Green v AAI Limited t/as GIO

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Green v AAI Limited t/as GIO [2022] NSWPIC 317
CLAIMANT:	Liam Green
INSURER:	AAI Limited t/as GIO
MEMBER:	Brett Williams
DATE OF DECISION:	24 June 2022
CATCHWORDS:	MOTOR ACCIDENTS - Claims assessment; Claimant suffered physical and psychological injuries as a result of a high speed head-on accident; primary dispute about the quantification of his economic loss where he conducted a business through a company; competing accounting reports adopting differing approaches to assessing economic loss; Held– as a consequence of his injuries the Claimant had a loss of capacity to earn that was productive of financial loss; appropriate measure of past economic loss is the replacement labour costs of the company; H Luntz and S Harder, Assessment of Damages for Personal Injury or Death (LexisNexis, 5th ed, 2021); Husher v Husher applied; parties submitted that a buffer award was appropriate for future economic loss; buffer of $130,000 allowed.
DETERMINATIONS MADE:	1. Under sub-sections 7.36(3) and 7.36(4) of the Motor Accident Injuries Act2017 (the MAI Act), I specify the amount of damages for this claim as $172,527. 2. The insurer is to pay the claimant’s costs in accordance with the MAI Act and the Motor Accident Injuries Regulation 2017 (Regulations).

Reasons for Decision

Background

Liam Green (the claimant) was injured in a motor accident at Summerland Way, Clifden, NSW, on 5 January 2019. The accident occurred in clear and dry conditions at high speed. The other vehicle involved in the accident crossed into the claimant’s lane. The two vehicles collided head on. The claimant’s vehicle rolled and landed on its side. Airbags were deployed. The driver of the other vehicle was killed.
On 9 September 2020 the claimant made a claim for damages on the insurer of the other driver involved in the accident, AAI Limited t/as GIO (the insurer). On 18 October 2020 the insurer admitted liability for the damages claim.
No claim is made for non-economic loss. Damages for past and future economic loss are claimed, as is an allowance in accordance with Fox v Wood. The claimant does not seek an award for loss of superannuation.[1]
[1] Claimant’s submissions dated 3 June 2022 at [37].

Evidence

Other than the claimant’s oral evidence, and the letter from the NSW Department of Education to the claimant dated 8 June 2022 that was tendered at the assessment, the evidence relied on by the parties is contained in the joint bundle and further joint bundle[2] prepared by the insurer.
[2] AD 5 and AD 6.

The claimant’s statement

The claimant has provided a statement dated 19 May 2021. The statement records that the claimant left school after completing year 10 and obtaining the school certificate. He subsequently obtained a number of certificates and licences predominantly associated with driving heavy and industrial vehicles. Since leaving school, the claimant has worked as an apprentice mechanic, a Marshall Batteries franchisee, a bus driver and tourist coach driver. In 2003 he commenced a business that involved training and assessing individuals who sought to obtain a heavy vehicle licence, together with training for the use of 4WD vehicles, forklifts, bobcats and excavators. In the middle of 2016, due to a combination of factors, including changes in regulatory requirements and his wife wanting to pursue a different career path, the claimant expanded his business to providing bus tours. To this end, a 28 seat long distance touring coach was purchased in August 2016. The trading name “Connect Coaches” was registered. The business started providing day tours in September 2016.
In his statement the claimant explains that he would drive the bus on day tours for between eight to ten hours a day. The bus driving involved in these tours required him to concentrate fully for extended periods as well as liaise and interact with the public. The driving involved the use of his right foot and right leg to operate the bus. He was also required to stand for periods of time on breaks serving morning tea and refreshments. In addition to day-tours he carried out airport transfers, cruise transfers, concert transfers, and wedding transfers. The transfer work required him to concentrate for lengthy periods, in addition to the physical demands of using the accelerator, together with loading and unloading of baggage.
The business grew and a 24 seat bus and trailer was purchased in January 2018. The claimant states that his wife would drive this bus and he would drive the larger bus.
In addition to the duties he performed as a tourist bus driver, the claimant continued to perform heavy driving assessments. An employee carried out the training aspects of this work. As at early to mid-2018, the claimant states that 60% of his exertion in the business was involved “with the bus side” and 40% with the heavy vehicle training and assessment.
As a result of the business growing, more tours and routes were offered. In October 2018 a casual driver (David Duff) was employed to carry out the additional driving.
The claimant’s statement records that he was diagnosed with Type 2 Diabetes in early 2018. He manages the condition through medication and annual medical reviews. He says that this condition has no impact on his ability to carry out his employment duties.
In terms of the accident, the claimant states that in the mid-afternoon on 5 January 2019 he was travelling north on Summerland Way, near Grafton. His wife was in the front seat. His son and his son’s friend were sitting in the back seat. The roadway had single lanes in each direction, with double unbroken lines in the middle. The speed limit was 100km/h. He was travelling at around 90km/h. A vehicle travelling in the other direction came onto the incorrect side of the road heading towards his vehicle. The claimant states that he had “limited options and time to do anything”. He tried to break and swerved slightly to the left in an attempt to avoid a collision. He was unable to do so, and the vehicles collided head on. The brunt of the force was on his side of the vehicle, which rolled onto its roof before coming to a halt. His wife and the children were screaming and yelling. The claimant was anxious about his son’s condition, as he had been hospitalised the year before for an aneurism to his brain.
The claimant states that he felt immediate pain in his right foot and chest. He was in “a lot of shock” and “deeply traumatised” by what had occurred. He was greatly distressed when he learnt that the other driver had been killed.
The claimant states that as a result of the accident he was diagnosed with fractures of the third and fourth metatarsal bones in his right foot, together with soft tissue injuries and ligamentous injuries to the foot. He also suffered soft tissue injuries to his chest from the seatbelt and psychological injuries.
The claimant states that after the accident he was taken by ambulance to Grafton Hospital. He was admitted and treated for two nights before being discharged with his right foot in a moonboot. He then came under the care of his GP, Dr Mandile, Mr Lloyd and Ms Cheshire, physiotherapists, and Mr Stork, psychologist. The physiotherapy has ceased. The psychological treatment continued until interrupted by the covid lockdown in June 2021. He was prescribed medication for anxiety and to help him sleep. He continues to take the medication.
The statement recounts a range of ongoing disabilities the claimant experiences associated with his right foot injury and his psychological symptoms.
The claimant states that, as of 1 January 2019, he believes his business was making “about $2,000 to $3,000 each week after expenses”. He would pay himself a wage of approximately $45,000 net per annum.
The claimant states that for the first month after the accident he was restricted to office duties and carried out some heavy vehicle licence assessments. He employed drivers to carry out the mini-bus and coach tour aspects of the business and instructors to carry out the training of potential drivers. He says that this was because he was not physically able to perform the driving duties and psychologically not able to cope with teaching inexperienced drivers or return to driving duties.
From 5 February 2019 he continued to retain drivers to carry out the driving duties of the day trip part of the business. He commenced to act as a guide on some of the day trips due to the lack of experience of the casual drivers. From 1 May 2019 to the date the statement was made, the claimant states that he returned to carrying out some of the driving of the day trip tours for approximately 12 hours a week. He states that he mostly drove the mini-buses as driving the coach is difficult for long periods of time due to the use of the brake pedal, which is heavier and requires more force to apply. This aggravates the ongoing symptoms he experiences as a result of his right foot injury. The claimant states that he is limited in the amount he can drive. He experiences considerable pain as well as pins and needles in his right foot after driving for approximately two to three hours. He states that this also makes it quite difficult if he is required to drive the following day. Due to the restricted movement in his foot, the claimant states that he also experiences difficulty loading bags underneath vehicles or loading trailers.
He continues to hire a sub-contractor to carry out the training aspects involved in the heavy vehicle side of the business wherever possible, as he struggles with this work from a psychological perspective. The right foot injury restricts him from being able to provide heavy vehicle training in trucks due to his lack of balance and inability to climb into the cab and the back of trucks to meet the load security component required for this type of licence.
The claimant states that, as a result of his inability to carry out normal business activities, the business has had to downsize the fleet to accommodate his reduced capacity and reduce its costs and overheads. In this regard, the 24 seat Mitsubishi Rosa was sold on 8 December 2020. The 28 seat touring coach was sold on 29 March 2021. A smaller 14 seat mini-bus was purchased by the business. The claimant states that this was necessary as he cannot drive his normal hours because of the physical and psychological injuries he sustained in the accident. He now shares the driving trips, using the mini-bus, with his wife. He experiences difficulties with the overnight trips as he has problems concentrating, particularly if he has had a poor night sleep the night before due to insomnia associated with anxiety, flashbacks and rumination related to the accident.
The claimant states that the aim is that with his wife, and her ability to drive the mini-bus, between them they will be able to compensate for his reduced driving ability without the need to continue to incur the ongoing extra costs associated with hiring additional drivers to cover the work he once undertook.
The claimant states that if he was able to perform his normal pre-injury driving duties, he could operate a larger vehicle where the ability to make more money exists. This is because it is possible to generate higher revenue as there is an ability to transport more people and cater for larger groups such as schools and community organisations. Further, the increased expense of operating a larger vehicle is marginal when compared with the expense of operating smaller vehicles; the additional cost being slightly more fuel and slightly higher greenslip insurance.

