The defendant sought to send his family abroad for his daughter’s health, but wanted to provide more money than would be allowed under exchange controls. He entered into an unlawful arrangement with the plaintiff an Italian national to get around the controls, providing security for his repayment. The plaintiff sought to enforce the security, but abandoned that claim for its illegality. The defendant sought the return of his security saying that since the contract was yet executory, it was not yet illegal.
Held: The reason it had not gone ahead was not due to any repentance of its illegality, but rather frustration by the plaintiff. The parties were in pari delicto, and the court would not come to his aid to recover the security deposited.
Pritchard J said: ‘If a particular case may be held to fall within the category of repentance cases, I think the law is that the court will help a person who repents, provided his repentance comes before the illegal purpose has been substantially performed. If I were able, in this case, to take the view that the defendant had brought himself within that sphere of the authorities, it might well be that I would have been able to help him by saying that his repentance had come before the illegal purpose had been substantially performed, but I do not take that view. I think, however, that this case falls within the category of cases which I call the frustration cases, and that it is proper to regard it as in the same category as Alexander v. Rayson [1936] 1 KB 169 and Berg v. Sadler and Moore [1937] 2 KB 158, rather than as in the category of cases such as Taylor v. Bowers (1876) 1 QBD 291 and Kearley v. Thomson (1890) 24 QBD 742, and, to some extent, Hermann v. Charlesworth [1905] 2 KB 123.’
Judges:
Pritchard J
Citations:
[1951] 1 All ER 92
Statutes:
Cited by:
Cited – Mahonia Limited v JP Morgan Chase Bankwest Lb Ag QBD 3-Aug-2004
The Claimant claimed on a letter of credit issued by the Defendant on behalf of Enron Ltd, who asserted it was not liable to pay there having been unlawful behaviour by Enron Ltd. Swap agreements had been entered into, and the defendant said the . .
Cited – SQ v RQ and Another FD 31-Jul-2008
The home in which the family had lived was held in the name of a brother. Each party claimed that it was held in trust for them. Chancery proceedings had been consolidated into these ancillary relief applications. The home had been in the husband’s . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 09 May 2022; Ref: scu.200486