Javed v Allianz Australia Insurance Limited

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Javed v Allianz Australia Insurance Limited [2024] NSWPIC 163
CLAIMANT:	Huzaifa Javed
INSURER:	Allianz
MEMBER:	Maurice Castagnet
DATE OF DECISION:	2 April 2024
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 was staying in Australia on a temporary student visa to complete his studies as an international student; Held – proposed settlement of $165,000 is approved.
DETERMINATIONS MADE:	CERTIFICATE Settlement Approval Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement sum of $165,000 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act 2017. 2. Pursuant to sub-s 3.40(1)(b) of the Act, the insurer is entitled to deduct the sum of $47,264.44 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

In this matter, the claimant, Huzaifa Javed made an application to the Personal Injury Commission (Commission) for an assessment of his claim for common law damages under s 7.36 of the Motor Accident Injuries Act 2017 (MAI Act) in respect to injuries he sustained in a motor accident on 31 December 2019.
The claim was made to the insurer on 26 July 2021. The insurer admitted liability for the claim on 16 November 2021.
The matter was referred to me for the assessment of damages.
Initially, the claimant was legally represented in the proceedings. However, at the second teleconference on 9 August 2023, the claimant informed me that he would be representing himself.
Since that time, I have conducted numerous teleconferences to allow the parties the opportunity to file remainder of their respective evidence in readiness for the assessment.
Following a teleconference in February 2024, I was informed by the insurer that the claimant had accepted an offer of settlement to settle his claim in the sum of $165,000 (the proposed settlement).
As the claimant is not legally represented, s 6.23(2) of the MAI Act requires that the proposed settlement be approved by the Commission.

DOCUMENTS CONSIDERED

In making my decision whether to approve the proposed settlement, I have considered the following documents:
(a)      the NSW Ambulance patient care report, dated 31 December 2019;
(b)     the clinical notes of Auburn Hospital and Westmead Hospital;
(c)      the claimant’s application for personal injury benefits dated 7 January 2020;
(d)     an X-ray report of the claimant’s ribs and sternum, dated 22 May 2020;
(e)      the clinical notes of NAS Advanced Medical Centre, as at 9 March 2021;
(f)       the two reports of counsellor, Ms Nafisa Talkuder, undated;
(g)      the medical report from Dr Sikander Khan, dated 20 July 2021;
(h)     a referral to Mr Medhat Metry dated 9 November 2021;
(i)       the medical certificate of Dr Muhammad Virk dated 30 January 2022;
(j)       the referral to Nas Physiotherapy (Step by Step) dated 19 August 2022;
(k)
the medical report of psychiatrist, Dr Robert Kaplan, dated

23 November 2023;
(l)       various certificates of fitness;
(m)    the claimant’s Grants of Visa dated 26 March 2019 and 22 April 2023;
(n)     various pay slips;
(o)
individual tax returns for the financial years ending 30 June 2019 to

30 June 2022;

(p)
payment summaries for the financial years ending 30 June 2019 to

30 June 2022, and
(q)
notices of assessment for the financial years ending 30 June 2019 to

30 June 2022.

THE MOTOR ACCIDENT

Th claimant was 21 years of age at the time of the accident.
On 31 December 2019, the claimant was riding his friend’s motorcycle as a pillion passenger in Greenacre, NSW. When the motorcycle was stationary at an intersection, it was rear ended by the insured vehicle, an SUV. As a result of the impact of the collision, the claimant fell off the motorcycle onto the road.
The NSW Ambulance Service attended the scene of the accident and conveyed the claimant to Auburn Hospital where he remained for two to three days. He was then transferred to Westmead Hospital for further treatment. He was discharged the next day.

