Insurance Australia Limited t/as NRMA Insurance v Delmar
[2024] NSWPIC 413
•1 August 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Insurance Australia Limited t/as NRMA Insurance v Delmar [2024] NSWPIC 413 |
| CLAIMANT: | Tony Delmar |
| INSURER: | Insurance Australia Limited t/as NRMA Insurance |
| MEMBER: | Maurice Castagnet |
| DATE OF DECISION: | 1 August 2024 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; settlement approval; claim for damages for past and future economic loss; claimant sustained a right humerus fracture, requiring open reduction and internal fixation; soft tissue injuries to right shoulder and right elbow; scarring; assessed at 7% whole person impairment; claimant has returned to his pre-accident full-time employment as a council asset inspection officer; claimant has limited capacity to pursue alternative career as fine arts instrument constructor and artist; whether a buffer allowance for future economic loss is appropriate in the circumstances; Held – proposed settlement of $125,000 is approved. |
| DETERMINATIONS MADE: | CERTIFICATE Settlement Approval Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement sum of $125,000 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act 2017. 2. Pursuant to sub-s 3.40(1)(b) of the Act, the insurer is entitled to deduct the sum of $19,505.72 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3. |
STATEMENT OF REASONS
INTRODUCTION
On 6 December 2021, the claimant, Tony Delmar made a claim for common law damages for the injuries he sustained in a motor accident on 26 April 2019.
On 1 March 2022, the insurer accepted liability for the claim.
The insurer and the claimant have now agreed to settle the claimant’s claim for the sum of $125,000 (the proposed settlement).
The claimant is not legally represented.
Section 6.23(2) of the Motor Accident Injuries Act 2017 (MAI Act) provides that a claim for damages by a claimant who is not represented in respect of the claim by an Australian legal practitioner, cannot be settled unless the proposed settlement is approved by Personal Injury Commission (Commission).
On 28 September 2023, the insurer lodged an application with the Commission to have the proposed settlement approved.
The matter was referred to me to consider approval of the proposed settlement.
DOCUMENTS CONSIDERED
In making my decision whether to approve the proposed settlement, I have considered the following documents:
(a) The insurer’s bundle of documents lodged with the application, marked A-1 to A- 25 (271 pages);
(b) The insurer’s supplementary bundle of documents lodged on 8 November 2023, marked A-1 to A-4 (24 pages);
(c) The insurer’s bundle of documents lodged on 10 January 2024 in the application for a medical assessment;
(d) Flyer regarding a gallery display of the claimant’s artworks;
(e) Text message screenshots regarding the sale of an artwork.
(f) Photograph of the one of the claimant’s recent artworks, and
(g) Photograph of the claimant’s scarring.
LEGISLATION
In making my decision, I considered the following legislation, rules and guidelines:
·the MAI Act;
·Motor Accident Injuries Regulation 2017 (Regulation);
·Personal Injury Commission Rules 2021 (PIC Rules), and
·the Motor Accident Guidelines, Version 9.1 (Guidelines).
COMPLIANCE WITH THE PIC RULES
Rule 95 (1) of the PIC Rules requires the insurer to lodge the application for approval with the Commission within seven days of reaching an agreement with the claimant about the proposed settlement.
The material before me showed that the claimant accepted the insurer’s initial offer of settlement submitted for approval, on 21 November 2023. On that basis, there was compliance by the insurer with r 95(1).
THE MOTOR ACCIDENT
On 26 April 2019, the claimant was riding his Vespa scooter in a roundabout in Engadine, when he was struck by the insured vehicle that failed to give way. As a result of the impact of the collision, the claimant was ejected from his scooter and landed on the roadway some distance from the point of the accident.
The NSW Ambulance Service attended the scene of the accident and conveyed the claimant to Sutherland Hospital where he remained for three days for treatment.
