High Court refuses special leave: No implied right to terminate long-term commercial contracts

Macpherson Kelley’s Brisbane Litigation team has secured a successful final outcome in a long-running commercial dispute on behalf of its client, Impact Healthcare Pty Ltd (Impact Healthcare).

The High Court of Australia has refused special leave to appeal in St Vincent’s Private Hospitals Ltd v Impact Healthcare Pty Ltd [2026] HCADisp 133, confirming Impact Healthcare’s earlier success in the Queensland Court of Appeal.

Macpherson Kelley acted for Impact Healthcare, a specialist provider that has staffed and operated the emergency department at St Vincent’s Private Hospital Northside in Chermside since 2001 (Hospital).

Dispute over implied termination rights in long-term contracts

The dispute concerned a fundamental question of contractual interpretation: can a court imply a right to terminate a long-term contract on reasonable notice where the contract does not expressly provide for it?

From the outset, the Hospital contended that such a right should be implied as a matter of fact and law. That position was pressed despite the agreement containing a detailed and prescriptive termination regime.

Earlier this year, the Queensland Court of Appeal unanimously rejected the Hospital’s position. It allowed Impact Healthcare’s appeal and declared that the agreement was not subject to any implied term permitting the Hospital to terminate on reasonable notice, whether in law or in fact.

From Court of Appeal success to High Court challenge

Following Impact Healthcare’s earlier success in the Court of Appeal, the Hospital sought to take the matter further by applying for special leave to appeal to the High Court.

The proposed appeal raised a question of broader significance: whether commercial contracts of indefinite duration are subject, as a matter of law, to an implied right of termination on reasonable notice.

If accepted, the argument would have established a new category of implied term capable of affecting a wide range of long-term commercial arrangements across Australia, particularly those deliberately structured without a fixed end date.

Against that backdrop, Impact Healthcare’s task was not only to defend the Court of Appeal’s reasoning but also to demonstrate that the case was not a suitable vehicle for the High Court to consider such a wide-ranging doctrinal shift.

The Hospital’s case in the High Court

The Hospital ‘s application focused on the test of necessity for implication of a term in law, as articulated by the High Court in Commonwealth Bank of Australia v Barker (2014) 253 CLR 169 (Barker).

It argued, relying on a long line of Australian and overseas authority, together with statements in Barker, that a businesslike interpretation of commercial contracts demanded recognition of the implied term.

Impact Healthcare’s response

Impact Healthcare’s response challenged the Hospital’s application on multiple fronts:

• there were express terms of the agreement that dealt comprehensively with termination rights and were inconsistent with the Hospital’s proposed implied term;
• the extensive and onerous performance obligations imposed on the parties, viewed against the surrounding circumstances (including pre-contractual negotiations in evidence before the Court of Appeal), reinforced the suggestion that the termination regime contained in the express terms was intended to “cover the field” on the parties’ termination rights;
• the Court of Appeal had correctly applied Barker, and the Hospital had failed to identify with any precision in the considerations of justice and policy said to compel implication across an entirely new class of contracts; and
• the case authorities relied upon by the Hospital did not establish recognition of the term as an implication of law; at most, they involved terms implied in fact and therefore did not support implying a new term into commercial contracts as a matter of law.

High court outcome: special leave refused

The High Court (Gageler CJ, Gordon, Edelman, Steward, Jagot and Beech-Jones JJ) determined the application on the papers, refusing special leave with costs.

The Court held that an appeal would not enjoy sufficient prospects of success and that an appeal of the matter was not a suitable vehicle to consider issues concerning contractual terms implied by an agreement as a matter of law.

What this means for commercial parties

While the High Court’s reasons were necessarily brief, the outcome reinforces several practical messages for businesses:

• courts are reluctant to intervene with agreements that contain a considered set of termination rights – particularly one that allocates unilateral or asymmetrical rights in the context of an extensive bargain between sophisticated parties; and
• an agreement without a specified end date is not, by that fact alone, susceptible to implied termination on reasonable notice.

A strategic litigation result

For Macpherson Kelley’s Brisbane Litigation team, this matter highlights that the most valuable wins are often defended, not just won.

Obtaining a unanimous Court of Appeal decision was a significant outcome for our client. Securing that outcome by defending the application for special leave, however, has undeniably cemented Impact Healthcare’s commercial certainty under the agreement; something it had bargained for well over two decades ago.

For more information or to discuss a complex commercial dispute or appellate strategy, contact Macpherson Kelley’s Litigation team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.