL. Email: frederick.wilmot-smith@all-souls.ox.ac.uk.
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Abstract

The law has long recognised a right to recover an enrichment transferred on a consideration which has failed. However, the consideration has to fail totally. Much ink has been spilled arguing that the limit is a bad one. Less has been written about quite what a total failure of consideration actually is. In this paper, it is argued that the best understanding of the total failure rule is that it prevents restitution when the failure is insubstantial; only substantial failures justify restitution. This shows that the limit is integral to the justification of the award of restitution.

Keywords

Failure of considerationtotal failuresubstantial failureapportionmentrestitutionunjust enrichmentcontract
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Articles
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The Cambridge Law Journal , Volume 72 , Issue 2 , July 2013 , pp. 414 - 436
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Copyright © Cambridge Law Journal and Contributors 2013 

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References

1 Moses v Macferlan (1760) 2 Burr. 1005, 1010 (Lord Mansfield).

2 Ibid., at p. 1012 (Lord Mansfield). It is assumed that failure of consideration is part of the law of unjust enrichment: for more detail on the debate, see F. Wilmot-Smith, “§38 and the Lost Doctrine of Failure of Consideration” in C. Mitchell and W. Swadling (eds), The Restatement Third, Restitution and Unjust Enrichment: Critical and Comparative Essays (Oxford 2013).

3 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd. [1943] A.C. 32, 77 (Lord Porter), H.L.

4 Ibid.

5 Ibid., at p. 65 (Lord Wright). See, further, Birks, P., “Restitution and the Freedom of Contract” (1983) 36 C.L.P. 141, 151Google Scholar.

6 For instance, in Guinness Mahon Co.. Ltd. v Chelsea and Kensington Royal London Borough Council [1999] Q.B. 215 C.A. the contract in question was void and yet the Court of Appeal awarded restitution for a failure of consideration.

7 Fibrosa v Fairbairn [1943] A.C. 32, 48 (Viscount Simon L.C.); Mitchell, P., “Artificiality in Failure of Consideration” (2010) 29 University of Queensland Law Journal 191, 198–99Google Scholar.

8 Wilmot-Smith, F., “Replacing Risk-Taking Reasoning” (2011) 127 L.Q.R. 610, 618Google Scholar.

9 A. Skelton, Restitution and Contract (Oxford 1998), p. 6; P. Mitchell, “Artificiality in Failure of Consideration” at pp. 196–200. Compare Giedo van der Garde BV v Force India Formula One Team Ltd. (formerly Spyker F1 Team Ltd. (England)) [2010] EWHC 2373 (Q.B.) Q.B.D., at [261] (Stadlen J.).

10 Re Ames' Settlement [1946] Ch. 217, 223 (Vaisey J.). T. Krebs, Restitution at the Crossroads: A Comparative Study (London 2001), 113–14 and 163–65; T. Baloch, Unjust Enrichment and Contract (Oxford 2009), 90; A. Burrows, The Law of Restitution, 3rd ed. (Oxford 2011), 398–9.

11 Neste Oy v Lloyds Bank Ltd., The Tiiskeri, Nestegas and Enskeri [1983] 2 Lloyd's Rep. 658, 666 (Bingham J.).

12 Fibrosa v Fairbairn [1943] A.C. 32, 56 (Lord Russell) and 82 (Lord Roche). For an excellent summary, see P. Mitchell, “Artificiality in Failure of Consideration” at pp. 200–8.

13 For an explanation of these problems, see C. Mitchell, P. Mitchell and S. Watterson, Goff and Jones: The Law of Unjust Enrichment (8th ed., London 2011) at [12–12].

14 E.g. ibid., at [12–10].

15 Anderson v McPherson [No. 2] [2012] WASC 19 at [235] (Edelman J.).

16 Haugesund Kommune v Depfa ACS Bank [2011] EWCA Civ 33; [2012] Bus. L.R. 230, at [62] (Aikens L.J.). His Lordship was discussing the distinction between absence and failure of consideration; however, the point is the same.

17 E.g., G. Virgo, The Principles of the Law of Restitution (2nd ed., Oxford 2006), 306, where ‘consideration’ is defined as ‘the condition which formed the basis for the claimant transferring a benefit to the defendant.’ C. Mitchell, P. Mitchell and S. Watterson, Goff and Jones: The Law of Unjust Enrichment, at [12–01]: ‘the recipient's right to retain [the enrichment] is conditional.’