The claimant’s evidence at the assessment

The claimant gave evidence at the assessment conference held on 15 June 2022. He confirmed that he had read his statement of 19 May 2021 that morning. He said that there was nothing in the statement that he wished to change. He agreed that things had remained fundamentally the same for him over the past 12 months. He still wears orthotics on his right foot. He continues to take medication for his psychological condition. The claimant confirmed that he continued to see a psychologist until the last covid lock-down, in June 2021. He may re-commence seeing the psychologist.
The claimant explained that his business was extremely busy at the moment. In terms of how he was coping with the work, he told me that he would “tread carefully”. He relies on casual workers to perform some of the work. The claimant stated that he had made an application to the Department of Education to transport disabled children to and from school. This would involve driving for an hour and a half in the morning and in the afternoon. A letter from the Department was tendered in this regard. The letter was in response to an application that had been made over two years ago. The letter confirmed that the application had not been successful. The claimant explained that he was attempting to change the type of work conducted by the business so that he wasn’t on the road for as much time as was involved in conducting tours. He thought that this work was more within his capabilities. The claimant explained that he was struggling with sleep problems and thought doing the school run, which involved picking up from near his home and dropping off at the local school, was a good direction for him to take.
The claimant gave evidence that rather than his business trying to expand to take on the Department of Education work, he saw it as an opportunity to move away from the tour work the business had been conducting. He had nominated himself as the main driver, and his wife and two employees as reserve drivers.
The claimant gave evidence that he is presently working between 10 to 15 hours a week. His evidence is that he was working approximately 30 to 40 hours a week in the 6 to 12 months prior to the accident.
The claimant confirmed that over the course of 2022, other than in the three weeks following the federal election, business had picked up. Although there were not a lot of bookings for January and February, there were lots of bookings for August, September and November 2022. He explained that the business had closed down for five or six months from mid-2021 due to the covid lockdown.
The claimant gave evidence that he continued to experience pins and needles and continuous discomfort in his right foot. He walks a few times a week because it helps with the movement of his ankle. His evidence is that he has struggled with anxiety since the accident. He said that the walking was also good for his mental health.
The claimant agreed that he had not mentioned complaints about his foot to Dr Mandile since January 2021. He said that he had learnt to live with the pain. The claimant explained that his foot symptoms interfere with his driving after a few hours and made it difficult for him to bend down and put bags into a vehicle. His evidence is that he doesn’t feel as confident with the brake pedal of the bus as much “these days”. The claimant gave evidence that the air brakes on the larger vehicles made driving difficult because there is a lot more weight pushing the vehicle forward. He said that this resulted in the business selling the larger bus and purchasing a smaller one.
The claimant confirmed that he experienced dizziness and palpitations after receiving a covid booster shot in February 2022. The symptoms lasted for about two weeks. He agreed that he would not have been able to drive during this period.
The claimant did not agree with the history recorded by Dr Prior that he sleeps well. He said that he still experiences problems with sleep. He said that “pretty much since the accident” he and his wife sleep in separate rooms because of the problems he was having with his sleep. He agreed that the medication he took helped him sleep.
The claimant was taken to the NSW Fitness to Drive Medical Assessments for 2019, 2020 and 2021, that had been completed by Dr Mandile, his general practitioner (GP). Each of those documents records that the claimant did not have any mental health conditions. They also record that he did not have a musculoskeletal disorder that may impact on safe driving. The claimant said he thought that mental health was different to anxiety. He did not know what a “musculoskeletal disorder” was. He did not recall a discussion with Dr Mandile, in this context, about physical problems. He explained that he had been seeing the doctor for five or six years, and that she “more or less” knew his history. He said that he thought she knew he had limitations in terms of his ability to drive for as long as he was able prior to the accident, and that he had been cutting back on the amount of work he had been doing.
The claimant gave evidence that the business was conducting seniors day tours twice a week. Once every three months they would conduct a trip away. He conducted the training for light rigid licences and the occasional medium rigid licence. He also undertook marketing work on the business website. The claimant said that he and his wife were working the business up to sell it.

