Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd; TWT Property Group Pty Limited v Cenric Group Pty Limited [2019] NSWCA 87

Bundanoon Sandstone Pty Ltd v Cenric Group Pty Ltd; TWT Property Group Pty Limited v Cenric Group Pty Limited [2019] NSWCA 87

A binding oral agreement was formed on 19 February 2018 to vary the head contract and sub-contract, including extension of time and royalty changes. TWT's show cause notice and contract termination were invalid due to the varied agreement and breach of implied obligation of good faith. Cenric was entitled to retain 50% of royalties up to a cap of $3 million as construed by the primary judge.

Parties
Appellant / Second Cross Respondent: Bundanoon Sandstone Pty Ltd; First Respondent / First Cross Respondent: Cenric Group Pty Ltd; Second Respondent / Cross Appellant: TWT Property Group Pty Ltd
Jurisdiction
Australia
Judgment Date
30 April 2019
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed with costs; Cross-appeal dismissed.
Legal Topics
Variation of Contracts, Breach of Contract, Implied Terms of Good Faith, Construction of Contract Terms, Liquidated Damages, Royalties
Contract Law Variation of Contracts Breach of Contract Implied Terms of Good Faith Construction of Contract Terms Liquidated Damages Royalties

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Parties

Bundanoon Sandstone Pty Ltd

Appellant / Second Cross Respondent

Cenric Group Pty Ltd

First Respondent / First Cross Respondent

TWT Property Group Pty Ltd

Second Respondent / Cross Appellant

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether parties formed a concluded agreement to vary the head contract and sub-contract
  2. 2 Validity of TWT’s show cause notice and contract termination
  3. 3 Construction of the cap on Cenric’s entitlement to royalties

Ratio Decidendi

A binding oral agreement was formed on 19 February 2018 to vary the head contract and sub-contract, including extension of time and royalty changes. TWT's show cause notice and contract termination were invalid due to the varied agreement and breach of implied obligation of good faith. Cenric was entitled to retain 50% of royalties up to a cap of $3 million as construed by the primary judge.

Court Disposition

Appeal dismissed with costs; Cross-appeal dismissed.

Orders

  • Appeal dismissed with costs.
  • Cross-appeal dismissed.