Excerpt from Case Beattie v Reid [2002] NSWSC 1088

JUDGMENT OF: Master McLaughlin

"No Court to lend aid to an action founded on an immoral or illegal act

"41 The well known litigation of Everet v Williams (the Highwayman's Case) ((1725), set forth in (1893) LQR 197, cited in Burrows v Rhodes [1899] 1 QB 816 at 826 (a case arising out of the Jameson Raid); see R.E. Megarry, Miscellany-at-Law (London, 1955)) reveals the unwisdom of such an approach. That was a case in the Court of Exchequer by which Everet sought against Williams an account of partnership profits. That plaintiff alleged that the partnership between himself and that defendant dealt in commodities such as plate, rings, watches and other valuables, that the plaintiff and the defendant had dealt successfully in these commodities in the course of the partnership, but that the defendant had failed to come to a fair account with the plaintiff concerning the partnership profits. In the course of the trial it was revealed that the business in which the partners were engaged was actually highway robbery, and that the plaintiff was aggrieved that the defendant had not handed over a fair share of the spoils. The case was thrown out of Court, both parties were hanged, the plaintiff's solicitors were attached for contempt and the plaintiff's Counsel was made to pay the costs of the proceedings (see Burrows v Rhodes [1899] 1 QB 816 at 826; see, also, Zelino Pty Limited v Budai [2001] NSWSC 501 (Palmer J, 24 July 2001, unreported).

42 People who deliberately set out to breach the law cannot expect to be aided by a Court. The rule permitting a Court to refuse its assistance to enforce a contract where to do so would be contrary to public policy is an ancient one. It was given expression by Lord Mansfield in Hollman v Johnson (1775) 1 Cowp 341 at 343; 98 ER 1120 at 1121 in these terms,

The principle of public policy is this… no Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act.

43 The foregoing dictum of Lord Mansfield was considered by McHugh J in Nelson v Nelson (1995) 184 CLR 538 at 604-605. See Yango Pastoral Company Pty Limited v First Chicago Australia Limited (1978) 139 CLR 410; see, also, Wetherell v Jones (1832) 3 B&Ad 221 at 225-226; 110 ER 82 at 84; St. John Shipping Corporation v Joseph Rank Limited [1957] 1 QB 267; Fitzgerald v F.J. Leonhardt Pty Limited (1997) 189 CLR 215.) The principle is most succinctly stated by Lord Atkin in Beresford v Royal Insurance Company Limited [1938] AC 586, where His Lordship, after citing with approval the judgment of Fry LJ in Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147 at 156, continued, at 598-599,

[T]he principle is that a man is not to be allowed to have recourse to a Court of Justice to claim a benefit from his crime whether under a contract or a gift. No doubt the rule pays regard to the fact that to hold otherwise would in some cases offer an inducement to crime or remove a restraint to crime, and that its effect is to act as a deterrent to crime. But apart from these considerations the absolute rule is that the courts will not recognise a benefit accruing to a criminal from his crime.