Medical evidence

A workplace assessment report from Recovre 21 March 2019 records that the claimant had resumed some workplace duties with the assistance of his wife and that he had employed a casual to drive the bus and perform heavier tasks. The claimant reported that his foot swells particularly when he places weight through his right leg. It is recorded that he experienced general aching, burning and tingling in his toes and could not walk any distance without the moonboot.
The MRI report in relation to the claimant’s right foot dated 24 July 2019 records that there were healing fractures of the third and fourth metatarsal necks. Orbit plane films did not identify a foreign body.
Dr Mandile reported to the claimant’s solicitors on 20 July 2020. The report records that the claimant experiences pain in his right foot that is exacerbated by walking long distances and repeated flexion/extension that is involved in long distance driving. The accident caused the right foot fractures and had contributed to his depressive mood with post-traumatic stress disorder (PTSD) traits. The claimant is unable to drive or walk long distances as it results in a flareup of his foot pain. This has impacted his ability to work to the same extent as he did prior to the accident. In the doctor’s opinion, it is not unusual for fractures of this nature to continue to cause pain and complications, including chronic regional pain syndrome. Prior to the accident the claimant had been working a 38-40 hour week. Post-accident he was only able to manage two to three days a week for two to four hours a day with breaks. He will not be able to engage in any industry that needs him to drive long distances, stand for periods longer than an hour or involve actions like squatting or bending, as these actions put increased pressure through the metatarsals. He required continued psychological and physiotherapy input, together with orthopaedic and pain consultants.
Dr Bodel, orthopaedic surgeon, reported to the claimant’s solicitors on 8 August 2020. He noted that the claimant had undergone physiotherapy for 12 months. He was in a moonboot for three months. The claimant complained of continuing pain and stiffness in his right foot and ankle. Prolonged standing or walking aggravates his pain. He experiences numbness and tingling in the foot. On examination there was pain at the base of the toes. There was evidence of loss in the distribution of the superficial perineal nerve over the dorsum of the foot down to the base of the toes. The doctor diagnosed fractures in the metatarsals of the right foot, which had been confirmed by X-rays, and which were attributable to the accident.
Dr Powell, orthopaedic surgeon, provided a report to the insurer’s solicitors dated 18 August 2020. He recorded that the claimant remained mildly symptomatic in his right foot. The claimant reported pins and needles involving the second to fifth toes and stiffness in the forefoot. He had difficulty negotiating sloping and uneven ground. The report records that there was no suggestion of overreaction or exaggeration by the claimant. The doctor found that the claimant had suffered fractures of the third to fourth metatarsal necks, which had gone on to heal satisfactorily. The claimant also experience the effects of some ongoing psychological injuries. His right foot and ankle remained a source of ongoing symptoms, with intermittent discomfort in the right forefoot, accompanied by mild stiffness and restriction in range of motion in the ankle, subtalar joint and forefoot. In the doctor’s opinion, the claimant has the capacity to return to his pre-injury duties. He would have had difficulty performing his full pre-injury duties for a period of four to six months. The psychological injuries have had an impact on the claimant’s ability to maintain employment. The doctor confirmed that this fell outside his area of expertise.

Dr Prior, psychiatrist, reported to the insurer’s solicitors on 29 July 2020. The report records that the claimant described affective symptoms, anxiety symptoms and post-traumatic symptomatology. Dr Prior diagnosed PTSD and chronic adjustment disorder with mixed anxious and depressed mood. These conditions had been caused by the accident. With further treatment there was a very good likelihood that the claimant’s PTSD will improve further. The doctor was not able to say how long this may take, as improvement would depend upon whether the claimant responded to treatment. The claimant had not been able to fully resume his pre-accident employment due to the psychological symptoms, predominantly anxiety concerning professional driving. If not for the intervention of the covid lockdown, the claimant would have been able to continue working to the extent he was immediately prior to the lockdown, driving a coach part-time and working as an instructor/assessor of bus, coach and heavy vehicle drivers. The doctor recorded that while the claimant was not working full time, he was working approximately 12 hours a week.
Associate Professor Robertson, psychiatrist, provided a report to the claimant’s solicitors dated 25 September 2020. The report records that since the accident the claimant had developed phobic anxiety for driving. He is often provoked into catastrophic panic attacks when driving long distances. He often experiences severe anxiety and apprehension in driving long distances and the responsibility of driving multiple passengers. He experiences flashbacks and is triggered into intrusive symptoms and panic by driving in similar circumstances to the accident. The claimant reported experiencing limited symptom panic attacks. He has consulted a psychologist and participated in Behavioural Therapy and Cognitive Behaviour Therapy. He has mild to severe driving anxiety. It is recorded that the claimant has been decreasingly capable of driving long distances and has had to constrict the kind of work he was doing before the slowdown arising from covid. In the doctor’s opinion, the claimant suffered from chronic PTSD of mild to moderate severity, together with panic attacks, the main cause of which was the accident. The claimant has a restricted capacity for employment. His phobic anxiety interferes with his capacity to drive long distances. He had lost work as a result. While the claimant had a reasonable prognosis, there are likely to be long term restrictions to him operating a vehicle long distance. The doctor assessed a 9% whole person impairment as a result of the PTSD.

