NAYAR V DENTON WILDE SAPTE

[2009] EWHC 3218 (QB), Queen's Bench Division, Mr Justice Hamblen, 16 December 2009

Illegality - Payment made to solicitor employed by defendants to obtain a contract with a third party - Payment amounting to a bribe - Contract did not materialise - Action for recovery of payment - Whether defendants vicariously liable for acts of solicitor - Personal liability of solicitor - Whether claims barred by illegality - Ex turpi causa

The claimants, travel agents, alleged that they had paid £383,259 to a solicitor employed by the defendants, by way of introduction to Air India for appointment as its UK Global Sales Agent. The agency was not awarded, and the deposit was not repaid. The claimants asserted that the solicitor had assumed a duty of care and had given negligent advice, and they sought to recover the deposit and wasted costs from the defendants on the basis of their vicarious liability. The court rejected the claims. (1) The claim was barred on the ground of illegality. Illegality barred a claim if it could not be advanced without relying on the illegality, but illegality would also be a defence if the claimant sought to make a profit from his own wrongdoing and there was a causal link between the illegality and the claim. In the present case the payment was a bribe and there was sufficient connection between the bribery and the claim to lead to the claim being refused on ex turpi causa grounds. (2) The defendants were not vicariously liable for the solicitor. Her acts were outside her actual and ostensible authority. Her role was one of marketing and business development, the claimants were not clients of the defendants and her conduct was for her own personal reward. (3) The solicitor would, but for the ex turpi causa defence, have been liable to the claimants for breach of duty, subject to contributory negligence.