KETCHELL v MASTER OF EDUCATION SERVICES PTY LTD [2007] NSWCA 161

KETCHELL v MASTER OF EDUCATION SERVICES PTY LTD [2007] NSWCA 161

Contravention of cl 11(1)(a) and (c) of the Franchising Code of Conduct, as mandated by s 51AD of the Trade Practices Act 1974 (Cth), rendered the franchise agreement illegal and unenforceable; judicial enforcement of payments under the contract would compound that contravention, as the statutory scheme did not negate the common law rule against enforcement of contracts prohibited by statute.

Parties
Appellant: Jean Florence Ketchell; Respondent: Master Education Services Pty Ltd
Jurisdiction
Australia
Judgment Date
19 July 2007
Procedural Posture
Appeal / Judgment After Appeal From Supreme Court (common Law Division), Following Prior Proceedings in Both Local and Supreme Courts
Outcome
Appeal allowed
Legal Topics
Illegality of Contract, Enforcement of Industry Codes, Franchise Agreements, Statutory Construction
Contract Law Statutory Interpretation Trade Practices Law Illegality of Contract Enforcement of Industry Codes Franchise Agreements Statutory Construction

Case Brief

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Parties

Jean Florence Ketchell

Appellant

Master Education Services Pty Ltd

Respondent

Procedural Posture

Appeal / Judgment After Appeal From Supreme Court (common Law Division), Following Prior Proceedings in Both Local and Supreme Courts

Legal Issues

  1. 1 Whether contravention of cl 11(1)(a) and (c) of the Franchising Code of Conduct, as made mandatory by the Trade Practices Act 1974 (Cth), rendered the franchise contract unenforceable due to statutory illegality
  2. 2 Whether the common law rule against enforcing illegal contracts is negated expressly or implicitly by the Act

Ratio Decidendi

Contravention of cl 11(1)(a) and (c) of the Franchising Code of Conduct, as mandated by s 51AD of the Trade Practices Act 1974 (Cth), rendered the franchise agreement illegal and unenforceable; judicial enforcement of payments under the contract would compound that contravention, as the statutory scheme did not negate the common law rule against enforcement of contracts prohibited by statute.

Court Disposition

Appeal allowed

Orders

  • Orders of Malpass AsJ made on 15 February 2006 set aside.
  • Summons in the Common Law Division dismissed.