Burmic Pty Ltd v Goldview Pty Ltd
[2002] QCA 479
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- Appeal Determined (QCA)
- Burmic Pty Ltd v Goldview Pty Ltd[2002] QCA 479
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Burmic Pty Ltd v Goldview Pty Ltd[2002] QCA 479
Reported at [2003] 2 Qd R 477
Burmic Pty Ltd v Goldview Pty Ltd[2002] QCA 479
Reported at [2003] 2 Qd R 477
SUPREME COURT OF QUEENSLAND
PARTIES: | BURMIC PTY LTD ACN 054 868 549 (plaintiff/appellant) v GOLDVIEW PTY LTD ACN 009 760 838 (defendant/respondent) |
FILE NO/S: | Appeal No 309 of 2002 DC No 325 of 2001 |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | District Court at Southport |
DELIVERED ON: | 8 November 2002 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 22 October 2002 |
JUDGES: | McPherson JA, Cullinane and Homes JJ Separate reasons for judgment of each member of the Court; each concurring as to the order made |
ORDER: | Appeal dismissed with costs |
CATCHWORDS: | CONTRACTS – GENERAL PRINCIPLES – DEFENCES TO ACTION FOR BREACH – IMPOSSIBILITY OF PERFORMANCE – WHAT CAUSES FRUSTRATION – City Council began enforcing existing permitting laws for signs – whether enforcement could cause frustration CONTRACTS – GENERAL PRINCIPLES – CONSTRUCTION IMPLIED TERMS – GENERALLY – whether a term not reflecting the common intention of parties can be implied – whether satisfies tests in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council CONTRACTS – GENERAL PRINCIPLES – ILLEGAL CONTRACTS – contract to do something the statute forbids – neither party intends to comply with statute – whether contract enforceable Buckland v Massey [1985] 1 Qd R 502, considered BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, applied Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, distinguished Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215, followed Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196, mentioned T P Rich Investments Pty Ltd v Calderon [1964] NSWR 709, followed Yango Pastoral Company Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410, applied Criminal Code (Qld), s 542 Gold Coast City Council Local Laws s 7, s 8, s 53, s 59 |
COUNSEL: | J S Douglas QC, with M J Campbell, for the plaintiff/appellant A M Daubney, with D Morrow, for the defendant/respondent |
SOLICITORS: | McDonald Brown Solicitors for the plaintiff/appellant Wockner Partners for the defendant/respondent |
[1] McPHERSON JA: This is an appeal against a decision given in the District Court at Southport dismissing a claim by Burmic Pty Ltd, which is the plaintiff and in this Court the appellant, against the defendant respondent Goldview Pty Ltd for damages for breach of contract. In July 1999 Burmic was conducting a McDonalds restaurant under franchise at Burleigh Heads on the Gold Coast. Across the road at no 1916 Gold Coast Highway was a single storey shop owned by Goldview, which was an ideal site for “directional signage” advertising Burmic’s restaurant to motorists and others passing southbound along the Highway. Previously Burmic had from 1997 to 1999 hired space for advertising on the wall of a different nearby building owned by someone else, but that agreement was due to expire in late July or August 1999. It was then that Ms Julie Madin, an employee of Burmic, negotiated a contract with Goldview for an advertising sign on the roof of its building at no 1916 Gold Coast Highway, which was more readily visible to passing traffic than the wall which had previously been used for that purpose.
[2] The contract is expressed in the simplest possible terms. In form it is a letter dated 22 July 1999 on Goldview letterhead addressed for the attention of Ms Julie Madin, and headed Re: Sign at 1916 Gold Coast Highway, Miami. Its entire content is as follows:
“Rent for 104 weeks for advertising on the billboard facing the southbound traffic commencing 26.7.99 and ending on 26.07.01 at $260.00 per month = $6,240.00 total for 24 months.
The first payment of $302.75 is due 1/8/99 which includes 5 days in July.
The tenant agrees to indemnify the landlord against any damages incurred to the rooftop by their tradesperson during this period.
