McWilliams v Allianz Australia Insurance Limited

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	McWilliams v Allianz Australia Insurance Limited [2023] NSWPIC 646
CLAIMANT:	Peter McWilliams
INSURER:	Allianz
MEMBER:	Shana Radnan
DATE OF DECISION:	1 December 2023
CATCHWORDS:	MOTOR ACCIDENTS - Assessment of Damages; pedestrian; culpability of claimant; contributory negligence deduction of 50%, 53-year-old male working as a butcher; 16% whole person impairment; non-economic loss $325,000; claim for past and future economic losses based on replacement labour cost and likely early retirement; expert accounting report noting difficulty establishing replacement loss on tax returns; little dispute on nature of injuries both physical; ongoing left knee, likely future surgery, knee reconstruction and psychological impact; Held – buffers awarded for both past and future economic loss.
DETERMINATIONS MADE:	CERTIFICATE OF DETERMINATION Issued in accordance with s 7.6 (1) of the Motor Accident Injuries Act 2017. 1. On the issue of contributory negligence, the claimant’s damages are reduced by 50% on account of the claimant’s contributory negligence. 2. In accordance with s 7.36(3) and s 7.36 (4) the amount of damages for the claim after deduction for contributory negligence is $327,307.50. 3. The insurer is to have credit of $60,390.86 for payments made pursuant to s 3.40(1)(b) of the Motor Accident Injuries Act 2017. 4. The amount of the claimant’s costs in this matter is $55,382.75 inclusive of GST.

STATEMENT OF REASONS

BACKGROUND

This dispute relates to an application for an assessment of a claim for damages (the Application) under s 7.36 of the Motor Accidents Injuries Act 2017 (the MAI Act) in respect of a motor accident that occurred on 16 November 2019 (the motor accident).
Peter McWilliams (the claimant), is a 53 year old man, who sustained injuries in the motor accident.
On 27 November 2019 the claimant made an application for personal injury benefits in respect of the motor accident against Allianz Australia Limited (the insurer) being the compulsory third-party insurer of the vehicle at fault. (document A3)
On 20 July 2021, the claimant made an application for damages under common law. (document A4)
In a liability notice dated 15 November 2021, the insurer admitted liability, including an admission of breach of duty of care, but alleged contributory negligence on the part of the claimant at 60%. (document IB 9-11)
The Application was lodged with the Personal Injury Commission (Commission) on
20 December 2021. The matter was allocated to me on 23 March 2023.
An in-person assessment took place at the Commission in Sydney on 12 October 2023. The claimant was directed to provide claimed costs and the insurer to reply within seven days.
The parties agreed that the following issues were required to be determined by me:
(a)      the contributory negligence if any, on the part of the claimant;
(b)     the nature and extent of the claimant’s injuries;
(c)      the quantum of damages for non-economic loss;
(d)     the quantum of damages for past loss of earnings or past loss of earning capacity, and
(e)      the quantum of the claimant’s damages for future loss of earnings or future loss of earning capacity.
The parties agreed that:
(a)    the insurer had made payments under s 3.40(1)(b) of the MAI Act (statutory benefits paid) in the sum of $60,390.86. The insurer made no deductions on the basis of contributory negligence when making the payments;
(b)     payments made by Allianz under s 4.5(1)(d) of the MAI Act (Fox v Wood damages) amount to $9,615, and
(c)     that I issue draft reasons to the parties to enable further submissions on costs.

EVIDENCE
Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    The claimant’s bundle:
(i)Submissions and schedules (A1)
(ii)Schedule of costs and disbursements (A2)
(iii)Application for personal injury benefits (A3)
(iv)Application for Damages (A4)
(v)Report Nigel McDonald – Liability (A5 & 6)
(vi)Medical reports:
1.Dr Nelapati (A7)
2.Dr Doig (A8)
3.Dr Hopcroft (A9 & 10)
(vii)Statements:
1.Claimant (A11 &12)
2.Kirrily Kay-McWilliams (A13)
3.Chris Bruton(A14)
(viii)Economic Loss reports:
1.Michael Lee (A15 & 16)
(b)    The insurer’s bundle:
(i)Submissions and schedules (IB2-6)
(ii)Division 3.3 list of payments (IB7-8)
(iii)Liability documents:
1.Liability Notice dated 15 November 2021 (IB9-11)
2.NSW Police file (IB12-29)
3.Report Professor Christie (IB30-45)
4.Accident Reconstruction report 28 April 2023 (IB46-138) and supplementary report 6 September 2023 (IB139-164)
(iv)   Medical reports:
1.NSW Ambulance (IB165-171)
2.Orange Health Services (IB172-199)
3.Tamworth Rural Referral Hospital (IB200-256)
4.Clinical Records Port Macquarie Base Hospital (IB257-269)
5.MRI left knee 16 January 2020 (IB270-271)
6.Report Dr Lyons dated 14 February 2020 (IB272-273)
7.Medical Case Conference dated 18 September 2020 (IB274-275)
8.Physiotherapist records dated 20 January 20201 (IB276-280)
9.RehabCo report dated 26 February 2021 (IB281-283)
10.AHRR report dated 12 March 2021 (IB284-288)
(v)    Economic loss reports:
1.Tammy Lindsay dated 20 June 2023 (IB289-331) and supplementary reports dated 20 September 2023 (332-347).