Assessment conference

An assessment conference was held on 15 June 2022. Mr Quickenden, of counsel, instructed by Mr Hobbs, appeared for the claimant. Mr Nesbeth, of counsel, instructed by Ms D’Alessandri, appeared for the insurer.
The only oral evidence at the assessment was given by the claimant, and is addressed earlier in these reasons. The claimant’s credit was not put in issue by the insurer.
I found him to be an honest and reliable witness.
Both parties relied on oral and written submissions. I was provided with hard copies of the following at the assessment:
a.     written outline of the claimant’s submissions dated 15 June 2022;
b.     the claimant’s schedules of past and future economic loss, and
c.     the insurer’s final submissions dated 14 June 2022.
The claimant also relied on a letter from the Department of Education dated 8 June 2022.
Mr Quickenden confirmed that the claimant’s case is that as a result of the accident the claimant suffered:
a.     fractures of the right third and fourth metatarsal;
b.     soft tissue and ligamentous injuries to his right foot;
c.     soft tissue injuries to his chest, and
d.     PTSD.

Mr Nesbeth confirmed that the insurer did not dispute that the claimant had suffered the injuries he alleges were caused by the accident. Mr Nesbeth also confirmed that the insurer did not dispute that the injuries suffered by the claimant as a result of the accident gave rise to a loss of capacity to earn that has been, and will be, productive of financial loss. The insurer agrees that the claimant is entitled to damages for past and future economic loss.
Where the parties diverge is the quantification of the claimant’s economic loss.
The parties confirmed that Fox v Wood damages were agreed at $696.
Mr Quickenden confirmed that the claimant did not claim damages for past or future loss of superannuation. He also confirmed that there was no claim for past economic loss from 1 April 2020 – 30 June 2020 and 1 July 2021 – 31 December 2021. These periods coincide with the covid lockdowns.

Claimant’s submissions

The claimant relies on written submissions dated 16 December 2021, 3 June 2022 and 15 June 2022. The December 2021 submissions particularise the injuries and disabilities the claimant alleges are attributable to the accident, and provide an outline of the treatment received by the claimant following the accident. Past economic loss in the sum of $66,544 is claimed on the basis of the Furzer Crestani (Furzer) report dated 13 December 2021. Future economic loss in the sum of $317,196 is claimed in accordance with Schedule F of the December 2021 Furzer report. The sum of $696 is claimed in accordance with Fox v Wood.
The 3 June 2022 submissions highlight the difficulties the claimant has experienced returning to his pre-accident work, including driving in general, but particularly driving the coach operated by his business. He has also experienced difficulties with the training aspects of the business. It is submitted that the limitations he has experienced arise from both his right foot injury and his psychological injury. The submissions record that, as a result of the claimant’s inability to carry out his normal business activities, he has had to downsize the business fleet to accommodate his reduced capacity and reduce the costs and overheads of the business. In this regard, it is submitted that he was required to sell the 24 seater Mitsubishi Rosa and the Bonluck 28 seater touring coach and a smaller 14 seater Mercedes Sprinter minibus was purchased. The submissions argue that the claimant could be making more money if he was operating larger vehicles.
The submissions record that both Vincents (report 29 March 2022) and Furzer (report 13 December 2021) adopt a method of pre and post-accident replacement labour costs to measure economic loss. The claimant submits that it is difficult, if not impossible, to measure the exact, or approximate loss he has suffered by analysing his financial documents. It is argued that the attempts by the accountants to measure labour ratio differences, pre and post-accident, have inherent problems. In this regard, the criticisms each accountant makes of the other are noted. The submissions identify a range of reasons why the claimant contends the insurer’s submissions in relation to economic loss are unrealistic and less than it should be. It is submitted that the expenditure on labour in the year following the accident is important as it confirms the claimant’s inability to work effectively in his business and the need for employees to maintain the business. The submissions propose an alternative basis for measuring past economic loss based on the claimant working an average of 26 hours a week between March and December 2018 and the average of his post-accident working hours, 4.7 hours a week, at $30 net an hour. It is submitted that the award for past economic loss should be $76,692 and that $308,026 should be awarded for future economic loss, together with an allowance of $696 for Fox v Wood. The submissions confirm that no claim for loss of superannuation is made because the claimant is self-employed.
At the assessment I was provided with further written submissions dated 15 June 2022. Those submissions focus on the claim for economic loss. It is submitted that the application of the legal principles relevant to the assessment of economic loss is not a simple exercise in this case. It is argued that the assessment of economic loss is not capable of precise calculation, and that the accountants give guideposts “but that is all”. It is argued that the use of the cost of employing replacement casual labour as a measure of economic loss has a number of limitations related to: the quality or availability of casual labour; that casual employees are not likely to be as productive as a self-employed person; and that self-employed people are incentivised to market their business while conducting tours while casuals are not. While the claimant does not accept the assessment of his economic loss made by Vincents, it is argued that if it is reasonably extended it suggests a minimum range. The submissions argue that a buffer for future economic loss, that measures the claimant’s real economic loss, is appropriate. Having made this submission, the claimant’s submissions contend for an award for future economic loss in the sum of $241,233, which is said to be based on a loss of $566 a week less 15% for vicissitudes.
In oral submissions Mr Quickenden adopted the Furzer criticisms of the Vincents report and submitted that the opinion in the Vincents report should not be used as a foundational basis for assessing past economic loss.
Mr Quickenden submitted that the following assumptions should be made for the purposes of s 4.7 of the MAI Act:
a.     but for the accident, the claimant would have returned to his business driving passenger vehicles without restrictions, either physical or mental;
b.     but for the accident, the claimant would have continued the work involved in heavy vehicle licencing and training without restrictions;
c.     the claimant was a conscientious, skilled, and enterprising individual;
d.     the claimant would have worked until he was 67 years of age;
e.     the claimant’s capacity to work is between 10 – 15 hours a week, and
f.     the claimant would be working 30 - 38 hours a week uninjured.
Mr Quickenden submitted that a buffer was the appropriate basis upon which an award of future economic loss should be made. He argued that a buffer of $240,000 should be awarded.