Please sign below confirming agreement.”
There follows a statement in the form “I, Frank Young (signature), and Don Kissell (signature) are both in agreement with these terms”. Mr Kissell’s signature is accompanied by the words “For Burmic Pty Ltd T/A McDonalds - Gold Coast Hwy, Burleigh Heads, Qld 4620.”
[3] Mr Kissell is the sole director of Burmic Pty Ltd which, in addition to the McDonalds restaurant at Burleigh Heads, operates another such outlet at Burleigh Waters. Between 1985 and 1995 he or his company owned two McDonald’s franchises in Surfers Paradise, and acquired the one at Burleigh Heads at some time after construction of the building in which it operates. Mr Young, who practised as an estate agent on the Gold Coast for some 25 years, and his wife are directors of Goldview, which has owned the building at 1916 Gold Coast Highway since 1965. It has been letting the advertising space on the northbound side of the Highway since 1973, and on the southbound side to someone other than the tenant of the building since about 1996.
[4] The roof of the building at no 1916 supported a metal frame or structure designed to support the advertising hoarding or sign. In the case of the McDonalds advertisement, the sign, consisting of a McDonald’s logo and some “directional” wording, was printed or painted across four sheets or panels of masonite, totalling in area about 16ft by 8ft and affixed to the structure. The decision in Claude Neon Ltd v Melbourne Metropolitan Board of Works (1969) 43 ALJR 69 shows that it is legally possible to lease part of the roof, parapets and walls of a building for advertising purposes, although it was an issue over which the High Court in that case was divided. In the present instance the agreement admittedly uses the word “rent”; but that would not give it the character of a lease or tenancy at common law unless it was the intention to grant a right of exclusive possession in the land: Radaich v Smith (1959) 101 CLR 209; Street v Mountford [1985] AC 809. There was plainly no such intention here, where in my opinion the agreement gave rise to no more than a licence, in return for stipulated payments, to occupy a space “for advertising on the billboard”, and for the purpose of doing so to use the supporting structure and the roof for access. Subject to any rights granted to third parties, the owner Goldview retained control of the land, the building, the roof, and the structure with the sign on it. The contrary was not submitted on appeal or in the court below.
[5] The contract therefore stands as an agreement embodying its own meagre express terms together with those additional terms, if any, that can properly be implied in it. The sign carrying the advertisement was installed on the roof at some time soon after 22 July 1999 by a firm of signwriters engaged and paid by Burmic on an invoice for $750 dated 20 August 1999. Monthly payments of rental were duly made by Burmic to Goldview under the agreement for the first six months or so. Then on 10 December 1999 the sign and a part of the supporting structure were damaged by a storm, which detached one of the panels. This had the effect of rendering the sign or its message in some respects incomplete and also of creating a risk that the remaining damaged parts of the sign might cause injury or damage to other persons or property. On or about 14 January 2000, Goldview removed the sign from the roof, as well as the frame or supporting structure on which it was mounted. Neither the sign nor the structure was ever reinstated.
[6] There can, to my mind, be little doubt that in removing the sign and structure from the roof, Goldview acted in breach of the contract. The primary judge construed the agreement as meaning that, as Burmic alleged in its statement of claim, Goldview would make the supporting structure available to Burmic at all times during the currency of the contract from 26 July 1999 to 26 July 2001. This interpretation is plainly correct and was not challenged on appeal. It is of course true that, in the capacity of owner and perhaps also the occupier of the building or at least of the roof, Goldview was at some risk of liability in either nuisance or negligence to persons or property that might be injured by further falling parts of the sign. One would, however, have expected Goldview first to have communicated with Burmic advising its intention to remove the sign if it was not repaired by Burmic within a specified reasonable time. It may be that, if Burmic had not then acted to repair the sign, Goldview would have been justified after proper notice in that behalf in terminating the contract. But it is difficult to see that it was entitled unilaterally and peremptorily to remove not only the sign but the supporting structure, so as to render the space unavailable for advertising, or in doing so without reference to Burmic. The consequence is that, by its conduct on 14 January 2001, Goldview repudiated the contract. Burmic was thereupon entitled to accept that repudiation and sue for damages for breach of contract, which is what it did in these proceedings.
