Terminating partnerships by 'Accepted Repudiation': the differing UK and Australian approaches

Graw, Stephen (2019) Terminating partnerships by 'Accepted Repudiation': the differing UK and Australian approaches. In: [Presented at the Society of Legal Scholars Annual Conference]. From: Society of Legal Scholars 110th Annual Conference, 3-6 September 2019, Preston, UK.

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Abstract

As a general rule, if one party commits a repudiatory breach, the other party can then terminate the contract. Therefore, if one partner commits a repudiatory breach of the partnership agreement, it might be expected that the partnership could be terminated — under general law principles. That, however, is not necessarily what happens — and the approaches of the UK and the Australian courts differ considerably.

The UK courts have generally followed Lord Millett's approach in Hurst v Bryk [2002] 1 AC 185 — holding that the doctrine of accepted repudiation cannot apply to partnerships. Although his reasoning on that point was clearly obiter, the remainder of the court did not disagree with it and it was subsequently adopted in both Mullins v Laughton [2003] Ch 250 and Golstein v Bishop [2014] Ch 455.

In Australia, the courts have taken the opposite view, holding that partnerships can be dissolved by repudiatory breach — though none of the cases to date have been finally decided on that basis. In Johnson v Snaddon [1999] VSC 243 Coldrey J accepted the possibility, but then held that, on the facts, there had been no repudiation. In Ryder v Frohlich [2004] NSWCA 472 McColl JA (with whom the other members of the court agreed) found that, while there had been a repudiation, there had also been an abandonment — and that was enough to terminate the agreement. The same applied in Walker v Melham [2007] NSWSC 264. Subsequent decisions (Fazio v Fazio [2012] WASCA 72, Bonzalie v Cullu [2013] NSWSC 1576, Letizia Building Co Pty Ltd v Redglow Asset Pty Ltd [2013] WASC 171 and Lien v Clontarf Residential Pty Ltd [2019] 1 Qd R 107) have used similarly equivocal reasoning — though all seem to have preferred McColl JA's approach to that of Lord Millett.

This paper considers the differences between the two approaches and asks the question: in the end result, does it really matter?

Item ID: 60901
Item Type: Conference Item (Non-Refereed Research Paper)
Keywords: partnership; termination; repudiation of contract; comparative law
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Copyright Information: Copyright to Stephen Graw
Date Deposited: 03 Dec 2019 00:32
FoR Codes: 18 LAW AND LEGAL STUDIES > 1801 Law > 180105 Commercial and Contract Law @ 50%
18 LAW AND LEGAL STUDIES > 1801 Law > 180106 Comparative Law @ 50%
SEO Codes: 94 LAW, POLITICS AND COMMUNITY SERVICES > 9499 Other Law, Politics and Community Services > 949999 Law, Politics and Community Services not elsewhere classified @ 100%
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