Legit’ it ain’t
Picture two fraudsters, A and B, who fall out over how the proceeds of a joint venture should be shared. B is sitting on the money.
As acknowledged by the European Court in Courage v Crehan C-453/99 [2001] All ER (EC) 886, it would be surprising to find any mature legal system that would entertain an action by A against B.
Suppose now that the parties had knowingly agreed to commit a purely regulatory offence in circumstances where B held all the cards. Under the English law of illegality those factors would make no difference. A would still be unable to claim that his case did not depend on the illegal character of the agreement: see Gibbs Mew plc v Gemmell [1999] 1 EGLR 43.
Conversely, A is not so handicapped under English law if is able to put his case on a different basis, as where, for example, he can show that B expressly or impliedly agreed to holding certain property as his nominee or trustee: see
the decision of the House of Lords in Tinsley v Milligan [1994] 1 AC 340 [social security fiddle] as recently applied in Poojary v Kotecha [2002] 21 EG 144 (CS) [alleged mortgage fraud].
Stand by, however, for a much more flexible approach where the allegedly illegal purpose is the contravention of EU competition laws. Following the reference to the European Court of the tied public house restrictions in Crehan*, it is now clear that A will not forfeit his right to protection simply because he was a party to the agreement that wrongfully purported to take it away: see
To fall foul of the Euro-version of the ex turpi causa principle he must at least bear a significant responsibility, in terms of bargaining power, for the attempted distortion of the market – an unlikely scenario where the agreement in question is a lease offered by a giant brewery.
* For factual background, see the summary of the Court of Appeal hearing in [1999] EGCS 85.
