Within private law, the defence of illegality has long been a source of confusion and injustice. The problems have been particularly acute within the law of unjust enrichment. The pendulum has swung from one extreme to another. During the 19th century. an unforgiving conception of illegality defeated restitutionary claims on the basis of relatively trivial improprieties. Under a ‘modern approach’, the availability of relief may turn on largely subjective notions of morality. A preferable model takes guidance from the notion of illegality that Justice McLachlin formulated in Hall v Hebert. Although that case dealt with a tort claim, the proposition that the illegality defence should reflect the need ‘to preserve the integrity of the legal system’ can be applied equally throughout private law. In Kim v Choi, British Columbia’s Court of Appeal recently demonstrated how that version of the defence can be used in unjust enrichment.
McInnes, Mitchell, ‘Illegality and Unjust Enrichment’, Canadian Business Law Journal, volume 65, issue 1 (September 2021), pp 1-3.