SUMMARY OF THE MEDICAL EVIDENCE

The clinical notes from Auburn Hospital and Westmead Hospital evidence showed that the claimant sustained multiple (10) fractures of the ribs on both sides and a fractured sternum. There were recorded complaints about pain in the left shoulder area and limited range of movement upon examination. It was recorded that there was pain in the left scapula region (which is the upper thoracic region on the dorsal surface of the rib cage), the left hip and lumbar sacral region.
In his application for personal injury benefits, the claimant described his injuries as a fractured sternum and by listing the multiple fractures of the ribs.
Upon discharge, the claimant continued his treatment under the care of his general practitioner, Dr Muhammad Virk of the NAS Advanced Medical Centre in Auburn. The clinical notes of the general practice showed that there were regular consultations with the claimant from 6 January 2020 to March 2021(this being the end date of the clinical notes produced). There were complaints of chest, ribs and sternum pain, low mood and depression reported by the claimant throughout that period. On 16 September 2020, there was a complaint of hair loss due to being under stress. On 1 October 2020, there was a complaint of “back pain worsening”.
The claimant was treated conservatively with rest, analgesics, and physiotherapy.
In a certificate of fitness issued by Dr Virk on 31 January 2020, he recorded a diagnosis of “fracture left ribs and sternum”. In later certificates of fitness issued from June 2020, the diagnosis was revised to “fracture left ribs and sternum, depression”.
In September 2020, the claimant was referred to orthopaedic surgeon, Dr Vijay Maniam for further review. In a report dated 18 September 2020 to the insurer, Dr Maniam noted the fractures that were sustained by the claimant and expressed the opinion that these injuries will not be a source of ongoing problems or disability.
On 20 July 2021, the claimant was examined (via a video conference due to COVID-19 restrictions) by general surgeon, Dr Sikander Khan at the request of his legal representatives.
Apart from the injuries I have referred to at paragraph 12 of these reasons, Dr Khan recorded the history of complaints at the two hospitals as including pain to the left side of the neck.
Dr Sikander was of the opinion that as a result of the accident, the claimant sustained multiple fractures to his ribs, a fractured sternum, soft tissue injuries to the cervical spine and thoracolumbar spine and an injury to the left shoulder. He also believed that the claimant had developed psychological injuries.
Dr Khan assessed the claimant’s injury to the left shoulder as giving rise to a whole person impairment (WPI) of 6%. He noted that impairment caused by the fractured sternum and ribs and ongoing intercostal neuralgia following the injuries is not covered in the Motor Accident Guidelines (Guidelines)[1] nor the Motor Accident Permanent Impairment Guidelines (AMA4). Dr Khan reference was made to paragraph 6.24 of the Guidelines[2] and noted that in this situation, assessment by analogy to a similar condition was made to an injury caused to the thoracic spine causing radicular symptoms in the chest wall similar to the intercostal post traumatic neuralgia from rib fractures. On that basis, Dr Khan assessed the chest /rib cage impairment as DRE category II of the thoracic spine - a WPI of 5%, giving a total WPI of 11%.
[1] The reference is still the same in Version 9.1.
[2] See page 88 of the Guidelines Version 9.1.
Dr Khan noted that at the time of the accident, the claimant was employed as a casual process worker in a warehouse and studying at the same time. He was of the opinion that at the time of his examination, the claimant was only fit for part-time selective duties and at reduced hours 6-12 hours per week. He was also of the opinion that the claimant is likely to experience a restriction or reduction in earning capacity in the future.
The claimant was treated by psychologist, Ms Nafisa Talkuder for his psychological symptoms in various sessions between April and June 2022. In an undated report (which would appear to have been written after June 2022), Ms Talkuder was of the opinion that it was highly probable that the claimant was suffering from clinical depression and that from a psychological point of view, he needed proper support for treatment in physiotherapy, psychotherapy and treatment for his back pain and hair loss. Ms Talkuder noted that the claimant’s assessment scores indicated that there was a risk of developing further pathology.
On 5 December 2022, the claimant was assessed by Medical Assessor Alan Home of the Commission to determine permanent impairment of the claimant’s physical injuries.
At the medical assessment, the claimant reported to the Medical Assessor that apart from his rib and sternum fractures, he experienced pain in his neck, left shoulder, and lower back. In that regard, he received treatment with physical therapy over six sessions with some benefit. The claimant complained that funding for further treatment then ceased. The medical assessor noted that the claimant was “quite agitated when discussing cessation of treatment.”
Medical Assessor Home found that the claimant had sustained significant injuries to his chest (by way of the multiple rib fractures and sternum fracture) and soft tissue injuries to the cervical spine and thoracic spine. He determined that the soft tissue injuries give rise to a WPI of 0%. He determined that on the basis of cl 6.229 of the Guidelines, the healed sternal rib fractures attracted a WPI of 0% because no impairment of respiratory function was evident.
It is to be noted that Medical Assessor Home was provided with a report from a consultant physiotherapist, Dr Lever and a report from an orthopaedic surgeon, Dr Phil Allen. Those reports were not before me.
The claimant was referred to psychiatrist, Dr Sylvia Barber by Dr Virk in early 2023.
In a report dated 23 February 2023, Dr Barber noted that it was difficult to engage with the claimant due to his emotional disturbance.
Dr Barber noted that the claimant had no social contacts due to his mental and physical illness. He admitted to having daily severe anxiety, frequent panic attacks, flashbacks of the motor accident and thoughts to end his life due to the feelings of ‘not worth living’ but no actual plan. His sleep is disturbed. He is pre-occupied with his hair loss. He has lost 14kg in weight and has a poor appetite. He has lost interest in his study.
Dr Barber’s diagnosis was that the claimant was suffering severe anxiety and depression and suicidality related to post-traumatic stress disorder as a result of motor accident and that this was ongoing. Dr Barber believed that the claimant required ongoing psychological support on a regular basis and psychiatric monitoring regarding the post-traumatic stress disorder and medication.
On 23 November 2023, the claimant was assessed via audio-visual link by psychiatrist,

