Legal Case Summary
Plaintiff not entitled to recover money paid under partially performed illegal contract
Facts
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.
Issue
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.
Decision / Outcome
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.
Updated 19 March 2026
This article accurately summarises the Court of Appeal’s decision in Kearley v Thomson (1890) 24 QBD 742. The core legal principle — that money paid under a partially performed illegal contract cannot be recovered — remained part of English law for well over a century.
However, readers should be aware that the law in this area has been significantly reformed. The Law Commission recommended reform of the illegality doctrine in its 2010 report, and the Supreme Court subsequently reshaped the law in Patel v Mirza [2016] UKSC 58. In that case, the Supreme Court (by majority) rejected the rigid rule-based approach to illegality in favour of a flexible, policy-based discretionary approach. The court must now consider the underlying purpose of the prohibition, the consequences of denying or allowing recovery, and broader public policy considerations. The old rule — as applied in Kearley v Thomson — that partial performance of an illegal contract automatically bars recovery, no longer represents the current legal position. Kearley v Thomson itself was expressly discussed in Patel v Mirza, and the continued authority of its strict approach was doubted. Students and practitioners should treat this case as important legal history rather than a reliable statement of current law.
