Pettet v Readiskill LMT Mildura & Anor M121/2001

This matter concerned an appeal to the High Court of Australia from a decision of the Supreme Court of Victoria. The appellant, Mr Pettet, had been injured in a motor vehicle accident and sought damages from the respondents, Readiskill LMT Mildura and its insurer. The primary dispute revolved around the appellant's entitlement to damages for economic loss, specifically concerning the extent to which his pre-accident earning capacity had been diminished.

The central legal issue before the High Court was whether the appellant's claim for economic loss should be assessed by reference to his actual earnings at the time of the accident or by reference to his earning capacity, which was argued to be significantly greater. This involved a determination of how the law should account for the potential for future earnings that had not yet been realised at the time of the injury.

The High Court, comprising McHugh and Hayne JJ, considered the principles governing the assessment of damages for economic loss in personal injury cases. Their Honours affirmed that damages for economic loss are intended to compensate for the loss of earning capacity, not merely for the loss of actual earnings. The court reasoned that if an injured party can demonstrate a pre-accident earning capacity that was greater than their actual earnings, and that this capacity has been diminished by the injury, then they are entitled to be compensated for that lost capacity, even if it had not yet been fully exploited. The court applied established principles of tort law, focusing on the need to place the injured party in the position they would have been in had the tort not occurred.

The appeal was allowed, and the matter was remitted to the Supreme Court of Victoria for re-assessment of damages in accordance with the principles articulated by the High Court.