SUMMARY OF THE MEDICAL EVIDENCE
The clinical notes from Sutherland Hospital recorded a diagnosis of an open comminuted fracture of the distal end of the right humerus. The claimant underwent surgery by way of an open reduction with internal fixation of the right distal humerus, performed by orthopaedic surgeon, Dr Hugh Jones, on 27 April 2019.
The claimant was discharged on 29 April 2019.
Upon discharge, the claimant continued his treatment under the care of his general practitioner (GP), Dr Muneeb Ahmed Syed of Engadine Medical Centre. The clinical notes of the GP showed that there were consultations with the claimant on 6 May 2019, 9 May 2019 and 16 May 2019. There were complaints of pain in the right hip and groin area and pain to the right side of the chest.
There were follow up visits with Dr Jones on 10 May 2019; 7 June 2019; 1 August 2019; 12 September 2019, and 17 October 2019.
On 12 November 2019, the claimant had the olecranon plate removed and an ulnar ostectomy of the right elbow performed by Dr Jones at Kareena Private Hospital.
On a follow up visit on 29 November 2019, Dr Jones indicated in a report of the same date that the claimant had made an uncomplicated recovery from the surgery.
On 10 November 2022, the claimant was examined by orthopaedic surgeon, Dr Charles Allen, at the request of the insurer. Dr Allen was of the opinion that claimant had regained full capacity for employment and that there was no future incapacity for employment anticipated.
Dr Allen assessed the claimant’s injury to the right elbow as giving rise to a whole person impairment (WPI) of 3% . He found that there was no assessable impairment for scarring.
Pursuant to my direction, the insurer made an application for a medical assessment of the claimant’s permanent impairment by the Commission. The injuries referred for assessment were the right elbow, right arm, right shoulder, cervical spine, right thigh and scarring.
On 4 April 2024, Medical Assessor Nigel Menogue issued a certificate finding that the following injuries caused by the motor accident gave rise to a permanent impairment of 7%, and is not greater than 10%:
· Right shoulder – soft tissue injury;
· Right arm – fractured humerus requiring open reduction with internal fixation;
· Right elbow – soft tissue injury, and
· Scarring.
The Medical Assessor also found that the soft tissue injuries to the cervical spine and the right thigh were caused by the motor accident and gave rise to no assessable permanent impairment.
CONSIDERATION
In conformity with s 6.23(3) of the MAI Act, before I approve the proposed settlement, I must be satisfied that that it complies with the applicable requirements of the MAI Act and the Guidelines.[1]
The claimant’s understanding of the proposed settlement
[1] The reference is to Version 9.1.
According to cls 7.37 (c) and (d) of the Guidelines, I must be satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner and understands the nature and effect of the proposed settlement and is willing to accept it.
I conducted two teleconferences with the parties to question the claimant about these issues and to explore the evidence. The claimant appeared for himself, and Ms Natalie Baladi appeared for the insurer.
At the earlier conference, the claimant stated that he is aware that he was entitled to be represented by a lawyer with respect to his claim, but he has chosen to represent himself. The claimant said that he has accepted a settlement sum of $100,000 and he would leave it up to the Commission to decide whether it is satisfactory.
In answer to my questions about the impact his injuries and disabilities have had on his capacity to work and his daily activities of living, the claimant stated:
(a) he has developed a droopy right shoulder and that he has lost some movement and strength in the right shoulder.
(b) his right arm cramps up and he experiences numbness and stiffness in the region. This is worse in cold weather.
(c) at the time of the accident, he was building up a series of artworks. Because of his injury to his right arm, it has not been easy to work in his art studio. The restricted movement, pain and loss of strength in the right arm slows down his painting ability. It takes longer to do the artwork. It was his intention at the time of the accident to build up his art portfolio and to hopefully generate a second income from the sale of his artworks.