18 Stocznia Gdanska v Latvian Shipping Co. [1998] 1 W.L.R. 574, 590 (Lord Goff), H.L.; see also Goss v Chilcott [1996] A.C. 788, 797 (Lord Goff), P.C.

19 Stocznia Gdanska v Latvian Shipping Co.. [1998] 1 W.L.R. 574, 590 (Lord Goff).

20 E.g. E. McKendrick, “Total Failure of Consideration and Counter-Restitution: Two Issues or One?” in P. Birks (ed), Laundering and Tracing (Oxford 1995), 230–31; A. Burrows, The Law of Restitution, pp. 333–35.

21 Most recently, Giedo van der Garde v Force India [2010] EWHC 2373, at [367] (Stadlen J.).

22 Stocznia Gdanska v Latvian Shipping Co. [1998] 1 W.L.R. 574.

23 Ibid., at p. 588d (Lord Goff).

24 E.g. Whincup v Hughes (1870–71) L.R. 6 C.P. 78, 85 (Montague Smith J.).

25 G. Virgo, The Principles of the Law of Restitution, p. 316. Virgo is here arguing that Lord Goff cannot be defining the conditions of a transfer; however, the point is essentially the same.

26 Re Ames' Settlement [1946] Ch. 217.

27 Ibid., at p. 223 (Vaisey J.).

28 The analysis here assumes that the total failure rule must apply to those cases where the condition is other than performance. Burrows has claimed that the total failure rule simply does not apply in such cases: A. Burrows, The Law of Restitution, at p. 322 fn21. However, there is no suggestion in the cases that the total failure rule is peculiar to conditions concerning the defendant's performance: compare G. Virgo, The Principles of the Law of Restitution, at p. 315.

29 Beyond the references below, see Edelman, J., “Restitution for a Total Failure of Consideration: When a Total Failure Is Not a Total Failure” (1996) 1 Newcastle Law Review 57, 57Google Scholar; R. Stevens, “Is There a Law of Unjust Enrichment?” in S. Degeling and J. Edelman (eds), Unjust Enrichment and Commercial Law (Pyrmont, N.S.W. 2008) 11, 27; E. Peel, Treitel on the Law of Contract (13th ed., London 2011) at [22–003]; A. Burrows, A Restatement of the English Law of Unjust Enrichment (Oxford 2012), 88. Barker appears to, but is imprecise about the definition of total failure: Barker, K., “Restitution of Passenger Fare: The Mikhail Lermontov” [1993] L.M.C.L.Q. 291, 293Google Scholar. See also Rover International Ltd. v Cannon Film Sales Ltd. (No 3) [1989] 1 W.L.R. 912, 924 (Kerr L.J.).

30 P. Birks, An Introduction to the Law of Restitution (Oxford 1985), 245.

31 G. Virgo, The Principles of the Law of Restitution, p. 310.

32 C. Mitchell, P. Mitchell and S. Watterson, Goff and Jones: The Law of Unjust Enrichment, at [12–16].

33 Rowland v Divall [1923] 2 K.B. 500 C.A.; Karflex Ltd. v Poole [1933] 2 KB 25 DC; Warman v Southern Counties Car Finance Co. Ltd. [1949] 2 K.B. 576; Heywood v Wellers [a firm] [1976] Q.B. 446, 458–9 (Lord Denning M.R.); Rover International Ltd. v Cannon Film Sales Ltd. (No 3) [1989] 1 W.L.R. 912; Baltic Shipping Co. v Dillon, The “Mikhail Lermontov” (1993) 176 C.L.R. 344, 378 (Deane and Dawson JJ.) (H.C.A.); Barber v N.W.S. Bank plc [1996] 1 W.L.R. 641 CA.

34 Giedo van der Garde v Force India [2010] EWHC 2373; noted Winterton, D. and Wilmot-Smith, F., “Steering a Course on Contract Damages and Failure of Consideration” (2012) 128 L.Q.R. 23Google Scholar.