Insurer’s submissions

The insurer has provided written submissions dated 25 January 2022, 14 April 2022 and 14 June 2022; the latter being provided at the assessment. The 14 June 2022 submissions are said to replace the 14 April 2022 submissions, which I will not address in these reasons.
The insurer’s 25 January 2022 submissions acknowledge that the experts are largely in agreement that the claimant has suffered, at least for some time, restriction in his capacity to work as a result of the physical and psychiatric injuries he sustained in the accident. The submissions summarise some of the evidence in relation to the claimant’s work capacity. No submissions are made in relation to damages as the insurer intended to qualify a forensic accountant.
The insurer’s submissions of 14 June 2022 confirm that the issues in dispute are the extent to which the claimant’s injuries result in economic loss and the method of calculation of economic loss. The submissions record that both Furzer and Vincents have based their calculation of economic loss on the cost of hiring other people to replace the work the claimant would have undertaken in the business were it not for the accident (replacement labour costs). The insurer submits that, essentially, Furzer have calculated the hours the claimant would have performed were it not for the accident, subtracted the hours he did work, and multiplied that amount by what Vincents describe as a “hypothetical hourly cost of replacement labour”.
The insurer relies on the assessment of past economic loss made by Vincents in their updated report of June 2022. That report involved some adjustments being made to Vincents’ earlier assessment of past economic loss to reflect the deduction of concert and tour expenses from the business before quantifying the replacement labour costs. The replacement labour costs for the six months before the accident accounted for 18.7% of the business income. Mr Quickenden confirmed at the assessment that there was no dispute about this figure. The insurer submits that, based on Vincents’ assessment, past economic loss should be awarded in the sum of $40,830.
As to future economic loss, the insurer’s written submissions point to the claimant not pursuing an ultrasound of his right foot and the lack of complaints recorded in the notes of Dr Mandile after 7 January 2021. The insurer argues that it is difficult to reconcile residual symptoms with any ongoing loss. The insurer’s primary position is that a buffer of $25,000 is appropriate for future economic loss. In the alternative, the insurer submits that future economic loss should be assessed on the basis of an ongoing loss of $5,245 a year until the claimant turns 67. This would result in an award of $42,990 after a deduction for vicissitudes.
In his oral submissions, Mr Nesbeth argued that the claimant’s business was doing well. He submitted that, because of his ability to control the business, the claimant will be able to work in excess of 10 hours a week. He argued that the claimant has demonstrated that he can do more than drive vehicles. In terms of loss of capacity the insurer pointed to the lack of complaints in the clinical notes since 2021.
Mr Nesbeth submitted that, in terms of an award for future economic loss, a buffer was the appropriate way to compensate the claimant. In this regard, the insurer’s primary submission is that a buffer of $25,000 is appropriate. As an alternative position, the insurer submitted that the sum of $43,000 would be an appropriate award.

Injury findings

As recorded earlier in these reasons, there is no dispute between the parties in relation to the injuries suffered by the claimant in the accident.
The X-ray reports dated 6 January 2019 and 13 February 2019, together with the MRI report dated 24 July 2019, confirm the presence of the right third and fourth metatarsal fractures.
The NSW Ambulance records confirm that the claimant was complaining of central chest pain at the scene of the accident. The Ambulance records also state that the claimant was experiencing bruising to, and pain in, his right ankle. I consider it probable that, in addition to the fractures, the claimant experienced soft tissue injuries to his right foot and ankle. I accept the opinions of Associate Professor Robertson and Dr Prior, that the claimant suffers from PTSD as a result of the accident.
I am comfortably satisfied on the evidence that as a result of the accident the claimant suffered the following injuries:
(a)    fractures of the right third and fourth metatarsal necks;
(b)    soft tissue injuries to his right foot and ankle;
(c)    soft tissue injuries to his chest, and
(d)    PTSD.
I find that the soft tissue injuries to the claimant’s right foot and chest have resolved.
While I accept Dr Powell’s opinion that the metatarsal fractures have healed satisfactorily, the doctor reported that the claimant’s right foot and ankle have remained a source of ongoing symptoms with intermittent discomfort, stiffness and reduction in range of motion in the ankle, subtalar joint and forefoot.
In her report of 20 July 2020, Dr Mandile recorded that the claimant continues to have pain in his foot, that is exacerbated by walking long distances and flexion and extension that is involved in long distance driving. The doctor expressed the opinion that it is not unusual for fractures of the type suffered by the claimant to continue to cause pain and complications. I accept her opinion in this regard. Further, whether described as an ache or pain, I find that the claimant continues to experience symptoms and limitations arising from the metatarsal fractures and the right ankle injury.
The evidence available to me, including the opinions of Dr Mandile, Associate Professor Robertson, and Dr Prior, together with the claimant’s evidence as to his ongoing psychological symptoms, satisfy me that he continues to suffer from PTSD.
Despite Dr Prior’s view that, with further treatment, there is a good likelihood that the PTSD will improve further, he was not able to say how long this would take as the improvement would depend upon how the claimant responded to the treatment. While I accept that there may be some further improvement in the PTSD, I find that the condition is unlikely to resolve. I accept Associate Professor Robertson’s opinion that the PTSD is chronic.

