(1) There is a fundamental disagreement between Gageler CJ on the one hand and the plurality and Gordon J on the other about whether damages for wasted expenditure are a separate head. Gageler CJ says that they are (while disclaiming the possibility that he’s going as far as Fuller and Purdue), whereas the plurality and Gordon J say that they are not. Jagot J also seems to infer that they’re not.

(2) The plurality characterises this kind of loss as a “consequential loss”. Although it’s not directly stated, I suspect this is a distinction which rests upon the idea that direct losses are substitutionary, and consequential losses reflect the actual loss and are subject to limitations such as causation and remoteness and so forth. Conversely, Gageler J seems to me to implicitly reject a substitutionary account of contract damages at [7]. Neither Gordon J nor Jagot J in their separate judgments consider this point.

(3) The court unanimously affirms the position in Amann Aviation that the plaintiff cannot elect between expectation and “reliance” measures.

(4) There is some disagreement on the nature of the principle: is it an evidentiary presumption or not? Gageler J seems to reject this, but the other judges see it as an evidentiary presumption. They do agree that it’s unnecessary for a plaintiff to prove incontrovertibly that the expenditure would have been recouped.

(5) There is some divergence around the question of whether it’s necessary for a plaintiff to show that it is difficult to recover on another basis for wasted expenditure to be recovered. The plurality and Gordon J say that impossibility or difficulty are relevant, whereas Gageler CJ and Jagot J say that it is unnecessary.

(6) The court unanimously rejects the distinction made in Fuller and Purdue’s article about the reliance interest between “essential reliance” and “incidental reliance.”

(7) The plurality seems to doubt the application of the remoteness rules in Hadley v Baxendale as a limit on recovery in these cases, whereas the other judges confirm it provides a limit.

(8) All judges apart from Gageler CJ say that principles of reasonableness, or a notion of expenses being reasonably incurred, is necessary before wasted expenditure can be recovered.

(9) All judges agree that there is an onus on the defendant to prove that the expenditure would not have been recouped by the plaintiff, and a mere possibility that it would not have been recouped is not enough.

(10) The plurality develops a more general “fair winds” principle in private law, drawing on Adam Kramer’s work, which is said to arise when losses are uncertain and the evidentiary difficulties arise as a result of the defendant’s conduct. [And yes, I love Armoury v Delamirie too.] Conversely, Gageler J and Gordon J both reject a more general principle.

Gageler CJ is the outlier in this decision, although he comes to the same conclusion as the others. I am a fan of Gordon J’s judgment—I found it clear and helpful—but that may also reflect my own biases in terms of how I see these cases.

All the best,

Katy