35 Giedo van der Garde v Force India [2010] EWHC 2373 at [3] (Stadlen J.).

36 Ibid., at para. [177] and [331] (Stadlen J.).

37 Ibid. at para. [337] (Stadlen J.). See 1.2(i)–(ii) of the Fee Agreement, excerpted at [10] of Stadlen J.'s judgment.

38 Ibid. at para. [337] (Stadlen J.).

39 Equally, failure to perform any of these collateral obligations cannot precipitate a failure of condition.

40 See note 31 above.

41 G. Virgo, The Principles of the Law of Restitution, pp. 320 and 351. Further, A. Burrows, “The English Law of Restitution: A Ten-Year Review” in J. Neyers, M. McInnes and S. Pitel (eds), Understanding Unjust Enrichment (Oxford 2004) 11, 29; Giedo van der Garde v Force India [2010] EWHC 2373, at [236] (Stadlen J.).

42 G. Virgo, The Principles of the Law of Restitution, p. 319. A similar claim is made in Giedo van der Garde v Force India [2010] EWHC 2373 at [339] (Stadlen J.).

43 A. Burrows, The Law of Restitution, p. 324. Similarly, Beatson calls total failure “arbitrary” as it ignores “real benefits received”: Beatson, J., “Discharge for Breach: The Position of Instalments, Deposits and Other Payments Due before Completion” (1981) 97 L.Q.R. 389Google Scholar, 406.

44 Rowland v Divall [1923] 2 K.B. 500.

45 Ibid., 506 (Scrutton L.J.).

46 See also ibid. p. 503 (Bankes L.J.), 506 (Atkin L.J.).

47 P. Birks, “Failure of Consideration” in F. Rose (ed), Consensus Ad Idem: Essays in the Law of Contract in Honour of Guenter Treitel (London 1996) 179, 180–81. For an earlier example of this claim, see Reynolds, F., “Warranty, Condition and Fundamental Term” (1963) 79 L.Q.R. 534, 551Google Scholar. Compare P. Birks, Introduction, p. 242, where Birks says the requirement of total failure “disappears” when counter-restitution is possible. On the relationship described here see E. McKendrick, “Total Failure of Consideration and Counter-Restitution”, p. 217.

48 David Securities Pty Limited v. Commonwealth Bank of Australia (1992) 175 C.L.R. 353 HCA, 383 (Mason C.J., Deane, Toohey, Gaudron and McHugh JJ.). Further, J. Edelman and E. Bant, Unjust Enrichment in Australia (Oxford 2006), 258–60.

49 Stocznia Gdanska v Latvian Shipping Co. [1998] 1 W.L.R. 574, 588d (Lord Goff).

50 This formulation leaves room for the law being mistaken about the merits: the point is that an interpretation should explain why one might think that the total failure rule serves these ends.

51 Spence v Crawford [1939] 3 All E.R. 271, 288–9 (Lord Wright).

52 Giedo van der Garde v Force India [2010] EWHC 2373, at [366]–[367] (Stadlen J.).

53 Baltic Shipping Co. v Dillon (1993) 176 C.L.R. 344, 350 (Mason C.J.).

54 Hunt v Silk (1804) 5 East 449 K.B.

55 Ibid., p. 450.

56 E.g., Goff, R., “Reform of the Law of Restitution” (1961) 24 M.L.R. 85Google Scholar, 89.

57 Mitchell, P., “Artificiality in Failure of Consideration” (2010) 29 University of Queensland Law Journal 191, 193–96Google Scholar. My analysis of the case owes much to Mitchell's paper. Further, R. McGarvie, “The Common Law Discharge of Contracts Upon Breach” (1964) 4 Melbourne University Law Review 305, 308.

58 Moses v Macferlan (1760) 2 Burr 1005, 1011 (Mansfield C.J.). This report of the case is more detailed than the report of the case itself: (1720) 1 Strange 406.

59 Hunt v Silk (1804) 5 East 449, 452 (Lord Ellenborough C.J.).

60 See T. Baloch, Unjust Enrichment and Contract, p. 124–28. See, in particular, Maclean v Dunn (1828) 4 Bing. 722, 728; 130 E.R. 947.

