clean hands

The maxim, he who comes to equity must approach the court with clean hands is commonly understood to deprive a claimant or defendant of equitable relief where some dishonesty, misrepresentation, illegality or unfairness taints the otherwise lawful conduct of a party who seeks equitable relief from a court, such as specific performance where the contract was induced by the claimant's misrepresentation. Although clear and unqualified in its intention, the rule does not apply as broadly as the maxim suggests. The conduct must relate to the relief sought by the claimant.

Clean hands

The maxim is not relevant ‘unless the depravity, the dirt in question on the hand, has an immediate and necessary relation to the equity sued for’: Moody v Cox (1917). Clean hands may relate to giving untruthful evidence to the Court, or the use of deplorable means to pursue an objective. Simply because a claimant has behaved poorly did not necessarily mean that it no longer has clean hands. There is no fixed rule of conduct required, and it must relate to the remedy sought to rely on the clean hands defence.

Case law

Lord Goff in The House of Lords reaffirmed over 200 years of case law in Tinsley v Milligan (1993), citing Lord Mansfield C.J. in Holman v. Johnson (1775) as a statement of public policy in England:

The objection, that a contract is immoral or illegal as between plaintiff and defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle of
public policy is this; ex dolo malo non oritur actio. No court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the court says he has no right to
be assisted. It is upon that ground the court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in
fault, potior est conditio defendentis.

Clean Hands: Connection between Conduct and Relief

In Fiona Trust & Holding Corporation v Yuri Privalov [2008] EWHC 1748, Mr Justice Andrew Smith said:

As to what constitutes a sufficiently close connection for the maxim to apply so as to deprive an applicant of equitable relief that he would otherwise have been granted, the test commonly cited is that of "an immediate and necessary relation to the equity sued for", which was propounded [...] in Dering v Earl of Winchelsea (1787) "If [the defendant's submission relying upon the plaintiff's misconduct] can be founded on any principle, it must be, that a man must come to a Court of Equity with clean hands; but when this is said, it does not mean a general depravity; it must have an immediate and necessary relation to the equity sued for; it must be a depravity in a legal as well as a moral sense" [...]. I confess that for my part I find it difficult to understand what precisely is meant by the stipulation that there must be a "necessary" connection between the misconduct and the equity sued for. [...] [T]he question whether the maxim should apply to deprive an applicant for relief will often arise when trickery on the part of the applicant designed to promote his case has been detected and so in the event the misconduct does not assist him to advance his case, but nevertheless, leaving aside the question of "clean hands", he would be granted equitable relief. In such circumstances it cannot be that the applicant needed to succeed in his trickery in order to obtain equitable relief. It might be that the connotation of "necessary" is that the misconduct is inherently directed towards the equitable relief sought. But what is clear from the authorities is that there must be a sufficiently immediate relationship between the misconduct and the relief.

The enquiry whether the maxim is to be applied is, of its nature, fact-sensitive, and there is a danger in making any general statements about the limits of its application. However, the authorities do, I think, justify these observations: that the maxim is directed, at least typically, to conduct that is in some way immoral and deliberate; that not all misconduct deprives an applicant of equitable relief and the misconduct may be too trivial for it to import this consequence; and the court will assess the gravity and effect of misconduct cumulatively, so that, while the elements of misconduct taken individually might be too trivial for the maxim to be applied, they might be sufficient taken together.

Accordingly, there nothing in principle preventing a fraudster obtaining equitable relief where approaches the court for relief where the fraud has been waived by the other party and no further facts renders the grant of the particular relief sought unjust.