![]() ![]() On the other hand, Lord Sumption: “ tendency of any test broader than the reliance test to degenerate into a question of instinctive judicial preference for one party over another.”Īlthough Lord Toulson considered other common law jurisdictions: Australia, New Zealand, Canada and the USA, he did not consider South Africa where the leading judgment is Jajbhay v Cassim. Lord Toulson (who delivered the main judgment): “ The rule as stated not permit differentiation between minor and serious illegality and between central or peripheral illegality.” Those in favour of a discretion were of the view that the situations which arose were too diverse to be solved by the reliance rule. Rimer and Vos LJJ held that they had a discretion to allow the claim to carry out justice even if Patel was relying on an illegal contract.Ī nine member panel of the UKSC was divided: Lords Toulson, Kerr, Wilson, Hodge, Neuberger and Lady Hale wished to lay down rule that the courts had a discretion to allow claims tainted with illegality, while Lords Sumption, Clarke and Mance favoured a stricter approach referred to as the “ reliance rule”: the court would only assist those litigants who could base their claim on a separate untainted ground e.g. Gloster LJ found that in reality, Patel was not relying on the illegal contract but seeking to undo it. The Court of Appeal (Rimer, Vos and Gloster LJJ) found in favour of Patel. The purpose of the contract was never carried out and Patel sued for the return of his money.ĭeputy Judge David Donaldson QC refused the claim on the ground that it was based on an illegal agreement. ![]() Patel paid £620 000 to Mirza to bet on Royal Bank of Scotland shares, using inside information. Claim for recovery of money paid under an illegal contract ![]()
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