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AAI Limited t as GIO v Catt [2022] NSWPIC 489 (29 August 2022)

Last Updated: 15 September 2022

STATEMENT OF REASONS

BACKGROUND

1. Trevor Clive Catt (the claimant) who was born in 1981 was injured in a motor vehicle accident at about 1.30pm on Monday 14 October 2019 at Hillsborough Road Warners Bay New South Wales when a vehicle driven by the insured collided head-on with the 2016 Toyota Hilux Ute driven by the claimant. The claimant who says he was driving at about 60kms per hour describes the impact as ‘with extreme force’. The claimant experienced pain in his hands, left knee, right foot, shoulders and neck.
2. There was what appeared to be like smoke in vehicle. The claimant thought that the vehicle would set fire and feared for his life. He was in shock.
3. The claimant was taken by ambulance to John Hunter Hospital and was assessed as having fractured his left hand, having a bruised and swollen left knee and bruising and swelling to his hips and torso and lacerations and abrasions to other areas of his body.
4. The insurer concedes breach of duty of care without contributory negligence.
5. The insurer concedes that the claimant is entitled to non-economic loss damages as well as damages for past and future economic loss and has claimed damages at Common Law.
6. The claimant had a history of prior shoulder pain while he was working in the building industry [history by Dr Tzaros 21 April 2011].
7. The claimant had radiological investigations of his right shoulder in April 2019 due to recurrent pain and his shoulder “popping”. The diagnostic investigations showed sub- acrominal bursal thickening with impingement. He was subsequently referred for an ultrasound guided cortisone injection in May 2019 and again in June 2020.
8. The claimant had a pre-existing history of psychological symptoms.
9. The insurer has offered to settle the claimant’s Common Law claim for $600,000.00 which the claimant has accepted by way of Agreement for Release [page 70] subject to approval.
10. The settlement offer is broken down as follows:

11. An amount of $14,842.07 in weekly benefits will be credited to NRMA and be deducted from the settlement.

CONSIDERATION

The legislation and legal principles

12. In making my decision I have considered the following legislation and Guidelines:

(a) the Personal Injury Commission Act 2020;

(b) the Personal Injury Commission Regulation 2020;

(c) the MAI Act, and

(d) the Guidelines.

13. Section 6.23 of the MAI Act provides:

“6.23 Restrictions on settlement of claim for damages

(1) A claim for damages by an injured person cannot be settled within 2 years after the motor accident unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor vehicle is greater than 10%.

(2) A claim for damages cannot be settled unless –

(a) the claimant is represented in respect of the claim by an Australian legal practitioner, or

(b) the proposed settlement is approved by the Commission.

(3) The Commission is not to approve the settlement of a claim unless satisfied that the settlement complies with any applicable requirements of or made under this Act or the Motor Accident guidelines.”

14. Clause 7.37 of the Guidelines states:

“Under section 6.23(3) of the Act, before the Personal Injury Commission may approve the settlement of a claim for damages, it must be satisfied that:

(a) the proposed settlement satisfies the timing requirements in section 6.23(1) of the Act;

(b) the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, and taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement;

(c) the claimant understands that they are entitled to be represented in respect of the claim by an Australian legal practitioner, and

(d) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.”

The evidence

15. I briefly review the evidence.
16. The claimant had a pre-accident history of:

(a) hypertension treated with medication;

(b) knee symptoms;

(c) symptoms in his lumbar spine;

(d) shoulder symptoms;

(e) psychological symptoms.

17. None of these symptoms would appear to have been of major import or have prevented the claimant from engaging in his usual employment.

John Hunter Hospital Discharge Summary

18. The Discharge Summary provides a diagnosis:

(a) small fracture base of the 5^th metacarpal on the left hand;

(b) right forefoot bruising without any obvious fracture on x-ray;

(c) left hand pain no obvious fracture on x-ray;

(d) left knee pain no obvious fracture on x-ray.

19. Dr Swanson provided a Certificate of Capacity of 14 October 2019. He diagnosed:

(a) fractures left base of 5^th metacarpal;

(b) soft tissue in R foot.

20. In a further Certificate of Capacity of 24 October 2019 Dr Swanson diagnosed a soft tissue injury to the left knee.
21. MRI left knee of 1 November 2019 – the study revealed oedema within the supra patellar potentially reflective of an impingement syndrome.

