ParkingEye Ltd v Somerfield Stores Ltd
A party whose performance of a lawful contract involved some illegality can still enforce it if denying the claim would be disproportionate.
Facts
ParkingEye agreed with Somerfield to provide automated parking enforcement at Somerfield's supermarket car parks, earning its revenue from charges paid by motorists who overstayed. Somerfield terminated the agreement early, and ParkingEye claimed damages for its lost profits. Somerfield argued that the claim was barred by illegality, because ParkingEye had intended to send motorists letters that falsely suggested it could take legal action in its own name, which would have been the tort of deceit.
Legal principle
The Court of Appeal held that ParkingEye could recover damages. The contract itself was lawful, and the illegality occurred only in the way ParkingEye intended to perform part of it. Sir Robin Jacob and Toulson LJ held that, taking into account the nature of the illegality, which was not a central part of the contract, ParkingEye's lack of intention to break the law at the time of the contract, and the fact that it was ready to change its letters, it would be disproportionate to deny its claim. The case anticipated the policy based approach adopted in Patel v Mirza.
Related cases on illegality and restraint of trade
- Archbolds (Freightage) Ltd v S Spanglett Ltd [1961] 1 QB 374
- Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269
- Fitch v Dewes [1921] 2 AC 158
- Herbert Morris Ltd v Saxelby [1916] 1 AC 688
- Holman v Johnson (1775) 1 Cowp 341
- Les Laboratoires Servier v Apotex Inc [2014] UKSC 55, [2015] AC 430
- Re Mahmoud and Ispahani [1921] 2 KB 716
- Mason v Provident Clothing and Supply Co Ltd [1913] AC 724
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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
