Commonwealth of Australia v Amann Aviation Pty Limited

The Commonwealth of Australia sought special leave to appeal from a majority decision of the Full Federal Court, which had awarded approximately $6.6 million in damages to Amann Aviation Pty Limited for breach of contract. The dispute concerned the principles governing the assessment of damages for breach of a contract for the supply of services.

The primary legal issue before the High Court was whether the respondent was entitled to compensation on the basis of being placed in the position it would have occupied had the contract not been entered into, thereby allowing for damages reflecting the full extent of its expenditure, irrespective of whether it would have recouped those costs. A related issue concerned the availability of other grounds for terminating the contract, with differing views expressed by the judges in the Full Court regarding the probability of such grounds existing.

The applicant argued that the Full Court's approach to damages was incorrect, submitting that the respondent should not be compensated for its entire expenditure without regard to potential recoupment. The High Court was required to determine the appropriate principles for assessing damages in such circumstances, considering the divergent views of the Federal Court judges, whose damage assessments ranged from $410,000 to nearly double the majority award of $6.6 million. The applicant's primary ground for special leave was the Full Court's adoption of an incorrect damages assessment principle.