IAG Limited trading as NRMA Insurance v Lucic - [2019] NSWSC 620

Supreme Court

New South Wales

Medium Neutral Citation: IAG Limited trading as NRMA Insurance v Lucic [2019] NSWSC 620
Hearing dates: 22 May 2019
Decision date: 28 May 2019
Jurisdiction: Common Law
Before: Adamson J
Decision:
(1) Dismiss the amended summons filed on 22 May 2019.
(2) Order the plaintiff to pay the first and fourth defendants’ costs.
Catchwords:
JUDGMENTS AND ORDERS – effect of – abuse of process – issue estoppel – whether arises from assessment of notional damages in proceedings brought by workers compensation insurer against compulsory third party insurer on statutory indemnity under s 151Z of the Workers Compensation Act 1987 (NSW) – no issue estoppel as distinct causes of action

JUDGMENTS AND ORDERS – effect of – relationship between s 151Z action by worker’s insurer against wrongdoer for indemnity for payments of compensation made and tort claim by worker for damages against wrongdoer

ADMINISTRATIVE LAW – requirement for CARS assessor to consider submissions of parties and address in reasons
MOTOR ACCIDENTS COMPENSATION – damages – challenge to awards for past and future economic loss – level of particularity required
Legislation Cited: Married Women’s Property Act 1882 (NSW), s 12
Motor Accidents Compensation Act 1999 (NSW), s 34, 58, 61, 69, 81, 92, 94, 95, 99, 104, 106, 122, 126
Supreme Court Act 1970 (NSW), ss 69, 94
Uniform Civil Procedure Rules 2005 (NSW), r 42.1
Workers Compensation Act 1926 (NSW), s 64
Workers Compensation Act 1987 (NSW), s 151Z
Cases Cited: Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13
Allianz Australia Insurance Ltd v Sprod (2012) 81 NSWLR 626; [2012] NSWCA 281
Brown v Lewis (2006) 65 NSWLR 587; [2006] NSWCA 87
Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853
Coco v The Queen (1994) 179 CLR 427; [1994] HCA 15
Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088
Government Insurance Office (NSW) v McDonald (1991) 25 NSWLR 492
Grant v Royal Rehabilitation Centre (1999) 47 NSWLR 263; [1999] NSWCA 250
Kay v Sydney Airport Corporation Ltd [2014] NSWSC 744
Kioa v West (1985) 159 CLR 550; [1985] HCA 81
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20
Manners v Transfield (1992) 8 WAR 111
O’Brien v McKean (1968) 118 CLR 540; [1968] HCA 58
Penrith City Council v Parks [2004] NSWCA 201
Port of Melbourne Authority Pty Limited v Anshun (1981) 147 CLR 589; [1981] HCA 45
QBE Workers Compensation (NSW) Ltd v Dolan (2004) 62 NSWLR 42; [2004] NSWCA 458
Ramsay v Pigram (1968) 118 CLR 271; [1968] HCA 34
Rippon v Chilcotin (2001) 53 NSWLR 198; [2001] NSWCA 142
Rodger v De Gelder [2015] NSWCA 211; (2015) 71 MVR 514
Saaed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23
The Nominal Defendant v Aychahawchar [2015] NSWCA 58; (2015) 70 MVR 89
Tickle Industries Pty Limited v Hahn (1974) 130 CLR 321; [1974] HCA 5
Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110
Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28
Tooth and Company Limited v Tillyer (1956) 95 CLR 605; [1956] HCA 49
Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43
WorkCover Queensland v Amaca Pty Ltd (2010) 241 CLR 420; [2010] HCA 34
Workers Compensation Nominal Insurer v Nominal Defendant [2013] NSWCA 301; (2013) 64 MVR 542
Zahed v IAG Limited t/as NRMA Insurance [2016] NSWCA 55; (2016) 75 MVR 1
Texts Cited: KR Handley, Spencer Bower and Handley Res Judicata (4th ed, 2009, LexisNexis)
Motor Accidents Authority, “Claims Assessment Guidelines”, 1 May 2014, cll 16.2, 18.4
Category: Principal judgment
Parties: IAG Limited t/as NRMA Insurance (Plaintiff)
Steven Lucic (First Defendant)
State Insurance Regulatory Authority (Second Defendant)
Allan Crowley, in his capacity as a Claims Assessor of State Insurance Regulatory Authority (Third Defendant)
Workers Compensation Nominal Insurer (Fourth Defendant)
Representation:
Counsel:
MA Robinson SC/ AE Maroya/J Gumbert (Plaintiff)
AJ Stone SC/BG McManamey (First Defendant)
R Sheldon SC (Fourth Defendant)
Solicitors:
Hall & Wilcox (Plaintiff)
Turner Freeman (First Defendant)
Stiles Lawyers (Fourth Defendant)

File Number(s): 2018/390135

Judgment

Introduction

These proceedings arise from a motor vehicle accident in which the first defendant, Steven Lucic (the Claimant), was injured while he was in the course of his employment. The plaintiff, IAG Limited, trading as NRMA Insurance (the NRMA), was relevantly the compulsory third party insurer responsible for loss and damage suffered by the Claimant as a consequence of the negligence of the driver of the motor vehicle, Vincent Yung (the Driver). The Claimant received workers compensation payments on the basis that his injuries in the motor vehicle accident were sustained in the course of his employment.
By amended summons filed in Court on 22 May 2019, the NRMA seeks relief under s 69 of the Supreme Court Act 1970 (NSW) for orders setting aside the assessment made and certificate issued in respect of the Claimant by the third defendant, Allan Cowley (the Claims Assessor), in his capacity as a claims assessor of the second defendant, State Insurance Regulatory Authority (SIRA). SIRA has filed a submitting appearance. Workers Compensation Nominal Insurer, the fourth defendant (the WC Insurer), has, with the consent of the other parties, been granted leave to intervene.
All references to legislation in these reasons are references to the Motor Accidents Compensation Act 1999 (NSW) (the Act), unless otherwise indicated. In these reasons, “compensation” means payments made under the Workers Compensation Act 1987 (NSW) and “damages” means monies claimed, payable or paid in an action other than under the Workers Compensation Act.

The relevant facts

The accident and the claims made

The motor vehicle accident referred to above occurred on 31 August 2005. At that time, the Claimant was employed by Robert Bookman Enterprises Pty Ltd (the Employer), which has since been wound up. The Employer’s workers compensation insurer was Allianz Australia Workers Compensation (NSW) Limited (Allianz), the predecessor to the WC Insurer. The Claimant made a claim for compensation under the Workers Compensation Act from his Employer and a claim for damages under the Act against the NRMA. Allianz made payments under the Workers Compensation Act to the Claimant. On 14 August 2006 the NRMA admitted liability to the Claimant in a notice served under s 81.

The recovery proceedings in the District Court

In 2007, Allianz brought proceedings in the District Court against the Driver pursuant to s 151Z of the Workers Compensation Act (the Recovery Proceedings). The Recovery Proceedings were defended by the NRMA as the Driver’s insurer. On 3 October 2007 Truss DCJ ordered judgment in favour of Allianz in the sum of $91,096.79, which comprised $82,299.46, being the total payments of weekly compensation and out of pocket expenses, and interest of $8,797.33.
Truss DCJ indicated that she assessed the damages to which the plaintiff would have been entitled in a claim in negligence against the Driver to be $196,800, comprising the following:

Head of damage

Amount

Past economic loss

$65,556

Future economic loss

$82,215

Past out of pocket expenses

$22,123

Future out of pocket expenses

$15,000

Fox v Wood

$11,906

The figure of $196,800 therefore became the limit of Allianz’s statutory indemnity against the NRMA. It was common ground that the NRMA has made payments to date up to the figure of $196,800. It has refused to make payments beyond that figure.

The claims assessment process

NRMA’s application for exemption

The NRMA applied for the Claimant’s claim to be exempted from assessment by the Claims Assessment and Resolution Service (CARS) pursuant to s 92(1)(b) and cl 14.6 of the Claims Assessment Guidelines (the Guidelines) on the basis that it was unsuitable for CARS assessment. On 30 July 2018, the Claims Assessor refused the NRMA’s application. This decision is not the subject of challenge. However, the NRMA re-agitated its application for exemption at the commencement of the CARS assessment referred to below and pressed the submissions it had made on the earlier application that there was an issue estoppel against the Claimant arising from the Recovery Proceedings.

The CARS assessment

The assessment of the Claimant’s claim was heard over two days, 15 May 2018 and 24 August 2018. The Claims Assessor’s decision was issued, together with his reasons, on 31 August 2018.
There are two aspects to the Claims Assessor’s decision: first, the finding that there was no issue estoppel or abuse of process which would prevent his making, or otherwise affect, the assessment; and, secondly, the assessment of Claimant’s damages at $1,548,026.45.

The decision regarding issue estoppel and abuse of process

The Claims Assessor rejected the NRMA’s submission that there was an issue estoppel which operated against the Claimant arising from the Recovery Proceedings or that it was an abuse of process for the Claimant to seek to be entitled to greater damages than had been found by Truss DCJ in the Recovery Proceedings. The Claims Assessor decided that the Claimant could not be regarded as a “privy” with respect to the Recovery Proceedings and referred in his reasons to what Truss DCJ’s had said in the judgment as follows:

“The worker gave evidence, which I have no reason not to accept, especially given that he presented as an open and honest person who has no interest in the outcome of the proceedings, that his condition is now significantly worse . . .”
[Emphasis added by the Claims Assessor in [28] of his reasons.]

The Claims Assessor concluded his reasons on issue estoppel as follows:

“[T]here was no proper contradictor between the proceedings with Allianz and NRMA with respect to the assessment of the Claimant’s damages. This was merely the exercise by Allianz of a statutory right to claim an amount of money from NRMA which could not and should not bind the Claimant. To do so would be to bring the law into disrepute.”

The Claims Assessor rejected the NRMA’s argument that the CARS assessment amounted to an abuse of process or that the NRMA was being treated oppressively, unfairly and vexatiously.