61 Fibrosa v Fairbairn [1943] A.C. 32.

62 P. Mitchell, “Artificiality in Failure of Consideration” at p. 196.

63 E.g. Smith v Scott 141 E.R. 654, 659; (1859) 6 C.B. N.S. 771, 783 (Byles J.).

64 Morgan v Richardson (1806) 7 East 482n, 1 Camp. 40n, 3 Smith K.B. 487n; Tye v Gwynne (1810) 2 Campbell 346, 170 E.R. 1179, 412; W. Barnes, Bayley's Summary of the Law of Bills of Exchange, Cash Bills and Promissory Notes, 3rd ed. (London 1813), 235.

65 Tye v Gwynne (1810) 2 Campbell 346, 347; 170 E.R. 1179.

66 Wells v Hopkins (1839) 5 M. & W. 7, 9–10; 151 E.R. 3, 5 (Parke and Alderson BB.); Oxford v Provand (1867–69) L.R. 2 P.C. 135, 156 (Sir William Erle).

67 Importantly, this ensures that the ultimate allocation of the enrichment does not depend on the mere fact of when the money was to be paid. Further, Mann v Lent 109 E.R. 674, 677; (1830) 10 B. & C. 877, 884 (Lord Tenterden C.J.); Trickey v Larne (1840) 6 M. & W. 278, 278 (Parke B), 281 (Alderson B).

68 Obbard, assignees of Blofeld (a bankrupt) v Bentham (1830) M. & M. 483, 486 (Lord Tenterden C.J.). There is some irony, then, in the allegation that it is “in defiance of established principle … to dress up as a claim for damages what was really a claim based on a partial “failure of consideration”: White Arrow Express Ltd. v Lamey's Distribution Ltd. [1995] C.L.C. 1251, 1254 (Sir Thomas Bingham M.R.).

69 Obbard, assignees of Blofeld (a bankrupt) v Bentham (1830) M. & M. 483, 486 (Lord Tenterden C.J.). Compare Whincup v Hughes (1870–71) L.R. 6 C.P. 78, 81 (Bovill C.J.), where Bovill C.J. flattens this important distinction.

70 In addition to the following references, see Beck, A., “The Doctrine of Substantial Performance: Conditions and Conditions Precedent” (1975) 38 M.L.R. 413, 421Google Scholar.

71 T. Baloch, Unjust Enrichment and Contract, pp. 98–100.

72 Kingston v Preston (1772) cited in argument in Jones v Barkley (1781) 2 Doug. 684; 99 E.R. 434.

73 Boone v Eyre cited in argument in Duke of St Albans v Shore 1 H. Bl. 270, 273; 126 E.R. 160.

74 Notice that rule three of Serjeant Williams' notes to Boone in his note to Pordage v Cole (1669) 1 Wms. Saund. 219, 85 E.R. 449, refers to whether “breach of such covenant may be paid for in damages” as relevant where “a covenant goes only to a part of the consideration”, and thus the covenants would be treated as independent.

75 The language is from T. Baloch, Unjust Enrichment and Contract, p. 111, but it represents a helpful summary of the analysis of the era. See, further, Stoljar, S., “The Doctrine of Failure of Consideration” (1959) 75 L.Q.R. 53, 72Google Scholar: “the failure of consideration had to be material or substantial or important before restitution … could be allowed.”

76 Behn v Burness (1863) 3 B. & S. 751, 755–6; 122 E.R. 281. Notice that the word “warranty” is used to describe what today we would call a “condition”: “a warranty that is to say a condition” (755). See further Chanter v Leese (1839) 5 M&W 698; 151 E.R. 296: Tindal C.J. refers to Boone v Eyre in his reasoning that there was a total failure 701–02 (M&W); 297–98 (E.R.).

77 W Story, A Treatise on the Law of Contracts Not Under Seal (Boston, 1844), §480. Further, (2nd edn, 1847) §480–81; (3rd edn, 1874) §480.

78 The language of “rescission” is used, but the terms are here meant to denote the same event.

79 The insufficiency of compensation may also be important to the justification of the award: see below, at 430–31. See Roberts v Brett 141 E.R. 595; (1859) 6 C.B. N.S. 611, 632 (Crompton J.).

80 Compare Havelock v Geddes (1809) 10 East 555, 564; 103 E.R. 886, 890 (Lord Ellenborough C.J.). This may be best read as endorsing (C).

