Insurance Australia Limited t/as NRMA Insurance v Zekanovic
[2023] NSWPIC 389
•4 August 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Insurance Australia Limited t/as NRMA Insurance v Zekanovic [2023] NSWPIC 389 |
| Claimant: | Ivana Zekanovic |
| insurer: | Insurance Australia Limited t/as NRMA |
| Member: | Shana Radnan |
DATE OF DECISION: | 4 August 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; settlement approval $172,500; 39-year-old female; past and future economic losses only; injuries; soft-tissue resolved; right knee possible replacement in later life; section 6.23; Held – proposed settlement is just, fair and reasonable; settlement approved. |
| determinations made: | CERTIFICATE Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement is approved under s 6.23(2)(b) of the Motor Accident Injuries Act 2017. 3. The proposed settlement complies with cl 7.392 to cl 7.411 of the Motor Accident Injuries Guidelines |
STATEMENT OF REASONS
INTRODUCTION
On 17 January 2020, Ivana Zekanovic (the claimant) was stationary in the line of traffic on Smithfield Road, when the insured collided into the offside of her vehicle from Mimosa Road at Greenfield Park.
The matter was reported to the police (document A52).
She did not require hospitalisation. The tow truck driver took her home. She then attended her general practitioner Dr Al-Khalidy. She also attended Drs Hameed, Rahman, Jaffrey and Haddad at the Wetherill Park Medical Centre for ongoing treatment. From time to time other medical practitioners within the practice were consulted.
She reported pain in her neck, shoulder, back and right knee.
A medical certificate issued by Dr Hameed on 1 February 2020 confirmed:
(a) knee pain including restriction of movement and grinding;
(b) neck pain;
(c) shoulder pain, and
(d) back pain.
A referral for MRI and X-ray revealed mild osteoarthritic changes and she was referred to
Dr Kinzel, orthopaedic surgeon on 5 March 2020.Physiotherapy was undertaken with Stephen Nguyen. Clinical assessment at this stage referred to lumbar sprain, cervical whiplash, right knee injury and bilateral shoulder rotator cuff strain.
An assessment as to right knee complaints was undertaken by Dr Kinzel on 15 April 2020. Mild effusion was noted. Significant patellofemoral crepitus with pain was recorded. The MRI scan noted softening of her patella with fraying and chondral damage in the patella facet. The scan showed her knee ligaments were normal. An arthroscopy and chrondoplasty was recommended.
Surgery was undertaken on 23 June 2020. Review took place again on 5 August 2020. Full extension and flexion recorded normal movement. Strengthening exercises were recommended at this stage to improve the results.
Review on 2 September 2020 confirmed good progress and no workplace limitations. The anterior knee pain had subsided. No further complaints of pain.
Physiotherapy concluded on 8 October 2020. The claimant reporting at this stage, ability to perform pre-injury duties and self-management.
At the assessment with Dr Kinzel in October 2020, some mild residual pain of the right knee was reported and an occasional pain in the left knee. A cortisone injection was recommended to assist in settlement of ongoing symptoms.
The insurer arranged for a medico-legal assessment to be undertaken by Dr Machart his report is dated 8 February 2023. He diagnosed right knee chrondomalacia patella of the right knee and potential impact damage on the patellofemoral joint articular cartilage. He reported pre-existing pathology of chrondomalacia patellae in both knees prior to the subject accident. The soft tissue injuries had resolved.
A history was taken in relation to an earlier 2017 motor accident wherein the claimant sustained injury to her chest, neck, back of both legs and both knees requiring physiotherapy for 12 months. That claim was settled on 3 September 2019.
The claimant has made a claim against NRMA (the insurer) of the at fault vehicle, for lump sum damages 30 September 2021 (document A2). By liability notice dated 18 November 2021 (document A6), the insurer wholly admitted liability for the common law damages claim.
The insurer has accepted that the claimant had sustained non-minor 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 for her accident caused injuries.
The claimant and the insurer have agreed to settle the claim for lump sum damages in the sum of $172,500. The basis of this offer was as follows:
(a) past economic loss $25,000 (including statutory weekly payments to date $15,631.73), and
(b) future economic loss incl superannuation - buffer $145,000.
As the claimant is not represented by a lawyer, the settlement must be approved in accordance with the MAI Act.
JURISDICTION OF THE PERSONAL INJURY COMMISSION
The Personal Injury Commission (Commission) was established on 1 March 2021 and the Dispute Resolution Service was abolished by cl 3 of Part 2, Division 2, Schedule 1 to the Personal Injury Commission Act, 2020.
I am a Member of the Motor Accidents Division of the Commission. Clause 14A (1) of the Personal Injury Commission Regulation 2020 designates the application “pre-establishment proceedings” and cl 14D empowers me to determine those proceedings.
