The defence of illegality is a defence which is well-known to lawyers and which is frequently invoked by litigants in civil claims. The defence is also often referred to by its equally well-known latin name ex turpi causa non oritur actio – no person can claim any right or remedy whatsoever under an illegal transaction in which he has participated. It is a rule of law based on public policy, which is indiscriminate in its application and admits of no discretion. Once the court makes a finding that a plaintiff has to rely on an illegality (for example, an illegal act, transaction or contract) to support his claim, the court must dismiss the plaintiff’s claim, even if the defendant who raised the defence of illegality was himself fully aware of and participated in the illegality.
In some cases, this may lead to a very unfair or harsh result for the plaintiff, for example where the “illegality” in question does not truly involve any morally reprehensible behaviour on the part of the plaintiff, such as in the case of a strict-liability offence. However, the court nevertheless has no choice but to dismiss the plaintiff’s claim, not for the sake of the defendant, but because the court will not lend its assistance to the plaintiff in such circumstances in order to protect the integrity of the legal system.
The leading English authorities on the illegality defence are the celebrated judgment of Lord Mansfield CJ in Holman v. Johnson (1775) 1 Cowp 34l (“No court will lend its aid to a man who founds his cause of action on an immoral or an illegal act.”), and the decision of the House of Lords in Tinsley v. Milligan  1 AC 340 (the plaintiff’s claim is barred only if the plaintiff needs to rely on facts which disclose the illegality.) These authorities have been followed and applied by Malaysian courts. In practice however, the courts have struggled with the application of the legal tests laid down in those authorities, particularly in relation to determining whether an act is “immoral” or “illegal” so as to trigger the application of the ex turpi causa defence. In this regard, it may perhaps be said that legally speaking, an “immoral” or “illegal” act is not like the proverbial elephant: the courts do not necessarily know it when they see it.
The UK Supreme Court has now delivered an important decision in the case of Les Laboratoires Servier & Anor v. Apotex Inc & Ors  UKSC 55 (29 October 2014), clarifying the scope of the illegality defence.
The leading judgment of the court was delivered by Lord Sumption. His Lordship observed that the application of the ex turpi causa principle commonly raises three questions: (i) what acts constitute turpitude for the purpose of the defence? (ii) what relationship must the turpitude have to the claim? (iii) on what principles should the turpitude of an agent be attributed to his principal, especially when the principal is a corporation? However, in Apotex, the UK Supreme Court was only concerned with the first question i.e. what amounts to “turpitude”? Lord Sumption’s answer to that question may be summarised as follows:-
- Generally speaking, the ex turpi causa principle is concerned with claims founded on acts which are contrary to the public law of the state and engage the public interest. The paradigm case is a criminal act. Lord Mansfield’s reference to immoral or illegal acts was a reference to acts which engage the public interest;
- In addition, the ex turpi causa principle is also concerned with a “quasi-criminal” acts which engage the public interest in the same way, such as (i) cases of dishonesty or corruption; (ii) anomalous categories of misconduct, such as prostitution, which without itself being criminal are contrary to public policy and involve criminal liability on the part of secondary parties; and (iii) the infringement of statutory rules enacted for the protection of the public interest and attracting civil sanctions of a penal character;
- However, the ex turpi causa principle is not concerned with acts which are merely tortious (not involving dishonesty) or in breach of contract; and
- There may be exceptional cases where even criminal and quasi-criminal acts will not constitute turpitude for the purposes of the illegality defence, for example in cases of strict liability, generally arising under statute, where the plaintiff was not privy to the facts making his act unlawful.
As Lord Sumption explained at para  of his judgment:-
In my opinion the question what constitutes “turpitude” for the purpose of the defence depends on the legal character of the acts relied on. It means criminal acts, and what I have called quasi-criminal acts. This is because only acts in these categories engage the public interest which is the foundation of the illegality defence. Torts (other than those of which dishonesty is an essential element), breaches of contract, statutory and other civil wrongs, offend against interests which are essentially private, not public. There is no reason in such a case for the law to withhold its ordinary remedies. The public interest is sufficiently served by the availability of a system of corrective justice to regulate their consequences as between the parties affected.
Ultimately, Lord Sumption emphasised that the application of the ex turpi causa defence must be based on established legal principle, and not the court’s subjective assessment or judgment of the significance of the illegality, the proportionality of its application or the merits of the particular case.
The decision of the Supreme Court in Les Laboratoires Servier & Anor v. Apotex Inc & Ors helpfully clarifies what amounts to “immoral” or “illegal” or “turpitudinous” acts for the purposes of the illegality defence. However, it should be noted that the Supreme Court did not deal with the two other equally important questions raised by Lord Sumption, namely what relationship must the turpitude have to the claim, and on what principles should the turpitude of an agent be attributed to his principal, especially when the principal is a corporation. The answer to the final question may not be too far away, as the UK Supreme Court had on 15 October 2014 heard arguments in the appeal from Jetivia SA & Anor v Bilta (UK) Ltd & Ors  EWCA Civ 968, a case concerning the very same issue.