Can extrinsic evidence be admitted in proof of illegal purpose?

Newfoundland and Labrador, Canada


The following excerpt is from Bursey v. Bursey, 1999 CanLII 19021 (NL CA):

One such authority is Letkeman v. Zimmerman, 1977 CanLII 196 (SCC), [1978] 1 S.C.R. 1097; 17 N.R. 564, upon which the trial judge placed reliance. The extrinsic evidence admitted in Zimmerman was a document signed by the parties to an agreement of purchase and sale of an apartment block which contained the actual purchase price of the property. That price was lower than that stipulated in a second document, also signed by the same parties, which was lodged by the purchaser with a mortgage lender in the expectation of obtaining larger mortgage financing than he anticipated would have been made available if the actual selling price had been revealed. In that case, Martland, J., on behalf of an unanimous bench, upheld a trial judge's dismissal of an action by the purchaser for specific performance of the actual contract because the transaction was tainted with illegality which the purchaser, as its architect, intended to perpetrate. In the course of his reasoning, Martland, J., made the following statement at p. 1104 which affords clear authority for admitting extrinsic evidence in proof of illegal purpose: "The fact that the documents on their face did not disclose the [purchaser's] unlawful purpose, which was disclosed by the evidence, does not improve his position. He was still in the position of seeking to enforce an illegal contract."

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