Albrecht v AAI Limited t/as GIO
[2022] NSWPIC 701
•1 December 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Albrecht v AAI Limited t/as GIO [2022] NSWPIC 701 |
| Claimant: | Jiri Albrecht |
| insurer: | AAI Limited t/as GIO |
| Member: | Robert Foggo |
| DATE OF DECISION: | 1 December 2022 |
CATCHWORDS: | MOTOR ACCIDENTS - Damages only; cyclist struck by a motor vehicle; whether prior injuries/conditions play a part in his current symptomology; claimant the proprietor of a successful cabinetmaking business; differing opinions from forensic accountants as to the impact of the Claimant’s injury on the business; State of NSW v Moss and Kallouf v Middis at [44]–[61] followed; domestic assistance; section 15(3)(a) of the Motor Accidents Compensation Act 1999; claimant on holidays during the six-month period; Hill v Forrester applied; Held – rejection of insurer’s contention that absence of evidence of economic loss negates an award of loss of earning capacity; on the issue of liability for the claim, the GIO’s insured owed a duty of care to the Claimant, breached that duty of care and the Claimant sustained injury loss and damage as a result of that breach of duty. |
| determinations made: | CERTIFICATE OF DETERMINATION 1. On the issue of liability for the claim, the GIO’s insured owed a duty of care to the Claimant, breached that duty of care and the Claimant sustained injury loss and damage as a result of that breach of duty. 2. Under sub-sections 94 (3) and 94 (4) of the Motor Accidents Compensation Act 1999 (the Act), I specify the amount of damages for this claim as $340,000.00. 3. The amount of the Claimant’s costs, taking into account the amount of damages assessed in respect of this claim, assessed in accordance with the Act is $54,558.36 inclusive of GST. |
REASONS FOR DECISION - GENERAL ASSESSMENT
Issued in accordance with s 94(5) of the Motor Accidents Compensation Act 1999
INTRODUCTION
The claimant was riding his pushbike along McCarr’s Creek Road in Ku-ring-gai Chase National Park when a four-wheel-drive vehicle struck him from behind. He sustained a number of injuries, the most serious and enduring of which was a burst fracture to the first lumbar vertebrae.
He was immediately conveyed to Royal North Shore Hospital where he was an inpatient for four days. He returned to work in his business six weeks after the accident, but managed to do some administrative tasks during his convalescence.
The insurer has admitted liability on behalf of the driver involved, but disputes the damages sought by the claimant, particularly as regards past and future loss of earnings, and domestic assistance.
In addition, on 14 October 2022, the insurer sought to make additional submissions after receiving an invoice from Vincents forensic accountants, which the claimant’s solicitors had provided as part of the claim for disbursements. That invoice made it clear that Vincents had been provided with financial records for the 2020, 2021 and 2022 financial years which had not been provided to the insurer or introduced into evidence.
BACKGROUND
The claimant was born in the Czech Republic. He obtained qualifications as an instrumentation engineer and had practical experience in this field during his four years of study. He then completed a year of compulsory national service, and then worked as an electrician with a mining company for two years. He then was appointed the manager of a tenpin bowling centre in the Czech Republic and in 2003 he and his now wife, Marcela, travelled to Australia. After completing courses in English, they both obtained Advanced Diplomas in Business Management after a further two years of study, becoming permanent residents in 2006.
The claimant obtained work as an air-conditioning mechanic and then bought a Hire a Hubby franchise in Manly. After three years he sold this business, purchased a factory in Dee Why and commenced his own handyman, carpentry and cabinetry business. After about five years the claimant decided to confine the business to cabinetmaking, and purchased a CNC machine, and employed Adam Moravec as the operator. At the time of his injury, the business had five employees, including the claimant.
ORAL EVIDENCE
The claimant told his counsel that his business manufactured custom furniture, kitchens and wardrobes, and also cut material to size for other cabinetmakers. He said that he was an instrumentation engineer by training and specialised in mechanical maintenance and he also had qualifications in Australia as a carpenter. He said that he was a very practical person who came up with good designs and was familiar with all aspects of production.
He agreed that the accident had changed the way he worked in that he now was mainly confined to the office and he did not get to do the physical part of the work. He said that installation was a rewarding part of his work, where you built something and saw the finished product. He said that he had implemented a system whereby the one person did a single job from start to finish. Prior to his injuries he said that he could do an entire job himself, whereas now he is dependent on other workers, and that he was not a part of the whole process as he did not get to see the finish. He also said that when he was working on the CNC machine, he was able to think about ways of how the operation of his factory could be improved.
