The Claimant in Alldinger v Du Ranot  NSWCA 271 was involved in a motor vehicle accident on 19 June 2017, at which time he was a sole trader operating a café in Moss Vale. There were significant differences between his actual earnings, the earnings shown in his bank statements and the earnings declared in his tax returns.
The Claimant originally claimed $654,122.81 for future economic loss, plus a $150,000 buffer to reflect his loss of earning capacity and a loss of opportunity to grow his business.
At first instance, the Claimant was awarded a total of $1,103,234.45. This included a buffer award of $450,000 for future economic loss which included a discount of 30%, to account for the following factors:
The Trial Judge accepted that the Claimant’s most likely future circumstances, but for the accident, would be that his café business would fail at some point once his tax evasion was discovered by the authorities.
The Claimant appealed the Trial Judge’s assessment of future economic loss.
The Court of Appeal held that the method of calculating future economic loss was correct, in accordance with section 126 of the Motor Accident Compensation Act 1999 (NSW). Section 126 required the Court to:
all of which the Trial Judge did.
The Court of Appeal commented that an assessment of future economic loss involves a comparison between the position the appellant is in because of the accident and the position they would have been in but for the accident.
His Honour accepted that the Trial Judge was correct in using the evidence of the Claimant’s past earnings as a guide for the future.
The Court of Appeal also accepted that the Trial Judge was entitled to consider his adverse findings of the Claimant’s credit in assessing his most likely future circumstances, but for the injury – as once the tax fraud was discovered, the potential for bankruptcy would be ever-present and would have brought the Claimant’s business to an end.
The decision in Alldinger v Du Ranot  NSWCA 271 demonstrates that actual business earnings that are at significant odds with declared business earnings, are not always an accurate depiction of potential future earnings.
The decision also highlights that assessing a claim for potential future earnings/increased profits, where significant discrepancies exist, involves a determination of the Claimant’s ‘most likely future circumstances but for the injury’.
This includes numerous considerations such as:
If you have a query relating to any of the information in this case note, or would like to discuss a similar matter of your own, please don’t hesitate to get in touch with CTP Insurance Lawyer Raissa Galang today.
On 25 October 2023, Justice Stewart of the Federal Court of Australia handed down the decision in Karpik v Carnival plc (The Ruby Princess) (Initial Trial)  FCA 1280 - believed to be the first decision (globally) addressing a claim for personal injury and related damages arising from COVID-19 infections on board a cruise ship.