The assessment of damages

As referred to above, the Claims Assessor assessed the Claimant’s damages as $1,548,026.45, which comprised the following:

Head of damage

Amount

Non-economic loss

$300,000

Past loss of earnings (incl superannuation and Fox v Wood)

$446,647

Future loss of earnings (incl superannuation)

$400,000

Past treatment (incl s 83 payments)

$217,399

Future treatment

$30,000

Past gratuitous care

$82,680

Future commercial care

$71,300

Total

$1,548,026

Relevant legislation

Section 151Z of the Workers Compensation Act (s 151Z) relevantly provides:

“151Z   Recovery against both employer and stranger
(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:
(a)  the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,
(b)  if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker’s injury under this Act, and the worker is not entitled to any further compensation,
. . .
(c)  if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,
(d)  if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),
(e)  if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,
(e1)  if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment,
(f)  all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission.

. . .”

The scheme of s 151Z recognises the entitlement of a worker to sue the employer and the wrongdoer: s 151Z(1)(a). Recovery of compensation by the worker followed by recovery of damages from the wrongdoer renders the worker liable to repay from those damages the compensation which he or she has been paid: s 151Z(1)(b). Once the worker recovers damages, he or she is not entitled to recover compensation: s 151Z(1)(c). The person who has paid such compensation has a right “to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages)”: s 151Z(1)(d). The right in s 151Z(1)(d) has been described as a right of statutory indemnity. A payment made by the wrongdoer under the statutory indemnity before the worker obtains judgment operates as a defence, to the extent of the amount, in the worker’s proceedings for damages: s 151Z(1)(e).
Thus, an employer is obliged to make workers compensation payments to a worker who has suffered an injury in the course of employment unless and until the worker recovers damages for such injury: s 151Z(1)(c). The employer can recover workers compensation payments from the wrongdoer pursuant to the statutory indemnity under s 151Z(1)(d); or from the worker from the damages awarded in the worker’s favour against the wrongdoer: s 151Z(1)(b). There is no obligation on a worker to claim damages against the wrongdoer.

The grounds of challenge in the amended summons

The grounds of challenge are as follows:

alleged errors regarding issue estoppel and abuse of process (the issue estoppel ground);

alleged error in relying on concession made by NRMA with respect to the neck injury (the neck ground); and

alleged error in determination of past and future economic loss (economic loss grounds).

The issue estoppel ground

The parties’ submissions

The NRMA repeated in this Court the submissions it had made to the Claims Assessor in its first and second applications for exemption which were as follows.
The NRMA submitted, that in order for Allianz to recover its payments of workers compensation, it was necessary for Truss DCJ to determine, in the Recovery Proceedings, the notional pool of damages that would be recoverable by the Claimant: Grant v Royal Rehabilitation Centre (1999) 47 NSWLR 263; [1999] NSWCA 250. It argued that, as a consequence, Allianz had prosecuted the same claim for damages in the Recovery Proceedings as the Claimant was prosecuting in the CARS assessment. The NRMA submitted that the Recovery Proceedings were the “subject of a full contest on damages with the claimant giving evidence and being cross-examined and various evidence being tendered by the parties.” The NRMA contended that the judgment in the Recovery Proceedings created a binding estoppel as to the quantum of damages recoverable by the Claimant. Alternatively, it submitted that it would be an abuse of process, which would tend to bring the law into disrepute, to allow the Claimant to re-litigate quantum of damages. The NRMA’s contentions depended on the Claimant and the WC Insurer (including Allianz) being privies. The concept of privies is addressed below.
The NRMA argued that if the Claimant was entitled to damages as assessed by the Claims Assessor, it would follow that Allianz would recover substantially more than was determined by Truss DCJ in the Recovery Proceedings. It submitted that to allow the CARS assessment by the Claims Assessor to stand would be at odds with the principles of estoppel which, with a view to minimising the potential for embarrassment and inconsistency which can arise from multiple determinations of the same issue, operate to prevent the re-litigation of matters which have already been the subject of a determination by a competent tribunal.
The NRMA sought to distinguish Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 (addressed below) on which the Claimant relied in support of his submission that there was no privity of interest between him and Allianz. Further, the NRMA submitted, on the basis of “res judicata by way of an issue estoppel” that the judgment in the Recovery Proceedings relieved it of any liability, past or future, to pay Allianz any amount in excess of the amount determined in the judgment of Truss DCJ.

Consideration of the issue estoppel ground

The Recovery Proceedings were proceedings taken by Allianz to recover on a statutory indemnity workers compensation payments already made to the Worker (under s 151Z(1)(d)) and to establish the limits of the indemnity.

The nature of a claim on the statutory indemnity conferred by s 151Z(1)(d)

Section 151Z(1)(d) creates a separate cause of action which is different to that vested in the worker: WorkCover Queensland v Amaca Pty Ltd (2010) 241 CLR 420; [2010] HCA 34 at [14], [19] (French CJ, Gummow, Crennan, Kiefel and Bell JJ). The worker’s claim against the wrongdoer is a claim in tort which is complete when injury is suffered. The worker’s damages in tort are to be assessed as at the date of judgment: O’Brien v McKean (1968) 118 CLR 540 at 545 (Barwick CJ); [1968] HCA 58. By contrast, the employer’s right under s 151Z(1)(d) is a right to be indemnified by the wrongdoer for workers compensation payments made to the worker.

Wrongdoer’s liability must be proved

In an action under s 151Z(1)(d), the employer must prove that the wrongdoer was, at some point, liable to the worker (whether or not the wrongdoer is still liable at the time of the s 151Z(1)(d) proceedings). This liability is to be assessed at the time of the wrong which caused the compensable injury: see the authorities referred to by McColl JA in Workers Compensation Nominal Insurer v Nominal Defendant [2013] NSWCA 301; (2013) 64 MVR 542 at [66].
Thus, in Workers Compensation Nominal Insurer v Nominal Defendant, the employer’s insurer, Workers Compensation Nominal Insurer (WCNI), was held to be obliged, in an action pursuant to the s 151Z statutory indemnity, to prove that the identity of the unknown vehicle could not be established after due inquiry and search as required by s 34 since this was an element of the Nominal Defendant’s liability to the injured worker.

“Notional damages” must be found to determine the monetary limit of the statutory indemnity

Secondly, the court when determining a s 151Z(1)(d) claim must determine “notional damages”, being the amount that the worker would have recovered had the wrongdoer been sued by the worker. In this context the liability of the wrongdoer is, as was described by the High Court in WorkCover Queensland v Amaca Pty Ltd (at [26]), a “notional liability at common law [or under a statute other than the Workers Compensation Act] for pecuniary and non-pecuniary loss … having regard to limitations on the liability of the wrongdoer to the person who has received compensation” [Emphasis in original]. This second exercise is performed in order to determine the limits of the statutory indemnity. The “notional damages” are determined as at the time of judgment on the statutory indemnity claim.

The method by which a court approaches a claim pursuant to the statutory indemnity was outlined by Cole AJA (Mason P and Sheller JA agreeing) in Grant v Royal Rehabilitation Centre at [8]-[9]. His Honour said that the court must determine the quantum of common law damages which would have been recoverable had they been sued for; and the amount of compensation which has been paid. The determination of “notional damages” is necessary because it operates to limit the amount of the indemnity. His Honour explained the rationale for this process as follows, at [9]:

“It is not a proper exercise of the functions required by s 151Z(1)(d) for acourt to find, when an indemnity is claimed by an employer, merely that thesum so claimed is less than the amount which the worker would have recovered had he sued at common law. Subsection (1)(d) requires a determination of “the amount of those damages” as that limits the amount of the indemnity. There is sound reason why that should be so. Were it otherwise, on each application for an indemnity which may be brought years apart, it would be necessary for different judicial officers to determine the amount of common law damages to which the injured worker would have been entitled. Apart from practical difficulties, that would lead to multiplicity of litigation which might involve different judicial officers expressing different views regarding the quantum of such damage. The legislature plainly had in mind that there would be one determination of the quantum of common law damages which the injured worker would have recovered, which determination will be binding as between the employer paying compensation to the injured worker, and the wrongdoer. Thereafter, once that limiting figure is known, both the employer and the wrongdoer, or his insurer, will know the extent to which the indemnity provided by s 151Z(1)(d) is recoverable from the wrongdoer. Certainty is introduced in the first proceeding.”
[Emphasis added.]

Consideration of the issue estoppel ground

The categories of claims

This case turns on the question whether, and in what circumstances, there is a res judicata or issue estoppel which has the consequence that the result of a worker’s action in tort against the wrongdoer affects, or is affected by, the result of the determination of the employer’s statutory indemnity under s 151Z(1)(d).
In order to address the parties’ submissions it is necessary to have regard to the relevant authorities. I propose to do so in chronological order. However, before addressing these authorities I propose to list the various possibilities which may arise, in the context of s 151Z, in terms of the claims that may be brought which involve a worker, an employer and a (putative) wrongdoer arising from a work-related injury caused by the negligence of the putative wrongdoer and the authority, or decision, for each category. The possibilities include:

The employer sues the alleged wrongdoer under s 151Z(1)(d) and succeeds on liability before proceedings by the worker against the alleged wrongdoer have been determined (the present case);

The worker sues the putative wrongdoer and loses after a contested hearing before the employer sues the alleged wrongdoer under s 151Z(1)(d): Manners v Transfield (1992) 8 WAR 111 (Manners v Transfield);

The worker is, and always has been, disentitled, as a matter of law, from recovering damages from the alleged wrongdoer and the employer sues the alleged wrongdoer under s 151Z(1)(d): Tooth and Company Limited v Tillyer (1956) 95 CLR 605; [1956] HCA 49 (Tooth v Tillyer);

The dependants of a deceased worker cannot sue the alleged wrongdoer because of a limitation defence by the time the employer brings proceedings against the putative wrongdoer under s 151Z(1)(d): Tickle Industries Pty Limited v Hahn (1974) 130 CLR 321; [1974] HCA 5 (Tickle v Hahn);

The worker sues the alleged wrongdoer and the proceedings are resolved by agreement by a consent judgment in favour of the alleged wrongdoer: Government Insurance Office (NSW) v McDonald (1991) 25 NSWLR 492 (GIO v McDonald) and QBE Workers Compensation (NSW) Ltd v Dolan(2004) 62 NSWLR 42; [2004] NSWCA 458 (QBE v Dolan); and

The worker sues the alleged wrongdoer and wins before the employer takes any action on the statutory indemnity.

