Illegality in English law
Encyclopedia
Illegality in English law is a potential ground in English contract law
, tort
or trusts
for a court to refuse to enforce an obligation. The illegality of a transaction, either because of public policy under the common law, or because of legislation, potentially means no action directly concerning the deal will be heard by the courts. The doctrine is reminiscent of the Latin phrase "Ex turpi causa non oritur actio
", meaning "no cause of action arises from a wrong". The primary problem arising when courts refuse to enforce an agreement is the extent to which an innocent party may recover any property already conveyed through the transaction. Hence illegality is raises important questions for English unjust enrichment law
.
, the principle would prevent a criminal from bringing a claim against (for example) a fellow criminal. In National Coal Board v England Lord Asquith
said,
It is not absolute in effect. For example, in Revill v Newberry an elderly allotment
holder was sleeping in his shed with a shotgun
, to deter burglars. On hearing the plaintiff trying to break in, he shot his gun through a hole in the shed, injuring the plaintiff. At first instance, the defendant successfully raised the defence of ex turpi to avoid the claim. However, the Court of Appeal
allowed the plaintiff's appeal, holding that the defendant was negligent to have shot blindly at body height, without shouting a warning or shooting a warning shot into the air, and that the response was out of all proportion to the threat.
The precise scope of the doctrine is not certain. In some cases, it seems that the illegality prevents a duty of care
arising in the first place. For example, in Ashton v Turner the defendant crashed a car in the course of getting away from the scene of a burglary, injuring the plaintiff. Ewbank J held that the court may not recognise a duty of care in such cases as a matter of public policy
. Similarly, in Pitts v Hunt the Court of Appeal rationalised this approach, saying that it was impossible to decide the appropriate standard of care in cases where the parties were involved in illegality.
where otherwise a claim would lie, again on grounds of public policy. In Tinsley v Milligan Nicholls LJ in the Court of Appeal spoke of the court having to "weigh or balance the adverse consequences of granting relief against the adverse consequences of refusing relief". The plaintiff was ultimately successful in Tinsley v Milligan in the House of Lords
, which allowed the claim on the grounds that the plaintiff did not need to rely on the illegality.
The recent case of Gray v Thames Trains upheld the basic rule of public policy that disallowed recovery of anything stemming from Plaintiff's own wrongdoing.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
, tort
English tort law
English tort law concerns civil wrongs, as distinguished from criminal wrongs, in the law of England and Wales. Some wrongs are the concern of the state, and so the police can enforce the law on the wrongdoers in court – in a criminal case...
or trusts
English trusts law
English trusts law is the original and foundational law of trusts in the world, and a unique contribution of English law to the legal system. Trusts are part of the law of property, and arise where one person gives assets English trusts law is the original and foundational law of trusts in the...
for a court to refuse to enforce an obligation. The illegality of a transaction, either because of public policy under the common law, or because of legislation, potentially means no action directly concerning the deal will be heard by the courts. The doctrine is reminiscent of the Latin phrase "Ex turpi causa non oritur actio
Ex turpi causa non oritur actio
Ex turpi causa non oritur actio is a legal doctrine which states that a claimant will be unable to pursue a cause of action if it arises in connection with his own illegal act...
", meaning "no cause of action arises from a wrong". The primary problem arising when courts refuse to enforce an agreement is the extent to which an innocent party may recover any property already conveyed through the transaction. Hence illegality is raises important questions for English unjust enrichment law
English unjust enrichment law
English unjust enrichment law is a developing area of law in unjust enrichment. Traditionally, work on unjust enrichment has been dealt with under the title of "restitution". Restitution is a gain-based remedy, the opposite of compensation, as a loss-based remedy...
.
Overview
In the early case of Holman v Johnson Lord Mansfield CJ set out the rationale for the illegality doctrine.Contract
- St John Shipping Corporation v Joseph Rank Ltd [1957] 1 QB 267, Devlin J purpose of the statute on overloading ships did not prevent enforceability of a carriage contract
- Archbolds (Freightage) Ltd v S Spanglett Ltd [1961] 2 QB 374, Devlin LJ, purpose of statute
- Janson v Driefontein Consolidated Mines Ltd [1902] AC 484, Lord Halsbury suggests the courts may no longer 'invent a new head of public policy', but this is doubtful
Public policy
- Pearce v Brooks (1866) LR 1 Ex 213, no compensation for a damaged brougham used for prostitution
- Richardson v Mellish (1824) 2 Bing 229, 252, Burroughs J, public policy is 'a very unruly horse, and when once you get astride it you never know where it will carry you'
- Enderby Town Football Club Ltd v The Football Association Ltd [1971] Ch 591, 606, 'with a good man in the saddle, the unruly horse can be kept in control. It can jump over obstacles.'
