Dykes v Insurance Australia Limited t/as NRMA Insurance
[2022] NSWPIC 618
•7 November 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Dykes v Insurance Australia Limited t/as NRMA Insurance [2022] NSWPIC 618 |
| Claimant: | Christopher Dykes |
| insurer: | Insurance Australia Limited t/as NRMA Insurance |
| Member: | Elyse White |
| DATE OF DECISION: | 7 November 2022 |
CATCHWORDS: | MOTOR ACCIDENTS - Assessment of damages; claimant injured in rear end collision; underwent two spinal fusions; extent of injuries and previous accidents in dispute; claimant was the owner operator of a carpet laying business; accepted incapacitated to continue to carry out these work activities; insurer paid statutory benefits based on erroneous calculation; claimant relied on this calculation to assess economic losses; further question whether claimant has a residual earning capacity; Held – regardless of the statutory benefits paid the pre-accident weekly earnings were based on evidence in the claimant’s tax returns and his statement; accepted the claimant had a future 50% residual earning capacity plus a buffer for loss of opportunity; non-economic loss assessed having regard to the claimant’s age and loss of amenities. |
| determinations made: | CERTIFICATE OF DETERMINATION Issued under s 7.36(1) of the Motor Accident Injuries Act 2017 Assessment of Claim for Damages made in accordance with s 7.36 of the Act 1. On the issue of liability for the claim, the IAG Limited t/as NRMA Insurance 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-ss 7.36 (3) and 7.36 (4) of the Motor Accident Injuries Act 2017 (the Act), I specify the amount of damages for this claim as $1,022,235.70. 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 $67,569.90 inclusive of GST. |
STATEMENT OF REASONS
introduction
The claimant, Mr Christopher Dykes, was injured in a motor vehicle accident on 12 September 2018 (the accident). He was stationary at red traffic lights at the intersection of the Old Illawarra Road and New Illawarra Road in Barden Ridge. A vehicle travelling in the same direction failed to stop and collided with the rear end of Mr Dykes’ vehicle.
Police and ambulance attended the scene. Mr Dykes was conveyed by ambulance to Bankstown Hospital where imaging was undertaken. He was discharged the following day.
The insurer, IAG Limited t/as NRMA Insurance wholly admitted liability and paid statutory benefits to Mr Dykes for treatment and weekly earnings. The insurer has questioned the reliability of the claimant’s evidence and histories given to doctors.
Unfortunately, throughout the assessment conference, Mr Dykes gave a running commentary of his opinion on the subject matter and attempted to provide explanations rather than answering questions directly. I asked him on a number of occasions to listen to the question and answer it directly. My suggestion was mostly dismissed which resulted in a lengthy hearing.
ISSUES
The following issues arose:-
a. Is the claimant’s evidence and histories given to doctors reliable?
b. What is the extent of the claimant’s accident related injuries?
c. What is the claimant’s pre accident earnings?
d. What is the quantum of the claimant’s past and future economic loss?
e. In the circumstances, what is the appropriate sum for non economic loss?
Is the claimant’s evidence and histories given to doctors reliable?
At the date of the accident, Mr Dykes was 25 years old. He told consultant psychiatrist, Dr Blagoje Kuljic in March 2022, his parents divorced when he was four years old. He grew up with his father and brother. When he was 10 years old, his father apparently remarried. After this, his relationship with his father was “rocky” caused by a controlling step-mother. She caught him smoking marijuana. After reporting this to his father, Mr Dykes was asked to leave the family home. He was homeless for a time and was mixed up in some unlawful behaviour before his maternal grandmother, offered him a place to live. Around the age of 17 years old, he made a positive choice to change direction and with the stability provided by his grandmother commenced a carpet laying apprenticeship.
Mr Dykes consulted his general practitioner, Dr Romit Saha-Chaudhury at Gymea Medical Centre from around 2013. Typed clinical notes from Gymea Medical Centre relating to Mr Dykes consultations were loaded on the Personal Injury Commission’s portal. Unfortunately, these notes are undated. Nevertheless, the parties’ legal representatives agreed the numbered pages 74 to 92 were records pre-accident and from page 93 onwards, post-accident. Much of Ms Dinkha’s questions focused on these pre accident clinical notes.
