SYDNEY - A Sydney pensioner whose winning lottery ticket was cancelled by mistake has been awarded A$2 million ($2.3 million) in damages by the NSW Supreme Court.

Werner Reinhold successfully sued NSW Lotteries and the newsagency which sold him the ticket and then cancelled it.

The 73-year-old bought an Oz Lotto autopick at the Macarthur Newsagency at Campbelltown, in Sydney's south-west, on September 19, 2005.

The ticket did not print correctly and he was issued another, which won the A$2 million jackpot.

But when Mr Reinhold went back to the newsagency, he discovered the replacement ticket was the one that had been cancelled.

Justice Reginald Barrett today awarded Mr Reinhold A$2 million in damages, despite finding he had no claim on the A$2 million prize.

"Mr Reinhold has failed in his claim to enforce the contract to which he, lotteries and the newsagents were parties by means of an order that lotteries pay him the prize of A$2 million that would have been payable in respect of the entry reflected by ticket B had ticket B not been cancelled," Justice Barrett said in his judgment.

"Mr Reinhold has also failed in the claim, pressed also by the newsagents, to have the electronic records of lotteries rectified in a way that would lead to such an order.

"But Mr Reinhold has succeeded in establishing liability of lotteries and the newsagents for both breach of contract and negligence such as to entitle him to judgment for damages in the sum of A$2 million."

Justice Barrett said he would now hear argument on the question of whether interest should be awarded on the damages, and on the question of costs.

- AAP