From: Neil Foster <neil.foster@newcastle.edu.au>

Sent: Wednesday 8 May 2024 03:14

To: obligations@uwo.ca

Subject: ODG: HCA on "wasted expenditure" damages in contract law

Dear Colleagues;

This is not my area but just thought I would note that the High Court of Australia has handed down its decision today in Cessnock City Council v 123 259 932 Pty Ltd [2024] HCA 17 (8 May 2024). ODG colleagues Katy Bamett, Adam Kramer and David Winterton are cited and will no doubt be able to explain the significance of the case better than I can.

But in brief, Cessnock Council entered into a contract with the respondent company (then called Cutty Sark ) to give development approval to allow construction and use of a facility near the local airport. In reliance on the promise, the respondent spent some $3 million on the building. The Council breached its promise by not doing what needed to be done for development approval. The respondent sued for breach of contract- it was hard to prove whether they would have made a profit from the business even if approval had been given. But the NSWCA, and here this 7 member bench of the HC, held that they could recover damages based on the wasted expenditure.

There was one plurality judgment (EDELMAN, STEWARD, GLEESON AND BEECH-JONES JJ), and three other separate judgements from Gageler CJ, Gordon J and Jagot J. There seems to have been a difference of approach to the way the question should be answered between the plurality and the CJ, but to be frank on a first reading I am not across the debates sufficiently to identify the difference. I think the difference can be seen in comparing the approach of Gageler CJ at para [3] with the plurality judgement at para [118]. But I leave further comment to other colleagues.

I will say that it was nice to see a reference to one my favourite tort cases, Armory v Delamirie, at [130] in the plurality judgment!

Regards

Neil

NEIL FOSTER

Associate Professor, Newcastle School of Law and Justice

College of Human and Social Futures

T: +61 2 49217430

E: neil.foster@newcastle.edu.au

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