Mr Dykes conceded he was involved in three accidents before this subject accident. He was unable to recall the exact dates. However, it appears the first accident was around 2014 on the M4 Motorway in Sydney. He agreed he was conveyed to hospital and some form of imaging was performed. He further recalled an insurance claim for loss of income. Otherwise, he was unable to recall any further details.
In 2015, he was a passenger in a van which was involved in another accident in which the van rolled. Apparently, Mr Dykes had lost his licence and had employed a driver. He denied suffering any injuries in this accident.
Mr Dykes then described another accident which he said was a head on collision. He said he believed this accident was around 2016.
None of these accidents were disclosed to any doctors or medical specialists engaged to either treat Mr Dykes for any injuries sustained in this accident, or provide medico-legal opinion.
Again, Mr Dykes makes no mention of any of these accidents in his statement signed 21 September 2022.
Ms Dinkha suggested to Mr Dykes, histories given to doctors were false. He had denied any pain or injuries before the accident other than a knee injury in a bike accident in 2017. Yet, she read to Mr Dykes, records of back pain in the Gymea clinical notes pre accident. His longwinded explanation essentially focused on his ability to work full time before the accident.
The clinical notes before the accident record in summary, abdominal pain; ? hernia; accident on M4-driving Toyota HiAce; hit head; Westmead Hospital CT scan; mild spondylosis, collar removed; still soreness in the neck and shoulders; whiplash neck; needs to complete insurance forms; neck better; keen to return to normal work asap; seeing physio; MAA forms completed; needs physio; headaches occurring occasionally; neck pain; acute stress reaction; excessive binge drinking; depression; poor sleeping; seeing psychologist; injured with Stanley knife; fall off motorbike; patella fracture; kneecap fracture healing ok; physio and rehab; phlegmy cough; hurting chest; dry cough; poor sleep; sore throat; exhausted fatigue; significant driving issues; needs clearance for work capacity for good behaviour bond; no previous back problems; onset back pain lifting carpet; left lumbar; radiates centrally; no significant radiation to leg; no leg weakness or numbness.
Unfortunately, the records of back pain have no reference dates, however there is no further complaints of back pain until after this accident.
Has Mr Dykes non disclosure of his previous accidents and back symptoms impacted on his credibility and reliability as a witness of truth?
He has found himself, at a very young and vulnerable age, homeless. This led to mixing with the wrong crowd and on the wrong side of the law. With the support of his grandmother, he chose a different path, training in an apprenticeship which resulted in him operating his own successful business. His focus was on work. This work attitude, is reflected in the general practitioner clinical notes.
His explanation for failure to disclose prior accidents and back symptoms is reasonable having regard to his pre-accident independence. He was forced to grow up fast and make positive changes to his life to avoid an uncertain and possible criminal future, which is a credit to him.
There is no evidence Mr Dykes sustained any injuries in any of the motor vehicle accidents other than the fracture to his knee.
I am satisfied Mr Dykes did not deliberately mislead the doctors or me in failing to disclose these accidents and symptoms of back pain due to a work incident.
However, much of what Mr Dykes said at the assessment conference is either irrelevant or is his opinion which I have disregarded unless supported by independent conclusions.
What is the extent of the claimant’s accident related injuries?
There is no dispute Mr Dykes sustained serious injuries in this accident. He says in his statement that on impact, his face was smashed into the steering wheel and his tools in the rear of the van, were forced forward pushing into the back of his seat. He felt pain immediately, most intense in his low back, radiating into his right foot. He lists his injuries as whiplash; a fractured jaw; a fractured nose; a fractured left scapular; pneumothorax at his chest resulting in a lung collapse; bulging disc at L5/S1 and a herniated disc; right leg and the loss of two front teeth. He says he has developed a Major Depressive Disorder.
He consulted Dr Saha-Chaudhury the day after discharge from hospital and a dentist. After a MRI revealed a disc herniation in February 2019, he underwent injections to his low back by Dr Ghahreman in May 2019 which failed to provide any long term pain relief.
Mr Dykes felt severe anxiety and low self esteem. He was referred to psychologist Ms Gloria Paduano in June 2019.