Dr Robert Kaplan at the request of the insurer. In his report of the same date, Dr Kaplan indicated that he was unconvinced that the claimant was suffering from any anxiety-based disorder as a result of the accident. He considered the claimant to be displaying various somatic symptom disorders consistent with illness behavior, including pain complaints, insomnia, obsessive focus on hair loss, lethargy, and withdrawal. His diagnosis was a somatic symptom disorder which isa secondary psychological factor and therefore cannot be considered as a primary injury.

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 Guidelines.[3]
[3] The reference is to Version 9.1.

The claimant’s understanding of the proposed settlement

According to cls 7.37 (c) and (d) of the Guidelines, I must be satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner and understands the nature and effect of the proposed settlement and is willing to accept it.
On 6 March 2024, I conducted a teleconference with the parties to question the claimant about these issues. The claimant appeared for himself, and Ms Nicola Aristides 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 Law Partners Lawyers, but he has chosen to represent himself. The claimant said that he has accepted the proposed settlement because he wants to put an end to the claims process.
I had previously made a Direction that the claimant’s psychological injuries be referred for a medical assessment by the Commission. After the issue of that Direction, the claimant wrote to the Commission expressing his wish not to proceed with that assessment. I again questioned the claimant about his wish and again explained to him that if he proceeds with the assessment and it is found that his psychological injuries gave rise to a permanent impairment that is greater than 10%, he will receive a substantial sum for damages for non-economic loss. The claimant said he understood this but confirmed his wish not to proceed with the medical assessment and that he wished to accept the proposed settlement.
I explained to the claimant that once he accepts the proposed settlement, this would end any entitlement to any further claim for damages of any kind.
I explained to the claimant that because he has sustained a non-threshold injury, he is entitled to claim reasonable and necessary treatment and care expenses for life. I explained to the claimant that these claims were managed by the insurer until
31 January 2024 and thereafter will 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 deed, 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 because of his student visa conditions. I further explained to the claimant that regardless of that fact, the insurer may still be required to obtain a clearance notice from Centrelink before any settlement funds are paid to him. Ms Aristides indicated that in this case, the insurer does not intend to request a clearance notice. Ms Aristides acknowledged that due the claimant’s visa condition, he is not entitled to any Medicare benefits and on that basis, there will be no need to proceed with the usual Medicare notification process.
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 (c) of the proposed Settlement Agreement, the insurer will be deducting the sum of the insurer of $47,264.44 for that purpose. The claimant stated that he was aware that the deduction will be made.
I explained to the claimant that according to paragraph 3(d) of the proposed settlement deed, the insurer will be deducting the sum of $24,376 to pay his previous solicitors, Law Partners. The claimant stated that he agrees to that payment being made by the insurer from the proceeds of the proposed settlement.
I indicated to the claimant that the net result of the proposed settlement is that he will receive the sum of $93,359.56 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 wishes to accept the proposed settlement.

Is the proposed settlement just, fair and reasonable?

According to cl 7.37 (b) of the Guidelines, before I approve the proposed settlement under s 6.23(3) of the MAI Act, I must be satisfied that it is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
The proposed settlement is in the sum of $165,000 which represents damages for past and future economic loss. There was no breakdown on how the sum was calculated.
I note that in the schedule of damages submitted by the claimant’s previous legal solicitors on 6 October 2022, the amount sought for past economic loss was $121,701 by way of a buffer, inclusive of superannuation. The amount sought for future economic loss was $380,000 also by way of a buffer, inclusive of superannuation.
Taking into account an allowance made for the regulated legal costs of the claimant’s previous legal representatives, I proceed on the basis that the allowance made for past and future economic loss components and a Fox v Wood component in the proposed settlement, was about $150,000- $155,000 inclusive of superannuation.

