Habib v Attorney‑General (Magisterial Appeal 17/1957) – 24 September 1957

Natural resources – alluvial diamonds – agency. The Alluvial Diamond Mining Ordinance 1956 prohibits any unlicensed person from dealing in alluvial diamonds. Section 18(3) abrogates the common‑law right of a licensee to employ an agent for the sale or purchase of diamondslegal500.com. A dealer who gives his licence and diamonds to an unlicensed agent to sell commits a statutory breach; the agent’s offer to sell would be a felony.

Contract – illegality – ex turpi causa. Courts will not lend assistance to enforce a transaction founded on an illegal or immoral actlegal500.com. Where evidence reveals that a bailment of diamonds was arranged to carry out an unlawful sale, the claimant has no right of action; it is unnecessary to decide ownership or guilt. The forfeiture provisions of the Minerals Ordinance (Cap. 144) do not alter the public policy that ex turpi causa non oritur actio.

Statutes – interpretation. Statutory language is construed so far as possible in conformity with the common law and existing policy, unless the statute plainly alters itsaflii.org. General words are not interpreted to change established policy unless no sense can otherwise be madelegal500.com. Section 18(3) of the Alluvial Diamond Mining Ordinance clearly intends to alter the common‑law right to appoint an agent; however, the forfeiture provision in s.62 of the Minerals Ordinance does not displace the principle that the court will not assist a claimant relying on his own illegality.

Procedural Posture

The appellant, A.K. Habib, was a licensed dealer in alluvial diamonds under the Alluvial Diamond Mining Ordinance 1956. His brother‑in‑law Abbess Ajami, who was unlicensed, was found in possession of 1 808 pieces of rough diamonds and prosecuted for unlawful possession under the Minerals Ordinance 1946 (Cap. 144) s.61. At Ajami’s trial, Habib gave evidence that he had handed his licence and diamonds to Ajami with instructions to sell them at Kenema. Ajami was convicted and the magistrate ordered that the diamonds be returned to Habib. The Attorney‑General appealed, and the Supreme Court remitted the matter for determination of ownership. After taking fresh evidence, the magistrate found that Habib had contravened the non‑transferability terms of his licence and had aided and abetted Ajami’s offence. He ordered the diamonds forfeited to the Crown under s.62 of the Minerals Ordinance. Habib appealed to the Supreme Court.

Facts of the Case

1. Licence and transaction. The Alluvial Diamond Mining Ordinance 1956 allows the Director of Mines to grant licences to mine, deal in or export alluvial diamonds. Habib held an Alluvial Diamond Dealer’s Licence which authorised him to buy diamonds from licensed miners and sell them to licensed exporters. The licence was expressly non‑transferable and required the licensee to produce it on demand when selling diamonds.
2. Use of an unlicensed agent. In February 1957 Habib travelled with his brother‑in‑law Ajami to sell diamonds to the Diamond Corporation at Kenema. Habib subsequently returned to Freetown and left Ajami at Kenema. He gave Ajami the diamonds and the dealer’s licence with instructions to sell the stones in Kenema. Ajami was not licensed to deal in diamonds.
3. Seizure and conviction. Police officers found Ajami in possession of the diamonds. He was prosecuted for unlawful possession under s.61 of the Minerals Ordinance (Cap. 144). During the criminal trial, Habib testified that he had entrusted the diamonds and licence to Ajami for sale. Ajami was convicted. The magistrate initially ordered the diamonds to be returned to Habib.
4. Remission and rehearing. On appeal by the Attorney‑General, the Supreme Court remitted the case to the magistrate to determine ownership. The magistrate heard fresh evidence and held that Habib had violated s.12(8) of the Alluvial Diamond Mining Ordinance by handing over his licence, had failed to comply with its terms and had aided and abetted Ajami’s unlawful dealing. He directed that the diamonds be forfeited to Her Majesty under s.62.
5. Appeal to the Supreme Court. Habib appealed, arguing that the sole issue was whether he owned the diamonds and that the Ordinance did not forbid a licensed dealer from sending a servant to sell on his behalf. He contended that he had no illegal intention and that Ajami was acting merely as his agent. The Crown responded that s.18(3) prohibits any person not licensed from dealing in alluvial diamonds and that the court should not assist a claimant who solicits a felony.

