Gageler CJ

5.

said in response that "wasted expenditure is a recognised and recoverable type of

loss, well within the compensatory principle".17

12 To characterise wasted expenditure as a distinct category of loss or damage,

it is unnecessary to go as far as Fuller and Perdue did when they famously wrote
of the plaintiff in an action for breach of contract having a "reliance interest" as
well as an "expectation interest" and postulated the availability of an award of
reliance damages having as its object "to put [the plaintiff] in as good a position as
[the plaintiff] was in before the promise was made".18 Within the framework set
by the principle in Robinson v Harman, a sufficient conceptual basis for
characterising wasted expenditure as a distinct category of damage lies in
recognising that wasting of past expenditure upon failure of performance is a
legally cognisable respect in which the plaintiff is worse off as a result of non-
performance in comparison to performance.19 The phenomenon in respect of which
the plaintiff is entitled to be compensated is the fact that non-performance by the
defendant has caused expenditure incurred by the plaintiff to have been thrown
away. Compensable damage lies in the simple fact that the plaintiff has incurred
expenditure which, because of non-performance, is incapable of yielding any
benefit or gain to the plaintiff.

13 Difficulty of proof of any benefit or gain which the plaintiff might have
expected from performance of a contract might well furnish a practical explanation
for why a particular plaintiff might choose to frame a claim for damages wholly or
partly as a claim for wasted expenditure in a particular case. The reality that
difficulty of proof of such benefit or gain is frequently encountered in practice by
plaintiffs in a variety of different factual scenarios is a reason for recognising
wasted expenditure as a distinct category of compensable damage. Not all
contracts are entered into with a view to direct and immediate profit: some
contracts are loss-leading, some are speculative, some are integers in a larger
commercial enterprise, some are entered into not with a view to profit at all but in
pursuit of a non-commercial benefit or gain as in a case of government
procurement.

14 But difficulty of proof of such benefit or gain as might have been expected
from performance of a contract, on this analysis, is neither a precondition to nor a

17 [2022] 2 All ER (Comm) 1082 at 1104 [73]. See also at 1105-1106 [84].

18 Fuller and Perdue, "The Reliance Interest in Contract Damages: 1" (1936) 46 Yale
Law Journal 52 at 54.

19 See Owen, "Some Aspects of the Recovery of Reliance Damages in the Law of
Contract" (1984) 4 Oxford Journal of Legal Studies 393 at 396. See also Chitty on
Contracts, 35th ed (2023), vol 1 at 2238 [30-025] and Seddon and Bigwood,
Cheshire & Fifoot Law of Contract, 12th Aust ed (2023) at 1235 [23.11].