Cester v Allianz Australia Insurance Limited
[2025] NSWPIC 27
•30 January 2025
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Cester v Allianz Australia Insurance Limited [2025] NSWPIC 27 |
CLAIMANT: | Robert Cester |
INSURER: | Allianz Australia Insurance Limited (Allianz) ABN 15 000 122 850 |
MEMBER: | Terence Stern OAM |
DATE OF DECISION: | 30 January 2025 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); the claimant was injured in a motor vehicle accident on 7 September 2021; the insurer wholly admitted liability for the claim; assessment of damages; claim for damages pursuant to section 7.36; economic loss damages for physical and psychological injury; division 4.2 of the MAI Act applied; past economic loss; Livingstone v Rawyards Coal Co applied; Medlin v State Government Insurance Commission applied; Husher v Husher applied; section 4.7 of the MAI Act applied; future economic loss; Nominal Defendant v Livaja applied; Held – damages for past and future economic loss assessed at $298,191.14; claimant’s costs assessed at $35,942.75 inclusive of GST. |
DETERMINATIONS MADE: | CERTIFICATE Issued under s 7.36 of the Motor Accident Injuries Act 2017 1. I assess damages in the amount of $298,191.14. |
STATEMENT OF REASONS
INTRODUCTION
The claimant, Robert Cester (Mr Cester), was born in March 1958 and is now 66-years-old.
He is single and without dependents.
He was injured in a motor vehicle accident in Five Dock on 7 September 2021.
The Insurer (Allianz) has admitted that the insured driver was negligent, and there is no allegation of contributory negligence.
Mr Cester is not entitled to non-economic loss damages.
Mr Cester claims damages for:
(a) past loss of wages;
(b) past superannuation;
(c) past and future loss of profits, and
(d) future economic loss, loss of superannuation.
The accident
In his Statement of 15 December 2021, Mr Cester states:
“[11] He was driving a 2002 Subaru Outback Station Wagon
…
[32] He was travelling on Lyons Road, Five Dock to the East, on the inside lane, being lane 2 of 2 with a green traffic light and continued to drive straight at about 40km/h
…
[34] On reaching the middle of the intersection with Great North Road, he suddenly felt an impact from his right-hand side. He did not see the vehicle nor hear brake noise but just felt the impact. His seatbelt engaged and locked him close to his seat. It was a heavy impact. There was dust in the car.
[35] The impact pushed his car sideways.
[36] The impact was strong. The other vehicle was driving north on the Great North Road.
…
[42] He could not open the driver’s side door.
[43] He extricated himself from the passenger side.
…
[47] He was taken by ambulance to Concord Hospital.
[48-49]He arrived at the Hospital at 5 pm and was in Emergency all night. The next morning, he saw a plastic surgeon and underwent surgery to his right arm at about 3 pm.”
Mr Cester continues:
“[63] Mr Cester sets out a list of symptoms, including
[a]Limitations of movement in the right arm
[b]Loss of strength in the right thumb
[c]Restriction on lifting
[d]Numbness in the right elbow
[e]Disturbed sleep
[f]Anxiety and depression
[g]Loss of confidence
[h]Personality changes
[i]Mood swings
[j]Flashbacks
[k]Insomnia
[l]Nightmares
[m]Irritability.”
He also states:
“[61] Had operated a café for many years. At the time of the accident, he had a job offer at ‘Espresso 96’ (the café). Knew the current and previous owner
[62] Had given the owner of Espresso 96 $10,000 to buy new outdoor furniture and assist him in opening night-time trading. He intended to buy in as a part owner of the café.
[63] Believes he is unable to work in a café given his current disabilities.”
Mr Cester's supplementary statement of 11 September 2024.
I briefly summarise this statement by reference to the paragraph numbers, Mr Cester:
[2] Worked as a boilermaker/welder from 1974 to 1984, then as a draftsman for 4 years.
[3] Worked as a courier between 1990 and 2002.
[4] Commenced work in 2002 as an area manager for a coffee and tea supplier until 2007.
[5] Operated his own café business from 2007 until 2013.
[6] Ceased working to look after both parents in 2013. In 2014, he received a carer pension. This continued until about July 2021.
[7] Mr Cester’s father died in September 2020, and his mother died the following year.
[8] Regularly visited Espresso 96, a café near where he lived
[9] Became acquainted with the proprietor of Espresso 96, Mr Bikash Dangol.
[10] Contacted Mr Dangol about working in the café. He was no longer caring for his parents and wanted to get back into the workforce.
[11] Agreed with Mr Dangol that he would commence work in the café on 11 September 2021. He was to be the head barista, working about 38 hours a week and paid $30 per hour. As he planned to go to Europe in August 2022, he would work until he took that trip and would go back to work on his return.
[12] Discussed expanding his hours and trading at night after he returned from Europe. Mr Cester would work at night. He would serve in the café, wait on the tables, take the payments, and work as a barista. He was also going to work as the head barista during the daytime.
[15] Wanted to expand the business and new furniture was needed. Before he left for Europe, Mr Cester gave Mr Dangol $10,000 towards the cost of buying new furniture. When he returned from Europe, he would give Mr Dangol a “future financial investment in the café”.
[16] Intended to work as long as possible and beyond the age of 67 years.
[17] Was not able to commence work as a result of the accident.
[18] Noted that running a café was very stressful and physical. Could not do that work after the accident.
