Sai Teys McMahon Real Estate Pty Ltd v Queen Street Apartments Pty Ltd

Sai Teys McMahon Real Estate Pty Ltd sought relief against Queen Street Apartments Pty Ltd, its former agent, and the latter's successor, Queen Street Apartments (No. 2) Pty Ltd, over breaches of agreements concerning the management and leasing of residential properties. The first defendant had entered into agreements with the plaintiff to act as caretaker and letting agent for luxury residential apartments. However, when the plaintiff agreed to sell its shares to a third party, Oaks, the first defendant expressed concern that the new owner might offer lower cost services, which it believed would breach the agreements. The first defendant demanded that the plaintiff sign a deed of variation, which the plaintiff refused, asserting it would abide by the terms as understood. The first defendant then purported to terminate the agreements, claiming the plaintiff's refusal constituted repudiation. The second defendant, formed after the initial breach, entered into a letting agreement with the plaintiff, further interfering with the first defendant's obligations.

The court had to determine whether the first defendant's termination was justified and whether the second defendant's actions constituted an inducement of a continuing breach. In assessing whether the first defendant's actions constituted a repudiation, the court considered whether a mistaken understanding of contractual obligations could amount to a repudiation. Additionally, the court examined whether the second defendant's participation in the ongoing breach was sufficient to establish the tort of interference with contractual relations. The court found that the first defendant's termination was wrongful and that the second defendant's actions did interfere with the plaintiff's contractual rights.

The court ruled that the first defendant's termination was a repudiation of the agreements and that the second defendant's actions amounted to interference with contractual relations. Consequently, the court declared the first defendant's purported termination to be a repudiation and ordered damages to be assessed against the second defendant. This decision underscores the importance of adherence to contractual terms and the consequences of wrongful termination and interference in contractual relationships.