- Franco v Bolton (1797) 3 Ves 368, promise to pay someone to be a mistress
- Lowe v Peers (1768) 2 Burr 2225, restraining someone from marriage
- Law Reform (Miscellaneous Provisions) Act 1970 section 1, abolishing illegality in breach of a promise to marry
- Bigos v Bousted [1951] 1 All ER 92, contract contrary to exchange control regulations
- Miller v Karlinski (1945) 62 TLR 85, contract to defraud the Inland Revenue
- Beresford v Royal Exchange Assurance [1938] AC 586, life insurance contract including cover for suicide illegal, and unenforceable because at the time suicide was illegal
- Clay v Yates (1856) 1 H&C 73, contract to publish a libellous statement
- Elliot v Richardson (1870) LR 5 CP 744, agreement to obstruct bankruptcy proceedings
- Scott v Avery (1855) 5 HLC 811, parties can agree to have a dispute referred to an arbitrator
- Arbitration Act 1996Arbitration Act 1996The Arbitration Act 1996 is an Act of Parliament which regulates arbitration proceedings within the jurisdiction of the United Kingdom.-Overview:*Section 69 allows for an appeal on a point of law to a court if parties have agreed for this to happen....
sections 68-69, 87, entitlement to appeal to a court after arbitration - De Wutz v Hendricks (1824) 2 Bing 314, contract to facilitate overthrow of a friendly government
- Parkinson v College of Ambulance Ltd [1925] 2 KB 1, agreement to procure a knighthood contrary to public policy
Statute
- Ashmore, Benson & CO Ltd v AV Dawson Ltd [1973] 1 WLR 828, tube banks on overloaded lorries breaching a regulation, knowledge of illegality matters
- Nash v Stevenson Transport Ltd [1936] 2 KB 128, ignorance of the law is no defence
- Re Mahmoud and Ispahani [1921] 2 KB 716, linseed oil and license
- Gaming Act 1845Gaming Act 1845The Gaming Act 1845 was an Act of the Parliament of the United Kingdom. The Act's principal provision was to deem a wager unenforceable as a legal contract. The Act received Royal Assent on August 8, 1845...
section 18, "all contracts or agreements, whether by parole or in writing, by way of gaming or wagering shall be null and void" - Financial Services Act 1986Financial Services Act 1986The Financial Services Act 1986 was an Act of the Parliament of the United Kingdom passed by the government of Margaret Thatcher to regulate the financial services industry. The Act used a mixture of governmental regulation and self-regulation, and created a Securities and Investments Board ...
- Gambling Act 2005Gambling Act 2005The Gambling Act 2005 is an Act of the Parliament of the United Kingdom. It mainly applies to England and Wales, and to Scotland, and is designed to control all forms of gambling...
section 335, and new Gambling CommissionGambling CommissionThe Gambling Commission is Great Britain's regulatory body for most, but not all, gambling.-History:It was established under the Gambling Act 2005 and assumed full powers in 2007, taking over responsibility from the Gaming Board for Great Britain, in regulating arcades, betting, bingo, casinos,...
Restraint of trade
- Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269, a garage agreed to accept all petrol from Esso exclusively, valid if protecting a legitimate interest
- Herbert Morris Ltd v Saxelby [1916] 1 AC 688, to sue to enforce a contract restraining an employee competingone must show "some proprietary right, whether in the nature of a trade connection or in the nature of trade secrets"
- Fitch v Dewes [1921] 2 AC 158
- Forster and Sons v Suggett (1918) 35 TLR 87
- Wyatt v Kreglinger and Fernau [1933] 1 KB 793
- Nordenfelt v Maxim Nordenfelt [1894] AC 535
- Schroeder Music Publishing Co Ltd v MacaulaySchroeder Music Publishing Co Ltd v MacaulaySummary: Restraint of trade; exclusive services agreement; whether unreasonableAbstract: In determining the enforceability of a contract in restraint of trade the court will consider the fairness of the bargain having regard to whether the restrictions are both reasonably necessary for the...
[1974] 1 WLR 1308 - Alec Lobb (Garages) Ltd v Total Oil (Great Britain) LtdAlec Lobb (Garages) Ltd v Total Oil (Great Britain) LtdAlec Lobb Garages Ltd v Total Oil Ltd [1984] is an English contract law case relating to undue influence.-Facts:Mr Lobb was the managing director of a small petrol station in South Street, Brain-tree, Essex. It had to buy petrol only from Total Oil. In 1969 he was in financial difficulty...
[1985] 1 WLR 173
Tort
In the law of tortTort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
, the principle would prevent a criminal from bringing a claim against (for example) a fellow criminal. In National Coal Board v England Lord Asquith
Lord Asquith
Lord Asquith may refer to:* Julian Asquith , styled Viscount Asquith 1925–1928* Cyril Asquith , created Baron Asquith of Bishopstone in 1951...
said,
It is not absolute in effect. For example, in Revill v Newberry an elderly allotment
Allotment (gardening)
An allotment garden, often called simply an allotment, is a plot of land made available for individual, non-professional gardening. Such plots are formed by subdividing a piece of land into a few or up to several hundreds of land parcels that are assigned to individuals or families...
holder was sleeping in his shed with a shotgun
Shotgun
A shotgun is a firearm that is usually designed to be fired from the shoulder, which uses the energy of a fixed shell to fire a number of small spherical pellets called shot, or a solid projectile called a slug...