He was referred to paragraph 25 of his statement of 15 August 2022, and agreed that but for the accident he would be able to do a further 2 to 3 hours of work a day on the floor. He said that the money in the business is generated by the machine processing, that the machine was costed out at $500 an hour and that he could be earning an extra $1000 for his additional 2 to 3 hours of work.
10.The claimant said that since the Covid epidemic that it was exceedingly difficult to obtain labour, especially skilled operators. He explained that another advantage of him being able to work on the floor before he was injured was that he was more alert than other employees to any sounds in the machine that might signify a problem or malfunction, whereas the other workers might ignore sounds that mean trouble.
11.He explained that every job had large pieces, and that if he tried to handle them, he got pain in his back and had to take time off.
12.He agreed with the insurer’s counsel that he was able to manage small pieces, and that it was possible for 2 to 3 hours of his time to be used on small pieces from the machine. He said that he bought a CNC machine in 2014, and that Adam had been trying to use the machine before he came to work for his business. He agreed that he had qualifications to operate the CNC machine and that Adam was also an instrumentation engineer with the same qualifications as he did. He said that Adam had left about 2 to 3 years ago, which was after the motor vehicle accident, and that he had not been replaced because it was very difficult to find anyone with his qualifications. He said that Thomas is a cabinetmaker and Andre is a mechanical engineer and that although both of them can use the CNC machine, they could not service it and if there was a problem, he had to call in a technician. He agreed that he was still looking for a technician to replace Adam.
13.The claimant agreed that he had spent less time in the business during the renovation of his new house at Beacon Hill, and that he thought that he had five employees at that time. It was put to him that his sales did not decrease during the renovations. The claimant explained that there is a lag time of about four months between being absent from the business due to the renovations and its impact on the cash flow of the business.
14.The claimant agreed with Ms Allan that the sequence of each job was that he went to a site about a new job, provided a quote, then a design, collaborated with the customer, the job then went to the factory and it was installed. He said that the normal timeframe for the installation of a kitchen before Covid was three – four months, but that now it was more like six – seven months.
15.The claimant agreed that he did spend most of his time doing quotes, but added that he also prepared work for his employees, and still did so when he was carrying out renovations, as he needed the money. He agreed that the staff did the work during his home renovations. He also agreed that the business continued operating when he went on holidays in 2016, even though he was not obtaining quotes.
16.He agreed that the edge bending machine, which he referred to in paragraph 27 of his first statement, was ordered before the motor vehicle accident because of increased sales, but was installed after the accident, in January 2018. He agreed that Thomas operated the machine. He was asked whether he continued doing quotes during his renovations, and responded that he did what had to be done as he needed the money. He agreed that he was doing less quotes and designs for the business at that stage. He disagreed that this ultimately meant less sales, saying that he would not let things slip that far. He agreed that after the renovations were completed that he focused on getting out quotes and designs. He agreed that every job started with a design but the design could sometimes be done by an architect. He said that 80% of installations could be done by one person, and he agreed that these continued when he was on holidays overseas and also during his renovations.
17.The claimant denied that he had physical problems prior to the motor vehicle accident. He agreed that he had seen a chiropractor prior to the motor vehicle accident, as he was putting more weight on one of his feet. He could not recall the reason why he first saw the chiropractor, and was informed that the records show that on 8 February 2012, the first record he complained of pain in the upper back and left elbow and that “work aggravated the pain.” Initially he could not remember that, then he recollected that he had a tennis elbow problem from painting. He agreed that the chiropractor’s records (IB page 179) recorded a history of musculoskeletal pain for over three weeks. He said that she had fixed his back and elbow problem over about three months and that, and that she was very good.
18.He agreed that he had 24 treatments during 2012 with the chiropractor, 2 in 2013, 6 in 2014, 18 in 2015, and 9 in 2016, and 9 in 2016. He was not sure why the frequency increased from two consultations in 2013 to 9 consultations in 2016, but said that most were for acupuncture and general adjustment and that chiropractor was a very good acupuncturist. The claimant could not explain why he did not tell the doctors at the various medico-legal consultations about his consultations with the chiropractor. Likewise, he had no explanation why he did not tell Dr Buckley and Dr Shatwell of his previous back pain.