[19] Tried to do some tasks to see how he coped in 2024. One day, he helped a friend who was renovating a property in Waverton and tried to do some painting. He had to use a ladder and found he was very unbalanced. The restriction to his right arm prevented him from doing any painting work. On a different occasion could not do work involving moving furniture.
[20] Does not consider he can do any work in the café business or do any work for which he is qualified because of his injuries.
[21] Would have been earning $900 gross per week at the café, had expected to earn more and move into a broader position at the business upon his return from Europe.
[22] Mr Cester’s accident has had an impact on his mental health. Continues to consult a psychologist. Has also been treated by Dr Rosenman. Takes medication for his mental health. Has nightmares, distress, anxiety, irritability, hypervigilance, sleep disorder, and mood swings. Also suffers from reduced power in his right hand and pins and needles in his right arm.
[23] Mr Cester’s overseas trip had to be cancelled.
Statement of Bikash Dangol – September 2024
I briefly summarise this statement by reference to the paragraph numbers, of Mr Dangol:
[2] Operates Espresso 96.
[3] Had two years left in the lease with a 5-year option to renew.
[4] Had known Mr Cester for about 7 years. He was a customer.
[6] Had on occasion offered Mr Cester work in the café.
[7-8] Following the death of his parents, Mr Cester and he agreed that Mr Cester could commence work at Espresso 96 as a barista working 30 hours a week for $30 an hour from 10 September 2021
[9] Had an initial discussion on extending the operating hours of the café in the afternoon/evening. Upon Mr Cester’s return from Europe in 2022, the cafe would trial operating later in the afternoon.
[10] Noted if the increase of the operating hours was successful, this would have become permanent.
[11] Noted that Mr Cester provided the $10,000 in late 2021 to buy new furniture for the café. Mr Cester suggested that he would make a future financial investment in the café.
[12] Noted the café was grossing about $200,000.
THE MEDICAL EVIDENCE
Clinical notes of Dr Lee Coates, general practitioner (GP) – various dates
I have been provided with a copy of the clinical notes of Dr Coates, which I briefly summarise to the extent relevant.
Mr Cester consulted Dr Coates as a new patient on 15 June 2022.
Dr Coates took a history that after Mr Cester's parents passed away, he started working as a barista in a café and was working in this capacity until the accident.
Mr Cester sustained extensive skin tears and deep lacerations to his right arm with debris and glass in wounds. He reported weakness and sensation changes mainly in the radial nerve distribution.
He was to commence café work the next day. He did not get a chance to contact the employer. The employer found a replacement employee.
Dr Coates records symptoms in keeping with post-traumatic stress disorder. Mr Cester was referred to a psychologist. His last appointment with her was in late 2021.
Mr Cester had not attended work since the accident.
Dr Coates set out the details of the consultation on 20 July 2022. Mr Cester had attended a driving course. It gave him more confidence. He is discussing post-traumatic stress disorder symptoms with his psychologist.
During the consultation on 16 August 2022, he expressed that practising driving alone still makes him feel nervous, and he continues to experience flashbacks.
During the consultation on 9 September 2022, he reported ongoing symptoms suggestive of post-traumatic stress disorder.
Durning the consultation on 20 January 2023, Mr Cester reported seeing Dr Mel Court, psychiatrist, and was seeing her prior to the accident.
In the consultation on 7 July 2023, Dr Coates reported that Mr Cester had no psychological capacity to participate in on-site work. No function or limitation preventing him from returning to work. Increased driving capacity. Driving instructing classes to continue.
On 15 August 2023, no functional limitation preventing him from returning to work, driving, instructing classes to continue
10 October 2023, currently taking 375mg Venlafaxine prescribed by Dr Court. Symptoms of depression and anxiety have worsened in the preceding six months. Also seeing psychologist Rose Cantali.
Consultation on 7 November 2023, seeing a new psychiatrist.
Consultation on 13 December 2023, significant deterioration in his mental health. He has no capacity to work and has been prescribed an atypical antipsychotic with ongoing high-dose Venlafaxine. No functional limitation prevented him from returning to work.
Consultation on 17 January 2024, still struggling with insomnia and unpredictable/erratic [sic] thoughts, mental health deteriorating.
Consultation on 16 February 2024, had an appointment with independent psychiatrist Dr Foster on 29 February 2024.
Consultations from 8 March 2024 until 29 September 2024, multiple prolonged consultations. No change in symptoms or capacity since December 2023. Has had a significant deterioration in his mental health on the background of depression and post-traumatic stress disorder. Had no capacity to work and continued with atypical antipsychotic with ongoing high ‘dose’ Serotonin and norepinephrine reuptake inhibitor (SNRI). No functional limitation prevented him from returning to work.
Treatment report of Dr Stephen Rosenman, psychiatrist – 8 November 2023
Dr Rosenman reported to Dr Coates that he saw Mr Cester on 8 November 2023.
Mr Cester gave a history of current symptoms dominated by chronic anxiety, sleep disturbance, and complaints of subjective fogginess persisting to late in the day.
Dr Rosenman considered the symptoms consistent with post-traumatic symptoms relating to the accident. His only previous experience of related symptoms was a period of depression for a few months following a significant physical illness in 2013.
Since the accident, Mr Cester has been on very high doses of Venlafaxine (Venlafaxine is a serotonin-noradrenaline reuptake inhibitor) SNRI used to treat major depressive disorder.
Dr Rosenman considered that Mr Cester's state appeared consistent with the trauma. The post-traumatic disorder was confirmed and typical.
