Kearley v Thomson (1890) 24 QBD 742
Plaintiff not entitled to recover money paid under partially performed illegal contract
The defendants were a firm of solicitors which represented a creditor in bankruptcy proceedings. The plaintiff was a friend of the bankrupt. The plaintiff offered to pay the defendants’ legal fees if they agreed not to appear at the public bankruptcy examination and not to oppose the order of discharge of the bankruptcy. The defendants agreed.
Before an application for the discharge had been made, the plaintiff brought an action to recover the money from the defendant. The Court held that although the contract was illegal, the partial performance of it prevented the plaintiff from recovering the money. The plaintiff appealed.
The Court of Appeal observed that the tendency of a such a bargain between the plaintiff and the defendants was obviously to pervert the course of justice. The defendants were not under an obligation to appear at the bankruptcy proceedings but were under an obligation not to contract themselves out of the opportunity of appearing. The Court held that where there has been a partial performance of an illegal contract it is impossible for money paid under that illegal contract to be recovered. The court distinguished the case of Herman v Jeuchner 15 Q. B. D. 561 where the Master of the Rolls appeared to recognise the proposition that money could be recovered back if a contract remained imperfectly performed. In that case, the Court had been under the impression that the contract had been fully performed.