Issues for Determination

1. Does s.18(3) of the Alluvial Diamond Mining Ordinance 1956 abrogate the common‑law right of a licensed dealer to employ an unlicensed agent to deal in diamonds?
2. Is the appellant barred from relief because his claim arises from an illegal transaction (ex turpi causa)?
3. Do the forfeiture provisions of s.62 of the Minerals Ordinance require the court to determine ownership in the appellant’s favour despite the illegality?

Arguments of the Parties

Appellant (Habib)

• Agency and ownership. The appellant argued that the only question was whether he owned the diamonds. He contended that the Ordinance did not expressly prohibit a licensed master from sending a servant or agent to sell diamonds on his behalf. Because he could lawfully sell the stones to the Corporation himself, he maintained that he could equally lawfully send Ajami as his agent. He claimed he did not intend any illegality.
• Construction of s.62. He relied on s.62 of the Minerals Ordinance, which provides that minerals seized in connection with an offence “shall, unless proved by some other person to be the property of that other person, be forfeited to the Crown.” Since he was the owner, the diamonds should not be forfeited.

Respondent (Attorney‑General)

• Statutory prohibition. The Crown submitted that s.18(3) of the Alluvial Diamond Mining Ordinance is absolute. It prohibits all unlicensed persons from dealing in diamonds and includes servants or agents of licensees. By handing the diamonds and the dealer’s licence to Ajami, the appellant contravened s.12(8) and solicited a felony. The common‑law right to employ an agent was abrogated by the statute.
• Illegality and public policy. The Crown relied on the principle that no court will assist a claimant whose cause of action is founded on an illegal act. Since Habib’s bailment of diamonds to an unlicensed person was illegal and its purpose felonious, the court should refuse relief. They cited cases such as Holman v Johnson and In re Mahmoud & Ispahani, where courts refused to enforce contracts prohibited by statutelegal500.comoercollective.caul.edu.au.
• Forfeiture provision. The respondent argued that s.62 must be read consistently with public policy and does not entitle an offender to recover property acquired through an illegal transaction. If restitution is to be made, it applies only where minerals are stolen or obtained by false pretences from an innocent owner.

Authorities Cited

• Statutes. Alluvial Diamond Mining Ordinance 1956 – s.12(8) (non‑transferable licence); s.18(3) (no dealing in diamonds except under and in accordance with a licence); s.24 (contravention of s.18 is a felony); s.31(2) (application of Ordinance). Minerals Ordinance 1946 – s.60 (possession of minerals by licence‑holders or their authorised employees); s.61 (offence of unlawful possession); s.62 (forfeiture of minerals seized unless proved to belong to another person).
• Cases. Holman v Johnson (1775) 1 Cowp 341 – Lord Mansfield’s dictum that no court will lend its aid to a person who founds a cause of action on an illegal or immoral actlegal500.com. Langton v Hughes (1813) 1 M & S 592 – a court will not enforce a contract intended to carry out an act prohibited by lawlegal500.com. In re Mahmoud & Ispahani [1921] 2 KB 716 – the Court of Appeal refused to enforce a contract prohibited by statute and held that the court must enforce the prohibition even where the person relying on illegality seeks to recoveroercollective.caul.edu.au. Brown Jenkinson & Co Ltd v Percy Dalton (London) Ltd [1957] 2 QB 621 – demonstration that a party who knowingly enters an unlawful agreement cannot maintain an action for indemnity. R v Morris (1867) LR 1 CCR 90 – Byles J’s dictum that statutes should be construed in conformity with the common law unless they plainly alter it. Holman v Johnson is often cited together with the equitable maxim “clean hands”.

