WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED (1) [2007] WASC 78 (28 March 2007)

WRIGHT PROSPECTING PTY LIMITED -v- HANCOCK PROSPECTING PTY LIMITED (1) [2007] WASC 78 (28 March 2007) - WASC 2007 case summary — Zoe

[16]

(i) the Plaintiff's asserted entitlement to the Defendant's interest in the Rhodes Ridge project; or

(ii) the asserted right to require transfer to itself (being the Plaintiff) of the Defendant's interest in the Rhodes Ridge project;

Particulars

(aa) document headed 'Notes on Discussions Re: WPPL's Position in relation to Hancock and Wright and in particular Rhodes Ridge' (WPPL discovered document A186, Tab 919A;

(bb) letter HPPL to Mrs Angela Bennett dated 7 August 1992 enclosing HPPL's faxes to Robert Hubbard of Coopers and Lybrand dated 3 April 1991 and 16 May 1991 respectively (WPPL discovered the contract no 189, Tab 930A);

(cc) letter WPPL to Mrs G H Rinehart dated 10 February 1993 (HPPL discovery number 762, Tab 934A);

(dd) facsimile transmission HPPL to Doug Salt of WPPL dated 18 February 1993 (HPPL discovery number 766, Tab 934C);

(ee) document headed 'Notes on Meeting between Gary Schwab (HPPL) and Doug Salt (WPPL) held on 22 February 1993' (WPPL discovered document no 676, Tab 395);

(ff) facsimile transmission WPPL to John Ralph, CRA Limited dated 31 March 1993 (WPPL discovery number 201, Tab 938);

(gg) letter Hamersley Resources Ltd to HPPL dated 14 September 1993 (HPPL discovery number 780, Tab 590);

(hh) letter Hamersley Resources Ltd to WPPL dated 14 September 1993 (WPPL discovery number 218, Tab 951);

(ii) letter WPPL to Mr I J Williams, Hamersley Resources Ltd of 27 September 1993 (HPPL discovery number 784, Tab 952);

(jj) letter HPPL to Doug Salt of WPPL dated 28 September 1993 (WPPL discovery number 225, Tab 954);

(kk) letter HPPL to Mr I J Williams, Hamersley Resources Ltd dated 1 October 1993 (WPPL discovery number 1173, Tab 955);

(ll) letter WPPL to Mr F R Madden, of HPPL dated 9 December 1993 (HPPL discovery number 903, Tab 959);

(mm) HPPL letter to Mr D V Salt of WPPL dated 19 January 1994 (HPPL discovery number 789, Tab 961);

(nn) HPPL letter to Mr D V Salt, WPPL dated 16 February 1994 together with attached letter WPPL to Mr F R Madden of HPPL dated 11 February 1994 (HPPL discovery number 791, Tab 965);

(oo) WPPL facsimile transmission to HPPL dated 23 June 1994 (HPPL discovery number 795, Tab 974A).

[54]

"The doctrine of anticipatory breach is, of course, applicable as soon as A has communicated to B his refusal to carry out the contract. Under that doctrine B is put to his election. He may, if he chooses, treat the contract as brought to an end in consequence of A's default, and recover damages from A for loss of the benefit of the contract. Alternatively, he may treat the contract as continuing on foot, in which case it will remain in force for the benefit of both parties, just as it would if the refusal had never been declared. If A persists in his refusal, B may at any time while the refusal continues elect to treat the contract as at an end and sue for damages; but unless and until he does so the contract remains on foot, and A may withdraw his refusal and require B to perform the contract on his part, subject only to giving B reasonable notice of his change of intention or he may take advantage of any supervening circumstances of such a character as to discharge the contract. But suppose that A's refusal is never retracted; that B does not elect while the period specified by the contract for performance is unexpired to treat the contract as determined by reason of the refusal; and that no event occurs during that period to discharge the contract. I am supposing, of course, a case like the present where in all the circumstances the refusal necessarily conveys to B that he need not trouble to fulfil a condition to which A's obligations under the contract are subject, because even if he does A will still not perform his obligations. Is it true in such a case to say that A's continued refusal must not be allowed any significance in an action by B against A, in which B seeks damages for not getting what he bargained for and A seeks to defend himself by relying upon the condition which he has all along shown that he was not concerned to have fulfilled? What does it matter for the purposes of that action that the refusal was not treated as ending the contract and as founding an action for anticipatory breach? The damages claimed are not for loss of the contract by premature termination, but for loss of the benefit which performance of the contract in accordance with its terms by both parties would by now have produced to B but for the fault of A. It is a cause of action which the facts I have assumed make out, unless the non-fulfilment of the condition is an answer to it; and as to that the inescapable fact is that A's refusal was a continuing intimation that the condition need not be observed, and it did not become any the less an intimation to that effect because B chose not to determine the contract before its time. The intimation having continued until the time came when A would certainly have been in default if the condition had been fulfilled, the law, as I understand it, treats A's obligation as absolute, and holds B entitled to damages for not having got what A promised he should have in the event of the condition being fulfilled."

[63]

"In the first, the promisor makes it plain by words or conduct, before the time fixed for performance, that when the time arrives he cannot or will not perform. This is the case of anticipatory breach of contract, where under English law the promisee has an option whether or not to continue with the contract. If he elects to 'accept' the promisor's conduct as a wrongful repudiation the obligations for the future of both parties are discharged, and the promisee may sue at once to recover damages for loss of the bargain. If, however, he elects not to treat the contract as repudiated the obligations of both sides continue in existence and the promisor's renunciation has no effect as a breach of contract and gives no immediate cause of action for damages, although it may create certain rights in equity.

The second situation exists where there is no renunciation in advance, but where when the day for performance (if the obligation is to do a once-for-all act) or the first day for performance (if the contract requires acts to be done continually or intermittently over a period of time) arrives the promisor either performs badly or does not perform at all. Here the fate of the bilateral obligation will depend on a number of factors. First, on the nature of the obligation and magnitude of the breach. If the obligation is a condition of the contract, or if the breach is serious enough to go to the root of the contract, the promisee will have the option to treat himself as discharged from his present and future obligations. Second, on whether the breach, even if insufficient in itself to justify a termination, nevertheless demonstrates when placed in the context of other relevant facts, an unwillingness or inability on the part of the promisor to go ahead and perform his obligations in the future. If it does, the promisee may elect to treat himself as discharged by anticipatory breach of those future obligations. Third, on the conduct of the promisee himself. This may be such as to be a waiver of the right to treat a breach of condition, or a serious breach of an 'innominate' term, as a ground to terminate the contract. Or it may show an election not to treat the future obligations as having been the subject of an anticipatory breach. In such cases the contract remains alive for the future. The point, however, for present purposes is that even if the promisee does not 'accept' the promisor's breach as a repudiation, it retains its character as a breach and is actionable at once, even though the continuing obligation to perform in the future will also be capable of founding new causes of action when the time becomes ripe. Thus I would not for my part accept that there is no right of suit, and hence no commencement of the limitation period, until the promisee finally loses patience and elects to bring the contract to an end."

At a glance

Court

Decision date

Before

Source

Judgment (79 paragraphs)

Legislation Cited (1)

Cases Cited (6)