19.The claimant was referred to the report of Dr Keller at page 249 the insurer’s bundle, which stated that he “reports no prior back or shoulder complaints.” He denied that this was wrong and denied that he had kept in information from the doctors. He agreed that he had visited Italy, the Czech Republic and the USA in 2017, and that he had suffered a tick bite whilst in the USA, and that the trips to Italy and the USA were in association with his business. He agreed that on 7 December 2017 he told the chiropractor that his “back was okay” but that his right shoulder and elbow were not good, and that he had seen the chiropractor mainly for his right shoulder and elbow in January 2018. He agreed that between 24 January 2018 and 2 August 2018 that he had no treatment from the chiropractor, and agreed the treatment improved his right shoulder condition.
20.The claimant was then questioned about the records from his general practitioner. He was asked when he returned to cycling after the accident and said “pretty much right away – in March or April I was cleared for exercise, and the doctor recommended stretching. I went to physiotherapy – that didn’t help, then the gym and then I bought a touring bike.” He agreed that he had gone cycling in Oregon, but that he could not do mountain biking. He said that if he had the time he would cycle after the accident, but that he was trying to rebuild his business. He agreed that he saw the chiropractor on 2 August 2018, having hurt his right shoulder when he fell off his bike. He did not think that he had aggravated his back on that occasion, and agreed that he saw the chiropractor twenty times in 2018. He denied that these consultations were all because of his fall, saying that some were for his back. He said that he did not think the fall was important and so he did not include it in his statement.
21.It was put to the claimant that when he told Dr Buckley on 9 April 2018 that his business made no profit after the accident for the first time, that this was incorrect. He said there was a good chance that he was talking about expendable cash flow. He said that he was unable to put money into the growth of the business after the motor vehicle accident, but agreed that the gross sales of the business had increased. He denied that he had endeavoured to exaggerate the impact of the accident on his business.
22.He said that the business was incorporated as at June 2019 but that no tax returns have been filed by the business. He explained that his accountant had said that the time had come for the business to be incorporated and he had set the company up. However he discovered that he still had to keep up the business as a sole trader because of his sponsorship of one of his employees. He said that the company commenced trading the beginning of the current financial year.
23.The claimant said that he provided all the financial records he had been requested and that there was no 2020 return for the company and that the financial records and tax returns have not been finalised for the 2021 financial year. The claimant agreed that the business was growing and said that he had supplied all of the records he was asked to supply.
24.Claimant agreed that he had told Dr Keller that he could assist with the cooking and the gardening without any assistance, and that he had told Dr Truscott that he was able to shop, do the housework as well as the yard.
25.The claimant told his counsel that as every job involves large pieces that he could not manage a job by himself and he would always have to get assistance.
26.The claimant said that he did not believe that Dr Buckley had asked him questions from the chiropractic records that had been provided to him by the insurer he was shown chiropractic records (IB page 180) and asked to direct his attention to the spot on the back of the second figure. The claimant then recollected that the reason he saw the chiropractor was that he had a muscle ache under his shoulder blade, as a result of being stuck in the rain and it was very painful. He said the chiropractor was able to fix it with acupuncture, whereas a physiotherapist was unable to get to the problem just using massage.
THE CLAIMANT’S CREDIBILITY
27.No challenge to the claimant’s credibility was made in the insurer’s initial and most recent submissions. This was announced the commencement of the assessment conference, and the claimant was questioned from medical and chiropractic records concerning conditions and injuries for which he had presented and were not related to the motor vehicle accident. Whilst he could remember some of the consultations, he was nevertheless challenged as to why he had not told doctors of conditions and injuries which he had forgotten.
28.He was challenged as to why he had not told Dr Buckley of his back pain and could not explain why this was the case. It later emerged in re-examination that the “back pain” was pain under his left shoulder blade which had occurred after he got caught in the rain.
29.I found his evidence impressive and conclude that he was a truthful and honest witness. He readily made concessions when questioned in connection to his business operations, for example that the number of employees had not increased since his motor vehicle accident, that turnover had increased, and that he was able to manage small pieces on the CNC machine. He revealed how anxious he was to return to bicycle riding after the accident having sought a clearance from his general practitioner to do so. Although his initial statement recorded that he had difficulties with domestic tasks and gardening, he promptly conceded that he had told Dr Keller and Dr Truscott that this was no longer the case. He was also challenged as to whether he had provided all his financial records to his solicitors, it being put to him that the most recent financial statements and taxation returns had not been supplied to the insurer. The invoice from Vincents (AD 16) demonstrates that the claimant provided all his available records to his solicitors and provided access of his electronic financial records to Vincents.
