Everet v Williams (The Highwayman’s Case)

Everet and Williams were robbers who had a joint enterprise to rob travellers, sell the goods onwards and split the proceeds evenly. For quite a time this joint enterprise went well. The men eluded capture and plundered quite handsomely, until Everet began to feel that he was not getting his fair share of the loot.

So what do you think you did? He sued in equity! Naturally he did not openly say that he was a highwayman; he tried to style himself as skilled in secondhand goods. The courts saw through it all immediately, and not only did the court refuse to enforce the contract, but both highwaymen were immediately arrested. They were both later hanged.

Pearce v Brooks (1866) LR 1 Exch 213,

In which a carriage was let to a prostitute in the knowledge that she would use the carriage in pursuit of her business. The court found that the owner of the carriage could not sue for outstanding hiring costs. The rationale for this rule, of course, was that the court did not wish to assist conduct which was seen as sexually immoral. It is also matter of notoriety that during the 20th century sexuality underwent a transformation.

His Honour said:
The arrangements between Ms Ashton and Mr Pratt involved none of the saving graces which enabled a different result to be reached in the cases to which I have referred. Those arrangements were not made to facilitate continuation of an existing cohabitation, but to establish the "mistress relationship". The evidence does not reveal a relationship, or consideration, beyond "meretricious sexual services". In my view, on the current state of the authorities, the arrangements were contrary to public policy and illegal in the relevant sense. Had they otherwise constituted a contract, it would have been void as contrary to public policy.

Public Service Employees Credit Union Co-operative Limited v Campion (1984) 56 ACTR 39)

where Campion offered a financial benefit to the Credit Union if the Credit Union did not report his son for misappropriating money.

law has long forbidden what is known as “maintenance”, which is the payment by one person of the legal fees of another person, where they have no real interest in supporting the legal action.

Elfic Ltd & Ors v Macks & Ors [2001] QCA 219.

The Supreme Court nicely encapsulated the opposing arguments:
“[64] The historical reasons for the development of the crime and civil wrong of maintenance and champerty in medieval times have little relevance today but the courts must remain vigilant to ensure in the interests of public policy that there is no trafficking in litigation or speculating in causes of action for improper gain. On the other hand, the courts also recognise the need for innovative but responsible ways of increasing access to justice for the impecunious: see the comments of Danckwerts J in Martell v Consett Iron Co Ltd.”

Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386 and Mobil Oil Australia Pty Ltd v Trendlen Pty Ltd [2006] HCA 42

The question was whether proceedings instituted by means of litigation funding should be stayed as contrary to public policy or as an abuse of process.

The court held the proceedings should not be stayed: (a) there was no general rule against maintenance and (b) particularly in those jurisdictions that had legislated on the issue, arguments on the basis of public policy could not prevail.

Parkinson v College of Ambulance Ltd [1925] 2 KB 1

Parkinson made a substantial donation to the college on the understanding that he would receive a knighthood in return. The donation was duly accepted, but no knighthood was forthcoming. Parkinson was quite nonplussed at this, and decided that his best course of action was to sue for a refund of his donation. He was unsuccessful, primarily because the contract was held to the unlawful: had the court enforced such a contract, it would have been tantamount to a situation in which public positions could be bought and sold.

Hirsch v Zinc Corporation Ltd (1917) 24 CLR 34

in which the High Court was called upon to unravel the mess created by an ongoing contract to sell zinc and silver to a German, resident in Germany (which was then of course an enemy nation). The question before the court was whether Hirsch was liable to pay for the zinc received before the outbreak of the war, or whether the entire contract was now void. There was no question, however, that the contract ceased in its effect once the war commenced.

Honour Clauses are not the same

What about honour clauses then? Don’t they seek to oust the jurisdiction of the courts? Well, in a sense they do, but they do so by making the agreement nonjusticiable: an honour clause says “this agreement is not a contract” whereas an ouster clause says “this agreement is a contract but you cannot sue anyway”

Finally, and perhaps most interestingly, the role of a marriage broker is void under these laws. A person whose role is to seek out and arrange marriages will potentially be unable to sue for their fee. Personally, my view is that if there is a test case on this issue from this point forward, this rule may not hold up to modern scrutiny.

Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535,

Nordenfelt sold his weapons and ammunition business to Maxim, and as part of the deal agreed not to manufacture guns or ammunition anywhere in the world for 25 years, and would not compete with Maxim “in any way”.

Attwood v Lamont [1920] 3 KB 571,

Lamont was employed in the tailoring department of a general outfitters. When he commenced, he signed a ROT clause under which he promised not to undertake a wide range of activities (tailor, dressmaker, general draper, milliner, hatter, haberdasher, gentlemen's, ladies', or children's outfitter) within ten miles of the employer. He later did so, but the court determined that the ROT clause was unreasonably broad, so it refused to enforce it.

Nelson v Nelson (1995) 184 CLR 538,

which in itself is a rather complicated real estate matter. McHugh J identified the circumstance in which a party might claim under an illegal contract:
• Where the claimant was ignorant or mistaken as to the factual circumstances which rendered the contract illegal;
• Where the statutory scheme that rendered the contract illegal was enacted for the benefit of a class to which the claimant is a member;
• Where the legal agreement was induced by the other party’s fraud oppression or undue influence; and
• Where the illegal purpose has not been carried into effect.