Cobram Laundry Services v Murray Goulburn Coop

COBRAM LAUNDRY SERVICES V. MURRAY GOULBURN CO-OPERATIVE CO LTD [2000] VSC 353

Supreme Court of Victoria– 7 September 2000

FACTS

In 1990 Cobram commenced a commercial arrangement for the provision and laundering of employee uniforms for Murray’s.

In 1993, the parties entered into a new contract for 3 years for the same scope of work but included a clause 7 into it. Clause 7 provided that Cobram would continue to supply and service items for Murray for three years and thereafter continue to do so indefinitely until a notice of termination was issued by either parties.

In 1996 the parties entered into a new contract for the similar scope of work and clause 7 was inserted into the contract.

In 1998 the parties agreed to amend the 1996 contract to include new price schedule for certain items and extend the contract for 6 years but stated that all other terms and conditions should remain unaltered. In December 1999 Murray’s gave a three month’s notice of termination. Cobram treated the termination as a repudiation of contract and sued for damages.

ISSUES

1. What were the expressed arrangement and expectations of the parties?
2. Could Murray exercise its right to terminate the contract pursuant to clause 7 ?

FINDINGS