31 What is required under s 126 of the Act was considered in State of NSW (NSW Police) v Nominal Defendant [2009] NSWCA 225, where Beazley JA said at [82] - [88]:
"82 It is reasonable to comment that the drafting of s 126 is not particularly clear and its proper construction and thus application has caused the courts considerable anxiety. There have been calls for legislative clarification: see MacArthur Districts Motor Cycle Sportsman Inc v Ardizzone [2004] NSWCA 145; (2004) Aust Torts Reports 81-744. In this case, the Court requested the parties to provide a joint note as to the history of s 126. In providing those submissions, the parties indicated a common approach to the proper construction of the section.
83 Pursuant to that request, the parties submitted that the correct approach to s 126 was: first, to arrive at an assumption as to the plaintiff's most likely earnings had the plaintiff remained uninjured: s 126(1); and secondly, to take into account other possibilities in adjusting the resulting calculation of damages for future economic loss for contingencies, including that the plaintiff's earnings may have been higher or lower had the plaintiff remained uninjured: s 126(2). Section 126(3) then required the Court to make explicit the assumptions upon which the award was based. In this regard, the assumptions in s 126(1) and s 126(2) had to be specified.
84 The parties further submitted that in the usual case, the Court could award damages for future economic loss by determining the difference between the plaintiff's "most likely" future earnings uninjured and "most likely" earnings injured. In determining the first of these integers, they accepted that the Court may take into account a range a possible future circumstances had the plaintiff remained uninjured. In that regard, they accepted that the correct approach to the assessment of future economic loss under s 126 was the approach approved by the Court in Norris v Blake (by his Tutor Porter) (No 2) (1997) 41 NSWLR 49; (1997) 25 MVR 101. The parties also submitted that that assessment would then be made subject to a discount for vicissitudes and suggested that, in the normal course, the usual discount for vicissitudes would be 15 per cent.
85 Some comment is required in respect of Norris v Blake (No 2) and the adjustment made for contingencies. Before dealing with those two matters, reference should also be made to Graham v Baker and Malec.
86 Graham v Baker is authority for the basal proposition that an injured plaintiff recovers not merely because his or her earning capacity has been diminished, but because the diminution of his or her earning capacity is, or may be, productive of financial loss.
87 In Malec, Deane, Gaudron and McHugh JJ explained how the assessment of that loss is to be undertaken. Although the relevant passage is long, it is appropriate to set it out in full, given that the appellant relied upon it as being the framework for the proper construction of s 126. Their Honours stated, at [7], 643:
"If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded. See Mallett v. McMonagle (1970) AC 166, at p 174; Davies v. Taylor (1974) AC 207, at pp 212, 219; McIntosh v. Williams (1979) 2 NSWLR 543, at pp 550-551. The approach is the same whether it is alleged that the event would have occurred before or might occur after the assessment of damages takes place."
88 The appellant contended that s 126 replicated this approach. The respondent did not contend to the contrary. In circumstances where the parties have agreed as to the construction of s 126 in this case, I do not consider that it is useful to enter upon an exegesis on the point. That should await an occasion when the construction of the section is directly in issue. This case turns upon whether her Honour erred in treating as a certainty that Senior Constable Moor would have left the police service by the time of the trial and whether his decision to remain in a non-management position was a personal choice or whether his inability to it was causally related to his Post Traumatic Stress Disorder."
32 It was argued for Mr Hutton-Potts that these conclusions as to the operation of s 126 were not binding and that in any event, the assessor had complied with the requirements of the section. While s 122(3) required the assessor to undertake the assessment of damages in the same way as a Court, assessors were not obliged to provide reasons for the conclusions reached, in the way that a Court was obliged to do, given the provisions of s 94(5) (see Insurance Australia Limited v Helou [2008] NSWCA 240 at [61]).
33 While it must be accepted that elaborate reasons were not required to be given for the conclusions reached by the assessor in relation to the assessment of Mr Hutton-Potts' future economic loss that did not relieve the assessor of the obligation of identifying the assumptions on which the damages award for future economic loss rested, which s 126 requires. Reasons could be given concisely, but they had to be given.
34 By an analysis of the reasons given, including those given in relation to past economic loss, it was argued for the first defendant that those assumptions were apparent, even if not expressly identified. Having carefully considered that submission, I am afraid that it may not be accepted.
