Southern Cross Pipelines Australia Pty Ltd & Ors v WMC Resources Ltd & Ors

Southern Cross Pipelines Australia Pty Ltd and others (the plaintiffs) brought proceedings against WMC Resources Ltd and others (the defendants) in the Supreme Court of Western Australia. The dispute concerned the interpretation and enforceability of certain agreements relating to the supply of natural gas. The plaintiffs sought declarations that the defendants were in breach of these agreements and that certain notices issued by the defendants were invalid.

The central legal issues before the High Court of Australia on appeal were whether the agreements, properly construed, imposed an obligation on the defendants to supply natural gas at a particular price, and whether the defendants had validly exercised their right to terminate the agreements. The court also had to consider the implications of the plaintiffs' alleged repudiation of the agreements.

The High Court, in a joint judgment, held that the agreements did not impose an obligation on the defendants to supply gas at a fixed price, but rather at a price determined by a formula. The court found that the defendants had not breached the agreements by supplying gas at a price determined by this formula. Furthermore, the court determined that the plaintiffs' conduct amounted to a repudiation of the agreements, which the defendants were entitled to accept. The principles of contract law concerning offer, acceptance, consideration, and repudiation were central to the court's reasoning.

The High Court allowed the appeal, set aside the orders of the Supreme Court of Western Australia, and ordered that the plaintiffs' application for declarations be dismissed.