GALEA & EMERSON

In *Galea & Emerson*, the Supreme Court of Victoria was asked to determine whether a plaintiff, who had been injured in a motor vehicle accident, was entitled to recover damages for economic loss arising from the loss of earning capacity, despite having been employed as a sex worker at the time of the accident. The defendant argued that the plaintiff's occupation was illegal and therefore her loss of earning capacity was not recoverable.

The central legal issue before the Court was whether the plaintiff's illegal occupation precluded her from claiming damages for economic loss resulting from her diminished earning capacity. This required the Court to consider the principles of causation and remoteness in tort law, and whether the illegality of the plaintiff's occupation constituted a novus actus interveniens or a failure of causation, thereby breaking the chain of liability. The Court also had to consider the public policy implications of allowing recovery for loss of earnings from an illegal enterprise.

Mushin J found that the plaintiff was entitled to recover damages for economic loss. His Honour reasoned that the defendant's negligent driving was the direct cause of the plaintiff's injuries, and these injuries directly caused the loss of her earning capacity. The fact that her occupation was illegal did not, in itself, break the chain of causation. The Court applied the principle that damages are recoverable for loss of earning capacity even if that capacity was derived from an illegal activity, provided the illegality does not render the loss too remote or otherwise disentitle the plaintiff to recover. The Court distinguished this case from situations where the illegality itself is the direct cause of the loss or where the plaintiff is seeking to profit from their illegal conduct.

The Court ordered that the plaintiff was entitled to recover damages for economic loss, with the quantum to be assessed.