Oral evidence

The claimant relied upon the statements served in the matter and provided no further oral evidence, before the insurer further questioned the claimant. The insurer questioned the claimant as to the circumstances of the accident, the location and his positioning on the roadway immediately before impact.
The circumstances of the claimant’s business operations both before and after the accident were tested. Questions of the operation of the Tamworth butchery after the closure of the Port Macquarie business were presented to the claimant and responded to. Details of staffing and the impact of the injuries sustained by the claimant as to the claimant’s ability to operate his business included evidence from butcher Chris Bruton currently employed by the claimant via face-time on a mobile telephone.
The parties concluded the conference with oral submissions which relied primarily on the written submissions already produced and the additional information elicited from the assessment conference oral evidence.

The accident

There is no dispute between the parties that the accident occurred at approximately 10.00pm on 16 November 2019. The claimant had attended a birthday party at Box Grove Reception Centre. After leaving the party, “the claimant and others walked in a southerly direction along Duramann Road, Eglington towards Bathurst”. The road had no street lights and there was no illumination from any properties in the vicinity. The area was semi-rural.
The insured’s driver was travelling on the road in the same southerly direction at approximately 80kmph in a 100km zone, noticed a lady in a red dress but did not see the claimant on the roadway.
The claimant was clipped by the vehicle and was thrown into a grassed ditch to the left hand side of the roadway sustaining injuries.
The claimant and insurer were in dispute as to the position of the claimant when he was struck by the insured’s driver.

Where was the claimant when he was struck by the insured’s vehicle?

