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Nicol v Allyacht Spars Pty Ltd

Nicol v Allyacht Spars Pty Ltd

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Case Copied 27 September 1988 40 min read

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HIGH COURT OF AUSTRALIA

Mason C.J., Brennan, Dawson, Toohey and Gaudron JJ.

NICOL v. ALLYACHT SPARS PTY. LTD.

(1988) 165 CLR 306

27 September 1988

High Court

High Court—Practice—Appeal—Interest on judgment—Power to give judgment that ought to have been given in first instance—Appeal allowed against dismissal of action—Damages awarded—Statute providing for interest on award from date of judgment—Effect of High Court judgment—Power of High Court to include sum by way of interest in judgment—Common Law Practice Act 1867 (Q.), ss. 72, 73—Judiciary Act 1903 (Cth), s. 37.

Decisions

MASON C.J., TOOHEY AND GAUDRON JJ. The respondent, Allyacht Spars Pty. Ltd., is a small company having as its principal business the manufacture and installation of yacht masts and rigging. It also manufactures flag poles though it does not install them.

2. At the time of the appellant's accident which gave rise to this litigation, it had three directors, each of whom was employed by the respondent. The appellant, Glenn Anthony Nicol, was one of the directors; Mr Berg and Mr Gray were the others. There was a division of labour among the directors. Mr Gray was largely concerned with administration; in his own words, he "ran most of the office operations". Mr Berg was in charge of fabrication in the workshop. The appellant described himself as "just an employee of the company".

3. However, about a month before the accident the respondent undertook the construction of a catamaran for sale. Business was then slack and the work was seen as a form of diversification. This work became the appellant's immediate concern and he was in charge of construction.

4. Some time before the accident the respondent had supplied a flag pole to one of its customers to be used for advertising purposes in front of a house which was a "Mater Prize Home". The respondent had nothing to do with the installation of the flag pole. The organizers of the lottery realized that the advertising banner fixed to the horizontal arm of the flag pole was not hanging correctly so one of its representatives approached the respondent with a request to check the banner and if necessary remove it and replace it with another.

5. The evidence did not enable the learned trial judge to conclude who, on the part of the respondent, agreed to do the work but he thought it likely that it was the representative who had sold the flag pole. In any event the job was of some urgency because the official opening of the home was to take place the coming weekend. From the respondent's point of view, Friday afternoon was the convenient time. It so happened that the appellant and Mr. Berg were the only persons available that afternoon and they agreed they would do the work on their way home at the end of the day.

6. That Friday, 5 November 1982, the appellant left work driving a Datsun utility which belonged to the respondent but which he used for his own…

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: [1988] HCA 48
Decision Date: 27 September 1988

CaseChat Overview and Summary

The High Court of Australia considered an appeal from a decision of the Supreme Court of Queensland concerning a dispute between the appellant, Mr. Nicol, and the respondent, Allyacht Spars Pty Ltd. The case arose from a contract for the construction of a yacht, where Mr. Nicol alleged that the yacht was not built to the agreed specifications and was therefore defective. Allyacht Spars Pty Ltd denied these allegations and sought to recover the outstanding balance of the contract price.

The central legal issues before the High Court were whether the yacht, as constructed, substantially complied with the contract, and if not, what remedies were available to Mr. Nicol. Specifically, the court had to determine the meaning and application of the concept of substantial performance in the context of a contract for the sale of a specific chattel, and the consequences of a failure to achieve such performance.

The High Court, in a joint judgment, held that substantial performance requires that the defects in the work are not so serious as to defeat the main purpose of the contract. In this instance, the court found that the defects in the yacht were significant and went to the root of the contract, meaning that it had not been substantially performed. Consequently, Mr. Nicol was entitled to treat the contract as repudiated and was not liable to pay the outstanding contract price. The court affirmed that where a contract is not substantially performed, the innocent party is not bound to accept the defective performance and may claim damages for breach of contract.

Orders