Insurance Australia Limited t/as NRMA Insurance v Morris
[2024] NSWPIC 451
•20 August 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | Insurance Australia Limited t/as NRMA Insurance v Morris [2024] NSWPIC 451 |
| CLAIMANT: | Mary Morris |
| INSURER: | Insurance Australia Limited trading as NRMA Insurance |
| MEMBER: | Susan McTegg |
| DATE OF DECISION: | 20 August 2024 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; section 6.23; settlement approval; compression fracture, fracture of scaphoid bone, dislocated lunate bone, fractured end of the ulna and bones in thumb, ligament damage to lunate bone, economic and non-economic losses; contributory negligence; claimant sustained injury when she fell off the back of a motor bike when it went over a raised part of bitumen; breach of duty of care admitted but contributory negligence of 80% alleged; claimant was absent from aged care work for 65 weeks and then returned to work on reduced shifts; insurer conceded she had sustained greater than 10% whole person impairment; initial offer not approved; further negotiations with insurer; settlement approved on basis of reduction for contributory negligence of 50%; allowance for non-economic loss; allowance for past economic loss and future economic loss including a buffer for possibility of early retirement; Held – settlement approved. |
| DETERMINATIONS MADE: | Settlement approval Issued under s 6.23 of the Motor Accident Injuries Act 2017 |
Settlement approval
Issued under s 6.23 of the Motor Accident Injuries Act 2017
INTRODUCTION
On 27 April 2019 Mary Morris (the claimant) was a passenger on a motorbike ridden by her then fiancé (now husband) travelling on the Princes Highway Bridge at Cobargo at 20 kmph when it travelled over a raised part of bitumen causing her to fall off the back of the motorbike (the accident).
Ms Morris sustained the following injuries in the accident:
· L2 compression fracture of the spine and her scaphoid bone;
· dislocated lunate bone;
· fractured end of the ulna and the bones in her thumb, and
· ligament damage to the lunate bone.
Ms Morris made a claim against Insurance Australia Limited trading as NRMA Insurance (the insurer).
In a liability notice dated 4 June 2021 NRMA accepted liability for the claim for common law damages but alleged contributory negligence assessed at 80% due the claimant’s failure to hold onto the driver of the motorcycle to prevent herself falling from the motorbike.
The insurer accepted that Ms Morris had non-threshold injuries and pursuant to Division 3.4 of the Motor Accident Injuries Act 2017 (the MAI Act) she is entitled to payment of reasonable treatment and care for the rest of her life for her accident caused injuries.
The insurer conceded Ms Morris sustained a whole person impairment (WPI) greater than 10% and agreed to pay Ms Morris damages for non-economic loss in the sum of $180,000. The initial offer of settlement dated 30 May 2024 was calculated as follows:
Non-economic loss $180,000
Past economic loss ($831 net per week x 65 weeks) $54,015
Past superannuation $5,400
Future economic loss $20,000
Tax paid on statutory benefits $16,018
Subtotal $275,433
Less 50% contributory negligence $137,716.50
Total $137,716.50
The settlement is subject to a deduction in the sum of $51,468.41 in respect of statutory payments already received.
Because Ms Morris is not represented by a lawyer, her settlement must be approved in accordance with the MAI Act.
The insurer lodged the application for approval of the settlement, and it was referred to me for consideration.
THE RELEVANT LAW
Section 6.23(2) and (3) of the MAI Act requires approval of the settlement and I am not to approve the settlement unless I am satisfied it complies with the requirements of the MAI Act or the Guidelines.
Clause 7.37 of the Guidelines states I must be satisfied as to the following:
(a) 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 a claims assessor (member), taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the Ms Morris, and taking into account any proposed reductions or deductions in the proposed settlement, and
(b) Ms Morris understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
DOCUMENTS CONSIDERED
I have considered the documents uploaded by the insurer in one indexed and paginated bundle.
REVIEW OF THE EVIDENCE
Liability evidence
Ms Morris was 54 years of age at the time of the accident. She is now 59 years of age.
Application for personal injury benefits dated 5 September 2019
Ms Morris described the accident as follows:
“I was pillion passenger on my fiancé’s motorbike and we were travelling at about 20 km/h, we hit a slight bump on the road and I came off the back of the bike, landed on my “bum” and put my hand out to brace the fall.”
Ms Morris described her usual occupation as aged care – personal carer and reported an income of $1,300 fortnightly. Ms Morris was employed with Sapphire Coast Aged Care at Hillgrove House as an Enrolled Nurse for 32 hours a week (9 days a fortnight).
