Wine ACC Supplies Pty Ltd v Bordex Wineracks Pty Ltd - [2014] SASCFC 49

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
WINE ACC SUPPLIES PTY LTD v BORDEX WINERACKS PTY LTD
[2014] SASCFC 49
Judgment of The Full Court
(The Honourable Justice Gray, The Honourable Justice Sulan and The Honourable Justice Blue)
27 May 2014
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - GENERALLY
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - INJUNCTIONS TO PRESERVE STATUS QUO AND PROPERTY PENDING DETERMINATION OF RIGHTS - MAREVA INJUNCTIONS
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - ELECTION AND RESCISSION - EFFECT OF RESCISSION
Appeal against interlocutory injunction and freezing order.
In 2011, the plaintiff, Bordex Wineracks Pty Ltd, brought an action against Bordex Manufacturing Pty Ltd and its two directors for breach of restraint of trade clauses in an agreement and associated directors’ deed under which Bordex Wineracks had purchased the business of Bordex Manufacturing. Bordex Wineracks pleaded that, by their conduct, the defendants had repudiated the agreement and directors’ deed and Bordex Wineracks accepted the repudiation. Bordex Wineracks claimed return of the purchase price of the business. In the alternative, it claimed damages for breach of the agreement and deed.
In 2014, Bordex Wineracks sought permission to join Wine ACC Supplies as an additional defendant, claiming that the third defendant was using it as a vehicle to carry on business in breach of the restraint of trade provision contained in the deed. A Judge granted an interlocutory injunction and freezing order restraining Wine ACC Supplies from manufacturing or selling wine racks or disposing of its assets except in limited circumstances.
Wine ACC Supplies appeals against the interlocutory injunction and freezing order. It contends that the agreement and deed were terminated by Bordex Wineracks in 2011 and Bordex Wineracks cannot now claim relief against it on the basis that the agreement and deed are still on foot. It contends in the alternative that the Judge erred in the exercise of the discretion to grant an interlocutory injunction and freezing order.
Held (per the Court) allowing the appeal:
1.      The Judge erred in the exercise of his discretion in granting the injunction and freezing order. The Judge did not address Wine ACC Supplies’ contention concerning termination of the agreement and deed. The Judge did not give adequate weight to the unexplained delay by Bordex Wineracks in seeking any interlocutory relief against any defendant. The balance of convenience did not favour the broad interlocutory injunction and freezing order granted (at [20]-[25]).
2.      By its statement of claim, Bordex Wineracks unequivocally terminated the agreement and deed and cannot now obtain relief against Wine ACC Supplies on the basis that the agreement and deed are still on foot (at [33]-[34]).
3.      Action against Wine ACC Supplies dismissed (at [35]).
N E Perry Pty Ltd v Judge (2002) 84 SASR 86; Heyman v Darwins Limited [1942] AC 356; Holland v Wiltshire (1954) 90 CLR 409; Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444, considered.

WINE ACC SUPPLIES PTY LTD v BORDEX WINERACKS PTY LTD
[2014] SASCFC 49
Full Court: Gray, Sulan and Blue JJ
THE COURT.

This is an appeal against pre-trial mandatory injunctive relief granted by a Judge of this Court.
On 15 April 2014, we discharged the injunction and freezing order and in lieu substituted the following:
Until further order [Wine ACC Supplies Pty Ltd] shall not dispose of, deal with or diminish the value of any of its assets except for the purpose of:
(a)     paying its reasonable legal expenses;
(b)     paying or receiving all income received by [Wine ACC Supplies Pty Ltd] into account No. […]with the Commonwealth Bank of Australia;
(c)     expending the money held in [Wine ACC Supplies Pty Ltd’s] account No. […] with the Commonwealth Bank of Australia to meet the business expenses of [Wine ACC Supplies Pty Ltd] bona fide and properly incurred for materials (timber, steel and packaging), office consumables, telephone, electricity, water, rent, shipping, website correction, bank fees, accounting fees and wages (wages fixed at $500 per week).