Tooth v Tillyer: category (3)

In Tooth v Tillyer, Mrs Tillyer, an employee, was prohibited by s 12 of the Married Women’s Property Act 1882 (NSW) from suing her husband as a result of injuries she sustained by his negligence. The High Court concluded that as the husband was, as a matter of law, not legally liable for his negligence towards his wife, the wife’s employer (Tooth) had no entitlement to an indemnity against the husband for the compensation it had paid to his wife.
The High Court said at 611-612:

“But the right which is given to the employer who has paid compensation rests on the existence for however brief a time of a true liability to pay damages to some person or persons in respect of the injury for which compensation was payable and has been paid. In that sense it is derivative . . . it is the existence of a liability which s. 64 (b) postulates, not a remedy, nor as already has appeared, the continuance or persistence of the liability.”
[Emphasis added.]

Category (3) is different from category (2) because it was the statute, the Married Women’s Property Act, which prevented the employer from ever being liable to the worker on the grounds that the employer and the worker were married. There was therefore no prospect that the employer could establish that the husband was liable to his wife in negligence as a matter of law.

Tickle v Hahn: category (4)

In Tickle v Hahn, Tickle Industries Pty Ltd (Tickle) paid $6,300 to the widow and child of one of its employees who died as a result of a motor car accident in the course of employment. Tickle sought to recover the sum from the driver (Hahn). By that time the dependants’ rights to bring an action against Hahn had expired. The High Court held that Tickle was entitled to an indemnity from Hahn notwithstanding that the right of action of the late employee’s widow and child had been extinguished by the passage of time.
Barwick CJ decided the case on the basis that the employer’s right against the wrongdoer Hahn was available irrespective of “the action or inaction of the employee [or his dependants]” (327-328). His Honour also considered that any compromise between the wrongdoer and the employee could not affect the wrongdoer’s obligation to indemnify the employer because the employer’s right to indemnity was an independent right. Barwick CJ said that if there had been a compromise for a lesser sum, then “an assessment of damages must be made, clearly not in an action by the workman but in an action by the employer” (at 331).

GIO v McDonald: category (5)

In GIO v McDonald, the injured worker had brought proceedings against the putative wrongdoer (the GIO) which were resolved by consent on the basis that, without admission, judgment would be entered in favour of GIO but that GIO would pay the plaintiff’s costs as assessed at $15,000. Subsequently, the employer (McDonald) sought to proceed against GIO under the statutory indemnity and relied on the statutory predecessor to s 151Z(1)(d) (s 64 of the Workers Compensation Act 1926 (NSW)). Following a trial by jury, the jury found that GIO had been negligent and that the worker had been guilty of contributory negligence amounting to one third. The jury assessed the worker’s damages at $819,000 and found that the workers compensation paid by McDonald amounted to $391,066.92. The trial judge directed entry of judgment for $530,383.92, inclusive of interest pursuant to s 94 of the Supreme Court Act. GIO appealed on the ground that it was not a person liable to pay damages to the injured worker as it had obtained judgment in its favour in the proceedings brought by the worker.
The Court of Appeal dismissed the appeal, on the basis of what Barwick CJ said Tooth v Tillyer at 611-612 (set out above). In GIO v McDonald, unlike in Manners v Transfield (see below), the issue of alleged privity of interest between the employer and the worker was not argued.

Manners v Transfield: category (2)

The NRMA relied on Manners v Transfield in support of its contention that Allianz and the worker were, relevantly, privies for the purposes of issue estoppel and abuse of process.
In that case a worker sued the driver of a motor vehicle (Manners) for damages in negligence and failed to establish that he was liable. Accordingly judgment was ordered in favour of the driver after a contested hearing. The employer (Transfield) then brought its own independent claim for statutory indemnity against the driver. The employer succeeded at first instance and the driver appealed.
The Full Court of Western Australia, by majority (Rowland and Murray JJ, Malcolm CJ dissenting), allowed the appeal on the basis that there was an issue estoppel between the worker and the driver (that the driver was not liable to the worker), which bound the employer.
The majority found that there was “sufficient” privity of interest between the employer and the worker in respect of the issue that the driver was not liable for the injuries for which compensation had been paid to the worker. Rowland J referred to Tickle v Hann and said, at 132:

“What flows from that case, relevant to the present, is that [the employer] must establish, first, a legal liability in [the driver] to pay damages to [the worker], arising from his negligence in causing the injuries the subject of the compensation payments. Relevantly, Tickle's case decides that that legal liability arises at the time of the injury. What also flows from Tickle's case is that [the employer] has a separate statutory cause of action and that cannot be affected in any way by the worker's later compromise of his right to damages, if that was the case, or giving the wrongdoer a discharge, if that was the case. Neither of these events occurred.
It seems to me, however, that the reasoning which led Barwick CJ to reach the conclusions in Tickle, that the condition of legal responsibility arises at the time of the injury being sustained, must also lead to the conclusion that that issue has been resolved by a court of competent jurisdiction and in this case it was resolved when the District Court dismissed [the worker’s claim for damages against [the driver].”
[Emphasis added.]

Murray J referred to Tooth v Tillyer and quoted from 612 where Dixon CJ, Williams, Webb and Fullagar JJ said that the employer’s right to indemnity:

“. . . rests on the existence for however brief a time on a true liability to pay damages to some person or persons in respect of the injury for which compensation was payable and has been paid. In that sense it is derivative.”
[Emphasis added.]

Murray J considered that the employer’s right to the statutory indemnity was “in a real sense, derivative from the right of the worker to recover damages” and that there was the relevant “identicality of interest” between the employer and the worker to make them privies.
Malcolm CJ, in dissent, would have dismissed the appeal on the basis that the employer’s cause of action for statutory indemnity against the putative wrongdoer was independent of the worker’s cause of action for damages against the driver. Malcolm CJ said at 121:

“The basic requirement of a privy in interest is that the privy must claim under or through the person of whom he is said to be a privy. A privy's position is necessarily derivative in that his claim or defence must be through or under that of the person of whom he claims or is asserted to be a privy. If the employer's action for an indemnity is independent and not derivative in this sense, it is difficult to see how the employer could be said to be a privy of the worker. Thus, if the employer's right of indemnity in respect of compensation is not defeated or limited by a settlement between the worker and the wrongdoer for an amount of damages less than the actual amount to which the worker would have recovered, had the action gone to trial, it becomes difficult to regard the employer as having privity in interest with the worker, in respect of the damages, as distinct from in respect of the compensation.”
[Emphasis added.]

Although GIO v McDonald was decided before Manners v Transfield, it was not referred to. The status of Manners v Transfield is important to the present case because of the reliance placed by the NRMA on the statements in the majority judgments that the employer’s statutory indemnity is a “derivative” of the worker’s claim and that there was “sufficient” privity between the worker and employer.
There are important differences between the present case and Manners v Transfield. In the present case, the WC Insurer brought proceedings on the statutory indemnity which were determined before the Claimant’s damages were assessed by the Claims Assessor; whereas in Manners v Transfield the employer sued on the statutory indemnity after the worker’s claim for damages against the driver had been determined by a judgment in favour of the driver. Further, liability was in issue in the worker’s claim against the driver; whereas there was no issue about the liability in negligence of the Driver (for which the NRMA was responsible) to the Claimant in the Recovery Proceedings.
Further, the result in Manners could have been arrived at without deciding that there was “sufficient” privity of interest between the employer and the worker, as it is explicable on a different basis. The alternative basis for the result in Manners was that the employer could not succeed against the driver because it could not establish the first limb of the statutory equivalent to s 151Z(1)(d): namely, it could not prove that the driver was “so liable” to the worker because the driver had a judgment in his favour against the worker. Whether this alternative analysis is correct has yet to be determined. It is unnecessary to determine it in the present case.

QBE Workers Compensation (NSW) v Dolan: category (5)

Manners v Transfield was considered by the Court of Appeal in QBE v Dolan. In that case, the worker commenced proceedings against his employer for compensation. Before those proceedings were determined, the worker commenced proceedings against the putative wrongdoer (Dolan), which were resolved on the basis that there would be a judgment for the putative wrongdoer, who would pay the worker’s costs of $4,000. Subsequently, the employer’s workers compensation insurer (QBE) brought proceedings under s 151Z(1)(d) against Dolan. Dolan argued that the judgment in his favour in the worker’s proceedings for damages meant that he did not have to pay on the statutory indemnity because he was not liable in negligence to the worker. Dolan succeeded at first instance. QBE’s appeal was upheld.
As in the present case, Dolan’s argument on the estoppel issue was based on the premise that QBE and the worker were privies in interest. Dolan relied on what was said in Tooth v Tillyer at 612 (in the passage extracted above) that the right given to the employer to claim indemnity under s 151Z(1)(c) was “derivative” and argued, on the basis of Manners v Transfield, that QBE was privy in interest to the claim brought by the worker.
Beazley JA (Mason P and Tobias JA agreeing) held that Manners v Transfield was not directly on point and decided that the result of QBE v Dolan should be governed by GIO v McDonald. Accordingly, the Court of Appeal held that there was no issue estoppel or res judicata which operated against QBE to prevent its recovering payments from Dolan under the statutory indemnity.
A further question arose in QBE v Dolan which did not need to be decided: namely, whether it would be open to an employer to sue a third party wrongdoer to obtain a different (higher) upper limit for the statutory indemnity if it was not satisfied with the amount of the damages awarded in an action by the worker against the wrongdoer. In response to Dolan’s submission that such a course would be open, Beazley JA said:

“If the majority is correct in Manners v Transfield that after adjudication by a court of competent jurisdiction there is sufficient privity to create an issue estoppel, then that is an answer to the respondent’s contention. It is certainly the answer that commends itself as a matter of common sense, and what one expects was intended by the legislature. However the boundaries of issue estoppel, consent judgments and privies has not been authoritatively determined: see Spencer Bower, Turner & Handley. The Doctrine of Res Judicata,3rd ed at [38].”
[Emphasis added in NRMA’s written submissions.]