The insurer retained Barringtons to undertake a liability investigation.
Ms Morris participated in a record of interview with Inika Lees on 15 December 2019.
She stated she had one drink before the accident, a bourbon and coke. At the time of the accident Ms Morris was wearing protective clothing. She further stated:
“Um, we had stopped at the pub which we quite often do on … after a ride and we had one drink and then got back outside on … got onto the bike um, and Darren took off. At that stage there, there was a little lip going onto Cobargo bridge. For some reason we hit that lip and he changed gears and it was just enough to jerk the bike. I wasn’t hanging on tight enough and I came off the back.”
The rider of the motorbike Darren Morris participated in a record of interview with Inika Lees on 15 December 2019. Mr Morris confirmed Ms Morris was wearing full motorbike gear, namely pants, gloves, jacket, helmet and boots.
Mr Morris described the circumstances of the accident as follows:
“We went for a ride with several friends out to Dalgety pub, had lunch out there, rode back, stopped at Cobargo pub which we nearly always do and have a debrief as we call it. One can of drink. Walked across the road, got on the bike. You right babe? Yep, I’m right. Took off onto the bridge. I just changed gears as we hit the bump onto the bridge. Unfortunately, Mary wasn’t hanging on and fell off the back. I stopped the bike, put the stand down, ran back, picked her up and saw that she was okay. Went back and took me bike home and grabbed the car. Drove the car back, put Mary in the car, drove Mary to the hospital and then she stayed the night and I drove home by myself and she got operated on the next morning.”
When asked what he believed caused the accident Mr Morris said:
“I think Mary wasn’t quite paying attention because she was in casual mode, not in full on ride mode. We only had to go three or four hundred yards home. She was complacent ‘cause we’d been riding all day. We’ve done fifteen thousand K’s on that bike together and never had an issue. Ah, er, it was just one of them things. She just didn’t quite hang on and she was just sitting on the back of the bike. Not much to hang onto on the back of that bike. It’s a fairly bare bones naked sports bike with no grab rails, no backpack, no nothing behind it and as we hit the bump on the bridge I changed gears and she just slipped off the back of the bike.”
When asked whether Ms Morris normally held onto him when riding on the back of his bike Mr Morris said:
“It’s me or nothin’. And she had her hands on me but she was not concentrating and not holding on tight and we hit the bump and sh … off she went.”
The investigators report includes a number of photographs of the accident scene including a photograph of the bridge depicting the slight bump across the road, although it is noted roadworks had been completed between the date of the accident and when the photographs were taken.
Medical evidence
Following the accident on 27 April 2019 Ms Morris was admitted to South East Regional Hospital. The history recorded was:
“fell off back of motorbike approx.. 50km/hr
No headstrike/LOC.
Injuries:
Right hand
- base proximal phalanx (thumb), intra-articular
- Scaphoid
- Possible transcaphoid perilunate dislocation; and
L2 anterior wedge fracture.”
An X-ray of the right hand and lumbosacral spine dated 27 April 2019 reported:
“There is an intra-articular fracture of the base of the distal phalanx of the thumb. There is evidence of fracturing of the scaphoid with a possible transcaphoid perilunate dislocation. CT evaluation of the wrist is therefore recommended.
The lumbar column is normally aligned but there is an anterior wedge fracture which is likely acute at the L2 level. This could be confirmed with CT or MRI but appears relatively stable. Moderate multilevel facet joint arthropathy is detected. Posterior column appears intact.”
A CT scan of the cervical spine, lumbar spine and right wrist dated 27 April 2019 concluded:
“Curvilinear lucency involving the left Cw articular pillar, suspicious for an undisplaced fracture.
L2 compression fracture, involving the inferior endplate and anterior cortex.
Perilunate fracture dislocation …. There are comminuted fractures of the lunate. Minimally displaced scaphoid fracture involving the proximal third scaphoid. Pisiform fracture….
Ulnar styloid fracture.”
Ms Morris underwent a closed reduction and percutaneous stabilisation of the right wrist under the care of Dr Asher Livingstone. Following the surgery Ms Morris’s right wrist was immobilised with a hand splint and she commenced physiotherapy with Ben Munroe of Sapphire Coast Physiotherapy.