In a letter to Allianz of 8 November 2023, Dr Rosenman advised that Mr Cester had not been responding well to the current medication. He confirmed the diagnosis of post-traumatic stress disorder and that symptoms had been disabling despite high levels of previous medications.
In a report of 14 December 2023 to Dr Coates, Dr Rosenman advised that the attempts to Venlafaxine to a lower dose had produced a mixture of intensified anxiety symptoms and withdrawal symptoms. He advised that he requested that Mr. Cester return to 300mg of Venlafaxine and had added amisulpride (Amisulpride is indicated for the treatment of acute and chronic psychiatric disorders) 50-100mg at night. He considered Mr Cester incapacitated for work by reason of his symptoms.
Dr Rosenman to Dr Coates on 13 March 2024. Venlafaxine was increased to 375mg. A high dose of venlafaxine along with a small dose of amisulpride was causing quite noticeable physical restlessness, restless legs at night and trunk movements.
In the report of 4 July 2024, Dr Rosenman advised Dr Coates that he had reduced the Effexor to 300mg because he thought the higher dose might be contributing to the agitation.
In the report of 23 August 2024, Dr Rosenman referred to the continuing inhibitory effect of his anxiety in all of his daily activities. He had trouble getting out of bed in the morning and was largely inactive during the day. Then, he had difficulty going to bed at night. He spent the whole day trying to have a shower before succeeding in the evening. He continues to take Effexor 300-375mg, amisulpride 50mg and the occasional temazepam.
Dr Rose Cantali (PhD), psychologist, reported on 2 August 2023 that Mr Cester's symptoms were consistent with post-traumatic stress disorder.
Since Mr Cester's initial consultation, he had reported some improvement in his psychological symptoms.
Although Mr Cester had made significant progress in recovery, he had reported that his psychological symptoms had deteriorated as a result of Allianz reducing his income. He had reported increased depressive symptoms and rumination.
Determination of Medical Assessor Alexey Sidorov assessment of 4 June 2024, certificate dated 20 June 2024.
Medical Assessor Sidorov assessed Mr Cester for the Personal Injury Commission (Commission) and is, by definition, independent.
Medical Assessor Sidorov had available the documents attached to the application and the Report of Dr Wayne Mason of 4 March 2024.
Medical Assessor Sidorov sets out the history of the accident and the following history of symptoms and treatment.
Medical Assessor Sidorov undertook a clinical examination, which he summarises at [14]-[15].
Medical assessor Sidorov at [17] refers to the report of Dr Nicholas Argyle, psychiatrist, dated 28 July 2023, noting that Dr Argyle assessed Mr Cester as having post-traumatic stress disorder and a whole person impairment (WPI) of 18%. Medical assessor Sidorov also noted the Report of Dr Rose Cantali (PhD) of 2 August 2023.
Medical assessor Sidorov was satisfied that Mr Cester did have post-traumatic stress disorder caused by the accident.
Medical Assessor Sidorov then determined the degree of permanent impairment by the Psychiatrist Impairment Rating Scale (PIRS) at 7% and gave his reasons for each class he allocated, the most significant being 3, for withdrawal from most of his social and recreational activities.
Greenlight vocational assessment – 1 December 2022
The report outlines several vocational options:
(a) cafe worker: based on Mr Cester’s past experience owning a cafe, Greenlight considers him physically and psychologically capable of this role, pending approval from his GP.
(b) Retail sales assistant: deemed suitable due to his retail management background, though approval from his GP is awaited.
(c) Process worker (Webster Packing): this entry-level role is considered appropriate due to minimal physical demands, allowing Mr Cester to build work capacity.
The report does not include the aged care worker option: This potential future avenue is currently not being pursued due to Mr Cester’s reluctance to fulfil study requirements.
Mr Cester possesses transferable skills from his previous roles but currently lacks confidence in his work capabilities; he is polite, clean, and well-groomed with no physical limitations affecting his daily tasks, though he experiences significant anxiety and memory concerns that impact his ability to drive and attend appointments.
Greenlight emphasises further discussions with Mr Cester’s treating doctor to finalise suitable employment. It suggests a gradual re-entry into the workforce, beginning with roles that align with his certified hours and functional capacity.
MEDICO-LEGAL OPINION
Report of Dr Peter Conrad, general surgeon, provided to Mr Cester's solicitors – 3 March 2023
Dr. Conrad was of the opinion that Mr Cester had sustained a substantial laceration of his right upper arm and also his right elbow. These had healed with significant scarring. In addition, He had injured his right thumb, and there was significant restriction of movement affecting the grip strength of his right hand. He needed conservative treatment with medication and physiotherapy.
Dr Conrad did not consider that Mr Cester was able to re-enter the workforce, given his symptoms and his age.
Report of Georgina Whitley, registered psychologist, provided to Mr Cester's solicitors – 3 March 2023
Georgina Whitley, a registered psychologist, undertook a vocational assessment of Mr Cester and reported on 20 November 2023.
Ms Whitley agreed with Dr Argyle that Mr Cester was unsuited for work. She referred to what Dr Argyle reported, namely that Mr Cester had not gained his confidence for work. He had a high level of anxiety, distraction, frustration and loss of confidence, which would make work difficult. His background of chronic Human Immunodeficiency Virus (HIV) might be an element that was impeding his recovery, as well as his sleep difficulties. She noted that Dr Argyle thought that Mr Cester’s long-term prognosis might be better than that in the short term.