I do not regard her Honour as endorsing the decision in Manners v Transfield. Indeed, her Honour expressly reserved the position, having not followed Manners v Transfield in the result.

Whether there is privity between the Claimant and the WC Insurer

In none of the cases referred to above, with the sole exception of Manners v Transfield, has there been found to be an issue estoppel or res judicata on the basis of “sufficient” privity of interest between the worker and the employer. It is difficult to reconcile the majority decision in that case with the principles relating to issue estoppel and res judicata.
Mr Robinson SC who appeared with Ms Gumbert and Mr Maroya for the NRMA, accepted that the only basis for such an estoppel was that the WC Insurer and the Claimant were privies.

The relevant principles for determining whether a person is privy to a party

A privy is someone who has the benefit and bears the burden of a res judicata or issue estoppel, Thus, anyone on whom the rights and obligations of a legal entity devolve, such as an executor, administrator or trustee in bankruptcy or a purchaser or assignee, may be a privy: Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853, 909-910. The relevant principles were summarised in KR Handley, Spencer Bower and Handley Res Judicata (4th ed, 2009, LexisNexis) in the following terms at [9.38]:

““Privies include any person who succeeds to the rights or liabilities of a party on death, insolvency, by assignment or by statute, or who is otherwise identified in estate or interest. The party estopped by privity must have some interest, legal or beneficial, in the previous litigation or its subject matter, and accordingly assignees are privies of the assignor. Privity was described by the US Supreme Court as a mutual or successive relationship to the same right of property, although this cannot be exhaustive. Privity is a matter of substance, not form.”

The principles governing privity of interest were stated in Ramsay v Pigram (1968) 118 CLR 271; [1968] HCA 34. In that case, Pigram brought proceedings in the Supreme Court for damages in negligence against Ramsay (the Nominal Defendant) arising from injuries he sustained in a motor vehicle accident when he was involved in a collision with a vehicle driven by a police officer in the course of his duties. The police officer (Thrift) had previously sued Pigram in the District Court for damages arising from the same collision. Pigram pleaded contributory negligence. The District Court proceedings were determined by a jury which returned a verdict for the police officer. The verdict necessarily indicated that the jury was not satisfied that the police officer had been guilty of contributory negligence, it being a complete defence at that time. In the subsequent action brought by Pigram, Ramsay argued that Pigram’s claim was defeated by an issue estoppel arising from the earlier proceedings on the basis that Ramsay and the police officer were privies.
The High Court (Barwick CJ, McTiernan, Kitto, Taylor and Windeyer JJ) found that there was no privity of interest between Ramsay and the police officer. Barwick CJ, Mr Tiernan and Windeyer JJ also found that the issues in the two proceedings were not identical. In the earlier proceedings in which the police officer had been the plaintiff, the issue was whether the police officer owed a personal duty towards Pigram. In the second proceedings the issue was whether the Government (for the liability of which Ramsay, as the Nominal Defendant, was responsible) owed a duty to Pigram. The Court found that there was no privity of interest between Ramsay or the Government and the police officer and that, therefore, neither Ramsay nor the Government was a privy of the police officer.

The principles established by Ramsay v Pigram were applied by the High Court in Tomlinson v Ramsey Food Processing on which the Claimant relied. In Tomlinson v Ramsey Food Processing, workers formerly employed by Ramsey Food Processing (RFP) complained to the Fair Work Ombudsman when RFP terminated its contract with the labour-hire company, T, by which they were employed following the termination of their employment with RFP. The Ombudsman brought proceedings against RFP to enforce the award in favour of the workers. The Federal Court held that RFP had been the true employer; that T had been its agent; and the interposition of T had been a sham.
Subsequently, one of the workers sued RFP in the District Court claiming damages in negligence for injuries he had sustained while working in the abattoir. The worker argued that T was his employer but that RFP owed him a duty of care. If RFP had been the worker’s employer, the worker’s claim would have been prohibited by statute. RFP argued that the worker was estopped by the orders made in the Federal Court proceedings from denying that RFP was his employer.
The High Court in Tomlinson v Ramsey Food Processing held that the orders made by the Federal Court did not create an issue estoppel as the worker was not a party to the proceedings and the Ombudsman did not represent the legal interests of the worker so as to give rise to an estoppel. The Ombudsman had been enforcing the award pursuant to his statutory functions and was not enforcing the worker’s entitlements on his behalf.

The application of the privy principles to the present case

For the reasons given in more detail below, I consider that Tomlinson v Ramsey Food Processing is not relevantly distinguishable from the present case. Allianz was enforcing the statutory indemnity in its favour when it brought the Recovery Proceedings; it was not bringing a claim on behalf of the Claimant. Its interests were distinct from his. The issues in the Recovery Proceedings were materially different from the issues involved in the Claims Assessor’s assessment of the Claimant’s damages, as were the parties. Although in both matters there was a consideration of the Claimant’s damages, in the Recovery Proceedings this assessment was notional and was assessed as at the date of judgment of the Recovery Proceedings, which were within the control of the WC Insurer. Applying the principles in Ramsay v Pigram, there is no, or insufficient, privity of interest between the Claimant and the WC Insurer.
The decision in GIO v McDonald turned on questions of statutory construction and flowed from the dicta in Tooth v Tillyer. It is also consistent with the principles of res judicata and issue estoppel. The proceedings in the District Court brought by the worker against the driver (the GIO) created a res judicata between the worker and the GIO. The employer (McDonald) was not a party to those proceedings and therefore there was no res judicata which affected it. Nor was the employer inhibited by any issue estoppel or concepts of abuse of process. It was permitted to litigate the issue whether the driver had at some point of time a liability in negligence to the worker, that issue not having been determined in proceedings in which it had been a party.
It is difficult to see how there could be any privity of interest between the Claimant and the WC Insurer given their different interests and their different causes of action against the NRMA. The conclusion of the majority in Manners v Transfield rested, at least in part, on the description by the High Court in Tooth v Tillyer of the employer’s claim for statutory indemnity being “derivative” of the worker’s claim. However, the word “derivative” was used in that case to reason that because the employer was not, and could never have been, liable to the worker, the employer could not establish the first element of its claim for statutory indemnity. The High Court in Tooth v Tillyer did not find the worker and her employer to be “privies”. Indeed, it was the difference between their causes of action which led Malcolm CJ, who dissented in Manners v Transfield, to conclude that there was no privity between the worker and the employer.

The application of the principles of procedural fairness

There is a further reason to reject the analysis for which the NRMA contended in the present case. A conclusion that the Claimant was the privy of the WC Insurer would be antithetical to the principles of natural justice. The Claimant would, if the conclusion were accepted, be bound by the result of proceedings in which he had no opportunity to be heard as a party. His only participation in those proceedings was as a witness. The right to procedural fairness in these circumstances could only be removed by express statutory words or necessary implication: Coco v The Queen (1994) 179 CLR 427; [1994] HCA 15, applied in the context of procedural fairness in Kioa v West (1985) 159 CLR 550 at 609 (Brennan J); [1985] HCA 81; see also Saaed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23 at [11]-[15] (French CJ, Gummow, Hayne, Crennan and Kiefel JJ). There is no indication in either the Workers Compensation Act or the Motor Accidents Compensation Act of any such legislative intention.
The heads of damage for which Allianz contended in the Recovery Proceedings did not include several heads of damage which the Claimant claimed against the NRMA, such as damages for non-economic loss, past and future treatment, past gratuitous care and future commercial care. Mr Robinson was unable to articulate on what basis the Claimant would be prevented from claiming damages under these heads if the NRMA’s argument about privies were accepted. There was no necessary coincidence of interest between the interests of the WC Insurer and those of the Claimant. The Claimant did not claim “under or through” his employer: his claim for damages against the wrongdoer was independent of his employer’s claim on the statutory indemnity and did not depend on his being employed at all.
It is both instructive and important that Grant v Royal Rehabilitation Centre did not find that the determination of notional damages for the purposes of an action on the statutory indemnity was binding on the “injured worker” but rather that it was binding on the employer paying workers compensation to him and the wrongdoer. The reasons for this are obvious. A worker injured by the negligence of a third party (who is not his or her employer) is entitled to have his or damages assessed as at the date of judgment. An employer (or employer’s insurer) is entitled bring a recovery action before a worker’s damages have been determined. A finding made in such proceedings is necessarily speculative because it is, by definition, made in advance of the determination of the worker’s actual damages upon determination of the worker’s claim against the wrongdoer (or the wrongdoer’s insurer).
The following example illustrates the point. A worker sustains a neck injury by reason of the negligence of a driver. The employer’s insurer pays workers compensation benefits to the worker and brings recovery proceedings under s 151Z(1)(d) against the driver’s insurer. At the time of the recovery proceedings, the worker proposes to have surgery for his neck which is likely to be successful and restore his neck to full function. The court in the recovery proceedings determines the worker’s likely damages for his claim against the driver on the basis that the surgery is likely to be successful and assesses them at $200,000. The court in the recovery proceedings enters judgment for $150,000, being a full indemnity for the employer’s insurer for all the workers compensation payments it has made to the worker. After judgment in the recovery proceedings has been entered, the worker has the surgery which, though conducted non-negligently, renders the worker a paraplegic. The worker’s claim against the driver is heard and determined three years after the surgery, when the worker’s capacity and function have stabilised. The court awards the worker $6 million, being its assessment as at the date of judgment of the worker’s damages.
If the NRMA’s submissions were accepted, the worker’s damages, in the above example, would be limited to $200,000 (or $196,800 in the present case) because the worker and his employer were “privies” with the consequence that the issue estoppel as to the limit of the indemnity bound not only the employer but also the worker.
Manners v Transfield is distinguishable, since it turned on liability rather than damages. Accordingly, it did not address the question whether, as in the present case, if the wrongdoer accepted liability, the damages assessed in proceedings by the worker against the wrongdoer would be limited to the “notional damages” found in the Recovery Proceedings. It is, accordingly, not necessary to express a final view about the result in Manners v Transfield. However, for the reasons given above, I reject the submission that there is “sufficient” privity between the Claimant and the WC Insurer in the present case to make the result of the Recovery Proceedings binding on the Claimant.