[7] This, however, represents only a part of the story of this ill-fated sign and the agreement that gave rise to it. When the contract was made, and at all material times after it, the matter of advertising in the local government area of the Gold Coast City Council was regulated by Local Law No 7 (Control of Devices). So far as material for present purposes, s 8(1) of that Law provides under the heading Unlawful exhibition of advertisements that:
“(1)An advertisement must not be exhibited in the area unless
(a)the advertisement is a permitted advertisement; or
(b)the exhibition of the advertisement is approved by the local government.
(2)If an advertisement is exhibited in contravention of subsection (1) the advertiser is guilty of an offence.”
“Advertisement” is defined in s 3 to mean “an advertisement or sign that is visible from a road .. and includes a structure .. to which it is attached, or on which it is exhibited”. Both the supporting structure on the roof of the building no 1916 and the panels attached to it exhibiting the advertisement therefore satisfied this definition.
[8] A critical part of the Local Law is the definition in s 3 of “advertiser”. It is defined to mean the person (a) by whom an advertisement is exhibited, or (b) whose business is advertised; and it also expressly includes a person who has the power to manage or control the place in which the advertisement is exhibited. Burmic is comprehended by both (a) and (b) of the definition, while Goldview is included as the person having power to control the premises or the roof at no 1916. It follows that if, without obtaining the prior approval of the Gold Coast City Council, the McDonald’s advertisement was exhibited on the roof of no 1916, each of Burmic and Goldview was in terms of s 8(2) of Local Law 7 guilty of the offence under s 8(1)(b) of exhibiting it.
[9] In fact, Council approval for the exhibition of the advertisement was never obtained either before the sign was installed or at any time afterwards. There is in s 9(1) of Local Law 7 provision for application for the local government’s approval of the “proposed exhibition” of the advertisement. The application must set out: (a) full details of the advertisement, including its contents, design, dimensions and construction, as well as (b) full details of when, where and how it is “to be” exhibited. The language used suggests that, as would be expected, the application and approval must precede exhibition of the sign if commission of the offence under s 8(2) is to be avoided. Section 9(3) adds that if an advertisement is to be exhibited in a place not controlled by the advertiser, the application must be accompanied by the written consent of the owner and occupier of the place. In this, there may be a degree of overlapping with the definition of “advertiser” in s 3; but s 9(3) is primarily intended to ensure that the written consent of the owner is obtained and furnished with the application whether or not he, she or it is also an “advertiser” as defined. The form of application provides a space in which the owner’s consent is to be incorporated.
[10] Here, as I have said, the approval was never obtained. On 9 September, 1999 the Council issued a notice addressed to Goldview reciting that an advertising device had been erected at 1916 Gold Coast Highway in contravention of Local Law 7 and requiring that it be taken down and removed within 14 days. Another letter was sent in October warning that legal proceedings would follow, to which Goldview responded on 8 November 1999. Further correspondence ensued including a letter from the Council’s solicitors advising that, unless approval was applied for, prosecution would ensue.
[11] On 21 December 1999, which was after the storm damage had occurred, Goldview forwarded an application in the approved form signed by it in the capacity of owner and occupier of the land and of the sign furnishing details required by s 9 of Local Law 7 together with the appropriate fee. The sign and the structure were, as we have seen, later removed by Goldview on or about 14 January 2000. Mr Young said this was done in the hope of inducing in the Council a more favourable attitude to the application for approval; if so, it was to no avail. By letter dated 1 February 2000, the Council notified Goldview that the application had been refused as not conforming to Council policy, and that the “advertising device” should be removed within seven days. In the meantime Burmic had on 17 January 2000 written to Goldview demanding compensation for removal of the sign and non-performance of the contract.
