Insurance Australia Limited T/as NRMA Insurance v Seaman
[2023] NSWPIC 359
•14 July 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Insurance Australia Limited T/as NRMA Insurance v Seaman [2023] NSWPIC 359 |
| Claimant: | Neil Seaman |
| insurer: | Insurance Australia Limited t/as NRMA |
| Member: | Susan McTegg |
| DATE OF DECISION: | 14 July 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; approval of settlement; section 6.23; claimant sustained fracture of third metacarpal of the left hand and fracture of the lateral process of the talus of the left ankle; claimant farmer and wool classer; unfit for work for seven weeks; fit to continue full time work as farmer; no entitlement to non-economic loss; claim economic loss only; settlement on basis unfit for work for seven weeks and on basis likely to retire five years early with additional buffer of $20,000 and allowance for loss of superannuation benefits; Held – settlement within range of likely potential damages assessment if claim was to proceed to assessment; settlement just fair and reasonable; settlement approved. . |
| determinations made: | Settlement Approval Issued under s 6.23 of the Motor Accident Injuries Act 2017 The proposed settlement is approved under s 6.23(2)(b) of the Motor Accident Injuries Act 2017 |
INTRODUCTION
On 1 March 2020 Neil Seaman (the claimant) sustained injury in a head on motor vehicle accident at approximately 100 kmph (the accident). He sustained a fractured left ankle and fractured left hand.
Mr Seaman has made a claim against Insurance Australia Limited trading as NRMA Insurance (the insurer) the insurer of the at fault vehicle, for lump sum damages.
The insurer has wholly accepted liability for the claim for common law damages.
The insurer has accepted that Mr Seaman had non-minor injuries and pursuant to Division 3.4 of the Motor Accident Injuries Act 2017 (the MAI Act) he is entitled to payment of reasonable treatment and care for the rest of his life for his accident caused injuries.
Mr Seaman and the insurer have reached agreement as to settlement of the claim for damages.
Because Mr Seaman is not represented by a lawyer, his 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 insurer has not conceded Mr Seaman has sustained a whole person impairment (WPI) greater than 10% and accordingly there is no entitlement to recover damages for non-economic loss. The claim for damages is limited to past and future economic loss.
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 any of the requirements of the MAI Act or the Guidelines.
Clause 7.37 of the Guidelines states I must be satisfied as to the following:
(b) 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, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the Mr Seaman, and taking into account any proposed reductions or deductions in the proposed settlement, and
(c) Mr Seaman understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
DOCUMENTS CONSIDERED
I have considered the following documents:
· insurer’s submissions dated 9 June 2023;
· settlement agreement;
· letter from Meridian Lawyers to Mr Seaman dated 31 May 2023 conveying offer of settlement;
· records of Goulburn Hospital;
· the ambulance report;
· certificate of capacity dated 19 March 2020;
· X-ray reports dated 14 April 2020;
· Dr Wisam Isheish report dated 23 April 2020;
· clinical notes of Dr Isheish;
· Optimum Health Solution report dated 4 May 2020;
· report of Dr Bentivoglio dated 6 July 2022;
· report of Dr Wallace dated 3 January 2023;
· claimant’s payslips, and
· email providing claimant’s particulars.
REVIEW OF THE EVIDENCE
Mr Seaman is a 46-year-old experienced farmer and wool classer based at Crookwell.
Following the accident on 1 March 2020 Mr Seaman was transported by ambulance to Goulburn Base Hospital. The ambulance report notes left ankle pain, left dorsum pain, left ankle swelling and left dorsum swelling.
The clinical records of Goulburn Base Hospital reported Mr Seaman sustained a fracture of the third metacarpal of the left hand and a fracture of the lateral process of the talus of the left ankle. He underwent surgery, namely, a left talus open reduction internal fixation under the care of Dr Ihsheish, orthopaedic surgeon. He was also complaining of sternal tenderness. Mr Seaman was discharged from hospital on 4 March 2023 in a moon boot which remained in situ for about seven to eight weeks. His left hand was treated conservatively in a plaster which remained for about seven to eight weeks.
On 19 March 2020 Mr Seaman was reviewed by Dr Ihsheish who removed the sutures and noted the claimant would be in immobilisation for another four weeks. On 23 April 2020
Dr Ihsheish recommended physiotherapy for both the hand and the ankle/subtalar joints and discharged Mr Seaman from his care.A Certificate of capacity/certificate of fitness dated 19 March 2020 noted the claimant was unable to walk on his left leg for six weeks and certified him unfit for work from 1 March 2020 until 12 April 2020.
Mr Seaman underwent a five-month course of physiotherapy with Optimum Health Solutions to restore range of motion, strength and function in the left ankle. This was followed by a home exercise program and the use of a TEN’s machine at home.
