Cotrell Pty Limited v D and M Pelle Holdings Pty Limited

The Court of Appeal of the Australian Capital Territory heard an appeal by Cotrell Pty Limited (the appellant) against a decision of a single judge of the Supreme Court of the Australian Capital Territory in favour of D and M Pelle Holdings Pty Limited (the respondent). The dispute concerned damages awarded to the respondent following a breach of contract by the appellant, which related to the respondent's delicatessen business.

The appeal raised several legal issues, including whether the respondent had failed to mitigate its loss, the likelihood of the respondent's lease being renewed, and an alleged error in the calculation of past and future loss of profits. The court was also required to consider the appropriateness of an indemnity costs order.

The Court of Appeal dismissed the appeal, finding no error in the primary judge's reasoning. Regarding mitigation, the court held that the onus was on the appellant to prove a failure to mitigate, and this had not been discharged. The evidence supported the primary judge's finding that the respondent had reasonably negotiated an end to its lease rather than breaching it, especially given the circumstances created by the appellant's breach. The court also found that the primary judge's conclusion regarding the reasonable chance of lease renewal was well-supported by the evidence of the business's profitability and the respondent's exercise of its option to renew. While acknowledging an admitted error in the calculation of past profits, the court found that the primary judge could still arrive at a justifiable figure for past loss of profits based on other expert evidence. Furthermore, the court considered the award for future loss of profits to be within the primary judge's discretion and not excessive. The court also found no error in the decision to award indemnity costs, noting the disparity between the parties' offers and the appellant's own threats regarding costs.

Consequently, the appeal was dismissed, and the appellant was ordered to pay the respondent's costs of the appeal.