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I am slightly confused. Is 'knowing receipt' different from 'honest receipt'? For, if we are taking of the same thing (but perhaps two different sides of it) wasn't the defence of 'honest receipt' (unless it is not the same as 'knowing receipt') comprehensively rejected by the House of Lords in Kleinwort Benson? As I understand it, the seeds of this defence was suggested by Brennan J in David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 109 ALR 57, when he said (at p 92): 'It is a defence for a claim for restitution of money paid or property transferred under a mistake of law that the defendant honestly believed, when he learnt of the payment or transfer, that he was entitled to receive and retain the money or the property.'

As to the availability of this defence, remember that Lord Goff said in Kleinwort Benson (at [1997] 3 WLR 1095, 1124) that it suffers from a chronic lack of support, as it is generally regarded as being wider than is necessary to meet the perceived mischief. He concluded (at p 1125):

'... it would be most unwise for the common law, having recognised the right to recover money paid under a mistake of law on the ground of unjust enrichment, immediately to proceed to the recognition of so wide a defence as which would exclude the right of recovery in a very large proportion of cases. The proper course is surely to identify particular sets of circumstances which, as a matter of principle or policy, may lead to the conclusion that recovery should not be allowed: and in so doing to draw on the experience of the past, looking in particular from the analogous case of money paid under mistake of fact.' Lord Lloyd (at p 1136), Lord Hoffman (at p 1136-7) and Lord Hope (at p 1151) concurred with Lord Goff on this point.

Louis Joseph