Fullerton Nominees Pty Ltd v Darmago

Fullerton Nominees Pty Ltd, an Australian company, engaged Darmago, a Malaysian company, as its agent for a business venture in the Philippines. Darmago successfully claimed unpaid commission under their agency agreement. The appellant sought to overturn the decision, arguing that the agency contract was illegal and unenforceable due to its provision for paying bribes to foreign officials, termed "invisible costs". The appeal was heard by the Supreme Court of South Australia.

The central legal issues were whether the agency contract was enforceable and if the illegal provisions for "invisible costs" could be severed from the contract. The court had to determine if the illegality was so pervasive that it rendered the entire contract unenforceable. Additionally, the court considered whether the illegality could be disregarded, allowing the enforcement of the legitimate terms of the contract.

The court held that the contract was indeed illegal and unenforceable due to its provision for paying bribes. The court found that the illegality was not confined to specific parts of the contract but permeated the whole agreement, as the provision for "invisible costs" was integral to the contract's purpose. Therefore, the illegality could not be severed from the rest of the contract. The court dismissed the appeal, ruling that the contract was unenforceable in its entirety.

The Supreme Court of South Australia dismissed the appeal and affirmed the decision of the lower court, holding that the agency contract was unenforceable due to its illegal provision for paying bribes. The court held that the illegality was pervasive and could not be severed from the contract, rendering the entire agreement unenforceable.