The claimant’s account to police when interviewed on 12 December 2019:
“4. ... about 10.00pm my friend….wanted to leave the party. He was intoxicated and my wife wanted me to go with him to make sure he got home. We walked down the driveway at the function centre, towards Duramann Road, Bathurst.. After exiting the driveway, we crossed onto the other side of the road heading in the direction of Bathurst township. The location of the function centre is semi-rural. At the time, it was dark and there was not any street lighting. The road is tarred and there is sufficient room for vehicles to travel in both directions. The road does not have any markings and there is a steep ditch on the left side of the road. As a result, Scott and I were forced to walk on the left side of the roadway. Initially we were walking side by side on the left side of the road. I estimates that I was about one to two from the centre of the roadway.
5. As we were walking I noticed headlights behind me. I am unable to estimate the distance from the driveway of the function centre. I moved so I was now walking single file behind Scott. I was now walking on the edge of the roadway. I did not look behind me. Suddenly the front passenger side of the vehicle hit my right leg, this caused me to be thrown to the left side of the road…”
In evidence, there is an accident description and diagram contained the material produced in response to a Government Information (Public Access) Act request for information. Under cover of letter dated 5 April 2023 (GIPA bundle) at pages 8 and 9 completed by the claimant and endorsed with his signature. The location of where the claimant and his friend was walking was not on the gravel verge as stated in the claimant’s oral evidence but on the roadway to the left hand side. The diagram where the claimant was walking before his move to single file was the middle of the southern lane.
The diagram produce by Senior Constable Robert Punnett at page 10 of the GIPA bundle, places the claimant and his friend further to the centre of the roadway in the southern lane of traffic.
The photographs on page 17 of the bundle taken of the scene where the claimant is being treated by paramedics showing the female in a red dress on the ground and another male in a white shirt with red suspenders, is consistent with the driver having seen a female in a red dress before the collision.
As to the point of impact, contained in the police evidence is a photograph taken at the scene, page 19 of the GIPA bundle which shows a piece of bumper bar fragments laying on a section of the roadway on the edge of the bitumen where the gravel and grass verge commences. The side of the lady in the red dress can be seen in the left foreground of the photo and the photograph is illuminated by floodlights.
The piece of debris is believed to be that from the insured’s vehicle positioning on the roadway was used to identify the location of the collision.
The claimant’s evidence has consisted of varying statements as to where he was walking when hit:
(a)    initially, he had no memory of the incident according to ambulance records;
(b)    he then gave a statement to police on 19 December 2019, that included a diagram of him walking side by side on the roadway approximately 1m from the centre line and when his wife screamed that a car was coming he moved behind his friend in single file, and
(c)    in a further statement of the claimant dated 17 February 2023 (A11) at paragraph 19 and at the assessment conference in the responses to the insurer’s questioning, the claimant was adamant he was walking on the grass verge and gravelled shoulder to the left of the bitumen.
The insurer relied upon:
(a) the statement by Matthew McCarthy the insured’s driver dated 4 May 2020 taken by an investigator engaged by the insurer that focused on the contributory negligence aspect of the claim. The relevant parts of that statement include the following:
“...13. I was travelling south in Duramana Road at about 80kph and just past the entrance of Boxgrove Wedding Reception I saw a lady in a red dress just off the edge of the road to my left. I moved to the centre of the road away from her. As the front of my car was next to the lady a figure in dark clothing was suddenly in front of the passenger side of my car – I had no time to do anything either to swerve or brake. The front of my struck the figure that I later learnt was a man.
14. At first I though (sic) I had hit a roo. I stopped as soon as I could and then reversed back about 20 metres to near where I could see the woman in red. …”
Experts were retained to reconstruct the accident to ascertain the location of the claimant and the insured’s vehicle at the point of impact:
(a) Nigel McDonald qualified by the claimant produced a collision reconstruction report dated 16 August 2023, in reply to the insurer’s. The conclusions drawn were (A8 at par 7.7):
(i)the claimant was struck by the defendant’s vehicle travelling south at approximately 80km;
(ii)there is no evidence that allows the position of the vehicle to be placed across the road with certainty;
(iii)the physical evidence available suggests the vehicle was travelling within the normal southbound lane at impact, and had not moved towards or across the centre of the road;
(iv)upon seeing the female in the red dress shortly prior to impact, I consider it reasonable to expect a driver to move towards or across the centre of the road and away from the female;
(v)had the defendant moved towards the centre of the road, it appears the collision with the claimant would not have occurred;
(vi)as a lone pedestrian on a remote section of unlit rural road is unusual, I consider it to be a prompt that other pedestrians or some unknown hazard associated with the pedestrian could be present, and the need for a driver to be alert, and
(vii)having been alerted to the potential for another pedestrian or other hazard by a female in the red dress, the defendant should have been able to recognise the claimant and /or his companion… on or near on the roadway, and successfully steer to avoid a collision regardless of whether or not the defendant had moved his vehicle towards the centre of the road beforehand. (A5)
(b) William Kerides was qualified by the insurer opined in his report dated
28 April 2023 and supplementary report of 6 September 2023, that the claimant was on the road surface approximately 2m from the edge in the centre of the lane as noted in figure 11 (IB83):
(i)The investigations of the site confirmed the following:
1.photographs of the site taken show the location approximately 100 m from the driveway of the reception centre;
2.measurements of the road taken by investigators confirmed the width to be about 6.9 m;
3.location of deep grassed ditch of 2 m width was on the eastern side of the roadway;
4.the western roadway was slightly elevated above the road surface; (IB 69)
5.the area has recently been mowed as the grassed areas were short. (IB72 Police photo 7), and
6.both sides of the road had traversable shoulders with width of 1.3 m.(IB73)
I note that the claimant’s wife produced a statement to assist her husband’s claim (A13) dated 14 February 2023. The content of this statement was silent on the circumstances of the accident even though she was present at the time.
Having reviewed the evidence presented in this matter, I am satisfied that the claimant was walking on the bitumen of the southern traffic lane somewhere between the left hand side of the southern lane and the middle of the southern lane. Noting the position of the lady in red dress (the claimant’s wife) walking on the grassed shoulder, the claimant could not have been walking where he believes he did walk as the driver would have collided with the lady in the red dress first.
Whilst the insurer relied upon its expert’s assessment of a piece of debris (bumper bar fragment) and where it came to rest on the roadway as a source of identification of where the impact took place, I am not satisfied this element assists me in the conclusions to be drawn as to the point of impact. The reason for my hesitancy is that the insured in his statement confirmed he initially heard a bang, continued travelling forward and then upon realising he hit somethings stopped his vehicle and then reversed back some 20m. When the item fell to the ground is unknown.
The conclusions drawn by Mr Keramidas were:
(a)    the incident occurred in darkness;
(b)    the claimant was walking in the southerly direction approximately two metres from the road edge placing him entirely within the southbound lane;
(c)    the insured’s vehicles headlights were on. He was unsure if low or high beam;
(d)    sight line on low beam would be 19 to 23m;
(e)    sight line on high beam 38 to 46m;
(f)    perception response time for the insured 2 to 2.09 seconds equating to 38.9 to 64.4 m;
(g)    the claimant would have had 150m visibility or 7 seconds, and
(h)    the claimant could have avoided the impact outright by employing reasonable judgment. “His position on the roadway was the primary cause of the collision”.(IB93)

