Illegality

2022 CLC 2072 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Illegality

If base/foundation of any order or action is illegal then whole superstructure built thereupon cannot be sustained.

2020 CLD 1 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Illegality could not be allowed to be perpetuated.

2020 PLD 1 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Illegality could not be allowed to be perpetuated.

2019 PLD 509 SUPREME-COURT Judicial Precedent

No one could claim permanent rights on the basis of an illegality or illegal orders.

2018 SCMR 2051 SUPREME-COURT Judicial Precedent

Illegal act would remain illegal.

2018 PLD 468 SUPREME-COURT Judicial Precedent

Ss. 10(2A), 10(4) & 17Malir Development Authority Act, 1993 (XI of 1994), Ss.4, 8(2)(iii), 9 & 14Adjustment of Government land with land belonging to a private real estate developerIllegalitiesAllegation that the value of the Government land was far higher than the value of the private land it was exchanged forValidity

[Per Ejaz Afzal Khan, J (Majority view): Enormous tracts of Government land were granted by the Provincial Board of Revenue to the relevant Development Authority for launching incremental housing scheme

Development Authority instead of launching the scheme on the land thus granted, exchanged it with the private real estate developer through its henchmen

Power to declare an area to be a controlled area laid with the Development Authority

Notification issued for declaring subject Government land as controlled area was issued by Senior Member of Board of Revenue who did not figure anywhere in the entire scheme of the Malir Development Authority Act, 1993 in general and S.14 in particular

Corrigendum at a later stage had been issued showing that the notification was indeed issued by the Provincial Secretary Local Government and Housing Town Planning Department, but he too being a non entity in the Malir Development Authority Act, 1993 neither had the power to declare an area to be a controlled area nor issue a corrigendum

Development Authority without preparing the Master Program and scheme let the private real estate developer initiate and embark upon a private housing scheme

No evidence was presented to establish that managers of the real estate developer requested the Development Authority for assistance in the preparation of scheme and what terms and conditions had been settled in between them as required by S.17(2) of the Malir Development Authority Act, 1993

Question was as to how the Development Authority owned or espoused a housing scheme of the real estate developer, which was prepared by the latter on its own without the assistance of the former in terms of S.17(2) and how could the housing scheme be held to have been prepared, undertaken or executed under the Malir Development Authority Act, 1993 in terms of S.2(p) of the said Act

Section 10(2A) of the Colonization of Government Lands Act, 1912 provided in unequivocal terms that a land granted to any person under S.10 of the said Act was not exchangeable with a private land

Since the Government land granted to the Development Authority under S.10 of the Act was comprised in tenancy and not proprietary it could not be said to have vested in the Development Authority

Since it could not be said to have vested in the Development Authority, it could not dispose of such land by sale, lease, exchange or otherwise

Development Authority opted to exchange the land granted to it with private land purchased by the dummies of the real estate developer before fulfilling the legal formalities and even before taking its possession under S.10(4) of the Colonization of Government Lands Act, 1912 and thereby abdicated its authority in favour of the real estate developer in violation of the provisions contained in S.10(2A) and proviso to S.17 of the said Act

Provincial Government also acted as more of a collaborator than a protector of the Government land

Provincial Board of Revenue, Development Authority and real estate developer did not explain as to what mode was adopted for determining the status and price of the Government land and that of the one it was exchanged for; nor had anything been brought on the record to show that the nature, character, location, potential of the Government land and that of the land it was exchanged for, stood on equal footing

Record available also did not explain as to why the Development Authority exchanged its compact and well-located blocks of land for scattered strips of land situated in far-off areas

Mode and manner adopted by the Executive, the Provincial Board of Revenue and the Development Authority prima facie showed that they conspired to cede valuable public property to an individual (real estate developer) for a handful gain

2018 PLC(CS) 619 ISLAMABAD Judicial Precedent

Arts. 25 & 199Constitutional jurisdiction of the High CourtIllegalityPlea of discrimination

Illegality could not be pleaded as a ground for discrimination, nor could it be allowed to be perpetuated while exercising powers under Art.199 of the Constitution.

2017 PLD 81 ISLAMABAD Judicial Precedent

Part II, Chap. 1 [Arts. 8 to 28]IllegalityScopeNo person could justify an illegality by contending that similar other illegal activities were going on

Rule of law could be upheld by effectuating and enforcing the law, rather than condoning and giving legitimacy to violations of law

Legitimizing illegality lead to chaos and thus results in violation of the Fundamental Rights of the citizens.

2017 PLD 81 ISLAMABAD Judicial Precedent

ScopeRights could not be claimed on the basis of an illegality

Illegal and void foundation could not create a right and any superstructure built thereon would equally remain illegal and void.