Dr Argyle reported on a medicolegal basis on 28 July 2023. I consider it to be a careful, analysed and thoughtful report.
The allocation of class 5 to adaptation I would have thought is accurate, and the articulation of the reasons for a moderate impairment are more convincing than those of Dr Sidorov.
Report of Dr Wayne Mason to Allianz’s solicitor – 4 March 2024
Dr Mason arrived at a WPI figure of 7%. I note he allocated class 3 for self-care but only class 2 social and recreational activities. He gave class 2 for adaptation, notwithstanding that on psychiatric grounds, the weight of the evidence is that Mr Cester is unable to work.
EVIDENCE AT THE ASSESSMENT CONFERENCE – 4 NOVEMBER 2024
At the assessment conference, no transcript was available. I took down the evidence by hand as accurately as possible and to the best of my ability.
There was extensive cross-examination directed to exposing inconsistencies and areas where Mr Cester’s evidence should not be accepted, including as to the alleged payment of the $10,000 for the furniture and the alleged discussion of the sharing of the profits.
Mr Cester survived the cross-examination well with intact credit.
SUBMISSIONS
Claimant’s submissions – 26 September 2023.
I refer to parts of the submissions by reference to paragraph numbers:
[28] Mr Cester would have worked from 11 September 2021 to the date of the assessment conference and would have derived $1,185 net per week.
[29] Mr Cester would have worked to at least age 74.
[31] He is unable to work and has been unable to work since his accident due to his physical and psychological injuries sustained in the subject accident.
[32] Dr Conrad noted Mr Cester had injured his right arm in the accident and underwent an operation on 8 September 2021. He also noted injury to Mr Cester’s chest and right thumb. He considered Mr Cester unfit for work, noting he has significant issues with using his right thumb, including difficulty with gripping. Mr Cester is right-hand dominant.
[33] Dr Argyle, psychiatrist, noted Mr Cester suffered from PTSD. Mr Cester suffered from flashbacks and nightmares, lacked motivation and was preoccupied with the accident. He has lost confidence in dealing with people, and this has impacted his ability to work in a café business. Dr Argyle considered Mr Cester was not fit to return to work.
[34] Assessor Sidorov assessed Mr Cester as suffering from PTSD. Whilst not binding, Assessor Sidorov considered Mr Cester was unfit to work in a café but considered he could work less than 20 hours per week in a less skilled and less stressful position. Assessor Sidorov, in expressing that opinion, was only expressing an opinion regarding the impact of Mr Cester’s psychological injury and was not taking into consideration the additional impact of Mr Cester’s physical injuries on his ability to work.
[35] The opinion of Dr Argyle and the opinion of Assessor Sidorov are supported by Dr Rosenman’s many reports to Mr Cester‘s GP, in which he stated Mr Cester suffered from chronic anxiety and sleep disturbance. Dr Rosenman, a treating psychiatrist, wrote to Allianz on 2 September 2024 in the following terms:
“This follows a missed appointment that I had thought might indicate a decreasing need for treatment. However, it had happened because his sleeping hours remained so disturbed that he slept through the alarm. He remains very disabled by symptoms of anxiety and tells me that he rarely leaves the house.”
Claimant’s submissions – 22 November 2024.
I briefly summarise the relevant parts of the submissions by reference to paragraph numbers.
[7]Mr Cester had always been employed and worked in a full-time capacity up to 2013. The only reason he ceased work in 2013 was to care for his parents. It was always his intention to return to work after he ceased caring for his parents.
[8]Mr Cester cared for both his parents until his father died in September 2020 and then continued to care for his mother until her death in June 2021.
[9]Mr Cester received a carer’s pension when caring for his parents but, on the death of his mother, that pension ceased.
[10]While he was caring for his parents, he would regularly attend Espresso 96 café. He got to know Mr Dangol, the proprietor.
[11]Before the accident, Mr Cester spoke with Mr Dangol before his mother died. He offered him a job at his café. Mr Cester was unable to take up that offer at the time because he was looking after his mother. He had always intended to return to work in the café business. He did some occasional work in the café whilst he was caring for his parents as a Barista.
[12]Mr Cester and Mr Dangol agreed before the accident that Mr Dangol would employ Mr Cester in the café from about 11 September 2021. Mr Dangol was not challenged by Allianz.
[13]Mr Cester was initially to work as head barista, working about 30 hours per week and being paid $30 per hour and he was to commence work on 11 September 2021 until August 2022 when Mr Cester was to travel overseas until October 2022, the absence being about 2 months. Mr Cester was unchallenged on this evidence.
[14]Mr Cester and Mr Dangol agreed the café would be open on several evenings per week to trial providing dinner to customers. Mr Cester’s hours were to increase on his return in October 2022 to 38 hours per week. Mr Cester agreed to pay Mr Dangol $10,000 to invest in outdoor furniture to allow outdoor seating for customers on the nights the café was to open.
[16]On payment of the $10,000 it was agreed Mr Cester would be an investor in the café and was to receive a share of the profits.
[17]Mr Cester understood the gross revenue of the business was $200,000 per annum. This is confirmed by Mr Dangol in his Statement at [12].
[18]Mr Cester paid the $10,000 on 14 April 2022. Mr Dangol confirmed the payment. Mr Dangol’s evidence was not challenged.
[19]The accident occurred on 7 September 2021. Mr Cester was to commence work on 11 September 2021. Covid restrictions had ceased by that time, and cafes were busy.
[20-21]Refers to the accident, Mr Cester’s injuries and his treatment at Concord Hospital.
