The appellant's main ground of appeal is that it terminated the agreement for the respondent's repudiation on or about 13 December 1989. If that ground of appeal fails, other matters are raised concerning the construction of the parties' agreement and the form of the orders.

It was not disputed that the appellant wrote a letter to the respondent on 13 December 1989 which was effective to terminate the agreement between the parties if, by then, the agreement had been repudiated by the respondent. The sole issue in relation to the main ground of appeal was whether or not the respondent repudiated the agreement by its assertions, demands and threats on 7 and 13 December. It is necessary to refer to earlier events to place the respondent's conduct on those days in their proper perspective.

In 1982, the appellant called for expressions of interest in "The Development of a Boat Harbour and Tourist Resort Complex on Part of the Foreshore of Cairns". After a successful tender, the respondent was granted a Special Lease for three years from 1 July 1985 for an "Impact Assessment Study". In 1988, a further Special Lease in respect of a slightly reduced area was granted for one year from 1 April 1988 for "Investigation". One of the conditions of that Special lease envisaged that the respondent might, in due course, be granted a further lease to develop all or some of the subject land. Another condition required the respondent to carry out investigations and studies and to provide the results to the appellant, which it did by about 22 March 1989. However, on 12 October 1989, the then Premier informed the respondent that the appellant proposed to reject the respondent's proposal to develop the land. At that time, an election for the Queensland Parliament was in the offing and the respondent's proposed development had attracted considerable public interest and opposition.

Commencing on 16 October 1989, discussions were held and correspondence was exchanged concerning the respondent's request for "reimbursement for funds expended" and compensation.

On 15 November 1989, a Cabinet Submission was signed by the then Ministers for Land Management and for Water Resources and Maritime Services. The submission stated that "... the material contained in the study reports has significant value, particularly in respect of the management of Trinity Inlet and it is considered to be of importance that this material be retained in public ownership". A minute of a decision by Cabinet on 20 November 1989 contained the following:

"That an offer to purchase the material in the study reports, on the basis of reimbursement of actual costs and expenses (at 1989 prices) be made to the [respondent], subject to the amount of such offer not exceeding $5 million".

Shortly afterwards, on 22 November 1989, that decision was publicly criticised by the then Leader of the Opposition, who was shortly afterwards voted into office as Premier following the State election on 2 December 1989. In his statement, he described the acquisition of the reports as "a very thin smoke screen", and asserted that the respondent "should bear its own loss".

Meanwhile discussions had continued and further letters had been exchanged between representatives of the appellant and the respondent. A sufficient indication of the course of the negotiations can be obtained by reference to the correspondence.

On 22 November 1989, the following letter was sent from the Director-General of the Premier's Department to the appellant:

"I refer to your discussions with the Honourable the Premier in Cairns on 19th November, 1989.

You will recall that the Honourable the Premier indicated a preparedness for the Government to purchase the information collected for and generated through the studies undertaken by your Company in addressing the requirements of Special Leases Nos. 09/47886 and 09/49764.

That matter has been considered by the Government and it has been approved that an offer be made for the acquisition of the sole and exclusive rights to that information.

It will be appreciated that any such offer will have regard to the costs incurred by your Company in the collection and generation of that information from the date of issue of Special Lease No. 09/67886 to date.

In order that I may make an assessment for the purposes of making a special offer in written terms, please advise details of those costs, such costs to be calculated in October 1989 prices.

In addition, incidental costs arising from transfer to the State Government of data held by your Company and consultants but not fully documented in the study reports should be detailed.

In providing details as to costs, please identify the actual materials which are the subject of those costs and which would be available and appropriate for purchase."

On 23 November, an employee of the respondent's engineer, Connell Wagner (Qld) Pty Ltd (formerly Macdonald Wagner Pty Ltd), sent the following letter to the appellant:

Further to your enquiry regarding reports and other information obtained by us during the Trinity Point research project, we advise the following:

All final versions of formal reports prepared either by us or our sub-consultants during the research project were included in either the Phase A submission to Cabinet (April 1987) or the development Lease Application (March 1989). Schedules 1 and 2 respectively provide details of these reports which were superseded by the final versions which were submitted as described above and which have been retained purely in the interests of maintaining complete records. These contain no information which is not included in the formal reports.

Regular reports detailing the progress of the study were submitted to Trinity Point Hotel Pty Ltd and copies were forwarded to Premier's Department for circulation to the relevant authorities. Schedule 3 includes details of these reports.

In addition to the above items, several reports have been produced for internal use. Details of these are set out in Schedule 4.

The coastal modelling work involved the use of three proprietry (sic) computer programs as listed below:

Of these programs, licences for (a) and (c) are owned by Connell Wagner while (b) was used on a bureau basis from CEANET.

Data files using the basic data contained in Coastal Processes Volumes 1 and 2 are archived in our Brisbane office and can be retrieved, collated and copied onto magnetic media if required.

In addition to this data we have obtained and collated records associated with wind and waves and can provide this if required.

As detailed in the Development Lease Application, a commitment was made to continue research into the following three areas:

Field work associated with all the above studies are now complete and a report has been received for Item 9(c). Reports for Items (a) and (b) are currently under preparation and are expected to be available by the end of the year. Details are given in Schedule 5.

We estimate the cost to process the outstanding reports [(a) and (b) under Item 5] and supply a copy of each report and other items detail with in Schedule 4 and Item 4 above will be of the order of $10,000.

As is the usual practice, originals of reports and drawings and other items will reside with Connell Wagner.

Reproducible drawings or prints and copies of other material can be supplied at commercial rates on request.

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MACDONALD WAGNER APR 1987 SUBMITTED TO PREMIER'S DEPT 3/4/87

PROJECT MANAGEMENT & STUDY MACDONALD WAGNER FEB 1987

incl ENVIRONMENTAL ASPECTS HOLLINGSWORTH SEP 1986 "

ENVIRONMENTAL ASPECTS NO 2 HOLLINGSWORTH SEP 1986 "

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COASTAL PROCESSES VOL 1 MACDONALD WAGNER SUBMITTED TO PREMIER'S DEPT

incl CURRENT AND WATER LEVEL MAPPING AND HYDROGRAPHIC "

incl GEOTECHNICAL DESIGN HOLLINGSWORTH CONSULTANTS "

incl GEOTECHNICAL REPORT HOLLINGSWORTH CONSULTANTS "

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PHASE B PROGRESS REPORT MACDONALD WAGNER NOV 1987 SUBMITTED TO PREMIER'S DEPT

PROGRESS REPORT - NOV 1987 MACDONALD WAGNER DEC 1987 "

PROGRESS REPORT - DEC 1987 MACDONALD WAGNER DEC 1987 "

PROGRESS REPORT - JAN 1988 MACDONALD WAGNER FEB 1988 "

PROGRESS REPORT - FEB 1988 MACDONALD WAGNER MAR 1988 "

PROGRESS REPORT - MAR 1988 MACDONALD WAGNER APR 1988 "

PROGRESS REPORT - APR 1988 MACDONALD WAGNER MAY 1988 "

PROGRESS REPORT - MAY 1988 MACDONALD WAGNER JUN 1988 "

PROGRESS REPORT - AUG 1988 MACDONALD WAGNER SEP 1988 "

PROGRESS REPORT - SEP 1988 MACDONALD WAGNER OCT 1988 "

PROGRESS REPORT - OCT 1988 MACDONALD WAGNER DEC 1988 "

PROGRESS REPORT - NOV 1988 MACDONALD WAGNER DEC 1988 "

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

PROJECT MANAGER'S TECHNICAL MACDONALD WAGNER - MARCH 1987 FOR INTERNAL USE

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MIGRATORY WADERS - ADDENDUM ENVIRONMENT SCIENCE AND DUE DECEMBER 1989

SEAGRASS TRANSPLANTS & DEPT PRIMARY INDUSTRIES DUE DECEMBER 1989

MANGROVE REVEGETATION - DEPT PRIMARY INDUSTRIES JUNE 1989

Further, on the same day the respondent's accountants, Shaw White and Associates, wrote to the appellant as follows:

_____________________________

We refer to your letter dated 22 November, 1989 addressed to Mr J.A. Dowson, a director of Trinity Point Hotel Pty Ltd, lessee named in the Special Leases granted by the Government of Queensland for the purpose of enabling studies to be made of the leased area. The purpose of such studies being principally to determine the physical, financial and ecological feasibility of undertaking commercial development of the leased area.

The lessee has instructed us to prepare a statement of costs incurred in the collection and generation of information through those studies and to submit same to you preparatory to the making of an offer by the Government for the purchase of that information.

We have accordingly reviewed the records submitted to us for consideration and calculate the costs incurred at a $3,390,359. The basis of calculation of this sum is set out on the attached schedules.

We understand that Connell Wagner Pty Ltd will be providing separately details of the actual material which will be available.

Should you require any further information from us in this regard, please do not hesitate to contact us."

[The schedules attached included details of accounts from Macdonald Wagner and Connell Wagner and payments thereof (both actual and indexed to 30 September 1989 C.P.I.) and details of "OTHER COSTS" (actual and similarly indexed).]

Both letters and associated documents were delivered by representatives of the respondent to employees of the appellant at a meeting on 24 November 1989. A file note of the events at that meeting indicates that the more senior of the appellant's employees who were present said that he would arrange for the material provided by the respondent to be examined and would advise the respondent or its accountant "if further material was required to substantiate costs". The respondent's accountant, Mr Shaw, who was also present, "... agreed to arrange for copies of all accounts not already provided for amounts over $10,000 to be faxed ..." that day.

On 30 November 1989, at its last meeting prior to the election, the Executive Council made a decision in accordance with the following minute:

"That approval be granted to expenditure of $3,280,000 for acquisition from Trinity Point Hotel Pty Ltd of technical data collected in relation to the Trinity Point Development Studies".

Later that day, the following letter was sent from the appellant to the respondent:

"I refer to my letter of 22nd November, 1989 and to information subsequently supplied to me in letters dated 23rd November, 1989 from Shaw White and Associates and Connell Wagner, and to additional information supplied by Shaw White and Associates in facsimiles dated 24th November, 1989 and 27th November, 1989.

On the basis of the information provided it is assessed that expenditures related to information collected for and generated through the studies undertaken by and for your Company in addressing the requirements of Special Leases No. 09/47886 and 09/49764 is $3,262,631 and it has been approved that an offer be made to your Company for that acquisition of the sole and exclusive rights to that information by the State for this amount.

This amount has been assessed on the basis of exclusion of some costs directly related to the public affairs programme undertaken by your Company.

Upon receipt of your written acceptance of this offer, I will arrange for a deed to be drawn up transferring the sole and exclusive rights in this information to the State Government.

The deed would be subject to the following conditions:

(a) a warranty by the Company that it is the lawful owner of all rights in the information and has the capacity to transfer the sole and exclusive rights in the information to the State;

(b) completion on a specified date some 30 days from the date of acceptance;

(c) that prior to completion, the Company must satisfy the State by such documentary or other evidence as the State may require, that it is the legal owner of all the information and in the event that the Company is shown to be not the legal owner of any item of information, the Company will obtain assignment of the rights in that information to it so that the Company is in a position to transfer all the rights in the information to the State at completion;

(d) where information in the custody of any third party is yet to be documented, the Company will, at the cost of the State, do all acts and execute all agreements necessary to bring the information into documented form so that the rights in the information are able to be transferred to the State on date of complete (sic) or such later date as the parties may agree;

(e) where data is held by third party in computer compatible form that data will be transferred to the State at date of completion and the Company will do all acts and enter into all agreements necessary for that purpose; and

(f) where the Company fails to obtain all rights in the information before date for completion or fails to fulfil its obligations under the agreement, the State may terminate and neither party will have any claim against the other in respect of any matter arising thereunder.