Because of the date of the accident cl 14D(3)(b) provides that the MAI Act and the Motor Accident Guidelines (the Guidelines) continue to apply.
THE RELEVANT LAW
Sections 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 7.38 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, 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, and
(c) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
Preliminary conference on 20 July 2023
The insurer lodged the application for approval of the settlement, and it was referred to me for consideration. I held a preliminary conference on 20 July 2023. The claimant participated in person. The insurer was represented by Ms Rappaport.
I discussed the details of the terms of settlement with the parties and the claimant advised of the progress of her injuries. She reported a full return to work wherein her role as Assistant Principal was a mixture of administrative tasks as well as teaching face to face.
The impact on her day to day work related tasks was limited to stairs aggravating her knee.
The possibility of a future knee replacement was canvassed with the claimant advising she would hold off for as long as possible noting the period of efficacy of such surgery was 15 – 20 years.
She reported returning to school on 28 January 2020 and had only a few days off that she could recollect was accident related since then. She enjoyed her work and continues to undertake exercise to keep the strength. As a single mother she needed to work to support her family and was reluctant to take any time off. She continued to mentor teachers and her involvement with students brought her joy.
As to ongoing pain she regularly used Voltaren and Nurofen to manage symptoms.
It became apparent that the claimant had on her evidence lost the opportunity to undertake a higher graded position. This would include a higher pay scale and a greater loss of future earning capacity than the insurer was aware. The claimant confirmed she could obtain additional evidence to prove her contentions.
The claimant was given time to marshall the additional evidence and for the parties to reconsider their position on the initial settlement offer once the material was on hand.
The claimant was advised if she had any concerns about the ongoing consequences of her injuries she should seek medical advice from her general practitioner or specialist to be fully informed as to any likely deterioration to her condition prior to finalising her settlement.
I asked the claimant if she understood the settlement and its implications and she confirmed to me that she understood the nature of the settlement and was accepting the terms of her own free will.
I asked if she had any question or wished to make any further comments and she said words to the effect “I am satisfied with the outcome”.
The insurer was also asked if any further information or statement was to be made and the representative said “No”.
The preliminary conference concluded with me advising I would make my decision and reduce it to writing. The parties were thanked for their assistance.
DOCUMENTS CONSIDERED
I had regard to the following relevant documents contained in evidence bundle of 565 pages:
· Liability:
application for statutory benefits dated 3 February 2020;
application for common law damages dated 30 September 2021;
liability notice - benefits up to 26 weeks dated 12 February 2020;
liability notice – benefits after 26 weeks dated 17 June 2020;
liability for common law notice dated 18 November 2021, and
letter whole person impairment not exceeding 10% dated 22 March 2022.
· Treating medical records:
clinical records of Dr B Hameed (document A11);
clinical records of Wetherill Park Medical Centre (document A12);
clinical records of Wetherill Park Physiotherapy (document A13);
hospital records Norwest Private (document A23);
hospital records Liverpool Hospital (document A46);
certificate of capacity dated 3 February 2023(document A14);
medical reports - Dr Hameed dated 1 February 2020 (document A36);
medical report Dr Crawford dated 15 June 2020 (document (A37);
medical reports Dr Kinzel various (documents A22, A35 – A44);
various imaging reports (documents A15-A20);
allied health reports-physiotherapy (documents A24-A32);
Arthur Chai physiotherapy reports (documents A47-A49), and
IPAR needs reports (documents A33-A35).
· Medico-legal reports:
Dr Frank Machart qualified by the insurer, dated 8 February 2023 (document A50),
He had previously reported on the claimant in relation to her 2017 accident. He assessed her on 11 January 2023.
Symptoms reported – anterior knee pain right knee, less so left
“I accept the injury to the right knee as patellofemoral impaction injury, on a background of prior chrondomalacia patellae. ..soft tissue injuries have resolved.”
“given that there was damage to articular cartilage in the knee joint, on background of prior chromdomalacia patellae, there is a potential for Ms Zekanovic to develop osteoarthritis 20 years down the track. If that is the case, then there is a small chance that she may undergo a knee replacement” (p352 of application bundle).
He opined whole person impairment at 2% for further damage to the right knee against a background of earlier injury and similar symptoms due to 2017 accident. There was no evidence of left knee injury due to compensatory weight bearing.
· Settlement documents:
settlement offer dated 8 June 2023, and
settlement agreement dated and executed on 9 June 2023.
REVIEW OF THE EVIDENCE
Statement of the claimant
The claimant confirmed her injuries during the teleconference. She reported that she continues to have difficulty with stairs and walking long distances.
The ongoing disabilities and restrictions related to the right knee are reduced by her work related tasks being sedentary in most tasks. She now has more administrative roles as an assistant principal.