On 9 May 2019 Dr Nghia Tran of Cobargo Doctors reported Ms Morris fell off the back of a motorcycle on 27 April 2019 at low speed 20 kmph. She was wearing a helmet, had no neck pain, sore lower back and thumb. In Certificates of Capacity/certificate of fitness Ms Morris was certified unfit for work until 19 May 2020 and fit for pre injury work from 20 May 2020, working eight hours a day four days a week with a 10kg lifting/carrying capacity and pushing/pulling ability. On 3 July 2020 Dr Tran certified Ms Morris fit for pre-injury work with no restrictions.
Ms Morris was reviewed by Dr Pik, neurosurgeon on 1 October 2019 in respect of her low back pain. He reported the pain had improved over time and she rated it as 3-4/10 most of the time. He noted a normal gait and an ability to walk on heels as well as toes. He reported a normal range of lumbar flexion and extension and a normal neurological examination of the lower limbs.
Dr Pik reported X-rays and CT lumbar spine showed evidence of an L2 vertebral body wedge fracture without neurological deficit from the accident. He reported the fracture was stable and did not require surgical treatment. Dr Pik considered the fracture was healing as expected.
Due to ongoing issues with pain and reduced function of the right hand and wrist Ms Morris sought a second opinion from Dr Jennifer Green, hand specialist who confirmed the wrist was still fractured and recommended fixation of the right wrist.
On 8 October 2019 Ms Morris underwent a right wrist joint arthrodesis/wrist fusion under the care of Dr Livingstone.
Following the surgery on 8 October 2019 Ms Morris underwent physiotherapy treatment with Mr Munro focused on strengthening her right upper limb, grip strength and hand range of movement.
Dr Livingston reviewed Ms Morris, seven months post right wrist fusion. In a letter dated
4 May 2020 he reported she could perform all her normal duties at home with occasional twinges in her forearm and hand which he thought was likely a muscular fatigue due to a prolonged period of inactivity and deconditioning.Dr Livingston noted some union at the fusion site and no loosening or movement of the plate or screws. He felt the amount of union was adequate for Ms Morris to return to her normal work duties but also noted that factors such as her age, general health, biosphosphonate treatment and smoking had all contributed to the decreased rate of healing at the fusion site. He suggested she participate in an unrestricted loading and strengthening physio program in preparation for a return to full work duties in about two months.
On 29 June 2020 Dr Livingston reported Ms Morris was able to lift up to 20kg with her right hand. He reported the wrist fusion was stable and she had full function of her hand without any irritation.
On Track Occupational Therapy, a rehabilitation provider monitored the claimant’s recovery and return to work.
On 16 July 2020 Ms Morris returned to work on her pre-accident hours and duties. On Track noted Ms Morris reported an increase in symptoms in her right wrist and back following completion of her shifts. In a report dated 10 September 2020 On Track also reported
Ms Morris had worked collaboratively with staff to problem solve any difficulties with tasks due to her restricted right hand range of movement and had developed modified techniques to be able to complete tasks independently.
Medico-legal evidence
Dr James Powell, orthopaedic surgeon
Dr Powell assessed Ms Morris at the request of the insurer on 7 December 2022. He provided a report dated 5 January 2023.
Dr Powell reported Ms Morris had trouble undertaking various activities with her hand. She reported discomfort about the metacarpophalangeal joints of the fingers and at the base of the thumb with activity. A lot of activity results in ulnar sided pain and swelling which takes a few days to settle. She also reported finding it difficult to hold and grip objects, and sometimes she drops things. Applying load when undertaking activities such as cutting up vegetables is difficult and she often needs help from her husband. She also finds holding the hose to vacuum irritating.
In relation to the lumbar spine Ms Morris reported her mobility and symptoms had improved, although she becomes uncomfortable with prolonged sitting or standing.
Dr Powell reported following the accident Ms Morris was off work for 15 months before returning to her normal role, although limited by symptoms to her wrist. He reported she had returned to motorbike touring with her husband. Dr Powell reported Ms Morris can do light activities but her husband still does the heavier activities, such as chopping of vegetables and household cleaning.
Dr Powell did not consider Ms Morris required any further treatment. He also reported she may require an over the counter inflammatory such as Nurofen for any reactive irritation and swelling that she experiences at the distal radioulnar joint.
Dr Powell considered Ms Morris should modify how she undertakes day-to-day activities around the wrist arthrodesis. He reported she had limited her hours of work around her symptoms at the right wrist which was likely to remain a reasonable limitation.
Dr Powell assessed a total whole person impairment of 26%.