[12] At the trial the learned trial judge acceded to a submission by Goldview that the contract had been frustrated by the happening of a supervening event on about 9 September 1999 when the Council notice required the sign to be removed. I am, however, unable to accept this conclusion. The event in question was said to be an unexpected change of policy on the part of the Council of enforcing the terms of Local Law 7 by requiring the removal of advertisements that had not been approved. The evidence bearing on this point at the trial consisted of affirmative answers by Mr Kissell to leading questions put in cross‑examination to the effect that, before 1999, the Council was “fairly nonchalant” about approvals for signs until the latter half of 1999 , when there was “a big crackdown” on approvals for signs; together with his affirmative answer to the further leading question “and they changed their policy and started to enforce the by-law in about the latter part of 1999. Do you agree with that?”. In my opinion, this is not a proper way of proving either that there was such a policy of the Council, or that in 1999 there was a change in it. At most it could amount to some evidence based, for what it was worth, on observation that in practice the provisions of Local Law 7 had not been strictly or universally enforced until some time in the second half of 1999. If there ever was any such “policy”, and it changed, they were matters that should have been proved by calling someone from the Council who could attest to those facts directly rather than by inviting inferences from a witness about his observations of what, at best, was no more than equivocal conduct on the part of the Council.
[13] Quite apart from this, however, I do not regard the case as one in which the contract can be regarded as having been discharged by frustration by the so-called change of Council policy. Reliance was placed on Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; but it was a very different case, in which performance of a contract for underground tunnelling that called for the work to be carried on for 24 hours a day seven days a week was intercepted by an injunction which, because of the noise and vibration inflicted on local residents, prohibited and prevented work from being done between 10 pm and 6 am daily, or at all on Sundays. The High Court by a majority held that the effect of the supervening injunction was to render further performance of the contract radically different from what had been contemplated at the time it was made, and so to frustrate it. By contrast, here the exhibition of the advertisement without Council permission had at all times been prohibited both before and after 22 July 1999, when the contract was entered into; and 9 September 1999, when the first Council notice to remove it was given. If, as was submitted, the giving of that notice frustrated the contract, it was discharged by frustration on receipt of the notice “forthwith, without more and automatically”, as Lord Sumner said in Hirji Mulji v Cheong Yue SS Co [1926] 497, 505, and irrespective of what happened thereafter: Court Line v Dant & Russell Inc [1939] 3 All ER 314. In fact, far from treating the contract here as discharged on receipt of the Council notice on 9 September 1999, both parties continued to perform their obligations under it until Goldview removed the sign on 14 January 2000. The most that can be said is that, at the time the agreement was made, the parties intended the contract to continue at least until, acting under Local Law 7, the Council succeeded in enforcing the removal of the advertisement, which did not occur until at earliest 14 January 2000.
[14] The legal issues in these proceedings are, however, not capable of being considered or determined in isolation from the effect of s 8 of Local Law 7 and its impact on the enforceability of the contract. The illegality issue, as it was described, was raised by Goldview in its defence to the claim at the trial; but his Honour did not consider it relevant to decide that question. It was raised again on the appeal, and in my opinion it is necessary on this occasion to determine it.
[15] It will be recalled that the agreement embodied in the contract dated 22 July 1999 was that rent would be paid monthly at the specified rate for two years “for advertising on the billboard” on the roof at no 1916. Section 8(1) of the Local Law prohibited the exhibition of the advertisement (which included the supporting frame or structure) without the approval of the Council, and s 8(2) made it an offence for each of Burmic and Goldview to contravene that prohibition. It would, of course, have been possible for the parties after making their contract to avoid committing the offence by refraining from exhibiting the advertisement until Council approval was in fact obtained. That they did not do. The first question, then, is whether the effect of the Local Law was such as to render their contract illegal and unenforceable at the time it was formed. The problem might perhaps have been circumvented if the parties had postponed the operation of their agreement by making it subject to an express condition that Council approval first be obtained; but nothing of that kind appears in the letter of 22 July 1999. It is not possible to imply it because the agreement provides for the first payment to be made on 1 August 1999, “which includes 5 days in July”, which would not have allowed a reasonable time for the approval to be sought and obtained from the Council before the contract began to operate.
