"from a dishonorable cause an action does not arise - a legal doctrine which states that a claimant will be unable to pursue a cause of action, if it arises in connection with his own illegal act"
It is also known as the "illegality defence", for instance, he broke a contract, conducted himself negligently or broke an equitable duty, nevertheless a claimant by reason of her own illegality cannot sue.
Holman v Johnson[2] Lord Mansfield CJ
.”“The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may say so. The principle of public policy is this; ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff's own standing or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both were equally in fault, potior est conditio defendentis
National Coal Board v England [1954] AC 403, Lord Asquith said "If two burglars, A and B, agree to open a safe by means of explosives, and A so negligently handles the explosive charge as to injure B, B might find some difficulty in maintaining an action against A."
In Revill v Newberry [1996] 1 All ER 291, an elderly allotment holder was sleeping in his shed with a shotgun, to deter burglars. On hearing the plaintiff trying to break in, he shot his gun through a hole in the shed, injuring the plaintiff. At first instance, the defendants successfully raised the defence of ex turpi to avoid the claim. However, the Court of Appeal allowed the plaintiff's appeal, holding that the defendant was negligent to have shot blindly at body height, without shouting a warning or shooting a warning shot into the air, and that the response was out of all proportion to the threat.
it seems that the illegality prevents a duty of care arising in the first place. For example, in Aston v Turner [1981] QB 137, the defendant crashed a car in the course of getting away from the scene of a burglary, injuring the plaintiff. Ewbank J held that the court may not recognise a duty of care in such cases as a matter of public policy.
In Pitts v Hint [1990] 3 All ER 344, the Court of Appeal rationalised this approach, saying that it was impossible to decide the approriate standard of care in cases where the parties were involved in illegality. In other cases, the courts view ex turpi as a defence where otherwise a claim would lie, again on grounds of public policy.
In Tinsley v Milligan [1992] Ch 310, Nicholls LJ (as he then was) in the Court of Appeal spoke of the court having to "weigh or balance the adverse consequences of granting relief against the adverse consequences of refusing relief". The plaintiff was ultimately successful in Tinsley v Milligan in the House of Lords, which allowed the claim on the grounds that the plaintiff did not need to rely on the illegality.
The recent case of Gray v Thames Trains[8] upheld the basic rule of public policy that disallowed recovery of anything stemming from Plaintiff's own wrongdoing.
Moore, Tindsell & Gray
The ex turpi principle was used by the House of Lords in Moore Stephens v Stone Rolls Ltd [2009] UKHL 39. This difficult case involved the question of whether auditors could be liable to a company for failing to detect fraud by the company when that fraud was carried out by the owner and sole shareholder. The point of the action was for the liquidators of the now bankrupt company to sue the auditors in order to reimburse the banks who were the victims of the fraud. It was agreed that the auditors were in breach of their duty to the company, but by a majority it was held that no action applied as the ex turpi causa principle applied. Lord Phillips said that the ex turpi principle applies if a claimant founds his claim on his own illegal conduct (para25) and he supported Lord Hoffmann’s view in Gray v Thames Trains Ltd [2009] UKHL 33; [2009] 3 WLR 167 that “The maxim ex turpi causa expresses not so much a principle as a policy. Furthermore, that policy is not based upon a single justification but on a group of reasons, which vary in different situations”. Accordingly the court will not assist a claimant to recover a benefit from his own wrongdoing.
Lord Walker pointed out that the leading modern English authority is the decision in Tinsley v Milligan [1994] 1 AC 340 where the House was unanimous in disapproving the “public conscience” test. But it was divided over the correct test. The majority identified the test as whether the claimant had to plead or rely on his own illegality. The minority favoured a broader test of whether the claim was tainted by illegality. Moore Stephens does not resolve that issue, but for the moment it seems that the majority view is being adopted.
Moore Stephens (a firm) (Respondents) v Stone Rolls Limited (in liquidation (Appellants)
Summary of Judges conclusions
In order to assist in following this lengthy opinion I propose at this stage to summarise my conclusions:
1) Under the principle of ex turpi causa the court will not assist a claimant to recover compensation for the consequences of his own illegal conduct.
2) This appeal raises the question of whether, and if so how, that principle applies to a claim by a company against those whose breach of duty has caused or permitted the company to commit fraud that has resulted in detriment to the company.
3) The answer to this question is not to be found by the application of Hampshire Land or any similar principle of attribution. The essential issue is whether, in applying ex turpi causa in such circumstances, one should look behind the company at those whose interests the relevant duty is intended to protect.
