JUDGMENT

Lord Denning:

The plaintiff Sardara Ali is a lorry driver living atNo. 132 Lorong Panjang, Malacca. The defendant Sajan Singh is a haulier living at Bukit Asahan Estate, Malacca. The two of them entered into an illegal transaction about a lorry. They broke the Regulations which governed the transfer and use of motor vehicles. The question is what are their rights consequent on this illegality.

The Regulations in question were made soon after the war by the Commissioner for Road Transport under the powers conferred on him by the Road Transport Proclamation dated 6 October 1945 and they were affirmed and continued afterwards by the Road Transport Amendment) Ordinance, 1949. They fell into two groups.

(i) The Regulations which required vehicles to be registered with the Registrar of Motor Vehicles: under these Regulations any person who had a motor vehicle had to register it and give particulars of his title to it. And it was provided that no person should "sell, exchange, part with the possession of, purchase, acquire or take possession of any motor vehicle without a permit in writing from the Registrar." See s. 2 of the Registration of Motor Vehicles Regulations dated 10 October 1945.

(ii) The Regulations which controlled the use of vehicles for the carriage of goods. Under these Regulations it was provided that no person should "use a goods vehicle or cause suffer or permit a goods vehicle to be used for the carriage of goods" unless it was an authorised vehicle, that is to say, unless there was a haulage permit authorising it to be so used. The Regulations said that a vehicle "shall not be deemed to be an authorised vehicle unless

it is used by the holder of a permit in accordance with the conditions of such permit." See s. 3 of the Motor Vehicles Commercial Use (Amendment) Regulations 1948.

For some years after the war it was very difficult for a newcomer to get a haulage permit. The policy of the Road Transport Department at that time was to grant haulage permits only to those persons to whom they had been granted before the war.

Their Lordships can now turn to the facts of the case. The plaintiff Sardara Ali is a lorry driver. In 1948 he wanted to acquire a lorry and use it to carry goods on his own account. But he had no chance of getting a haulage permit as he had never had one before the war. The defendant Sajan Singh was a haulier who had apparently had a haulage permit previously and had every chance of getting one. So they came to an arrangement whereby the defendant Sajan Singh was to acquire a second-hand lorry and to register it in his own name and to get a haulage permit for it in his own name, but all the time it was intended that it should belong to the plaintiff Sardara Ali and be used by him on his own account. The transaction was carried out in this way: In December 1948, the British Military Disposals Board were offering six second hand motor lorries for sale. The defendant Sajan Singh bought them in his own name but the plaintiff Sardara Ali paid $1,500 towards the cost on the understanding that one of them should belong to him. This vehicle was a Dodge lorry numbered M 2207. It was registered in the name of the defendant Sajan Singh and the haulage permit was issued in his name. On 4 August 1950 the plaintiff Sardara Ali with a friend Nihal Singh paid another $3,500 and the defendant Sajan Singh gave the plaintiff Sardara Ali a document in the Punjabi language which, being translated, was as follows:

I, Sajan Singh (Malacca) have sold a Dodge lorry No M 2207 to Nihal Singh and Sardara Ali jointly for $3,500. Both of them can sell this lorry but cannot sell the haulage permit. The haulage permit is to be returned to Sajan Singh. If anyone asks for the lorry after my death he cannot get it. Even if (anyone) takes it by force then (he or she) must pay $3,500. If there is anything concerning the lorry then Nihal Singh and Sardara Ali can represent. Sajan Singh.

In 1953 Nihal Singh sold his sh