(d) At the time of the accident, he was looking to change career and pursue self-employment as a Fine Arts instrument constructor and to continue to build his private collection of artworks for sale. In relation to instrument construction, he was in the process of building his skills and had put a fair amount of resources toward achieving that goal. In relation to his artworks, at the time of the accident, he had built up a small portfolio and had achieved one sale through an art gallery. He had not yet received payment for the sale and did not know how much he would receive from the sale. He feels that the injury to his right arm has created a setback to achieving this career change.
(e) He has returned to his pre-accident work as an asset inspection officer with Bayside Council. However, because of restriction of movement, strength and pain his right arm, elbow and shoulder, he has not been able to function at his pre-accident capacity.
(f) He has limitations doing the physical aspects of the job. He cannot climb to inspect certain areas and he cannot lift manholes.
(g) There was an opportunity at work for a position of fleet coordinator which has more physical work involved. The salary offered was $80,000 to $110,000. He feels that because of his disabilities, he has missed out on the opportunity of obtaining that job. He also feels that because of the time he has had off work and his physical limitations, he will be overlooked for positions in the future.
At the first teleconference and after hearing the claimant’s description of his injuries and disabilities, I expressed my concern about whether the assessment of all the claimant’s injuries had been taken into account by Dr Allen when assessing permanent impairment.
As previously indicated, I made a direction for the insurer to lodge an application for a medical assessment of the claimant’s permanent impairment. I therefore adjourned the matter to a further teleconference to await the completion of the medical assessment.
At the second teleconference on 4 June 2024, I discussed the findings of Medical Assessor Menogue with the parties.
Following these discussions, the insurer agreed to increase their settlement offer to $125,000, which is now the proposed settlement.
I explained to the claimant that according to the MAI Act, the insurer is entitled to be repaid all the weekly payments of statutory benefits that have been made to him and according to paragraph 2.2 of the proposed Settlement Agreement, the insurer will be deducting the sum of the insurer of $19,505.72 for that purpose. The claimant stated that he was aware that the deduction will be made.
I explained to the claimant that according to paragraph 2.1 of the proposed Settlement Agreement, the insurer is required to deduct any amount repayable to Centrelink for any benefits received by the claimant after the accident. The claimant stated that he has not received any Centrelink benefits after the accident. I further explained to the claimant that regardless of that fact, the insurer must still proceed to obtain a clearance notice from Centrelink before any settlement funds are paid to him.
I indicated to the claimant that the net result of the proposed settlement is that he will receive the sum of $105,494.28 once the above deductions are made and subject to any charge by Centrelink. The claimant confirmed his wish to accept the proposed settlement.
I explained to the claimant that once he accepts the proposed settlement, this will end any entitlement to any further claim for damages of any kind.
I explained to the claimant that because he has sustained a non-threshold injury, he is entitled to claim reasonable and necessary treatment and care expenses for life. I explained to the claimant that these claims were managed by the insurer until 24 April 2024 and thereafter are managed by the Lifetime Care and Support Authority. The treatment and care benefits include the costs such as medical treatment, medication, home assistance such as lawnmowing and future surgery.
The claimant reconfirmed his wish to accept the proposed settlement.
I am satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner, but he has chosen not to do so.
I am satisfied that the claimant understands the binding nature and effect of the proposed settlement and that he will be precluded from making any further claim for damages arising from the motor accident.
I am satisfied that the claimant understands that following the settlement of his claim for damages, he has ongoing rights to claim future treatment and care.
I am satisfied that the claimant is willing to accept the proposed settlement.
Is the proposed settlement just, fair and reasonable?
According to cl 7.37 (b) of the Guidelines, before I approve the proposed settlement under s 6.23(3) of the MAI Act, I must be satisfied that it is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
The proposed settlement is in the sum of $125,000 which represents damages for past and future economic loss.
Past economic loss
At the time of the accident, he was working with Bayside Council as an asset inspection officer in a full-time capacity earning about $1140 net per week.
