Stand and deliver, your money or your wife! Of Georgian highwaymen, modern sham marriages, illegal contracts, and abuse of the legal process

James Freney

James Freney (1719–1788)

an Irish contemporary of Everet and Williams; the so-called
Noblest Highwayman in Ireland
Two sole traders form a partnership, and then fall out, so that one sues the other for outstanding monies. It is a common enough story now, and was even in the early 1700s. There is normally little of general interest in such case; but, in 1725, the additional facts in Everet v Williams earned it a notoriety that persists to this day, because the plaintiff had sued the defendant for the proceeds of highway robbery, and there had been a classic falling out amongst thieves. Unsurprisingly, the Court declined to lend its aid to the claim, and dismissed the case with costs (see Everet v Williams (1725) reported (1787) 2 European Magazine 360 (pdf) and (1893) 9 Law Quarterly Review 197 (pdf); see also William David Evans (ed) Pothier on Obligations (Strahan, London, 1802, vol 2) 3 (pdf); Nathaniel Lindley A Treatise on the Law of Partnership (1st ed, Johnson & Co, London, 1860) 161 (pdf); Robert Megarry Miscellany-at-Law (Sweet & Maxwell, London, 1955) 76 (pdf); mentalfloss).

The Court’s approach in this case was replicated by Twomey J in English v O’Driscoll [2016] IEHC 584 (25 October 2016), whilst the case itself was cited by Humphreys J in the High Court in KP v The Minister for Justice and Equality [2017] IEHC 95 (20 February 2017). In this short post, I want to mention the outcome in Everet v Williams, note its subsequent judicial citation, and refer briefly to the recent judgments of Humphreys and Twomey JJ.

In Everet v Williams, the Court referred the matter to the wonderfully-titled Deputy Remembrancer of the Court of Exchequer in Equity. His report that the case was a matter of “scandal and impertinence” was confirmed by the Court; the parties solicitors were attached for contempt and fined £50 each for reflecting so disreputably “upon the honour and dignity” of the Court; and the lawyer who drafted the plaintiff’s proceedings was ordered to bear the costs of the action for causing such “indignity to the Court”. But the parties did not learn their lesson; and they continued – separately – to ply their trade, until their luck eventually ran out: John Everet, the plaintiff, was executed at Tyburn in 1730; and Joseph Williams, the defendant, was executed at Maidstone in 1727 – by not hanging together, they were hanged separately, proving Benjamin Franklin’s aphorism half a century before he uttered it!

Moreover, in 1735, the almost equally colourful William Wreathock, the plaintiff’s solicitor, was convicted of conspiracy and robbery, and sentenced to be hanged. However, his sentence was commuted to transportation, though he eventually obtained a Royal Pardon, returned to England, and resumed his practice; nevertheless, he was struck off the roll of attorneys in 1758 (see Malcolm McKenzie Park “William Wreathcock – Imperfect Attorney” (1993) 87 Victorian Bar News 73 (SSRN)).

The case has had a strong pull on the legal imagination down the ages. (See, eg, Ashhurst v Mason (1875) LR 20 Eq 225, 230 (Bacon VC); Sykes v Beadon (1879) 11 Ch D 170, 195-196 (Sir George Jessel MR); Burrows v Rhodes [1899] 1 QB 816, 826 (Kennedy J); Foster v Driscoll [1929] 1 KB 470, 511 (Lawrence LJ); Columbia Picture Industries Inc v Robinson [1987] Ch 38 (Scott J); Pitts v Hunt [1991] 1 QB 24, [1990] EWCA Civ 17 (04 April 1990) (Beldam LJ); Soleimany v Soleimany [1999] QB 785 (Waller LJ); Marlwood Commercial Inc v Kozeny [2006] EWHC 872 (Comm) (28 April 2006) [154], [179] (HHJ Jonathan Hirst QC); St Paul Travelers Insurance Co v Okporuah [2006] EWHC 2107 (Ch) (10 August 2006) [1] (HHJ Hodge QC); Lilly Icos Llc v 8pm Chemists Ltd [2009] EWHC 1905 (Ch) (31 July 2009) [286] (Arnold J); Les Laboratoires Servier v Apotex [2011] EWHC 730 (Pat) (29 March 2011) [65] (Arnold J) (and see the Supreme Court in this case, below); RTA (Business Consultants) Ltd v Bracewell [2015] EWHC 630 (QB) (12 March 2015) [43] (HHJ Richard Seymour QC)).

