Wardley Australia Ltd & Anor v State of Western Australia

The High Court of Australia heard an appeal concerning the assessment of damages in a case involving Wardley Australia Ltd and another party against the State of Western Australia. The dispute centred on the proper method for calculating compensation, particularly in situations where the loss claimed is contingent on future events.

The central legal issue before the High Court was the validity and application of the doctrine established in *Forster v Outred*, which had been applied by lower courts. Specifically, the court was required to consider criticisms of this doctrine, including whether it relied on a misconstruction of earlier authorities such as *Nocton v Ashburton*, and whether it erroneously treated the likelihood of financial loss as damage in itself, contrary to statutory distinctions. The court also had to consider the potential for the doctrine to lead to erroneous compensation, either by under-compensating a plaintiff when a contingency materialises or over-compensating them when it does not.

The court's reasoning, as indicated by the submissions presented, involved a detailed examination of the *Forster v Outred* doctrine and its jurisprudential underpinnings. The arguments presented to the court suggested that the doctrine was flawed due to its reliance on a potentially misconstrued precedent and its failure to maintain a clear distinction between the occurrence of damage and the likelihood of its occurrence. The court was invited to consider academic commentary and other judicial analyses that critiqued the approach of valuing a chance or contingency as a method of assessing damages, with a view to ensuring that compensation accurately reflected actual loss.