Surgery was performed after a collapsed lung by Dr Sheen Peeceeyen in July 2019. He was hospitalised after this procedure for a month.
In December 2019 Mr Dykes was assisted by a rehabilitation consultant for treatment and to identify suitable work.
Dr Ghahreman recommended fusion surgery which was postponed due to COVID but performed in April 2020. Unfortunately, this procedure was not successful and further surgery was performed in August 2021.
Although, Mr Dykes has reported improvement in his back pain levels, he continues to take pain medication, attend physiotherapy and perform self managed home based exercises.
After reporting the above injuries and treatment, the insurer loaded on the portal with the consent of the claimant, typed and dated clinical notes from Gymea Medical Centre. Before the accident, these commence in late 2013 with the final consultation with Dr Scott Willcocks on 13 October 2017 approximately one year pre-accident. These dated notes do not alter my previous findings.
Mr Dykes sustained a serious injury to his low back in the accident which has resulted in two surgical procedures. Although he has reported some pain relief after the second surgery, he continues to experience significant relentless back pain.
Initially, neurosurgeon Dr Peter Bentivoglio was asked by the insurer to assess Mr Dykes’ medical symptoms. Subsequently, a refresher examination was arranged with Dr Bentivoglio around mid-2021. The doctor diagnosed persistent back pain.
Occupational physician, Dr Thomas Rosenthal examined Mr Dykes for the insurer in May this year. Mr Dykes told the doctor he experienced constant low back pain. He described right leg pain. He said the pain comes and goes. Dr Rosenthal diagnosed soft tissue injury to the neck and possibly to the shoulders, L5/S1 disc injury and injury to Mr Dykes’ two front teeth and lower jaw. The doctor accepted ongoing restrictions in the claimant’s lumbar spine and disabilities associated with the accident.
Based on the report by Mr Dykes in his statement which is repeated in the insurer’s expert opinion, the extent of his ongoing injuries include persistent back pain with restrictions, and radiating pain down both legs. He appears to have developed psychological injuries which were diagnosed by Dr Kuljic in March this year as Major Depressive Disorder. Mr Dykes’ solicitor arranged this medico legal opinion. Although he reported psychological injuries pre accident, it is apparent these symptoms developed after two traumatic deaths in Mr Dykes’ life, a mate and his grandmother.
Mr Dykes described to Dr Kuljic a mood of flat, hopelessness and depression. Although the psychiatrist felt his prognosis is very guarded, he did recommend treatment for two to five years and opined, past treatment was reasonable and necessary. It is clear Mr Dykes’ emotional symptoms impact on his functioning including social, occupational and other areas of functioning as set out by the psychiatrist.
What is the claimant’s pre-accident earnings?
After completing his carpet laying apprenticeship, Mr Dykes started his own business and also sub-contracted his skills which included removing and installing carpets in homes, offices and public buildings. He would meet with clients to assess their carpet needs. He prepared quotations and also worked in teams with other carpet layers. He was responsible for the financial aspects of his business.
A dispute arose between the claimant and the insurer as to the amount of his pre-accident earnings.
Mr Dykes signed his statement around two weeks before the assessment conference. At paragraph 21 he says “…I usually took a wage of around $1,021.22 per week from the business”. This estimate is confirmed in paragraph 122 of his statement where he says “I have been unable to return to my business in any capacity. I have lost around $200,000.00 in net income since the accident”. This assessment of pre-accident weekly earnings is supported by his taxation returns.
When questioned by Dr Kuljic for a medico-legal opinion arranged by his solicitor, Mr Dykes reported to the doctor he turned over $7,800 weekly with about $5,000 weekly profit. As there is no independent support, this report to the doctor has no merit.
The insurer engaged the services of Mr Mark Bland, a partner in the firm Moser Bland and Co, Chartered Accountants and Business Advisors. Mr Bland reached a conclusion Mr Dykes annual income was $105,623, $2,031.21 gross per week, which after tax amounts to $1,476.89 net per week. Based on this report, which is not relied on by the insurer, the claimant submits his annual weekly earnings were $1,637.36 net per week.
However, the insurer submits the opinion expressed by Mr Bland is erroneous and cannot be relied on due to an error in the assessment of the evidence of the claimant’s past earnings. I accept Mr Bland has erred. The claimant has made no submissions to support the basis of their claim for $1,637.36 other than Mr Bland’s calculations contained in an email.