2016 SCMR 1637 SUPREME-COURT-OF-UK Judicial Precedent

Doctrine ofIllegality as a defence to a civil claimWhether a defendant would be able to rely on the defence of illegality"Reliance test" and "Range of factors" approach to the issue of illegalityScope and relevance

[Per Lord Toulson, JSC, 'Reliance test' expressed in Tinsley v Milligan [1994] 1 AC 340, which was the authority for the illegality defence, should no longer be followed as it resulted in inconsistent and unjust outcomes

New test for the defence of illegality was the "range of factors" approach, whereunder the court had to consider, first the underlying purpose of the prohibition which had been transgressed and whether that purpose would be enhanced by denial of the claim; second, any other relevant public policy on which the denial of the claim may have an impact, and, third whether denial of the claim would be a proportionate response to the illegality]

[Per Lord Kerr; Rule-based approach to the question of illegality, exemplified in Tinsley v Milligan [1994] 1 AC 340, failed to deliver predictability

Court should apply a more flexible approach, taking into account the policy considerations that were said to favour recognising the defence of illegality]

[Per Lord Neuberger: When faced with a claim based on a contract which involved illegal activity the court should, when deciding how to take into account the impact of the illegality on the claim, bear in mind the need for integrity and consistency in the justice system, and in particular the policy behind the illegality; any other public policy issues, and the need for proportionality]

[Per Lord Mance (Minority view): Whatever shortcomings the "reliance test" may have, it did not justify tearing up the existing law and starting again

Court should adopt a limited approach to the effect of illegality, focused on the need to avoid inconsistency in the law, without depriving claimants of the opportunity to obtain damages for wrongs or to put themselves in the position in which they should have been

'Range of factors' approach to the issue of illegality would be too vague and potentially too wide, requiring courts to make value judgments in an unspecific and non-legal sense]

[Per Lord Clarke (Minority view): "Range of factors" approach to the issue of illegality was far too vague and potentially far too wide to serve as the basis on which a person may be denied his legal rights

Power of the court to deny recovery on the ground of illegality should be limited to well defined circumstances, and there was no need to replace such approach with an open and unsettled range of factors]

[Per Lord Sumption (Minority view): 'Reliance test' accorded with settled principle; it ensured that the illegality principle applied no more widely than was necessary to give effect to its purpose of preventing legal rights from being derived from illegal acts

"Range of factors" approach would widen the application of the defence of illegality as well as render its application more uncertain

Furthermore it would largely devalue the principle of consistency, by relegating it to the status of one of a number of evaluative factors, entitled to no more weight than the judge choose to give it in the particular case]

Supreme Court concluded that 'reliance test' expressed in Tinsley v. Milligan [1994] 1 AC 340 should no longer be followed as the authority for the illegality defence, and instead the 'range of factors' approach/test should be applied.

2016 SCMR 1637 SUPREME-COURT-OF-UK Judicial Precedent

Illegality as a defence to a civil claimUnjust enrichmentIllegal contract

Whether a claimant who had transferred money pursuant to an illegal contract could recover the sums paid, when the contract was not executed

Principles

Circumstances in which illegality should be a defence to a civil claim

Plaintiff gave money to the defendant to buy shares on the basis of insider knowledge

Insider dealing plan did not materialize

Plaintiff sued the defendant to recover his money

[Per Lord Toulson: Plaintiff was entitled to restitution of the money which he paid to the defendant

Illegality did not necessarily prevent the operation of the unjust enrichment rules

Claimant who satisfied the ordinary requirements of a claim for unjust enrichment should not be debarred from enforcing his claim by reason only of the fact that the money which he sought to recover was paid for an unlawful purpose

In rare cases where for some particular reason the enforcement of such a claim might be regarded as undermining the integrity of the justice system, but there were no such circumstances in the present case]

[Per Lord Neuberger: In a case, such as the present one, the general rule should be that the claimant was entitled to the return of the money which he had paid

Such general rule would apply to any contract where the illegality would result in the court (if it could otherwise do so) not being able to order specific performance of the contract or damages for its breach

Even where the contemplated illegal activity had been performed in part or in whole, it would be right to apply the general rule in appropriate cases]

[Per Lord Mance: So long as restitution was possible, there was no inconsistency in the law in permitting a party to an illegal arrangement to recover any sum paid under it

In the present case plaintiff was entitled to require the defendant to return the stake which plaintiff put up for an illegal purpose to make profits for their joint benefit

Plaintiff's claim did not seek to enforce or profit by the illegality, it sought merely to put the position back to where it should have been had no such illegal transaction ever been undertaken]

[Per Lord Clarke: General rule that the claimant was entitled to the return of the money which he had paid was consistent with authority and with policy and rendered the outcome in cases of contracts involving illegality and the maxim ex turpi causa non oritur actio relatively clear and certain]

[Per Lord Sumption: Restitution being possible in the present case, the plaintiff was not barred from recovering the money which he paid to the defendant

Order for restitution would simply return the parties to the position in which they would and should have been, had no such illegal arrangement been made]

Supreme Court held that the plaintiff was entitled to recover the money paid to the defendant along with interest

Appeal was dismissed accordingly.