Creative Academy Group Pty Ltd v White Pointer Investments Pty Ltd

Creative Academy Group Pty Ltd (the appellant) appealed from a judgment of Rees J in favour of White Pointer Investments Pty Ltd (the respondent). The dispute concerned the recovery of monies paid by the respondent to the appellant under a contract for the sale of a business. The respondent sought to recover these monies on the basis that the appellant, an unlicensed agent, had acted in breach of relevant legislation in New South Wales and the Australian Capital Territory.

The primary legal issues before the Court of Appeal were whether the respondent was entitled to restitution of the monies paid, notwithstanding the existence of a contract, and whether the appellant's promise to perform certain actions constituted valid consideration for a new promise made by the respondent. Specifically, the court had to determine if the appellant's actions were in breach of the *Property and Stock Agents Act 2002* (NSW) and the *Agents Act 2003* (ACT), and if such a breach rendered the contract illegal or unenforceable, thereby entitling the respondent to recover the payments. The court also considered whether the respondent's payments were made under a mistake of fact or law, and whether the appellant's purported compromise of a disputed claim provided sufficient consideration for the respondent's payments.

The Court of Appeal found that the appellant's conduct in inducing the respondent to enter into the contract was in breach of the licensing requirements under the *Property and Stock Agents Act 2002* (NSW). However, the court held that the legislation did not expressly preclude recovery of monies paid under such a contract, nor did it provide a specific mechanism for recovery. Applying principles of restitution, the court determined that it would be incongruent with public policy to allow an unlicensed agent to retain monies paid in breach of statutory obligations. The court also considered the doctrine of consideration, finding that the appellant's promise to perform actions it was already contractually bound to do did not constitute good consideration for the respondent's subsequent promise. The court concluded that the respondent was entitled to restitution of the monies paid.

The Court of Appeal allowed the appeal in part, setting aside the original judgment and ordering judgment against the appellant in the amount of $567,250, plus interest. The appeal was otherwise dismissed, and the appellants were ordered to pay 75% of the respondent's costs of the appeal.