State of NSW v Gee (aka Michaels)

The appeal concerned the assessment of damages for personal injury. The appellant, the State of New South Wales, appealed against a judgment of the primary judge awarding damages to the respondent, Gee (also known as Michaels), for injuries sustained. The injuries included frontal lobe epilepsy, which caused blackouts and aggressiveness.

The central legal issue before the Court of Appeal was the correct assessment of the respondent's residual earning capacity. Specifically, the court had to determine whether the respondent's residual earning capacity, assessed at 35% of his uninjured capacity (which was equivalent to average weekly earnings), meant the appellant was liable for the entire remaining 65% difference, or if a further allowance for vicissitudes should be applied.

The Court of Appeal found that the primary judge had erred in not making a separate allowance for vicissitudes in addition to the assessment of residual earning capacity. The court reasoned that the 35% residual earning capacity already accounted for some factors that might reduce future earnings, but it did not fully encompass the uncertainties inherent in future employment, such as the possibility of further injury, illness, or economic downturns. Therefore, a further allowance for vicissitudes was necessary to reflect these contingencies.

The appeal was allowed, and the judgment in favour of the respondent was reduced from $826,023.00 to $616,918.00. The respondent was ordered to pay the appellant's costs of the appeal, with a provision for a suitors' fund certificate if otherwise entitled.