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(a) That could be right, but it is difficult to predict the outcome with much certainty. The difficulty arises because these days there are thousands of statutory provisions that make all sorts of conduct unlawful. The effect of each of these provisions depends on what the legislature intended. In some Acts, conduct is penalised, but not necessarily invalidated. In other cases, a statute invalidates conduct, without penalising it. And sometimes conduct is both invalidated and penalised. Which of these alternatives was intended is not always made explicit and the courts must interpret the relevant Act to decide the question.

In the example, the legislation only expressly penalises B's conduct. The court will have to decide whether the legislature also intended to invalidate any conduct associated with the breach. Generally, the courts are reluctant to find an implied intention to this effect, particularly if the penalty appears sufficient. This supports the choice you have made.

However, if the court forms the view that a penalty alone does not provide a sufficient sanction (perhaps because of the considerable safety issues involved) they may decide that there is an implied intention to invalidate any agreement that is in breach of the licence requirement. The outcome would then be different and the contract would be invalid.

Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215.

Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101.