The claimant’s 2020, 2021 and 2022 financial records
30.The insurer’s submissions of 14 October 2022 contended that the claimant’s failure to provide the 2020 and 2021 financial material gave rise to an inference pursuant to the principles of Jones v Dunkel 101 CLR 298.
31.On 17 October 2022, I caused a message to be forwarded to the parties, indicating that I would prefer that the financial statements from the missing periods sought by the insurer be made available to myself and the insurer as to their relevance and significance, even if they had not been finalised. I also rejected the claimant’s contention that the insurer was not entitled to make its submission of 14 October 2022 on the basis that the insurer had repeatedly requested this information, and having been informed that it existed, in my view was that I would be assisted by this material.
32.Counsel for the claimant provided written submissions on 5 November 2022 in response to those of the insurer of 14 October 2022. It was pointed out by counsel that the claimant’s amended submissions of 9 September 2022 (not 2 November 2022 as stated in counsel’s submissions) that the claimant did allege that there was any measurable ongoing loss to his business after August 2019. Those amended submissions at paragraphs 86 – 89 also made it clear that the claimant’s future loss was confined to a claim for $413 net a week in respect of his inability to work an additional two – three hours a week, and a buffer of $125,000 in respect of any possible future deterioration of the claimant’s present physical capacity for work.
33.The failure by the claimant to make the 2020 and 2021 financial material available to the insurer and myself, is defensible, as argued by counsel for the claimant, because of the manner in which the claimant frames the damages sought for past loss and future of earnings. However, if I do not accept that approach, and award damages on the basis of a buffer, then this material in my view may be relevant to my considerations in determining the amount of the buffer.
34.Although I find that I am entitled to draw an inference because of the non-provision of this material, it seems that the extent of that inference is limited to inferring that the missing material may have disclosed an increase in in the profitability of the claimant’s business. That inference, however, needs to be tempered by the fact that the financial records provided to Vincents were extracted from the claimant’s accounting program and accordingly inchoate and have not been finalised by his accountants, who no doubt will prepare financial statements in the light of the transition of the business to a proprietary company.
35.As will be seen in my reasons below, I have found that the only appropriate method of assessing the claimant’s past and future loss of earnings and earning capacity is by means of a buffer. Accordingly, in the formulation of the extent of that buffer, I intend to infer, that despite the claimant’s injuries, his business has continued to do well over the past two or three years, and that it may continue to flourish in the future.
PAST AND FUTURE TREATMENT EXPENSES
36.At the conclusion of the assessment conference, the parties had agreed that these amounted to $5,000 and $10,000, respectively.
PAST AND FUTURE LOSS OF EARNINGS
37.The claimant’s most recent written submissions rely on the report of Vincents, which calculated past economic loss to be $271,583. This report arrived at that figure by concluding that the appropriate methodology was to use the replacement cost of labour is the most accurate measure of the claimant’s past loss of earnings.
38.The insurer’s most recent submissions at IB page 515 – 517 point out that the report relied on by the claimant is over three years old (3 September 2019) and that it does not have the most recent financial statements and taxation returns. In addition, the submissions point out that there is no evidence that additional employees were engaged after the claimant’s accident (which was readily conceded by the claimant at the assessment conference), and further that the projections for future earnings in the Vincents report are based on period of only six months prior to the accident.
39.The submissions also point to the increased turnover of the business and also the fact that the claimant moved into larger premises since claimant’s accident. They note that it is only the claimant’s assertion that he would have worked an additional 2 to 3 hours a week each day on the floor of the business which is the real foundation for past and future economic loss.
40.The insurer’s report from Furzer Crestani concluded that in the light of the limited information with which it had been provided (no current financial statements or tax returns, no material from CNC Pty Ltd), that it would use the Vincents methodology of calculating the additional cost of replacement labour, which it believed was confined to the financial year subsequent to the accident, and calculated that this amounted to $21,000.
41.I agree with the insurer’s criticism of the claim for economic loss as outlined in their most recent submissions. The methodology used by Vincents to calculate past and future loss of earnings by means of the additional cost of labour is merely one illustration of how the claimant’s loss of earnings in the particular circumstances may be calculated, but does not conform to the reality of how the business operated after the claimant’s accident. Likewise, the prediction of future losses on the basis of an analysis of only six months of trading is a classic example of ignoring the law of small numbers.
