Ketchell v Master of Education Services Pty Ltd

The appellant, Mr. Ketchell, sought to recover money paid under a franchise agreement, alleging the agreement was void due to the respondent, Master of Education Services Pty Ltd, failing to provide a disclosure document as required by the Franchising Code of Conduct. The primary judge had dismissed Mr. Ketchell's claim.

The central legal issue before the Court of Appeal was whether the respondent's contravention of clause 11 of the Franchising Code of Conduct, which mandates the provision of a disclosure document before a franchise agreement is entered into, rendered the agreement illegal and unenforceable at common law, or if the statutory scheme provided an exclusive remedy. The court also considered whether the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) and the Franchising Code of Conduct displaced the common law rule that contracts made in contravention of a statute are void.

The Court of Appeal held that the failure to provide the disclosure document did not render the franchise agreement illegal or void. The court reasoned that the Franchising Code of Conduct, enacted under the *Trade Practices Act 1974*, did not expressly or implicitly prohibit the making of a franchise agreement in the absence of a disclosure document. Instead, the Code provided specific remedies for such contraventions, including penalties and the right to terminate the agreement within a certain period. The court distinguished this situation from cases where a statute expressly or implicitly prohibits the very act of entering into a contract, thereby rendering it void at common law. The statutory scheme was intended to be the exclusive means of addressing breaches of the Code.

Consequently, the appeal was allowed, and the orders of the primary judge were set aside.