A recent decision of the South Australian Court of Appeal in Motor Accident Commission v Raccanello & Ors [2025] SASCA 146 provides useful guidance on liability for damages for personal injury in cases involving business losses and damages said to arise from deliberate illegal conduct, such as substance abuse.
While the case arose in South Australia, the Court considered provisions of the Civil Liability Act that are similar to the Tasmanian legislation. As a result, the principles discussed in the case are likely to have application in the context of Tasmanian personal injury claims.
Background
The respondent was injured in a motor accident and claimed damages for personal injury. Related family business entities also claimed losses said to flow from the respondent’s reduced capacity to work.
At first instance, damages of approximately $2.2 million were awarded, including substantial sums for alleged business losses and missed commercial opportunities.
The Motor Accident Commission appealed.
The Court’s decision
On appeal, the Court of Appeal substantially reduced the damages award.
The Court confirmed that, where a business claims for the loss of an injured employee’s services (a per quod claim), damages will generally be limited to the cost of replacing that labour at the time the services were lost. Claims for broader losses, including reduced profits, lost opportunities or poor commercial performance, will usually fail unless they can be clearly and directly attributed to the loss of the employee’s services rather than to other operational, financial or strategic factors.
Claims relating to the sale of assets and the loss of future growth or appreciation were rejected because they were characterised as claims for lost commercial opportunities lying beyond the scope of liability for personal injury, rather than losses caused by the injury itself.
The Court also emphasised that compensation under the Civil Liability Act is not unlimited and must be confined by principles governing the scope of liability, even where an injury has serious and long-lasting effects. In addressing the respondent’s substance abuse, the Court found that the alleged causal connection between the accident and that conduct had not been established. The Court further held that, even if causation had been established, the scope of liability did not extend to consequences flowing from the respondent’s deliberate and illegal conduct.
An application for special leave to appeal to the High Court of Australia was later refused.
Key implications for Tasmanian claims
The decision is a useful reminder that:
· Business and company claims arising from an injured worker’s incapacity will generally be limited to the replacement cost of labour.
· Losses resulting from an individual’s own illegal or intentional conduct, such as substance abuse, may not be recoverable even where the injury is said to have contributed.