Ongoing exercises are undertaken to build up knee strength. The clinical records reveal little ongoing treatment or complaints to her general practitioners. She manages by being careful not to overstress the knee joint.
The claimant confirmed she only took three weeks off work during the school holidays and returned to work post-accident at the beginning of the next school term.
As to time off work, there may have been a day here and there of an afternoon off, but she did not recall taking a lot of time off work. When she had the arthroscopy she took a few days off then returned to work.
There is little ongoing treatment apart from over the counter analgesics and creams to assist her when her symptoms flared up.
As to ongoing difficulties, she is careful not to overstress the right knee. She continues with home exercise and physiotherapy intermittently.
Pre-existing injuries and unrelated conditions
The claimant had been previously injured in a motor vehicle accident which was subject to a claim for damages. In this collision she sustained injury to her cervical spine, thoracic and lumbar spine. The claim was finalised on 3 September 2019.
The medical certificate of Dr Haddad confirmed the earlier accident and issues with neck pain.
Records pertaining to this claim confirmed the claimant complained of severe back pain, inability to conduct housework, gardening and patellofemoral crepitus with pain to right knee and non-painful left knee.
Scans were undertaken in November 2019 for voice abnormality. The clinical records revealed that the claimant was not attending her medical practitioners for the 2017 accident injuries at the time of the subject accident.
Dr Machart in his report confirmed that the claimant had pre-existing knee complaints when he assessed the claimant in relation to her 2017 accident but conceded they were asymptomatic at the time of the second accident and accepted there was a direct impaction injury to the right knee.
INJURIES
Following the accident, the claimant attended upon Dr Hameed and her orthopaedic specialist Dr Kinzel.
As a result of the accident the claimant initially suffered the following injuries:
(a) musculoskeletal pain back and neck radiating to left shoulder;
(b) right knee aggravation of osteoarthritic condition;
(c) headaches, and
(d) dizziness.
The radiological investigations undertaken at the time to her neck and shoulders showed no abnormality detected.
The claimant attended Dr Kinzel for her right knee clicking and grinding with associated pain and an arthroscopy and chrondoplasty was performed.
The surgery was successful with Dr Kinzel confirming the benefits of the surgery. Muscle strengthening was prescribed and so extensive physiotherapy and exercise was undertaken.
The claimant complied with her rehabilitation and physiotherapy to achieve maximal medical improvement at the time.
On 7 August 2020 the claimant fell at work and bruised both knees.
The claimant was reviewed by Dr Kinzel on 2 September 2020 her report noted;
“Ivana was seen again today. She has made great progress and is not complaining of any pain. On examination today the anterior knee pain has subsided. She has full extension and full flexion. Ivana is already at full work capacity. There are no workplace limitations.” (p203 of application bundle).
The claimant attended Stephen Nyugen for physiotherapy treatment on 44 occasions between 10 February 2020 and 12 October 2020. Her discharge summary confirmed the following:
“Ivana has progressed well over the course of her rehabilitation. She is able to perform her pre-injury duties without issue and has regained the confidence she need to independently self-manage for the future, As a result she has been discharged from physiotherapy with no plans for follow-up.” (p237 of application bundle)
The claimant subsequently attended her medical practitioner for unrelated conditions on a regular basis.
The claimant was referred back to Dr Kinzel in August 2022 with some pain around her kneecap. Mild effusion with full range of motion was confirmed. Loading the patella caused pain and her quads were weak. She was recommended further physiotherapy.
The further treatment was undertaken and her walking pattern returned to normal and “She stated she does not get pain any more”.
A further review in October 2022 noted the mild residual pain on the medial inferior aspect of her right knee. A cortisone injection was recommended and was successful in reducing the residual pain.
Having reviewed the medical evidence I am satisfied that the claimant’s injuries would not exceed the statutory threshold and that non-economic loss would not have been available to the claimant.
I accept that the claimant is still symptomatic from time to time as it relates to her right knee.
Initial injuries resulted in the claimant requiring time off time work. The ongoing intermittent right knee pain is likely to impact on the claimant’s ability to work from time to time where she needs to undertake treatment or rest due to a flare up of symptoms.
The claimant sustained injuries in the accident which have impacted on her earning capacity. A claim was made for both past and future economic loss.
ECONOMIC LOSS
Past economic loss
At the time of the accident the claimant was working as a primary teacher. The duties of her position include face to face teaching and administrative roles. She has taken on increased duties in the position of assistant principal and mentoring other teachers since the accident which has resulted in an increase to her remuneration.
The claimant was employed pre-accident as a teacher at the date of accident with the Department of the Education earning $4,039.05 gross per fortnight. (p10 of application bundle).
The claimant was off work for three weeks during the school holiday period, before she returned to full-duties at the commencement of the first term in the school year.
