Case: Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54 ; (1991) 174 CLR 64
Outcome: referred to
s 721(1) of the Act provides that a person who suffers loss or damage as a result of a breach of an AWA may recover that loss or damage in curial proceedings, the provision is silent as to the basis on which such loss and damage should be calculated. Mr Van Efferen submits that, because AWAs are statutory contracts, damages should be calculated as they would be in respect of any breach of contract. The applicant should be placed in the same situation, as far as money may do it, as if the contract had been performed: Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54 ; (1991) 174 CLR 64 at 80 (Mason CJ and Dawson J), 98-9 (Brennan J), 116 (Deane J) and 148 (Gaudron J). In appropriate cases damages could be calculated by reference to what the applicant was entitled to expect by way of performance by the respondent and the losses incurred when the respondent failed to comply with its contractual obligations: Amann Aviation , at 91-2. Mr Van Efferen submitted that, had CMA complied with clause 2.10, he would not have been removed from the Dolphin Project and would have continued to perform his duties as marine supervisor until the project was completed on 15 April 2008. He submitted that damages should be assessed by reference to what he would have earned during this period, less the amount which he had earned since the termination of his employment. Alternatively, Mr Van Efferen contended that the same measure of damages should be awarded if a "loss of expectation" or "loss of chance" analysis of the kind deployed in Amann Aviation was applied. The award of compensatory damages for breach of contract protects the expectation interest of the innocent party: Amann Aviation at 80. That expectation is that the contract would be performed according to its terms. Mr Van Efferen sought to characterise the present case as one involving a "loss of chance" because he had lost the opportunity to obtain benefits which would have resulted from his continued employment with CMA. These submissions led to what I regard as an unprofitable debate about whether damages could and should be awarded in the present case on the alternative basis of a "loss of chance". In Amann Aviation , the plaintiff obtained damages against the Commonwealth for breach of a three year contract under which the plaintiff was to provide aerial coastal surveillance. Damages were awarded on the conventional basis. Additional damages were also awarded to compensate the plaintiff for a loss of opportunity to obtain a further contract after the repudiated contract had run its term. The plaintiff succeeded. The court considered that there was "a strong prospect of renewal" (at 94): it would have had the benefit of three years experience and any competitor would effectively have been starting from scratch. It was this latter award of damages that attracted the terms "loss of a chance" or "lost opportunity". More recently, in McDonald v Parnell Laboratories (Aust) Pty Ltd (2007) 168 IR 375 Buchanan J cautioned that the award of damages for "loss of a chance" could not occur, consistently with Amann Aviation , in the absence of a fixed term contract and evidence supporting the possibility that the contract might be renewed.