[20]Mr Cester paid the $10,000 on 14 April 2022, he was still hoping his health would improve sufficiently to permit him to commence that work.
[21]Mr Cester informed Mr Dangol of his accident. Mr Cester’s medical health continues to prevent him from undertaking work.
[22]Mr Cester said at the Assessment Conference that his poor memory, poor sense of balance, lack of focus, and inability to use the café machine because of restrictions with his arm and his anxiety prevented him from working in the café. It was not suggested to him in cross-examination that he was now capable of working in the café.
[23]Dr Argyle [28 July 2023] opines that Mr Cester’s ability to work had been affected by the accident and considered the claimant was unfit for any work unless there was a “significant” improvement in his PTSD.
[24]Dr Rose Cantali, Psychologist, agreed with the diagnosis of PTSD [report 2 August 2023].
[25]Dr Rosenman, treating psychiatrist, [2 September 2024] states “He remains very disabled by symptoms of anxiety and tell me that he rarely leaves the home”.
[28]Assessor Sidorov diagnosed PTSD caused by the accident with 7% WPI. Mr Cester was unfit to return to his work in the café
[29]Refers to Mr Cester’s physical injuries – Dr Conrad 3 March 2023 “……there is significant restriction of movement (in his right thumb) which now affects his grip strength of the right hand”. Dr Conrad did not believe Mr Cester was able to re-enter the workforce.
[30]The opinions in the vocational assessment of Greenlight must be subject to the medical evidence which demonstrates Mr Cester unfit for work.
[31]Allianz’s questions concerning profitability of the café were of very little assistance. Mr Cester had said that he had not made any such inquires of Mr Dangol or his business because he knew Mr Dangol was an honest person. Mr Dangol’s evidence was unchallenged and should therefore be accepted.
[32]No challenge to Mr Cester’s evidence that he was to commence work on 11 September 2021 and, that initially he would have worked 30 hours per week at $30 per hour until August 2022 when he would have then been absent for 2 months until October 2022. There was no challenge to Mr Cester’s case that he paid Mr Dangol $10,000 in April 2022 as a fee to buy into the business. There was no challenge to his evidence that he was to receive a share of the profits.
[33]Allianz questioned as to the success of the café at night. Mr Cester agreed that there was some uncertainty. Mr Cester gave evidence that he was confident the business would succeed given its locality, nature and style.
[35]It was not put to Mr Cester that the agreement with Mr Dangol was not fully formed or in its infancy. Mr Dangol was not questioned. Mr Cester was adamant the agreement was fully formed.
[36]It was not put to Mr Cester that the business arrangement could not have been successful.
[40]Mr Cester is 66. He would have worked until the age of 70, at least. Given his age and his medical health, he has no real prospects for returning to work in the future.
[41]He would have commenced work at the café at $900 gross per week (30 hours per week at $30 per hour) which, on the tax tables converts to $800 net per week. From October 2022 onwards the claimant would have worked 38 hours per week at $30 per hour being $1,140 gross per week/$958 net per week.
[42]Past economic loss is $800 per week from 11 September 2021 to August 2022 being 48 weeks and, from October 2022 to 30 November 2024 which is a period of 112 weeks at $958 net per week.
[43]The claimant’s loss from 11 September 2021 to August 2022 (48 weeks) at $800 per week is $38,400.
[44]The claimant’s loss from October 2022 to 30 November 2024 (112 weeks) at $958 net per week is $107,296.
[45]Mr Cester would have been entitled to superannuation on the damages submitted of $145,696 of $17,483.00.
[46]The estimated loss of profits to the date of Mr Reynold’s Submission based on the gross loss of $20,000 per year, representing Mr Cester’s 10% share in the business. The submission continues given there was some limited uncertainty about that aspect of the claim, Mr Cester submits the correct approach to assessing that loss is to discount the gross sum by 25% making a greater allowance for contingencies/vicissitudes. On that basis Mr Cester’s claim for loss of profits would be an additional $15,000 gross per annum, which Mr Cester would have paid tax at the rate of 32.5% giving a net annual share of profit of $10,125.00. In the two years from October 2022 to 30 November 2024 Mr Cester’s net share of profit would have been $20,250.00.
[47]Mr Reynolds sets out Mr Cester’s summary of past loss of income:
Past loss of wages - $145,696.00
Past loss of superannuation - $17,483
Past loss of profits - $20,250
Total - $183,429.00
[48]Future economic loss comprises of loss of wages, loss of superannuation and loss of profits. Mr Cester’s weekly wage loss is $958 net per week. His loss of profits will be at $10,125 net per annum and his loss of superannuation will be at the statutory rate.
[49]Mr Cester is presently 66 years old and, his evidence was, he intended to work “well beyond the age of 67”. He was not challenged on that evidence. He claims he would have worked to at least age 70 being a period a further 4 years. The multiplier for 4 years is 189.6.
[50]At $958 net per week for 4 years the calculation is 189.6 x $958 = $181,636 less 15% for contingencies = $154,400.00 (rounded).
[51]Mr Cester claims loss of superannuation on his future loss of wages. On $154,400.00 the loss of superannuation is $18,528.00
[52]The loss of profits, calculated on the net annual sum of $10,125.00 equates to a net weekly sum of $19.47. The calculation of the claim for future loss of profits is 189.6 x $19.47 = $3,692.00. There should be no further discount for contingencies/vicissitudes given the core figure of $10,125 had already been discounted for contingencies by 25%.