The claimant also took a few days off work after her surgery in August 2020.Therefter there has been little time taken off.
The insurer conceded a buffer of $25,000 for past economic loss, submitting it was appropriate to allow for the intermittent periods off work and the initial three weeks taken off.
Past losses including superannuation and tax were agreed in the sum of $25,000.
Future economic loss
The claimant confirmed she had received a promotion to Assistant Principal and remains currently in the position. She is able to manage her duties as the role is more administrative and predominantly sedentary. Some of her tasks are standing when face to face teaching.
It has been accepted by the parties that the claimant may require time off in the future where her right knee symptoms flare up. This is likely to be intermittent. Noting the claimant’s current age of 39 years she has a working life to age 67 years and her most likely circumstances but for the accident is that she will remain employed by the Department of Education to retirement.
There is also a possibility that she will undertake a knee replacement in the distant future and whilst recovering will suffer economic loss.
A buffer of $145,000 was agreed upon for the anticipated future economic losses inclusive of superannuation losses.
SHOULD I APPROVE THE SETTLEMENT
I am satisfied that the whole person impairment as a consequence of injuries sustain in the subject accident would not entitle her to damages for non-economic loss. I am persuaded by the contents of the medical records, the commentary of Dr Kinzel and the opinion of
Dr Machart qualified by the insurer.I am satisfied that the amounts allocated in the settlement for past and future economic losses accord with the evidence provided by the claimant in this matter and are within the range of likely potential damages assessment for the claim were the matter to be assessed by a Member of the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant.
The claimant was working as a teacher with the Department of Education and has subsequently increased her earning capacity in the role of Assistant Principal. She has also iterated that she would like in the future to apply for higher roles should the opportunity arise.
The past losses include statutory benefits in the sum of $15,631.73 which will be deducted from the payout as it has already been paid to the claimant. This will result in a net payment for past economic loss to the claimant of $9,368.27.
In assessing future economic loss, I must have regard to the provisions of s 4.7 of the MAI Act which states no allowance may be made for future loss of earning capacity unless the claimant establishes that the accident has caused a change in her most likely future circumstances.
In cases such as Medlin v State Government Insurance Commission (1995) 185 CLR and Husher v Husher (1999) 197 CLR 138, the High Court confirmed that the fundamental questions to be determined in a case such as this, are whether the claimant has sustained a loss or diminution in her earning capacity and, if so, whether that loss or diminution will result in economic loss. The circumstances in this matter accord with the most likely circumstances but for the accident.
Further, it is appropriate to award a buffer when the impact of an injury upon the economic benefit from exercising earning capacity after injury is difficult to determine, as per Penrith City Council v Parks [2004] NSWCA 201. I agree that this is an appropriate matter for the award of a buffer as the claimant has a variable diminution to her earning capacity.
I consider the agreed buffer in the sum of $145,000 is within the range of likely damages had the matter been assessed by a Member of the Commission.
I am satisfied that the claimant is aware of her right to have her ongoing accident related treatment provided for by the insurer. She is also aware that she is entitled to care needs where appropriate and approved by the insurer which would include rehabilitation post surgery.
Ms Rappaport confirmed there was likely no Centrelink deductions and that the insurer would not deduct and pay monies to Medicare under the Health and Other Services (Compensation) Act, 1995 (Cwlth) from the settlement sum. If any charge is raised the insurer will pay the charge as a treatment expense in addition to the settlement sum. The only deduction would be the statutory weekly payments already made to date in the sum of $15,631.73.
I advised the claimant if a charge is raised by Medicare in respect of treatment expenses paid by Medicare relating to the injury, she should refer the matter to the insurer to pay that charge as part of their obligation to pay reasonable treatment costs.
CONCLUSION
I am satisfied the proposed settlement of $172,500 is just, fair and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment by a Member of the Commission taking into account the nature and extent of the claim, the injuries, disabilities, impairments and losses sustained by the claimant.
I am satisfied the claimant was aware she could seek legal advice but chose not to avail herself of legal representation.
I am satisfied the claimant 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 the claimant was willing to accept the proposed settlement and her decision to accept it was of her own volition.
I am satisfied the claimant is aware that from the proceeds a sum of $15,631.73 will be deducted as prepaid statutory benefits.
Accordingly, pursuant to s 6.23(2(b) of the MAI Act I approve the settlement of the claimant’s claim for damages.
Legislation
In making my decision I have considered the following legislation and guidelines:
· MAI Act;
· Motor Accident Injuries Regulation 2017, Personal Injury Commission Regulation 2020, Motor Accidents and Workers Compensation Legislation Amendment Regulation 2020, and
· Motor Accident Guidelines 2017/Personal Injury Commission Rules 2021.
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