Terminating partnerships by "Accepted Repudiation": revisiting Lord Millett's dicta

As a general rule, if one party commits a repudiatory breach of contract, the other party can then terminate it. Consequently, if one partner commits a repudiatory breach of the partnership agreement, it might be expected that the partnership could be terminated under general law principles. That, however, is not necessarily what happens — and the approaches that the UK and the Australian courts have taken differ considerably. The UK courts have generally followed the approach that Lord Millett took in Hurst v Bryk [2002] 1 AC 185, arguing that the doctrine of accepted repudiation cannot apply to partnership agreements. Although his reasoning was clearly obiter, the remainder of the court did not disagree and it was subsequently expressly endorsed in other cases, including, most notably, Mullins v Laughton [2003] Ch 250 and Golstein v Bishop [2014] Ch 455. In Australia, the courts have taken the opposite view, arguing that partnerships can be dissolved by acceptance of repudiatory breach — though none of the cases to date have been finally decided on that basis. This paper considers the differences between the two approaches and asks the question: in the end result, does it really matter