Port Macquarie-Hastings Council v Diveva Pty Limited

The Court of Appeal of New South Wales heard an appeal concerning a contract dispute between Port Macquarie-Hastings Council and Diveva Pty Limited. The central issue revolved around the proper construction of an option within a contract awarded to Diveva following a tender process, and the subsequent calculation of damages for the Council's alleged breach of that contract, specifically relating to the loss of a chance to renew the contract.

The court was required to determine whether the Council had breached its contractual obligations to Diveva by failing to properly exercise or consider an option for renewal. Furthermore, the court had to assess the appropriate method for calculating damages, particularly in relation to the loss of a chance to renew the contract, which involved considering future-looking damages.

The Court of Appeal upheld the primary judge's decision, finding that the Council had indeed breached the contract. The reasoning focused on the interpretation of the contractual terms regarding the option for renewal, concluding that the Council's actions did not comply with its obligations. The court applied principles of contract construction and the assessment of damages for loss of a commercial opportunity, affirming that damages could be awarded for the loss of a chance, even if that chance was not a certainty.

Consequently, the appeal was dismissed. The Council was ordered to pay the respondent's costs of the appeal and to release funds paid into court to the respondent, along with interest accrued from the date of payment into court.