81 C.G. Addison and L.W. Cave, Addison on Contracts: Being a Treatise on the Law of Contracts, 7th ed. (London 1875), 233–34. Previous editions had no such passage, though there may be a precursor: C.G. Addison, A Treatise on the Law of Contracts, 5th ed. (London 1862), 347. Compare C.G. Addison, A Treatise on the Law of Contracts and Rights and Liabilities Ex Contractu, 2nd ed. (London 1849) 322.

82 See 419–20.

83 Sumpter v Hedges [1898] 1 Q.B. 673, 674 (A.L. Smith L.J.).

84 Ibid.

85 The critics of Sumpter v Hedges are often best read as making this claim, which concerns the best way to construe conditions in the law of unjust enrichment: see A. Burrows, The Law of Restitution, pp. 356–58.

86 E.g. Law Com. W.P. No. 65 (1975), at [20].

87 Baltic Shipping Co. v Dillon (1993) 176 C.L.R. 344, at [4] (Gaudron J.).

88 Compare (C): an “essential aspect of the condition” would have been satisfied. To build a house, it is essential to lay its foundations.

89 E.g. Ebrahim Dawood Limited v Heath (Est. 1927) Limited [1961] 2 Lloyd's Rep 512 Q.B.; Lusty Architects v Finsbury Securities (1991) 58 B.L.R. 66 C.A.

90 Pavey & Matthews Pty Ltd. v Paul (1987) 162 C.L.R. 221 H.C.A.

91 s. 45 of the Builders Licensing Act 1971 (N.S.W.) required such contracts to be “in writing signed by each of the parties”.

92 Burrows, A., “Free Acceptance and the Law of Restitution” [1988] 104 L.Q.R. 576, 592Google Scholar; P. Birks, “In Defence of Free Acceptance” in A. Burrows (ed), Essays on the Law of Restitution (Oxford 1991), 111. See now Equuscorp Pty Ltd. v Haxton & Others (2012) 86 A.L.J.R. 296; [2012] HCA 7, [33] (French C.J., Crennan & Kiefel JJ.), [134] (Heydon J.).

93 Though not unanimous: compare Pulbrook v Lawes (1876) 1 Q.B. 284, 289 (Blackburn J.).

94 P. Birks, Introduction, pp. 226–34; E. McKendrick, “Total Failure of Consideration and Counter-Restitution”, p. 182; Barker, K., “Coping With Failure – Re-Appraising Pre-Contractual Remuneration” (2003) 19 Journal of Contract Law 105, 114, 116Google Scholar. For a nuanced analysis, see T. Baloch, Unjust Enrichment and Contract, pp. 167–74.

95 W.A. Keener, A Treatise on the Law of Quasi-Contracts (New York 1893), 327. Despite the reference to “conscience”, Keener is clear, at p. 19, that the basis of the obligation is that “a man shall not be allowed to enrich himself unjustly at the expense of another.” See, further, Williston, S., “Repudiation of Contracts” (1901) 14 Harvard Law Review 317, 320Google Scholar.

96 Yeoman's Row Management Ltd. v Cobbe [2008] UKHL 55, [2008] 1 W.L.R. 1752 at [43] (Lord Scott). See, further, C. Mitchell, P. Mitchell and S. Watterson, Goff and Jones: The Law of Unjust Enrichment at [12–03]–[12–05].

97 E.g. C. Mitchell, P. Mitchell and S. Watterson, Goff and Jones: The Law of Unjust Enrichment, at [12–16].

98 A. Burrows, The Law of Restitution, p. 333.

99 No other interpretation of the total failure rule can even plausibly explain such cases.

100 See, for instance, Giedo van der Garde v Force India [2010] EWHC 2373, at [287] (Stadlen J.).

101 The cases are very few and far between: ibid. and John Grimes Partnership Ltd. v Gubbins Unreported County Court (Exeter), 16 March 2012, at [206] (H.H. Judge Cotter Q.C.) may be the only cases which have adopted the wide reading of Lord Goff's formulation to dispose of a question in a case. However, see, further: Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1994] 4 All E.R. 890, 925 (Hobhouse J.) D.C.