35 In evidence were various expert reports, which went to the question of economic loss. The assessor dealt with them, noting that there was general agreement that the claimant had no present earning capacity. He then turned to his pre-accident capacity, when he had 'a patchy work history' and had participated in a clinical trial for treatment of his hepatitis C, which caused significant lethargy. It was concluded that this is likely to have had some impact from time to time on his earning capacity.
36 The assessor then turned to the post accident period, where he found that but for the accident, the claimant was unlikely to have earned anything for two to three years. He was then pursuing a business, the likely profit of which could not be determined.
37 The assessor accepted what the claimant said, that if the business had not worked out, he would have returned to the driving and maintenance jobs he had done in the past. The claim was, however, based on likely earnings of a sales representative, with losses of just over $60,000 per annum claimed. This claim was not accepted, not being supported by the claimant's own evidence. As to the future, it was assumed that a patchy work history would have continued. The claimant was unlikely to work again.
38 As submitted for Mr Hutton-Potts, when assessing damages in a situation where there is but scant evidence, a Court cannot generally abandon the attempt. In State of NSW v Moss [2000] NSWCA 133, Heydon JA observed at [87]:
"In short, where earning capacity has unquestionably been reduced but its extent is difficult to assess, even though no precise evidence of relevant earning rates is tendered, it is not open to the court to abandon the task and the want of evidence does not necessarily result in non-recovery of damages. Statements to the contrary such as those made in Allen v Loadsman [1975] 2 NSWLR 787 at 792 are not correct: Baird v Roberts [1977] 2 NSWLR 389 at 397-8 per Mahoney JA; J K Keally v Jones [1979] 1 NSWLR 723 at 732-735 per Moffitt P; Yammine v Kalwy [1979] 2 NSWLR 151 at 154-5 and 156-7 per Reynolds JA and Mahoney JA; Thiess Properties Pty Ltd v Page (1980) 31 ALR 430; see also Radakovic v R G Cram & Sons Pty Ltd [1975] 2 NSWLR 751 at 761 where Samuels JA criticised the "meagre facts" provided but did not say it was not open to the jury to find a substantial sum for diminished earning capacity by the "application of their own knowledge and experience". The task of the trier of fact is to form a discretionary judgment by reference to not wholly determinate criteria within fairly wide parameters. Though the trier of fact in arriving at the discretionary judgment must achieve satisfaction that a fair award is being made, since what is involved is not the finding of historical facts on a balance of probabilities, but the assessment of the value of a chance, it is appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility. The trial judge in substance explained these aspects of the jury's task satisfactorily."
39 That is the position at common law. When dealing with claims brought under the Act, however, the obligations imposed by s 126 must be observed. That required the assessor to explain the assumptions he made, on which the damages assessed for future economic loss of $231,477.50 rested. All that was identified was that it rested on a weekly figure of $500. That seems a conclusion inconsistent with the claimant's pre-accident work history, which had been patchy. While it was said expressly that this would have continued, an award of $500 per week did not reflect that assumption. There was no explanation of the assumptions on which that departure rested. What assumption the $500 figure selected as the weekly rate rested on, was also not explained.
40 That approach does not accord with the Court of Appeal's discussion in State of NSW (NSW Police) of what s 126 requires. For my part, I cannot see any good reason for departing from that construction of the section, even if the view that the decision was not binding, could be accepted. What other approach was being urged for the first defendant was not, in any event, clear. For myself, the fact that Beazley J took the view that it was not necessary in the circumstances where the parties were in accord as to the proper construction of the section to embark on a lengthy explanation for the conclusion reached in relation to Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638, does not result in the decision not being binding on this Court. In any event, the construction of the section discussed, particularly at [83] and [84], seems to me to accord with the intent, structure and purpose of the section.
41 The result of these conclusions, it seems to me, must be the same as that reached by Hidden J in Allianz Insurance Australia Ltd v Ward [2010] NSWSC 720 at [53], applying Kirk v Industrial Relations Commission of New South Wales [2010] HCA 1; (2010) 239 CLR 531. The error is jurisdictional. While there is a discretion to refuse the grant of prerogative relief, the error here in question cannot be described as minor, resulting as it has in an award of damages for future economic loss of over $230,000. Unlike the situation in Ward, this is not the only basis on which the assessment is challenged. For reasons which I will explain in relation to the other matters argued, they, too, support the conclusion that this is not an appropriate case to exercise the discretion to refuse relief.