Wilkinson v Osborne

The case of Wilkinson v Osborne concerned an appeal to the High Court of Australia following a judgment by the Supreme Court of New South Wales. The dispute arose from a contract between William Boyce Wilkinson, acting as an agent for landowners, and John Percy Osborne and George Alfred Jones, who were members of the New South Wales Legislative Assembly and also carried on business as land agents. Wilkinson had agreed to pay Osborne and Jones a fee for their services in relation to a proposed purchase of land by the Crown under the Closer Settlement (Amendment) Act 1907 (NSW).

The central legal issues before the High Court were whether the agreement between Wilkinson and Osborne and Jones was void as being contrary to public policy, and consequently, whether a judgment obtained by Osborne and Jones against Wilkinson for the agreed fee could form the basis of bankruptcy proceedings against Wilkinson. The agreement involved Osborne and Jones, as members of Parliament, undertaking to exert pressure on the Government to approve the land purchase. Crucially, the purchase was subject to approval by resolutions of both Houses of Parliament, meaning the completion of the transaction, and thus the earning of the fee, could be dependent on their own votes.

The High Court, in overturning the Supreme Court's decision, held that the agreement was void as being contrary to public policy. The Court reasoned that members of Parliament owe a duty to the public to consider matters impartially, particularly when public funds are involved and parliamentary approval is required. By agreeing for a pecuniary consideration to use their influence to expedite the purchase and potentially vote on its approval, Osborne and Jones placed themselves in a position where their public duty could be compromised by their private financial interest. This conflict of interest was deemed to undermine the integrity of the legislative process and the proper administration of public funds, thereby contravening a fundamental principle of public policy. The Court emphasised that public policy is based on established principles adopted by the community, either formally by law or tacitly by its conduct, and that courts can only apply these existing principles, not create new ones.

Consequently, the High Court ordered that the bankruptcy notice founded on the judgment obtained by Osborne and Jones against Wilkinson be set aside. The Court concluded that a judgment based on an illegal contract could not be relied upon to support bankruptcy proceedings, as the underlying debt was unenforceable.