Summary of analysis of the cases and the application of the principles to the present case

All the cases referred to above are consistent with the following principles of res judicata and issue estoppel. In each of these principles, “party” includes a “privy” to the party. The principles are:

parties to proceedings are bound by judgments between them and essential issues decided in proceedings to which they are parties;

where a party could have made a claim against the other party to proceedings, but did not, the party will not be permitted, in further proceedings, to raise the claim since this would amount to an abuse of process: Port of Melbourne Authority Pty Limited v Anshun (1981) 147 CLR 589; [1981] HCA 45;

as between the same parties, an issue estoppel will arise in subsequent proceedings on a different cause of action to prevent re-litigation of an issue already determined between them in previous proceedings: Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110;

persons who were not parties to such proceedings are not affected except to the extent that a party to such proceedings is estopped from re-litigating in new proceedings against a different party an issue on which it was unsuccessful in previous proceedings since this, too, would amount to an abuse of process: Rippon v Chilcotin (2001) 53 NSWLR 198; [2001] NSWCA 142.

As referred to above, the majority in Manners v Transfield considered the principle in (3) to be applicable only on the basis that the employer and worker had sufficient privity of interest for the principle to apply. The application of these principles has the following consequences for the different categories I have identified above.
In scenario (1) (which includes the present case), an employer who establishes that the wrongdoer’s negligence caused the worker’s injury is entitled to judgment for the amount of the payments to the date of judgment under the statutory indemnity: s 151Z(1)(d). The employer will be entitled to further payments from the wrongdoer under the statutory indemnity up to the limit of the notional damages which the court in those proceedings has determined. The worker’s damages are not limited to the “notional damages” and will, if the worker sues the wrongdoer, be determined as at the date of judgment of the worker’s proceedings.
Scenario (2) was the case of Manners v Transfield. For the reasons given above, it is not necessary to address it further.
In scenario (3), the consequence for the employer is that it will not be entitled to recover on the statutory indemnity as the worker has never had any legal right to recover damages from the wrongdoer and therefore liability cannot be established as an element of the cause of action on the statutory indemnity: Tooth v Tillyer. Therefore any action on the statutory indemnity would be futile since, as a matter of law, the employer could not establish that the husband could ever have been liable to his wife.
In scenario (4), the employer would still be entitled to sue on the statutory indemnity as in Tickle v Hahn, notwithstanding that no action of damages could succeed against the wrongdoer.
In scenario (5), the employer would still be entitled to sue on the statutory indemnity as in GIO v McDonald and QBE v Dolan. It is not bound by the consent judgment between the worker and the wrongdoer and is entitled to judgment on the statutory indemnity as long as it can establish that the worker suffered an injury as a result of the wrongdoer’s negligence and can recover workers compensation payments made up to the limit of the damages which the court in those proceedings finds would have been recoverable had they been sued for by the worker. It appeared to be accepted that scenario (5) would occur in cases where a worker, having initiated proceedings to recover lump-sum damages, thought better of it and decided that it was preferable to continue to receive workers compensation payments than to relinquish the right to receive such payments, as would occur if an award of damages was made.
In scenario (6), the worker would be obliged to pay to the employer from the damages any amount referable to workers compensation payments because the worker is not entitled to retain both damages and compensation s 151Z(1)(b).
The matter to which Beazley JA adverted at [56]-[59] in QBE v Dolan, whether an employer who is dissatisfied with the quantum of damages awarded to a worker in the worker’s claim against the wrongdoer can bring an action on the statutory indemnity to have the notional damages (and therefore the limit of the statutory indemnity) determined at a higher figure, has yet to be determined.
The interest of an employer in a worker’s claim against the wrongdoer has, in some cases, led the employer to have its claim under the statutory indemnity heard together with the worker’s claim against the wrongdoer: see, for example Kay v Sydney Airport Corporation Ltd [2014] NSWSC 744. In such cases, there is only one assessment of the worker’s damages since the fact that the proceedings are heard together obviates the need for a notional assessment to be made for the purposes of determining the limit of the statutory indemnity since the limit corresponds to the damages as assessed on the worker’s claim. The procedure adopted in Kay v Sydney Airport Corporation Ltd is not available where the worker’s claim is determined by a CARS assessor rather than by a court. There is no provision in the Act which contemplates that the employer would be entitled to participate in the CARS assessment process.

Conclusion

The Claimant is not bound by the finding as to the notional damages in the Recovery Proceedings because he was neither a party nor privy to a party in those proceedings. There is no applicable issue estoppel. What the court in recovery proceedings is required to determine, as Cole AJA said in Grant v Royal Rehabilitation Centre, is the quantum of common law damages which would have been recoverable had they been sued for measured at the date of the recovery proceedings. This is a different question from the quantum of common law damages actually recoverable by the worker when he or she sues for them, which are measured from the date of judgment in those proceedings.
The effect of the judgment in the Recovery Proceedings is to create a res judicata between the Employer and Allianz (who are relevantly privies) and the Driver and the NRMA (who are also relevantly privies) as to the payments to the date of judgment and an issue estoppel as to the limit of the statutory indemnity, being the notional damages determined in those proceedings. Thus, irrespective of the assessment by the Claims Assessor, the limit of the statutory indemnity is $196,800, as found by Truss DCJ in the Recovery Proceedings. The Claimant, though a witness in the Recovery Proceedings, was neither a party nor a privy. Therefore there is no res judicata or issue estoppel against him arising from the Recovery Proceedings. The Claims Assessor was, accordingly, both entitled and obliged to assess the Claimant’s damages without regard to the limitation on the statutory indemnity which bound the NRMA and the WC Insurer.
It follows that the NRMA has not made out the issue estoppel ground.

Legislation relevant to the neck and economic loss grounds

Before turning to the remaining grounds I propose to summarise the applicable legislation in so far as it is relevant to them.
Part 3.4, “Medical Assessment” provides for certain matters (“medical assessment matters”) to be referred to medical assessors. Such matters include whether the degree of permanent impairment of the injured person as a result of the injury caused by the motor accident is greater than 10%: s 58(1)(d). Following an assessment, a medical assessor is required to give a certificate, which is conclusive evidence as to the matters certified in any court proceedings or assessment by a claims assessor: s 61(1). This provision is subject to exceptions, none of which is presently relevant.
Section 94(1)(b) requires a claims assessor to make an assessment of “the amount of damages . . . (being the amount of damages that a court would be likely to award).” The assessment is to be made having regard to such information as is conveniently available: s 94(2). The assessment is to specify an amount of damages: s 94(3). The claims assessor is to issue a certificate as to the assessment to which is attached a brief statement of the reasons for the assessment: s 94(4) and (5). It was accepted that the assessment is binding on the parties, subject to the proceedings in this court for judicial review: s 95.
Those performing functions as claims assessors have been appointed by SIRA and are regarded by it as being “suitably qualified”: s 99. Section 104 provides for hearings before claims assessors. Section 104(4) relevantly provides:

“(4) A claims assessor must take into account any written submission prepared by an Australian legal practitioner acting for a party to the assessment and submitted by or on behalf of the party . . .”

Section 106 provides that claims assessments are subject to the relevant provisions of the Claims Assessment Guidelines (the Guidelines). It was common ground that the applicable Guidelines were those dated 1 May 2014.
Chapter 5, entitled “Awards of Damages”, modifies the common law principles relating to assessment of damages. It contains s 122(3) which provides:

“This Chapter [Chapter 5] applies to and in respect of the assessment of damages by a claims assessor under Part 4.4 in the same way as it applies to and in respect of an award of damages by a court.”

Section 126, which is also contained in Chapter 5, provides:

“126 Future economic loss—claimant’s prospects and adjustments
(1) A court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant’s most likely future circumstances but for the injury.
(2) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury.
(3) If the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.”

Clause 16.2 of the Guidelines relevantly provides that the claims assessor is to take such measures as are reasonably practicable to ensure that the parties have an opportunity to have their submissions considered: cl 16.2.3.

Clause 18.4 of the Guidelines provides:

“18.4 A certificate under section 94 or 96 is to have attached to it a statement of the reasons for the assessment. The statement of reasons is to set out as briefly as the circumstances of the assessment permit:
18.4.1 the findings on material questions of fact;
18.4.2 the Assessor's understanding of the applicable law if relevant;
18.4.3 the reasoning processes that lead the Assessor to the conclusions made; and
18.4.4 in the case of an assessment certificate pursuant to section 94, the Assessor must specify an amount of damages and the manner of determining that amount.”

The neck ground

This ground requires consideration of the Claims Assessor’s reasons. The NRMA contended that the Claims Assessor misapprehended the NRMA’s concession in respect of the Claimant’s neck and “took a short cut” and did not undertake a legal assessment of causation as he was required to do. Mr Robinson submitted that this error was one which was evident from the face of the record, which included the reasons of the Claims Assessor.

