PATEL v MIRZA: A NEW APPROACH TO THE ILLEGALITY DEFENCE

Author(s):

Harcharan Singh Ujagar Singh

In a landmark decision, a full bench of nine Justices of the United Kingdom Supreme Court in Patel v Mirza [2016] UKSC 42, [2017] AC 467 reviewed the proper approach to be taken by courts when confronted with a defence of illegality in private law claims. The claim in question was for the restitution of unjust enrichment arising out of a failed contract in which the claimant had paid a sum of money to the defendant pursuant to an illegal purpose that did not materialise. The Supreme Court unanimously allowed restitution, but there was a sharp difference in opinion on the proper approach to be adopted towards the illegality defence. A majority of the Supreme Court prescribed a new approach which the minority rejected. Whilst the new approach was formulated in the context of a claim for the restitution of unjust enrichment, it is arguable that the majority intended it to apply in all the other areas of private law involving the illegality defence. This paper seeks to examine how, if at all, the new approach has settled or clarified English law in the confused and confusing area of illegality.

Abstract

Screenshot 2018-11-11 at 4.19.27 PM.png

Defence of Illegality, Recovery Claims, Rejection of Rule-based Approach, Trio of Considerations, Proportionate Response