Until further order [Wine ACC Supplies Pty Ltd] shall keep proper accounts of all income received and expenditure paid by it and file copies of the accounts with the Court as an exhibit to an affidavit of its solicitor each calendar month, the first such account to be filed on 15 May 2014.
We reserved consideration of the submission that the action against Wine ACC Supplies Pty Ltd should be dismissed. We have now reached the conclusion that the action against Wine ACC should be dismissed. Reasons for our conclusions on all issues follow.
Background
In these proceedings, on 1 April 2011, the plaintiff and respondent, Bordex Wineracks Pty Ltd, brought an action against Bordex Manufacturing Pty Ltd, Duyen Minh Pham and Dang Minh Pham. In the statement of claim filed on the same day, Bordex Wineracks pleaded that it entered into an agreement with Bordex Manufacturing on 17 September 2010 whereby Bordex Wineracks purchased the business of Bordex Manufacturing for $120,000.00. The agreement included a restraint of trade clause. Duyen Pham and Dang Pham signed a directors’ deed agreeing to equivalent restraints. It was further pleaded that Bordex Wineracks, Duyen Pham and Dang Pham acted in breach of the agreement and the directors’ deed and continued in breach of the restraint to engage in a like business.
Under the heading “Repudiation – Business Sale Agreement”, Bordex Wineracks pleaded:
[24]By reason of the matters pleaded in paragraphs 20, 21, 22 and 23 above, [Bordex Manufacturing] has evinced an intention not to be bound by the Business Sale Agreement and repudiated the same.
[25][Bordex Wineracks Pty Ltd] accepted the said repudiation by the issue and service of the Summons in this Action.
[26][Bordex Wineracks Pty Ltd] has suffered loss and damage by reason of [Bordex Manufacturing’s] repudiation of the Business Sale Agreement, namely the loss of the sum of $120,000.
On 6 March 2012, Bordex Wineracks applied to join Monterey Wine Accessories Pty Ltd as a defendant. It was claimed that Monterey was acting under the control of Duyen Pham and Dang Pham, and had been engaging in business in breach of the restraint provisions from a date shortly after 27 September 2010. An order was made joining Monterey as the fourth defendant. A second statement of claim was filed. The pleadings, as extracted above, remained in the same terms in the second statement of claim.
On 6 June 2013, pursuant to a grant of permission, Bordex Wineracks filed a third statement of claim which alleged further breaches of the agreement and repeated paragraphs 24 to 26 of the first statement of claim as extracted above with amendments. There was added a plea that Duyen Pham and Dang Pham repudiated the directors’ deed, that the repudiation was accepted and a claim against them for the sum of $120,000 and the legal fees incurred in preparation of the business sale agreement. After the amendment, paragraphs 24 to 26B pleaded:
By reason of the matters pleaded in paragraphs 20A, 20B, 20C, 20D, 21, 21A, 22, 22A, 22C, 22D, 23 and 23A above, [Bordex Manufacturing] has evinced an intention not to be bound by the Business Sale Agreement (either on the proper construction pleaded in paragraph 14A above or, in the alternative, subject to their rectification as pleaded below) and repudiated the same.
By reason of the matters pleaded in paragraphs 20A, 20B, 20C, 20D, 21, 21A, 22, 22A, 22C, 22D, 23 and 23A above, [Duyen Pham] and [Dang Pham] have evinced an intention not be bound by the Directors Deed (either on the proper construction pleaded in paragraph 18A above or, in the alternative, subject to their rectification as pleaded below) and repudiated the same.
[Bordex Wineracks Pty Ltd] accepted the said repudiation by the issue and service of the Summons in this Action.
[Bordex Wineracks Pty Ltd] has suffered loss and damage by reason of [Bordex Manufacturing’s] repudiation of the Business Sale Agreement, namely the loss of the sum of $120,000 and legal fees incurred in relation to the preparation of the Business Sale Agreement and Directors’ Deed of $2,750.
