Illegality

Question 1

What is the significance of the Supreme Court’s decision in Patel v Mirza?

Answer 1

General rule used to be that a contract to perform an illegal act or contract contrary to public policy would be declared void and unenforceable.
* following Patel, general principle no longer applies and courts now adopt a discretionary approach applying principles of public policy and proportionality.

Question 2

What necessary condition are needed to bar a claim for illegallity?

Answer 2

a) to consider underlying purpose of prohibition which has been transgressed and whether purpose will be enhanced by denial of claim,
b) to consider if denying claim would undermine any other relevant public policy
c) to consider whether denial of claim would be proportionate response to the illegality.