Capacity findings

The claimant’s evidence, which I accept, is that before the accident he was working 30 – 40 hours a week.
The claimant’s evidence is that he undertook some office duties and a few assessments in the first month following the accident. From 5 February 2019 he commenced to act as a guide on some day trips. From 1 May 2019 he returned to carrying out some of the driving, which he continues to do.
I accept the claimant’s evidence that he now works between 10 – 15 hours a week. The claimant’s evidence is that his work capacity is limited by both his right foot injuries and his psychological injury.
Dr Bodel expressed the opinion that the claimant has a restricted capacity for work. The doctor recorded that the claimant has ongoing pain and stiffness in his right foot and ankle, together with ongoing residual effects of his psychological condition (which the doctor acknowledged was outside his area of expertise). While he does not say so, I infer that the restrictions to which Dr Bodel refers in his report arise from the pain and stiffness in the claimant’s right foot and ankle.
Dr Mandile recorded that the claimant’s right foot pain was exacerbated by the repeated flexion and extension involved in long distance driving. In her opinion the claimant is limited in how far he can drive and will not be able to engage in any industry that needs him to drive long distances, stand for periods longer than an hour or involve actions like squatting or bending, as these actions put pressure through the metatarsals.
The claimant’s evidence is that his ongoing right foot symptoms have had an impact on his ability to drive heavy vehicles for long distances. He explained that airbrakes in larger vehicles were a particular problem as they require him to apply more weight on his right foot.
I note the contents of the NSW Fitness to Drive Medical Assessments for 2019, 2020 and 2021, completed by Dr Mandile, which record that the claimant did not have any mental health conditions or a musculoskeletal disorder that may impact on safe driving. It is not immediately clear to me why those forms do not make reference to the claimant’s right foot injuries and PTSD. Dr Mandile’s report of 20 July 2020 makes it clear that not only was she aware of the injuries, she was aware that they gave rise to a number of limitations relevant to the pre-accident work performed by the claimant, including driving. The information provided in the Drive Medical Assessments is not consistent with my assessment of the evidence and my findings in relation to the injuries the claimant suffered as a result of the accident. Those Assessments do not alter my view about the impact of the claimant’s injuries on his capacity for work.
I am not persuaded by Dr Powell’s opinion that, in terms of his right foot injury, the claimant has the capacity to return to his pre-injury duties. I prefer Dr Mandile’s opinion as to the impact that the metatarsal fractures have on his work capacity. The doctor’s opinion is in keeping with the claimant’s evidence, which I accept, in relation to the ongoing problems he experiences as a result of the fractures. I find that the claimant has had, and will have, a loss of capacity to earn as a result of his right metatarsal fractures and to a lesser extent his right ankle injury.
The claimant’s evidence is that he experiences ongoing symptoms associated with PTSD. The condition affects his sleep, which in turn effects his ability to drive. Although the medication he is taking, Avanza, assists him get to sleep, it does not completely address the problem. The condition gives rise to what he describes as “anxiety”, particularly when driving. He also experiences panic attacks, forgetfulness, inattentiveness, nightmares and flashbacks.

Associate Professor Robertson recorded that the claimant had developed phobic anxiety for driving, experienced panic attacks, severe anxiety, apprehension and flashbacks. In the doctor’s opinion, the claimant has a restricted capacity for employment. His phobic anxiety interferes with his capacity to drive long distances. Although he should benefit from ongoing treatment, the doctor expressed the opinion that there are likely to be long-term restrictions to him operating a vehicle long distance.
Doctor Prior took a comprehensive history from the claimant, which he thought was internally consistent and consistent with the mental status examination. The doctor thought that the claimant had not reached maximum medical improvement or sufficiently recovered in that he has not had the treatment of choice for PTSD, namely cognitive behavioural therapy in combination with appropriate psychoactive medication. In the doctor’s opinion, with this treatment, there is a very good likelihood that the claimant’s PTSD would improve further. In the doctor’s opinion the claimant’s inability to work full time in his pre-accident employment was due to the PTSD. If not for the intervention of the covid lockdown (in 2020) he would have been able to continue working 12 hours a week.
The evidence satisfies me that, due to a combination of his injuries, the claimant was unable to work for most of January 2019. I am satisfied that from 5 February 2019 he commenced to act as a guide on some day trips, and that from 1 May 2019 he returned to carrying out some of the driving, which he continues to do. I find that since 1 May 2019, the claimant has been able to work for between 10 – 15 hours a week.
I find that his inability to return to his full pre-accident duties is attributable to his metatarsal fractures and his PTSD.
Associate Professor Robertson, Dr Bodel, Dr Powell and Dr Prior, all reported in the second half of 2020. I am satisfied that the claimant’s physical and psychological injuries have not improved significantly since that time. I find that the claimant has an ongoing loss of capacity to earn as a consequence of these injuries. I think it more likely than not that the claimant’s capacity to work will not increase significantly.

