Port Sorell Bowls Club Inc v Dann

The Supreme Court of Tasmania, constituted by Blow CJ, Pearce J, and Marshall AJ, considered an appeal concerning the assessment of damages for impairment of earning capacity. The dispute arose from a claim for damages brought by the respondent, Mr. Dann, against the appellant, Port Sorell Bowls Club Inc.

The central legal issue before the Court was whether the Medicare levy, a compulsory government charge, should be taken into account when calculating the quantum of damages awarded for an impairment of earning capacity. Specifically, the Court had to determine if the levy constituted a deductible expense that should reduce the gross amount of lost earnings when assessing compensation.

The Court reasoned that the Medicare levy is a statutory charge imposed on assessable income, and as such, it is a necessary expense that a plaintiff would have to bear on any earnings, whether earned in the past or in the future. Therefore, when assessing damages for loss of earning capacity, the levy should be deducted from the gross amount of lost earnings to arrive at the net loss that the plaintiff has actually suffered. This approach ensures that the damages awarded reflect the plaintiff's actual loss, rather than an inflated figure that does not account for mandatory deductions. The Court applied the principle that damages should compensate for actual loss.

The Court allowed the appeal, setting aside the original judgment and remitting the matter for reassessment of damages in accordance with the principles that the Medicare levy is a deductible expense.