Merrylands Bowling, Sporting & Recreation Club v P & H Property Services

The appeal concerned a dispute between Merrylands Bowling, Sporting & Recreation Club (the appellant) and P & H Property Services (the respondent) regarding the termination of a contract. The appellant sought to terminate the contract, alleging breaches by the respondent. The primary legal issue before the court was whether the appellant was entitled to terminate the agreement based on the respondent's alleged breaches, and consequently, whether the appellant could claim damages. A secondary issue involved the admissibility of certain evidence tendered by the respondent concerning the assessment of damages.

The court was required to determine whether the respondent's conduct amounted to a repudiation of the contract, thereby entitling the appellant to rescind it. This involved assessing whether the respondent had evinced an intention no longer to be bound by the contract or to fulfil it in a manner substantially inconsistent with its obligations. Furthermore, the court had to consider the procedural fairness afforded to the appellant in relation to the admission of evidence, particularly a "Schedule of Damages" tendered by the respondent. The court also had to rule on the admissibility of this schedule, which was objected to on grounds including the lack of production of source documents, insufficient notice of the alternative method of damage calculation, and the expertise of the witness providing the evidence.

The court reasoned that a fundamental rule in non-jury cases is that evidence tendered which may go to a matter in issue should be admitted, subject to relevance and objection, with its effect to be ruled upon at the conclusion of the case. The trial judge had rejected a bundle of documents tendered by the appellant, which were intended to prove the respondent's failure to comply with its contractual obligations. The court found that this rejection, along with the admission of the respondent's "Schedule of Damages" despite objections regarding its basis and late production, constituted a denial of procedural fairness to the appellant. The court applied the principle that a contract may be repudiated if a party renounces its liabilities or intends to fulfil the contract only in a manner substantially inconsistent with its obligations, entitling the innocent party to accept the repudiation and sue for damages.

The appeal was allowed, and orders were made for a new trial. The court concluded that the denial of procedural fairness to the appellant entitled it to a new trial, implying that the original judgment, which had upheld the respondent's submissions and rejected the appellant's evidence, was flawed.