Based on Mr Dykes’ evidence in his statement at paragraphs 21 and 122, and his pre-accident taxation records, I assess Mr Dykes pre accident weekly earnings of $1,022 rounded up net per week.
What is the quantum of the claimant’s past and future economic loss?
At the date of the accident, Mr Dykes submitted his past economic loss was $364,136.26. This sum was calculated for a period of total incapacity from 12 September 2018 to 6 April 2021 (133 weeks) with a net wage nominated in the amount of $1,637.36. For the second period from 2 April 2021 to 5 August 2021 the claimant was employed earning $850 per week working for Hi Octane Racing in a position as junior sales. His activities were largely sedentary in nature with some lifting which involved the assistance of other workers. His boss was sympathetic to his physical restrictions caused by the accident. When Mr Dykes was scheduled for surgery, he left this employment on 5 August 2021 and has been unemployed since. The amount claimed by the claimant for this 17 week period is $787.36 net loss per week and thereafter $1,637.36 to the current time. A further claim for past loss is $33,103.30 superannuation.
Contained in the insurer’s submissions undated titled, “Insurer’s Supplementary PIC Reply Submissions” the number of weeks proposed by the claimant are agreed with the claimant’s submissions. The amounts are in dispute. Also, the claim for loss of superannuation is rejected on the basis the claimant was self employed pre accident with no evidence he made superannuation contributions.
As the number of weeks in the various periods are agreed, the only issue in dispute is the amount of Mr Dykes’ weekly loss.
I have previously determined, based on the evidence of Mr Dykes pre accident average weekly net earnings are $1,0220. The calculation for past economic loss is as follows: -
a. 12 September 2018 to 6 April 2021, 133 weeks at $1,022 net per week = $135,926;
b. 6 April 2021 to 5 August 2021,17 weeks at $172 net per week = $2,924;
c. 3 August 2021 to 31 October 2022, 65 weeks rounded up at $1,022 net per week = $66,430,
d. Total = $205,280.
The insurer has paid statutory benefits amounting to $357,526.38 to which they receive a credit.
The Fox v Wood component is agreed in the sum of $35,172.
Mr Dykes gave no evidence of voluntarily contributing to superannuation before the accident. There is no supporting documentation that there should be any claim for superannuation. As there is no evidence of superannuation contributions pre-accident I agree with the insurer’s position Mr Dykes is not entitled to damages for past superannuation.
For the future, Mr Dykes is seeking an amount of $1,767,289.38 for loss of earnings. He relies on his reports of good health pre-accident working on a full-time basis as a carpet installer. He enjoyed his role and the flexibility being self employed.
Although he says he was generally coping with his employment at Hi Octane, he had to use pacing strategies and modify his activities. He says he experienced fatigue and low mood with increasing anxiety and frustration.
After his final surgery, Mr Dykes says he has no capacity to work and seeks damages for a total incapacity. He refers to the comment by Dr Gehr reporting the claimant is not able to return to his physically demanding pre injury job.
The calculation for future economic loss is 41 years, multiplier 924.8 less 15% for vicissitudes plus a buffer of $300,000 for loss of opportunity, his reliance on medications and his inability to perform physically arduous activities.
The insurer disputes the claim for future economic loss. Whilst they concede he can no longer engage in carpet installing work, Mr Dykes has demonstrated a capacity to undertake alternate sedentary work in the area of sales.
He was asked if he could perform duties such as car sales, sweeping floors and small tasks in a gyprock business or sedentary activities in an engineering company. The evidence suggests the insurer’s rehabilitation consultant identified numerous suitable positions Mr Dykes was capable of undertaking. Mr Dykes again did not give direct responses to these questions, rather giving a lecture on his opinion of such suggestions. As such, I revert to the opinions of the medical experts.
Firstly, the claimant’s expert agreed he is unable to return to his carpet installing job. However, Dr Gehr says other occupations may be suitable for assessment by an occupational physician. He did restrict Mr Dykes lifting restrictions to 5kg, standing or sitting at any one time for more than an hour and that he would require regular breaks on an hourly basis. Dr Gehr does not opine Mr Dykes is totally incapacitated for any work in the future.