Dr Bentivoglio, orthopaedic surgeon
Dr Bentivoglio assessed the claimant and provided a report dated 6 July 2022. He reported Mr Seaman had pain in his left foot after he had been on it for prolonged periods, predominantly over the lateral aspect of his foot. He felt he had regained full movement of his foot. His foot and ankle tend to swell and he experiences difficulties walking on hard surfaces. Dr Bentivoglio also noted a well healed but unattractive 7 cm scar over the lateral aspect of the left ankle.
On examination Dr Bentivoglio reported extension to more than 10º, flexion to greater than 40º, inversion to 20º, and eversion to 15º. He found no muscle wasting in the calves and no sign of lateral ligament instability involving the left ankle.
Dr Bentivoglio reported Mr Seaman still experienced discomfort with the third metacarpal in his left hand, particularly after use. He has regained full movement but not full strength.
Dr Bentivoglio reported Mr Seaman had normal alignment present in his left hand. With his left wrist he had flexion to 40º, extension 60º, ulnar deviation 30º and radial deviation 15º. He reported no muscle wasting present in the forearms.
Dr Bentivoglio reported Mr Seaman still had some residual symptoms which are likely to remain indefinitely and that it was reasonable for him to experience significant symptoms at the end of a day’s activity. He stated he should avoid activities that require him to walk a lot, climb stairs or ladders or walk on hard concrete surfaces. Dr Bentivoglio felt there was a small chance Mr Seaman will develop degenerative osteoarthritis involving his left ankle and subtalar joint.
Dr Bentivoglio undertook an assessment of whole person impairment (WPI). He assessed a 3% WPI for the left foot/ankle, a 2% WPI of the left wrist and a further 2% WPI for the scarring to the left ankle.
Dr Wallace, orthopaedic surgeon
Dr Wallace assessed the claimant at his request on 8 December 2022 and provided a report dated 3 January 2023. He reported the claimant’s work duties involved mustering stock on a motorbike, classing wool and carrying out general farm work including fencing.
Dr Wallace reported X-rays showed Mr Seaman had sustained a comminuted fracture of the 3rd metacarpal of the left hand and a fracture involving the lateral process of the left talus.
In relation to the left hand Mr Seaman reported no current pain, no swelling, no paraesthesia or numbness, only some weakness of grip and intermittent mild stiffness.
Mr Seaman reported intermittent aching pain globally about the left foot, made worse with stair climbing, maintaining one position, prolonged standing or running but relieved by rest or elevation. He reported stiffness of the left ankle and swelling with activity.
Dr Wallace reported Mr Seaman was unfit for work for eight weeks and then returned to work full time as a farmer.
On examination Dr Wallace found a full range of movement at the fingers and thumb of the left hand and noted he was neurovascularly intact distally.
On examination of the left foot and ankle Dr Wallace reported an 8 cm anterior transverse scar with crosshatching, brown in colour and moderately visible. He report an active range of movement at the left ankle of dorsi flexion 10º, plantar flexion 60º, inversion 40º, and eversion 10º. He found no effusion but tenderness inferior to the lateral malleolus.
Dr Wallace found the ligaments were stable and he was neurovascularly intact distally.Dr Wallace reported examination of the right ankle showed a range of movement of dorsi flexion 10°, plantar flexion 60°, inversion 40° and eversion 20°. His gait was normal, he could heel and toe stand and his heel alignment was neutral.
Dr Wallace concluded Mr Seaman had a guarded prognosis for further recovery of function at his left hand and left foot, but considered he was fit to continue his full time pre-injury duties as a farmer.
Dr Wallace assessed a 2% WPI based on 1% WPI for the left ankle and foot and 1% WPI for the scar.
Economic loss evidence
The claimant’s PAYG payment summary issued by HP & MA Seaman for the year ended
30 June 2019 disclosed gross income of $76,700 with tax withheld of $18,000.A Payroll Ledger of HP & MA Seaman records payments made to the claimant on the 12th of each month in the sum of $4,900 net per month, or an average of $1,225 net per week.
The claimant provided an email dated 5 April 2023 in which he indicated at some stage over the next five years his father will retire and he will take on full responsibility for the day to day running of Rosemont. In terms of additional labour hired to assist him in performing his duties at the farm Mr Seaman stated:
“We have a contract shearing team for approximately 4 weeks a year @ conservatively $10k/week.
We get a crutching trailer to help with crutching for about 3 weeks a year @ about $1000 per day.
I have a general farm assistant that assists 1 day a fortnight @ $220/day.
My children help out when they can at no cost.”
Mr Seaman declined to provide the names of additional labour hire staff but stated the remuneration paid was varied. In terms of who paid the additional labour staff Mr Seaman replied “Seaori Pastoral Company, the name of our company. However, this is irrelevant”. He considered it was not necessary to provide the names of the trustees of the HP Seaman Trust and not necessary to provide tax returns for HP Seaman Trust from 2019 to date.
In his email Mr Seaman indicated he was not questioning the offer for past economic loss, only the offer for future economic loss. After addressing the difficulty, he considers he will experience in undertaking his work as he ages Mr Seaman indicated he would accept compensation for future economic loss on the basis of early retirement by five years.
