ABSTRACT
The most common effect of illegality, whether through contravention of the law or public policy, is to prevent enforcement of the contract, in whole or in part. The contract will be void ab initio, and, therefore, any property which has already passed cannot be recovered. An interesting example of the dilemma faced by the courts is provided by DB Waite (Overseas) Ltd v Sidney Leslie Wallath.130 There, a written agreement to transfer a native lease required the approval of the Native Land Trust Board for validity. The purchaser paid deposit moneys to the vendor before the agreement was submitted by the vendor for the Board’s approval. The vendor did not request approval or take any further action. When the purchaser claimed the return of this deposit and damages, the vendor claimed the agreement was illegal without approval and asserted that no moneys were recoverable. It was held that damages could not be awarded because this would mean that the agreement had passed some interest in the land, which was not possible without the Board’s approval. However, without giving clear reasons, the court ordered the vendor to refund the deposit moneys and interest to the purchaser.