[Bordex Wineracks Pty Ltd] has suffered loss and damage by reason of the repudiation by [Duyen Pham] and [Dang Pham] of the Directors’ Deed, namely the loss of the sum of $120,000 and legal fees incurred in relation to the preparation of the Business Sale Agreement of $2,750.
In the alternative, [Bordex Wineracks Pty Ltd] claims restitution of the monies paid pursuant to the Business Sale Agreement due to [Bordex Manufacturing’s] repudiation in that there has been a total failure of consideration and/or unjust enrichment.
At the commencement of trial on 3 March 2014, the trial Judge was informed that Dang Pham had filed a petition for bankruptcy and that Bordex Manufacturing and Monterey Wine Accessories had both “passed into liquidation” that morning. The Judge was informed that mediation was to take place between Bordex Wineracks and Duyen Pham. On 4 March 2014, the Judge was further informed that resolution had been reached and the action against Duyen Pham was to be dismissed.
On 3 March 2014, on the application of Bordex Wineracks, the trial Judge granted an ex parte freezing order in respect of Wine ACC Supplies Pty Ltd. On 6 March 2014, the Judge granted Loc Bui, a director of Wine ACC, permission to appear on behalf of Wine ACC. The freezing order granted on 3 March 2014 was extended to 14 March 2014 and later extended to 19 March 2014. On this latter occasion, Wine ACC was represented by counsel. The Judge extended the freezing order until 28 March 2014, directed Bordex Wineracks to file an amended statement of claim by 21 March 2014 and gave directions for the filing of further affidavit material.
On 28 March 2014, following argument, the trial Judge ordered that Wine ACC be joined as a defendant, that an interlocutory injunction be granted restraining Wine ACC from manufacturing or selling wine racks and the freezing order be extended to trial.
Counsel appearing for Wine ACC before the trial Judge opposed the granting of any injunctive relief or the continuation of the freezing order. It was submitted that a prima facie case had not been made out and that the balance of convenience favoured Wine ACC. It was said that the relevant status quo was that which was in place before the making of the freezing order. Counsel contended that the agreement and directors’ deed came to an end when Bordex Wineracks accepted the repudiation by Bordex Manufacturing, Duyen Pham and Dang Pham. It was pointed out that the pleadings extracted above from each of the versions of the statement of claim included an explicit plea that Bordex Manufacturing had repudiated the agreement and Duyen Pham and Dang Pham had repudiated the directors’ deed and that Bordex Wineracks had accepted the repudiation. It was contended that there could not be any orders for specific performance because the agreement had been terminated. It was argued that, in these circumstances, it was not possible to grant relief against Wine ACC because that entity had not come into existence until the issue of proceedings and following the termination of the agreement and the directors’ deed. Counsel also drew attention to the delay in the making of any application for interlocutory injunctive relief against any party, pointing out that this was the first occasion on which any such relief had been sought.
The Judge, when granting injunctive relief and continuing the freezing order until trial, provided ex tempore reasons. In regard to the order joining Wine ACC, the Judge reasoned:[1]
In all the circumstances I am satisfied it is proper to join Wine ACC Supplies Pty Ltd as a defendant to the proceedings. I do so on the basis that I am satisfied that the broad power conferred upon me by 6SCR 74 should properly be invoked if for no other reason than to enable a remedy to be enforced in this matter.
The Judge, on the topic of injunctive relief, concluded:[2]
I am satisfied that an injunction should lie on an interlocutory basis. I am satisfied that a prima facie case has been established on the material before me, that damages would not be an adequate remedy in the circumstances and that the balance of convenience favours the grant of the interlocutory application.
The Judge, in extending the freezing order, reasoned:[3]
I am also satisfied that the freezing order made ex parte should continue in the terms in which it was made. I am satisfied that there is a good arguable case. I am satisfied of that on the same basis I am satisfied there is a prima facie case. I accept that the good arguable case test is a less onerous test than the prima facie case test. I am also satisfied that there is a risk that if the freezing order is not continued, Wine ACC Supplies might dissipate its assets.