Assessment of damages

At the time of the accident the claimant was exercising his earning capacity in a business conducted through a corporate vehicle, Central Coast Driver Training Services Pty Ltd (the Company). At the time of the accident the focus of the business was conducting bus tours. There was also an arm of the business that involved training and assessing people who sought to obtain a heavy vehicle licence.
At the time of the accident the claimant undertook much of the coach driving and some of the work relating to the assessment of individuals who sought to obtain a heavy vehicle licence. His wife undertook some of the driving. A casual driver was engaged by the business and an employee carried out the training aspects of the licencing work. The claimant received a salary from the Company that is reflected in his individual tax returns.
The claimant’s evidence is that, as a result of the accident, the Company has sold the two larger vehicles and replaced them with a smaller vehicle. There is then the impact of covid, and the associated lockdowns in 2020 and 2021, on the business. In this regard there is no doubt that the business would not have operated for significant periods, a factor that both parties have acknowledged and taken into consideration in terms of past economic loss. In the end, the parties agree that the injuries the claimant suffered in the accident have resulted in a loss of capacity to earn that is productive of financial loss, but disagree as to the extent of the loss. The claimant’s submissions acknowledge that assessing his past and future economic loss is not a simple task.
Although he was paid a salary by the business, neither party has argued that the claimant’s salary reflects his contribution to the business or his capacity to earn. Neither party submits that his economic loss should be assessed on the basis of the salary he has received from the business. I am satisfied that his salary from the business is not a true reflection of his pre-accident earning capacity. Nor is it a reflection of his post-accident capacity.
In Husher v Husher [1999] HCA 47, the plurality (Gleeson CJ, Gummow, Kirby and Hayne JJ) restated a number of well settled principles, including:
a. the damages to be awarded are that sum of money which will put the party who has been injured in the same position as they would have been in if they had not sustained the wrong for which they are being compensated [6];
b. if the injured person’s pursuit of gainful employment is interrupted or affected because of the negligent infliction of injury they are to be compensated by an amount that reflects the financial consequences that follow from the impairment [6], and
c. damages for both past loss and future loss are allowed to an injured plaintiff "because the diminution of his earning capacity is or may be productive of financial loss". Both elements are important. It is necessary to identify both what capacity has been lost and what economic consequences will probably flow from that loss. Only then will it be possible to assess what sum will put the plaintiff in the same position as he or she would have been in if injury had not been sustained [7].
In Husher, the High Court confirmed at [18] that the financial loss occasioned by impairment of earning capacity is the loss of what (if there had been no accident) the injured plaintiff would (as opposed to could) have expected to have had under his or her control and at his or her disposal by exercising that capacity. Critically, it was held at [23] that deciding what value is to be ascribed to the loss of earning capacity of an injured plaintiff requires close attention to the facts of each case.
A further consideration in the assessment of the claimant’s damages is that he is under a duty to mitigate his damages: s 4.15 of the MAI Act.
In circumstances where a claimant conducts a business through a company (or other vehicle), the requirement to mitigate the loss would ordinarily mean that the damages for economic loss cannot exceed the cost of employing someone to do the work that the injured claimant is unable to do: H Luntz and S Harder, Assessment of Damages for Personal Injury or Death (LexisNexis, 5^th ed, 2021) [6.5.1].

Past economic loss

As recorded earlier, the claimant did not undertake any work for most of January 2019. He undertook limited duties until 5 February 2019, when he started to act as a guide on some day trips. From 1 May 2019 he returned to carrying out some of the driving, which he continues to do. He has worked between 10 – 15 hours a week since this time.
The claimant relies on reports from Furzer dated 13 December 2021 and 20 May 2022. The insurer relies on reports from Vincents dated 7 November 2019, 29 March 2022 and 10 June 2022. The Vincents November 2019 report addresses the claimant’s pre-accident weekly earnings, for the purposes of determining his entitlement to weekly payments of statutory benefits under Part 3 of the MAI Act. I have read and considered all the accountant’s reports. I do not intend to provide a detailed summary of these reports. The parties have them, and know what they say.
Both accountants have concluded that the appropriate way to measure the claimant’s past economic loss is on the basis of the replacement labour required by the claimant’s business on account of his inability to undertake the work he was performing prior to the accident. In particular, the business has been required to rely on casual bus drivers to undertake the bus driving the claimant has been unable to perform.
The Furzer report of 20 May 2022 contains an updated assessment of the claimant’s past and future economic loss. The report builds on their earlier report of 13 December 2021. There is also a review of the Vincents report of 29 March 2022, with a number of criticisms of that report being made, in particular at paragraphs 5.3.2 and 8.2, in relation to the methodology applied by Vincents to the assessment of the claimant’s economic loss.
In making their updated assessment of the claimant’s past economic loss, Furzer have: relied on a spreadsheet provided by the claimant relating to hours worked; taken into account the reduction in hours worked due to the covid pandemic; from 1 January 2022 assumed a reduction of the claimant’s earning capacity of 20 hours a week (Alternative A) and 10 hours a week (Alternative B); and adopted an hourly rate of $40, including all on costs.[3]
[3] Furzer report 20 May 2022 at [5.4.1].
Alternative 1 results in a past loss of $76,692, calculated as set out in updated Schedule B. Alternative 2 results in a past loss of $69,469, calculated as set out in updated Schedule C. In each Alternative, no loss is allowed for the periods 1 April 2020 – 30 June 2020 and 1 July 2021 – 31 December 2021. I note that no claim is made for a loss during these periods.
The Vincents report of 10 June 2022 updates their earlier report of 29 March 2022 and responds to criticisms of the earlier report made by Furzer in their report of 20 May 2022. Two of three Furzer criticisms were rejected; those criticisms relating to the sales income reported in the general ledger not reconciling with the sales income reported in the company’s financial statements and the timing difference between receipt of income and the performance of work. Vincents accepted that an analysis of the pre and post-accident labour costs of the business, after considering the tour costs incurred by the business, is a reasonable approach to analysing the pre and
[4] I note that Table 1 on page 2, paragraph 6.5.4, and Schedule E of the report state that the past loss for this period is $36,585. However, the figures in row (i) of Schedule E, said to reflect loss of income, add up to $36,586 ($3,901 + $27,440 + $5,245 = $36,586).
post-accident labour to income ratios of the business. Consequently, Vincents provided an updated assessment of the claimant’s economic loss. From the date of the accident to 30 June 2021, a loss of $36,586 was assessed, as set out in Schedule E[4] of the report. From 1 July 2021 to 30 June 2022, an “illustrative” loss of $5,245 was assessed. The amount assessed for the year ending 30 June 2022 is described as being “illustrative” as the trading results of the Company for the year ending 30 June 2022 are not available. In these circumstances, the “illustrative” loss assessed by Vincents is based on the replacement labour assessment for the year ending 30 June 2021, $5,245.
Having considered the Furzer and Vincents reports, I have determined that, for the period commencing on the date of the accident to 30 June 2021, the loss assessed by Vincents represents the appropriate measure of the claimant’s damages for that period. I have come to this conclusion because:
a.     it takes into consideration the actual labour costs of the claimant’s business;
b.     it incorporates the criticism by Furzer that an analysis of the pre and
post-accident labour costs of the business, after considering the tour costs incurred by the business, is a reasonable approach to analysing the pre and post-accident labour to income ratios of the business;
c.     the past labour costs from the date of the accident to 30 June 2021 are based on an assessment of the replacement labour costs actually incurred by the business during that period calculated with reference to the labour to income ratio of the business, net of tour expenses, during the six months immediately prior to the accident compared with the corresponding labour to income ratios after the accident, and
d.     as the claimant is under a duty to mitigate his damages, I consider that his damages for past economic loss should not exceed the cost of employing someone to do the work that he was unable to do.
As to the criticisms made by Furzer, in their report of 20 May 2022, with respect to the approach adopted by Vincents in their report of 29 March 2022:
a. in circumstances where the gross income reported in the business’ financial statements for the year ending 30 June 2019 does not reconcile with the income amounts reported in the general ledger records for that year, I consider it was reasonable for Vincents to rely on the general ledger records from the business when calculating the pre and post-accident labour to income ratios of the business during the year of the accident and when attempting to forecast the likely labour costs of the business for the purposes of assessing the replacement labour claim, and
b. I am not satisfied that any timing difference between the receipt of income and the provision of services would materially change Vincents assessment of post-accident labour to income ratios.
Accordingly, I find that the claimant’s past economic loss from the date of the accident to 30 June 2021 is $36,586.
With respect to the period 1 July 2021 to the date of the assessment, 15 June 2022, there is no claim for the period 1 July 2021 – 31 December 2021. The claimant’s evidence was that the business did not have a lot of bookings in January 2022. The claimant was unable to work for a period in February 2022 because of his reaction to the covid booster and because he contracted covid.
This in effect means that the period during which the claimant suffered financial loss due to his injuries amounts to approximately 20 weeks in the period 1 July 2021 – 15 June 2022. In the absence of relevant financial records from the business, I am satisfied that an amount of $5,245 is an appropriate measure of his loss during this period. It reflects the additional labour costs from the previous year, which I consider represents a reasonable benchmark.
Accordingly, I assess the claimant’s past economic loss in the amount of $41,831. I am satisfied that this is an appropriate measure of the claimant’s past economic loss.
I assess the sum of $696 in accordance with Fox v Wood.

