Bonnici v Government Insurance Office of New South Wales

In *Bonnici v Government Insurance Office of New South Wales*, the New South Wales Court of Appeal considered an appeal concerning the assessment of damages for a motor vehicle accident. The appellant, Mr Bonnici, had suffered injuries in a motor vehicle accident and sought to recover damages from the respondent, the Government Insurance Office of New South Wales, which was the compulsory third-party insurer. The primary dispute revolved around the appropriate method for calculating the appellant's loss of earning capacity.

The central legal issue before the Court of Appeal was whether the trial judge had erred in applying a discount for "vicissitudes of life" to the appellant's pre-accident earning capacity when assessing his future economic loss. Specifically, the court had to determine if the trial judge had correctly considered the inherent uncertainties and contingencies that might affect the appellant's future earnings, and whether the discount applied was appropriate in the circumstances of the case.

The Court of Appeal held that the trial judge had erred in applying a discount for the vicissitudes of life to the appellant's pre-accident earning capacity. The court reasoned that such a discount should generally be applied to the *net* loss, after the loss of earning capacity has been calculated, rather than to the earning capacity itself. This approach ensures that the discount reflects the uncertainties affecting the *actual* loss suffered, rather than the potential to earn income. The court emphasised that the assessment of future economic loss requires careful consideration of all relevant factors, and that a discount for vicissitudes should only be applied where there is a real and substantial possibility of events occurring that would reduce the plaintiff's future earnings.

The Court of Appeal allowed the appeal, set aside the judgment of the trial judge, and remitted the matter back to the Supreme Court for re-assessment of damages in accordance with the principles laid down by the Court of Appeal.