Decision / Judgment

1. Statutory abrogation of agency. Bairamian C.J. held that s.18(3) of the Alluvial Diamond Mining Ordinance plainly abrogates the common‑law right of a person to employ an agent to buy or sell goods. The section prohibits any person from dealing in diamonds unless licensed, and “dealing in” includes offering them for sale. Because Ajami held no licence, he could not lawfully offer the diamonds for sale. The appellant’s instruction that Ajami should sell the diamonds amounted to soliciting a felony.
2. Public policy and illegality. Citing Lord Mansfield’s dictum in Holman v Johnson, the Chief Justice emphasised that courts will not lend their aid to a claimant who founds his cause of action on an illegal act. Once the court is aware that a claim arises from the transgression of a positive law, it must take the objection and refuse relief. The bailment of diamonds to Ajami was a breach of the Ordinance and its purpose was felonious; therefore the appellant had no right of action. It was unnecessary to decide whether he was guilty of a criminal offence or whether he owned the diamonds.
3. Construction of s.62. The Chief Justice rejected the argument that s.62 of the Minerals Ordinance required the court to return the diamonds to the appellant if he proved ownership. He held that s.62 should be construed consistently with the common‑law and public policy; it does not abrogate the principle that courts will not enforce an illegal transaction. Section 62 is intended to permit restitution in cases where minerals are stolen or obtained by false pretences from an innocent owner, not where the claimant himself violates the law.
4. Result. The appeal was dismissed. The court affirmed the forfeiture order. Because the claim arose from an illegal bailment, the court refused to order the return of the diamonds and found it unnecessary to determine ownership.

Key Quotations from the Judgment

Lord Mansfield’s principle of illegality.  “No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act”.

Construction in conformity with the common law.  “It is a sound rule to construe a statute in conformity with the common law rather than against it, except where or so far as the statute is plainly intended to alter the course of the common law”.

Re Mahmoud & Ispahani.  “If an act is prohibited by statute for the public benefit, the court must enforce the prohibition even though the person breaking the law relies upon his own illegality”

Brown Jenkinson principle.  It is settled law that where an act is manifestly unlawful, the doer cannot maintain an action for contribution or indemnity; Brown Jenkinson v Percy Dalton is a noted example.

Ratio Decidendi

1. Statutory prohibition supersedes common‑law agency. Section 18(3) of the Alluvial Diamond Mining Ordinance expressly prohibits dealing in alluvial diamonds by any person not licensed. In so doing, it abrogates the common‑law right of a licensee to employ an agent or servant for the sale or purchase of diamonds.
2. Illegality bars relief. A claimant cannot obtain relief where the cause of action is founded on an illegal act or on the solicitation of a felony. Courts must refuse assistance once illegality comes to light.
3. Forfeiture provisions construed with public policy. Forfeiture provisions permitting restitution to an owner do not override the public policy embodied in the principle ex turpi causa. Only innocent owners may benefit from such provisions; a claimant who participates in the illegality is barred.

Obiter Dictum

The Chief Justice observed that s.62 of the Minerals Ordinance may operate to restore minerals to their rightful owner where a convicted person obtained them by theft or false pretences. Police who catch a thief near a mining camp may return the mineral to the owner; likewise, a miner duped by a person pretending to hold a licence may recover his diamonds. Such cases fall outside ex turpi causa. The remarks underscore that the forfeiture provision has a limited restitutionary function consistent with public policy.

Final Orders / Reliefs Granted

• Appeal dismissed. The Supreme Court dismissed the appeal and confirmed the magistrate’s order that the diamonds be forfeited to the Crown.
• No determination of ownership. The court found it unnecessary to decide whether Habib owned the diamonds, as his claim was tainted by illegality.

Commentary / Practice Note

This case illustrates the interplay between statutory regulation of natural resources and general contract principles. The Supreme Court applied the ex turpi causa doctrine, refusing to aid a claimant whose cause of action rested on an illegal transaction. The decision emphasises that licensing regimes for valuable resources are strictly enforced; holders cannot delegate their rights to unlicensed persons. The court construed s.18(3) as a clear abrogation of the common‑law right to employ an agent. In doing so, it applied the interpretive presumption that statutes should be construed to preserve the common law unless the language plainly indicates otherwise. Practitioners should note that licensing conditions are considered part of public policy; breach of those conditions may bar civil relief.

The reasoning aligns with wider common‑law authorities. In Holman v Johnson, Lord Mansfield held that courts will not assist a plaintiff whose claim arises from an illegal or immoral act. In re Mahmoud & Ispahani reaffirmed that courts must enforce statutory prohibitions and cannot enforce contracts prohibited by statute. Brown Jenkinson v Percy Dalton illustrates that parties involved in an unlawful shipping document cannot seek indemnity. These cases demonstrate a consistent refusal to enforce claims tainted by illegality. The principle remains influential, though modern courts adopt a more nuanced approach, weighing proportionality and public policy factors.

