Ultimately the Court determined that the breach was not material, as it was the consequence of a simple oversight which could easily have been remedied. The Court themselves made it clear that “the concept of a “material” breach has not been easy to define“. In reviewing the case, the key factors of materiality for the Court were the issues, context and consequences. Therefore, the Court were keen to understand the breaching party’s explanation for the relevant breaches, the consequences to each party for either the contract remaining in existence or being terminated and the significance of the breach in the context of the contract as a whole.
The Court decided that a material breach “is more than trivial, but need not be repudiatory…The breach must be a serious matter, rather than a matter of little consequence”. In light of this, the fact that the breach was capable of remedy and caused no loss was indicative that it was not material. RiverRock had not been concerned by the dissolution, and there were no practical consequences arising from the breach other than the need to replace the fund manager, which based on the evidence was the intention even without the breach occurring. RiverRock were therefore not entitled to the sums it sought from Mr Harnack and Mr Moersdorf.