Calculating past loss of income arising out of personal injury
is fairly straightforward. But what happens when a corporate entity
has lost the benefit of the services of an injured person integral
to its operations and wishes to make a claim?
In this article, Senior Associate Anna Hendry considers the
recent decision of Du Pradal & Anor v Petchell 
QSC 261 and the court's approach to quantifying damages for
loss of services.
The first plaintiff, Mr Du Pradal, was seriously injured in a
speed boat accident on 29 June 2008 for which the defendant was
found liable. Prior to the accident, the first plaintiff and his
wife were directors and shareholders of the second plaintiff, a
fashion business. Mrs Du Pradal was the designer and the first
plaintiff undertook administration and management of the
Following the accident, the first plaintiff was unable to
undertake those duties and, rather than hiring substitute labour,
they were taken over by Mrs Du Pradal. The second plaintiff alleged
that as a result of Mrs Du Pradal taking over the administrative
and management duties, the business became less profitable and it
sought to recover that loss of profit from the defendant by way of
an action for loss of services of the first plaintiff.
The defendant alleged that loss of profit is not an appropriate
measure of damages in an action for loss of services and that the
second plaintiff's pleaded case must fail on that basis. At
trial, the second plaintiff departed from its pleaded case by
leading evidence that the cost of substitute labour would have been
$70,000 and attempted to assert that value of the loss of services
ought to be the cost of substitute labour less the distribution of
$30,000 which would have been paid to the plaintiff had he not been
In considering the correct measure of damages in an action for
loss of services, Justice Mullins noted the High Court of Australia
decision of Barclay v Penberthy (2012) 246 CLR 258 and in
particular the majority judgment which held the measure of damages
"should be the market value of the services, which will
generally be calculated by the price of a substitute less the wages
which the master is no longer required to pay to the injured
servant". In separate reasons, Justice Kiefel also
specifically addressed the issue of loss of net profits as a
measure of damages, noting:
"To permit recovery on any wider basis,
including for profits lost, would be to transform an exceptional
remedy for a particular type of loss into a substantial exception
to the general principles which have developed concerning recovery
of economic loss in tort. In terms of the coherence of the law,
that would be undesirable."
Accordingly, Justice Mullins found that the second
plaintiff's pleaded case for loss of profits could not succeed
and that the claim for the cost of replacement labour which was not
in fact incurred (and had not been pleaded) must also fail.
Take Away Points
An action for loss of services is available to a corporate
entity where it is wrongfully deprived of the services of the
The appropriate measure of damages is the actual cost of
substitute labour incurred by the corporate entity, less the wages
or distributions that would have been payable to the injured person
had he or she not been injured.
The onus is on the corporate entity, as it is on all
plaintiffs, to mitigate its loss in this regard.
This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).