I note from the correspondence referred to in the first paragraph of this letter that your project managers, Connell Wagner, are the custodians of all project related information that has yet to be documented and also of some data held in computer compatible form.

The State will require an undertaking from Connell Wagner that all such information, save such proprietary computer programs as identified in paragraph 4 of that Company's letter to you of 23rd November, 1989 (Reference DDR:FH MCK20600) will be made available upon request to agencies nominated by this Department, subject only to the payment of that Company's current rates for copying and collation of information.

The deed will contain a schedule of the information the subject of the agreement between the parties and the schedule will include the information currently in the custody of Connell Wagner that has yet to be documented and also the data held in computer compatible form."

On the following day, the last day before the election, the offer contained in that letter was accepted by the following letter sent by the respondent to the appellant:

"We acknowledge receipt of your letter of the 30th November 1989.

The company accepts the offer and the conditions as set out therein.

We look forward to receiving the Deed reflecting the Agreement constituted by the correspondence and accordingly settlement will be on or before the 31st December 1989."

On the same day, there was considerable activity on the part of the respondent, encouraged by a senior officer in the Premier's Department, who told the respondent that Executive Council had approved payment and wanted to pay the respondent as quickly as possible. Steps taken that day, Friday 1 December 1989, included the following:

(i) a letter from the respondent to Connell Wagner in the following terms:

I advise that the Company has today entered into an Agreement with the State Government for the sale of its proprietary rights to the technical reports and information accumulated during the Trinity Point research project.

It will transfer its legal ownership to the information on or before the 31st December 1989.

As Project Manager and Principal Consultant we would request that you notify all sub-consultants of this agreed assignment . . . . . ."

(ii) Connell Wagner wrote the following letter to the sub-consultants listed below:

We wish to advise that, further to recent decisions regarding Trinity Point, Trinity Point Hotel has entered into an agreement with the Queensland Government to sell its proprietary rights to reports and information accumulated during the Trinity Point research project.

A copy of Trinity Point Hotel's letter of even date to us to that effect is attached for your information.

As from the date of completion of the assignment, the proprietary rights to that information will reside with the Queensland Government who will be deemed to be the Principal and be deemed to have all rights in respect of the subject reports and other information as if it had commissioned and paid for that material.

You will be further notified following completion of the assignment.

We wish to thank you for your efforts in contributing to this research project and advise you of Trinity Point Hotel's appreciation."

Professor C. Apelt Department of Civil Engineering,

Dr R. Dowling, Botany Branch, Department of Primary

B.R. Pollock, Fisheries Branch, Department of Primary Industries, Brisbane

T. Hardy, Department of Civil and Systems Engineering,

Dr R. Foott, Foott and Associates, San Francisco, U.S.A.

(iii) Connell Wagner sent the following letter to the respondent:

We acknowledge receipt of your facsimile letter dated 1 December advising of your intended sale of proprietary rights as Principal.

As requested we have advised all our subconsultants of the above and will forward a copy of the relevant letter and distribution list in due course.

(iv) Connell Wagner wrote to the respondent attaching copies of letters which it had sent to "all sub-consultants as requested".

(v) Connell Wagner wrote to the appellant as follows:

We attach a copy of a letter received from Trinity Point Hotel Pty Ltd notifying us of an agreement reached for the sale of that company's proprietary rights to information and reports prepared during the Trinity Point research project.

We acknowledge that as from the date of completion of the assignment, the proprietary rights to that information will reside with the Queensland Government who will be deemed to be the Principal and be deemed to have all rights in respect of those reports as if they had commissioned and paid for that material.

When the outstanding technical reports as set out in Schedule 5 of our letter dated 23 November 1989 are received, they will be processed and copies forwarded to Premier's Department as Principal. We understand that the cost for the above work will be met by the Queensland Government.

We undertake that all such information, save such proprietary computer programs as identified in paragraph 4 of our letter to Trinity Point Hotel of 23 November 1989 (reference DRR:FH MCK20600 - copy attached) will be made available upon request to agencies nominated by Premier's Department, subject only to the payment of our current rates for copying and collation of information.

We advise that letters have been sent to all subconsultants advising them of the above state of affairs. Copies of the Trinity Point Hotel's letter referred to above have also been forwarded to sub-consultants."

(vi) Although the appellant's offer to the respondent of 30 November 1989 stated that the appellant would arrange for a deed to be drawn up upon receipt of the respondent's written acceptance of the offer, an arrangement was made between a director of the respondent and an employee of the appellant for the respondent to prepare the deed to hasten the process.

(vii) The respondent prepared and executed a deed in the following terms:

BETWEEN THE GOVERNMENT OF THE STATE OF QUEENSLAND in right of the Crown ("the Government") of the first part

AND TRINITY POINT HOTEL PTY LIMITED of 107 The Esplanade, Cairns ("the Company") of the second part

1. The Government has agreed to purchase and acquire from the Company its proprietary rights to the technical information and the reports accumulated by or on behalf of the Company during the Trinity Point research project commencing from the issue of Special Lease No. 09/47886 and thereafter during Special lease No. 09/49764 (hereinafter collectively called "the information"); and whereas

2. The Company has agreed to assign to the Government all its proprietary right in and to that information and to those reports which are more particularly set out in the first schedule hereto for the price and subject to the terms, covenants and conditions as hereinafter set out.

1. The Company is the lawful owner of the information and reports more particularly set out in the first schedule hereto and warrants that it has the proprietary rights to the information and further that it has the unencumbered and unfettered rights to transfer the sole and exclusive rights to that information as it deems fit.

2. In consideration of these presents and in consideration of payment of the sum of $3,262,631.00 (being the cost to the Company of compiling the information) by the Government to the Company the Company shall assign and transfer to the Government the whole of its right title and interest in and to the information for the sole and exclusive use of the Government as the Government may in its absolute discretion deem fit so to use and it is acknowledged by the parties hereto that upon payment of the said sum all proprietary right to the information shall thereupon vest in the Crown absolutely.

3. The Company shall give notice or shall cause to be given notice of that assignment to all authors of any report and all consultants or sub-consultants associated with the preparation and compilation of any report, material or study herein referred to such notice to be given within seven (7) days of the date of completion.

4. Completion of this assignment shall be effected on or before 31st December 1989.

5. On or before the date of completion the Company shall satisfy the Government by such documentary or other evidence as the Government may require that it is the legal owner of the information and if it is not the owner of any such information then it will cause the proprietary rights of that information to be assigned ultimately to the Crown on the date of completion.

6. It is acknowledged by the parties that where information is in custody of any third party and that information is yet to be documented then the company shall do all such acts and execute any agreements which may be necessary to cause that information to be documented at the cost and expense of the Government so that the information is capable of being assigned to the Government on the date of completion or on such other date as the parties may agree and for that purpose notice of the assignment of the Companys proprietary rights to any documented information shall be given by the Company to that third party in writing and such notice shall be sufficient to evidence the assignment by the Company to the Government of the proprietary right to the information.

7. The parties acknowledge that certain computer data files exist and that the proprietary rights to those computer programs noted as (a) Longwave - 2 dimensional model and (b) Estry - 2 dimensional model are held by and are the property of Connell Wagner and the computer program known as Ribicon - 1 dimensional model is owned by and is the property of CEANET and it is acknowledged by the parties that the Company has no proprietary interest in these programs.

8. It is acknowledged by the parties that the Company has no proprietary rights to data files relating to collated records of wind and waves and contained in Coastal Processing Volumes 1 and 2 but the Government may in its discretion seek at its own cost the retrieval collation or copying of that data onto magnetic media from Connell Wagner.

9. The Company shall assign or cause to be assigned to the Crown all other computer data in a compatible form where proprietary right is held by the Company and the Company will upon receipt of a notice directed to it by the Government do all such things and sign all such agreements as may be necessary to effect such an assignment.

10. The parties acknowledge that certain information is in the custody of third parties in respect of completion of certain ongoing studies and reports relating to:-

AND further the parties agree that the Company will at the cost of the Government do all such acts and things and execute all or any such agreements as may be necessary to cause those studies and information to be documented and further the parties acknowledge that the proprietary rights in respect of such studies and information when completed shall be the Agreement vest in the Crown absolutely whether such reports are documented at the date of settlement or not.

11. The Company shall on or before the date of completion obtain a written undertaking from Connell Wagner that all the information shall be delivered or made available immediately upon request of any Government Department, Agency or any other person, company or association whatsoever as may be nominated by the Crown such delivery shall be unconditional save and accept for any payment to Connell Wagner of its then current rates for copying and collating the information.

12. If the Company should fail to obtain all proprietary rights to the information before the date of completion or should fail to comply and fulfil its obligations under the agreement then the Government may terminate this agreement by notice in writing and neither party shall have any claim against the other in respect of any matter arising thereunder.

(viii) The respondent transmitted by facsimile to the appellant a copy of that deed, copies of the letters referred to above in (i), (iii) and (v), and a further letter which concluded:

"We would refer to all the correspondence of Connell Wagner (Qld) Pty. Ltd., including the recent correspondence and the letter of 23 November 1989 in support of our warranty of proprietorship in the information and believe this constitutes satisfactory ownership and evidence of our entitlement to assign that information pursuant to the Agreement reached."

(ix) The respondent executed a second deed in the following terms:

"This Deed Poll is made this 1st day of December 1989 BY TRINITY POINT HOTEL PTY. LIMITED of 107 The Esplanade, Cairns ("the Company")

1. The Government of the State of Queensland ("the Government") has agreed to purchase and acquire from the Company its proprietary rights to the technical information and the reports accumulated by or on behalf of the Company during the Trinity Point research project commencing from the issue of Special Lease No.09/478886 and thereafter during Special Lease No. 09/49764 (hereinafter collectively called `the information'); and whereas

2. The Company has agreed to assign to the Government all its proprietary right in and to that information and to those reports which are more particularly set out in the first schedule hereto for the price and subject to the terms, covenants and conditions as hereinafter set out.

1. The Company is the lawful owner of the information and reports more particularly set out in the first schedule hereto and warrants that it has the proprietary rights to the information and further that it has the unencumbered and unfettered rights to transfer the sole and exclusive rights to that information as it deems fit.

2. In consideration of payment of the sum of $3,262,631.00 (being the cost to the Company of compiling the information) by the Government to the Company the Company shall assign and transfer to the Government the whole of its right title and interest in and to the information for the sole and exclusive use of the Government as the Government may in its absolute discretion deem fit so to use and it is acknowledged by the parties hereto that upon payment of the said sum all proprietary right to the information shall thereupon vest in the Crown absolutely.

3. The Company shall give notice or shall cause to be given notice of that assignment to all author is of any report and all consultants or sub-consultants associated with the preparation and compilation of any report, material or study herein referred to such notice to be given within seven (7) days of the date of completion.

4. Completion of the assignment has been agreed to be effected on or before 31st December 1989.

5. On or before the date of completion the company shall satisfy the Government by such documentary or other evidence as the Government may require that it is the legal owner of the information and if it is not the owner of any such information then it will cause the proprietary rights of that information to be assigned ultimately to the Crown on the date of completion.