102 E. McKendrick, “Total Failure of Consideration and Counter-Restitution”, p. 221.

103 E.g. Barker, K., “Restitution of Passenger Fare” [1993] L.M.C.L.Q. at p. 293Google Scholar; Maher, F., “A New Conception of Failure of Basis” [2004] Restitution Law Review 96, 105–06Google Scholar.

104 Beyond the theoretical point made in this section, the practical result of (D) is that arbitrary results are avoided: the time when performance is rendered under a contract does not, of itself, affect the ultimate distribution of losses and gains between the two parties. See above note 67.

105 Robinson v Harman (1848) 1 Ex. 850, 855 (Parke B).

106 Birks, P., “Restitution and the Freedom of Contract” (1983) 36 C.L.P. 141, 158Google Scholar.

107 Williston, S., “Rescission for Breach of Warranty” (1903) 16 Harvard Law Review 465, 472CrossRefGoogle Scholar. Further, Friedmann, D., “The Performance Interest in Contract Damages” (1995) 111 L.Q.R. 628Google Scholar, 632.

108 Taylor v Motability Finance Ltd. [2004] EWHC 2619 (Comm), at [26] (Cooke J.). This formulation is agnostic on when a deficiency can be adequately compensated. Compare K. Barker, “Restitution of Passenger Fare” at p. 294.

109 E. McKendrick, “Total Failure of Consideration and Counter-Restitution” at p. 223.

110 See J. Gardner, “Obligations and Outcomes in the Law of Torts” in P. Cane and J. Gardner (eds.), Relating to Responsibility: Essays for Tony Honoré (Oxford 2001), 140–41.

111 Hongkong Fir Shipping Co. Ltd. v Kawasaki Kisen Kaisha Ltd. [1962] 2 Q.B. 26 CA, 66 (Diplock L.J.).

112 Bunge Corp v Tradax Export SA [1981] 1 W.L.R. 711 at 724 (Lord Roskill); G.H. Treitel, Some Landmarks of Twentieth Century Contract Law (Oxford 2002) 109–11; E. Peel, Treitel on the Law of Contract, pp. 866–74.

113 Reynolds, F., “Warranty, Condition and Fundamental Term” (1963) 79 L.Q.R. 534Google Scholar, 551: “It might be expected that restitution would be obtainable in the same circumstances as those under which a contract can be repudiated”.

114 Hazell v Hammersmith & Fulham London Borough Council [1992] 2 A.C. 1, H.L.

115 Mistake was initially thought unavailable as the mistake was of law. Compare Kleinwort Benson Ltd. v Lincoln City Council [1999] 2 A.C. 349, H.L.

116 Westdeutsche (DC) [1994] 4 All E.R. 890, 924 (Hobhouse J.).

117 Ibid. at p. 924 (Hobhouse J.).

118 Guinness Mahon Co. Ltd. v Chelsea and Kensington Royal London Borough Council [1999] Q.B. 215, 239–40 (Robert Walker L.J.); Edelman, J. and Briggs, A., “Restitution and not-so-local Authority Swaps” (2010) 126 L.Q.R. 500Google Scholar, 503. Compare Virgo, G., “Restitution of Void Loans” (2010) 69 C.L.J. 447Google Scholar, 448.

119 G. Virgo, The Principles of the Law of Restitution, p. 374; further, p. 371.

120 A. Burrows, The Law of Restitution, p. 332. In this sentence, Burrows is referring to the annuity cases; however, he refers to the swaps cases in the same paragraph and would make the same claim about them.

121 Guinness Mahon Co. Ltd. v Chelsea and Kensington Royal London Borough Council [1999] Q.B. 215.

122 Submission of Mr Jonathan Sumption Q.C., cited Westdeutsche (DC) [1994] 4 All E.R. 890, 928 (Hobhouse J.). For a more extensive argument to this effect see F. Maher, “Failure of Basis” (DPhil thesis, University of Oxford 2008) Chapter 2; J. Edelman, “Liability in Unjust Enrichment where a Contract Fails to Materialise” in A. Burrows and E. Peel (eds.), Contract Formation and Parties (2010) 159, 167–68.

123 Guinness Mahon Co. Ltd. v Chelsea and Kensington Royal London Borough Council [1999] Q.B. 215, 227 (Morritt L.J.) (emphasis removed).