[53]Mr Reynolds sets out Mr Cester’s summary of future economic loss:
Loss of future wages - $154,400.00
Loss of superannuation - $18,528.00
Loss of profits - $3,692.00
Total - $176,620.00
[40]Mr Cester submits that the award should total $360,049 plus regulated costs.
The insurer’s Further Submissions – 18 November 2024
I refer to Allianz’s Further Submissions by reference to paragraph numbers:
[1] Refers to the only other evidence tendered at the Assessment Conference was the Covid lockdown that impacted on Espresso 96.
[2] Mr Cester’s answers reinforce Allianz’s previous submissions that the evidence as to the prospects of Mr Cester earning an income from Espresso 96 were unsatisfactory.
[3] Mr Cester was unable to explain why details of the agreement with Mr. Dangol were not set out in the claim form. He simply answered ‘details should have been there’. The absence of the material from the claim form is consisted with there not having been a fully negotiated agreement and that it was in ‘infancy’.
[4] Mr Cester was also uncertain as to when the nominated amount of $200,000 gross turnover for Espresso 96 related to. He indicated that he had not made any inquiries as to the viability of the business when he provided Mr Dangol with the $10,000. This gives rise to obvious difficulties because there is no evidence to assess the prospects of the business being able to provide a wage for Mr Cester.
[5] Mr Cester told me that the business had six employees in addition to Mr. Dangol. Mr Cester also agreed that the café faced significant outgoings for public liability insurance, wages, rent, food, workers' compensation insurance, and other outgoings that had to be paid out of the $200,000 gross. Mr. Dangol has not provided tax returns or disclosed what he earns from the business.
[6] During COVID lockdown periods, Mr. Dangol operated the café alone, only trading until 9 a.m. and serving coffees.
[7] Despite being paid the $10,000 for the furniture, Espresso 96 has not traded at night. If this was viable in that location, then Mr Dangol would have found an alternative to Mr Cester working as a barista and the business would have pursued that opportunity.
[8] Mr Cester did not agree with the description of the physical injuries he gave to the Police, and I ought to accept that Mr Cester’s recollection at the time of his physical injuries was more reliable than what he has now given the length of time that has passed.
[9] Mr Cester may have hoped to return to work after his mother passed. There is insufficient evidence for me to be persuaded that Espresso 96 was a viable opportunity for that to occur. Further, I should not be persuaded that Mr Cester could not return to the workforce psychologically or physically now given the apparent improvement that has occurred.
[10] The resolution of this claim is likely to lead to the improvement of Mr Cester’s condition given that the claim has become a so-called point for Mr Cester’s distress.
[11] The amounts previously conceded by Allianz remain appropriate.
[12] While the rules of evidence do not apply in the Commission, the evidence must still be of probative value. The evidence concerning potential earnings in this claim does not meet that threshold.
PAST ECONOMIC LOSS
Consideration
The medical consequences of the accident
On the balance of probabilities, Mr Cester is suffering from the ongoing effects of post-traumatic stress disorder and from his continuing physical injuries.
Mr Cester has had the benefit of many consultations with a treating psychiatrist Dr Stephen Rosenman, who has had the responsibility of treating the ongoing psychiatric condition of Mr Cester, who has a complex history.
Dr Rosenman has described Mr Cester's ongoing psychiatric symptoms as severe and disabling. They have persisted for a significant period of time, and now, over three years since the accident.
As Dr Rosenman states, Mr Cester was on very high doses of Venlafaxine, a powerful psychotropic medication, and over the three months preceding the report of 8 November 2023, there had been a worsening of his symptoms. It is noteworthy that Dr Rosenman states that the longer history is not particularly contributive.
In the subsequent report to Allianz on 8 November 2023, Dr Rosenman described the symptoms as “disabling” despite the high level of medications.
In his report of 14 December 2023, Dr Rosenman considered Mr Cester incapacitated for work.
In a comment that is telling on the issue of personal care and the appropriate PIRS classification, Dr Rosenman refers to the fact that “… he spent the whole day trying to have a shower before succeeding in the evening.”
In considering the value of the opinions over the significant number of reports produced by Dr Rosenman compared with medico-legal opinion, the result of a single consultation, I consider that the central opinions of Dr Rosenman referred to above are reliable and more likely to be correct.
In addition to the psychological/psychiatric problems referred to above, Mr Cester does have significant problems with respect to the use of his right arm and thumb.
I conclude that the weight of the evidence, the restriction of movement of his right arm and thumbs (Dr Conrad) and his serious post-traumatic stress disorder symptoms, which are ongoing, constitute a significant impairment for employment now, in the short term, and probably longer.
The regulatory framework and caselaw
This decision has taken into account the relevant provisions of the Motor Accidents Injuries Act 2017 (MAI Act) and, in particular, ss 7.36(1), 7.36(3), and 7.36(4).
The fundamental principle for assessing or awarding damages to an injured person is that a Tribunal should assess damages so that they represent no more nor less than the person’s actual loss: Livingstone v Rawyards Coal Co [1880] UKHL 3.
Damages for personal injury are given on a once-and-for-all basis, irrespective of whether the person’s condition worsens or improves.
In cases such as Medlin v State Government Insurance Commission [1995] HCA 5; (1995) 182 CLR 1 and Husher v Husher (1999) CLR 138, the High Court has confirmed that the fundamental question to be determined is whether a claimant has sustained a loss or diminution in his earning capacity, and if so whether that loss or diminution will result in economic loss. In calculating any such loss, I must have regard for the provisions of Div 4.2 of the MAI Act.
