McCrohon v Harith

McCrohon and others (the appellants) appealed to the New South Wales Court of Appeal against orders made by Smart AJ in the Supreme Court of New South Wales. The dispute concerned the assessment of damages for breach of contract, breach of duty of care, and breach of fiduciary duty. The respondents sought to recover compensation for losses allegedly suffered as a result of the appellants' conduct.

The Court of Appeal was required to determine several key legal issues. These included the appropriate time for assessing damages in cases of breach of contract, tort, and fiduciary duty, and the relevance of events occurring after the breach. The Court also had to consider whether an innocent party is entitled to choose the most advantageous remedy when multiple causes of action are available, and the standard of proof applicable when an innocent party seeks to establish future possibilities or past hypothetical situations. Furthermore, the Court had to address the admissibility of evidence concerning the conduct of the innocent party had the breach not occurred, and the proper approach when the evidence called by the innocent party fails to provide a rational foundation for a proper estimate of damages. Procedural issues regarding the status of an amended notice of appeal filed without leave after judgment was reserved, and submissions exceeding the scope of limited leave granted, were also before the Court.

The Court of Appeal allowed the appeal, finding that the primary judge had erred in his assessment of damages. The Court reasoned that post-breach events were relevant to the assessment of damages, particularly in determining the quantum of loss. The Court applied principles relating to the assessment of damages for loss of opportunity, emphasizing the need for a rational foundation for any estimate of future possibilities. The Court also considered the principles governing equitable compensation for breach of fiduciary duty, noting that the quantum of such compensation is generally assessed at the time of the breach or at a later date if it is more advantageous to the plaintiff. The Court varied the primary judge's orders, reducing the amount of damages awarded to the respondents and adjusting the order for costs. The cross-appeal was dismissed.