The Claims Assessor’s reasons

In order to address this ground it is necessary to set out the Claims Assessor’s reasons in relation to the Claimant’s neck, which are as follows:

“WHAT IS THE NATURE AND EXTENT OF THE CLAIMANT'S INJURIES?
37.   The parties agreed that there are two main body parts for assessment by me, namely injury to the neck and injury to the lower back.
38.   The issues are whether the Claimant's complaints of injury to the neck and back arose directly from the subject accident and/or are an aggravation of pre-existing injuries. Depending upon my assessment of the causation of these injuries and each of those injuries or lack of them give rise to further assessments of damages for all other heads of damages.
Did the Claimant suffer an injury to the neck arising from the subject accident?
39.   The Claimant's injuries and initial treatment were described by Truss J in her judgement previously referred to [the reasons in the Recovery Proceedings were set out by the Claims Assessor when addressing the estoppel ground.
. . .
44.   The Claimant had been in the course of his employment when the subject accident occurred, and he completed a Workers Compensation Claim Form on 3 November 2005 (2 months post-accident) describing his injuries as lower back and "slight neck".
45.   He completed a Motor Accident Claim Form on 6 January 2006 (4 months post-accident) at which he listed his injuries as left sided neck, muscle and ligament injuries and lower back injuries.
46.   The Claimant submits that prior to the motor vehicle accident he had no symptoms in his neck and that that evidence had not been challenged. That does not seem to be the case from the evidence as submitted by the Insurer.
47.   At times in his earlier treatment post-accident it appears that his lower back pain sometimes overwhelmed his neck pain and thus may have led to different histories being taken by various treating doctors and hospitals.
48.   Ultimately the Clamant was assessed by MAS Assessor Long in August 2014 who accepted that there had been an injury to the neck in the accident of 31 August 2005. However he believed the neck symptoms had resolved prior to a subsequent motor vehicle accident on 2 September 2006 when he thought the Claimant's neck was again injured. The Claimant submits that that conclusion ignored evidence that the Claimant continued to complain of neck problems throughout the period between the accident and 2 September 2006.1 accept that submission.
49.   In fact, the assessment of Assessor Long was disputed by the Claimant and the issue of causation with respect to the issue of the cervical spine was successfully reviewed by the Proper Officer on the basis that there was a reasonable cause to suspect that the medical assessment was incorrect in a material respect.
50.   The cervical spine was further assessed by Dr Terry Coyne who certified in January 2017 that "the cervical spine disc or other soft tissue injury/aggravation of pre-existing asymptomatic cervical spine degenerative change" was caused by the accident and gave rise to a Whole Person Impairment of 25% for which there was no deduction for pre-existing or subsequent causes.
51.   There was considerable medical history of the Claimant's treatment for his neck complaints. For example the Claimant was examined by Dr James Bodel on behalf of Allianz some ten weeks after the accident. At that time Mr Lucic gave a history that he was aware of immediate onset of pain in the neck as well as his back but that his neck was his main area of complaint. Dr Bodel made note of the severe pain in Mr Lucic's back radiating down his right leg. He also noted the early morning stiffness and intermittent neck pain. Dr Bodel saw the Claimant again in July 2008 and at that stage opined that the Claimant had suffered a disc injury at the lumbosacral junction and a minor disc injury in the cervical region as a result of the subject accident.
52.   As previously noted the Claimant continued to be treated by Dr Gerry Day who ultimately concluded in 2012 that Mr Lucic should undergo neck surgery namely an interior cervical discectomy and total disc replacement.
53.   Allianz disputed the need for surgery although they accepted that the accident had at least aggravated injuries to the neck.
54.   Ultimately an approved medical specialist appointed by the Workers Compensation Commission, Dr Bookallil was satisfied that the surgery was reasonable and necessary and that it was a result of the subject accident. Dr Bookallil considered the important matters to be that there was no prior history of neck pain and that there had been problems ever since the 2005 accident. As a result of Dr Bookallil's report the Workers Compensation Insurer, Allianz was ordered to pay the costs of the surgery which took place on 19 February 2013.
55.   Although Dr Day initially thought that there was about a 50% chance of the surgery being successful, Mr Lucic reports that the surgery has bought significant symptomatic improvement.
56.   Both parties made extensive submissions with respect to the Claimant's neck region but ultimately the Insurer accepts that the neck injury was caused by the subject accident and that any claim for non-economic loss relates only to the neck region and not the back. They further submit that the evidence of the Claimant, his treating surgeon Dr Day, and that of their own experts, is that the Claimant's neck problems have now mostly resolved and that this impacts upon the heads of damage.
57.   Ultimately this will require further assessment from me.”
[Emphasis added to indicate the passage on which the NRMA particularly relied.]

The Claims Assessor addressed the Claimant’s lumbar spine, with some reference in passing to the cervical spine. He returned to the issue of causation with respect to the cervical spine as follows:

“92.   The Claimant submits in their written and oral submissions at the assessment that I should accept with respect to the neck injury that the subject accident was the cause. In particular they rely on the numerous reports of treating neurosurgeon Dr Day who had the benefit of treating the Claimant before and after the accident along with the subsequent accident on 2 September 2006. Further that I should have regard to the reports of Dr Bodel qualified on behalf of the Insurer Allianz who examined the Claimant just after the subject accident and the approved medical specialist appointed by the Workers Compensation Commission, Dr Bookallil, who was satisfied that the surgery was reasonable and necessary.
93.   They also note that MAS Assessor Long accepted that there was an injury to the neck although he believed, against the weight of contemporaneous medical evidence, that the neck symptoms had resolved prior to the subsequent accident on 2 September 2006.
94.   MAS Assessor Coyne made the conclusions as set out in paragraph 50 above.
95.   The Insurer relies on the clinical notes of treating GP Dr Gupta who only make reference to "slight neck problems' and further, that at times Dr Day did not make any reference to neck pain only lower back pain.
96.   They rely on the conclusions reached by Dr Maxwell, Dr Coroneos, Dr Mills and Dr Rogers that so far as the cervical spine is concerned the Claimant suffered a soft tissue injury against a background of age related degenerative changes, with his ongoing problems and in particular need for surgery, being unrelated to the subject motor vehicle accident.
97.   They further submit that on close analysis there is no convincing evidence that the variable neck problems which occurred in the years subsequent to the motor vehicle accident can be simply attributed sole to the soft tissue consequences of that accident.
98.   In reply by way of oral submissions the Claimant notes that the Insurer does not address the conclusions reached by Dr Day who has no difficulty concluding that the subject motor vehicle accident was the cause of the Claimant's neck problems. Further that all of the doctors that the Insurer relies on have failed to take a correct history.
99.   With respect to the neck injury I have no difficultly in therefore accepting the assessment of MAS Assessor Coyne and the conclusions reached as set out in paragraph 50 above previously referred to noting his assessment of Whole Person Impairment at 25% which is a very substantial impairment.”
[Emphasis added to indicate the passage on which the NRMA particularly relied.]

The nature and extent of any concession made by the NRMA as to a causal connection between the motor vehicle accident and an injury to the Claimant’s neck

After the first day of hearing before the Claims Assessor, the NRMA provided written submissions dated 9 July 2018 in which it said, under the heading “Causation – cervical spine”:

"34. The position so far as causation of the claimant's cervical problems is obviously more fact‑sensitive, given that there is no history of significant prior problems in that area. Nonetheless, there was clearly pre‑existing degenerative change in the cervical spine."

In these submissions, the NRMA addressed the various histories given by the Claimant from time to time in relation to neck problems and concluded:

“46. . . . On close analysis, there is no convincing evidence that the variable neck problems which occurred in the year subsequent to the motor vehicle accident, can be simply attributed to the soft tissue consequences of that accident.”

Later in these submissions, the NRMA submitted, under the heading “Alternative Findings as to Causation”:

"60. It is the insurer’s submission that the Assessor would regard neither the neck nor the claimant’s back problems as causally related to the subject motor accident other than for a brief period of aggravation following the event.
61. If, contrary to the insurer's submissions, one were to regard the neck as causally related to the accident, it is clear that the neck does not incapacitate the claimant in any real sense. As such, it does not give rise to any impaired earning capacity, nor need for domestic assistance or ongoing treatment. On any view of it, the claimant has made a good recovery and, at the very most, his neck causes minor, low grade problems."
[Emphasis added.]

In oral submissions before me, Mr Robinson said of [61] at tr. 22.11-.17:

“That's the extent of any actual admission ‑ if it's called an ‘admission’ ‑ that something might have happened for a few weeks, for a short time, something might have been aggravated, that is, his pre‑existing degenerative change might have been aggravated for a little while. We're talking years after the accident. The accident was August 2005. We're in 2018, discussing this. We conceded a small soft tissue, perhaps aggravation and that's it, and it became something different.”

In support of its contention that the NRMA had not, at any stage, conceded that the Claimant’s “alleged neck injury was caused by the subject accident on 31 August 2005”, the NRMA read the affidavit of Jane Faulks affirmed 18 April 2019. The deponent, a Senior Claims Manager, was present at the two day hearing before the Claims Assessor. She was cross-examined by Mr Stone SC, who appeared with Mr McManamey for the Claimant, including by reference to comprehensive hand-written notes which she made over the two days of hearing. I accept, on the basis of Ms Faulks’ evidence, that the Claims Assessor asked the parties to provide written submissions following the conclusion of the second day of hearing in which they addressed issues of compensation relating to the neck and back, separately and together, by reference to the submissions on causation. The following exchange between Mr Stone and Ms Faulks occurred in the present proceedings:

“Q. The point of your affidavit is to say that nowhere did Mr Catsanos [who appeared for the NRMA at the hearing before the Claims Assessor] make any concession in relation to causation and the neck injury?
A. The totality of the claimed neck injury and causation.”

On 3 September 2018, after the second day of the hearing before the Claims Assessor, the NRMA sent a written submission, as requested by the Claims Assessor, in which it said of present relevance:

"So far as the claimant's neck is concerned, the insurer contends that, for the reasons outlined in paragraphs [36]-[46] of its Submissions in Reply dated 9 July 2018, any aggravation had ceased by 10 April 2006 (R35) and (R36) when the problems with the neck were not, on the face of it, the subject of any complaint or clinical abnormality."

On a fair reading of the NRMA’s submissions to the Claims Assessor, I am satisfied that the NRMA accepted that the Claimant had suffered a transient injury to his neck in the motor vehicle accident, the effects of which had ceased by 10 April 2006, less than a year after the accident. However, the NRMA contended that the substantial neck problems in respect of which the Claimant sought to be compensated were not caused by the accident.

