Neal v Ayers [1940] HCA 21

Neal v Ayers [1940] HCA 21

The contract was not founded upon illegality, as the primary purpose was sale and purchase of a hotel in the ordinary course of business, and the plaintiff's incidental intention to continue after-hour trading did not render the entire transaction unlawful. The plaintiff was not disabled by illegality from maintaining her action for deceit based on fraudulent misrepresentation.

Parties
Appellant, Plaintiff: Alma Phyllis Violette Neal; Respondent, Defendant: Maud Alice Ayers
Jurisdiction
Australia
Procedural Posture
Appeal / Appeal From Supreme Court of New South Wales (full Court), Remitter for New Trial
Outcome
appeal allowed
Legal Topics
Fraudulent Misrepresentation, Deceit, Illegality in Contract
Contract Law Tort Law Fraudulent Misrepresentation Deceit Illegality in Contract

Case Brief

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Parties

Alma Phyllis Violette Neal

Appellant, Plaintiff

Maud Alice Ayers

Respondent, Defendant

Procedural Posture

Appeal / Appeal From Supreme Court of New South Wales (full Court), Remitter for New Trial

Legal Issues

  1. 1 Whether a claim in deceit arising from fraudulent misrepresentation inducing purchase of a hotel is barred by illegality due to knowledge of after-hour trading
  2. 2 Whether the contract was tainted with illegality due to intention to continue unlawful after-hour trading

Ratio Decidendi

The contract was not founded upon illegality, as the primary purpose was sale and purchase of a hotel in the ordinary course of business, and the plaintiff's incidental intention to continue after-hour trading did not render the entire transaction unlawful. The plaintiff was not disabled by illegality from maintaining her action for deceit based on fraudulent misrepresentation.

Court Disposition

appeal allowed

Orders

  • Judgment of the Supreme Court set aside
  • District Court's nonsuit discharged