Damages

Where two parties have made a contract which one of them has broken,

the damages which the other party ought to receive in respect of such breach of contract should be

such as may fairly and reasonably be considered either arising naturally,

i.e., according to the usual course of things,

from such breach of contract itself,

or such as may reasonably be supposed to have been in the contemplation of both parties,

at the time they made the contract, as the probable result of the breach of it.

Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants,

and thus known to both parties,

the damages resulting from the breach of such a contract,

which they would reasonably contemplate,

would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances

so known and communicated.

But, on the other hand, if these special circumstances were wholly unknown to the party breaking the contract,

he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally,

and in the great multitude of cases not affected by any special circumstances, from such a breach of contract.

For, had the special circumstances been known

the parties might have specially provided for the breach of contract by special terms as to the damages in that case;

and of this advantage it would be very unjust to deprive them arising out of any breach of contract.

… we think that his Honour should have allowed the amount claimed in respect of the sales staff over the period of three years which was in the sum of $1,899,731

It was incumbent on the plaintiff to establish on the balance of probabilities that it had lost a valuable opportunity.

If the plaintiff satisfied the burden of proof it bore on this issue, the Court could proceed to value that opportunity in accordance with the degree of likelihood that the opportunity would have ensued to plaintiff's pecuniary gain.

In Sellars v Adelaide Petroleum NL the High Court analysed the authorities at length, emphasising the distinction between causation of loss (which must be determined in accordance with the general civil standard of proof) and the assessment of the plaintiff’s loss “taking into account any reductions arising from the uncertainty of future events“

No special principles of fact or law apply to contractual claims relating to building and construction. Where there is a significant cause of loss not attributable to the defendant a global claim will fail. Any apportionment of damages must have an evidentiary basis [182]-[206].

John Holland Construction & Engineering Pty Ltd v Kvaerner RJ Brown Pty Ltd(1996) 8 VR 681, applied

Laing Management (Scotland) Ltd v John Doyle Construction Ltd [2004] BLR 295; 2004 SC 713, disapproved

Irene Henderson Ltd v Eddie Mair Ltd [2012] CSOH 66; Musselburgh And Fisherrow Co-Operative Society Ltd v Mowlem Scotland Ltd (No 2) [2006] CSOH 39; Lichter v Mellon-Stuart Company [1962] USCA3 173; 305 F 2d 216 (1962); Astley v Austrust [1999] HCA 6; 197 CLR 1; Pilmer v Duke Group (in liq) [2001] HCA 31; 207 CLR 165, considered.