Consideration of the neck ground

Mr Robinson submitted that the Claims Assessor’s use of the word “ultimately” in paragraph [56] of the reasons was a powerful indication that the Claims Assessor regarded the acceptance by the NRMA as dispositive of the Claimant’s claim arising from an injury to his neck. He contended that the length of the reasons relating to the Claimant’s back, which followed paragraph [56] indicated that the Claims Assessor understood that, while there were substantial issues of causation regarding the Claimant’s back, the issues relating to the Claimant’s neck had been resolved by the NRMA’s concession.
I am not persuaded by this submission. I regard the Claims Assessor’s use of the word “ultimately” as indicating no more than that, whatever may have been the position before the conclusion of the hearing and final submissions, the NRMA accepted there had been at least some injury to the Claimant’s neck in the accident. If, as Mr Robinson contended, the Claims Assessor regarded the neck injury as a matter that had been resolved by the NRMA’s concession, it is difficult to see why the Claims Assessor reviewed the evidence and submissions relating to the Claimant’s neck in the context of causation at paragraphs [92]-[98]. I regard these paragraphs as constituting a detailed consideration of the evidence, including the assessments made by Medical Assessment Service (MAS) assessors, leading to the finding at paragraph [99].
It is of significance that, in paragraph [50] of the reasons, the Claims Assessor summarised the assessment by Dr Coyne, a MAS assessor, whose opinion was that the accident had caused a WPI of 25% “for which there was no deduction for pre-existing or subsequent causes”. The Claims Assessor was bound by what was in Dr Coyne’s certificate. It was common ground that the Claims Assessor was bound to make an award for non-economic loss on the basis of Dr Coyne’s certificate that the degree of permanent impairment was greater than 10%: Brown v Lewis (2006) 65 NSWLR 587; [2006] NSWCA 87 at [21] (Mason P). The Claims Assessor was not bound by Dr Coyne’s reasons. However, the Claims Assessor was entitled to take into account Dr Coyne’s reasons in deciding for himself whether the Claimant had established a causal link between the substantial neck problems and the accident. In substance, the Claims Assessor, as his reasons indicate, accepted the opinions of Drs Day and Coyne as to causation with respect to the Claimant’s neck. By reason of s 58(1)(d) and s 61(2), the Claims Assessor was entitled to regard Dr Coyne as having accepted the causal link between the neck impairment which he found and injuries sustained by the Claimant in the accident, as required by s 58(1)(d).
Mr Robinson also placed emphasis on the words “I have no difficulty therefore” in paragraph [99] of the reasons. I regard these words as apt to import an acceptance of the Claimant’s submissions set out in the previous paragraph as well as an acceptance of the opinions of Drs Day and Coyne. I do not regard the Claims Assessor’s findings as resting on the minor concession made by the NRMA referred to above. His reasons indicate that he weighed the evidence adduced by both parties and considered their submissions before preferring, and accepting, the evidence of Drs Day and Coyne to the evidence adduced by the NRMA.
In the alternative, the NRMA submitted that the Claims Assessor had denied it procedural fairness by failing to respond to the NRMA’s causation argument. It relied on Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 at [24] and Rodger v De Gelder[2015] NSWCA 211; (2015) 71 MVR 514. In Rodger v De Gelder, the Court of Appeal found that a medical panel had made a jurisdictional error and failed to accord procedural fairness when it failed to engage with, or respond to, a substantial argument based on the circumstance that the claimant had made a contemporaneous complaint of the onset of pain in his thoracic spine resulting from the accident. For the reasons given above I am not satisfied that the Claims Assessor’s approach reveals any denial of procedural fairness or other error of law. It is plain from the reasons that he considered the NRMA’s arguments, submissions and evidence to the effect that the Claimant had suffered, at best, a transient injury to his neck as a result of the accident and rejected them, preferring instead the evidence of Drs Coyne and Day, not only as to impairment but also as to causation.
The NRMA has failed to make out the neck ground.

The economic loss grounds

It is convenient to address these grounds together although there are differences between the ground relating to past economic loss and the ground relating to future economic loss.
The NRMA submitted that the Claims Assessor failed to comply with either s 94(5) or cl 18.4 of the Guidelines with respect to the awards for either past or future economic loss and failed to set out his actual path of reasoning for the awards, as he was required to do: Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [55]. The NRMA contended that the Claims Assessor made findings neither regarding the Claimant’s likely work but for the accident nor whether the Claimant had any residual work capacity following the accident.
The NRMA identified the following matters, which it described as “critical integers” (referring to Zahed v IAG Limited t/as NRMA Insurance [2016] NSWCA 55; (2016) 75 MVR 1 at [8] (Leeming JA)) for an award of past economic loss:

“(a) If the claimant was not going to work continuously from the date of the accident to the present time, for what periods would he have likely worked?
(b) If the claimant has a retained earning capacity, what has it been from the date of the accident to the present time?”

The Claims Assessor’s reasons

As with the neck ground, these grounds require consideration of the Claims Assessor’s reasons in relation to the awards for past and future economic loss.

“WHAT IS THE CLAIMANT'S PAST ECONOMIC LOSS?
136.   The Claimant relies on the reports of Mark Thompson of Vincents dated September 2014 and September 2017. Mr Thompson notes from January 2004 Mr Lucic was self-employed as a courier driver which he continued up until the date of accident. He noted that he was previously trades qualified as a motor mechanic and had plans to become a long distance truck driver.
137.   He noted the Claimant had not worked since the accident.
138.   He prepared his report on the basis of three scenarios namely that but for the accident Mr Lucic would have continued to be self-employed as a courier driver, or that he would be self-employed as a truck driver, or that he would have been self-employed as a motor mechanic.
139.   Mr Thompson proceeds on the basis that the 2005 financial year represents the only full year in which Mr Lucic worked as a courier driver and that as a result his taxable income for that full year was $40,602 Mr Lucic only worked a few weeks into the 2006 financial year before he had his accident.
140.   Based on scenario one, that is continuing as a courier driver, Mr Thompson calculates that Mr Lucic's notional weekly earnings after tax as at date of the accident was $643.58. Mr Thompson then adjusts that figure for CPI increases such that the calculation as at 24 September 2018 is $568,542.16.
141.   The Insurer relies upon the report of Mark Bland forensic accountant with Moser Bland and Co dated May 2018.
142.   Mr Bland opines that Mr Lucic has overstated his historical earnings in only using the 2005 financial year as a starting point given that the Claimant had no clear pattern of employment or even occupation in the five years prior to the subject accident. Accordingly, Mr Bland has calculated an average in the Claimant's weekly earnings in the preceding five years which is $309.34 net per week.
143.   As a long-distance truck driver or motor mechanic the Claimant may have received higher remuneration as calculated by Mr Thompson although the amounts are not that much greater. In any event given the Claimant's pre-accident history I doubt whether he would have even been able to work as a long-distance truck driver or return to work as a motor mechanic and therefore I have discounted all but scenario one.
144.   I agree with the Claimant's submission that in the circumstances it is more appropriate to take the last year of income rather than average the previous five years as adopted by Mr Bland.
145.   However the Insurer then goes on to submit that given the Claimant's past employment record, his previous medical history, it is doubtful that the Claimant, but for the accident, would have been able to work as a courier driver fulltime from date of accident to date.
146.   I note in 2012 the Claimant won one million dollars in a lottery. Since that time, he has used those funds apparently to go on extended holidays in Thailand and in Europe.
147.   The Insurer submits, relying on the successful surgery as reported by the Claimant and Dr Day and the various medical reports including an earning capacity report of Dr Graham Hall and psychiatrist Dr Apler that the Claimant was capable of returning to work and/or had a residual earning capacity at various times after the accident. The Insurer's primary submission is that but for the accident the Claimant could have returned to work within a few weeks. Alternatively, they envisage various other submissions including that after the successful surgery performed by Dr Day, and on the Claimant's own evidence he is now able to return to the workforce. They note that this may be subject to the Claimant also receiving psychological/psychiatric treatment and also entering into a detox program with respect to his alcohol and/or drug dependence.
148.   In my assessment it is inappropriate to adopt the calculations as made by Mr Thompson, that is that the Claimant has sustained a loss which envisages that but for the accident he would have been continuously employed to the present time, and that since the accident he has been incapable of returning to the workforce even in some residual capacity. It is impossible to make precise calculation in those circumstances and therefore I have assessed a global figure taking into account all of the medical reports and opinions, and my experience which I have assessed at $400,000.
149.   I have made no allowance for past superannuation on the basis that it is included in that global assessment.
. . .
WHAT IS THE CLAIMANT'S FUTURE ECONOMIC LOSS?
153.   The Claimant firstly relies upon the report of Mark Thompson of Vincents.
154.   They also submit that the combination of the physical injuries and psychological injuries means that the Claimant is unfit for work. The reality is that after 13 years out of the workforce there is no prospect of him ever being able to work again.
155.   The Claimant also seeks to rely on the Insurer's forensic accountant Mr Bland and his approach to indexation to the current earnings which they calculate would be $1,073.21. Applying the usual 15% discount for vicissitudes gives a future economic loss of over $570,000 plus superannuation.
156.   The Insurer submits that as with all heads of damage the issue of causation looms large. For example, if the Claimant's back is not related to the injury in question, he realistically has no entitlement to any damages for loss of earning capacity. Alternatively, if the back is thought to be related, the Ghaleb discount and the comparison with the Claimant's pre-existing status means that there would be very little loss of earning capacity. His significant symptomatic improvement and the Ghaleb factors which are at play, in the application of S126 would lead to very modest future economic loss. Thus, the Insurer invites me to allow a buffer, rather than calculate a precise loss.
157.   In my assessment that is the appropriate approach, as it was for past economic loss.
158.   The Claimant has undergone surgery to both the neck and back which he says have led to considerable improvement.
159.   I have accepted that both the neck and back injury are an exacerbation of his previous spinal vulnerability. But for the accident I believe he would have continued to be employed as a courier driver although I believe this employment would have been disrupted from time to time due to his pre-existing spinal weaknesses. That is reflected in my assessment of his past economic loss.
160.   I also accepted that he has been on Workers Compensation benefits from date of accident to date, and that the prospect of the Claimant being able to return to work is limited. Nonetheless I believe he does have some residual capacity and therefore he is not entitled to what in effect is 18 years loss of earnings.
161.   In my Assessment $400,000 is an appropriate figure. Such a figure makes due allowance for vicissitudes, and superannuation.”

Consideration

The connection between past and future economic loss

The starting point is that, although the Act prescribes different requirements for past and future economic loss in that s 126 relates only to awards for damages for future economic loss, the requirement to give reasons can, in cases such as the present, impose similar requirements with respect to awards for past and future economic loss. The calculations of both past and future economic loss involve the assessment of hypothetical circumstances: Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20, which was referred to in a context similar to the present in The Nominal Defendant v Aychahawchar [2015] NSWCA 58; (2015) 70 MVR 89 at [18] (Adamson J, Basten and Gleeson JJA agreeing). Further, as I said in The Nominal Defendant v Aychahawchar at [18], the principle of coherence requires that where an assessment is to be made of the Claimant’s “most likely future circumstances but for the injury” for an award of future economic loss, this assessment will necessarily affect the assessment of the damages for the past. The date of the judgment following trial is an arbitrary date which divides the past from the future for the purposes of damages.

