The recent case of Lien & Anor v Clontarf Residential Pty Ltd [2018] QSC 94 considered implied duties of good faith in the context of joint venture project development agreements. It was held that parties with management and payment powers were in a fiduciary relationship with, and owed implied duties of good faith to, joint venture parties that were vulnerable to the exercise of those powers. On the facts of the case, a breach of the implied duties was sufficient to constitute repudiation of the contract.
This case comes just as the High Court revisits the issue of implied obligations of good faith. On 18 May 2018, the High Court heard a special leave application in respect of the Full Federal Court's decision in Virk Pty Ltd (in liq) v YUM! Restaurants Australia Pty Ltd [2017] FCAFC 190, which dealt with the questions whether an implied good faith obligation is separate from a reasonableness obligation, and whether reasonableness is to be considered objectively or subjectively. The High Court rejected the application for special leave to appeal.
