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(C) THE PARTIES ARE NOT IN PARI DELICTO

The claimant’s restitutionary claim will succeed even though the claim arises from participation in an illegal transaction, where the parties are not in pari delicto, which will usually be the case where the defendant is more responsible for participating in the illegal transaction than the claimant.

(i) Compulsion

The claimant will be able to bring a restitutionary claim by virtue of compulsion[1] despite the fact that he or she has been tainted by illegality.[2] This has also been recognized by the European Court of Justice in the context of a claimant who is not as responsible as the defendant for entering into an anti-competitive agreement which is illegal by EC law.[3]

(ii) Actual or Potential Exploitation

In certain circumstances the defendant will be deemed to be more responsible for participation in the illegal transaction than the claimant where the defendant occupied a position in which he or she could actually or potentially exploit the claimant’s weaker position.117 This will arise in two situations: first, where the defendant has acted oppressively;118 secondly, where statute imposes an obligation on one party to ensure that the transaction complied with the law.119

  • [1] 116 Case C-453/99 Courage Ltd v Crehan [2002] QB 507. 117 See p 286, above.
  • [2] 118 See, for example, Smith v Cuff (1817) 6 M and S 160, 105 ER 1203.
  • [3] 119 See, for example, Kiriri Cotton Co Ltd v Dewani [1960] AC 192.
 
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