The case also engages the interpretation of forfeiture provisions. Bairamian C.J. highlighted that while s.62 allows restoration of seized minerals to an innocent owner, it does not override public policy. Similar considerations arise in modern contexts, such as confiscation of assets from unlicensed mining or environmental offences. Lawyers advising clients in regulated industries should ensure strict compliance with licensing conditions and caution against delegating statutory privileges to unlicensed persons. The decision underscores that good intentions do not excuse non‑compliance; an absence of criminal intent does not defeat statutory prohibitions.

Related Case Law

• Cole v Cummings (No 2) – In a land registration context, the Sierra Leone Court of Appeal held that possessory title may prevail over a registered instrument where the registered conveyance originated from someone with no title. Livesey Luke C.J. noted that registration of an instrument does not confer title unless the vendor had authority. This case, though concerned with land rather than diamonds, similarly illustrates that statutory formalities cannot validate invalid underlying transactions.
• Seymour‑Wilson v Musa Abess – The Supreme Court emphasised that statutory declarations may establish fee‑simple title. While distinct from the illegal dealing issues here, the case shows the court’s willingness to enforce documentary formalities when untainted by illegality.
• Commissioner of Police v Fofana Bangali – A later case under the Alluvial Diamond Mining Ordinance where the court considered whether procedural irregularities in convicting an unlicensed dealer invalidated the conviction. The court affirmed the strict approach to regulation and underscored that offences involving unlicensed dealing attract forfeiture.

These cases collectively highlight the stringent approach to resource regulation and the limited tolerance for informal or illegal arrangements.

Objective (Multiple‑Choice) Questions

1. Under the Alluvial Diamond Mining Ordinance 1956, which of the following statements about dealing in alluvial diamonds is true?
   A. A licensed dealer may freely transfer his licence to another person to act on his behalf.
   B. Unlicensed persons may offer to sell diamonds provided they are acting under the direction of a licensed dealer.
   C. Dealing in diamonds includes offering to sell and is prohibited for anyone without a licence.
   D. The Ordinance permits family members of a licence holder to trade without a licence.
2. Which statutory provision explicitly abrogated the common‑law right of a licensee to employ an unlicensed agent in the sale of alluvial diamonds?
   A. Section 12(8) of the Minerals Ordinance 1946.
   B. Section 18(3) of the Alluvial Diamond Mining Ordinance 1956.
   C. Section 60 of the Minerals Ordinance 1946.
   D. Section 31(2) of the Alluvial Diamond Mining Ordinance 1956.
3. What principle did Bairamian C.J. apply to refuse Habib’s claim for the return of the diamonds?
   A. The doctrine of promissory estoppel.
   B. The equitable maxim that delay defeats equity.
   C. The principle that no court will assist a claimant whose cause of action is founded on an illegal act.
   D. The rule that registration of documents confers title.
4. Which of the following cases was cited by the court as authority for refusing to enforce a contract prohibited by statute?
   A. Brown Jenkinson v Percy Dalton.
   B. Holman v Johnson.
   C. In re Mahmoud & Ispahani.
   D. All of the above.
5. In the judgment, what was the court’s view of s.62 of the Minerals Ordinance?
   A. It automatically requires diamonds seized from an offender to be returned to the person claiming ownership.
   B. It abrogates the principle of ex turpi causa and allows offenders to recover illegally obtained minerals.
   C. It allows restitution in cases where minerals are stolen or obtained by false pretences from an innocent owner, but does not aid a claimant who breached the law.
   D. It has been repealed by the Alluvial Diamond Mining Ordinance.
6. Which of the following best describes the relationship between common‑law agency principles and s.18(3) of the Alluvial Diamond Mining Ordinance?
   A. The common‑law right to employ an agent completely overrides statutory provisions.
   B. Statutory provisions must be interpreted to conform to common‑law principles even if the statute clearly changes them.
   C. Where statutory language is clear, it may abrogate common‑law agency rights; s.18(3) plainly did so.
   D. Statutory and common‑law principles are entirely unrelated.
7. Which authority provides the dictum that statutes should be construed in conformity with the common law unless the statute plainly intends to alter it?
   A. Byles J. in R v Morris.
   B. Lord Mansfield in Holman v Johnson.
   C. Scrutton L.J. in In re Mahmoud & Ispahani.
   D. Livesey Luke C.J. in Cole v Cummings (No 2).
8. Which of the following facts did the court consider most significant in rejecting Habib’s appeal?
   A. Habib’s relationship to Ajami.
   B. The number of diamonds seized.
   C. Habib’s admission that he gave his licence and diamonds to an unlicensed person to sell.
   D. The initial magistrate’s order returning the diamonds to Habib.
9. According to the decision, what is the purpose of the forfeiture provision under s.62 of the Minerals Ordinance?
   A. To punish licensees who contravene any provision of the mining laws.
   B. To allow the state to seize all minerals found in the possession of any convicted person.
   C. To provide for the restoration of minerals to their rightful owners when taken through theft or fraud, but not to assist persons who have committed an illegal transaction.
   D. To confiscate minerals permanently regardless of circumstances.
10. How did the court treat the appellant’s claim that he had no illegal intention in sending Ajami to sell the diamonds?
    A. It found that lack of intent excuses statutory violations.
    B. It held that good faith is a complete defence to statutory contraventions.
    C. It held that intent is irrelevant because the statute imposes an absolute prohibition and the transaction was illegal regardless of motive.
    D. It reserved the question for a future case.

