Gordon J

17.

44 GORDON J. The appellant, Cessnock City Council ("the Council"), entered into
an agreement for lease with the respondent, 123 259 932 Pty Ltd, formerly Cutty
Sark Holdings Pty Ltd ("Cutty Sark"), for a 30-year lease over part of Cessnock
Airport, to operate from the day after the registration date of the plan of subdivision
of the land ("the Plan"). Under the agreement for lease, the Council promised to
take all reasonable action to apply for and register the Plan by 30 September 2011
("the Sunset Date"), and in the meantime granted Cutty Sark a licence to occupy
the proposed Lot 104.

45 While in occupation of Lot 104, Cutty Sark built an aircraft hangar, at a cost
of over $3.6 million, from which it intended to operate a business conducting joy
flights and advanced aerobatic training for pilots. In breach of the agreement for
lease, the Council did not take reasonable action to register the Plan.
Consequently, the Plan was not registered, either by the Sunset Date or at any later
time, and the proposed 30-year lease was not granted. Cutty Sark sued the Council
for breach of contract, seeking "reliance damages" – namely, damages for losses
suffered as a consequence of relying upon the Council's contractual promise which
was breached. In this appeal, Cutty Sark sought to recover the expense of
constructing the hangar.

46 The primary judge held that Cutty Sark was not entitled to reliance
damages, on the grounds that the "presumption of recoupment" did not arise and
was, in any event, rebutted, and awarded Cutty Sark nominal damages only.
The Court of Appeal overturned the primary judge's decision and awarded Cutty
Sark $6,154,459.40 (inclusive of interest).

47 The detail of the relevant background is set out in the reasons of Edelman,
Steward, Gleeson and Beech-Jones JJ. For the reasons that follow, I agree that the
appeal should be dismissed. I prefer to express the applicable principles in the
following terms.

Damages for breach of contract

48 The general rule at common law is "that where a party sustains a loss by
reason of a breach of contract, [they are], so far as money can do it, to be placed
in the same situation, with respect to damages, as if the contract had been
performed".64 The corollary is that a plaintiff is not entitled, by an award of
damages, to be placed in a superior position to that which they would have been in

64 Robinson v Harman (1848) 1 Ex 850 at 855 [154 ER 363 at 365]. See also Wenham
v Ella (1972) 127 CLR 454 at 471; Burns v MAN Automotive (Aust) Pty Ltd (1986)
161 CLR 653 at 667, 672; The Commonwealth v Amann Aviation Pty Ltd (1991)
174 CLR 64 at 80, 98, 161; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd
(2009) 236 CLR 272 at 286 [13]; Clark v Macourt (2013) 253 CLR 1 at 6 [7],
11 [26], 19 [60], 30 [106].