Introduction to Part Three

As has been indicated, ¹ the illegality defence and the forfeiture rule are based on policy rather than justice. Their application depends on whether there is a public interest which will be injured if the claim is allowed. They are not concerned with the question whether one party will suffer a disadvantage. Consequently the result of their application can sometimes be unfair or unjust to one party. A man receives goods from another and keeps them, but refuses to pay for them; or a man receives money from another under a loan agreement, but refuses to repay the money; or work is done by one man for another, but the other refuses to pay for the work done. In all such cases where the defendant refuses to pay the agreed price, if both parties are equally guilty, the plaintiff cannot recover the money, whether in contract ² or in restitution. ³ It matters not “who complains of it; the thing is illegal”. ⁴ It is for this reason that the illegality defence has been described as a “very dishonest” ⁵ defence. But although it may be dishonest for the defendant to raise the defence, yet, as has been seen, it is not for the defendant’s sake that the defence is applied. The greater good of ensuring respect for the law outweighs the lack of good faith or the injustice as between the individuals concerned. ⁶