Cessnock City Council v 123 259 932 Pty Ltd: Clarifying Wasted Expenditure, A Facilitation of Proof

Abstract

In Cessnock City Council v 123 259 932 Pty Ltd (‘Cessnock’), the High Court of Australia provided long-awaited clarity regarding the method of proving damages for wasted expenditure in an action for breach of contract. The plurality did so by presenting a new framework for assessing such damages where a wrongdoer’s breach causes or increases uncertainty regarding the position the plaintiff would have been in ‘but for’ the breach — a principle of facilitation of proof. This case note examines the High Court’s treatment of wasted expenditure, analysing the method of proving wasted expenditure and considering the application of Hadley v Baxendale. Further, Cessnock prompts consideration of how damages should be assessed, and why they are awarded. I argue that while the decision appears to provide an elegant solution to difficulties faced by plaintiffs in proving damages where a defendant causes or increases uncertainty as regards the plaintiff’s loss, the solution is impractical and inconsistent with earlier authority.