6. Where information is in custody of any third party and that information is yet to be documented then the company shall do all such acts and execute any agreements which may be necessary to cause that information to be documented at the cost and expense of the government so that the information is capable of being assigned to the Government on the date of completion or on such other date as the parties may agree and for that purpose notice of the assignment of the Companys proprietary rights to any documented information shall be given by the Company to that third party in writing and such notice shall be sufficient to evidence the assignment by the Company to the government of the proprietary right to the information.

7. Certain computer data files exist and that the proprietary rights to those computer programs noted as (a) Longwave - 2 dimensional model and (b) Estry - 2 dimensional model are held by and are the property of Connell Wagner and the computer program known as Ribicon - 1 dimensional model is owned by and is the property of CEANET and it is acknowledged by the parties that the Company has no proprietary interest in these programs.

8. The Company has no proprietary rights to data files relating to collated records of wind and waves and contained in Coastal Processing Volumes 1 and 2 but the government may in its discretion seek at its own cost the retrieval collation or copying of that data onto magnetic media from Connell Wagner.

9. The Company shall assign or cause to be assigned to the Crown all other computer data in a compatible form where proprietary right is held by the Company and the Company will upon receipt of a notice directed to it by the Government do all such things and sign all such agreements as may be necessary to effect such an assignment.

10. Certain information is in the custody of third parties in respect of completion of certain ongoing studies and reports relating to:-

AND further it has been agreed that the Company will at the cost of the Government do all such acts and things and execute all or any such agreements as may be necessary to cause those studies and information to be documented and further the parties acknowledge that the proprietary rights in respect of such studies and information when completed shall by the agreement vest in the Crown absolutely whether such reports are documented at the date of settlement or not.

11. The Company shall on or before the date of completion obtain a written undertaking from Connell Wagner that all the information shall be delivered or made available immediately upon request of any Government Department, Agency or any other person, company or association whatsoever as may be nominated by the Crown such delivery shall be unconditional save and accept for any payment to Connell Wagner of its then current rates for copying and collating the information.

12. If the Company should fail to obtain all proprietary rights to the information before the date of completion or should fail to comply and fulfil its obligations under the agreement then the Government may terminate this agreement by notice in writing and neither party shall have any claim against the other in respect of any matter arising thereunder.

On the following Monday, 4 December 1989, the first business day after the election, a further meeting took place in circumstances in which it was apparent that the election had resulted in a change of government. Those present at the meeting were the two senior employees of the appellant who had had most to do with the matter and a director of the respondent supported by a member of the defeated Government. The originals of both deeds, signed by the respondent, were provided to the appellant at that meeting, as were copies of the letters which Connell Wagner had sent to the sub-consultants on 1 December 1989. A perceived need for urgency was accepted by all present at that meeting. The senior employee of the appellant who was there said that advice would be sought from the Crown Solicitor and that, although the documentation prepared by the respondent provided for completion on 31 December 1989, the appellant wanted to make payment before then. The respondent's representatives said that they would remain in Brisbane until payment was made and advised where they could be contacted.

Later that day, the appellant provided copies of the deeds which had been signed by the respondent to the Crown Solicitor and sought advice which was received on that and the next day.

On the second of those days, 5 December 1989, an employee of the appellant telephoned an employee of Connell Wagner and they discussed requirements of the appellant following advice which had been received from the Crown Solicitor. It was agreed that additional information would be obtained and provided by Connell Wagner and that discussions would be held in Cairns on 7 December. Further, a letter would be sent setting out the appellant's requirements, as was done that day.

On 5 December, letters were also exchanged between the appellant and the respondent. The latter, which was probably the earlier in point of time but not by much, sought confirmation of a number of matters, including that "an offer and acceptance constituting an agreement exists between us". Its second last and last paragraphs were as follows:

"The Government should also be aware that consultants or sub-consultants have no power to assign material or information which we had paid for and is our property. Could you confirm that this is your understanding?

We have by notice delivered the consultant (and subconsultants by our consultant) of the agreed assignment which will have the effect of making the Government the Principal in our place."

The letter from the appellant dated 5 December 1989 was as follows:

"I refer to your letters of 1st and 4th December, 1989 forwarding draft Deeds relating to the proposed purchase by the Government of proprietary information from Trinity Point Hotel Pty. Ltd.

It is advised that these documents have been reviewed and it is considered that, in a number of respects, the Crown interests are not adequately protected in the drafts as proposed.

(1) the Company's undertaking to transfer its rights in the information (whereas the Crown requires transfer of sole and exclusive rights whether the Company presently holds these rights or otherwise)

(2) the adequacy of the schedule in respect of its identification of all the information as provided for in the letter of offer.

A revised draft Deed has been prepared and is attached for your consideration.

The schedule as drafted identifies only that information which is contained in formal reports prepared for the Company. The Crown's offer to purchase included all information collected for or generated during the studies and it is anticipated that information other than that included in the study reports would lie within the scope of that offer. It will, therefore, be necessary to develop a schedule which more comprehensively describes the information being acquired by the Crown and I seek your assistance in the preparation of such a schedule. Officers of my Department will be in Cairns on Thursday, 7th December, 1989 and would be available to consult with representatives of Connell Wagner to develop the appropriate schedule.

Further, my advice is that it is more appropriate to have a bilateral Deed than a Deed Poll because the bilateral Deed more properly and accurately reflects the arrangements constituted by the letter of offer and the Company's acceptance.

I have also been advised that the Crown should request a Deed of Assignment from each of the various consultants and sub-consultants. Such assignment would amount to adequate documentary evidence capable of satisfying the State that the Company is the legal owner of the relevant information and that no rights still remain with the originating authors of any of the material. A suggested form of Deed for this purpose is also attached.

Could you please provide me with any comments you have on the revised Deed and certified copies of the necessary Deeds of Assignment at your convenience."

The copies of the deeds referred to (apart from an incomplete heading on that first mentioned due to a photocopier malfunction) were as follows:

"1. The Government has agreed to purchase and acquire from the Company the information collected for and generated through the studies undertaken by and for the Company in addressing the requirements of Special Leases No.09/47886 and 09/49764.

2. The Company has agreed to transfer and assign to the Government the sole and exclusive proprietary rights in the information referred to in paragraph 1 for the price and subject to the terms covenants and conditions as hereinafter set out.

1. In this Deed - `the information' means the information collected for and generated through the studies undertaken by and for the Company in addressing the requirements of Special Leases No.09/47886 and 09/49764 and as more particularly set out in the First Schedule hereto.

2. The Company is the lawful owner of the information and warrants that it has the sole and exclusive proprietary rights in the information and further that it has the unencumbered and unfettered right to transfer the sole and exclusive rights in the information to the State.

3. In consideration of these presents and in consideration of the payment of the sum of $3,262,631.00 (being the cost to the Company of compiling the information) by the Government to the Company the Company shall and hereby does assign and transfer to the government the sole and exclusive right title and interest in the information for the sole and exclusive use and benefit of the Government and the Company hereby acknowledges that upon payment of the said sum all proprietary rights to the information shall thereupon vest in the Crown absolutely.

4. The Company shall ensure that every author of any part of the information or any consultant or sub-consultant associated with the preparation or creation of any original material forming part of the information who enjoys any proprietary right (including but not limited to copyright) in the information or any part of the information does all things and executes all agreements necessary to assign and transfer all rights in that information to the Company prior to completion.

5. Completion of this agreement shall be effected on or before 31 December 1989.

6. On or before the date of completion the Company shall satisfy the Government by such documentary or other evidence as the Government may require that it is the legal owner of the information and has complied with its obligations pursuant to clause 4 hereof.

7. The parties acknowledge that certain computer data files exist and that the proprietary rights to those computer programs noted as (a) Longwave - 2 dimensional model and (b) Estry - 2 dimensional model are held by and are the property of Connell Wagner and the computer program known as Rubicon - 1 dimensional model is owned by and is the property of CEANET and it is acknowledged by the parties that the Company has no proprietary interest in these programs.

8. It is acknowledged by the parties that the Company has no proprietary rights to data files relating to collated records of wind and waves and contained in Coastal Processes Volumes 1 and 2 but the Government may in its discretion seek at its own cost the retrieval collation or copying of that data onto magnetic media from Connell Wagner.

9. The Company shall deliver up to the Crown all data in computer compatible form which is identified in the First Schedule hereto and shall do all things and sign all such agreements as may be necessary to effect such delivery.

10. The parties acknowledge that certain information is in the custody of third parties in respect of completion of certain ongoing studies and reports relating to:-

11. AND further the parties agreed that the Company will at the cost of the Government do all such acts and things and execute all or any such agreements as may be necessary to cause those studies and information to be documented and further the parties acknowledge that the proprietary rights in respect of such studies and information when completed shall vest ion the Crown absolutely whether such reports are documented at the date of settlement or not.

12. If the Company should fail to obtain all proprietary rights to the information before the date of completion or should fail to comply and fulfil its obligations under the agreement then the Government may terminate this agreement by notice in writing and neither party shall have any claim against the other in respect of any matter arising thereunder.

1. Trinity Point Hotel Pty. Ltd. (the Company) has transferred to the Crown in right of the State of Queensland (the Crown) sole and exclusive rights in the information described in the Schedule hereto (the information).

2. The Crown requires that the Company obtain from the Assignor an assignment to the Company of all proprietary rights which the Assignor may have in the information.

That in consideration of these presents the Assignor assigns and transfers to the Company all proprietary rights (including but not limited to copyright) which the Assignor holds in the information absolutely for the benefit of the Company and that upon execution of this deed all proprietary rights of the Assignor in the information shall vest absolutely in the Company.

A copy of the Deed of Assignment was provided that day by the respondent to Connell Wagner, which was to sign a copy and have copies executed by the sub-consultants. The schedule was left blank because it was to be prepared by Connell Wagner and discussed with the appellant in Cairns on 7 December.

That evening, a director of the respondent (Sciacca) telephoned the senior employee of the appellant who was directly dealing with the matter (Mulheron). Earlier that day, Sciacca, who is himself a solicitor, had spoken to the respondent's solicitor, Mr Geoffrey Clark, a partner in Williams Graham & Carman of Cairns, and they had formulated amendments to the Crown Solicitor's draft deed to omit any requirement that the respondent assign information in the "public domain". Further the trial judge found that Sciacca "believed that what the Crown sought in Mulheron's letter of 5 December exceeded the provisions of the contract already made". The trial judge also made findings in relation to the telephone conversation between Sciacca and Mulheron. He said:

"At about 6 p.m. on 5 December 1989 Sciacca telephoned Mulheron. Mulheron said Crown Law had redrawn the deed Sciacca had prepared and had also drawn a deed of assignment. Sciacca referred Mulheron, among other things, to the notion that some of the information being purchased was not subject to copyright because it was in the public domain and said "I hope you are not trying to set us up for a default by asking us to perform something which is impossible to perform and make it a condition precedent". Mulheron replied "Absolutely not - the documents have been drawn by Crown Law in absolute good faith". Sciacca responded by saying in effect "If we are all acting in good faith then we would attend to all matters that are legally possible" and Mulheron said "I understand. That's right.".

It was during this conversation that Mulheron told Sciacca that Crown Law required a clearer schedule of what was being transferred and Sciacca replied saying in effect that Connell Wagner were the only people who could do that and he would speak to them immediately."

It was also found that Sciacca did speak to Connell Wagner as indicated.

On the following day, on the respondent's instructions, Connell Wagner transmitted the following letter and schedule to the appellant:

Further to your request of 5 December, we have provided the required schedule of information (other than formal reports or other items described in our letter dated 22 November 1989) held by ourselves and our various sub-consultants. As you will see from the attached schedule, we have established four categories of consultant/sub-consultant as determined by the type of role played in the research project. These categories are briefly explained below.