Future economic loss

I have found that the claimant has an ongoing loss of capacity to earn as a result of his metatarsal fractures, right ankle injury and PTSD. I am satisfied that his loss of capacity to earn will be productive of financial loss. While there may be some improvement in his condition I think it probable that his injuries and work capacity have plateaued.
For the purposes of s 4.7(1) of the MAI Act I find that, but for the injuries sustained in the accident:
a.     the claimant would have worked until he turned 67 years of age;
b.     the claimant would have worked between 30 - 40 hours a week in his business, or a similar enterprise, undertaking driving and training/assessing duties for heavy vehicle licences, and
c.     that the claimant would have continued to undertake driving and training/assessing duties for heavy vehicle licences, together with other duties he performed in the business, without either physical or mental restrictions.
Both parties submitted that this is a case in which an award by way of a buffer is appropriate. The claimant has also made a submission in the alternative that his future economic loss should be assessed on the basis that he has the capacity to work 20 hours a week, and that he has a loss of capacity amounting to 18 hours a week. At $40 an hour, it is submitted that his loss would be $566 net a week, which, if calculated to the age of 67, would result in an award of $241,233.
The insurer, on the other hand, contends for a buffer of $25,000.
A number of factors make the assessment of this head of damage challenging. There is the undoubted impact of the covid pandemic on the business. But for the accident the claimant’s business may have expanded. The performance of the business since the accident is likely to have been adversely impacted by the sale of the two larger vehicles that the claimant says were sold because he could no longer drive them. The claimant gave evidence that he and his wife may work the business up to sell it in the next year or two. It is not clear whether that will eventuate. There is also uncertainty as to the extent to which the claimant’s loss of capacity to earn will be productive of financial loss and the quantification of the loss. That this is so is illustrated by the challenges encountered by the accountants in assessing his past loss of earnings.
The task of assessing economic loss is evaluative. The claimant’s earning capacity has unquestionably been reduced as a result of the injuries he sustained in the accident. The impact of the claimant’s injuries upon the economic benefit from exercising his earning capacity is difficult to determine. I am satisfied that this is a case in which it is appropriate to award a buffer for future economic loss.
I do not consider that a buffer of $25,000, or the approach to assessing future economic loss proposed in the “illustrative assessment of future economic loss” provided in Vincents report of 10 June 2022[5], would adequately or fairly compensate the claimant for his loss of capacity and consequential financial loss arising from his accident caused injuries. I have determined that the appropriate way to compensate the claimant is by way of a buffer in the sum of $130,000.
[5] See Vincents report 10 June 2022 at [6.9], Table 5 and Schedule E.

Assessment of damages summary

Under sub-section 7.36(1)(b) of the MAI Act, I am required to make an assessment of the amount of damages that a court would be likely to award.
I assess the claim as follows on the findings set out above:
·         Past loss of earnings - $41,831
·         Fox v Wood - $696
·         Future loss of earnings - $130,000
Total Damages Assessed - $172,527
The claimant’s economic loss is to be reduced by, and the insurer is to have credit for, weekly payments of statutory benefits paid to the claimant under Div 3.3 of the MAI Act in the sum of $3,317.78.

Costs

118.The insurer is to pay the claimant’s costs in accordance with the MAI Act and the Regulations. If there is any dispute in relation to cost the parties have liberty to apply.

[2022] NSWPIC 317

24 June 2022