Sagacious Procurement Pty Limited (Subject to Deed of Company Arrangement) v Symbion Health Limited

Sagacious Procurement Pty Limited (Subject to Deed of Company Arrangement) (the plaintiff) brought proceedings against Symbion Health Limited (the defendant) in the Supreme Court of New South Wales. The dispute concerned the plaintiff's claim for an alleged breach of contract, specifically relating to the defendant's termination of a licence agreement. The plaintiff sought damages for this alleged breach. The judgment being summarised is from the High Court of Australia, on appeal from the Court of Appeal of New South Wales.

The High Court was required to determine whether the Court of Appeal had erred in finding that the defendant was entitled to terminate the licence agreement. This involved considering whether the plaintiff had committed a repudiatory breach of the agreement, thereby entitling the defendant to accept that repudiation and terminate the contract. A key aspect of the determination was the proper construction of clause 13.2 of the licence agreement, which stipulated the conditions under which the defendant could terminate the agreement.

The High Court held that the Court of Appeal had correctly found that the plaintiff had repudiated the licence agreement. Their Honours reasoned that the plaintiff's conduct, particularly its failure to make payments as required by the agreement and its subsequent conduct in relation to those payment obligations, demonstrated an intention no longer to be bound by the terms of the agreement. This conduct constituted a repudiatory breach, which the defendant was entitled to accept. The legal principle applied was that a party's conduct can amount to a repudiation if it evinces an intention to be no longer bound by the contract or shows a readiness and willingness to perform the contract only on terms fundamentally different from those agreed.

The High Court dismissed the appeal and affirmed the orders of the Court of Appeal.