Mad Dogs Pty Ltd (in liq) v Gilligan's Backpackers Hotel and Resort Pty Ltd (No 3)

The case of Mad Dogs Pty Ltd (in liq) v Gilligan's Backpackers Hotel and Resort Pty Ltd (No 3) involved the plaintiff, Mad Dogs, claiming damages for breach of contract against the defendants, Gilligan's and Mr Ainsworth. Mad Dogs alleged that Gilligan's wrongfully terminated the contract but subsequently withdrew the termination, and Mad Dogs elected to continue with the contract. Mad Dogs further alleged that Mr Ainsworth's conduct interfered with the contractual relations between Mad Dogs and Gilligan's, and that such conduct amounted to repudiation of the contract. The case was heard in the Supreme Court of Queensland.

The court was required to determine whether Gilligan's and Mr Ainsworth's conduct evidenced an intention to no longer be bound by the contract, whether the conduct of the defendants prior to Mad Dogs' election to continue could be used as evidence of repudiation, whether an action could be maintained against Mr Ainsworth for interfering with contractual relations, and whether the contract contained implied terms that each party would cooperate and not interfere with the performance of the agreement. The court also needed to assess damages for breach of contract and determine if the actions of Gilligan's and Mr Ainsworth caused Mad Dogs' insolvency.

The court held that the conduct of Gilligan's and Mr Ainsworth did evince an intention to no longer be bound by the contract, and that their conduct prior to Mad Dogs' election to continue could be used as evidence of repudiation. The court further found that an action could be maintained against Mr Ainsworth for interfering with contractual relations, as he was in substance a de facto director of Gilligan's. The court also held that the contract contained implied terms that each party would cooperate and not interfere with the performance of the agreement, and that Gilligan's and Mr Ainsworth's conduct was in breach of these implied terms. Finally, the court assessed damages for breach of contract and determined that the actions of Gilligan's and Mr Ainsworth caused Mad Dogs' insolvency.

The court ordered judgment for the plaintiff against the first defendant, Gilligan's, and dismissed the claim as against the second defendant, Mr Ainsworth. The court further ordered that the parties would be heard regarding the calculation of damages and interest, and costs, on 27 November 2015.