Past economic loss

The claimant came to Australia in March 2019 to study as an international student, holding a Student (subclass 500) visa granted from the Department of Home Affairs. The visa allows the claimant to temporarily stay in Australia whilst completing his studies. The claimant’s current student visa is valid until 16 April 2025.
In May 2019, he began studies for a Certificate III in Dental Laboratory Assistant and a Diploma in Dental Technology at the Australia Institute of Business and Technology. He discontinued that course in January 2020.
In January 2020, the claimant commenced studies for a Diploma in Business and an Advanced Diploma of Business at the Australian Harbour International College. He completed his Diploma of Business but ceased studies for the Advanced Diploma of Business.
Since August 2021, the claimant has commenced a Bachelor of Business and Information System at the Australian Institute of Higher Education. There have been failures and it is not clear whether he will be allowed to hold his student visa until the expiry date.
One of the claimant’s visa conditions is that he is restricted from working more than 40 hours per fortnight.
From May 2019 to the date of the accident, the claimant was working as a fruit and vegetable process worker in a warehouse through Workmates/Green Collar Recruitment. The claimant was working as an independent contractor with his own Australian Business Number (ABN).
According to the claimant’s tax return ending 30 June 2020, he received a gross business income of $19,561 and a net business income of $14,443. After tax (which I calculate as Nil), I calculate a net income of about $555 per week.

According to a certificate of fitness issued by Dr Virk on 30 December 2021, the claimant was fit to work 20 hours per week as from 30 December 2021. Allowing for past economic loss from 1 January 2020 to 30 December 2021 (104 weeks x 555), I calculate an amount of $57,720.
This means that the allowance for future economic loss equates to about $100,000.

Future economic loss

Section 4.5(1)(a) of the MAI Act provides that damages may be awarded for past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity.
In cases such as Medlin v State Government Insurance Commission [1995] HCA 5 and Husher v Husher [1999] HCA 47, the High Court of Australia confirmed that the issue to be determined in the present case is whether the claimant has sustained a loss or diminution of his earning capacity and if so, whether that loss or diminution will result in economic loss.
In calculating any economic loss into the future, I must have regard to the provisions of
s 4.7 of the MAI Act.
Section 4.7(1) of the MAI Act provides that damages may not be awarded for future economic loss unless the claimant first satisfies the court or Commission that the assumptions about future earning capacity or other events on which the award is to be based, accorded with the claimant’s most likely future circumstances but for the injury.
Section 4.7(2) of the MAI Act provides that the amount of damages for future economic loss that would have been sustained on those assumptions is to be adjusted by reference to the percentage possibility that the events concerned might have occurred but for the injury.
Section 4.7(3) of the MAI Act provides that if an award for future economic loss is made, the Court or Commission is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.
Section 4.9(1) of the MAI Act provides that where an award of damages is to include compensation, assessed as a lump sum, in respect of damages for future economic loss which is referrable to deprivation or impairment of earning capacity, the present value of the future economic loss is to be qualified by adopting the prescribed discount rate. Section 4.9(2) of the MAI Act prescribes a discount rate of 5%.
Section 4.7 of the MAI Act does not preclude the awarding of a buffer for future economic loss. The occasion for a buffer in accordance with the principles enunciated in Penrith City Council v Parks [2004] NSWCA 201 is when the impact of the injury on the economic benefit from exercising earning capacity after injury is difficult to determine.
The claimant is now 25 years of age. Based on his completed and partly completed studies, I consider that the claimant’s most likely future circumstances but for the injury is that he would pursue a career in business or information technology fields in Pakistan on a full-time basis. Due to the mature of his visa, it is not possible to assume that the claimant would be permitted to remain in Australia a permanent resident. There is no suggestion that the claimant had applied for a permanent residency visa.
The weight of the medical evidence suggests that the claimant has or should have recovered from his physical injuries. The fractures of the ribs and sternum have healed. The clinical notes show that there have been hardly any complaints about any physical injuries except pain and soreness to the chest area.
The medical evidence shows that the claimant’s ongoing problems relate to his psychological symptoms and that would appear to be the main impediment to any future earning capacity for work. In that regard, I note that the claimant has resisted treatment advise from his treating providers.
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 future earning capacity will be affected by his psychological injuries, I am satisfied that an allowance by way of a buffer is appropriate. For that purpose, the sum of about $100,000 inclusive of superannuation, is in the range of a likely award that would be made by the Commission for future economic loss.

CONCLUSION

Having regard to all the above matters, I am satisfied that the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, the disabilities and the impairments sustained by the claimant.
The proposed settlement of the claimant’s claim for damages in the sum of $165,000 is approved under sub-s 6.23(2)(b) of the MAI Act.
Pursuant to sub-s 3.40(1)(b) of the MAI Act, the insurer is entitled to deduct the sum of $47,264.44 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 claimant has agreed that the legal costs of his previous legal representatives, Law Partners in the amount of $24,376 be deducted from the proposed settlement and paid directly to Law Partners.

[2024] NSWPIC 163

2 April 2024