By acquiescing in the unlawful overloading of the hauliers’ lorries, the consignors’ assistant transport manager and his assistant made the haulage contract unenforceable at the instance of the consignors, who were unable to recover when a lorry toppled over damaging the goods being carried.
Whether a contract is unenforceable for illegal performance, depends upon whether the method of performance chosen and the degree of participation in that illegal performance is such as to ‘turn the contract into an illegal contract’ Where illegality by virtue of the common law is concerned the question is whether the common law would say that a contract has by its illegal performance been turned into an illegal contract. A party may be prevented from enforcing it.
Denning LJ said: ‘Not only did [the plaintiff’s transport manager] know of the illegality. He participated in it by sanctioning the loading of the vehicle with a load in excess of the regulations. That participation in the illegal performance of the contract debars [the plaintiff] from suing [the defendant] on it or suing [the defendant] for negligence.’ and per Scarman LJ ‘But knowledge by itself is not . . enough. There must be knowledge plus participation . . For these reasons I think the performance was illegal’.’
Denning LJ, Scarman LJ
 1 WLR 828
England and Wales
Cited – B and B Viennese Fashions v Losane CA 1952
Cited – Hall v Woolston Hall Leisure Limited CA 23-May-2000
The fact that an employment contract was tainted with illegality of which the employee was aware, did not deprive the employee of the possibility of claiming rights which were due to her under a statute which created rights associated with but not . .
Cited – Colen and Another v Cebrian (UK) Limited CA 20-Nov-2003
The company paid the claimant sales commission. Part was diverted and paid to his wife to reduce the tax payable. The employer had appealed a finding of unfair disamissal, the company arguing that the contract was illegal.
Held: The contract . .
Cited – Jetivia Sa and Another v Bilta (UK) Ltd and Others SC 22-Apr-2015
The liquidators of Bilta had brought proceedings against former directors and the appellant alleging that they were party to an unlawful means conspiracy which had damaged the company by engaging in a carousel fraud with carbon credits. On the . .
Cited – Patel v Mirza SC 20-Jul-2016
The claimant advanced funds to the respondent for him to invest in a bank of which the claimant had insider knowledge. In fact the defendant did not invest the funds, the knowledge was incorrect. The defendant however did not return the sums . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 April 2022; Ref: scu.189939