Management Services Australia Pty Ltd t/as Peak Performance PM v PM Works Pty Ltd

Management Services Australia Pty Ltd trading as Peak Performance PM (the appellant) and PM Works Pty Ltd (the first respondent) entered into an agreement to jointly provide project management training services to third parties. The appellant was responsible for providing course materials and issuing completion certificates. A dispute arose when a client expressed dissatisfaction with the services. Subsequently, the first respondent began delivering training courses using its own materials and certification services. The central issue was whether the parties had varied their original agreement, and if so, whether this variation required the first respondent to pay a royalty fee to the appellant for courses delivered using its own materials and certification, and whether the first respondent was bound to engage the appellant for certification services.

The court was required to determine whether the parties had mutually agreed to vary their original contract. Specifically, it needed to ascertain if the first respondent's subsequent actions, including developing and using its own course materials and certification services, constituted a breach of the agreement as varied. Furthermore, the court had to consider whether the first respondent's cessation of royalty payments for courses provided using its own materials and certification amounted to a repudiation of the contract by conduct, and whether the primary judge had erred in inferring that the parties' conduct was consistent with a mutual agreement to terminate their contractual relationship.

The court found that the parties' conduct indicated a mutual agreement to vary their original contract. The first respondent's use of its own materials and certification services, coupled with the appellant's acquiescence, demonstrated an intention to depart from the original terms. The court reasoned that the primary judge had correctly inferred from the parties' conduct that they had mutually agreed to terminate their contractual relationship. This conclusion was based on the evidence that the first respondent had ceased paying royalty fees and had independently provided training services, and the appellant had not objected to this course of action.

The appeal was dismissed, and the appellant was ordered to pay the first respondent’s costs of the appeal.