Insurance Australia Limited t/as NRMA v Hussain
[2023] NSWPIC 383
•2 August 2023
| CERTIFICATE OF DETERMINATION OF MEMBER | |
Citation: | Insurance Australia Limited t/as NRMA v Hussain [2023] NSWPIC 383 |
| Claimant: | Shuhel Hussain |
| insurer: | Insurance Australia Limited t/as NRMA |
| Member: | Maurice Castagnet |
| DATE OF DECISION: | 2 August 2023 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; approval of settlement; section 6.23; claim for damages for past and future economic loss; no entitlement to damages for non-economic loss; where the claimant sustained injuries in a prior motor accident and a subsequent motor accident; where the claimant has completed his studies as an international student and is currently staying in Australia on a temporary post-study and work visa; whether a buffer allowance for future economic loss is appropriate in the circumstances; Held – proposed settlement of $134,500 is approved. |
| determinations made: | CERTIFICATE Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement sum of $134,500 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 $46,781.19 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 28 April 2020, the claimant, Shuhel Hussain, made a claim for common law damages for the injuries he sustained in a motor accident on 19 May 2018.
On 28 July 2020, 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 $134,500 (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 13 April 2023, the insurer lodged an application with the Commission to have the proposed settlement approved.
The matter has been referred to me to consider approval of the proposed settlement.
DOCUMENTS CONSIDERED
In making my decision, I considered the following documents:
(a) the insurer’s bundle of documents submitted with the application marked A-1 to A-27 (408 pages);
(b) the claimant’s additional documents (submitted on 15 May 2023 pursuant to my direction) comprising of submissions, payslips, visa documents and the claimant’s 2019- 2020 and 2021-2022 tax returns (35 pages);
(c)
the insurer’s further submissions and additional documents (submitted on
25 May 2023 pursuant to my direction) (207 pages), and
(d) the file of AAI Limited, trading as GIO (GIO) in relation to a personal injury claim made by the claimant, arising from a motor accident which occurred on 12 December 2021 (495 pages).
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 (Guideline).
COMPLIANCE WITH THE PIC RULES
Section 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 proposed settlement on
22 March 2023 and that the application was lodged with the Commission by the insurer on 13 April 2023. The application was therefore lodged 15 days late.
I note that following acceptance of the proposed settlement by the claimant, the insurer engaged legal representatives (Sparke Helmore Lawyers) to compile the application for lodgment on their behalf.
Considering the time required to instruct its legal representatives and the volume of documents that had to be compiled in support of the application, I propose on this occasion, to dispense with the requirement for the insurer to comply with r 95(1) of the PIC Rules.
THE EVIDENCE
The documents before me may relevantly be summarised as follows:
Previous motor accident on 4 November 2017
The claimant sustained injuries in a prior motor accident on 4 November 2017 (the prior motor accident). He made a claim for damages with Allianz Australia Insurance Limited.
According to the report of Dr Andrew Keller, occupational physician, dated 18 June 2018, the claimant sustained soft tissue injuries to his chest, his cervical spine and his lumbar spine. As at the date of his report, Dr Keller noted that the chest injury and the cervical spine injury had resolved.
Dr Keller noted that the claimant did not work for three weeks after the accident. At the time of his examination, he was of the opinion that the claimant was fit for full-time work without restriction.
The claimant was examined by Dr Keller about a month after the subject accident (19 May 2018). However, I note that there was no reference to the subject accident in Dr Keller’s report. It is unclear whether the claimant failed to mention the accident to Dr Keller.
On 13 May 2019, the claimant was assessed by Medical Assessment Service (MAS) Medical Assessor David Crocker of the State Insurance Regulatory Authority (the Commission’s predecessor). He provided a certificate on the same date.
In his certificate, Medical Assessor Crocker found that the following injuries were caused by the prior motor accident:
· an acute musculoligamentous strain injury of the cervical spine;
· an acute musculoligamentous strain injury to the thoracic spine, and
· a mild limitation with acute range of motion in the left shoulder girdle secondary to cervical spine injury.