Findings on the accident

I am persuaded by the evidence contained in the police report, the insurer’s investigations, the initial diagrams prepared by the claimant of the following:
(a)    that the claimant was walking along the roadway in a southerly direction away from the function centre;
(b)    the claimant was approximately 1.7 to 2m into the lane;
(c)    the claimant was wearing dark clothing;
(d)    the claimant was significantly intoxicated at the time of the accident;
(e)    the claimant’s perception was impaired by his level of intoxication;
(f)    the claimant has a blood alcohol concentration was 0.215g% (with a possible range of 0.204 and .237g%, and
(g)    the claimant’s conduct also contributed to the collision.
The conduct of the claimant is to be assessed against a test of whether a reasonable person in the position of the claimant would have acted in the same manner.
An assessment of contributory negligence of the parties follows.

CONTRIBUTORY NEGLIGENCE
The relevant legislation and legal principles

Section 1.4(1) of the MAI Act defines fault as negligence or any other tort.
Section 4.17(1) of the MAI Act provides that in assessing contributory negligence, regard must be had to the common law and the enacted law.
Section 4.17(3) of the MAI Act provides that the damages recoverable in respect of the motor accident are to be reduced on account of contributory negligence by such percentage as the court or Commission thinks just and equitable in the circumstances of the case unless
s 4.17(4) requires that the damages be reduced by a fixed percentage. The circumstances specified in s 4.17(4) do not arise in this case. Section 4.17(3) further provides that the court or Commission must state the reasons for determining the particular percentage.
Section 3B(2)(a) of the Civil Liability Act 2002 (the CLA) provides that Divisions 1 - 4 and 8 of Part 1A (Negligence) of the CLA apply to motor accidents.
Section 5B(1) of the CLA provides that a person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and, the risk was not insignificant; and, in the circumstances, a reasonable person in the person’s position would have taken those precautions.
Section 5B(2) of the CLA provides that in determining whether a reasonable person would have taken precautions against the risk of harm, the court is to consider the following (amongst other relevant things):
(a)    the probability that the harm would occur if care were not taken;
(b)     the likely seriousness of the harm;
(c)     the burden of taking precautions to avoid the risk of harm, and
(d)     the social utility of the activity that creates the risk of harm.
Whether there is any contributory negligence requires, pursuant to s 5R of the CLA, a determination of whether a reasonable person in the claimant’s position, would have walked on the where and how he did, knowing what he did or what he ought to have known. Section 5R of the CLA imposes an objective test.
In assessing the degree of negligence, I am required to weigh up the respective acts of negligence of the parties involved and determine an appropriate apportionment between them. In analysing the relative degree of culpability of the claimant and the insured driver, the facts need to be considered.