Organisations in this category are private companies which performed original research for the project and which are capable of assigning authorship. With the exception of miscellaneous data file referred to in our letter dated 22 November 1989, the information held but not included in the formal reports is limited to notes, calculation and correspondence files, originals of reports, drawings, and text, photographs, and miscellaneous third party published and unpublished data such as is usually accumulated by consultants in the evolution of their practices and over which the Principal would have no rights.

Organisations in this category are public bodies (either government departments or universities) which performed original research. Universities are publicly-funded education and research institutions and presumably cannot be directed in the manner of private companies. In the case of James Cook University, Prof Stark has since died and in any case, Trinity Point Hotel has previously granted limited rights of dissemination of the relevant information within academic circles (refer attached copy letters).

Organisations in this category performed limited field work and design work on behalf of Connell Wagner. In the case of Neumann Dredging, the field logs obtained from the sand quarry are included in the relevant report while Slurry Systems provided a letter (also included in the formal reports) base on their experience in the field of slurry transports. While it is possible that both organisations would have records of minor calculations and cost estimates, it is believed that these are of no commercial value or any worth to anyone. We do not believe that this work falls within the category of 'original research'.

The six organisations in this category were not responsible for any original research as their role involved the review and/or checking of the formal reports. In doing so, they made reference to various third party published and unpublished material in their possession, none of which was obtained for the purpose of this research project. Dr Fott in his role as geotechnical adviser took various field notes covering his two trips from San Francisco and performed miscellaneous preliminary calculations to guide and check the detailed work being done by the major consultants. The material supplied with the formal reports are the results of that guidance. We do not believe that this work falls within the category of 'original research'.

Each organisation/person in this category provided Connell Wagner with a written report (or reports, notes etc) during the evolution of the research and/or upon completion of the formal reports. Formal reports from Dr Bunt, Prof Bird, and Wilkins & Davies are included in the formal reports while those from the University of Queensland and Water Resources Commission consisted of detailed critiques for the purpose of quality assurance of the work as it progressed and which were taken into account in preparation of the final reports.

SCHEDULE OF INFORMATION HELD BY CONNELL WAGNER AND SUBCONSULTANTS

Correspondence files, Cost data, briefs & full reports, drawings

Correspondence files, video, fact sheet and project booklet, photographs, drawings, models, display panels

Calculation files, aerial photographs (ex Sunmap), drawings, wave and wind records, bathym metric data, system models for longwave

Calculation files, quantities, estimates, drawings, schedules

Calculation and correspondence files, estimates, drawings

Borehole logs, assorted samples, photographs, drawings, report originals

Calculation files, computer analysis data files, drawings, report originals

Borehole logs, assorted samples, photographs, drawings, report originals

Field notes, aerial photographs (ex Sunmap), report originals (incl. with DPI report), assorted third party literature

Field notes, observation log sheets (collated in report), notes from interviews, assorted third party literature, report originals

Club log book data (ex Trinity Inlet Management Study), ABS data, QCFO reports, notes from interviews, report originals

Civil Aviation Authority statistics (in report), various third party literature, report originals

Photographs, sketches, models, calculation files, drawings, schedules

AB data, correspondence files, records of interviews, various third party literature, report originals

ABS data, correspondence files, records of interviews, various third party literature, report originals

Calculation files, schedules, various third party literature, report originals

Field and laboratory notes, various third party literature, report originals

Proprietary computer software, reef terrain data, miscellaneous wind, tide and wave data, various third party literature, report

Field and laboratory notes, computer database, rough maps, photographs, various third party literature, report originals

Field notes, various third party literature, report originals

Field notes, various third party literature, report originals

Report originals, Cairns Post Article, various third party literature

The trial judge found that the schedule with that letter was prepared by Connell Wagner as a basis for discussion during the meeting planned to be held in Cairns on 7 December.

On the same day as that last letter from Connell Wagner, 6 December 1989, the respondent's solicitor wrote to the appellant suggesting amendments to the draft deed prepared by the Crown Solicitor which were intended, as the letter said, to reflect the fact that the Government had ready access to information in the public domain. Although it is unnecessary to set out the entire letter, other parts included the following:

"We detect a concern on the Crown's part about access to information in the public domain and prepared by Government Departments or Institutions of Research. Quite clearly this is information which the Government readily has access to from its own sources. Clearly it is information which our client has no copyright or proprietory (sic) interest in.

Clearly that which can be sold is only that which our client has a proprietory interest in and over which it could exercise proprietory (sic) rights so as to exclude access to the Crown to that information. If access is available to the Crown through its own Departments or because information is in the public domain, then clearly that access was never the subject of contemplation of the agreement between the parties.

We confirm that a Director of our client Company is presently in Brisbane and holds the appropriate Powers of Attorney to execute the Deed on behalf of the Company.

The above material and suggestions is offered by way of an attempt to resolve what appears to be a technical impasse only and in no way should be regarded as a retraction by our client Company from the agreement reached on 1st December, 1989 between the parties and as reflected in the executed Deed forwarded to the Crown on 1st December, 1989.

We confirm also that our client's consultants Connell Wagner, have forwarded an appropriately comprehensive Schedule of information together with authors and a brief summary of the nature of that information.

Should you have any queries arising out of the above please do not hesitate to contact the writer, or alternatively you may care to invite the appropriate person in the Crown Law Department to contact the writer directly."

Later that day, a meeting took place in Brisbane between the Director-General of the Premier's Department and the director of the respondent (Sciacca) and the member of the outgoing government (Tenni) who had attended the meeting on 4 December.

Prior to that meeting, Sciacca had executed on behalf of the respondent a deed in the form prepared by the Crown Solicitor amended in accordance with the respondent's solicitors' letter of the same date. That document was handed over at the meeting to the Director-General of the Premier's Department, together with copies of the Deed of Assignment signed by some only of the sub-consultants. (By the following day, 7 December 1989, which is the date upon which the appellant asserts the respondent repudiated the agreement, only seven Deeds of Assignment had been obtained from Connell Wagner and the following six sub-consultants:-

None of these deeds included a completed schedule and nor did the deed executed on behalf of the respondent by Sciacca. Despite this, Tenni, without dissent from Sciacca, said at that meeting that "the money should be paid ... as soon as possible. Legal action will be taken if it is not." Sciacca said: "We have now completed the agreement. We treat the agreement as completed except for the payment of money." The Director-General of the Premier's Department indicated to the respondent's representatives at the meeting that the documents would be considered.

He also told them of a further development which had occurred that day, namely a letter from the outgoing Premier to the incoming Premier requesting his concurrence to the execution of the deed by the appellant.

On the following day, 7 December 1989, the new Premier was sworn in and he expressed a wish that further action be deferred until he had obtained and considered detailed advice from the Crown Solicitor.

Mulheron and another employee of the appellant had flown to Cairns the previous evening and it was contemplated that the other employee would have discussions concerning the schedule with Connell Wagner. After speaking to the Crown Solicitor, they cancelled their appointment, indicating an intention to later fix another time or to have telephone discussions, and returned to Brisbane to provide a full briefing, when, as Mulheron said, "the legal processes took over".

By the time that occurred, the respondent, by its solicitor, had sent the letter dated 7 December 1989 which the appellant contends repudiated the agreement. That letter provided:

"RE: TRINITY POINT HOTEL PTY LTD - CROWN IN RIGHT OF THE GOVERNMENT OF QUEENSLAND

We confirm that we act for Trinity Point Hotel Pty. Ltd. (the Company).

We refer to Agreements entered into between the Company and the State of Queensland, which have been the subject of exchange of correspondence over recent weeks.

We refer in particular to the attendance at your office yesterday by Mr. Sciacca of our client Company and the delivery during the course of the morning of 6th December, 1989 of the Deeds of Assignment from the various consultants.

As our client is in now in a position where it has performed all of its obligations under the Agreement with the Government, our client has now completed the Agreement.

We are therefore instructed to call for the Government to complete the Agreement by the delivery of the funds constituting the purchase price namely $3,262,631.00.

We note that this amount was demanded by a Director of our client Company of you yesterday but that you were not in a position to deliver the cheque.

Whilst, funds are technically due immediately, our client is prepared, without prejudice to any of its rights, and having cognisance of the current administrative matters which may be concerning the Government, to delay exercising its rights until close of business (i.e. 5 p.m. Eastern Summer Time) on Monday 11th December, 1989.

However, we must advise that we have instructions to the effect that unless the sum is received into this firms Trust Account at National Australia Bank at 14 Shields Street, Cairns Account number 041 8921 by that time then we have instructions to immediately issue Writs and make application for Summary Judgment against the Government immediately thereafter.

The writer is available to discuss any aspect of this matter as you may wish at any time."

Subsequent events can be summarized relatively briefly.

The trial judge found that, having no reply or response to their letter of 7 December, the respondent's solicitors wrote again to the appellant on 13 December in the following terms:

We refer to previous correspondence and communications in this matter.

We refer in particular to the penultimate paragraph of our facsimile letter to you of 7th December, 1989. We note that we have not received payment on behalf of our client over the amount owing to it pursuant to the Agreement entered into between our client and the Crown in right of the Government of Queensland.

We confirm that we have instructions to issue Writs today against the Government. Nevertheless our clients have indicated that they have never sought to put this matter in the public arena and accordingly invite you to contact the writer today prior to 12:00 noon, Eastern Summer Time, if there are any matters concerning the delivery of funds pursuant to the Agreement between our client and the Government which you wish to put to the writer."

He also found that the response to that letter was the following letter dated that day from the Crown Solicitor:

I act for the Crown in right of the State of Queensland with respect to its dealings with the abovementioned Company, your client.

I refer to your letter of 7 December 1989 in which you assert that your client "has performed all of its obligations under the Agreement with the Government" and in which you insist upon payment forthwith of the sum of $3,262,631.00.

Without conceding the enforceability of "the Agreement" to which you refer, the Crown regards the assertion made on behalf of your client that it has performed all of its obligations under any such agreement as being clearly wrong. In the circumstances, such an assertion also reveals that your client does not take the contract seriously.

It is apparent from the correspondence emanating from your client and its consultant Connell Wagner that your client has not provided to the State of Queensland sole and exclusive rights to all the information collected for and generated through the studies undertaken by and for your client in addressing the requirements of Special Leases Nos. 09/47886 and 09/49764. Further, your client has not obtained or provided assignments of the rights in information held by its consultants so as to transfer to the State all the rights in the information.

For your client to assert that it has performed its obligations (when it has not done so), and to insist upon payment immediately (when it is not entitled to do so) involves a clear indication on the part of your client that it is prepared to carry out its part of the contract only insofar as it suits it to do so. Your client's unwillingness to perform its part of the agreement upon which it relies is manifest.

In the circumstances, your client's repudiation of the agreement entitles the Crown to determine the agreement upon which your client relies.

I am, therefore, instructed to advise you that any agreement between the Crown and your client is at an end.

The documents described as deeds of assignment which were previously forwarded to the Premier's Department will be returned to you by that Department forthwith."

It is common ground that, by that letter, the appellant terminated the agreement if, by then, it had been repudiated by the respondent.