, to deter burglars. On hearing the plaintiff trying to break in, he shot his gun through a hole in the shed, injuring the plaintiff. At first instance, the defendant successfully raised the defence of ex turpi to avoid the claim. However, the Court of Appeal
Court of Appeal of England and Wales
The Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...
allowed the plaintiff's appeal, holding that the defendant was negligent to have shot blindly at body height, without shouting a warning or shooting a warning shot into the air, and that the response was out of all proportion to the threat.
The precise scope of the doctrine is not certain. In some cases, it seems that the illegality prevents a duty of care
Duty of care
In tort law, a duty of care is a legal obligation imposed on an individual requiring that they adhere to a standard of reasonable care while performing any acts that could foreseeably harm others. It is the first element that must be established to proceed with an action in negligence. The claimant...
arising in the first place. For example, in Ashton v Turner the defendant crashed a car in the course of getting away from the scene of a burglary, injuring the plaintiff. Ewbank J held that the court may not recognise a duty of care in such cases as a matter of public policy
Public policy
Public policy as government action is generally the principled guide to action taken by the administrative or executive branches of the state with regard to a class of issues in a manner consistent with law and institutional customs. In general, the foundation is the pertinent national and...
. Similarly, in Pitts v Hunt the Court of Appeal rationalised this approach, saying that it was impossible to decide the appropriate standard of care in cases where the parties were involved in illegality.
- Hewison v Meridian Shipping Services Pte LtdHewison v Meridian Shipping Services Pte LtdHewison v Meridian Shipping Services Pte Ltd [2002] is an English tort law case, concerning an employer's liability for an employee's illegal acts.-Facts:...
[2002] EWCA Civ 1821
Trusts
The courts view ex turpi as a defenceDefense (legal)
In civil proceedings and criminal prosecutions under the common law, a defendant may raise a defense in an attempt to avoid criminal or civil liability...
where otherwise a claim would lie, again on grounds of public policy. In Tinsley v Milligan Nicholls LJ in the Court of Appeal spoke of the court having to "weigh or balance the adverse consequences of granting relief against the adverse consequences of refusing relief". The plaintiff was ultimately successful in Tinsley v Milligan in the House of Lords
House of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
, which allowed the claim on the grounds that the plaintiff did not need to rely on the illegality.
The recent case of Gray v Thames Trains upheld the basic rule of public policy that disallowed recovery of anything stemming from Plaintiff's own wrongdoing.
- Moore Stephens v Stone Rolls LtdMoore Stephens v Stone Rolls LtdMoore Stephens v Stone Rolls Ltd [2009] is a leading case relevant for UK company law and the law on fraud and ex turpi causa non oritur actio...
[2009] UKHL 39
Recovery
- Strongman (1945) Ltd v Sincock [1955] 2 QB 525
- Shelley v Paddock [1980] 348, innocent person can recover damages after fraudulent misrepresentation
- AL Barnes Ltd v Time Talk (UK) Ltd [2003] EWCA Civ 402
- Hughes v Liverpool Victoria Legal Friendly Society [1916] 2 KB 482, not being in pari delictoIn pari delictoIn pari delicto , Latin for "in equal fault " is a legal term used to indicate that two persons or entities are equally at fault, whether the malfeasance in question is a crime or tort.The phrase is most commonly used by courts when relief is being denied to both parties in a civil action because of...
- Taylor v Bowers (1876) 1 QBD, repudiating illegal purpose
- Tribe v Tribe [1996] Ch 107, Millet LJ
- Bowmakers Ltd v Barnet Instruments Ltd [1945] KB 65
- Tinsley v Milligan [1994] 1 AC 340, recovery without relying on illegality
- Euro-Diam Ltd v Bathurst [1990] 1 QB 1
See also
- In pari delictoIn pari delictoIn pari delicto , Latin for "in equal fault " is a legal term used to indicate that two persons or entities are equally at fault, whether the malfeasance in question is a crime or tort.The phrase is most commonly used by courts when relief is being denied to both parties in a civil action because of...
- Nemo auditur propriam turpitudinem allegansNemo auditur propriam turpitudinem allegansNemo auditur propriam turpitudinem allegans is a civil law maxim which may be translated into English as "no one can be heard to invoke his own turpitude" or "no one shall be heard, who invokes his own guilt" The maxim operated with another, in pari causa turpitudinis cessat repetitio , to preclude...
, civil law maxim - NZ Illegal Contracts Act 1970
- Nelson v Nelson (1995) 184 CLR 538