Interestingly, occupational physician Dr Rosenthal answers Dr Gehr’s suggestion regarding alternate occupations. Dr Rosenthal agrees with Mr Gehr’s restrictions, although he believes Mr Dykes has a 10kg lifting restriction and should avoid prolonged sitting, walking or standing for more than one hour. Unfortunately, he falls short of suggesting alternate occupations.
I note Dr Bentivoglio last saw Mr Dykes before his final surgery. At that stage, the doctor states that Mr Dykes “…is not incapacitated to work…” noting that he was coping with the sales position.
In the absence of medical support, I am not persuaded Mr Dykes has a total future incapacity to work. Therefore, his claim for damages in excess of $1.7 million dollars cannot be maintained.
Previously, before his final fusion surgery he was working full time earning $850 per week. He said he struggled five days per week and that some of the duties in that position he was unable to perform. He has to be commended for his efforts.
Section 126 of the Act requires me to ask, but for the accident what was Mr Dykes most likely future circumstance concerning his future economic loss? My response to this test, is he would have continued to be self employed mostly working in the carpet installing and associated activity business. There is no dispute he can no longer perform any duties associated with physical carpet laying duties.
As such, having regard to the physical restrictions placed upon Mr Dykes activities by all medico-legal experts engaged by both parties, I accept he has an incapacity to carry out work which involves lifting over 5kg, prolonged sitting, standing and bending. Nevertheless, he has demonstrated an ability to perform sedentary work such as sales, keeping books, as he did when he was self employed and work involving computer skills, estimating and quoting as he did pre accident.
I am persuaded this loss is a 50% incapacity, accepting as he ages, Mr Dykes will no doubt suffer deterioration.
His pre accident earning were $1,022 per week. I assess his future loss at $511 net per week. The claimant says he would have continued to work as a carpet installer to age 70 years. There is no evidence from any carpet installer aged 70 years to support this claim. As such, the calculation will adopt a standard acceptable age of retirement, 67 years, which is 38 years into Mr Dykes future. The calculation is as follows: -
(a) 38 years, 5% multiplier 902.0 x $511 = $460,922 less 15% vicissitudes = $391,783.70.
Mr Dykes makes a buffer claim for loss of opportunity and other suggested losses. Other than oral submissions made by Ms Dinkha, the insurer is silent about this claim in written submissions. Ms Dinkha submitted there is no basis for an additional buffer claim. I disagree.
A cushion or buffer assessment is relevant in circumstances where earning capacity has unquestionably been reduced but its extent is difficult to assess, see Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302, [2012] NSWCA 13. I therefore agree that a loss opportunity for future economic loss can only be assessed by way of a buffer as there is no methodology to accurately calculate this loss.
Mr Dykes loved his job. He was self employed laying carpet which was instrumental in his path down the right way rather than continuing on a path of personal destruction. With his grandmother’s encouragement and the opportunity to make something of himself, he was developing into a successful businessman with unknown opportunities for expansion and development.
The accident took these opportunities away. He is now limited to sedentary duties in areas he has little expertise. A buffer is an appropriate assessment of Mr Dykes loss of opportunity to continue to improve his business and for him to explore and develop other avenues to expand his business. An additional buffer sum may give Mr Dykes an avenue to either retrain or examine alternate opportunities to establish a sedentary self employment business. The appropriate amount having regard to Mr Dykes relevant circumstances is $50,000.
Mr Dykes’ total assessment for future economic loss is $441,783.70.
I have made findings on his claim for superannuation.
In the circumstances, what is the appropriate sum for non economic loss?
The insurer has conceded Mr Dykes is entitled to damages for non-economic loss. They say having regard to the circumstances of the accident and the claimant’s post accident recovery, the appropriate sum for this head of damage is $250,000. In submissions, there is no reference to the claimant’s age or his loss of self employment and social and sporting activities.
Division 4.3, s 4.11 relevantly:-
“No damages for non economic loss may be awarded in respect of injury unless the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%.
Section 4.13(1)
The maximum amount of damages that may be awarded for non economic loss is $595,000.00.
Section 4.13(2)
If that amount is adjusted by the operation of section 4.22 (indexation of maximum for non economic loss damages), the applicable maximum amount is the amount as at the date the award is made.”
