Krishna v Loustos (No 2)

In *Krishna v Loustos (No 2)*, the Supreme Court of Victoria considered an appeal concerning the restitution of money paid under a contract that was later found to be void. The appellant, Mr Krishna, sought to recover money he had paid to the respondent, Mr Loustos, under an agreement that was subsequently declared void for illegality.

The central legal issue before the Court was whether Mr Krishna was entitled to restitution of the money paid, notwithstanding the illegality of the contract. Specifically, the Court had to determine if the principle of *ex turpi causa non oritur actio* (from a dishonourable cause an action does not arise) precluded Mr Krishna from recovering the money, or if the equitable doctrine of restitution could apply to prevent unjust enrichment.

The Court reasoned that while the contract was void for illegality, the principle of *ex turpi causa* should not be applied rigidly to prevent restitution where it would lead to an unjust outcome. Applying principles of equity and unjust enrichment, the Court found that Mr Loustos had been unjustly enriched by retaining the money paid by Mr Krishna. The Court distinguished this case from situations where a party actively participates in or seeks to profit from an illegal scheme.

Consequently, the Court allowed the appeal and ordered that Mr Loustos pay the sum of $100,000 to Mr Krishna, representing the restitution of the money paid under the void contract.