Medical Assessor Crocker found that a soft tissue injury to the anterior chest, possibly a musculoligamentous strain injury to the lumbar spine and a mild limitation with acute range of motion in the right shoulder girdle secondary to the cervical spine injury were also caused by the accident but these injuries were not submitted for assessment by the claimant.
Medical Assessor Crocker also noted that the soft tissue injury to the chest had resolved.
I note that there was also no reference to the subject accident in Medical Assessor Crocker’s certificate. Again, it is unclear whether the claimant failed to mention the subject accident to Medical Assessor Crocker.
Medical Assessor Crocker assessed the claimant’s injuries as giving rise to 5% whole person impairment (WPI) as a result of the cervical-thoracic spine injury, and 2% WPI as a result of the left shoulder injury.
The subject motor accident on 19 May 2018
The motor accident occurred when the insured vehicle made a right-hand turn into the path of the claimant’s motorcycle, causing the claimant to take evasive action. In the process, the claimant fell onto the roadway and sustained injuries.
The claimant was taken by ambulance from the scene of the accident to St Vincents Hospital where he was admitted for treatment. The next day, he was discharged on crutches and wearing a CAM boot.
On 2 February 2020, the claimant was examined on 2 February 2020 by orthopedic surgeon, Dr Graeme Doig at the request of the insurer. According to Dr Doig’s report dated 21 April 2020, the claimant sustained an undisplaced, distal fracture at the left ankle and a symptomatic exacerbation of a pre-existing condition of the lumbar sacral spine.
Dr Doig found that the claimant’s injury to the left ankle gave rise to a WPI of 2%. He assessed an injury to the lumbar spine as giving rise to a WPI of 5%. He was of the opinion that this impairment would have been pre-existing as a result of the prior motor accident because the claimant continued to experience pain and restrictions from his lower back and was receiving treatment at the time of the subject accident on
19 May 2018.
At the time of his report, Dr Doig noted that the claimant had returned to work as a delivery driver for 20 hours per week. The claimant reported to Dr Doig that he was having difficulty doing these hours.
Dr Doig believed if the claimant continued to work as a delivery driver, he would have a 10 to 15kg lifting, pushing and pulling restriction, with limited bending and twisting through the spine. He may require breaks from prolonged sitting and driving. Dr Doig believed these restrictions would be the result of both the subject accident on 19 May 2018 and the prior motor accident.
With respect to the left ankle, Dr Doig believed the claimant should avoid repetitive stair and hill climbing and walking on uneven ground. He would have difficulty running and may require breaks from prolonged standing and walking.
Dr Doig noted that the claimant was studying information technology. Dr Doig was of the opinion that a more appropriate position for the claimant to undertake in the future, would be in that field where he would benefit from an ergonomic set-up at work with the ability to sit and stand.
On 10 October 2022, the claimant was assessed by Medical Assessor David McGrath of the Commission for the purpose of determining whether the claimant’s injuries sustained in the accident gave rise to a permanent impairment.
Medical Assessor McGrath found that the motor accident caused a left ankle fibula fracture and soft tissue injuries to the thoracic and lumbar spine.
Medical Assessor McGrath found that the claimant has a residual permanent impairment of the left ankle and that he has increased lower back pain, which was present from the prior motor accident.
The claimant reported to Medical Assessor McGrath that he had sustained injuries to the cervical spine, lumbar spine and left shoulder in the prior motor accident. The claimant reported that he has had a gradual improvement in cervical spinal pain and left shoulder pain, but he had some continuing lower back pain at the time of the subject accident.
Medical Assessor McGrath recorded the claimant’s current symptoms at the time of his assessment as follows:
“Mr Hussain sketched out his pains onto a body diagram. He indicated that he experiences discomfort or pain over the dorsum of the left ankle with movements and activities. He records a central lower back discomfort.”
Medical Assessor McGrath noted that the claimant’s disability questionnaire indicated the following:
“(the claimant) … had difficulties with standing, crouching, kneeling and climbing stairs as a result of the ankle impairment. He records a relatively normal sitting capacity at over two hours. His lower back troubles him when he tries to perform activities involved with forward bending.”
The claimant reported to Medical Assessor McGrath that he was working 20 hours per week as a software engineer with Z 10 Finance Group, but the claimant felt that working more hours would be uncomfortable for his lower back and ankle.
