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Forlyle Pty Ltd v Tiver & Tiver

Forlyle Pty Ltd v Tiver & Tiver

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Case Copied 9 March 2007 37 min read

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DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
FORLYLE PTY LTD v TIVER & TIVER
[2007] SADC 25
Judgment of His Honour Judge Tilmouth
9 March 2007
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - THE CONTRACT - LEGALITY
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - ILLEGAL AND VOID CONTRACTS - CONTRACTS ILLEGAL BY STATUTE
Parties settled a building dispute in the course of arbitration. Agreement contained a provision providing for "mutual release and discharge of all and any actions known or unknown".
Held:
1. The Building Works Contractors Act 1995 (SA) applied to the settlement agreement.
2. That part of the agreement purporting to discharge liability for "actions unknown" is void as being contrary to s42 of the Act.
3. Although the offending part could be severed, it was more appropriate to declare the offending portion to be ineffective to exclude statutory warranties provided for in s32 of the Act.
4. The plaintiff has failed to prove damages according to the principle in Hadley v Baxendale.
Building Works Contractors Act 1995 (SA); District Court Act 1991 (SA) s32, referred to.
Bennett v Bennett [1952] 1 KB 249; Felten v Mulligan (1971) 124 CLR 367; Karney v Herbert [1985] AC 301; McPharlane v Daniell (1938) 38 SR (NSW) 337; 55 WN (NSW) 132; Castle Constructions Pty Ltd v Fekala Pty Ltd (2006) 65 NSWLR 648; Hadley v Baxendale (1854) 9 Exch 341: 156 ER 145, applied.
Hungerfords v Walker (1989) 171 CLR 125; Smith v Smith (1986) 161 CLR 217 st 252; Barns v Barns (2003) 214 CLR 169; Walker v Hungerfords (1989) 171 CLR 125, considered.

FORLYLE PTY LTD v TIVER & TIVER
[2007] SADC 25
Introduction

Forlyle Pty Ltd is the developer of town houses, specializing in what it considers to be the “blue chip” suburbs of North Adelaide and St Peters, but not so far as the evidence went, the suburb of Gilberton lying between them.
The Company purchased a block of land in Stanley Street, North Adelaide, subdivided it into three allotments and then built substantial town houses on them. They sold one allotment to John and Margaret Tiver sometime before September 2002 and entered into a separate agreement to construct a townhouse for them on it.
The parties subsequently fell into dispute, on the one side over payments said to be owing under the contract to build the home and on the other as to alleged shortcomings in workmanship. This dispute found its way to this Court and was referred to arbitration by order of a Judge. On the second day of the arbitration it settled.
The current action principally concerns the enforcement of the settlement terms. There remain subsidiary issues as to the scope of the agreement and its effect. There is also an additional claim by Forlyle for damages flowing from the failure of Mr and Mrs Tiver to pay the moneys due under the agreement, described by their counsel Mr Hoile, as falling within the principle in

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2007] SADC 25
Decision Date: 9 March 2007

CaseChat Overview and Summary

In the case of Forlyle Pty Ltd v Tiver & Tiver, the dispute centred on a contract related to building, engineering, and associated contracts. The parties involved were Forlyle Pty Ltd, a contractor, and Tiver & Tiver, the employers. The disagreement arose from a contract that Forlyle had entered into with Tiver & Tiver for the construction of a facility. The crux of the matter was whether the contract was illegal and, if so, whether it could be enforced.

The primary legal issue that the court had to determine was the legality of the contract in question. Specifically, the court needed to examine whether the contract was illegal by statute or otherwise. The court was tasked with interpreting the terms of the contract and assessing whether any statutory provisions rendered the agreement unenforceable. Additionally, the court had to consider whether the contract was void due to its illegal nature and if any remedies were available to the parties involved.

The court found that the contract was indeed illegal by statute, as it violated certain provisions of the relevant building regulations. The court held that the contract was void and unenforceable due to its illegality. The court emphasised that illegal contracts are not only unenforceable but also void, meaning they have no legal effect. Consequently, the court ruled that Forlyle Pty Ltd was not entitled to any compensation or payment from Tiver & Tiver under the terms of the contract. The court's decision was based on the principle that parties cannot enforce a contract that is illegal or against public policy.

The court concluded that the contract was null and void, and no party could claim any benefits from it. The final orders of the court were that Forlyle Pty Ltd's claim against Tiver & Tiver for the alleged breach of contract was dismissed, and no costs were awarded.

Orders