Answers to Objective Questions

1. C  2. B  3. C  4. D  5. C  6. C  7. A  8. C  9. C  10. C

Essay Questions and Model Answers

Question 1

Discuss the doctrine of ex turpi causa non oritur actio and analyse how it was applied in Habib v Attorney‑General. In your answer, refer to at least two authorities cited in the judgment.

Model Answer

The Latin maxim ex turpi causa non oritur actio translates to “no action arises from a dishonourable cause.” It encapsulates the common‑law principle that a court will not assist a claimant whose cause of action is founded on an illegal or immoral act. In Holman v Johnson Lord Mansfield observed that “no court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act”. This principle was reaffirmed in In re Mahmoud & Ispahani, where the Court of Appeal refused to enforce a contract prohibited by statute, holding that the court must enforce the statutory prohibition even when the person breaking the law seeks relief.

In Habib v Attorney‑General, the Supreme Court applied this doctrine to refuse Habib’s claim for the return of diamonds. Habib’s cause of action rested on an illegal bailment: he had handed his diamonds and dealer’s licence to his unlicensed brother‑in‑law Ajami with instructions to sell them. Section 18(3) of the Alluvial Diamond Mining Ordinance expressly prohibited any person from dealing in diamonds unless licensed. By appointing Ajami, Habib solicited a felony. Bairamian C.J. held that the court, once aware of this illegality, was bound to take the objection and refuse relief. The court drew on Holman v Johnson and In re Mahmoud, demonstrating that the policy is not to protect the defendant but to prevent the court from aiding a plaintiff whose case arises from illegal conduct. The decision thus illustrates a strict application of ex turpi causa in the context of resource licensing.

Question 2

Explain how Bairamian C.J. reconciled the forfeiture provision in s.62 of the Minerals Ordinance with the public policy against enforcing illegal transactions. What examples did he offer of situations where s.62 might permit restitution?

Model Answer

Section 62 of the Minerals Ordinance provides that minerals seized in connection with an offence shall be forfeited to the Crown “unless proved by some other person to be the property of that other person.” Habib argued that, since he owned the diamonds, the court must return them. Bairamian C.J. rejected this argument, reasoning that s.62 must be construed in line with public policy and common‑law principles. He noted that general words should not be interpreted to alter existing policy unless the statute plainly intends to do so. The forfeiture provision does not override ex turpi causa and cannot be invoked by a claimant whose claim arises from an illegal transaction.

The Chief Justice gave examples to show when s.62 may legitimately operate. If the police catch a thief leaving a mining camp with stolen minerals, the rightful owner may prove his property and recover the mineral. Similarly, if a person posing as a dealer induces a miner to sell diamonds on credit and is later caught, the miner should be able to reclaim the diamonds. In both situations, the claimant is innocent and did not participate in any illegal dealings. By contrast, Habib had deliberately entrusted the diamonds to an unlicensed person in contravention of the Ordinance. Therefore he was barred from relying on s.62.

