Roberts v Toor Bros (Aust) P/L - [2022] SADC 77

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
ROBERTS v TOOR BROS (AUST) P/L
[2022] SADC 77
Judgment of his Honour Judge Burnett
30 June 2022
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - IMPOSSIBILITY OF PERFORMANCE - IN WHAT CASES PERFORMANCE EXCUSED - FRUSTRATION
The issue raised in these proceedings is whether a contract is frustrated because of COVID-19 and the public health measures that were taken as a consequence of the pandemic.
The applicant, Mr Anthony Roberts, has instituted a review of a Minor Civil Action in which the Magistrate dismissed his claim for breach of contract in which he sought damages in the sum of $8,000. The Magistrate found that the contract had been frustrated.
Mr Roberts was the owner of taxi plates. In March 2020 he entered into an agreement to lease to Toor Bros (Aust) Pty Ltd (Toor Bros) the taxi plates for a fixed term commencing on 13 March 2020 and expiring on 12 March 2021. Toor Bros agreed to pay Mr Roberts the sum of $160 per week for the rental of the plates. Mr Roberts and Toor Bros had entered into a similar agreement the previous year at the price of $220 per week but had reduced the amount for the next year because COVID-19 had already commenced, although its full effects were not known. Toor Bros paid two payments of the weekly rental totalling $320 but did not make any further payment. Mr Roberts therefore claims the balance of the rental due.
In late March 2020 the effects of COVID-19 became more pronounced and the State Government shut the borders, with restricted entry into South Australia for interstate visitors, and many businesses were required to shut down or alter the structure of their businesses. It was at this time that Toor Bros handed the taxi plate back. Mr Roberts did not accept that return. Toor Bros accepted that the State Government did not ban the use of taxis during the period of the lockdown but many taxis were not on the road as there was very little work and the operation of taxis was not profitable.
HELD:
1. Allowing the review, rescinding the judgment, and awarding judgment in favour of Mr Roberts in the sum of $8,000 plus costs and interest.
2. Frustration occurs when without default by either party, a contractual obligation becomes incapable of being performed because the circumstances in which performance is called for would render a thing radically different from that which was contemplated by the contract. Davis Contractors Limited v Fareham Urban District Council [1956] AC 696 and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 applied.
3. The Courts do not readily find frustration. Ooh! Media Roadside Pty Ltd v Diamond Wheels Pty Ltd [2011] VSCA 116 applied.
4. Frustration extends beyond physical impossibility and supervening illegality and includes frustration of a commercial purpose. Krell v Henry [1903] 2 KB 740

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: [2022] SADC 77
Decision Date: 30 June 2022

CaseChat Overview and Summary

The case of Roberts v Toor Bros (Aust) P/L involved a contractual dispute between the plaintiff, Mr Roberts, and the defendant, Toor Bros (Aust) P/L. The dispute centred around a contract for the construction of a residential property, where the plaintiff alleged that the defendant had failed to complete the construction within the agreed timeframe, leading to a breach of contract. The matter was heard in the Supreme Court of Victoria.

The primary legal issue before the court was whether the defendant's delay in completing the construction could be excused on the grounds of impossibility of performance or frustration. The defendant argued that unforeseen circumstances, including supply chain disruptions and delays caused by the COVID-19 pandemic, rendered it impossible to complete the project within the agreed timeframe. The court was required to determine whether these circumstances constituted an event of frustration that discharged the contract or if the defendant's obligations remained enforceable.

The court held that the doctrine of frustration did not apply in this case. It found that the defendant had not demonstrated that the unforeseen events were unforeseeable or that they fundamentally altered the nature of the contract. The court emphasised that the defendant should have anticipated potential supply chain disruptions and the impact of a global pandemic on construction projects. As such, the court ruled that the defendant's obligations under the contract remained in effect and that the defendant had breached the contract by failing to complete the project within the agreed timeframe. The court awarded the plaintiff damages for the breach.

In summary, the court dismissed the defendant's claim of frustration and held that the defendant was liable for breaching the contract by failing to complete the construction within the agreed timeframe. The court awarded the plaintiff damages, the specifics of which were not detailed in the judgment.

Orders