There was further argumentative correspondence which it is unnecessary to discuss. Then, on 22 December 1989, the respondent issued its writ, which was specially endorsed with a claim for $3,262,631.00 as a debt due and owing. It was implicit in this claim that the respondent asserted that it had performed its obligations under the agreement and it unsuccessfully applied for summary judgment on this basis. This remained the respondent's position until an Amended Statement of Claim was delivered almost three years later on 22 September 1992. In that pleading, the respondent continued to maintain its claim for a debt, but added an alternative claim for specific performance, which is the relief which it seeks to maintain on this appeal. The respondent now accepts that its stand in December 1989, as manifested by its letters of 7 and 13 December, was wrong, that it had not satisfied its obligations under the agreement, and that it was not entitled to immediate payment and would only have become entitled to payment in return for performance, or at least substantial performance, of its part of the agreement which had not occurred. However, it was argued for the respondent that it nonetheless had not repudiated the agreement on or prior to 13 December 1989, when the appellant wrote to terminate the agreement.

The principles applicable to the major issue in dispute between the parties are not really in doubt. The point has been considered in the High Court on many occasions, including a number of recent decisions. Subject to one matter, it is sufficient to set out two passages, which were amongst those cited by the trial judge.

In Shevill v. Builders' Licensing Board [1982] HCA 47; (1982) 149 C.L.R. 620, Gibbs C.J. (with whose reasons Murphy and Brennan JJ. agreed) said (at p. 625-6):-

" As Lord Wright pointed out in Heyman v. Darwins Ltd. (1942) A.C. 356 at p. 378, repudiation is an ambiguous word and is used in various senses. We are of course concerned only with a case in which it is admitted that there was a valid and binding contract. Such a contract may be repudiated if one party renounces his liabilities under it -- if he evinces an intention no longer to be bound by the contract (Freeth v. Burr (1874) L.R. 9 C.P. 208 at p. 213) or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way (Ross T. Smyth & Co. Ltd. v. T.D. Bailey, Son & Co. (1940) 3 All E.R. 60 at p. 72; Carr v. J.A. Berriman Pty. Ltd. [1953] HCA 31; (1953) 89 C.L.R. 327 at p. 351). In such a case the innocent party is entitled to accept the repudiation, thereby discharging himself from further performance, and sue for damages: Heyman v. Darwins Ltd. (1942) A.C. at p. 399."

In Laurinda Pty Ltd v. Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 C.L.R. 623, Deane and Dawson JJ. said (at pp. 657-8):-

"Lord Wright's oft-quoted admonition that 'repudiation of a contract is a serious matter, not to be lightly found or inferred' (Ross T. Smyth & Co. Ltd. v. T.D. Bailey, Son & Co. (1940) 3 All E.R. 60 at p. 71) is, no doubt, a wise one. It should not, however, be allowed to cloud the fact that an allegation of repudiation of contract in a civil case does not involve an assertion that the alleged repudiator subjectively intended to repudiate his obligations. Thus, it is of little assistance in the present case to identify reasons why the lessor was unlikely to have subjectively desired to repudiate its agreement to grant a lease. An issue of repudiation turns upon objective acts and omissions and not upon uncommunicated intention. The question is what effect the lessor's conduct 'would be reasonably calculated to have upon a reasonable person' (per Lord Herschell L.C. Carswell v. Collard (1893) 20 R. (H.L.) 47 at p. 48; Forslind v. Bechely-Crundall (1922) S.C. (H.L.) 173 at p. 190. It suffices that viewed objectively, the conduct of the relevant party has been such as to convey to a reasonable person in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it."

However, the respondent relies upon a line of authority which establishes that an incorrect stance with respect to contractual obligations is not necessarily a repudiation of the contract. Thus, in DTR Nominees Pty Ltd v. Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 C.L.R. 423, Stephen, Mason and Jacobs JJ, with whom Aickin J. agreed, said at p. 432-433:

"No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him.

... on the evidence this Court would not be justified in finding that the appellant acted otherwise than in accordance with a bona fide belief as to the correctness of the interpretation which it sought to place upon the contract. Consequently it is a case of a bona fide dispute as to the true construction of a contract expressed in terms which are by no means clear (see Asprey J.A. in Satellite Estate Pty. Ltd. v. Jaquet (1968) 71 S.R.(N.S.W.) 126 at p. 149). In these circumstances the Court is not justified in drawing an inference that the appellant intended not to perform the contract according to its terms or that it repudiated the contract. That being so, the respondents were not entitled to rescind the contract for 'anticipatory breach' as they purported to do by their notice of 19th July 1974."

On the other hand, it is not an answer in every case that the party accused of repudiation has based its conduct upon an erroneous view of the contract. Thus, for example, it has been said that a purchaser would be entitled to treat a contract at an end if "the vendor persistently maintained an untenable construction of the contract": Dainford Ltd v. Smith (1985) 155 C.L.R. 342 at p. 350 per Gibbs C.J., with whom Dawson J. agreed; see also pp. 365-366 per Brennan J., with whom Mason J. agreed.

In The Progressive Mailing House Pty. Ltd. v. Tabali Pty Ltd [1985] HCA 14; (1985) 157 C.L.R. 17, the High Court held that a lease had been repudiated by a lessee which refused payment of the rent. At p. 37, Mason J., with whom Wilson, Brennan, Deane and Dawson JJ. agreed, said:

"The appellant's excuse for not paying the rent was that the work specified in the second schedule had not been carried out satisfactorily. Even assuming that this claim was well founded it did not entitle the appellant to refuse to pay the rent. The appellant persisted in maintaining a claim which was without any foundation, namely that it was under no liability to pay the rent until the work in question was carried out satisfactorily. This was a refusal to carry out its obligations according to the terms of the unregistered lease and a persistence in carrying them out in a way substantially inconsistent with these terms.

It is not to the point that the appellant acted in accordance with counsel's advice. This is not a case like D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty. Ltd. [1978] HCA 12; (1978) 138 C.L.R. 423, at pp. 431-433 in which there was a bona fide dispute as to the true construction of a contract expressed in unclear terms. Here there was simply no basis in the provisions of the lease to support the appellant's refusal to pay rent. The rent did not represent but a nominal amount or but part of the valuable consideration which the appellant had agreed to provide in return for the right to use and occupancy which it argued under the memorandum of lease. It represented the whole of what the respondent was entitled to receive in the ordinary course in respect of the demised land during the term of the lease in a context where it would continue to be liable for some of the outgoings in respect of the premises.

In the result the evidence supports the conclusion that the appellant's conduct amounted to a repudiation of the lease or a fundamental breach of its obligations under the lease. The fact that the appellant lodged a caveat on 11 July 1979 to protect its interest as lessee under the unregistered lease is not at all inconsistent with this conclusion. Though maintaining a claim to the benefit of a contract, a party may repudiate it or commit a fundamental breach of it by refusing to perform his obligations according to its terms."

The respondent does not now maintain the stance which it adopted in December 1989 (which continued until September 1992) or submit that its view was arguably correct, but asserts nonetheless that it acted bona fide, relying upon evidence concerning opinions held by its directors and solicitor and the material employee of Connell Wagner. However, this is a wrong approach. Subjective attitudes with respect to the nature and extent of contractual obligations do not determine whether or not a repudiatory intention is established; the intent of the party which has allegedly repudiated is to be determined as an objective inference from what it has said and done. The relevance of bona fides to intent is not derived from the party's subjective motives but from its acts and omissions, including the objective reasonableness of its conduct.

While the trial judge in his reasons stated the correct test to be applied and this Court must accord weight to the inferences which he drew (Warren v. Coombes [1979] HCA 9; (1979) 142 CLR 531, 551), there were a number of factors which impermissibly influenced his decision that the respondent did not repudiate the agreement.

Thus, by way of example, he appears to have rejected a conclusion that a reasonable person in the position of the appellant would have decided that the respondent intended to repudiate because the appellant "was not at the relevant time `a reasonable person' ... ". This seems not only immaterial but to have had an unsatisfactory foundation, being apparently related to a perception that the appellant had undergone a change in attitude which engendered a change in advice from the Crown Solicitor when the Government changed. While the appellant's attitude may have undergone a change, that seems to have no bearing upon whether or not the respondent repudiated the agreement, at least in the absence of a suggestion that the appellant's attitude or behaviour wrongly caused the respondent to act as it did. Further, if the matter be relevant, I do not consider that the evidence established any basis for the criticism which was made of the Crown Solicitor.

His Honour also considered it significant that letters from the respondent and its representatives went unanswered and that the appellant's employees did not pursue discussions concerning the schedules to the deeds. However, I am unable to discern how the appellant's omission to respond by 7 December to letters from the respondent on 5 and 6 December or postponing discussions with respect to the schedules could possibly have led the respondent to the attitude which it adopted by its letter of 7 December, and certainly that letter cannot have been induced by any continuing absence of communication from the appellant between 7 and 13 December. That was the date upon which the respondent repeated its inaccurate assertions and unjustified demands and the appellant acted to terminate the agreement.

The trial judge additionally placed weight upon the indications given by the appellant to the respondent that payment was anticipated earlier than the nominated date (31 December 1989), but such a finding provides no logical foundation for a claim to be paid immediately at a time when the respondent's obligations under the agreement were plainly unfulfilled.

Nor does "the informality with which the completion machinery of this purchase was handled" assist "in reaching the conclusion ..." that the respondent did not repudiate. The "machinery" involved urgent high level bureaucratic and even political contact simultaneously with the participation of the respondent's directors, solicitors, accountants and engineer. Taken with the substantial amount to be paid for property which needed careful description, the course which was being undertaken tends to emphasise the extraordinary nature of the respondent's stance and its peremptory assertions, demands and threats.

The respondent placed considerable reliance upon the concluding sentence in its letter of 7 December 1989 in which it advised that its solicitor, Clark, was "available ... to discuss any aspect of this matter at any time". However, taken in context, that statement simply cannot do all the work asked of it. At least one of the respondent's directors, Sciacca, who was also a solicitor, had been party to a suggestion of confrontation prior to 7 December, based on his perception that the respondent should do no more, and the respondent cannot but have known of the incomplete state of what it was offering in return for the price it demanded and that the documents which it had signed were seriously deficient. It would entirely contradict the substance of the remainder of the respondent's letter of 7 December, as well as its letter of 13 December, to regard the last sentence of the 7 December letter as an intimation that, although the respondent was asserting an unwarranted attitude it was open to be convinced that it was wrong and then would perform its true obligations.

The fundamental difficulty for the respondent in this matter is that its assertions, demands and threats on 7 and 13 December 1989 were not only untenable but, viewed objectively, must be taken to have been known to be so. It is sufficient to mention some of the circumstances:

(i) further discussions between the parties were needed to finalise the identification and description of the information which formed the subject matter of the agreement;

(ii) As the trial judge found, the respondent was acquiescent in the appellant's "pressing for as wide an expanse of information to be assigned to it as it could obtain", and the appellant was clearly "concerned with copyright in the material purchased";

(iii)only a fraction of the number of the necessary deeds of assignment had been received;

(iv) the deed executed by the respondent and each of the deeds of assignment was incomplete and inoperative.

There was no rational basis for an assertion that the respondent had performed all its obligations under the agreement, a demand for the very considerable price (more than $3 million) or the threat of legal action.

In the circumstances, the respondent did repudiate the agreement prior to the appellant's letter of 13 December and, by that letter, the appellant terminated the agreement.

Accordingly, the appeal should be allowed, the judgment below set aside and the respondent's action dismissed. The respondent should pay the appellant's taxed costs of and incidental to the action and the appeal.