Evidence as to earnings
A payroll advice from Sapphire Coast Community Aged Care Ltd for the pay period
3 April 2019 to 16 April 2019 demonstrates the claimant worked a total of 50 hours earning a total gross salary of $1,982.A payroll advice from Sapphire Coast Community Aged Care Ltd for the pay period
17 April 2019 to 30 April 2019 demonstrates the claimant worked a total of 50 hours including 16 hours sick leave earning a total gross salary of $2,337.63.
Preliminary conference on 8 July 2024
I held a preliminary conference on 8 July 2024. Ms Morris appeared in person. The insurer was represented by Ms Gabby Mulry.
During the preliminary conference Ms Morris confirmed she had chosen not to get a lawyer because it was a lot of hassle.
Ms Morris stated she had learnt to adapt by doing things with her left hand. She stated whilst the injury impacts her life she did not let it stop anything. She said after peeling one potato her thumb became very sore. The lack of flexibility with her right wrist had impacted on her personal care. She stated because her right wrist cannot bend she finds she uses her elbow and shoulder more. She finds it difficult to hold the hose when vacuuming. She is wary of holding heavy objects in her right hand. She tends to drop things often and finds it difficult to pick things up with her right hand. She stated fortunately her husband was available to assist her whenever necessary.
Ms Morris stated at work she has tried to adapt to utilising her left hand as her dominant hand particularly when using slide sheets or the lifter. In fact, she stated she often gets another staff member to use the lifter because of her concern about her wrist but also because it is safer for the resident.
Ms Morris stated her lower back is tender and sore at times and she has to look out for it. She said it caused her difficulty in picking up her grandkids and giving them a cuddle.
I asked her whether it was correct as suggested by Dr Powell that she had limited her hours of work. Ms Morris confirmed she used to work nine shifts a fortnight but she now only works six shifts a fortnight. Ms Morris confirmed that prior to the injury she had intended to work until age 67 years but now did not think she would be physically able to work until that age.
I informed Ms Mulry that I did not consider the allowance for future economic loss to be adequate having regard to the difficulties experienced by Ms Morris. I also indicated I was not convinced the figure for non-economic loss was appropriate.
Ms Mulry indicated she would like an opportunity to obtain further instructions. Ms Morris was happy to permit the insurer to further consider the offer of settlement and for the preliminary conference to be adjourned to 15 July 2024.
Preliminary conference on 29 July 2024
Ms Morris appeared in person. The insurer was represented by Mr Adrian Toro of Hall & Wilcox, Lawyers.
Ms Morris informed me the insurer had made a further offer of settlement on Friday
26 July 2024. That offer was as follows:Non-economic loss $220,000
Past economic loss ($831 net per week x 65 weeks) $54,015
Past superannuation $5,400
Future economic loss $90,048.28
Tax paid on statutory benefits $16,018
Subtotal $285,481.28
Less 50% contributory negligence $192,740.64
Total $192,740.64
The insurer calculated the allowance for future economic loss based on an ongoing loss of 10 hours per fortnight at $36.52 per hour to age 67 (eight years) plus a buffer sum of $20,000 for the chance Ms Morris may not be able to continue working to age 67 as a result of her injuries.
Ms Morris queried why the allowance for future economic loss was based on a loss of 10 hours per fortnight when the report sent through from the pay officer showed she was losing on average 20 hours per fortnight.
Mr Torio stated the payroll records confirmed that the average hours worked prior to the accident was 62.9 hour per fortnight and the average hours worked since the accident was 40.88 hours per fortnight. He stated Ms Morris’ hours had decreased by 27%.
When asked why the insurer only allowed for 10 hours per fortnight and not 20 hours per fortnight Mr Torio indicated the claimant’s base wage rate had increased. He also noted the insurer had allowed an additional buffer of $20,000 for the possibility the claimant will not be able to work until age 67 years.
I reminded Mr Torio that I was required to assess the impairment of her earning capacity and the fact that there had been an increase in the base wage rate did not mean if the matter proceeded to assessment Ms Morris would not be compensated for the loss of 20 hours per fortnight. I also note the buffer is to allow for early retirement and the potential loss of the 40.88 hours per fortnight now worked by the claimant.
Ms Morris also queried whether the allowance for past economic loss made any allowance for the loss of shifts during the four years since she returned to work. It seemed the allowance for past economic loss only compensates Ms Morris for the time she was absent from work following the accident. Ms Morris said she returned to work in July 2020 but has consistently worked less hours since that date.
I informed the parties I thought the increased allowance for non-economic loss was appropriate.
