General Principles – Appeals on Damages – Part 3

by Craig Hobbs

POTTS v FROST – FULL COURT – CHALLENGE TO THE PRECISE MATHEMATICAL APPROACH ADOPTED BY THE TRIAL JUDGE IN ASSESSING THE AWARD FOR FUTURE LOSS OF EARNING CAPACITY

 

  1. The Appellant asserted errors were made by the Trial Judge in the assessment of the allowance for the future component of Loss of earning capacity (salary component) and in the assessment of the allowance for Loss of earning capacity (superannuation component).
  2. In the Reasons for Judgment at [313] his Honour stated : “I think it fair to assess residual earning capacity at 30 per cent” and at [314] “I would apply a ten per cent discount for the usual contingencies”.
  3. The % findings in respect of each were not challenged by either party on the appeal.
  4. Having, as a starting point, correctly assessed the base figure of $980,000.00, his Honour then went on to conclude at [315] : “Accordingly … the calculations are the reduction of $980,000.00 by 40 per cent – ten per cent for contingencies and 30 per cent for residual earning capacity” reaching a resultant award for future loss of earning capacity in the sum of $579,000.00 (the correct figure should have been $588,000.00).
  5. It was submitted on appeal before the Full Court, that having assessed residual earning capacity at 30% and concluding 10% should be applied as a discount for contingencies the appropriate calculation is as follows:-

$980,000.00 less 30% for residual earning capacity = $686,000.00 less 10% for contingencies = $617,400.00

 

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