[16] In the Court below, the learned judge rejected a submission from Burmic that a term should be implied that Goldview would obtain any Council approval for the erection of the structure and the advertising signs. I respectfully agree with his Honour’s conclusion that the implication contended for fails to satisfy the tests laid down in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, PC. It would in any event be inconsistent with the common intention of the parties, which was that the contract should begin its operation from 26 July before the necessary approval of the Council could have been obtained. No attempt was made, either before or after the agreement was entered into, to communicate to or supply Goldview with any of the “full details” of the sign that are required by s 9(1) of the Local Law to be included in the application for Council approval of the advertisement “to be” exhibited. Indeed, the evidence, so far as it goes, suggests that the form and directional wording on the sign were not settled by Burmic until or shortly before instructions were given by it to the signwriters to prepare and install the sign.
[17] In Yango Pastoral Company v First Chicago Australia Ltd (1978) 139 CLR 410, 413, Gibbs ACJ, in a passage in his reasons which was adopted by Dawson and Toohey JJ in Fitzgerald v F J Leonhard Pty Ltd (1997) 180 CLR 215, 218-218, said that there are four main ways in which enforceability of a contract may be affected by a statutory provision which renders particular conduct unlawful:
“(1)The contract may be to do something which the statute forbids; (2) The contract may be one which the statute expressly or impliedly prohibits; (3) The contract, although lawful on its face may be made in order to effect a purpose which the statute renders unlawful; or (4) The contract, although lawful according to its own terms, may be performed in a manner which the statute prohibits.”
Although not in terms repeating this statement in their joint reasons in Fitzgerald v Leonhards, McHugh and Gummow JJ adopted a similar approach, saying (189 CLR 215, 229) that a court should not refuse to enforce contractual rights arising under a contract “associated with”, or in furtherance of, an illegal purpose:
“where the contract was not made in breach of a statutory prohibition upon its formation or upon the doing of a particular act essential to the performance of the contract or otherwise making unlawful the manner in which the contract is performed.”
[18] Here the contract is not within the second of the categories specified in the reasons of Gibbs ACJ in Yango v First Chicago as being one that is expressly or impliedly prohibited by statute. Local Law 7 does not, as statutes sometimes do, forbid the formation of a contract to advertise by prohibiting or even penalising the making of such a contract by proscribing some element in its formation, such as “agreeing” or “offering”, “selling”, or “undertaking” as, for example, did the statutory prohibition considered in Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196. In Buckland v Massey [1985] 1 Qd R 502, the Full Court held that a statutory prohibition of “disposal” of a motor vehicle rendered a contract for sale illegal as formed. Such an interpretation might, with respect, be open to the criticism that a prohibition on “disposal” affected the performance rather than the making of the contract; but there the agreement was for the sale of specific goods in a deliverable state in which the property would have passed (and so have been “disposed of”) on the formation of the contract. It was technically therefore a “sale”, and not merely an agreement to sell under which ownership would pass only on delivery of the vehicle in the course of performance of the contract. The contrast here was not one the formation of which was prohibited. The Local Law did not prohibit the making of a contract to advertise. The next question is whether the contract was one that fell within the first of the categories enumerated by Sir Harry Gibbs; that is, as being a contract to do something prohibited by statute. In considering that question, it is necessary to identify the act that the parties agreed to do, and then to see if it was prohibited by statute. The act that s 8(1)(b) of Local Law 7 prohibits is not the exhibition of an advertisement as such, but its exhibition without its being approved by the Council. A simple agreement to exhibit an advertisement is not prohibited by s 8(1)(b). Section 8(1)(b) is contravened, and the offence created by s 8(2) is committed, only if the advertisement is exhibited without Council approval or, as I see it, without prior Council approval. The question then is whether the parties agreed to exhibit the sign without first obtaining approval. If so, it was a contract to do an act prohibited by statute.
