Private Law Theory

ABSTRACT
The traditional English jurisprudence granting restitution of benefits conferred under agreements rendered unenforceable because of illegality was unsatisfactory. As a general principle, it held that there was a presumption against restitutionary relief for benefits conferred under such agreements (the Holman principle). This principle was subject to a series of exceptions granting relief to parties who were innocent of fault with respect to the illegal conduct or, at least, less at fault than the defendant. The main difficulty with this approach was that it denied relief in cases where, though the plaintiff was implicated to some extent in the illegality as a perpetrator or, at least, a participant in the illegal conduct, restitution appeared appropriate. The traditional Holman exceptions were stretched to accommodate such cases and collateral forms of relief developed. The resulting doctrine was both complex and unpredictable in its application. A modern approach emerged in American and, more recently, in Canadian and Australian law, of simply granting recovery to a guilty party who could establish that, in the particular circumstances, restitutionary relief was appropriate. A different approach to modernization of the doctrine has been recently adopted in English law. In its 2016 decision in Patel v Mirza, the Supreme Court of the United Kingdom appears to have adopted a reform scheme proposed by Professor Peter Birks. In essence, the Birksian scheme reverses the Holman principle and presumes that all plaintiffs are entitled to recover such benefits. The defendant, however, is entitled to raise a defence of illegality which will not invariably be available against perpetrators of the illegal conduct. This paper argues that the new English model is deeply flawed and ought not be adopted elsewhere. The modern American, Australian, and Canadian approach offers a more direct and sound solution to the problem.

McCamus, John D, Is Illegality a Defence to Restitutionary Claims?, Osgoode Hall Law Journal 62.2, 529-568 (2026).