Question 3

Analyse the court’s approach to statutory interpretation in Habib v Attorney‑General. How does the judgment apply the presumption that statutes do not alter the common law unless clearly expressed? Provide examples from the case and related authorities.

Model Answer

The presumption that statutes should be construed in conformity with the common law unless clearly intended to alter it is a well‑established interpretive principle. Byles J. articulated this rule in R v Morris: statutes are to be construed consistent with the common law unless the language shows a plain intention to change it. In Habib v Attorney‑General, Bairamian C.J. invoked this presumption to analyse two statutory provisions.

First, the court examined s.18(3) of the Alluvial Diamond Mining Ordinance. The language of the section prohibits “any person” from dealing in alluvial diamonds unless licensed. The Chief Justice held that this provision plainly intended to alter the common‑law right of a principal to employ an agent. Therefore, the presumption did not apply; the statute abrogated the agency right.

Second, the court considered s.62 of the Minerals Ordinance, which allows forfeited minerals to be restored to the owner. Here, the language did not plainly indicate an intention to abrogate public policy against enforcing illegal contracts. The Chief Justice applied the presumption and concluded that s.62 should be read consistently with ex turpi causa. He explained that the section’s general words should not be construed to alter the existing policy of the law unless no sense can be made of them otherwise. As a result, s.62 was interpreted narrowly to allow restitution only to innocent owners, not to those who have contravened the law.

This balanced approach demonstrates that courts will preserve common‑law doctrines unless the legislature clearly directs otherwise. It also illustrates the importance of reading statutes holistically and in light of established policy.

Question 4

Consider the significance of licensing conditions in regulatory statutes. Why did the court consider the non‑transferability of Habib’s dealer’s licence essential, and how did this affect his ability to rely on common‑law principles?

Model Answer

Regulatory statutes often attach conditions to licences to ensure that valuable or hazardous activities are conducted only by qualified persons. In the context of diamond mining in 1950s Sierra Leone, the Alluvial Diamond Mining Ordinance sought to control the trade of alluvial diamonds and prevent illicit dealing. Habib’s licence stated that it was non‑transferable and authorised him personally to buy from licensed miners and sell to licensed exporters. Section 19(3) of the Ordinance required a licensed dealer to produce his licence when selling diamonds.

The non‑transferability condition meant that Habib could not delegate his licence to another person. When he gave the licence and diamonds to Ajami, he violated this condition. This breach was central to the court’s reasoning: it demonstrated that Habib’s conduct was not an innocent oversight but a direct contravention of the statutory scheme. Because the statute expressly prohibited dealing by unlicensed persons, the court held that the common‑law right to employ an agent was abrogated. Habib therefore could not rely on common‑law agency principles to justify his actions. The case underscores that licensing conditions are more than formalities; they are integral to the regulatory framework and must be strictly observed. Non‑compliance may not only expose a licensee to criminal liability but also bar civil claims arising from the contravention.

Question 5

Identify and discuss two practical lessons that lawyers and resource companies should draw from Habib v Attorney‑General concerning the delegation of licensed activities and the enforcement of contracts.

Model Answer

First, licensed rights are personal and non‑delegable unless the statute provides otherwise. In Habib v Attorney‑General the court held that the Alluvial Diamond Mining Ordinance’s prohibition on unlicensed dealing abrogated the common‑law right to employ an agent. This means that licence holders must strictly comply with licensing conditions and cannot delegate their authority to unlicensed persons. Resource companies should establish clear compliance protocols to ensure that employees or contractors hold appropriate licences before engaging in regulated activities.

Second, contracts or transactions that contravene statutory prohibitions are unenforceable. The court’s application of the ex turpi causa doctrine demonstrates that parties cannot rely on illegal arrangements to claim civil remedies. Even if the parties act in good faith or consider the arrangement commercially reasonable, the court will not assist if the transaction is illegal. Lawyers should therefore ensure that contracts involving regulated commodities conform strictly to statutory requirements. Where a transaction might violate a statute, parties should seek legal advice or refrain from proceeding, as courts may refuse to enforce such contracts and may order forfeiture of the property involved.

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