42.The claimant’s description of the difficulties he encountered with work, as set out in paragraphs 18 – 36 of his statement on 15 August 2022 (CB page 492 – 493) are clearly in accordance with what one would expect would be the physical constraints which he has as a result of the burst fracture of L1:
18.Since the accident and my inability to do a whole job, including the floor work, I have to transfer the programmed job to one of the machine operators and explain to them what I have programmed, and this is where mistakes can happen. Sometimes you might forget to transfer the information or not transfer it well enough that the machine operator has understood it.
19.It is not just the time it takes to explain any issues with the program, it is the mistakes that arise from that.
20.It is more efficient to see the whole process through and it cuts down on mistakes.
21.I have skills that some of the others who work for me don't have and, therefore, I am a resource not being fully utilised.
22.The workers don't have my training in the instrumentation. For example, the machines are self-greasing, however, you have to look for blockages and make sure that the machines are properly greased. Sometimes some of the workers, when asked, say that they haven't had time to grease the machine, but what I have found is that people need to be told to do this, because if you don't grease the machine and the machine seizes, you could be out of action for 3 weeks with that particular machine, which slows down or halts the process.
23.All of the other workers in my business run their project from start to finish to try and avoid the mistakes that arise out of the transfer of information or lack thereof.
24.It would probably be more efficient if people did individual tasks but, as I have previously mentioned, that style of working increases mistakes.
25.I can do a couple of hours in the office but I can't do it all day. I find that after a couple of hours I am not very productive in the office. If I hadn't been injured in the accident I would have done 2 to 3 hours a day on the floor after all of my other managing, bookwork and programming tasks.
26.I have never enjoyed doing the office work, but I know it has to be done. I would much prefer to be doing the hands on work of building the product.
27.If I hadn't been injured in the accident I would definitely be doing some of the floor work. I would be able to see all of my projects through to completion.
28.If I could do the floor work it would save all of the transfer information issues and I would gain 3 hours a day in productivity because I wouldn't have to ask somebody else to cut out my jobs.
29.I would also go to sites more to do installs and, as such, you get a better ability to quote because you are able to see the feedback and to know exactly how much to quote because you are seeing the time consumed by travel to a site, installation and problems at a site and then travelling back to the factory.
30.In looking at my business I am completely unutilised on the physical side and I could add an extra 3 hours a day of productivity. This would not only be good for the company but also good for me.
31.If I were able to do the physical work it would make it easier for me to sort out practical problems and refresh systems where I saw problems and could identify solutions.
32.I would also find it more beneficial to interact and supervise what the other workers are doing on the floor, and this would also help me implement the change that I need to make the business stay competitive.
33.Doing some of the manual work on the floor would also help me clear my head and I would be more productive in the office.
34.I have developed a culture in the business where workers see a job through from start to finish, and I believe that this is why people stay employed in the business for a number of years.
35.I have found that my inability to attend installations has hampered the business somewhat because at the installation stage, that's when you will identify whether there has been a problem in the programming or cutting of the product and you need to fix it on the spot.
36.I also really miss the satisfaction that comes from creating a finished product, installing it and witnessing how happy the clients are with what you have made for them. This makes such a difference to my work satisfaction.
43.They are also congruent with the examinations and conclusions drawn by the independent MAS assessors, Dr Truscott and Dr Cameron, and with the opinion of Dr Keller, an occupational therapist who examined the claimant on behalf of the insurer.
44.Moreover, the above passage demonstrates the futility of chartered accountants employing their usual metrics to calculate the value of the claimant’s loss of past earnings and projecting that into the future. The examples given by the claimant of how the accident has impacted his operation of the business clearly establish that the profitability of the business has been affected by the claimant’s physical impairments due to the accident. They also clearly establish that it is impossible to measure the extent of the loss of that profitability.
45.The insurer’s submission that the claimant’s intention to work 2 to 3 hours more each day is only a bare assertion and is not evidence of what was going to happen in the future is undoubtedly correct. However, it is evident what the claimant intended to do. Given his impressive past history of continually improving his earnings and earning capacity, it follows that the claimant would have done more than merely think about working an extra 2 to 3 hours a day. It is not realistic to accept that this would have occurred each and every day. The pressures of family life, the claimant’s demonstrated need for exercise, being involved in the running and administration of the business, preparing quotes and performing many other functions associated with his business, would undoubtedly have meant, had the accident not happened, that he would have had to avail himself of these extra hours as and when the appropriate opportunity presented itself.