Noting that there was not currently an agreed settlement on the table for approval the matter was adjourned for a further preliminary conference on 19 August 2024 to enable the parties to consider further settlement discussions.
Preliminary conference on 19 August 2024
Ms Morris appeared in person. The insurer was represented by Ms Melissa Zen of Hall & Wilcox, Lawyers.
I was informed the insurer had made a further offer of settlement on 13 August 2024 which had been accepted by the claimant. I was asked to approve the settlement.
The offer was as follows:
Non-economic loss $220,000
Past economic loss $109,732.31
· ($831 net per week x 65 weeks) = $55,015
· 27 July 2020 – 29 July 2024 (209 weeks)
at $66.59 for the loss of 14.6 hours per
fortnight = $55,717.31
Past superannuation $12,070.55
Future economic loss $122,268.18
· 14.6 hours per fortnight at $36.42 per hour
to age 67 years (multiplier 345.6) = $92,133.50
· future superannuation = $10,134.68
· buffer for the possibility the claimant will not be able
to continue working until age 67 years
Tax paid on statutory benefits $16,018
Subtotal $480,089.04
Less 50% contributory negligence $240,044.52
Total $240,044.52
Ms Morris was aware the insurer is entitled to credit for the sum of $51,468.41 paid by way of statutory benefits and that the sum she will be paid after that deduction will be $188,576.11.
Ms Morris confirmed she had not received any benefits from Centrelink since the accident.
Ms Morris was aware approval of the settlement will mean she is unable to make any further claim for non-economic loss or economic loss arising out of the accident.
I informed the parties I considered the settlement was just, fair and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment. I indicated I was prepared to approve the settlement.
SHOULD I APPROVE THE SETTLEMENT
In Podrebersek v Australian Iron and Steel (1985) 59 ALR 529 (Podrebersek) the High Court at [10] stated:
“The making of an apportionment as between a plaintiff and a defendant of their respective shares in the responsibility for the damage involves a comparison both of culpability, i.e. of the degree of departure from the standard of care of the reasonable man … and of the relative importance of the acts of the parties in causing the damage …and cases there cited. It is the whole conduct of each negligent party in relation to the circumstances of the accident which must be subjected to comparative examination. The significance of the various elements involved in such an examination will vary from case to case.”
I consider the apportionment of damages proposed by the insurer, that is the reduction of damages by 50% for the claimant’s contributory negligence, to be appropriate in the circumstances.
Section 1.4 of the MAI Act defines non-economic loss as:
(a) pain and suffering;
(b) loss of amenities of life;
(c) loss of expectation of life, and
(d) disfigurement.
The current maximum payable for non-economic loss is $620,000.
The claimant is currently 59 years of age with a life expectancy of 28 years. Ms Morris appears to be a stoic person who has attempted to get on with her life but with ongoing difficulty. I consider the allowance of $220,000 for non-economic loss to be within the range of the award of damages the claimant would receive for non-economic loss if the matter was to proceed to assessment.
I consider the offer for past and future economic loss to be appropriate taking into consideration the ongoing impairment of the claimant’s earning capacity evidenced by her inability to return to her pre-injury hours of work and the additional buffer for the possibility she may not be able to work until age 67 years.
I am satisfied that Ms Morris is aware of her right to have her reasonable treatment expenses paid for the remainder of her life. Whilst the insurer is only liable to pay statutory benefits including treatment expenses for five years, thereafter the claim may be transferred to Lifetime Care and Support who will be liable for ongoing reasonable treatment expenses.
I am satisfied Ms Morris understood that the settlement was only in respect of her entitlement to damages for non-economic loss.
The insurer will not deduct and pay monies to Medicare under the Health and Other Services (Compensation) Act, 1995 (Cwlth) from the settlement sum. In the event a Notice of Charge is raised by Medicare for reasonable and necessary treatment expenses the insurer will pay the charge in addition to the settlement sum as part of their obligation to pay statutory benefits.
CONCLUSION
I am satisfied the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment taking into account the nature and extent of the claim, the injuries, disabilities, impairments and losses sustained by Ms Morris.
I am satisfied Ms Morris is aware she can seek legal advice but does not wish to do so.
I am satisfied Ms Morris understands the binding nature of the settlement and that she will be precluded from making a further claim for damages arising out of the accident. I am satisfied Ms Morris is willing to accept the proposed settlement.
Accordingly, pursuant to s 6.23(2)(b) of the MAI Act I approve the settlement of $240,044.52 in respect of Ms Morris’s claim for damages.
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