In so far, as it is relevant to the calculation of past and future economic loss, Mr Cester is a person whose credibility should be accepted. He seemed to me to be straight-forward, forthright and direct in answering questions which he did to the best of his ability. There were gaps in the evidence, but this is to be expected as part of human fallibility.
There was a sustained attack on Mr Cester’s credit, but his evidence remained coherent and credit-worthy.
Nothing in my view turns on the non-inclusion of details of the agreement in the claim form.
With respect to paragraph 3 of the submissions, I accept as credible and on the balance of probabilities true, that Mr Cester did reach an agreement with Mr Dangol before the accident, the essential components of which were set out in Mr Cester’s statement and in the submissions of his counsel, Mr Reynolds, summarised above.
In respect to Allianz’s submission [4], I do find that the reference to the $200,000 gross sum was a reference in general to the approximate gross annual earnings for the most recently completed year.
In respect to Allianz’s submission [4], although it is a matter of common sense, the $200,000 gross related to the most recent period of 12 months irrespective of when that had started from, I agree that Mr Cester was pretty relaxed as to establishing the net as he very much relied on his perception of Mr Dangol’s honesty and integrity, as he had not checked the actual records or done any due diligence by way of reference to an accountant or financial statements.
With respect to submission [5], I accept that Mr Cester did not refer to the Income Tax Returns, and there had been no calculation with any precision, or in fact at all, of the value of the outgoings and Mr Cester can only have been relying on his own experience.
I note as a matter of common sense, the submission that had evening trading been likely to be viable, Mr Dangol would probably have pursued that opportunity.
With respect to Mr Cester’s physical injuries, I find that his evidence was credible and that he did sustain the injuries, and disability arises as noted by Mr Reynolds in his submissions.
I have made findings of fact as to the injuries Mr Cester sustained, both physical and psychiatric. The evidence to which I have referred above supports the finding that the combination of the physical injury to the right thumb and the psychiatric injuries, the effects of which are continuing, constitute a relevant impairment as described in Medlin.
I am satisfied that Mr Cester has a continuing impairment, and his injuries are not the sort of injuries which will resolve simply by the resolution of the claim.
Past impairment of earning capacity and its economic consequences
Based on my findings on the evidence, Mr Cester has the relevant impairment to entitle him to claim damages for past economic loss, primarily a psychiatric impairment of post-traumatic stress disorder, which in combination with the physical impairment of his right upper limb and his right thumb, has precluded him from employment in the past.
Allianz concedes the sum of $75,000 for past economic loss at the same time as arguing that the past economic loss is poorly particularised and difficult to respond to.
I accept the submissions of Mr Reynolds and Mr Cester’s evidence that he would have worked until age 70 and I find that he has no real prospect returning to work in the future. He is incapacitated by reason of the accident and its physical and psychiatric consequences.
I find that Mr Cester would have commenced work on the balance of probabilities at Espresso 96 at $800 net per week (as submitted at [41]).
I accept and find that there was an agreement, and that on the balance of probabilities, Mr Cester would have worked 38 hours per week earning about $958 net per week from October 2022 onwards.
I accept as being consistent with the evidence, that Mr Cester’s past economic loss is $800 net per week from 11 September 2021 to 13 August 2022 (when he would have stopped work to travel), giving a period of 48 weeks.
I find that Mr Cester’s net weekly loss for the first period from 11 September 2021 to, say, 13 August 2022 for 30 hours per week at $30 per hour which amounts to $800 net per week, making a total past net loss for this period of $38,400.
Further, I find that on the balance of probabilities, Mr Cester would have returned to work on or about 11 October 2022 for 38 hours per week at the same rate of $30 per hour, giving $958 net per week.
Applying common sense, in the second period Mr Cester and Mr Dangol, consistent with their agreement, would have trialled evening trading to see whether or not it was profitable.
In this respect, applying common sense, I have assumed the trial period would have been for about six months.
Further, I have assumed that if the business had not shown signs of likely profitability, for example, an upwards trend, the parties would not have persisted beyond about 26 weeks.
The second period of 26 weeks takes it from about 11 October 2022 to about 11 April 2023.
The calculated loss for Mr Cester of this second period of 26 weeks at a rate of $958 net per week for 38 hours per week is $24,908.
For the third period, the continuing past economic loss of Mr Cester from about the 11 April 2023 to date, say 31 January 2025, is 94 weeks at $30 per hour for 30 hours per week, being $800 net per week, giving a net past loss of $75,200. The 30 hours per week is based on the assumption that with the trial not having succeeded, Mr Cester would have, but for the accident, have continued to work in his previous capacity as a barista for $30 per hour for 30 hours per week.
Past loss of superannuation for each period at 11.5% is calculated as follows:
(a) Period 1: $4,416 (11.5% of $38,400).
(b) Period 2: $2,864.42 (11.5% of $24,908).
(c) Period 3: $8,648 (11.5% of $75,200).
Although the evidence allows the finding as to Mr Cester’s most probable working hours as a barista but for the accident, a finding on past loss of profits is another matter.
I find that the calculation by Mr Cester’s counsel at [46] is artificial and speculative.
In that respect I agree with Allianz’s Submissions that it was too early to say whether or not evening trading would in fact have resulted in a profit.