Separate reasons for judgment by the President, McPherson JA. and Pincus JA.. The President and Pincus JA. agreeing in the order. McPherson JA dissenting

APPEAL ALLOWED. THE JUDGMENT BELOW IS SET ASIDE AND THE RESPONDENT'S ACTION DISMISSED. RESPONDENT TO PAY THE APPELLANT'S TAXED COSTS OF AND INCIDENTAL TO THE ACTION AND THE APPEAL

CATCHWORDS: CONTRACT - Breach - Respondent asserted it had performed all its obligations under an agreement to assign rights to information - respondent demanded payment before settlement date and threatened legal action - had not performed all of its obligations - whether anticipatory breach.

Counsel: Mr. P.A. Keane Q.C. with him Mr. G.J Gibson Q.C., Mr. M.W. Forde and Mr. G. Martin for the appellant

Mr A.J.H. Morris Q.C. with him Mr A. Moynihan for the respondent

Sly and Weigall Cannan and Peterson for the respondent

This is an appeal in a contract case. The appellant argues that the contract, which was one for a sale of information, was repudiated by the respondent. The appellant's case is based mainly on a letter of 7 December 1989 written by the respondent, which said in effect that the respondent had done all the contract obliged it to do and so was entitled to be paid the contract price.

It is now accepted that the respondent was not entitled to take the stance manifested by that letter, that it had by no means done all it was required to do, nor was it entitled to be paid the price. The respondent contends nevertheless that its letter should not have been held to be repudiatory, for various reasons, but mainly because the appellant should have treated the letter in question as reflecting an erroneous but bona fide view of the scope of its obligations under the contract.

The relevant parts of the documents principally in question are to be found in the reasons of the President, which I have had the advantage of reading. In these reasons the full text of those documents will not be found; for the sake of brevity, their content is generally merely summarised.

The respondent sued successfully for specific performance of an agreement pleaded as having been constituted by two letters, one dated 30 November 1989 from the appellant to the respondent and a reply dated 1 December 1989; the primary judge said the "express terms of the contract are found exclusively" in those two letters and that is common ground. Some analysis of their contents is necessary, to determine whether the allegedly repudiatory letter dated 7 December 1989 should have been construed by the appellant as having that character.

The background to the agreement was that the respondent had commissioned investigations pursuant to leases it had been granted for limited purposes; the general intention was that the respondent would, under those leases, have studies carried out in relation to the effect of a major proposal it hoped to put into effect, one for the development of a boat harbour and tourist resort at Cairns. In October 1989 the then Premier told the respondent, on behalf of the appellant, that the proposal would be rejected and a formal letter declining to grant a further lease was sent on 27 November 1989. Subsequently, and presumably because of a sense of moral rather than legal obligation, the appellant agreed to buy from the respondent, at cost, the information obtained in the course of its studies. One may be permitted the observation that had it not been for a change of government between the date of the contract and the time of intended performance the agreed sum - over $3M - might well have been paid, and in that sense political factors underlie the dispute. However, those factors are presently irrelevant, as are the motives and undisclosed ruminations of the participants; although this is by no means an ordinary commercial contract, the legal rights of the parties must be judged just as if it were such a contract.

The first of the two letters constituting the contract relied on, that of 30 November 1989, is one of the documents fully set out in the President's reasons and not again set out here. It offered to buy the "sole and exclusive rights to that information" and by "that information" what was meant was "information collected for and generated through the studies undertaken by and for" the respondent in "addressing the requirements" of the leases I have mentioned. The letter proposed conditions which should be summarised: (a) a warranty by the respondent of ownership of the information and capacity to transfer the "sole and exclusive rights" in it; (b) completion "some 30 days from the date of acceptance"; (c) prior to completion, the respondent to satisfy the appellant of its ownership of the information and failing that to obtain appropriate assignments; (d) the respondent to bring undocumented information in the custody of a third party into documented form; (e) computer compatible data held by a third party to be transferred to the appellant at date of completion; (f) failure on the respondent's part to obtain all rights to the information before the date for completion or to fulfil its obligations under the agreement gives the appellant a right to terminate.

The use of the expression "sole and exclusive rights" will be noted; this created a difficulty in applying the contract to one category of information collected for the relevant studies, namely that which was already, to use the respondent's language, in the public domain. One solution is to read the contract as impliedly excluding such information from its scope, but it is not necessary to decide that point.

Condition (c), contemplating that the respondent would obtain an assignment of the rights in information, also produced difficulty; as will appear, some assignments were produced, but they were ineffective and much of the information required to be assigned was never dealt with.

The data in computer compatible form, dealt with in condition (e), was to be transferred at the date of completion and it will have been noticed that condition (c) was also to be satisfied prior to completion. It appears arguable that, reading condition (f) literally, any failure in these respects gave the appellant a right to terminate; that may have been a matter of concern to the respondent, for the contract created obligations whose fulfilment promised to be complex and had to be completed "some 30 days" from acceptance of the appellant's offer.

To continue with the terms of the letter of 30 November 1989, it referred to the respondent's "project managers, Connell Wagner" as the custodians of certain undocumented information and also some held in computer compatible form; it stipulated that Connell Wagner should undertake to make all such information, save certain identified computer programs, available upon request. It is unnecessary to make any further reference to that subject.

The contract contemplated that a deed would be drawn up transferring the "sole and exclusive rights" in the relevant information to the appellant. Deeds were in fact drawn and are further mentioned below.

On 1 December 1989, the day after the letter of offer, the respondent accepted it in writing. The next point requiring discussion is the identification of the steps taken towards compliance with the respondent's obligations prior to the date of the alleged repudiation, 7 December 1989 - 6 days after the letter of acceptance of the appellant's offer.

By a letter of 6 December 1989, written with the respondent's authority, Connell Wagner listed persons and organisations having relevant information and indicated the general nature of the information thought to be held by each. That day deeds of assignment from six of those entities were handed to a representative of the appellant by a Mr Sciacca on behalf of the respondent. It will be recalled that condition (c) required either evidence of the respondent's legal ownership of relevant information or an assignment of the rights of the owner to the respondent. The assignments in question were apparently intended to satisfy the obligation mentioned in the second alternative; however, none of the deeds of assignment executed had any legal effect. Each assigned rights which the assignor held in information described in "the schedule hereto", but there was no schedule in any of them. Apart from those six assignments, there was produced an assignment by Connell Wagner itself. This had the deficiency just mentioned, namely that there was no schedule defining the information assigned, but in addition the assignment was conditional, being made "subject to payment of all outstanding fees".

As to the other persons and organisations mentioned in Connell Wagner's letter of 6 December, no assignments were produced on that date. For the sake of accuracy it is necessary to mention that the lists of persons and organisations holding information were not entirely consistent. A letter of 1 December 1989 which Connell Wagner wrote to a number of persons and organisations, advising them of the agreement between the appellant and respondent, was sent to two parties, named as Tropical Environment Services and B & M Public Affairs who were not mentioned in the Connell Wagner list of 6 December. Further, the schedule produced by Connell Wagner on 6 December purporting to list the information held omitted three of the parties included in a Connell Wagner list of 23 November 1989, namely Tropical Environment Services, Mapping & Hydrographic Surveys and Williams Graham & Carman. These discrepancies are not of any great consequence, except perhaps as illustrating the detail which had to be mastered if the respondent was to be safe from the threat of termination under condition (f) on the ground of failure to obtain "all rights and information before date for completion". But the essential point is that, so far from assignments of all the relevant information having been obtained, no effective assignments whatever had been obtained by 6 December, with respect to information of which the respondent was not the legal owner on that date.

As is explained in detail in the reasons of the President, it was asserted on 6 December on behalf of the respondent, at the meeting at which the seven ineffective assignments were produced, that the money had to be paid and that the respondent had completed the agreement. Then the letter of 7 December, principally relied on as repudiatory, was sent. It referred to the delivery on 6 December "of the Deeds of Assignment from the various consultants". I am unable to understand how it can be suggested that the writer, a solicitor, could have regarded those assignments as complying with the respondent's obligations. Those which were produced depended for their efficacy on schedules which were not included and most of the relevant persons and organisations had not executed any assignment. Not only had Connell Wagner prepared schedules making it clear that there was information held by persons and organisations mentioned in Connell Wagner's letters, but correspondence from the respondent's solicitors disclosed that they were aware of that position. I refer in particular to the letter from Williams Graham & Carman solicitors dated 6 December 1989 referring to Connell Wagner's having "forwarded an appropriately comprehensive Schedule of information together with authors and a brief summary of the nature of that information".

The letter of 7 December 1989 included the following :

"As our client is in now in a position where it has performed all of its obligations under the Agreement with the Government, our client has now completed the Agreement.

We are therefore instructed to call for the Government to complete the Agreement by the delivery of the funds constituting the purchase price namely $3,262,631.00.

We note that this amount was demanded by a Director of our client Company of you yesterday but that you were not in a position to deliver the cheque.

Whilst, funds are technically due immediately, our client is prepared, without prejudice to any of its rights, and having cognisance of the current administrative matters which may be concerning the Government, to delay exercising its rights until close of business (i.e. 5 p.m. Eastern Summer Time) on Monday 11th December, 1989.

However, we must advise that we have instructions to the effect that unless the sum is received into this firms Trust Account at National Australia Bank at 14 Shields Street, Cairns Account number 041 8921 by that time then we have instructions to immediately issue Writs and make application for Summary Judgment against the Government immediately thereafter.

The writer is available to discuss any aspect of this matter as you may wish at any time."

The demand for payment of the money and the statement that the respondent had "performed all of its obligations" and "now completed" the agreement were related to one another. That was so because the principal obligations of the respondent under the agreement were, insofar as any time was expressly set for their fulfilment, to be done either prior to (condition (c)) or on (condition (d)) or at (condition (e)) completion; there was no express requirement of the agreement that the undertaking by Connell Wagner about making information available to nominated agencies should be produced at or before completion. With that possible exception, the respondent's obligations and that of the appellant were, at best for the respondent, concurrent. So that it would have made no sense for the respondent to have demanded the money unless it were also asserting either that it had done all the contract required or that any deficiencies would be remedied at settlement. It may be that unjustified demands are commonly made, of such a kind as to convey unwillingness to comply with the contracts giving rise to them; if so, then those who make such demands should be aware that they may incur risks, illustrated by this case, in doing so.

It is of course clear that the appellant does not have to demonstrate, in order to succeed, that the respondent said that there was no longer any contract or that the respondent denied that the contract created obligations which continued to subsist. Precisely what the appellant must show is a matter which may be variously expressed, according as one chooses a formulation derived from one authority or another; but it is my opinion that for present purposes the test mentioned and applied in the reasons of McPherson J.A. is the appropriate one. I repeat it; there must be words or conduct by which a party "evinces an intention no longer to be bound by the contract...or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way". It is the second alternative which is more relevant here.

It was contended that the manner in which the letter indicated the respondent proposed to fulfil its obligations was substantially inconsistent with its obligations and I can see no good answer to that. Its true position on 7 December was that nothing had been done to obtain title to a substantial part of the information the subject of the agreement; as has been explained, only about a third of the persons and organisations involved had executed assignments and none of those was effective. Despite that, the respondent said, in effect: "We have done all the contract requires and are entitled to be paid; and we will sue if not paid". I should add that Connell Wagner wrote in their letter of 6 December that some of those persons and organisations had nothing in their possession falling within the category of "original research"; but that appears not to be relevant, as the appellant's rights to information under the contract were not confined to that which constituted "original research".

