Case: Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385
Outcome: applied
In Foran v Wight [1989] HCA 51 ; (1989) 168 CLR 385 at 417 Brennan J said: "Where the respective obligations of parties to a contract are mutually dependent and concurrent, the primary rule is that neither party who fails to perform his obligation when the time for performance arrives can rescind for the other party's failure at that time to perform his obligation. Each party's obligation is conditional on performance by the other; neither can complain of non-performance by the other when the condition governing the other's obligation goes unfulfilled. But if one party intimates to the other that it is useless for the other to fulfil his obligation and the other acts on the intimation, the party to whom the intimation is given is dispensed from a nugatory tender of performance." 188 It is common ground that the respondents &#8226; by their solicitors' letter of 31 March 2005 stated that the respondents would no longer be dealing with the applicants in any capacity &#8226; terminated the supplies of sauces and Squires Loft cuts of meat from Top Cut to the applicants &#8226; refused to supply any further stationery to them &#8226; changed their business cards, menus and marketing material to exclude any reference to the applicants, and &#8226; did not have a website operating for October and December 2005, and by their solicitors' letter of 9 November 2005 refused to acknowledge any interest of the applicants in having the website up and running. 189 In these circumstances the respondents have intimated to the applicants that it was useless for them to perform their part of the licence. The prima facie obligation on the applicants to perform their part was thus dispensed with. Accordingly the applicants have not by their conduct evinced an intention not to be bound by the licence. It was not open to the respondents to treat them as if they had, and thereby bring it to an end. The steps taken by the applicants, namely obtaining their own sauces and stationery, were forced on them by the respondents. 193 In my view it was the respondents' solicitors' letter of 31 March 2005 and the ensuing conduct set out at [188] that constituted the breach and activated the principle in Foran v Wight . 194 As at November 2006 Joel did not think that Harold and Saul's right to use the name had terminated as a result of his and Lionel's acceptance of their repudiation of the licence. I refer in this connection to what I have said at [184]. 195 In their submissions the parties dealt exhaustively with the name Squires Loft: the applicants claiming an ownership interest and the respondents contending for a mere licence. They also dealt fully with the registration of the name, and what should be done to correct the erroneous impression created by Saul's appearance as its proprietor. Apart from the name, the applicants did not identify the components of "all intellectual property related to the venture". This is doubtless to be explained by the fact that the respondents' case was that they had granted the applicants a licence to use in the City restaurant the name and "the get-up and methodology used by the Respondents in running a restaurant in South Yarra under the name 'Squires Loft'": par 3(b) of the defence. Of course the applicants claimed that the agreement was that the parties would jointly own all intellectual property related to the venture, including the name. However, their fall back position, in the defence to cross-claim, was that if Lionel and Joel had granted them the licence alleged in par 3(b) of the defence, it was for the life of the City restaurant business established pursuant to the licence. The applicants' main case having failed, and the respondents' licence case having succeeded, all that remained for decision was whether the licence of the name and the get up and methodology employed by the respondents in running the South Yarra restaurant was a licence &#8226; terminable at will &#8226; terminable for breach &#8226; which came to an end upon the dissolution of the parties' business relationship, or &#8226; for the life of the City restaurant. I have decided that the licence was not terminable at will, had not been terminated for breach, did not come to an end when the parties fell apart, but was for the life of the City restaurant.