4) While in principle it would be attractive to adopt such a course, there are difficulties in the way of doing so to which no clear resolution has been demonstrated.
5) On the extreme facts of this case it is not necessary to attempt to resolve those difficulties. Those for whose benefit the claim is brought fall outside the scope of any duty owed by Moore Stephens. The sole person for whose benefit such duty was owed, being Mr Stojevic who owned and ran the company, was responsible for the fraud.
6) In these circumstances ex turpi causa provides a defence to the claim.
The Law Commission has issued a consultation paper (The Illegality Defence, Consultative paper No. 189, July 2009). Their provisional recommendation is that ‘The courts should consider in each individual case whether the application of the illegality defence to a claim in tort can be justified on the basis of the policies that underlie that defence. These include: (a) furthering the purpose of the rule which the illegal conduct has infringed; (b) consistency; (c) that the claimant should not profit from his or her own wrong; (d) deterrence; and (e) maintaining the integrity of the legal system. In reaching its decision the court will need to balance the strength of these policies against the objective of achieving a just result, taking into account the relative merits of the parties and the proportionality of denying the claim. Whenever the illegality defence is successful, the court should make clear the justification for its application.’
The test enunciated in Vellino was used in Gray v Thames Trains [2009] 3 WLR 167, [2009] UKHL 33, however Lord Hoffmann did add that
‘It might be better to avoid metaphors like “inextricably linked” or “integral part” and to treat the question as simply one of causation. Can one say that, although the damage would not have happened but for the tortious conduct of the defendant, it was caused by the criminal act of the claimant? (Vellino v Chief Constable of the Greater Manchester Police [2002] 1 WLR 218). Or is the position that although the damage would not have happened without the criminal act of the claimant, it was caused by the tortious act of the defendant? (Revill v Newbery [1996] QB 567)’.
Gala v Preston may be further weakened by the fact that Cook v Cook has been overruled by the High Court of Australia. See the note to page 45 and Imbree v Mcneilly (2008) ALJR 1374
www.austlii.edu.au/au/cases/cth/HCA/2008/40.html
The Canadian Perprective http://www.jstor.org/pss/4507841
Lord Hoffmann thought there was both a narrow and a wider rule. The narrow rule states that where a person is convicted and punished, the claimant cannot be compensated for the consequences of that sentence. This prevented his claim for loss of earnings as that was a consequence of his incarceration. Lord Hoffmann said ‘Mr Gray’s claims for loss of earnings after his arrest and for general damages for his detention, conviction and damage to reputation are all claims for damage caused by the lawful sentence imposed upon him for manslaughter and therefore fall within the narrower version of the rule’.
However this principle would not cover all the claims. Lord Hoffman said that ‘there are some additional claims which may be more difficult to bring within this rule, such as the claim for an indemnity against any claims which might be brought by dependants of the dead pedestrian and the claim for general damages for feelings of guilt and remorse consequent upon the killing. Neither of these was a consequence of the sentence of the criminal court’.
The ‘wider’ principle is that expressed in Vellino (see note 2 to p198 above) and this prevented these claims as the claimant’s liability to compensate the dependants of the ead man was an immediate “inextricable” consequence of his having intentionally killed him. The same was true of his feelings of guilt and remorse.
Felix qui potuit rerum cognoscere causas
(“Fortunate is he who can understand the causes of things”)[1]
Causation is neither an exclusively philosophical problem nor a matter that only ever troubled the classical Roman poets. As a legal concept, it is pivotal in many areas of law, particularly within the law of negligence. Chiefly, this is explicable by the observation that causation often serves as the last line of defence open to wrongdoers. And yet, despite its apparent centrality in law, many judges still consider causation to be a matter of ‘common sense’. But it is worth remembering Lord Hoffmann’s extra-judicial observations in the Law Quarterly Review (2005) when commenting on Hart and Honoré’s Causation in Law published in 1959. According to Lord Hoffmann,
the great achievement of Hart and Honoré was to unpack the concept of causation when it is used, as the law uses it, to attribute responsibility for things that happen. They showed that when judges say that it is a matter of common sense, they usually mean that it accords with ordinary moral notions of when someone should be regarded as responsible for something which has happened.[2]
The crucial point here is the idea of the ‘attribution of responsibility’. As Lord Hoffmann suggests, law is not so much interested in a neutral inquiry into what caused what; rather it is in the business of attributing responsibility – or in the language of negligence, blame. The recent House of Lords judgement in Gray v Thames Trains[3] illustrates the process at work.
http://blogs.kent.ac.uk/law/2009/07/20/the-viscissitude-of-personal-responsibility/