Dr John Lancashire, General Practitioner

22. Dr Lancashire is the claimant’s general practitioner and reported on 10 March 2021 at the request of the claimant.
23. Dr Lancashire [4. Summary and Recommendations] described the claimant’s injuries as a closed fracture of L5 metacarpal and soft tissue injuries to his left knee and right foot. The fracture was managed by a period of immobilisation of the left hand and wrist and physiotherapy to manage soft tissue injuries affecting his left knee and right foot.
24. After a period of physiotherapy by Mr Rod Millington the claimant returned to his pre- injury duties. Since then, he has reported onset of episodic flare-ups symptoms. At the time of the report Dr Lancashire was not able to form an opinion as to whether or not the current symptoms represented chronic outcomes from the motor vehicle accident.

Dr Wayne Mason Psychiatrist

25. Dr Mason reported at the request of the insurer on 30 May 2022.
26. Under History he described the speed of the insured vehicle at between 75 and 80kph. That vehicle had suddenly veered across the road and the claimant was unable to avoid a head-on collision. It was so sudden he did not even have time to apply the brakes. Dr Mason says that the combined impact speed was between 135 and 140kph. All the airbags deployed. The claimant was unsure if he had lost consciousness. He suffered cuts and abrasions to his hands and face and bone marks on his forearms. There were two imprints in the shattered windscreen ‘presumably made by his hands’. He said the car filled with smoke and he thought he would die. The ‘smoke’ later turned out to be white powder from the airbags. He sat in shock for a few minutes trying to work out what had happened. His hands were extremely painful. Finally, he managed to get the door open and fell out of the car. When he tried to walk his left knee was extremely painful and his right knee lessor. He was struggling to walk.
27. The claimant described his symptoms post-accident in detail to Dr Mason:

‘....the accident changed his life. It is always there......he thinks about it every day. .....his sleep was terrible. He found it hard to get the sleep......he was dreaming almost every night about the.....accident......

......he found it impossible to relax.....he became very grumpy and difficult to live with.....his temper was explosive.....no appetite.....lost weight for 3/to 4 weeks.....then started to use alcohol in excess.

28. Under Mental State Examination the claimant was tearful throughout the interview. He was depressed in appearance but denied suicidal thought or intent. He described traumatic dreams and intrusive recollections, social withdrawal and increasing anger. He was hyper-vigilant with an exaggerated startled response.
29. Dr Mason diagnosed a Post Traumatic Stress Disorder the symptoms of which continue.
30. Dr Mason commented that although then it had been 2 & ½ years since the accident when he had assessed the claimant, he had not received effective treatment until the last 12 months and that reduced his chance of a full recovery.
31. The claimant required assessment by a psychiatrist, and he outlined the likely treatment needs.
32. Dr Mason assessed Whole Person Impairment at 15%.

Associate Professor Paul Miniter

33. Associate Professor Miniter assessed the claimant at the request of GIO and reported on 30 November 2021. The report is fairly superficial.
34. At 9 Dr Miniter says that the claimant’s then presentation could be consistent with an injury as it had been a severe injury but his conclusions were hampered by the lack of investigation at that stage.
35. He considered that his injuries had stabilised.
36. From the physical point of view the claimant did not require further treatment though he did (then) require further investigation.
37. The injury to the left wrist was likely a direct result of the motor vehicle accident but the left knee issue was pre-existing.

Should the settlement be approved Legislation

38. Non-economic loss is defined in the Act by s 1.4 of the Act to mean:

(a) pain and suffering, and

(b) loss of amenities of life; and

(c) loss of expectation of life;

39. The maximum that may be awarded under this head of damages has since the 1^st October 2021 been $595,000.00 [s 4.12].
40. The amount of non-economic loss damages to be awarded should be proportionate to the claimant’s injuries and disabilities:

“11.....it is a relationship of the award to the injury and its consequences.....which is to be proportionate. .....It is not a matter to be resolved by reference to some norm or standard supposedly to be derived from a consideration of amounts award in a number of other specific cases. .....The principle to be followed.....It is that the amount of damages must be fair and reasonable compensation for the injuries received and disabilities caused. It is to be proportionate to the situation of the claimant.....and not to the situation of other parties in other actions, even if some similarity between their situations may be supposed to be seen. The judgment of a Court awarding damages is not to be overborne by what other minds have judged right and proper for other situations. It may nbe granted that a judge who is making such an assessment will be aware of and give weight to current general ideas of fairness and moderation. But this general awareness is quite a different thing..... The awareness must be a product of general experience and not formed ad hoc a process of considering particular cases and endeavouring..... to allow for differences between the circumstances of other cases and the circumstances of the case in hand.” [Planet Fisheries Pty Ltd v La Rosa (1968) 119CLR 118 per Barwick CJ, Kitto and Menzies JJ] [at para 11]”

