George v Greater Adelaide Land Development Co Ltd

The High Court of Australia heard an appeal from the Supreme Court of South Australia concerning a contract for the sale of land. The appellant, Charles Edgar George, had entered into a contract with the respondent, Greater Adelaide Land Development Co. Ltd., for the purchase of certain vacant allotments. George sought to avoid the contract and recover money paid under it, alleging misrepresentation, unreasonable persuasion under the Land Agents Acts, and contravention of the Town Planning and Development Act 1920 and the Real Property Act 1886. The respondent sued for the balance of the purchase money.

The primary legal issue before the High Court was the validity of the contract in light of the Town Planning and Development Act 1920. Specifically, the court had to determine whether the contract was rendered illegal and invalid by the Act's provisions, which prohibited the subdivision and sale of land except in accordance with the Act's requirements, including the deposit of a plan of subdivision and obtaining approval from the Government Town Planner. The court also considered whether the appellant was entitled to recover money paid under the contract, applying principles relating to illegal contracts and the recovery of money paid thereunder.

The High Court held that the contract was illegal and invalid because it contravened section 23 of the Town Planning and Development Act 1920. The court reasoned that the Act and its regulations imposed an obligation to obtain the Government Town Planner's approval to a plan of subdivision before any allotment could be lawfully sold. As no such approval had been obtained at the time of the contract, and compliance was not possible after the contract was made, the contract was void. The court further held that the appellant was not entitled to recover the money paid under the contract, following the principle established in *Harse v. Pearl Life Assurance Co. Ltd.*, which states that money paid in pursuance of an illegal contract cannot be recovered unless there are specific circumstances, such as fraud, duress, or a fiduciary relationship, indicating the parties were not *in pari delicto*. The court found no such circumstances present in this case.

The High Court affirmed the Supreme Court's decision regarding the Land Agents Acts and the Real Property Acts, finding no contravention in those respects. However, it reversed the Supreme Court's decision on the validity of the contract under the Town Planning and Development Act and the recoverability of money paid. Consequently, the appeal was allowed in part, with the action and counterclaim being dismissed.