It was on the evidence as I said so early in the piece that it is not possible to say whether or not there would have been a profit or a loss. It was untested and notwithstanding Mr Cester’s optimism and the optimism of Mr Dangol, all there was was an opportunity and said opportunity that had not been tested in terms of capacity to result in an actual profit. There was no feasibility study, no costing and in effect, nothing but a “gut feeling”.
I calculate Mr Cester’s past loss of income:
(a) past loss of wages = $138,508 (Period 1 at $38,400, Period 2 at $24,908, and Period 3 at $75,200)
(b) past loss of superannuation = $15,928.42
(c) Total = $154,436.42.
FUTURE ECONOMIC LOSS
Regulatory framework for future economic loss
Section 4.7 of the MAI Act: Future economic loss — claimant’s prospects and adjustments
(a) damages may not be awarded for future economic loss unless the claimant first satisfies the court or Commission that the assumptions about future earning capacity or other events on which the award is to be based are in accord with the claimant’s most likely future circumstances but for the injury.
(b) The amount of damages for future economic loss that would have been sustained on those assumptions is to be adjusted by reference to the percentage possibility that the events concerned might have occurred but for the injury.
(c) If an award for future economic loss is made, the court or Commission is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.
How the Court deals with the assumptions of fact
Basten JA, delivering the judgement of the Court, also reproduced the assumptions about future earning capacity at [31] and other events as noted in Nominal Defendant v Livaja [2011] NSWCA 121 at [41]:
“The assumptions or events upon which a baseline may commonly be calculated include:
(a) identification of the skills, training and experience of the plaintiff as of the date of the accident;
(b) the work he or she was undertaking immediately prior to the accident;
(c) the likelihood that he or she would have continued in such employment, but for the accident;
(d) the possibility that he or she might have obtained promotion or other benefits, but for the accident;
(e) the age to which he or she was likely to have worked in that employment and
(f) the possibility that the employment would not have been continuous."
Assumptions of fact for future economic loss
I set out the assumptions of fact that I make in respect of my decision on future economic loss.
(a) but for the accident, Mr Cester would have continued in good health to pursue work as a barista.
(b) He probably would have worked as a barista for Mr Dangol.
(c) He probably would have worked until about age 70.
(d) It is not possible to say whether he would have worked in the evenings and for 38 hours per week or for a lesser period such as 30 hours per week, but the latter is more likely.
(e) He was getting older and as a matter of common sense, working as a barista involves prolonged standing which does take its toll, even without the involvement of the injury-related accident.
(f) During the period in which I have awarded an amount for past economic loss, I have taken into account an increased number of hours from 30 hours per week to 38 hours per week to take into account evening trading, but only for a trial of 26 weeks.
(g) The past period, it was in effect an experiment to see whether or not the evening trading was profitable and on the balance of probabilities, he would not have persisted searching for profitability until now i.e., beyond a period of 26 weeks.
(h) I find that it is quite speculative as to whether or not there would have been a profit, and it is impossible to come to a view that the business would in fact have been profitable. The evidence does however show on the balance of probabilities that more likely than not, Mr Cester would have worked for a further four years until about age 70 as a barista in the mornings for about 30 hours per week,
(i) I find that taking into account all of the evidence, Mr Cester intended to work well beyond age 67 and that as a matter of common sense, the job involved prolonged standing. On the balance of probabilities, Mr Cester would have worked in the mornings for 30 hours per week at $900 gross or $800 net. The multiplier for four years is 189.6.
This gives rise to a calculation for future economic loss of four years of 189.6 x $800 gives $151,680 less 15% for vicissitudes gives $128,928.
Mr Cester’s loss of superannuation, at the rate of 11.5%, is $14,826.72.
The summary of Mr Cester’s future loss of income:
(a) loss of future wages = $128,928
(b) loss of superannuation = $14,826.72
Total = $143,754.72
Summary of damages
Past economic loss = $154,436.42
Future economic loss = $143,754.72
Total =$298,191.14
Assessment of regulated costs
Stage 1 as claimed: 2.92 units at $119.96 = $350
Stage 2 as claimed: 4.32 units at $119.96 = $518
Stage 3 as claimed at 114.48 monetary units (mu) plus 2 cents= $18,220
(1 monetary unit = $124.53)
Stage 4 as claimed at 2 cents per dollar = $2,000
Representation at an Assessment Conference: 30 units at $124.53 = $3,736
Additional conference time with Counsel (8 conferences): 8 hours claimed at $338= $2,704
Disbursements
Assessed as fair and reasonable
Dr Conrad consultation and report 17 February 2023 = $1,980
Dr Argyle consultation and report 17 February 2023 = $1,980
Ms Cantali (PhD) report 13 August 2023 = $227.04
Dr Argyle supplementary report 25 October 2023 = $880
Dr Argyle supplementary report 15 July 2024 = $880
Unregulated assessed as fair and reasonable
Sydney Local District Health medical records 8 January 2024 = $224.70
Georgina Whitley vocational assessment and report 20 November 2023 = $2,035
Dr Soo medical notes 27 July 2023 = $136.18
Dr Rosenman medical notes 19 February 2024 = $71.83
The amount of the claimant’s costs, taking into account the amount of damages assessed in respect of this claim, assessed under the MAI Act is $35,942.75 (including goods and services tax (GST)). (Total cost of costs and disbursements and GST.)
Total costs and disbursements assessed are $35,942.75 (including GST).
DETERMINATION
I assess damages in the amount of $298,191.14 including the loss of superannuation and take into account vicissitudes.
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