46.Both before and after his accident, the claimant had a machine, which, with human assistance could bring in $500 per hour, sitting idle from the time his employees left at 5 PM. Before the accident, the claimant had the opportunity to engage in physical work he found satisfying, and in completing a specific project and being present when his work was accepted and appreciated by his customers. I reject the insurer’s contention that he was not precluded from doing physical work because he could confine himself to smaller pieces on the CDC. This submission ignores the uncontroverted evidence that the claimant had organised his business so that one person manages the entire job, and that each job contained somewhere between one and five large pieces which he was physically unable to manipulate without the assistance of one of his employees.
47.Both in its written and oral submissions, the insurer, although conceding that the claimant had suffered a significant injury, argued that although his injuries may have affected the claimant’s earning capacity, that they were not productive of economic loss. The insurer’s contention that the absence of evidence of economic loss prohibits an award of loss of future earning capacity is not in accordance with decided authority. In State of NSW v Moss [2002] 54 NSWLR 536 Heydon JA found that it was wrong to conclude that damages to compensate for a loss of earning capacity should be minimal if there had been no actual loss of earnings up to the date of the hearing.
His Honour’s summary at [89] was:
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 no 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.
A detailed summary of the principles applicable in circumstances where future loss of earning capacity is claimed, but where there has been no actual loss of earnings to the date of the hearing, was made by McColl JA and Hall J in Kallouf v Middis [2008] NSWCA 61 at [44]–[61]:
1. Damages for past and future loss of income are allowed because diminution of earning capacity is or may be productive of financial loss: Graham v Baker, above. An alternative way of expressing the principle is that the plaintiff is compensated for the effect of an accident on the plaintiff’s ability to earn income: Medlin v SGIO, (1995) 182 CLR 1, per McHugh J at [16].
2. Although the exercise involves assessment of lost earning capacity and not loss of earnings, evidence of wage rates, known for the past and likely in the future, provides a basis for assessment.
3. Both the lost capacity and the economic consequences of that loss must be identified before it will be possible to assess the sum that will restore the plaintiff to his or her position but for injury.
4. What was earned in the past may be a useful guide to what might be earned in the future but it does not always provide certain guidance.
5. Assessment of future income loss necessarily involves the consideration of future possibilities or hypothetical events. The exercise is imprecise and carried out within broad parameters.
6. Evaluation of the extent to which a plaintiff may in future lose time from work and of the proper compensation to be allowed depends on the evidence.
7. An error of principle would be involved in concluding, in the absence of evidence, as a matter of certainty that a plaintiff will suffer future income loss.
8. The onus is on the plaintiff to provide evidence in support of the claimed diminution in earning capacity. Past income is relevant to this consideration but is not always determinative.
9. The onus is on the defendant who contends that the plaintiff has a residual earning capacity to provide evidence of the extent of that capacity and of the availability of employment.
10. In both cases the evidence must establish more than a mere suggestion of loss or capacity.
11. Where it is clear that income-earning capacity has been reduced but its extent is difficult to assess, the absence of precise evidence will not necessarily result in non-recovery of damages. The task is to consider a range of what may be possibilities only that a particular outcome might be achieved to arrive at an award that is fair and reasonable.
50.Both Malec v Hutton and Medlin v SGIO were decisions where the High Court found that, if a plaintiff demonstrates some loss of earning capacity extending beyond the date of trial, although it may be difficult to assess, courts are bound to award something unless, on the material before the court, it can be seen confidently that the damage suffered by the plaintiff will not be productive of economic loss.
51.I am persuaded that the claimant’s inability to do the physical tasks he had done prior to the accident in connection with his business have been in the past and will be in the future productive of economic loss. He has lost the opportunity to contribute to and grow his business in the manner he is outlined in the passage quoted above from his statement of 15 August 2022. It is evident that it is impossible to accurately measure the extent of the claimant’s loss of earnings. As I have set out above, both the High Court and the NSW Court of Appeal has made it clear that this inability to measure the extent financial loss does not preclude the awarding of damages for past and future loss of earnings and loss of earning capacity.
52.It seems implicit in the parties’ submissions that they each have accepted but for the accident the claimant’s most likely future circumstances in relation to his employment would be that he continued running his business until normal retirement age. Given his focus on his own physical fitness and health, it is highly likely that, apart of the accident, he would have worked beyond retirement age.
