Mad Dogs Pty Ltd v Gilligan's Backpackers Hotel and Resort Pty Ltd and Anor

Mad Dogs Pty Ltd brought an action against Gilligan's Backpackers Hotel and Resort Pty Ltd and another defendant, alleging interference with contractual relations. The plaintiff claimed the second defendant was the controlling mind of the first defendant and thus, the second defendant was in substance a de facto director of the first defendant. The plaintiff further alleged the second defendant engaged in interfering conduct on behalf of himself and the first defendant. The court was required to determine whether an action could be maintained against the second defendant for interfering with contractual relations.

The court considered the legal issues regarding the defendants' liability for interfering with the plaintiff's contractual relations. The court found the plaintiff's allegations that the second defendant was the controlling mind of the first defendant were sufficient to establish that the second defendant was in substance a de facto director of the first defendant. The court also considered whether the plaintiff was precluded from relying on the alleged termination by dint of its election to affirm the agreement. The court found the plaintiff was not precluded from relying on the alleged termination because the court proceedings did not amount to an election to affirm the contract.

The court dismissed the defendants' application, stating that the plaintiff was entitled to file and serve a further amended statement of claim by a specified date. The court also ordered that argument as to costs and the hearing of the plaintiff’s application would occur at a specified time and date. The plaintiff was required to state facts sufficient to indicate whether any of the conduct presently described in paragraph (9)(a) of the Fourth Amended Statement of Claim occurred after the service of the purported termination letter of 18 July 2007 and if so what the conduct was alleged to have been.