Netline Pty Ltd v QAV Pty Ltd

This appeal concerns the assessment of damages for a breach of contract between the appellants, Netline Pty Ltd and Kathryn Isabel Lance, and the respondent, QAV Pty Ltd. The dispute arose from a wrongful termination of a split return agreement (SRA) between the parties, which was intended to provide caretaking and letting services for an apartment complex known as Ascot Village. The Court of Appeal was required to decide whether the Master's approach to the assessment of the appellants' damages was flawed.

The Court of Appeal found that the Master's approach to the assessment of the appellants' damages was flawed. The Court held that the Master did not assess the amount of the appellants' loss by reason of the respondent's wrongful refusal to perform the SRA and then determine the amount of the loss which the appellants had avoided and then determine whether there was any additional loss which the appellants, acting reasonably, should have avoided. The Master did not apply the well-established legal principles in determining whether the appellants had taken reasonable steps to mitigate their loss. Instead, the Master made an erroneous application of the concepts of 'election' and 'inconsistency'. The Court of Appeal concluded that the Master's characterisation of the appellants' decision to enter into the New Agreement as involving an 'election' or an 'inconsistency' was not a proper basis for deciding that the appellants had failed to mitigate their loss.

The appeal was allowed, and the orders of the Master made on 6 May 2020 were set aside. The appellants' application for the assessment of damages was remitted to a judge of the General Division of the Supreme Court for rehearing and determination according to law.