[1]    Bordex Wineracks Pty Ltd v Bordex Manufacturing Pty Ltd & Ors [2014] SASC 48, [3].
[2]    Bordex Wineracks Pty Ltd v Bordex Manufacturing Pty Ltd & Ors [2014] SASC 48, [4].
[3]    Bordex Wineracks Pty Ltd v Bordex Manufacturing Pty Ltd & Ors [2014] SASC 48, [5].
The Judge then provided more detailed reasons for reaching his conclusions. However, nowhere in his reasons did the Judge address the submission that the contract came to an end on 1 April 2011 when Bordex Wineracks accepted the defendants’ repudiation and terminated the contract.
On the question of the adequacy of damages as a remedy and the need to fortify the undertaking as to damages, the Judge concluded:[4]
[Counsel to Wine ACC] submits that even if I am satisfied that a prima facie case had been established on the material before me, I could not be satisfied that damages would not be an adequate remedy. I reject that submission. I do so, with respect, for the same reasons that were found persuasive by Edelman J in Emeco International v O'Shea, particularly at paragraphs 18 through to 22 of his Honour's reasons which are reported in [2012] WASC 282. [Counsel to Wine ACC] further submitted that even if I was satisfied that a prima facie case had been established on the material before me, I should not be persuaded that the balance of convenience favoured the grant of an interlocutory injunction. I reject that submission. In my view, in the absence of an interlocutory injunction, [Wine ACC] would continue to trade by way of the manufacture and sale of wine racks and that could do irreparable harm to the [Bordex Wineracks’] commercial interests in the particular market in which it operates. I note in that context the provision of an undertaking as to damages by the plaintiff and although there has been some criticism levelled by [counsel to Wine ACC] at the company's capacity to satisfy that undertaking in the event that [Bordex Wineracks] fails in the action, I am not dissuaded that that is a sufficient basis to find that the balance of convenience does not favour the granting of the interlocutory injunction sought, particularly where I am prepared to accommodate the parties with an early trial.
[4] Bordex Wineracks Pty Ltd v Bordex Manufacturing Pty Ltd & Ors [2014] SASC 48, [13].
The Appeal
On appeal, Wine ACC complained about all of the orders made save for the order of joinder. It was said that the freezing order was made in the absence of evidence that there was any real risk that Wine ACC would dispose of assets or take them out of the jurisdiction so as to frustrate any judgment of the Court. It was further complained that, in making the freezing order, the Judge failed adequately to consider discretionary matters weighing against the granting of the order, including the delay in seeking interlocutory injunctive relief against the other defendants earlier in the proceedings, the use by Bordex Wineracks of the ex parte freezing order to gain a commercial advantage and the failure of Bordex Wineracks to prosecute the action diligently. It was further argued that the Judge failed to give sufficient weight to a number of relevant matters, including the unchallenged evidence of Mr Bui, the prejudice that has been suffered by Wine ACC, the poor prospects of success and the inadequacy of the undertaking as to damages. It was complained that the Judge inappropriately had regard to earlier conduct of the action by other defendants and failed to consider the separate position of Wine ACC.
Wine ACC contended that the Judge erred in law in granting an interlocutory injunction because no prima facie case had been made out. In the alternative, it was said that the balance of convenience favoured maintaining the status quo, that damages were an adequate remedy and that the breadth of the order was such as to effectively shut down the business of Wine ACC in its entirety. The written argument of Wine ACC developed each of these contentions. In particular, in the course of the written argument, it was emphasised that the agreement had been terminated by notice on the issue of proceedings in April 2011 and that, accordingly, there was no available right to specific performance.
