- Koompahtoo Local Aboriginal Land Council (Koompahtoo) enters into a partnership for a development with Sanpine Pty Ltd (Sanpine).
- $2 million of liabilities were incurred but due to a range of issues, the development never proceeded to rezoning.
- Koompahtoo declared the contract breached due to administrative issues.
- Sanpine sued to say the contract was still on foot.
- Was Koompahtoo entitled to terminate the contract due to Sanpine’s breaches?
- Gleeson, Heydon, Crennan and Gummow JJ: There are 3 types of contractual terms; warranties, conditions and intermediate terms (upholding the decision in Hong Kong Fir)
- Renunciation is when there is “conduct which evinces unwillingness or an inability to render substantial performance of the contract.”
- Repudiation is a breach which justifies termination by the other party.
- There can be a ‘sufficiently serious breach’ of a non-essential term to justify the contract being repudiated.
- Kirby J disagreed with the approach of Tramways in regards to essential terms because it involves looking at subjective intentions, which is inconsistent with the rest of the law of contracts.
- Instead, you should look at the objective result of the breach.
- The actual consequences of a breach should be irrelevant.
- If you have intermediate terms, then a Court will always be necessary to adjudicate them because they are not the result of some inherent characteristic.
- Kirby J submitted that intermediated terms and the doctrine should be abolished: you can terminate when:
- 1) there is a breach of an essential term;
- 2) there is a serious breach of a non-essential term; and
- 3) there is renunciation – so in essence there are only 2 types of terms.
Full text is available here: https://jade.io/summary/mnc/2007/HCA/61
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