Port Jackson Stevedoring Pty. Limited v Salmond and Spraggon (Australia) Pty. Limited: PC 10 Jul 1980

(Australia) Lord Wilbeforce said: ‘A breach of a repudiatory character . . entitles the innocent party, unless he waives the breach, to claim to be released from further performance of his obligations under the contract. So far their Lordships of course agree. One of these obligations, counsel proceeded to argue, was to bring any action on the breach within a period of one year, and the innocent party was released from his obligations. An alternative way of putting it was that the bringing of suit within a year was a condition with which the innocent party was obliged to comply; the repudiatory breach discharged this condition.
Their Lordships’ opinion on these arguments is clear. However adroitly presented, they are unsound, and indeed unreal.
Moreover it is quite unreal to equate this [limitation clause] with those provisions in the contract which relate to performance. It is a clause which comes into operation when contractual performance has become impossible, or has been given up; then, it regulates the manner in which liability for breach of contract is to be established. In this respect their Lordships found it relevantly indistinguishable from an arbitration clause, or a forum clause, which, on clear authority, survive a repudiatory breach. . . Counsel for the consignee appealed for support to some observations by Lord Diplock in Photo Production Ltd v Securicor Transport Ltd [1980] 1 All ER 556 at 566-567, [1980] 2 WLR 283, 294-295, where reference is made to putting an end ‘to all primary obligations . . remaining unperformed’. But these words were never intended to cover such ‘obligations’ . . as arise when primary obligations have been put an end to. There then arise, on his Lordship’s analysis, secondary obligations which include an obligation to pay monetary compensation. Whether these have been modified by agreement is a matter of construction of the contract. The analysis, indeed, so far from supporting the consignee’s argument, is directly opposed to it. Their Lordships are of the opinion that, on construction and analysis, [the limitation provision] plainly operates to exclude.’
Lord Wilberforce
[1981] 1 WLR 138, [1980] UKPC 23, [1980] 3 All ER 257, [1980] 2 Lloyd’s Rep 317
Bailii

Updated: 15 March 2021; Ref: scu.444009