Bordex Wineracks supported each of the Judge’s orders, summarising what was said to be the evidence supporting the prima facie case of breaches of the business sale agreement, such as to support the injunctive relief granted, and the evidence said to support the freezing order. In substance it was the contention of Bordex Wineracks that the orders made were well within the discretion of the Judge and no basis had been shown to interfere with those orders.
At the outset of the hearing of the appeal, the Court raised with counsel for Wine ACC the significance of the plea of Bordex Wineracks that the agreement had come to an end. Counsel acknowledged that there was no ground of appeal directly raising this question, but pointed out that a challenge had been made to the finding of a prima facie case. Without objection, leave was granted to amend the Notice of Appeal.
Counsel for Bordex Wineracks contended that it was open to his client to withdraw paragraph 25 as it had appeared in the first, second and third statements of claim. He acknowledged, however, that permission was required to withdraw the plea. He also acknowledged that the plea was more than simply an assertion of a material fact relevant to the cause of action. He accepted that it was arguable that the plea was designed to be notice given to the then defendants that the agreement was at an end and was terminated by the acceptance by Bordex Wineracks of the defendants’ repudiation. Counsel argued, however, that the pleading as a whole should be construed as preserving alternative claims for recovery on termination of the purchase price of the business or for specific performance of the agreement with an election between those inconsistent alternatives being deferred until trial. We do not accept this contention. To our mind, the position is no different to a letter being written giving notice of termination based on repudiation which comprises an election and effective notice and from which the notice giver cannot resile.
The argument concerning the matters raised by paragraphs 24 to 26 of the statement of claim were the subject of both written and oral submissions before the trial Judge. It was contended by Wine ACC that, as a consequence of the plea, the agreement came to an end as at 1 April 2011 and, accordingly, the restraint clause could not operate beyond that date. On the appeal, counsel for Bordex Wineracks acknowledged that, if this was correct, the injunction and freezing order should be discharged and the action against Wine ACC dismissed.

The reasons of the Judge do not address this contention at all. In this circumstance, the conclusion can be drawn that the Judge exercised his discretion without having regard to a material circumstance that went to the strength of the claim of Bordex Wineracks. It follows that the exercise of his discretion miscarried, and that it is appropriate that this Court reconsider the application by Bordex Wineracks for interlocutory injunctive and freezing orders. It will be necessary to return to a consideration of paragraphs 24 to 26 and Wine ACC’s submission that the action against it should be dismissed.
It is to be observed that this proceeding has been conducted without any sense of urgency. The action was commenced on 1 April 2011 but was not set down for trial until September 2013. A review of the file discloses that at no time was any interlocutory injunctive relief sought against any of the defendants until the application for injunctive relief against Wine ACC. A review of the initial statement of claim and the second and third statements of claim discloses an awareness on the part of Bordex Wineracks of dealings by the defendants with several major retailers. As counsel acknowledged, it would have been a straightforward matter to issue subpoenas to those retailers to obtain the relevant documents and to support an application for interlocutory injunctive relief. Nothing in fact occurred and no meaningful explanation has been provided for the approach taken by Bordex Wineracks. On its case, any restraint of trade comes to an end in September 2014. It is odd indeed that injunctive relief was not pursued for two and a half years and then pursued with great urgency in respect of the remaining six months of the possible period of restraint. It is also to be noted that Bordex Wineracks’ case against Wine ACC critically depends on a contention that Dang Pham has used and is using Wine ACC as a vehicle for breaching the restraint provision, yet no injunctive relief has been sought against Dang Pham. In our view, these matters count very heavily against the grant of interlocutory injunctive relief at this late stage.
When considering the strength of the claim of Bordex Wineracks, it is to be understood that the restraint is expressed in very wide terms over a significant geographical area and is said to continue for a period of four years. This restraint was given in exchange for the payment of a relatively modest sum for the business of $120,000.00. In NE Perry Pty Ltd v Judge,[5] the operator of a chiropractic practice in Whyalla entered into an agreement containing a restraint of trade for two years. The trial Judge’s conclusion that a one year restraint period was reasonable but a two year period was not was upheld by this Court on appeal. While the reasonableness of a restraint clause must be considered on its own circumstances and decisions in other cases are of limited assistance, that decision illustrates the difficulties which Bordex Wineracks will face in seeking to establish the reasonableness of the restraint clause at trial. It is plainly arguable that the restraint in the present case will not be upheld, at least to give it its full effect of applying for four years which is necessary for Bordex Wineracks to succeed against Wine ACC.