The maximum award which was the indexation order made on 1 October 2021 is $595,000. To put the amount of damages for non-economic loss into lay terms, I must assess what Mr Dykes’ non-economic loss up $595,000 being the maximum sum as per indexation. The maximum amount is generally accepted to be reserved for claimant with extreme catastrophic injuries such as brain injury, spinal paraplegia as examples.
By virtue of s 4.11 of the Act the claimant is entitled to damages for non-economic loss and s 4.13(1) prescribes a maximum that I may award for non-economic loss. Section 1.4 relevantly defines non-economic loss to mean:
a. Pain and suffering, and
b. Loss of amenities of life, and
c. Loss of expectation of life, and
d. Disfigurement.
The question for me becomes what assessment should be made of this claimant’s entitlement to general damages having regard to the particular circumstances of this case.
Damages are assessed with the application of Common Law Principles up to the maximum provided for in s 4.13(1). This was explained by Heydon JA in Hodgson v Crane (2002) 55NSWLR 199 when he said it is not possible to construe the concept of proportionality out of the language of s 131 - s 134 of MAC Act. When the threshold of 10% of whole person impairment was passed, the court was required to assess non-economic loss without statutory restraint except for the maximum that may be awarded.
According to the authority in Dell v Dalton (1991) 23NSWLR 528 the Court determined that the assessment of non-economic loss involved “…questions of fact and degree, and matters of opinion, impression, speculation and estimations, calling for the exercise of common sense and judgment”.
The insurers’ experts note “He was in obvious distress” and “all lumbar movements were reduced …” he was diagnosed with permanent lifting restrictions. He is unable to do lawns and has a limited driving capacity. He has persistent low back pain. He cannot undertake all home domestic duties. Based on these reports the insurer’s submission is inadequate
Mr Dykes reports the following; before the accident he was fit, strong and agile. He enjoyed swimming at the beach and pool, skate boarding and exercising at the gym. He owned a jet ski and had a large circle of friends He enjoyed dirt bike riding with friends. He owned a race car and worked on motors and cleaning his own car. He enjoyed travelling. He took care of his own home. He operated hand and power tools and manhandled all his own tools and equipment required for his work.
Although he says at paragraph 78 in his statement, he avoids sitting for more than 25 minutes. In the initial period of the assessment conference, I observed he sat in the one place for a prolonged period for over an hour before asking if he could stand, notwithstanding at my opening address, where I invited him to ask for a break or to adjust his position at any time.
He says he gets depressed because he can no longer pursue his self employment. He is embarrassed to seek help with simple tasks. He sold his bike and jet ski. He spends most of his time in bed. He told me he tries to get out by taking his dog for a walk. He is anxious about money and his health. At paragraph 121(a) to (ccc) he lists his disabilities and restrictions. He says ”The accident has completely changed my life for the worse”. He has had to rely on his mother. He has lost fitness and agility. He says he cries a lot.
His current partner, Jordan Latta has provided a statement of her observations. She met Mr Dykes post accident.
Mr Dykes submissions for non-economic loss is the amount of $400,000.
Mr Dykes is only 29 years old. He has body disfigurement in the regions of the surgical scars. He no longer has enjoyment of life and has a significant loss of amenities. Pain and suffering is a constant element and his emotional state is poor.
The assessment of non-economic loss having regard to all the circumstances is $340,000.
Additional claim
Mr Dykes in written submissions is claiming for additional travel. This was not pressed in oral submission. In any event I have been unable to locate any supporting evidence of this claim. As such there is no assessment for additional travel.
Assessment of damages summary
The summary of damages is as follows:
·Past economic loss $240,452.00
·Future economic loss - $441,783.70
·Non economic loss - $340,000.00
·Total $1,022,235.70
The insurer is to receive a credit for $357,526.38.
Costs and disbursements
The claimant submitted a schedule of costs and disbursements on 13 October 2022 identified as AD11. The insurer conceded that this claim submitted for medical dispute amount is $1,800.48.
All costs and disbursements are contained in the costs calculator.
NOTE: Although no additional claim was made by the claimant the assessment conference commenced at 11.00am and did not finish until late afternoon.
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