Under What Circumstances Can An Agreement Be Terminated?

In Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61

("Koompahtoo"), the High Court has confirmed the ability of a party to a contract to terminate, where the other party has breached a non-essential term of the contract.

The Facts

Koompahtoo entered into a joint venture agreement with Sanpine Pty Limited ("Sanpine"). Koompahtoo contributed the land, and Sanpine managed its development.

The joint venture failed to obtain approval for the land to be rezoned for commercial use. An administrator, subsequently appointed to Koompahtoo, terminated the joint venture agreement, as Sanpine had failed to keep proper accounts or financial records for the duration of the joint venture. The administrator asserted that Sanpine had, by its conduct, repudiated the agreement, by breaching its obligations under the agreement.