THE PROPOSED SETTLEMENT
The insurer calculated the offer of settlement in the sum of $126,892.55 rounded up to $127,000. The claimant has received statutory benefits in the sum of $9,254.71 paid for by the insurer. The insurer will be entitled to receive credit for the sum of $9,254.71 out of the settlement sum.
Past economic loss
The insurer calculated the claimant’s pre-accident weekly earnings based on his payslips to be approximately $1,225 net per week. The Certificates of Capacity demonstrate that the claimant had no capacity for any work from 1 March 2020 until 15 April 2020 (7 weeks). Accordingly, the insurer allows $1,225 x 7 weeks in the sum of $8,575.
Past superannuation was calculated at 11% of $8,575 in the sum of $944.
The insurer made an allowance of $1,918 for Fox v Wood representing taxation payments deducted from statutory weekly payments.
Future economic loss
In calculating future economic loss, the insurer noted the claimant alleges:
(a) he, alongside his father, are the only full-time employees on his merino sheep farm;
(b) his father is expected to retire within the next five years, leaving full-time responsibility of the farm to the claimant;
(c) he would have worked until he was 70 but will now only be able to work until he is 65 years old. That is, his working life will be shortened by five years;
(d) once his father retires and he inherits the farm, he will have to pay someone to complete the tasks required to maintain stock performance at its current level, and
(e) the package for such a role, inclusive of wages, superannuation, fully maintained vehicle, and a mobile phone would be valued at $120,000 per annum.
The insurer calculated future economic loss based on a loss of $1,225 for five years deferred for 19 years discounted by 15% for the vissisitudes of life. The insurer also allows an additional buffer of $20,000. The sum of $115,455.55 was calculated as follows:
$1,225 (hire replacement cost) x 231.5 ( multiplier for 5 years on the 5% tables) x 0.396 (deferred multiplier for 19 years on the 5% deferred tables) x 85% (discount for vicissitudes of life) in the sum of $95,455.55 plus an additional buffer of $20,000.
Teleconference on 10 July 2023
I held a teleconference on 10 July 2023. Mr Seaman appeared in person and the insurer was represented by Ms Laura D’Alessandri of Meridian Lawyers.
Mr Seaman understood the settlement did not include an allowance for non-economic loss and why that was so, having regard to the opinions of Dr Bentivoglio and Dr Wallace.
The proposed settlement was in the sum of $127,000 in respect of past and future economic loss.
Firstly, it was noted there was an error in paragraph 2(d) of the Deed which states the amount of statutory benefits for which the insurer is entitled to credit is the sum of $1,439.24. Mr Seaman agreed he understood the insurer was entitled to credit for the sum of $9,254.71 already received by way of statutory benefits. It was agreed the Deed required amendment.
Secondly, no allowance was made for future loss of superannuation benefits when an allowance was made for past loss of superannuation benefits. Mr Seaman confirm he worked as an employee for the family company and superannuation was paid on his behalf.
Ms D’Alessandri sought an opportunity to confirm the position in relation to superannuation and subject to being satisfied there was an entitlement to superannuation benefits to obtain instructions to make an additional allowance for a future loss of superannuation benefits.Mr Seaman expressed his thanks to Ms D’Alessandri for her conduct of the claim and the assistance she had rendered to him.
Teleconference on 11 July 2023.
A second teleconference took place on 11 July 2023. Again, Mr Seaman appeared in person and Ms D’Alessandri appeared for the insurer.
After further discussion, the settlement sum was increased to $139,250 including an allowance of $12,500 for future loss of superannuation benefits. It was agreed that after deducting the sum of $9,254.71 in respect of statutory payments already received the claimant will receive the sum of $129,995.29 in his hand.
Mr Seaman confirmed he had not received any benefits from Centrelink since the accident. He is not currently undergoing treatment but understood his right to have reasonable treatment expenses paid for the remainder of his life. He also understood this settlement will extinguish his right to make any further claim for damages arising out of the accident.
Because the Deed uploaded to the portal today was in the sum of $139,000 Ms D’Alessandri agreed the insurer would upload a further Deed evidencing the settlement in the sum of $139,250 to the portal by close of business 12 July 2023.
Mr Seaman asked for the settlement to be approved.
SHOULD I APPROVE THE SETTLEMENT
I am satisfied Mr Seaman is aware the settlement finalises his entitlement to weekly benefits and to common law damages under the MAI Act.
I am satisfied that Mr Seaman is aware of his right to have his reasonable treatment expenses paid for the remainder of his 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.
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.
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 Mr Seaman.
I am satisfied Mr Seaman is aware he can seek legal advice but does not wish to do so.
I am satisfied Mr Seaman understands the binding nature of the settlement and that he will be precluded from making a further claim for damages arising out of the accident. I am satisfied Mr Seaman is willing to accept the proposed settlement.
Accordingly, pursuant to s 6.23(2)(b) of the MAI Act I approve the settlement of Mr Seaman’s claim for damages in the sum of $139,250.
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