If you have lost a commercial opportunity because of the conduct of a third party, then you may be able to claim the value of that lost opportunity against them. It may be that the other party has broken a binding promise, breached a contract, or given poor professional advice, that has directly led you to suffer a loss. If you think that may apply to you, there are three elements to a claim for a loss of a commercial opportunity[1]:
Did a chance actually exist?[2]
It’s not enough to have had a good idea that went nowhere. You will need to show that the lost opportunity had reasonable prospects of being profitable[3].
Has the opportunity actually been lost?
In other words, you must show on the balance of probabilities that you would have pursued the opportunity but for the conduct of the third party[4].
How much should be awarded?
The Courts will assess the amount to be awarded with regard to the likely success of the opportunity[5].
The approach is generally “broad brush”[6] and does not lend itself to hard and fast rules[7], although the Court will require some evidence on which to base its determination[8].
The Court may also apply a discount that it considers fairly represents the realistic prospects of the opportunity succeeding[9]. Put another way, if the Court considers that the opportunity had a 40% of succeeding then the likely discount would reflect that percentage.
Summary
If you believe you have been deprived of a genuine commercial opportunity to make a profit, contact one of our highly skilled and experienced Litigation team for advice.
Liability limited by a scheme approved under Professional Standards Legislation
[1] Masters Home Improvement Pty Ltd v North East Solution Pty Ltd [2017] VSCA88; [2017] 372 ALR440, Santa Maria, Ferguson & Kaye JJA @ [411]
[2] Sellers v Adelaide Petroleum [1994] 179CLR 332; [1994] HCA4 @ 335 per Mason CJ, Dawson, Toohey & Gaudron JJ
[3] Principal Properties Pty Ltd v Brisbane Broncos Leagues Club Ltd [2018] 2Qd R584 @ [21]
[4] Doolan v Renkon Pty Ltd [2011] 21Tas R156; [2011] TASFC 4
[5] Malec v JC Hutton Pty Ltd [1990] 169CLR 638; [1990] HCA20 @ [369] and [642-3]
[6] Nikolaou v Papasavas, Phillips & Co [1989] 166CLR 394; [1989] HCA 11
[7] Commonwealth v Amann Aviation Pty Ltd [1991] 174 CLR64 @119 [1991] HCA54 per Deane J
[8] Thompson v Schacht [2014] NSWCA 247; [2014] 53FAM LR133 @ [76]
[9] Burger King Corporation v Hungry Jacks Pty Ltd [2001] NSWCA187