And this attraction has been felt even at the highest levels, such as the Supreme Court of Canada (Consumers Cordage Co v Connolly (1901) 31 SCR 244, 302 (Girouard J)), the UK House of Lords and Supreme Court (Stone & Rolls Ltd v Moore Stephens [2009] 1 AC 1391, [2009] UKHL 39 (30 July 2009) [187]-[188] (Lord Walker); “Ex Turpi Causa – When Latin Avoids Liability” (2014) 18(2) Edinburgh Law Review 175, 177 (Lord Mance); R v Ahmad [2015] 1 AC 299, [2014] UKSC 36 (18 June 2014) [67] (Lords Neugerger, Hughes and Toulson, in a joint judgment); Les Laboratoires Servier v Apotex [2015] 1 AC 430, [2014] UKSC 55 (29 October 2014) [24] (Lord Sumption); Jetivia SA v Bilta (UK) Ltd [2016] AC 1, [2015] UKSC 23 (22 April 2015) [59] (Lord Sumption)), and the Irish Supreme Court (Iarnród Éireann v Ireland [1996] 3 IR 321, 374, [1996] 2 ILRM 500, 507 (O’Flaherty J; Hamilton CJ, Blayney, Denham and Barrington JJ concurring)).

Indeed, it has been referred to on a number of occasions by Posner J in the Seventh Circuit Court of Appeals (see, eg, SEC v Lyttle 538 F3d 601 (7th Cir, 2008) (pdf); Schlueter v Latek 683 F3d 350 (7th Cir, 2012) (pdf); Thomas v UBS AG 706 F3d 846 (7th Cir, 2013) (pdf)) as well as by Higginbotham J in the Fifth Circuit Court of Appeals in one of the many cases relating to Allen Standford‘s massive Ponzi scheme (see Janvey v Rincon (5th Cir, 31 January 2017)).

On the question of the enforceability of an illegal contract, which was at the heart of Everet v Williams, the leading Irish case is now Quinn v Irish Bank Resolution Corporation Ltd [2015] IESC 29 (27 March 2015). Clarke J’s general approach to illegality in that case would not change the outcome in Everet v Williams; although, in Quinn, Clarke J held that various loans were enforceable, notwithstanding that they may have been made in breach of company law. If the loans had been illegal and unenforceable, it is not clear whether they would have been recoverable. On the one hand, in Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498, [2012] HCA 7 (8 March 2012), on facts similar to Quinn, the High Court of Australia held that restitution of loans advanced in contravention of the Companies Code would stultify the policy of that Code ([45] (French CJ, Crennan and Kiefel JJ) [99]; Gummow and Bell JJ). On the other hand, in Patel v Mirza [2016] 3 WLR 399, [2016] UKSC 42 (20 July 2016) the UK Supreme Court (without reference to Equuscorp) held that payments advanced for insider trading could be recovered. As Lord Toulson put it in that case ([99], [120]):

… there are two broad discernible policy reasons for the common law doctrine of illegality as a defence to a civil claim. One is that a person should not be allowed to profit from his own wrongdoing. The other, linked, consideration is that the law should be coherent and not self-defeating, condoning illegality by giving with the left hand what it takes with the right hand. … The essential rationale of the illegality doctrine is that it would be contrary to the public interest to enforce a claim if to do so would be harmful to the integrity of the legal system …

It would have been harmful to the integrity of the legal system to enforce the claims in Everet v Williams. Indeed, the kind of collusive action concerning an illegal contract that was at issue in that case recurred in English v O’Driscoll [2016] IEHC 584 (25 October 2016). Twomey J held that he was obliged to consider the issue of illegality, even though (as in Everet v Williams) none of the parties had pleaded it; he found that the parties were knowing participants in an unlawful arrangement to obtain capital allowances; and held that (at [34]):

… in cases where there is a possibility of the Revenue being defrauded and where there is nobody in Court representing the taxpayer, as will often be the case, it is this Court’s view that it is the duty of the Court to be alive to illegal transactions, since the parties themselves are unlikely to call evidence which might damage their case and may even seek to conceal their true intentions. If the Court does not look out for the interests of the taxpayer, by being alive to transactions which are designed to defraud the Revenue, the parties themselves are unlikely to do so.