In his certificate dated 22 October 2022, Medical Assessor McGrath assessed the claimant’s injuries as giving rise to a WPI of 4% (ankle), 0% (thoracic spine) and 0% (lumbar spine).
Subsequent motor accident on 12 December 2021
The claimant was involved in a subsequent motor accident on 12 December 2021.
The claimant made a claim for payment of statutory benefits with the relevant insurer GIO. According to his claim form, the claimant sustained injuries to the right side of his neck, right shoulder, right arm and right hip.
The insurer accepted liability to make payment of statutory benefits for the first 26 weeks. The claimant received weekly payments of $1,684.78.
The insurer then declined liability to make any further payments of statutory benefits having determined that the claimant had sustained threshold injuries only for the purposes of the MAI Act. The determination also meant that the claimant was not entitled to make a claim for damages.
The claimant sought a review of the determination, but it was unsuccessful.
It is apparent from the certificate of Medical Assessor McGrath that the claimant did not report the injuries sustained in the subsequent accident to Medical Assessor McGrath at the assessment on 10 October 2022.
CONSIDERATION
In conformity with s 6.23(3) of the MAI Act, before I approve the settlement, I must be satisfied that that it complies with the applicable requirements of the MAI Act and the Guideline.
The claimant’s understanding of the proposed settlement
According to cls 7.37 (c) and (d) of the Guideline, 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.
On 4 May 2023, I conducted a teleconference with the parties to question the claimant about these issues. The claimant appeared for himself, and Ms Andrea Boyd-Boland of Sparke Helmore Lawyers appeared for the insurer.
In answer to my question, the claimant stated that he is aware that he was entitled to be represented by a lawyer with respect to his claim. He was previously represented by Paramount Compensation Lawyers, but he has chosen to represent himself. The claimant said that he has accepted the proposed settlement, but 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 as a software engineer, the claimant stated that:
(a) when he sits at his computer for prolonged periods, his left ankle gets sore; he gets tingling sensations; it does not feel “normal”;
(b) when he sits at his computer for prolonged periods, he has pain in his mid and lower back, and
(c) his employer has asked him to work 40 hours per week, but he has declined. He does not feel that he is able to do more hours than he is currently doing.
The claimant also stated that in 2022, he started a business providing universities with a service whereby he provides prospective international students with assistance with the preparation and processing of their study applications. The claimant stated that in the last four to five months, he has worked about 50 hours in the business. He receives 5% of the students’ enrolment fees as commission. However, he did not have any record of payments as these would occur in the future after enrolments take place.
I explained to the claimant that in order to be satisfied that the amount offered by the insurer for his economic loss is appropriate and/or has been properly calculated, I needed to consider further documents and information from him. The claimant has since provided the Commission with this material.[i]
I indicated to Ms Boyd-Boland that I required further explanation from the insurer on how the amount of past economic loss was calculated and submissions on how a buffer of $50,000 for future economic loss was arrived at. The insurer has since provided the Commission with this information.[ii]
I conducted a further teleconference on 13 June 2023. On this occasion, I explained to the claimant that after having considered the further material provided by the parties, I am satisfied that the proposed settlement is just, fair and reasonable. (My reasons for coming to that conclusion are stated further below).
I explained to the claimant that once he accepts the proposed settlement, this would bring to an 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 have been managed by the insurer until
19 May 2023 and thereafter would be managed by the Lifetime Care and Support Authority. The treatment and care benefits include the costs of medical treatment, medication, home and transport modifications, home assistance such as lawnmowing and future surgery.I explained to the claimant that according to paragraph 3(a) 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 explained to the claimant that according to paragraph 3 (f) of the proposed Settlement Agreement, the insurer will be deducting the sum of $4,500 to pay his previous solicitors pursuant to a notice received from MARS Legal, the solicitors for the liquidator of Paramount Compensation Lawyers. The claimant stated that he agrees to that payment being made by the insurer from the proceeds of 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 3 (d) of the proposed Settlement Agreement, the insurer will be deducting the sum of the insurer of $46,781.49 for that purpose. The claimant stated that he was aware that the deduction will be made.
