Where one party cancels a contract because of repudiation by the other party there is an obligation to make restitution and to pay money or deliver assets which were received as performance under the cancelled contract. The cancellation gives rise to a personal obligation to pay or deliver what was received. The same would apply to an obligation resting on the party to pay damages or pay money by virtue of unjustified enrichment following the cancellation.

In Cook v Morrison one party cancelled the contract on the basis of repudiation. However, he failed to sue within three years of the cancellation date. It was held that his claim had prescribed.

A debt is something owed or due or a liability or obligation to pay or render something. A restitution obligation fits within this definition formulated by the courts in 1981. The fact that the other party benefited from the contract without making counter-performance was the inherent result of the law of prescription.

The law tolerates the extinction of debts through prescription because of the public interest in the finality of claims. The claim failed.