The findings made by the Claims Assessor

The Claims Assessor’s reasons included the following findings. But for the accident, the Claimant would probably have continued to work as a self-employed courier driver ([138] and [143]), although he would not have been continuously employed ([148]). As the 2005 financial year was the only full year in which he worked as a courier driver, it is appropriate that his earnings but for the accident be measured by reference to his last year of income rather than an average of the previous five years ([139] and [144]). As at the date of the accident he was earning $643.58 net per week.
Because the Claimant won one million dollars in the lottery, even but for the accident, he would have taken time off to go on extended holidays in Thailand and Europe as he did in any event ([146]).
If the Claimant’s loss of earnings for the past was total, the figure for past loss, taking into account CPI increases would be $568,542.16. This figure is too high for three reasons: there would have been periods of unemployment (due to his pre-existing spinal weakness) or holidays (as a result of the lottery win) and the Claimant has some residual earning capacity notwithstanding the accident ([146]; [148]; [159] and [160]).
Having regard to the factors referred to above, it is not appropriate to adopt a capitalised discounted figure based on weekly loss for the past 13 years since the accident. The upper limit figure (based on total loss of earning capacity and the assumption that the Claimant would have worked full-time as a courier driver without extended breaks) of $568,542.16 must be discounted. The discounted buffer figure for the past is $400,000, inclusive of superannuation ([148]-[149]).
The Claimant would, but for the accident, have worked until the age of 67 (18 years from the date of assessment). Although his prospects of returning to work are limited, he has some residual earning capacity: [160].
The current earnings for a self-employed courier driver were, as at the date of the assessment, $1,073.21 ([155]). If this figure is capitalised and discounted for the usual vicissitudes of 15%, the figure for future economic loss is $570,000 plus superannuation ([155]). This figure must be discounted to take account of the Claimant’s pre-existing spinal weakness and the residual earning capacity. A buffer of $400,000 is appropriate, taking into account vicissitudes plus superannuation ([160]).

The methods available to assess economic loss

There are, in substance, two main approaches to assessing the economic loss component in damages for personal injuries: the mathematical approach and the “buffer” or “cushion” approach. The mathematical approach is typically appropriate for a worker who had a fixed, continuous weekly income before the accident caused by the wrongdoer and who was wholly incapacitated for work following the accident. Past economic loss requires the net weekly income to be multiplied by the number of weeks between the accident and the date of assessment. Future economic loss requires the net weekly loss to be multiplied by a multiplier which depends on the number of years remaining in the worker’s working life. The lump sum figure is discounted for vicissitudes, which are typically 15%. This example is positioned at one end of the spectrum.
At the other end of the spectrum lies, for example, a casual worker whose earnings were not regular, or who may have been at the beginning of his or her career. This worker may have had pre-existing disabilities or other characteristics which might have taken him or her out of the workforce in any event. Damages are commonly assessed in such cases by way of a buffer. The Court of Appeal has held that an award of damages by way of a buffer is not inconsistent with the statutory requirements of s 126: Penrith City Council v Parks [2004] NSWCA 201 (particularly at [58]) and Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13. The requirements of s 126 may be fulfilled in a buffer case by statements of greater generality: Allianz Australia Insurance Ltd v Kerr at [69] and Allianz Australia Insurance Ltd v Sprod (2012) 81 NSWLR 626; [2012] NSWCA 281 at [30] (Barrett JA, Campbell JA and Sackville AJA agreeing).

Consideration

The particular matters which the NRMA contended were “critical integers”, the periods during which the Claimant would have worked were not identified; and the Claimant’s residual earning capacity, were incapable of precise quantification. The assessment of damages requires evaluative and quantitative judgments to be made which are not susceptible of simple mathematics because the assessment of past and future economic loss requires a comparison between hypothetical and actual (in the case of the past) and hypothetical and hypothetical (in the case of the future).
The Claims Assessor, in the present case, has adopted a blended approach by discounting the capitalised sums for past and future economic loss calculated by reference to weekly figures. In my view, the Claims Assessor’s reasons are sufficient to explain the decision to assess damages in this way. I consider that the Claims Assessor sufficiently complied with s 126 when the reasons are read fairly as a whole.
The economic loss grounds have not been made out.

Costs

None of the parties identified any reason why costs ought not follow the event in accordance with the general rule: Uniform Civil Procedure Rules 2005 (NSW), r 42.1.

Orders

For the reasons given above, I make the following orders:

Dismiss the amended summons filed on 22 May 2019.

Order the plaintiff to pay the first and fourth defendants’ costs.

**********

Decision last updated: 29 May 2019

Medium Neutral Citation:	IAG Limited trading as NRMA Insurance v Lucic [2019] NSWSC 620
Hearing dates:	22 May 2019
Decision date:	28 May 2019
Jurisdiction:	Common Law
Before:	Adamson J
Decision:	(1) Dismiss the amended summons filed on 22 May 2019. (2) Order the plaintiff to pay the first and fourth defendants’ costs.
Catchwords:	JUDGMENTS AND ORDERS – effect of – abuse of process – issue estoppel – whether arises from assessment of notional damages in proceedings brought by workers compensation insurer against compulsory third party insurer on statutory indemnity under s 151Z of the Workers Compensation Act 1987 (NSW) – no issue estoppel as distinct causes of action JUDGMENTS AND ORDERS – effect of – relationship between s 151Z action by worker’s insurer against wrongdoer for indemnity for payments of compensation made and tort claim by worker for damages against wrongdoer ADMINISTRATIVE LAW – requirement for CARS assessor to consider submissions of parties and address in reasons MOTOR ACCIDENTS COMPENSATION – damages – challenge to awards for past and future economic loss – level of particularity required
Legislation Cited:	Married Women’s Property Act 1882 (NSW), s 12 Motor Accidents Compensation Act 1999 (NSW), s 34, 58, 61, 69, 81, 92, 94, 95, 99, 104, 106, 122, 126 Supreme Court Act 1970 (NSW), ss 69, 94 Uniform Civil Procedure Rules 2005 (NSW), r 42.1 Workers Compensation Act 1926 (NSW), s 64 Workers Compensation Act 1987 (NSW), s 151Z
Cases Cited:	Allianz Australia Insurance Ltd v Kerr (2012) 83 NSWLR 302; [2012] NSWCA 13 Allianz Australia Insurance Ltd v Sprod (2012) 81 NSWLR 626; [2012] NSWCA 281 Brown v Lewis (2006) 65 NSWLR 587; [2006] NSWCA 87 Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 Coco v The Queen (1994) 179 CLR 427; [1994] HCA 15 Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 Government Insurance Office (NSW) v McDonald (1991) 25 NSWLR 492 Grant v Royal Rehabilitation Centre (1999) 47 NSWLR 263; [1999] NSWCA 250 Kay v Sydney Airport Corporation Ltd [2014] NSWSC 744 Kioa v West (1985) 159 CLR 550; [1985] HCA 81 Malec v J C Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20 Manners v Transfield (1992) 8 WAR 111 O’Brien v McKean (1968) 118 CLR 540; [1968] HCA 58 Penrith City Council v Parks [2004] NSWCA 201 Port of Melbourne Authority Pty Limited v Anshun (1981) 147 CLR 589; [1981] HCA 45 QBE Workers Compensation (NSW) Ltd v Dolan (2004) 62 NSWLR 42; [2004] NSWCA 458 Ramsay v Pigram (1968) 118 CLR 271; [1968] HCA 34 Rippon v Chilcotin (2001) 53 NSWLR 198; [2001] NSWCA 142 Rodger v De Gelder [2015] NSWCA 211; (2015) 71 MVR 514 Saaed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23 The Nominal Defendant v Aychahawchar [2015] NSWCA 58; (2015) 70 MVR 89 Tickle Industries Pty Limited v Hahn (1974) 130 CLR 321; [1974] HCA 5 Tiufino v Warland (2000) 50 NSWLR 104; [2000] NSWCA 110 Tomlinson v Ramsay Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 Tooth and Company Limited v Tillyer (1956) 95 CLR 605; [1956] HCA 49 Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 WorkCover Queensland v Amaca Pty Ltd (2010) 241 CLR 420; [2010] HCA 34 Workers Compensation Nominal Insurer v Nominal Defendant [2013] NSWCA 301; (2013) 64 MVR 542 Zahed v IAG Limited t/as NRMA Insurance [2016] NSWCA 55; (2016) 75 MVR 1
Texts Cited:	KR Handley, Spencer Bower and Handley Res Judicata (4th ed, 2009, LexisNexis) Motor Accidents Authority, “Claims Assessment Guidelines”, 1 May 2014, cll 16.2, 18.4
Category:	Principal judgment
Parties:	IAG Limited t/as NRMA Insurance (Plaintiff) Steven Lucic (First Defendant) State Insurance Regulatory Authority (Second Defendant) Allan Crowley, in his capacity as a Claims Assessor of State Insurance Regulatory Authority (Third Defendant) Workers Compensation Nominal Insurer (Fourth Defendant)
Representation:	Counsel: MA Robinson SC/ AE Maroya/J Gumbert (Plaintiff) AJ Stone SC/BG McManamey (First Defendant) R Sheldon SC (Fourth Defendant) Solicitors: Hall & Wilcox (Plaintiff) Turner Freeman (First Defendant) Stiles Lawyers (Fourth Defendant)
File Number(s):	2018/390135

Head of damage	Amount
Past economic loss	$65,556
Future economic loss	$82,215
Past out of pocket expenses	$22,123
Future out of pocket expenses	$15,000
Fox v Wood	$11,906

Head of damage	Amount
Non-economic loss	$300,000
Past loss of earnings (incl superannuation and Fox v Wood)	$446,647
Future loss of earnings (incl superannuation)	$400,000
Past treatment (incl s 83 payments)	$217,399
Future treatment	$30,000
Past gratuitous care	$82,680
Future commercial care	$71,300
Total	$1,548,026