Makland Constructions Pty Ltd v Page Steel Fabrications Pty Ltd [2024] VSCA 142

Chris Hey  |  Michael Lo  |  Jesse Guo 

Key takeout

Repudiation of a contract requires a clear indication of refusal to perform a contract, which is not easily inferred. It demands an analysis of all circumstances, including a party’s actual conduct, rather than their subjective intentions.  Negotiations and adjustments in contract performance are part of normal commercial dealings and will not necessarily amount to repudiatory conduct.

Where a party has demonstrated a continued commitment to fulfilling its contractual obligations its conduct is unlikely to amount to repudiation.

Facts

Makland Constructions Pty Ltd (Makland) engaged Page Steel Fabrications Pty Ltd (Page) to supply and erect steel framework for two warehouses, including offices and canopies.

Disputes arose early in the project, and Makland commenced proceedings in the County Court of Victoria seeking damages against Page for repudiation of the contract.   Makland alleged that Page had refused to deliver steel for the canopies until Makland provided a deed of release.

After the parties entered into a contract, there were discussions between the parties about the delivery of the canopies which differed from Page’s original obligations under the contract and it is in this context that Makland had requested a deed of release.

At first instance, the trial judge held that Page had not repudiated the contract.

Decision  

The Court of Appeal dismissed Makland’s application for an appeal and upheld the trial judge’s decision.

Page had not repudiated the contract and the request for a deed of release was not repudiatory because it was made in response to Makland’s request for performance outside the contract. The court considered existing authorities on repudiation including Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited (2007) 233 CLR 115 and Alphater Consulting Engineers Pty Ltd v Rozman [2016] VSCA 111.

The request, in the course of renegotiating a contract, was found to be not repudiatory and was simply not clear, such that it could be said that Page was refusing to perform the works under the contract – especially having regard to the fact that Page was making every attempt to do so.