Master Education Services Pty Limited v Ketchell [2008] HCA 38

HIGH COURT OF AUSTRALIA

GUMMOW ACJ,

KIRBY, HAYNE, CRENNAN AND KIEFEL JJ

MASTER EDUCATION SERVICES PTY LIMITED APPELLANT

AND

JEAN FLORENCE KETCHELL RESPONDENT

Master Education Services Pty Limited v Ketchell [2008] HCA 38

27 August 2008

S139/2008

ORDER

1. Appeal allowed.

2. Set aside orders 1, 2 and 3 of the orders of the New South Wales Court of Appeal made 19 July 2007, and also order 4 save insofar as it deals with costs, and in place thereof order that:

(i) there be judgment in favour of the appellant on the Statement of Liquidated Claim issued 15 August 2003, in the sum of $26,043.59 plus interest at the prescribed rate from that date;

(ii) orders 2, 3, 4 and 5 made by Malpass AsJ on 15 February 2006 be set aside; and

(iii) the appeal to the Court of Appeal otherwise be dismissed.

On appeal from the Supreme Court of New South Wales

Representation

C R C Newlinds SC with V V Bedrossian for the appellant (instructed by Meehans Solicitor Corporation)

T M Jucovic QC with S J Burchett for the respondent (instructed by McPhee Kelshaw Solicitors)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Master Education Services Pty Limited v Ketchell

Contract – Illegality – Statute not complied with – Appellant franchisor contravened cl 11(1) of Franchising Code of Conduct ("Code") in entering into franchise agreement with respondent franchisee – Section 51AD of Trade Practices Act 1974 (Cth) ("TPA") provided that applicable industry codes must not be contravened by corporations in trade or commerce – Court of Appeal of New South Wales held franchise agreement to be unenforceable due to illegality at common law arising from contravention of Code and s 51AD – Whether contravention of Code and s 51AD resulted in illegality and unenforceability of franchise agreement – Whether legislative purpose of Pt IVB of TPA could be fulfilled without franchise agreement being unenforceable in light of remedies available in Pt VI for contravention of s 51AD.