P and M Quality Smallgoods Pty Ltd v Norman

The New South Wales Court of Appeal considered a dispute between P and M Quality Smallgoods Pty Ltd (the appellant) and Norman (the respondent). The case concerned the respondent's claim for damages arising from a breach of contract.

The primary legal issue before the Court of Appeal was whether the respondent had suffered a loss as a result of the appellant's breach of contract, and if so, the quantum of that loss. Specifically, the court had to determine if the respondent was entitled to recover damages for the loss of profits that would have been earned had the contract been performed.

The Court of Appeal applied the principles of contract law regarding the assessment of damages for breach. It held that damages are intended to place the innocent party in the position they would have been in had the contract been performed. The court found that the respondent had failed to establish with sufficient certainty that the loss of profits claimed was a direct and foreseeable consequence of the appellant's breach. Therefore, the respondent was not entitled to recover damages for those lost profits.

The Court of Appeal allowed the appeal in part, setting aside the original judgment regarding the award of damages for loss of profits.