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Ashmore, Benson, Pease & Co Ltd v A V Dawson Ltd [1973] 1 WLR 828

Performing a lawful contract in an illegal way renders the contract void.

Facts:

In 1967 the plaintiffs, Ashmore, Benson, Pease & Co, manufactured tube tanks. The defendants, AV Dawson, a haulage company, agreed to carry the plaintiff’s equipment by lorry. With the knowledge of the plaintiff’s transport manager, the defendants loaded their vehicle in excess of the weight permitted by the Road Traffic Act 1960, s.64(2). The vehicle toppled over during the journey, and the plaintiffs sued in negligence for £2,225 in damage caused to the equipment by the defendant’s driving. At first instance the trial judge found in favour of the plaintiffs and awarded damages. The defendants appealed.

Issues:

The defendant hauliers claimed that the contract was void for illegality. They argued that the equipment had been loaded by the plaintiff’s own servants and the load had exceeded the law with the plaintiff’s knowledge and assistance. They also claimed that the plaintiff’s transport manager had insisted the tubes be carried by lorry even though they knew this would exceed the legal weight limit. Therefore, the parties had a common design in an unlawful purpose.

Held:

The Court of Appeal reversed the trial judge’s decision. It held that the contract was void for illegality. Although the contract itself was not illegal, it had been performed in a manner that was illegal with the knowledge and agreement of the plaintiff. If a party enters into a lawful contract and it is agreed that contract is to be carried out unlawfully, that party cannot recover damages for its breach.


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