Computer Accounting & Tax Pty Ltd v Professional Services of Australia Pty Ltd & Anor

Computer Accounting & Tax Pty Ltd (the applicant) sought leave to appeal to the High Court of Australia from a decision of the Full Federal Court. The dispute concerned the applicant's claim for damages for breach of contract and misleading and deceptive conduct against Professional Services of Australia Pty Ltd and its director (the respondents). The applicant alleged that the respondents had failed to provide adequate services under a contract for the development and implementation of accounting software, and that representations made by the respondents regarding the software's capabilities were misleading and deceptive.

The High Court was required to determine whether the Full Federal Court had erred in its assessment of the damages awarded to the applicant. Specifically, the court considered whether the Full Federal Court had correctly applied the principles of remoteness of damage and causation in assessing the loss suffered by the applicant as a result of the alleged breaches and misleading conduct. The central legal issue was the extent to which the applicant's losses were a foreseeable consequence of the respondents' actions and whether the applicant had established a sufficient causal link between the respondents' conduct and the claimed damages.

In their joint judgment, Heydon and Kiefel JJ granted leave to appeal and allowed the appeal. The Court found that the Full Federal Court had erred in its approach to assessing damages. The High Court reiterated the principles of remoteness of damage, emphasizing that damages must be a natural and probable consequence of the breach of contract or misleading conduct. The Court held that the losses claimed by the applicant were too remote and that the applicant had failed to establish that these losses were caused by the respondents' conduct. The Court applied the principles established in *Hadley v Baxendale* and subsequent authorities on causation and remoteness in contract and tort.

The High Court ordered that the appeal be allowed, set aside the orders of the Full Federal Court, and remitted the matter to the Federal Court of Australia for redetermination of the damages to be awarded to the applicant in accordance with the principles stated by the High Court.