Edelman J

Steward J
Gleeson J
Beech-Jones J

51.

buyer could not accumulate both amounts. This Court rejected that argument but
emphasised that no question of election arose because both amounts were aspects
of a single measure of damages: the wasted expenditure claimed was not separate
from the claim for lost profits. A plaintiff, "having expended £X which he would
have got back together with £Y profit" had the contract been performed, can
recover "£X + Y; and it makes no difference if you prefer to say that he can recover
£X under the name of cost plus £Y under the name of [additional] profit".184

The facilitation principle in Amann Aviation

141 The leading decision on the application of these principles is the decision
of this Court in The Commonwealth v Amann Aviation Pty Ltd.185 It is not easy to
identify a ratio decidendi at any level of specificity from the six different sets of
reasons in that case. Nevertheless, as explained below, the decision broadly
conformed with the principles discussed above.

142 Amann Aviation entered a contract with the Commonwealth to conduct

aerial coastal surveillance of Australia's northern coastline. The contract term was
three years. There was a strong prospect that the Commonwealth would renew the
contract at the expiry of the three years because, by that time, Amann Aviation
"would be fully equipped with the cost of its aircraft written down. It would be
very difficult for a competitor to match this advantage."186 At trial in the Federal
Court, and on appeal to the Full Court of the Federal Court, it was held that the
Commonwealth repudiated the contract six months after entry. One basis upon
which Amann Aviation put its claim was to recover its wasted expenditure. In
anticipation of, or reliance on, the performance of the Commonwealth's contractual
obligations, Amann Aviation had spent considerable sums in reasonable pre-
operational expenditure, in acquiring and fitting out aircraft (which had a resale
value of far less than the amount spent), in termination payments and on a security
deposit.

143 The primary judge held that Amann Aviation would have made a profit on
the contract, without renewal, of $820,000 but that, since there was a 50 per cent
chance that the Commonwealth would lawfully have terminated the contract, the
damages were limited to $410,000. The Full Court of the Federal Court, however,
held that Amann Aviation was entitled to have its damages assessed on the basis

184 (1963) 180 CLR 130 at 142.

185 (1991) 174 CLR 64.

186 (1991) 174 CLR 64 at 74.