41. A key principle is that the amount assessed for non-economic loss should be comparable to awards of non-economic by other Assessors and Courts [James Hardie & Co v Newton (1977) 42 NSWLR 729 as per Handley JA at 732].
42. The amount award is not assessed on the basis of a percentage of the maximum but on the basis of what the appropriate dollar amount is. The non-economic loss figure awarded is not required to be proportionate to the maximum. This was rejected in Hodgson v Crane [2002] NSW CA 276.
43. The claimant’s age at the time of assessment of damages is a relevant factor but one of only a number of matters which the court should take into account [Reece v Reece [1994] NSWCA 259 and as discussed in Varga v Galea [2011] NSWCA 76 where McColl JA said at para. 72:

“Reece v Reece states the uncontroversial proposition that the plaintiff’s age at the time of the assessment of damages is a factor relevant to the assessment of non-economic loss, a proposition Handley JA made abundantly clear when considering Reece v Reece in Marshall v Clarke.....; see also Christalli v Kassar [1994] NSWCA 48.”

44. The degree of Whole Person Impairment [in this case assessed by Dr Wayne Mason at 15%] is not a reliable indicator of the severity or otherwise of the claimant’s injuries. Whole Person Impairment is a statutory method of assessing entitlement. It does not directly measure incapacity, pain and suffering.
45. The claimant was the driver of the Ute in a sudden and quite shocking accident where he genuinely felt that the Ute was on fire and that he was going to lose his life. The criteria for Post Traumatic Stress Disorder were well accepted by Dr Mason as having been established in this case.
46. The claimant’s other injuries i.e. physical injuries were less significant.
47. The claimant is likely to acquire continuing psychiatric treatment and to have ongoing psychiatric symptoms and to require therapy and medication.
48. The claimant and the insurer have reached an agreement which is a proper one and within the range of outcomes for non-economic loss which one would expect from a court exercising its discretion.

Past Economic Loss

49. The insurer has set out the basis for calculation of past economic loss at paragraph 4.8 to 4.15 of its Submissions and, in particular, 4.14.
50. Part of the calculation is precise [4.14] at $16,852.84 but given that additional time has been taken off for treatment and/or periodic symptoms the insurer has allowed a buffer for $30,000.00 as an appropriate amount for past economic loss which it submits is within the range of what the claimant would be awarded on assessment.
51. I agree that the insurer’s calculation is reasonable.
52. Finally, at [4.16] the insurer has paid $14,842.07 in weekly benefits and seeks credit for that amount pursuant to s 3.40 of the Act.
53. The total amount for past economic loss is $30,000.00 on a buffer basis.

Future economic loss

54. I refer to the insurer’s Submissions at [4.17 – 4.21] and note that the insurer has allowed a global buffer of $270,000.00 for loss of earning capacity and submits that I would find this allowance appropriate bearing in mind that the claimant continues to work on a full- time basis in a similar role to that which he was performing pre-accident.
55. The authorities permitting the assessment of a buffer when a loss is likely but the amount cannot be determined with precision include Penrith City Council v Parks [2004] NSWCA 201; Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13, [considered and applied in, inter alia, Allianz Australia Insurance Ltd v Shamoun [2013] NSWSC 579; Allianz Australia Insurance Ltd v Cervantes [2012] NSWCA 244; QBE Insurance (Australia) Ltd v Volokhova [2014] NSWSC 726, IAG Limited t/as NRMA Insurance v Al-Kilany [2017] NSWSC 342 (30 March 2017), Sretenovic v Reed [2009] NSWCA 280 per McColl JA at paras 79-86, Allianz Australia Insurance Limited v Sprod & Ors [2011] NSWSC 1157, Allard v Jones Lang Lasalle (Vic) Pty Ltd [2014] NSWCA 325 (16 September 2014) and Allianz Australia Insurance Limited v Zein  [2016] NSWSC 196. 
56. The buffers for past and future economic loss are reasonable and appropriate.

Determination

57. The claimant understood that $14,482.07 would be deducted. He also understood he was entitled to be represented by an Australian legal practitioner. He understood the nature and effect of the proposed settlement.
58. The proposed settlement is appropriate and complies with clause 7.04.2 of the Guidelines in that it is “just, fair and reasonable and within the range of likely potential damages assessment for the claim were the matter to be assessed by a member of the PIC, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant.”
59. I am satisfied that the claimant understands the binding nature and effect of the proposed settlement and that he will be precluded from making a further claim for damages arising out of the motor accident but is entitled to ongoing treatment and care needs for life. Whilst AAI Limited t/as GIO is only liable to pay statutory benefits, including treatment expenses for five years.
60. Accordingly, I approve the proposed settlement of $600,000.00 subject to the deduction only of $14,842.07 for payments already made pursuant to s.3.40 of the Act.