[19] The question is one on which the trial judge made no specific finding because he did not consider it necessary to determine the illegality issue. In this Court, it now falls to be decided as a matter of inference from facts proved or facts not contradicted in the evidence adduced at trial. Plainly Mr Kissell of Burmic was aware of the prohibition. He agreed that, for the advertising at his other McDonald outlets on the Gold Coast, applications were made to the Council for their approval or renewal for which he said he paid an annual fee. His Honour was prepared to find that Mr Young of Goldview must, by reason of his 25 years as an estate agent on the Coast, have known that there was a requirement for Council approval. Both witnesses gave evidence for thinking that the terms of the prohibition in the Local Law might have been different from what they really are or were in July 1999; but that is not relevant. Neither of them is entitled to rely on his ignorance of the terms of Local Law 7 or s 8(1)(b) so as to entitle them to enforce an illegal contract, if that is what it is. The question to be determined is whether, given the existence of that alleged state of ignorance of the law, they agreed to exhibit an advertisement without first obtaining Council approval.
[20] As to that, I consider that there can be no real doubt. At the time they entered into their contract dated 22 July 1999, they had no intention of applying for approval. So much is demonstrated by their protestations in evidence that they did not know that approval was needed in the case of this advertisement or the supporting structure on the roof. How can either of them deny that they intended to exhibit the advertisement without Council approval if they were ignorant of the requirement under Local Law 7 that Council approval should first be obtained? Of course, Mr Kissell on behalf of Burmic was disposed to say that it was Goldview’s contractual duty to obtain that approval. He might perhaps have added, although he did not, that he had assumed as a fact that Goldview had done so, or that it would do so before the advertisement was exhibited. The obstacle to any such assertion is, however, that, as I have said, he made no attempt at any time before or even after the contract was made to supply Goldview with “full details” of the advertisement required by s 9(1) of the Local Law for Goldview to make an application for approval to the Council. Equally, Goldview knew that it had not been asked to provide its written consent under s 9(3) as owner or occupier to the exhibition of the advertisement. Each party therefore knew before the contract was made that the other was not intending to apply for Council approval prior to exhibiting the advertisement and each of them knew that his own company was not intending to do so itself.
[21] In his closing submissions at the trial Mr Morrow of counsel for Goldview summed the matter up as follows:
“It’s clear that when we look at the negotiation for the contract neither of the parties had an intention to seek the approval of the Gold Coast City Council prior to the placing of the advertisement by the plaintiff … so, since neither of the parties intended to seek approval for the sign, there was only one way that that contract could have been performed, by the placing of an advertisement by McDonalds on the sign without McDonald’s having sought or obtained the approval of the City Council.”
I take it that by McDonalds in this context Mr Morrow was referring to Burmic. Subject to that, what he said is correct as well as its constituting an admission on behalf of his client Goldview. All that it is necessary to add is that, for reasons I have given, both parties were also aware that the other party was not intending to apply for Council approval. For various reasons, they believed or said they believed, incorrectly as it turned out, that Local Law 7 did not require them to do so.
[22] For these reasons, I am satisfied that the agreement that was made by the parties on 22 July 1999 was a contract to exhibit the advertisement without the prior approval of the Council, which was, within the first category described by Gibbs ACJ in Yango Pastoral Company v First Chicago Australia Ltd, a contract to do an act prohibited by statute. In the passage in his submission at trial, Mr Morrow of counsel described it as a contract to be performed in an illegal way; but that is simply another way of bringing it within the first category mentioned by Sir Harry Gibbs. If it was intended to perform the agreement by exhibiting the sign without first having obtained Council approval, then it was a contract to do something that was prohibited by statute and was in law an offence. It is not necessary to consider either of the other two categories in the collocation by his Honour in his reasons in the Yango case.
