". . . money payable by the Defendant to the [Claimants] as money had and received by the Defendant to the use of the [Claimants]."

(a) the claimants are husband and wife who originate from Pakistan and speak no English;

(b) the defendant is a prominent member of their local community and he became a close friend;

(c) the claimants' home in Smethwick was the subject of a compulsory purchase order in consequence of which in June 1994 the local authority by cheque paid them £14,314 as the purchase price;

(d) at that time the claimants were in receipt of benefits paid by the DSS;

(e) the claimants moved into rented accommodation but intended to deploy the proceeds of the compulsory purchase in the purchase of another home;

(f) the defendant advised the claimants that, once the cheque was paid into their own bank account, they would lose their DSS benefits and that, in order to continue to receive benefits, they should endorse the cheque in his favour, so that he could keep the money for them;

(g) the claimants endorsed the cheque accordingly, with the result that the defendant secured payment of the money to himself;

(h) at the same time, and at the suggestion of the defendant, both he and the claimants signed a document suggesting that £14,000 of the sum received by him represented repayment to him of three loans which he had made to the claimants totalling that sum;

(i) the claimants continued to claim DSS benefits and, in accordance with advice given to them by the defendant, falsely told officers of the DSS that the proceeds of their home had been spent in repaying debts and remitting money to the first claimant's father in Pakistan for humanitarian purposes; and

(j) the defendant has repaid the claimants sums totalling £1,824 but declines to pay the outstanding balance of £12,490.

"The plaintiffs' case, therefore, is exactly how it appears in a nutshell in paragraph 4 of the particulars of claim, namely the only reason why he gave that cheque to the defendant was because he feared, and rightly I suspect, that if he put it into his own bank account then his social benefits would either be stopped or at the very least reduced.

It is my judgment that that arrangement is the clearest case of a conspiracy to defraud the Benefits Agency that I have ever come across. The defendant therefore submitted as a preliminary point in this case that the court should not entertain the plaintiff's action because he was endeavouring to sue on an illegal contract, but as I indicated to counsel yesterday I do not find that there was a contract in this case. In particular, I find no consideration passing, and I doubt very much whether there was any intention if this agreement be right that the parties would create a legal relationship between them. The plaintiff's claim is not said to be in contract and I do not believe that it is in contract.

However, the second argument put to me by [the advocate for the defendant] and one which does and has concerned me is whether or not, bearing in mind the frank way in which the claim is based, the rules of public policy operate to disentitle the plaintiff from recovering against the defendant. I have been referred to the case of R v The National Insurance Commissioner ex parte Connor [1986] 1 QB; particularly the part of the judgment I am concerned with is at page 773, the judgment given by the then learned Lord Chief Justice, Lord Lane. In that case he said that there were instances when public policy decreed that the courts would not entertain a civil action. The question for me is whether this is such a case.

That authority says, and of course I accept, that it is not every type of crime which operates so as to cause public policy to make the courts reject a claim, but I am quite confident that public policy in today's social and political climate undoubtedly requires that those who enter into a conspiracy such as has occurred here should not be allowed to enforce restitution of their property when the conspiracy fails or the conspirators fall out.

Accordingly, I do find that the rules of public policy operate in this case and the court declines to entertain the plaintiffs' claim."

"Neither at law nor in equity will the court enforce an illegal contract which has been partially, but not fully, performed. However, it does not follow that all acts done under a partially performed contract are of no effect. In particular it is now clearly established that at law (as opposed to in equity), property in goods or land can pass under, or pursuant to, such a contract. If so, the rights of the owner of the legal title thereby acquired will be enforced, provided that the plaintiff can establish such title without pleading or leading evidence of the illegality. It is said that the property lies where it falls, even though legal title to the property was acquired as a result of the property passing under the illegal contract itself. I will first consider the modern authorities laying down the circumstances under which a legal proprietary interest acquired under an illegal transaction will be enforced by the courts. I will then consider whether the courts adopt a different attitude to equitable proprietary interests so acquired."

"In my judgment, to draw. . . distinctions between property rights enforceable at law and those which require the intervention of equity would be surprising. More than 100 years has elapsed since the administration of law and equity became fused. The reality of the matter is that, in 1993, English law has one single law of property made up of legal and equitable interests. Although for historical reasons legal estates and equitable estates have differing incidents, the person owning either type of estate has a right of property, a right in rem not merely a right in personam. If the law is that a party is entitled to enforce a property right acquired under an illegal transaction, in my judgment the same rule ought to apply to any property right so acquired, whether such right is legal or equitable.

In the present case, Miss Milligan claims under a resulting or implied trust. The court below have found, and it is not now disputed, that apart from the question of illegality Miss Milligan would have been entitled in equity to a half share in the house. . . "

"A presumption of resulting trust also arises in equity when A transfers personalty or money to B. . . The presumption of a resulting trust is, in my view, crucial in considering the authorities. On that presumption (and on the contrary presumption of advancement) hinges the answer to the crucial question 'does a plaintiff claiming under a resulting trust have to rely on the underlying illegality?' Where the presumption of resulting trust applies, the plaintiff does not have to rely on the illegality. If he proves that the property is vested in the defendant alone but that the plaintiff provided part of the purchase money, or voluntarily transferred the property to the defendant, the plaintiff establishes his claim under a resulting trust unless either the contrary presumption of advancement displaces the presumption of resulting trust or the defendant leads evidence to rebut the presumption of resulting trust. Therefore, in cases where the presumption of advancement does not apply, a plaintiff can establish his equitable interest in the property without relying in any way on the underlying illegal transaction."

"Although the presumption of advancement does not directly arise for consideration in this case, it is important when considering the decided cases to understand its operation. On a transfer from a man to his wife, children or others to whom he stands in loco parentis, equity presumes an intention to make a gift. Therefore in such a case, unlike the case where the presumption of resulting trust applies, in order to establish any claim the plaintiff has himself to lead evidence sufficient to rebut the presumption of gift and in so doing will normally have to plead, and give evidence of, the underlying illegal purpose."

"A party to an illegality can recover by virtue of a legal or equitable property interest if, but only if, he can establish his title without relying on his own illegality. In cases where the presumption of advancement applies, the plaintiff is faced with the presumption of gift and therefore cannot claim under a resulting trust unless and until he has rebutted that presumption of gift: for those purposes the plaintiff does have to rely on the underlying illegality and therefore fails."

"The cheque was paid to the Defendant at his suggestion as he advised the Plaintiffs that receipt of that sum of money would disentitle them to receiving social security benefits."