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The illegality defence: Thames Trains, Henderson and strict liability offences

Peter Dodge (instructed by Philip Evans and Freddie Beard of Clyde & Co) appeared for the First Defendant in Owadally v Planology Ltd [2023] EWHC 339 (KB), a High Court appeal against a refusal to grant reverse summary judgment

O and K, a husband and wife, bought a Grade II listed house in Paddington to develop as flats. WCC, the local planning authority, prosecuted them under the Planning (Listed Buildings and Conservation Areas) Act 1990 for causing works to be executed to a listed building without consent, the offence being one of strict liability. In the Magistrates’ Court, they were each convicted on four counts and fined. On appeal, the Crown Court quashed two of the convictions but upheld the other two (one being narrowed). They were also disciplined by their professional body.

O and K sued P, a planning consultancy, BB, a firm of consulting engineers and HR, the solicitors who had acted for them in the purchase. They sought to redistribute losses which they claimed to have suffered as a result of the events leading to their prosecution and conviction. P and BB applied for reverse summary judgment and strike out on the basis that (i) that they had an illegality (“ex turpi”) defence or (ii) the claim amounted to an abuse of process.

The significance of Owadally lies in the cautionary guidance which it provides to any professional defendant considering a summary application based on a defence of illegality, even in a case where the circumstances of the conviction might appear to cast the claimant in an unfavourable light. The principal source of the law to be applied at trial on a defence of illegality remains four recent House of Lords or Supreme Court cases, two of which (Gray v Thames Trains and Henderson v Dorset NHS Trust), like Owadally, involved prior criminal convictions (albeit not of strict liability offences) but the other two of which (Les Laboratoires Servier v Apotex and Patel v Mirza) concerned different forms of illegality.

In dismissing P’s and BB’s appeals, Collins Rice J analysed the exercise which would be necessary at trial to reflect the guidance contained in those four cases and apply that guidance thoughtfully to the full set of relevant circumstances.

Whilst acknowledging that they might face challenging evidential difficulties at trial, Collins Rice J held, first, that the judge below had been entitled to find that O and K had a real, as opposed to fanciful, prospect of establishing that they had lacked turpitude: according to Lord Sumption JSC in Apotex, an important (and binary) requirement where the offence is one of strict liability.

Secondly, she considered that, if O and K were to establish that they lacked turpitude, there would be room for argument about the application of the law to their circumstances even to the extent that the so-called ‘narrow principle’ described by Lord Hoffmann in Thames Trains was engaged: “you cannot recover for damage which is the consequence of a sentence imposed upon you for a criminal act”.

Thirdly, she concluded that the judge below would have been entitled to consider the application of the illegality defence a sufficiently fact-sensitive and evaluative matter to be inappropriate for determination on an application for a terminating ruling.

Fourthly, perhaps surprisingly, she expressed the view that, even if both she and the judge below had been persuaded that the ‘narrow principle’ aspect of O and K’s claim was obviously bad for illegality, the judge below would still properly have been entitled as a matter of case management to permit the whole case to go forward for consideration in the round.

Fifthly, on the abuse of process ground, she was unpersuaded that letting the claim and the illegality defence go forward to trial must be viewed as a pointless and abusive exercise.

You can read the full judgment here.