53.Insofar as his injuries in the motor vehicle accident now impact upon the issue of when he will cease work, my view is that his increased role in administration, management and design would mean that he will still be physically capable of working beyond age 67. However, given the loss of satisfaction in his present role, as outlined in paragraph 36 of his second statement, he may well retire before otherwise would be the case. I accept the insurer’s submission that the claimant will not be forced retire earlier than otherwise would be the case because his present physical capacity for work will deteriorate, as there is no medical evidence to support this eventuation.
54.In estimating the claimant’s past and future loss of earnings and earning capacity, I have taken into account his intention to work additional hours which he now is unable to do and thereby earn additional income. I have acknowledged that this intention would not, absent the accident, have been realised 2 to 3 hours a day every day of every week in the past and future. I have also taken into account that it is likely that the claimant’s business has continued to grow in profitability to the present time, and will do so in the future. It may be that the claimant, if this trend continues, whether the accident occurred or not, may l sell the business to pursue another more challenging venture, or simply retire before his mid-sixties.
55.I have accordingly concluded that the award of a buffer is the only appropriate method of estimating the claimant’s past and future loss of earnings and earning capacity. I award the amount of $150,000 in respect of past loss of earnings. This amount does not include loss of superannuation, as the claimant remains self-employed at present time.
56.In respect of the future, I award a buffer of $175,000 for future loss of earnings and earning capacity. I have made some allowance for loss of future superannuation in this figure, as it appears clear that the claimant’s business will shortly be transitioned from that of a sole trader to a corporation.
DOMESTIC ASSISTANCE
57.In oral submissions, counsel for the insurer pointed out that the claimant’s holiday in 2017, for five weeks to the Czech Republic, severed the continuity of the six-month period prescribed by section 15 (3) (a) of the Motor Accidents Compensation Act.
58.Counsel for the claimant submitted that the five-week holiday taken by the claimant could not disentitle him to the period which he was otherwise provided with gratuitous domestic assistance.
59.Although the New South Wales Court of Appeal observed that many people may share Mr Grey’s view, this is not the law in New South Wales:
It is true, as Mr Robertson submitted on behalf of the appellant, that on any view a claimant who cannot demonstrate that gratuitous services were, or are to be, provided for a period of at least six consecutive months will be ineligible for an award of damages. Thus if each six months block during which gratuitous services are provided is interrupted by a short period during which the gratuitous services are not provided, the claimant will never be entitled to receive a damages award. It is also true that many would regard this result as arbitrary. But the fact that clear words in legislation produce an apparently arbitrary result in one situation does not mean that the statutory language should be construed to produce an arbitrary result in another, where the words are consistent with a different outcome.
60.The above comments from Sackville AJA at [104] in Hill v Forrester [2010] NSWCA 170 have been affirmed by the Court of Appeal in a number of occasions. Accordingly, the claimant is not entitled to past domestic assistance.
61.In respect future assistance, although the claimant in his initial statement of 3 December 2019 that he found some of the gardening and lawn mowing difficult, as it made his back sore (paragraph 76 CB page 38), his most recent statement was silent as to whether this was still the case. At the assessment conference, he readily conceded to counsel for the insurer of that he had told Dr Keller he could assist with the cooking and the yards without assistance, and that he told Dr Truscott he was able to shop to the housework and the yard.
62.It follows that there is no basis for an award of future commercial care.
ASSESSMENT OF DAMAGES SUMMARY
I assess the claim as follows on the findings set out above:
·Past loss of earnings (incl. superannuation and Fox v Wood) $150,000
·Future loss of earnings (incl. superannuation) $175,000
·Past treatment (incl. s 83 payments) $5,000
·Future treatment $10,000
·Past domestic assistance $nil
·Future commercial care $nil
TOTAL DAMAGES ASSESSED $340,000
64.The claimant’s economic losses are to be reduced by and the insurer is to have credit for the following payments in accordance with s 130:
·Section 83 payments $170.00
COSTS AND DISBURSEMENTS
65.I agree with the insurer that as the claimant has not provided the 2020 and 2021 financial material nor provided a further report from Vincents, the final invoice from Vincents should be disallowed. The insurer makes no other objection to the claimant’s estimated costs and disbursements.
66.In accordance with the attached sheet, I accordingly assess costs and disbursements as follows: $54,558.36.
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