Bensons Property Group Pty Ltd v Key Infrastructure Australia Pty Ltd

[2021] VSCA 69

Victorian Court of Appeal

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For Australian Law.

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Interrogate

Catchwords

1. Contract
2. › Implied terms
3. › Duty to cooperate
4. › Negative covenant not to hinder or prevent fulfilment of contractual conditions
5. › Whether duty arises as universal rule of construction or implied term subject to necessity test
6. › Whether advancing erroneous construction of contract constitutes breach of duty to cooperate
1. Contract
2. › Implied terms
3. › Duty to cooperate
4. › Standard of breach
5. › Whether conduct must render performance impossible or merely hinder or impede performance
6. › Whether 'hinder or prevent' sets lower threshold than impossibility
1. Contract
2. › Prevention principle
3. › Nature and scope
4. › Whether prevention principle operates independently of breach of contract
5. › Whether wrongful conduct must be identified by reference to contractual obligations
1. Contract
2. › Prevention principle
3. › Causation
4. › Whether conduct deprived party of substantial chance of satisfying contractual condition
5. › Whether delay in lodging VCAT application caused by letter or by independent commercial considerations

Quick Take

The prevention principle in contract law requires an identified breach of a contractual term — it cannot be applied as a free-standing principle carrying independent remedies. The implied duty to cooperate does not extend to an obligation to correctly construe the contract, and advancing an erroneous construction of a contract (even deliberately) is not a breach of the duty to cooperate. However, such conduct may constitute an anticipatory breach or repudiation if properly pleaded. The threshold for breach of the negative covenant not to hinder or prevent fulfilment of contractual conditions is lower than impossibility of performance — conduct that 'hinders or prevents' performance suffices.