I have mentioned that the contract between the parties called for a deed; it was to be one "transferring the sole and exclusive rights in this information to the State Government". On 6 December, after some prior exchanges on this subject, the respondent gave the appellant an executed deed. A question arises whether that met the contractual requirements and a number of arguments appear to be open suggesting a negative answer. Only one of them requires to be mentioned. Clause 1 of the deed, defining the information assigned by it, included the words "...as more particularly set out in the First Schedule hereto", there being no schedule. The contract expressly provided for the inclusion of a schedule in the deed and the primary judge was of the view that the absence of a schedule falsified the respondent's claim by its letter of 7 December to have performed its obligations under the contract. However, his Honour appeared to have been of the view that the respondent's case got some assistance from the fact that it "regarded the matter of the schedule as something which would be satisfactorily resolved by discussion after the purchase money was paid". With respect, that cannot have anything to do with the question whether on 7 December 1989 the respondent had any right to assert that it had done all the contract required. In my opinion, the judge was right in thinking that the absence of a schedule from the deed made it defective; there was plainly room for argument about the content of the schedule, and in its absence the deed was simply ineffective.

It was, as I understood the argument, suggested that the letter of 7 December did not definitely or finally adopt the stance I have mentioned, and in that connection reliance was placed upon the reference at the end of the letter to the availability of the writer for a discussion. It might be suggested that the sentence qualified the stance unequivocally announced in the earlier part of the letter or indicated that it was to be taken as a tentative one only - exploring the ground, so to speak. I do not think a reasonable recipient of such a letter would take it to be intended to have an effect of that kind, particularly a recipient aware of the attitude orally expressed on behalf of the respondent on the previous day, namely that the respondent had completed the agreement and demanded payment. In my opinion, a general statement to the effect that the lines of communication remain open would not ordinarily render ineffective a letter which would otherwise be held repudiatory. To conclude that it did so would tend to destroy the point of the doctrine which attaches a penalty to a party's renouncing its obligations under a contract. One purpose of that doctrine is to enable the other party immediately to free itself from its own obligations, where it appears that the obligations owed to it have been repudiated. To attribute to the last sentence in the letter of 7 December the effect of extracting all the vice from the letter would, in my view, be too generous to those inclined to repudiate their obligations.

Dr Carter suggests, in his work on "Breach of Contract" 2nd ed. at p. 280 that:

"...for bona fides to prevent conduct from constituting a repudiation, it must be established that the proper course for the promisee is to take out a construction summons to vindicate the promisee's construction of the contract."

That appears to me, with respect, not to be supported by authority; but it is nevertheless correct, as the learned author's discussion illustrates, that not every announcement a party makes about the way in which it regards its contractual obligations is excluded from the possibility of being held a repudiation, if shown to be based on a mistake in construction: Luna Park (NSW) Ltd v. Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 C.L.R. 286, Federal Commerce and Navigation Co. Ltd v. Molena Alpha Inc. [1979] A.C. 757 at 780E, 786D. (There may be some difficulty in reconciling the approach taken in the latter case with that used in Woodar Investment Ltd v. Wimpey Construction UK Ltd (1980) 1 W.L.R. at 277.) A recent statement in Braidotti v. Queensland City Properties Ltd [1991] HCA 19; (1991) 172 C.L.R. 293 at 304 refers to the leading High Court authority and to "cases...where a party acts on a mistaken but bona fide interpretation of a contract in circumstances in which it is proper to infer that the party, though maintaining that his or her interpretation of the contract is correct, will perform the contract according to its terms, if the interpretation is shown to be incorrect." The letter primarily relied on by the appellant, that of 7 December, was not one which implied a willingness to act in a way utterly different from that expressed in the letter, on suitable arguments being advanced. Its tone was intransigent, and appears more so if one has regard to the similar communications of 6 December and 13 December. Let it be assumed that in truth the respondent did not mean what it said; it took the risk that the appellant might simply take the respondent at its word, rather than attempt to persuade it to comply with the contract.

Although, as it appeared to me, the respondent's counsel did not strongly press upon us that all the learned primary judge's reasons for holding that there was no repudiation should be adopted, it is necessary to say something of them. His Honour mentioned a number of considerations as favouring his conclusion on the subject, not all of which call for discussion.

The judge pointed out that on 1 December 1989 one Mulheron, on behalf of the appellant, told one Sciacca on behalf of the respondent that the Governor in Council had approved payment and wanted to pay the plaintiff as quickly as possible. His Honour remarked: "This statement...led the plaintiff quite reasonably to anticipate payment well before 31 December 1989". In my respectful opinion, the statement of 1 December made by Mulheron is irrelevant to the present problem. The parties could of course have settled whenever they liked, but the repudiatory letter did not deal with the question whether payment might be expected or conveniently made on a certain date; it demanded payment, on the basis that the respondent had done all that was required of it.

The judge also found that after 7 December 1989, Mulheron and one Cook, who had been having certain discussions with the respondent, had matters "effectively taken out of their hands and they were not permitted to enter into any such discussion". Again, I do not regard that as being an issue which had to be resolved. It was not material that the appellant chose, after 7 December, not to use Messrs Mulheron and Cook to represent it.

Lastly, it appears desirable to make reference to his Honour's expressed view that the appellant was not a "reasonable person" at the relevant time. That observation follows shortly after his Honour's statement of the test to be applied as including "the effect of the plaintiff's conduct on a reasonable person in the shoes of the defendant". The opinion that the appellant was not a reasonable person was based on the fact that "the Premier's views as to paying the plaintiff were I infer operating in the Government's instructions to the Crown Solicitor". The underlying proposition appears to be that if the party which accepts the repudiation is pleased to be able to do so, because it would prefer not to have to carry the contract out, it is therefore unreasonable and no repudiation by the other side can avail it. In my respectful opinion that proposition is unsound. It may commonly happen that a party is glad to receive a repudiatory letter, because it does not itself wish to carry out the contract dealt with by the letter. This cannot produce the result that the recipient of the letter is not entitled when told by the other party: "I will not do that which, in substance, the contract requires of me", to reply: "Nor then will I; the contract is at an end". More generally, it is not the law that the right to accept repudiation is denied to those who regard the contract as disadvantageous and would be glad to get rid of it.

As I have mentioned, it was contended on behalf of the respondent that the decision below could be upheld on the basis that the letter of 7 December 1989 put forward or was based upon a bona fide, but mistaken view of the effect of the contract. It appears to me to follow from the above discussion of the respondent's obligation under the contract, and what had been done by 7 December to comply with it, that the submission has no real strength. Considering the matter objectively, as counsel for the respondent correctly conceded one must do, the letter amounted to a plainly erroneous assertion that the respondent, not having assigned anything like the requisite information to the appellant, was nevertheless entitled to be paid the full price and not obliged to do anything further. There was not put before us any possible construction of the contract which could justify the attitude expressed in the letter of 7 December. What was argued, as I understood it, was that such an attitude might have been justified if the contract had been in terms, not of the contract sued on, but some pre-contractual communications. I am unable to see why the recipient of what would otherwise have been a repudiatory letter should lose the right to accept on such a ground. It has never been in issue that the contract is contained only in the two documents mentioned above.

In my opinion, an inference which might reasonably be drawn is that the respondent's attitude was produced, not by a mistaken view of the effect of the contract, but by the thought that the new government could be bluffed or pressured into settling prematurely, coupled with the notion that it might be difficult, as a practical matter, to comply fully with all the obligations of the contract, as condition (f) seemed to require, in time for settlement during the month of December. Counsel for the respondent used the expression "stratagem or tactic", in reference to the respondent's letter of 7 December. But it is unnecessary to pursue that to a conclusion; to characterise a repudiation as possibly tactical does not deprive it of legal effect.

The learned primary judge held that the expression "information" in the contract was to be read as confined to that mentioned in certain schedules to a letter from Connell Wagner dated 23 November 1989 and referred to above, together with certain computer compatible data. As to those schedules, reference to them shows that they refer only to reports, in being or forthcoming. It is my respectful opinion that his Honour's conclusion on that aspect of the matter is erroneous. By no permissible process of construction can the expression used in the contract, "information collected for and generated through the studies undertaken by and for your company...", be so far read down as to exclude all information other than that which has been or is to be embodied in reports. The expression quoted is not capable of that meaning; nor, with respect, does anything in the rest of the contract give support to his Honour's interpretation. If the parties had intended that the sum agreed be paid for such information only as might be embodied in reports, it would have been simple enough to say so. Only by a process of rectification - and a rather drastic one at that - could the parties' agreement be treated as having the content found by his Honour. However, the point seems peripheral, for on any view it is clear that the demand made on 7 December was one which had no basis in law and that it was founded on an entirely wrong assertion that the respondent had done all it was obliged to do.

Next, reference should be made to a second allegedly repudiatory letter relied on by the appellant, that of 13 December 1989. I think it unnecessary to set out the terms of that letter, which are mentioned in the President's reasons. Its only importance is that it echoes the letter of 7 December insofar as it invites the appellant to contact the writer. However, the proposed subject of contact is only "matters concerning the delivery of funds pursuant to the agreement...", confirming to some extent the notion that the reference at the end of the letter of 7 December to the possibility of discussion was not intended to qualify the assertions contained in that letter.

Lastly, it should be mentioned that there is some support in the United States for the view that there might be two levels of repudiation: one in which a communication is made of such a kind as to create doubts in one party about the other's intention to complete the contract, and the higher level, corresponding to the notion of repudiation in our law. I refer to Williston on Contracts 3rd Ed. Vol.11 pp. 111-112, 138. The point of the distinction is that at the lower level the only right given to the "innocent party" is to put an end to the contract, whereas at the higher level damages may be able to be recovered as well. In my respectful opinion the distinction makes some practical sense, but it is not open to an intermediate Australian appellate court to adopt or rely upon it.

The appeal should be allowed on the ground that the respondent repudiated the contract by demonstrating an intention to act on it "only in a way substantially inconsistent with [its] obligations and not in any other way". I would set aside the orders made by the learned primary judge and in lieu of them order that the respondent's action be dismissed, and I would order that the respondent pay the costs here and below.

Judgment delivered the Twenty First day of October 1993

The first and the principal question on this appeal is whether, as the appellant submits, there was a repudiation of the contract by the respondent that brought it within the scope of the rule entitling the appellant as the other party to treat the contract as discharged. To constitute such repudiation, there must be words or conduct by which a party "evinces an intention no longer to be bound by the contract ... or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way". See Shevill v. Builders Licensing Board [1982] HCA 47; (1982) 149 C.L.R. 620, 625-626, per Gibbs C.J., adopted by Mason J. with the concurrence of Wilson, Deane and Dawson JJ. in Progressive Mailing House Pty Ltd v. Tabali Pty Ltd [1985] HCA 14; (1985) 157 C.L.R. 17, 33.

This appeal is concerned primarily with the applicability of that principle. In the present case the repudiation is said to have been brought about by the words used in the letter of 7 December 1989 from respondents' solicitors in Cairns to the Premier's Department. The letter contains no express repudiation. There is nothing in it that says the contract is no longer binding, or that the respondent will not perform it, or intends to fulfil it in any particular manner. The argument that a repudiation is involved must therefore rest on inference or, more accurately, implication from the terms of the letter itself.

I do not find it possible to derive from the contents of the letter an intention on the part of the respondent either that it would not any longer be bound by the contract, or that it would perform the contract only in a manner that was inconsistent with its obligations. The letter on analysis yields only three matters of present relevance. The first is the assertion that the respondent "has performed all of its obligations" under the agreement with the appellant, and so has "now completed" the agreement. The second is the claim that the contract price of $3,262,631 is due "immediately" coupled with a demand on the appellant that it pay that sum by 5 p.m. on 11 December 1989. The third is the further statement that the solicitors have instructions that, unless the sum is received by the time specified, they are to issue writs and apply for summary judgment immediately.

