Patel v Mirza

Patel v Mirza

A claimant who has paid money under an illegal agreement may recover it if the illegal purpose has not been carried out, regardless of whether the agreement became impossible to perform or was frustrated, and regardless of whether the claimant voluntarily withdrew. The doctrine of locus poenitentiae applies so long...

Source-derived case information.

Parties
Appellant: Chandrakant Patel; Respondent: Salman Mirza
Jurisdiction
England and Wales
Judgment Date
29 July 2014
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court
Outcome
appeal allowed
Legal Topics
Illegality Defence, Unjust Enrichment, Locus Poenitentiae, Agency, Insider Dealing, Public Policy
Contract Law Equity Restitution Criminal Law Illegality Defence Unjust Enrichment Locus Poenitentiae Agency +2 more

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Summary, issues, holding and outcome

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Parties

Chandrakant Patel

Appellant

Salman Mirza

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether a claimant can recover money paid under an illegal agreement when the illegal purpose was not carried out
  2. 2 Whether reliance on the illegal agreement bars recovery
  3. 3 Whether the doctrine of locus poenitentiae applies where the illegal purpose is frustrated and not performed

Ratio Decidendi

A claimant who has paid money under an illegal agreement may recover it if the illegal purpose has not been carried out, regardless of whether the agreement became impossible to perform or was frustrated, and regardless of whether the claimant voluntarily withdrew. The doctrine of locus poenitentiae applies so long as the illegal purpose remains unperformed. The public policy underlying the illegality defence does not require forfeiture of the money in these circumstances, and section 63(2) of the Criminal Justice Act 1993 supports this outcome.

Court Disposition

appeal allowed

Orders

  • Repayment of £620,000 by Mr Mirza to Mr Patel