BAE Systems Australia Ltd v Cubic Defence New Zealand Ltd [2011] FCA 1434

FEDERAL COURT OF AUSTRALIA

BAE Systems Australia Ltd v Cubic Defence New Zealand Ltd [2011] FCA 1434 Citation: BAE Systems Australia Ltd v Cubic Defence New Zealand Ltd [2011] FCA 1434

Parties: BAE SYSTEMS AUSTRALIA LIMITED v CUBIC DEFENCE NEW ZEALAND LTD

File number: SAD 302 of 2011

Judge: BESANKO J

Date of judgment: 14 December 2011

Catchwords: CONTRACTS — application for declaration that respondent's purported termination of contract was unlawful and invalid — where issue of termination of contract was to be decided as a separate question from the related Trade Practices Act 1974 (Cth) cause of action — where respondent had contracted with Commonwealth to provide defence supplies and support — where respondent entered into 'back to back' subcontract with applicant for provision of some supplies and support — where both contracts contained an 'acquisition phase' and an 'operate and support/manage' phase ('O and S/M') — where Commonwealth sought to terminate its contract for convenience after the acquisition phase and enter into new form of contract with respondent for the O and S/M phase with the terms and conditions remaining substantially the same — where Commonwealth and respondent entered into deed terminating contract and entered a new contract — where respondent purportedly terminated its subcontract with the applicant in reliance on a clause entitling it to terminate for convenience where it had received notice that Commonwealth had terminated for convenience — whether entry into deed and new contract constituted notice by Commonwealth of termination of main contract — whether deed and new contract were really reduction in scope or variation of the main contract which did not entitle respondent to terminate the subcontract — whether the subcontract contained implied terms that neither party would by its own motion prevent the other's performance of the subcontract, that neither party would do anything to destroy efficacy of the parties' bargain, and that each party would do all things necessary to enable the other to have the benefit of the contract — whether implied term required respondent to enter into deed varying rather than terminating its contract with Commonwealth — whether respondent obliged by implied term of cooperation to pass on new contractual provisions as variations to the existing subcontract Held: The respondent had validly and lawfully terminated the subcontract.