I indicated to the claimant that the net result of the proposed settlement is that he will receive the sum of $83,218.51 once the above deductions are made and subject to any charge by Centrelink. 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 Guideline, 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 $134,500 which represents damages for past and future economic loss.
Past economic loss
In the proposed settlement, the insurer has made an allowance of $80,000 for past economic loss.
At the time of the accident, the claimant was undertaking studies for an Information and Communications Technology bachelor’s degree at Western Sydney University under an international student visa.
At the same time, the claimant was working as a delivery driver for Uber Eats and Deliveroo for about 20 hours per week. The conditions of the claimant’s visa suggest that this was the maximum amount of hours he could work per week.
The claimant was certified unfit or partially unfit for work until February 2020.
The claimant received weekly payments of statutory benefits from the insurer for the period after the accident, until 25 March 2020.
Following the accident, the claimant was off work for a period of 100 weeks up to
26 March 2020. The claimant then returned to work as a delivery driver until his subsequent accident on 12 December 2021.
Based on the small business income declared in the claimant’s 2017-2018 tax return, the insurer has calculated an amount of $810.35 gross per week ($695 net per week) as the claimant’s average earnings as at the date of the accident. Having reviewed the documents before me, I accept that calculation.
The insurer has therefore allowed past economic loss for 100 weeks at $695 net per week ($69,500) and $9,814 by way of reimbursement for income tax paid on statutory benefits in accordance with s 4.5 of the MAI Act. That comes to a total of $79,314 (rounded to $80,000).
I am satisfied that based on the evidence, that is an appropriate allowance for past economic loss.
Future economic loss
In the proposed settlement, the insurer has made an allowance of $50,000 as a buffer for future economic loss.
The insurer submits that an allowance by way of a buffer is appropriate in the circumstances of this matter, considering the following factors:
(a) the claimant is currently on a temporary visa. The skilled pathway under the visa requires accumulation of points based on years of employment and there is no guarantee of permanent residency, and
(b) in circumstances where the claimant has sustained injuries in a prior motor accident and a subsequent motor accident, it is appropriate that future economic loss is allowed on a buffer basis.
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 26 years of age. On 28 April 2022, he was granted a Temporary Graduate (subclass 485) visa from the Department of Home Affairs. The visa entitles the claimant to stay in Australia and undertake further study and work on an unrestricted basis, until
28 April 2024. At the teleconference on 13 June 2023, the claimant informed me that he intends to eventually apply for permanent residency.
The claimant completed his information and technology university degree in December 2021. After the grant of the visa, the claimant commenced work in that field as a development programmer in early 2022 with Z10 Finance Group Pty Ltd working 20 hours per week and earning $590 net week. The claimant continues to work the same hours.
I consider that the claimant’s most likely future circumstances, but for the injuries is that he would continue to pursue a career in that field on a full-time basis.
The medical evidence suggests that the claimant’s left ankle condition will continue to improve in the short term.
In circumstances where it is uncertain whether the claimant would continue to reside in Australia as a permanent resident and where it is difficult to determine the extent to which the claimant’s injury to the lower back sustained in the prior motor accident and the claimant’s injuries to his neck, right shoulder, right arm and right hip sustained in the subsequent motor accident, would continue to contribute to the claimant’s future loss of earning capacity, I am satisfied that an allowance by way of a buffer and in the amount of $50,000, is appropriate.
CONCLUSION
Having regard to all of 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 $134,500 is approved under sub-s 6.23(2)(b) of the MAI Act.
Pursuant to sub-s 3.40(1)(b) of the Act, the insurer is entitled to deduct the sum of $46,781.19 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3.
I note that the insurer has made an allowance of $4,500 for the legal costs of the claimant’s previous legal representatives, Paramount Compensation Lawyers. I further note that the claimant has agreed for the insurer to make the payment of that sum directly to MARS Legal (the legal representatives of the liquidator of Paramount Compensation Lawyers) from the proceeds of the proposed settlement.
[i] See paragraph 8(b) of these reasons for a list of the additional documents requested of and provided by the claimant.
[ii] See paragraphs 8(c) and 8(d) of these reasons.
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