He therefore concluded (at [118]):

As a matter of public policy, this Court must therefore refuse to offer assistance to either party in relation to these proceedings, since to do so, would be to implicitly approve of the unlawful scheme in which the parties were engaged.

If it would have been, in Lord Toulson’s words, harmful to the integrity of the legal system to enforce the claims in Everet v Williams and English v O’Driscoll, it would have been just as harmful to enforce the claim in KP v The Minister for Justice and Equality [2017] IEHC 95 (20 February 2017). Here, Humphreys J cited Everet v Williams and explained its application in terms similar to Lord Toulson’s in Patel v Mirza. On foot of marriages to EU nationals, the applicants were awarded permission to remain in the State. However, the Minister decided that these marriages were a sham; she revoked their permission to remain; and made orders to deport them. In this application for judicial review, Humphreys J held that the orders were validly made. Moreover, echoing his comments in the earlier ABM v Minister for Justice and Equality [2016] IEHC 449 (29 July 2016) and SA v Minister for Justice and Equality [2016] IEHC 462 (29 July 2016), he excoriated the applicants’ sham marriages and their attempt to derive legal rights therefrom (at [18]-[20]):

The applications arise out of a gross abuse of immigration law and of the rights of third parties … The Minister has made unchallenged determinations that the applicants entered into marriages of convenience. … Those findings are unchallenged and, as with any unchallenged decision, the applicants have to live with such a conclusion for the purposes of these proceedings.

The present applications are therefore an attempt to enforce, under colour of law, “rights” purportedly acquired by reason of such sham marriages. … marriages of convenience are not simply a gross breach of duties under immigration laws and of unenumerated duties under the Constitution. They are also a fundamental violation of the rights of third parties (including the other party to the marriage), because it is highly unlikely that consent to such an arrangement could be regarded as fully informed, given the level of downstream legal complication likely to be unleashed on the other party … as well as the effects upon innocent persons with whom such parties subsequently have family relationships. …

Legal action designed to enforce “rights” deriving from a marriage of convenience is an affront to the court and makes a mockery of the constitutional commitments to legality, human rights, and to marriage and the family. The court is an institution of State and, while obviously not in any way to be identified with the interests of the government of the day, is certainly to be identified with values fundamental to the Constitution, the State and to an ordered society.

Moreover, Humphreys J likened the applicant’s attempts to invoke the jurisdiction of the Court in aid of his sham marriage to the highwaymen’s attempt in Everet v Wiliams to invoke the jurisdiction of the Court in aid of their illegal agreement (at [22]):

A suit to enforce “rights” obtained by fraud upon the system is an example of the type of proceedings considered in Everet v Williams (1725) 2 Pothier on Obligations 3, which was an attempt to bring proceedings to enforce an agreement between highwaymen for the division of spoils. The discovery of the fact that the proceedings were founded on an unlawful act resulted, predictably, in their dismissal. That was however only step one in the response of the law to such an affront to its processes. The plaintiff was hanged at Tyburn and the defendant at Maidstone. The arrest of both solicitors for contempt was ordered and both were fined. Counsel was ordered to pay the costs personally. One of the solicitors was also convicted of robbery and sentenced to death, although notable leniency was shown in that that sentence was commuted to transportation. While prevailing views as to appropriate punishments may have evolved since 1725, the fundamental principle has not; namely that the court will not entertain an action founded on a wrongful act. These judicial review leave applications, as an attempt to use the process of the court to enforce “rights” obtained by fraud, fall into that category.

Long thought apocryphal, the case of Everet v Williams is enjoying something of a renaissance at present. Not only is it being cited at the highest levels throughout the Common Law world, but, in Ireland, its spirit suffused the judgment of Twomey J in English v O’Driscoll, and its letter animated that of Humphreys J in KP v Minister for Justice. The lesson is clear: do not seek to invoke the jurisdiction of the Courts to enforce illegal contracts or to uphold illegal or sham arrangements. The Courts will not now, as they did not in 1725, lend their aid to such an abuse of the legal process. The consequences might not be as stark nowadays as they were then, but they will still be severe. As Humphreys J put it in Walsh v Walsh [2017] IEHC 181 (02 February 2017) [74] the Courts will not allow those who have themselves repudiated legal obligations to invoke the law when it seems expedient for them to do so. Even highwaymen cannot eat their cake, and then still have it.