Reassessing "Reliance Damages": The High Court Appeal in Cessnock City Council v 123 259 932 Pty Ltd

Abstract

The forthcoming appeal in Cessnock City Council v 123 259 932 Pty Ltd affords the High Court an opportunity to reconsider the law governing the recovery of expenditure incurred in reliance upon an unperformed contractual promise. The appeal’s central focus is likely to be the nature and status of the so-called ‘presumption of recoupment’ commonly said to provide the legal foundation for the recovery of such expenditure as damages for breach of contract. Depending on the arguments made, and on the Court’s approach, the appeal may additionally provide the chance to identify more precisely when expenditure incurred in reliance upon an unperformed contractual promise is presumptively recoverable as damages: in particular, the relevance of the rule established in Hadley v Baxendale in this context. It is argued that the High Court should reject the expansive interpretation of the Amann decision some have adopted or, alternatively, provide further guidance regarding the appropriate limits on presumptively recoverable reliance expenditure.