[5] N E Perry Pty Ltd v Judge (2002) 84 SASR 86.
The restraint clause is poorly drawn and an order for rectification has been sought. That order is opposed. Even if rectified as sought, the meaning of the clause may not be entirely clear. It appears that the draftsperson intended there to be cascading periods of time over which the restraint may operate, that is if the four years is found to be unreasonable, then a restraint of three years is to apply, and if that is unreasonable, the restraint would operate for two years. There is inadequate material to allow any conclusion to be drawn on the question of the reasonableness of the restraint. However, Bordex Wineracks is clearly at considerable risk of the restraint clause being read down, particularly as to the period during which it is to operate.
The combined and several effects of the injunctive and freezing orders effectively bring the business of Wine ACC to an end. Such an order may be viewed as extreme. The extraordinary circumstances to warrant such an order do not exist, in our view, in the present action. This difficulty is compounded by the failure of Bordex Wineracks to offer any form of fortification of undertaking as to damages. The only evidence as to the worth of Bordex Wineracks is an unaudited balance sheet and accounts prepared for the 2012/2013 financial year. This balance sheet discloses that Bordex Wineracks is not of substance. Its net assets total something of the order of $35,000.00 and that net asset position is only achieved by bringing to account goodwill in the amount of more than $110,000.00 as well as several debtors. As mentioned, these accounts are unaudited and it is difficult to understand how it can be said that Bordex Wineracks is of any substance at all.
Wine ACC indicated that it was prepared to submit to the orders to hold the status quo including that until further order it shall not dispose of, deal with or diminish the value of any of its assets except for the purpose of paying its reasonable legal expenses, paying or receiving all income received into its account with the Commonwealth Bank of Australia, and expending the money held in that account with the Commonwealth Bank of Australia to meet business expenses bona fide and properly incurred. Wine ACC also indicated that it was prepared to submit to an order requiring it to keep proper accounts of all income received and expenditure paid by it and file copies of the accounts with the Court.
On the making of these orders, the appeal was allowed, and the injunctive and freezing orders set aside.
There remains to be considered the earlier referred to issue concerning the termination of the contract by Bordex Wineracks as a consequence of paragraphs 24 to 26 of the statement of claim in its original and second and third versions. As earlier noted, it was accepted that, if the contentions of Wine ACC were correct, the consequence would be that the action could not be maintained and the proceeding against Wine ACC should be dismissed.
Not all breaches of a term of a contract give rise to a right to terminate. However, if a party wrongfully refuses to comply with a material term of a contract, such conduct may amount to a repudiation of the contract, giving the other party a right to terminate for breach. In the present proceeding, it was the case of Bordex Wineracks that Bordex Manufacturing, Duyen Pham and Dang Pham had acted in flagrant breach of the covenants concerning restraint, both in the agreement and in the directors’ deed. Bordex Wineracks then took the step of terminating the contract. As noted above, it did this through the issue of the summons and the initial statement of claim on 1 April 2011. In our view, it is significant that paragraphs 24 to 26 of the pleading informed the reader that Bordex Wineracks accepted Bordex Manufacturing’s repudiation of the agreement by the service of the summons in the action. This then led Bordex Wineracks to plead that it had suffered loss and damage by reason of Bordex Manufacturing’s repudiation of the agreement, namely the loss of a sum of $120,000.00.
As earlier noted, in the third statement of claim alleging further breaches of the agreement, a plea was specifically added that Duyen Pham and Dang Pham had repudiated the directors’ deed and that the repudiation was accepted, and a claim was made against both for $120,000.00 and the legal fees incurred in the preparation of the agreement.