Of these three matters, it is plain that the particular assertion that the money was due and payable was not capable of conveying the requisite intention to repudiate. Premature demands for payment of debts, whether or not they are accompanied by threats of legal proceedings, are a recurrent feature of legal and commercial life. There is sometimes reason to suspect that such demands are made in the full knowledge that the debt claimed, or a part of it, may not be due at all. Neither that circumstance, nor the fact that the demand is coupled with a threat to enforce it by action, adds anything in the nature of a repudiation to the demand itself. It is largely a sabrerattling ritual and commonly recognised as such.

If the intention to repudiate is to be discovered in the letter, it can be found, if at all, only in the assertion that the respondent had "completed" the agreement and "performed all its obligations" under the contract with the appellant. For this claim there was no factual or legal foundation whatever. So much is now acknowledged by the respondent. Again, however, experience shows that groundless overstatements of that kind are not unknown in letters of demand written by lawyers on the instructions of their clients. It would be exceptional for anyone to view them as evincing an intention no longer to be bound by the contract. On the contrary, and particularly when taken with a demand for payment like the one made here, it is the essence of such an assertion that the contract is binding on both parties, and that the other party should at once attend to performing his part of it.

If (as I consider) the statements in the letter fail to evince an intention not to be bound, the only remaining basis on which they might be brought within the scope of the principle in Shevill's case is that they reveal an intention on the part of the respondent "to fulfil the contract only in a manner substantially inconsistent with [its] obligations, and not in any other way". Stated like that the principle is not apt to cover the present case, where the matter to which the respondent's letter was directed was not the future fulfilment of its own obligations (which it claimed were already complete) but the performance by the appellant of its obligations under the contract, which were alleged to be due immediately. For the appellant to sustain an argument based on a repudiation in this form, it would at the very least have to show that, in demanding from the appellant immediate payment in consequence of its own asserted complete performance, the respondent was also insisting on interpreting the contract in a manner that treated all of its obligations as having been completely satisfied : cf. D.T.R. Nominees Pty Ltd v. Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 C.L.R. 423, 433.

To approach the question here in that fashion would, it seems to me, be quite artificial. There is not a hint of anything about interpretation in the letter. At the time of writing it the respondent was obviously not engrossed in any such question. It was simply demanding something that was not (yet) due to it under the contact, and which, it may fairly be assumed, was known by both parties not to be due to it. The case is not directly covered by what was said in Shevill. Comparable circumstances do not appear to have been considered or analysed from the standpoint of a repudiation in any English or Australian case unless Morris v. Barron & Co. [1918] A.C. 1, 41, can be viewed as an example. Such cases have, however, arisen with such relative frequency in the United States as to produce a rule or principle, which is stated in Corbin on Contracts, vol.4, s973, at 910, as follows:

"If one party to a contract, either wilfully or by mistake, demands of the other a performance to which he has no right under the contract and states definitely that, unless his demand is complied with, he will not render his promised performance .... an anticipatory breach has been committed. Such a repudiation is conditional in character, it is true; but the condition is a performance to which the repudiator has no right."

The authorities used by Corbin in formulating this principle include Michigan Yacht & Power Co. v. Busch 143 F.929 (1906) and J.A. Humphrey v. Placid Oil Co. 142 F.Supp. 246 (1956). In the first of these cases a purchaser refused to pay an instalment of price due on a vessel being built for him unless he was given security. In holding he had thereby repudiated the contract, the Federal Circuit Court of Appeals said (at 932) it was not a case of simple omission to pay, but of positive refusal by the purchaser to perform the contract unless the other party provided a security there was no obligation to give. In the second of the two cases, the defendant sent a telegram to the plaintiffs insisting that they carry out additional expensive testing procedures not required by their oilwell drilling contract, and concluding:

"We request that [oil] well be properly tested as herein provided, the failure of which will be a material breach of agreement and a forfeiture of all your rights under the same."

In holding it an anticipatory breach justifying rescission, Sheehy C.J. said that, although couched in terms of a request, the telegram was in effect "a positive unconditional statement on the part of the defendant that it would not perform the contract by making payment to the plaintiffs of $25,000" unless the additional testing was carried out. The decision in Placid Oil is the closest I have been able to find to the facts of the present case. It is distinguishable because of the clear threat that was made there to withhold payment if the extra work was not done.

The present case would fall fairly within the principle stated by Corbin if the letter of 7 December had made it plain that there would be no further performance by the respondent unless the appellant paid the price by 11 December, which was something that in the circumstances it was not yet bound to do. The letter did not, however, expressly say that, or anything like it; nor can it properly be considered as impliedly refusing performance of the contract or threatening to refuse it. If it had done so impliedly, it would still probably not have been sufficient to attract the principle. According to Corbin, what is required to constitute repudiation is a "definite and unequivocal manifestation" of intention not to render the promised performance when the time for it arrives : Corbin on Contracts, s973, at 905. Williston says "the defendant's refusal to perform must have been positive and unconditional" : Williston on Contracts, 3rd ed., s1322, at 130. What is stated in those treatises is amply borne out by the terminology adopted in decisions such as Mobley v. New York Life Insurance Co. [1935] USSC 124; 295 US 632 ("some unqualified refusal"); Ackley v. Hunter 51 S. 964, 968 ("distinct and unequivocal refusal"); STC Inc. v. Billings 543 P2d. 374, 378 ("positive, unequivocal, absolute expression of intention not to perform").

It seems to me that the principle adopted in the United States should be applied here unless in this particular there is a material difference between that law and ours. I do not think there is. The ordinary meaning of the word repudiation is "to refuse to discharge or acknowledge a debt or other obligation" (O.E.D., applied in William Cory & Son Ltd v. London Corporations [1951] 1 K.B. 8, 14; affd. [1951] 2 K.B. 476). To speak, as the Australian authorities do, of evincing an intention not to perform, or of an intention to perform only in a manner substantially inconsistent with the contract, is to describe a refusal to perform. The American authorities say that the refusal must be "distinct" or "unequivocal", whereas our decisions stress that repudiation is a serious matter, which is not to be lightly found or inferred : Shevill v. Builders Licensing Board [1982] HCA 47; (1982) 149 C.L.R. 620, 633; Laurinda Pty Ltd v. Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 C.L.R. 623, 657. The difference is one of emphasis rather than of substance. In Rawson v. Hobbes [1961] HCA 72; (1961) 107 C.L.R. 466, 481, Dixon C.J. spoke of "a definitive resolve or decision against doing in future what the contract requires". His Honour's remarks were there directed specifically to the absence of readiness and willingness by the vendor of land as excusing the purchaser from going on with a sale; but the underlying principle is the same. Indeed, the task of establishing repudiation must needs be more, rather than less, exacting than demonstrating absence of readiness and willingness to perform.

The result therefore is, as I see the matter, that the trial judge was correct in concluding that the respondent had not, by its solicitors' letter of 7 December 1989 or otherwise, repudiated the contract with the appellant. It did not expressly refuse to perform its obligations in the future, and it did not do so impliedly. Although it wrongly claimed to have performed its obligations, and demanded payment for doing so, it did not refuse to render performance in the event that its demand was not complied with. There was on the respondent's part no distinct or unequivocal refusal or expression of intention not to perform, and no definitive resolve against doing in future what the contract required of it. I see nothing at all in the respondent's solicitors' letter of 13 December 1989 that might be said to detract from this conclusion; rather the contrary.

The decision of the trial judge on this aspect should in my opinion not therefore be disturbed.

The second point in the appeal, although it is a subsidiary one, concerns the identity of the contractual subject matter. In the letter dated 30 November 1989 containing the offer it is described as "information collected for and generated through the studies undertaken by and for your Company in addressing the requirements of Special Leases No. 09/47886 and 09/49764 ...". The trial judge considered that the information so described was capable of bearing a narrow or a broad interpretation. Stated in a general way, the former had the effect of excluding from the matters being transferred some reports of subconsultants, and also what may be called the primary materials on which a final report had been based; for example, field notes, surveys, working papers, calculations and so on.

Items like these appear to fall within the literal terms of the subject matter as it is described in the letter of offer. Such items might also be thought fairly to have been within the contemplation of the parties in using the word information. The trial judge nevertheless preferred the narrow meaning of the contract, which excluded items of the kind mentioned. In doing so, he was influenced by evidence of prior negotiations and discussions between the parties or their representatives, and by the impression he formed of the genesis and purpose of the contract.

There is no doubt that parole evidence of surrounding circumstances may be used to identify the subject matter of a written contract, and that evidence of the knowledge of the parties is a circumstance that on occasions may be capable of being derived from prior negotiations. See Codelfa Constructions Pty Ltd v. State Rail Authorities of NSW (1982) 149 C.L.R. 337, 348-352. Before us the appellant contended that, even so, parole evidence is not available for the purpose of identifying a subject matter except where there was some element of ambiguity in the contractual description, which it was submitted was not so here.

I am inclined to agree that there is no apparent ambiguity in the subject matter as it is described in the letter dated 30 November. Whether or not that means that parole evidence ought to have been excluded from consideration, I have not found anything in the particular evidence in question helpful in confirming the respondent's claim that the contractual subject matter should be approached in the narrow manner contended for. The fact that before the letter of 30 November was received, or the offer it contained accepted, the parties or their representatives may have written and spoken about only some of the reports, and not of others or the material on which they were based, does not mean that they so defined or confined the subject matter as to take it outside the terms that were later used to describe it in that letter. Indeed, on one view, the contrary might be thought to be the case.

There is, however, a difficulty about dealing with this aspect of the matter on appeal. His Honour's conclusion on the question of the construction of the contract is not reflected in any declaration to that effect, nor directly in any order forming part of the formal judgment. However, as a part of the decree for specific performance of contract, the parties were directed to prepare and execute a deed giving effect to that contract. In carrying out this order, as they did before the appeal was heard, they naturally adopted, and the executed deed reflects, his Honour's view of the proper construction of the contract. Fortunately, the possibility of a successful appeal on this aspect of the matter was expressly catered for by the parties in the final schedule to the deed that they executed. Another deed is to be substituted should the decision on appeal require it.

For my part I cannot see that it was or is necessary at this stage to go further than to order specific performance of the agreement sought to be enforced. Having regard to matters that are no longer in issue, it was no doubt more than a simple spirit of helpfulness that prompted his Honour to pass upon the question of construction concerning subject matter. But it was not essential for him to have done so before ordering specific performance. The case was one in which particular questions might well arise, in the course of attempting to settle the contract consequent on a decree for specific performance, about the precise scope or extent of the information sold. If the parties were unable to agree on how those questions should be resolved, it was always open to either or both of them to apply to the Court for directions in the course of working out the order for specific performance. Liberty to apply is implicit in a judgment such as this.

Requiring that a deed be executed by the parties might well effect some saving in costs; but it ran the risk that, without concrete instances of the particular problems that might arise, the provisions of a deed drafted to anticipate them might say either too much or too little. In those circumstances it is preferable to leave the parties to exercise their right to apply as and when any apparently insoluble problems arise.

In these circumstances I would be prepared to allow the appeal, but only to the extent of varying the judgment below by omitting the second, third and fourth paragraphs of that judgment. Otherwise the judgment below should stand, and the appeal should be dismissed with costs.