Where evidence of illegality was before the court, but was not relied on in the pleaded defence, it was incumbent on the court only to find illegality established if it was satisfied that all the relevant facts were before it so that could clearly be seen whether the contract had an illegal object.Claimants' ('P') appeal from the decision of HH Judge Benson on 20 November 2002 to dismiss their claim against the defendant ('M') on the grounds that it had been brought pursuant to a contract tainted with illegality. P had sought a grant from the local council for the construction of ground floor accommodation suitable for wheel chair access on the basis of an estimate and contract price supplied by M. M had not relied on illegality in his defence, but had stated that the parties had agreed that if the grant was awarded, M would make certain payments to P and a third party ('S'). M believed that because P had not received payment, the property had been deliberately damaged so that proceedings could be brought for defective workmanship. At trial, P denied that there had been an arrangement to receive money from M. M did not call S as a witness, and, on the third morning of the trial, made an application to call S. The judge refused that application on the basis of lateness, and went on to hold that the contract was wholly tainted by the arrangement. On the basis of Edler v Auerbach (1950) 1 KB 359 and David Birkett v Acorn Business Machines Ltd (1999) 2 All ER (Comm) 429 P argued as follows: (i) the judge should never have taken the illegality point of his own motion; (ii) the judge should not have allowed the evidence of illegality to be adduced if it was not pleaded; (iii) the judge should not have relied on an illegal object revealed in evidence; and (iv) in a case of the present kind, where there was available evidence from witnesses which went to the heart of the illegal purpose, the court should admit it save in the rarest of circumstances.HELD: (1) This court did not regard what Sedley LJ had said in Birkett (supra) as applying any different burden of proof from the usual burden. (2) The observations made by Devlin J in Edler (supra) were made at a time when there was no exchange of witness statements. (3) In elucidation of the witness statements, the judge had heard evidence that suggested an illegal purpose. At the end of the case no point was taken as to admissibility. (4) Where an unpleaded issue of illegality came to the court's attention as a result of evidence adduced before it, it was incumbent on the court only to find illegality established if it was satisfied that all the relevant facts were before it for it to see whether the contract had an illegal object. (3) Had the judge been guided on the authorities, this court had no doubt that he would have done other than permit S to be called.Appeal allowed.For related proceedings see R v Bradford Metropolitan District Council, ex parte (1) Julie Pickering (2) Lawrence Gerald Pickering (2000)

[2003] EWCA Civ 554