Australia: Establishing total loss of earning capacity in motor vehicle accident - Court of Appeal sets the bar high

Last Updated: 30 April 2008
Article by Peter Hunt

Case Note Kallouf v Middis [2008] NSWCA61

McColl and Hall JA

In Brief

  • Whilst the Defendant carries an evidentiary onus in respect of the Plaintiffs residual earning capacity, the onus of establishing a total loss of earning capacity rests with the Plaintiff.
  • An award should not be made for superannuation loss in circumstances where the award for loss of earning capacity is based upon self-employed earnings.
  • An award should not be made for physiotherapy for life in the absence of medical evidence suggesting that the accident has caused a need for life-time physiotherapy.


The NSW Court of Appeal handed down its decision in Kallouf v Middis on 11 April 2008.

The Plaintiff was injured in a motor accident on 5 February 2000, when he was 30 years of age. Liability was admitted by the Defendant. At trial, Neild DCJ assessed the Plaintiffs damages at $740,247 plus costs, calculated as follows:

  • Future medical expenses - $1,824.00
  • Future physiotherapy expenses - $9,198.00
  • Future medication expenses - $19,122.00
  • Past wage loss - $231,120.00
  • Future wage loss - $434,150.00
  • Past superannuation loss - $13,770.00
  • Future superannuation loss - $24,748.00
  • TOTAL: $735,932.00

The Defendant challenged the allowances for future loss of earning capacity, future physiotherapy and superannuation loss.

Court of Appeal

Future Economic Loss

At the time of the accident, the Plaintiff was employed as a floor sander and finisher and cork tiler.

At first instance, the Trial Judge found that the Plaintiff would have worked for the remaining 35 years in his working life, but for the accident, and was totally incapacitated as a consequence of the accident. His Honour accepted that Plaintiff was only suited to work involving heavy physical activity and the accident and significantly impaired his capacity to perform that kind of work. It was also noted that the Plaintiff had not worked during the 7 year period between the accident and the trial. His Honour, therefore, awarded a total loss.

On Appeal, the Defendant argued that the Trial Judge erred in finding a total loss of capacity.

In agreeing with the Defendant, McColl JA (with whom Hall JA agreed) found that the Plaintiff had not discharged his onus of establishing a total loss of capacity. At paragraph 81, her Honour reasoned:

"81 Whilst we consider that the [Defendant] failed to discharge her evidentiary onus to produce evidence of the residual capacity the respondent possessed, we are also of the opinion that the [Plaintiff] did not establish that he had no residual capacity whatsoever. Dr Ellis accepted that the [Plaintiff] could do light work. The [Plaintiff] himself sought to retrain and to obtain work, which also gives some insight into his capacity for light work. In our view the [Plaintiff] will be able to undertake such work in the future, although we accept that any residual capacity the [Plaintiff] does have is limited. It would, at best, involve part-time employment in the field of clerical/stores work or similar work with special provision made for standing and sitting and periodic resting."

On this basis, the Court of Appeal reduced the Plaintiffs damages for future loss of earning capacity by 15% to $369,028.

Past and Future Superannuation

The Trial Judge allowed a sum exceeding $38,000 for past and future loss of superannuation. However, as the Plaintiff was self-employed prior to the accident and as the Trial Judge assessed loss of earning capacity on a self-employed basis, the Court of Appeal accepted the Defendants argument that no allowance should have been made for loss of superannuation. Specifically, McColl JA reasoned, as follows, at pagraphs 96 and 97:

"96 While we have upheld the challenge to the future economic loss claim we have calculated the award for that head of damage on the basis of the respondents earnings in a self-employed capacity. The past economic loss figures are based on that premise too.

"97 In those circumstances it is not appropriate to compensate the respondent for loss of superannuation. As a self-employed person he would have had to cover himself for superannuation out of his income."

Future Physiotherapy

The Trial Judge awarded the Plaintiff $9,198 for future physiotherapy on the basis that he required 10 sessions per years for the remainder of his life expectancy, which exceeded 40 years.

The Defendant argued that there was no evidence to justify allowing physiotherapy over such a long period and the Court of Appeal agreed. At paragraphs 101 & 102, McColl JA reasoned as follows:

"101 The respondent did not adduce medical evidence that he would be required to receive physiotherapy treatment for the rest of his life. There is, as stated above, however, recommendations in the past by Dr Ellis for the respondent to have physiotherapy as well as other forms of treatment. The respondent gave evidence that physiotherapy had produced some limited short-term improvement in his symptoms.

"102 In light of Dr Elliss opinion, it was reasonable for Nield DCJ to make an allowance for future physiotherapy treatment, but a more conservative assessment ought to have been made and 50% of the amount allowed was reasonable. Accordingly, the allowance of $9,198 should be reduced to the amount of $4,599."


Whilst the findings with respect to loss of superannuation and future physiotherapy are useful, the most interesting aspect of the Court of Appeals reasoning in this matter relates to the future economic loss dispute.

At first instance, the trial judge found a total loss of earning capacity on the grounds that the accident had removed the Plaintiffs capacity to perform the kinds of hard physical work which he did prior to the accident.

Even though the Defendant served no expert evidence as to the kinds of work the Plaintiff could still manage the Defendants doctors suggested no loss of any capacity and despite no cross-examination on the Plaintiffs residual capacity, the Court of Appeal still found that the Plaintiff had not discharged his onus of establishing the absence of any future earning capacity.

On the basis of the Court of Appeals reasoning in Kallouf, the onus of establishing a total loss of earning capacity is a high one.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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