[23] The contract was therefore illegal. It was accepted by both sides on appeal that, if that conclusion was reached, it was unenforceable. Technically, it may have amounted to a conspiracy within the meaning of s 542 of the Criminal Code (cf Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196, 203); and courts do not enforce criminal conspiracies; but it is not necessary to pursue that question on this occasion. If the contract is affected by illegality in the way it is here, neither party may sue to enforce it, whether to recover damages or obtain specific performance or any other form of relief that the law provides. In T P Rich Investments Pty Ltd v Calderon [1964] NSWR 709, the Full Court of New South Wales held that a cheque delivered in payment of rent for premises leased without obtaining the prior approval of the local Council for the use of those premises for a particular purpose was unenforceable. The claim here is to enforce the contract by recovering damages for its breach rather than for a debt arising under it, but it is indistinguishable in principle from that decision.
[24] In the passage referred to earlier from the reasons of McHugh and Gummow JJ in Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215, 229, their Honours spoke of doing an act “essential to the performance of the contract”. If that requirement is additional to the matters stated by Gibbs ACJ in Yango, it is satisfied here. The act of exhibiting the advertisement was at the very core of the contract entered into by the parties on 22 July 1999; without it there would have been no contract at all. In the course of their joint judgment in Fitzgerald v Leonhardt, McHugh and Gummow JJ cited with approval a statement by McHugh J from Nelson v Nelson (1995) 184 CLR 538, 613, which was relied on by Burmic in this appeal. That decision was, however, concerned with recovery or restitution of property or money or its proceeds paid over for an illegal purpose or consideration, which is subject to the rule at one time crudely expressed in the Latin maxim in pari delecto potior est conditio defendantis, and not as here with the corresponding applicable to enforcing contracts ex turpi causa non oritur actio, which is discussed by Windeyer J in Smith v Jenkins (1970) 119 CLR 397, 409-412.
[25] In Fitzgerald v F J Leonhardt Pty Ltd (1997) 189 CLR 215, the plaintiff’s claim for money earned under a contract for the work and labour of drilling a bore was sought to be defeated by relying on illegality arising from a statutory prohibition on drilling without a permit. The attempt failed because the High Court construed the statutory obligation to obtain a permit as resting exclusively on the property owner and not on the plaintiff drilling contractor. The making or formation of the contract was not as such prohibited, and unless, therefore, the parties had at the time of contracting a common intention to drill without a permit, there was no agreement between them to do an act prohibited by statute. Because the obligation to obtain the permit was cast upon the owner, and there was no reason for the drilling contractor to suppose he had not performed it, the drilling contractor was, as Dawson and Toohey said, not “implicated in” the illegality (189 CLR 215, 221); or, as McHugh and Gummow JJ stated it, there was no suggestion that the contractor had acted otherwise than in good faith or had “aided or abetted the owner in any offence committed by [the owner]” under the statute (189 CLR 215, 227).
[26] The present case is different. The statutory prohibition in s 8 of Local Law 7 is, when read with the definition of “advertiser” in s 3, imposed on each of Goldview as the building owner and Burmic as the exhibitor of the advertisement. They each knew that there was no intention on the part of the other to obtain the approval of the Council, and did not themselves intend to do so. Instead they intended that the advertisement be exhibited without any such approval. This is what made their agreement a contract to do an act prohibited by statute, which the courts will not enforce.
[27] The plaintiff Burmic’s action must therefore fail, as it did but for a different reason in the court below. It follows that the appeal against that decision must also fail. In these circumstances, it is unnecessary to consider the quantum of damages, which were assessed by his Honour only because of the possibility that his decision might be set aside on appeal.
[28] I would dismiss the appeal with costs.
[29] CULLINANE J: I have read the reasons for judgment of McPherson JA in this matter and agree with those reasons and the orders proposed.
[30] HOLMES J: I agree with the reasons for judgment of McPherson JA and with the orders he proposes.