As a result of his accident, the claimant was off work until 5 July 2019 which represents a period of about 11 weeks. The claimant then returned to work on light duties until 19 November 2019. He was off work for a further week whilst the plate and screws were removed. For the relevant periods, the insurer made weekly payments of statutory benefits of $19,505.72. In the proposed settlement, the insurer has made an allowance of $35,000 for past loss of earnings, inclusive of a Fox v Wood component and superannuation. I am satisfied that this represents an adequate amount for the claimant’s past economic loss.
Future economic loss
Section 4.5(1)(a) of the MAI Act provides that damages may be awarded for past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity.
In cases such as Medlin v State Government Insurance Commission [1995] HCA 5 and Husher v Husher [1999] HCA 47, the High Court of Australia confirmed that the issue to be determined in the present case is whether the claimant has sustained a loss or diminution of his earning capacity and if so, whether that loss or diminution will result in economic loss.
In calculating any economic loss into the future, I must have regard to the provisions of
s 4.7 of the MAI Act.Section 4.7(1) of the MAI Act provides that damages may not be awarded for future economic loss unless the claimant first satisfies the court or Commission that the assumptions about future earning capacity or other events on which the award is to be based, accorded with the claimant’s most likely future circumstances but for the injury.
Section 4.7(2) of the MAI Act provides that the amount of damages for future economic loss that would have been sustained on those assumptions is to be adjusted by reference to the percentage possibility that the events concerned might have occurred but for the injury.
Section 4.7(3) of the MAI Act provides that if an award for future economic loss is made, the Court or Commission is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.
Section 4.9(1) of the MAI Act provides that where an award of damages is to include compensation, assessed as a lump sum, in respect of damages for future economic loss which is referrable to deprivation or impairment of earning capacity, the present value of the future economic loss is to be qualified by adopting the prescribed discount rate. Section 4.9(2) of the MAI Act prescribes a discount rate of 5%.
Section 4.7 of the MAI Act does not preclude the awarding of a buffer for future economic loss. The occasion for a buffer in accordance with the principles enunciated in Penrith City Council v Parks [2004] NSWCA 201 is when the impact of the injury on the economic benefit from exercising earning capacity after injury is difficult to determine.
The claimant is now 56 years of age. He was educated in NSW to Year 10. After he left school, he worked for Telstra as a linesman for 16 years. He obtained a position with Sydney Council for five years, and then Bayside Council for 17 years. He was employed by Bayside Council at the time of the accident. He has since returned to that employment.
The claimant’s Notices of Assessments for the financial years 30 June 2020 to 30 June 2023 show that the claimant has earned at least $1250 net per week in that employment.
I consider that the claimant’s most likely future circumstances, but for the injuries, is that he would have continued working for Council as an asset inspection officer on a full-time basis until retirement and may have obtained other positions or promotions attracting a higher income. Because of injuries suffered in the accident, he is no longer fully fit for the duties of his employment. While his employment is in no immediate peril, if he were to lose his current employment, he would not be competitive on the open labour market. If he is able to retain his employment with the Council for another 11 years until age 67, he most probably will not be considered for higher paying jobs.
The claimant says that, at the time of the accident, he was considering self-employment as an instrument maker and artist. He is no longer fit to undertake that work. Moreover, he can no longer risk a period of self-employment because of his injuries. In view of his work history, if uninjured, and if the self-employment venture did not work out for him, the claimant would most probably return to a job that was similar to his employment with the Council. Because of his injuries, finding similar employment if the self-employment venture were to fail, will be more difficult.
In the circumstances, the amount of $90,000 represents adequate damages for future economic loss.
CONCLUSION
Having regard to all the above matters, I am satisfied that the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, the disabilities and the impairments sustained by the claimant.
The proposed settlement of the claimant’s claim for damages in the sum of $125,000 is approved under sub-s 6.23(2)(b) of the MAI Act.
Pursuant to sub-s 3.40(1)(b) of the MAI Act, the insurer is entitled to deduct the sum of $19,505.72 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3.
I thank the parties for their cooperation and assistance in reaching this outcome.
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