Kleinwort Benson, a bank, paid Birmingham City Council money under interest rate swap agreements that were later declared to be ultra vires and void by the House of Lords.

[1] The council argued it did not have to repay the money because the bank had passed on its losses through hedging transactions long before.

Second, the claims in unjust enrichment are not subject to a restriction on the defendant’s gain that it must correspond with loss.

[a] Evans LJ gave the leading judgment, referring to American, Australian and Canadian authority outlining the problems of a passing on defence.

His obligation to return the money is not based on any loss the payer may have sustained, but on the simple ground that it is unjust... [The phrase "at the expense of" describes] the need for the payer to show that his money was used to pay the payee... What this expression does not justify is the importation of concepts of loss or damage with their attendant concepts of mitigation, for these have nothing whatever to do with the reason why our law imposes an obligation on the payee to repay to the payer what he has no right to retain.Morritt LJ concurred.