An election to terminate on the basis of the other party’s repudiation has the effect of discharging both parties from the obligation to perform their respective contractual duties. The contract remains, but the parties’ obligations under it are at an end. The position was described by Lord Porter in Haymen v Darwins Ltd in the following terms:[6]
… To say that the contract is rescinded or has come to an end or has ceased to exist may in individual cases convey the truth with sufficient accuracy, but the fuller expression that the injured party is thereby absolved from future performance of his obligations under the contract is a more exact description of the position. Strictly speaking, to say that on acceptance of the renunciation of a contract the contract is rescinded is incorrect. In such a case the injured party may accept the renunciation as a breach going to the root of the whole of the consideration. By that acceptance he is discharged from further performance and may bring an action for damages, but the contract itself is not rescinded. …
[6] Heyman v Darwins Limited [1942] AC 356, 399.
The High Court addressed the topic in Holland v Wiltshire,[7] where the general principles extracted above were affirmed. As Dixon CJ went on to observe:[8]
... It is hard to see why this should not enable the vendor to treat the whole contract as discharged by the purchasers' breach or in other words to treat the contract as no longer binding upon him. This means that both parties would be discharged from further performance of the contract. The whole contract was involved, including the clause relating to rescission.
[7] Holland v Wiltshire (1954) 90 CLR 409.
[8] Holland v Wiltshire (1954) 90 CLR 409, 416; See also Kitto J at 422.
The discharge of the contract takes effect from the time of the acceptance of the repudiation. The election to terminate is final. In Ogle v Comboyuro Investments Pty Ltd, Barwick CJ observed:[9]
It seems to me that the case on these findings can be resolved by the application of well-known and well authenticated propositions of the law of contracts. Where a promisor has so conducted himself prior to the date for performance of his promise that the promisee may reasonably form the opinion that the promisor does not intend to perform the promise, the promisee may terminate the contract in the sense of putting an end to his own and the promisor's further obligation to perform thereunder. He may, of course, not choose to regard the promisor's attitude or conduct as warranting the termination of the contractual obligations of further performance, but instead he may insist on the performance of the promisor's promise according to its terms. If he takes the latter course, the promisor, if he performs his promise at a subsequent time, will not be liable in any respect for conduct which might have been treated as an anticipatory breach or a repudiation of the contract. Further, he may rely to his advantage on conduct of the promisee subsequent to the time at which the promisee chooses not to terminate the contract.
But if the promisee chooses to treat the contract as at an end, in so far as it requires further performance on the part of either party to it, the promisor will be quit of any obligation further to perform the contract, assuming of course that he does not successfully contest the right of the promisee so to treat the contract as at an end. However, the promisee's right to damages for any breach which has occurred up to the date of the termination of the contract, including the anticipatory breach or repudiation of it, remains. It is also a consequence of the acceptance of the repudiation that the contract, being duly terminated, may not be revived except by consent of the parties. It will not be revived, if duly terminated by the unilateral action of the promisee.
[9] Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444, 450-1.
In the present proceeding, Bordex Wineracks’ acceptance of the repudiation is unequivocal. The election to do so is identified as being made by the issue of the summons. Bordex Wineracks made it plain to all that the acceptance of the repudiation took place on 1 April 2011. This is explicit in the first statement of claim, repeated in the second statement of claim, and the subject of explicit re-pleading by way of an amendment in the third statement of claim.
Earlier in these reasons, we referred to the submissions of Bordex Wineracks that asserted that the acceptance of the termination was no more than a plea in the alternative. We do not consider that the alternative plea appearing later in the pleading has the effect of qualifying the acceptance of the repudiation. Presumably, that plea was advanced against the possibility that the Court may find that Bordex Wineracks had wrongfully terminated the contract.
Conclusion
We dismiss the action against Wine ACC.
We will hear the parties as to any consequential orders.