About the project

The Singapore Academy of Law’s Law Reform Committee recommended reform of the law relating to relief from the unenforceability of illegal contracts and trusts. When a contract or trust is found by the court to be illegal and thus unenforceable, it is possible that the defendant may be unjustly enriched. In general, this is tolerated for policy reasons. Nonetheless, the courts have felt it necessary to minimise the occasions on which holding that a contract or trust is illegal will lead to the unjust enrichment of a defendant who is as blameworthy as the plaintiff. This has led to the development of complex rules to do real justice between the parties, despite the presence of illegality.

The Committee was of the view that courts and arbitrators exercising their proper jurisdiction should be empowered to afford relief in their discretion in respect of illegal contracts or trusts, having regard to all the circumstances and, in particular, such considerations as:

• the seriousness of the illegality involved;
• the knowledge and intention of the party seeking to enforce the contract, seeking to recover benefits conferred under it, or seeking the recognition of legal or equitable rights under it;
• whether denying the claim would deter the illegality;
• whether denying the claim would further the purpose of the rule which renders the contract illegal; and
• whether denying relief would be proportionate to the illegality involved.

Project status: Completed

• The report was published on 5 July 2002.
• The report has been cited in the following court judgments:
  • Rohag Singapore Pte Ltd v Ang Chin Beng [2005] SGDC 103 at paragraph 24, District Court.
  • Aqua Art Pte Ltd v Goodman Development (S) Pte Ltd [2011] SGCA 7, [2011] 2 Singapore Law Reports [SLR] 865 at paragraph 24, Court of Appeal.
  • Boon Lay Choo v Ting Siew May [2013] SGHC 175, [2013] 4 SLR 820 at paragraph 29, High Court; and Ting Siew May v Boon Lay Choo [2014] SGCA 28, [2014] 3 SLR 609 at paragraph 69, Court of Appeal. In the latter decision, the Court of Appeal relied on the report and the draft Illegal Transactions (Relief) Act that accompanied the report to identify general factors that courts should look at in assessing whether it is proportional to deny relief in response to an illegal contract.
  • Ochroid Trading Ltd v Chua Siok Lui (trading as VIE Import & Export) [2018] SGCA 5, [2018] 1 SLR 363 at paragraphs 37 and 38, Court of Appeal (discussing the Ting Siew May case, above).
• The report was also cited in the following works:
  • Yeo Tiong Min, “Restitution” (2002) 3 Singapore Academy of Law Annual Review of Singapore Cases [SAL Ann Rev] 345 at page 378, paragraph 19.99.
  • Andrew Phang Boon Leong, “Vitiating Factors in Contract Law – Some Key Concepts and Developments” (2005) 17 Singapore Academy of Law Journal [Sing Acad LJ] 148 at pages 231–233, paragraphs 157 and 158.
  • Tey Tsun Hang, “Reforming Illegality in Private Law” (2009) 21 Sing Acad LJ 218.
  • Andrew Phang Boon Leong, “Illegality and Public Policy” in Andrew Phang Boon Leong (general editor), The Law of Contract in Singapore (Singapore: Academy Publishing, 2012), 903 at pages 1036–1037, paragraph 13.239, footnotes 653–655.
  • Tee Ming Zee, “The Defence of Illegality Defended: Analysing Patel v Mirza in Light of Ochroid Trading Ltd v Chua Siok Lui” (2018) 1 Singapore Comparative Law Review [Sing Comp L Review] 26 at page 31, footnote 57.

Areas of law

◾ Contract law
◾ Trust law

Click on the image above to view the report

Last updated 11 June 2019