124 As well as the cases cited by Mitchell, P., “Artificiality in Failure of Consideration” (2010) 29 University of Queensland Law Journal 191Google Scholar, see Chapman v Speller (1850) 14 Q.B. 621, 624 (Patteson J.): “the true consideration was the assignment of the right … that the defendant had acquired by his purchase at the sheriff”s sale; … this consideration has not failed.”

125 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] A.C. 669, 710 (Lord Browne-Wilkinson).

126 This is entirely orthodox: e.g. Giles v Edwards (1797) 7 Term Rep. 181.

127 Further proof of this point can be found in cases on the sale of goods: see C Mitchell “Unjust Enrichment” in A Burrows (ed) English Private Law (forthcoming), para 18.88.

128 P. Mitchell, “Artificiality in Failure of Consideration” at pp. 209–10; C Mitchell “Unjust Enrichment” in A Burrows (ed.), English Private Law at paras 18.87–88.

129 Stevenson v Snow (1761) 3 Burr. 1237, 97 E.R. 808.

130 Ibid. at p. 1240 (Lord Mansfield C.J.).

131 Notice that these cases are inconsistent with the claim that the contract must be set aside before restitution is ordered: see T. Baloch, Unjust Enrichment and Contract, pp. 128–9; 147–51.

132 Goss v Chilcott [1996] A.C. 788, 798 (Lord Goff).

133 Minister of Sound (Ireland) Limited v World Online Ltd. [2003] EWHC 2178; [2003] 2 All E.R. (Com) 823, at [63] (Nicholas Strauss Q.C.); Giedo van der Garde v Force India [2010] EWHC 2373 (QB), at [298] (Stadlen J.).

134 Giedo van der Garde v Force India [2010] EWHC 2373, at [262] (Stadlen J.), echoing G. Virgo, The Principles of the Law of Restitution, p. 320.

135 G. Virgo, The Principles of the Law of Restitution, p. 322. I avoid saying inconsistent as Virgo only claims that apportionment will “lead to” partial failure.

136 Whincup v Hughes (1870–71) L.R. 6 C.P. 78.

137 Ibid., at p. 81 (Bovill C.J.).

138 Compare ibid., at p. 81 (Bovill C.J.). However, Bovill C.J. misunderstands the total failure rule, interpreting it as (A).

139 Ibid., at p. 85 (Montague Smith J.).

140 Biggerstaff v Rowatt's Wharf Ltd. [1896] 2 Ch. 93 C.A.

141 Ibid., at p. 103 (Lopes L.J.); further, pp. 100 (Lindley L.J.), 105 (Kay L.J.). See, further, Agra & Masterman's Bank Ltd. v Leighton (1866–67) L.R. 2 Ex. 56, 65 (Channell and Pigott BB.).

142 Fibrosa v Fairbairn [1943] A.C. 32, 77 (Lord Porter).

143 For an indication of the difficulties, see the discussion in Giedo van der Garde v Force India [2010] EWHC 2373 at [292]–[373] (Stadlen J.).

144 For instance, Virgo regards the apportionment suggested by Lord Goff in Goss v Chilcott [1996] A.C. 788 is a step too far: G. Virgo, The Principles of the Law of Restitution, p. 322.

145 Whincup v Hughes (1870–71) L.R. 6 C.P. 78, 83 (Willes J.), 85 (Montague Smith J.) and 86 (Brett J.); Fibrosa v Fairbairn [1943] A.C. 32, 65 (Lord Wright); Ebrahim Dawood Limited v Heath (Est. 1927) Limited [1961] 2 Lloyd's Rep 512; Sale of Goods Act 1979, s.30(1); Baltic Shipping Co. v Dillon (1993) 176 C.L.R. 344, 375 (Deane and Dawson J.J.); Roxborough v Rothmans of Pall Mall Australia Ltd. (2001) 208 C.L.R. 516 H.C.A., at [199] (Callinan J.).

146 J. Edelman and E. Bant, Unjust Enrichment in Australia, pp. 256–7.

147 This lexical twist would not, of course, need the imprimatur of authority. By way of contrast, those who claim that restitution should be granted for a partial failure must await a ruling of the Supreme Court: House of Lords authority stands in the way of any lower court making such a ruling.