The relevant facts to consider in this determination include:
(a)    the accident occurred at night (10pm) on a roadway in a semi-rural area;
(b)    the lighting conditions were dark;
(c)    the claimant was wearing dark clothing, with white suspenders and hat;
(d)    the claimant had a blood alcohol concentration between .204g% - .237g%;
(e)    the claimant was walking on the southbound lane of the roadway;
(f)    the claimant was walking with his back to the southbound traffic;
(g)    the insured drove his vehicle in the southbound lane at speed of approximately 80km in a 100km zone;
(h)    the insured moved his vehicle to the right and centre of the road when he saw a lady in a red dress on the grass verge to the left of the southbound lane, and
(i)    the front nearside bumper of the insured vehicle collided with the claimant’s right side of his body.
In Podrebersek v Australian Iron and Steel Pty Ltd (1985) HCA34 the High Court of Australia confirmed that the following considerations should be made when determining the apportionment of culpability between parties:
(a) the culpability of both parties; that is, the degree of departure and standard of care of the reasonable man, and
(b) the relative importance of the acts of the parties in causing the damage.
The degree of culpability assessment requires a determination from the standard of care which each party exhibited: Salmon v Meacham [2006] NSWCA89.
Reliance was also placed on prior decisions of the court in particular those with similar facts:
(a)    Serrao (by his tutor) v Cornelius (no2) [2016] NSWCA 231 which involved an intoxicated pedestrian, walking on an unlit road who was hit from behind. In that matter the Court of Appeal criticised the pedestrian for walking with their back to the traffic, not keeping as far to the left as possible and their failure to notice the vehicle coming from behind them. Contributory negligence was determined at 50%. The insurer in this matter submitted that because the claimant was so heavily intoxicated and failed to heed the warnings of those with him, the percentage should be higher;
(b)    reference was also made to Manley v Alexander [2005] HCA79 and Vale v Eggins [2006] NSWCA340 both cases involved heavily intoxicated pedestrians where the court determined contributory negligence of 70% and 75% respectively, in excess of the submissions made in this matter;
(c)    Hawthorne v Hillcoat [2008] NSWCA340 where the NSW Court of Appeal commented that the 80% contributory negligence adopted by the trial judge as “generous to the plaintiff noting a very high blood alcohol reading of .226”, and
(d)    Gordon v Truong [2014] NSWCA97 where the insurer having admitted liability, there was no proper consideration of the nature of the insured’s breach of duty. The court confirmed that consideration should address both parties culpability.

The insured’s negligence

The insurer has conceded that the insured had breached a duty of care to the claimant. By its submission it conceded the percentage attributable to the insured should be 40%.
The conduct of the insured considered negligent was detailed in its liability notice dated
15 November 2021 as follows:
“By our insured failing to notice your presence on the road or taking in consideration there may have been other pedestrians in the area, it is accepted that our insured breached the duty of care they owed to you.”
The claimant submitted the insured was 100% at fault and there should be no finding against the claimant. If in the alternative, I was not persuaded by their submissions then at best the claimant’s negligence should be found in the range of no more than 15% - 20%. The issue of the claimant’s intoxication was of no consequence.

The claimant’s negligence

The insurer submitted the conduct of the claimant amounted to contributory negligence of 60% as he:
(a)    failed to keep a proper lookout when crossing the road;
(b)    walked along an unlit roadway in a semi-rural area;
(c)    crossed while affected by alcohol;
(d)    crossed whilst wearing dark clothing in a poorly lit area;
(e)    walked on the incorrect side of the road in contravention of NSW Road Rule 238, and
(f)    failed to heed the warning of others that he was endangering himself by walking on the roadway in such proximity to traffic.
That I should have regard to the opinions of NSW Police constables attending the scene, who took the view that the claimant was at fault for the collision as he was walking in the roadway.
That I should take into consideration the fact that the claimant was heavily intoxicated and that the claimant’s conduct was impaired by this factor. It relied upon the opinion of Professor Macdonald (IB30-45) to support the finding that the claimant would have been affected by his alcohol consumption.
The assessment of the likely blood alcohol concentration at the time of the collision was calculated to have been within the range of 0.204g% to 0.237g%. The analysis was undertaken from a blood sample obtained from the claimant at hospital on the night of the collision when admitted. The initial reading at hospital was 0.182g%.
The impairment of a person with a blood alcohol concentration in the range described according to Professor Macdonald includes “severe impairment of perception, judgment, reasoning, skills, reactions, balance and gait”.
The conduct of the claimant in failing to look behind him when he could see headlights is a clear indication that the impact of the quantity of alcohol consumed that evening impaired his perception and such conduct contributed to the collision.
The claimant failed to take care of his own safety by walking on the roadway in the line of traffic. It has been submitted by the insurer that the claimant could have undertaken a number of alternative actions and that a reasonable persons would have:
(a)    walked on the western side of the roadway, so as to face oncoming traffic;
(b)    walked on the 1.3m wide nature strip adjacent to the roadway on either side of the roadway as others such as his wife who was in the near vicinity behind him had done;
(c)    look around assessed and adjusted his position when he noticed headlights coming from behind him;
(d)    used a light source such as mobile telephone to better appreciate his position on the roadway;
(e)    not embarked on a long walk to the township nearby given his level of intoxication, and
(f)    heed the warnings of others around his who alerted him to oncoming traffic.
The path the claimant walked was inherently dangerous and he took little care for his own safety.

Apportionment between the parties

Section 4.17(3) of the MAI Act provides that the damages recoverable in respect of the motor accident are to be reduced on account of contributory negligence by such percentage as the court or Commission thinks just and equitable in the circumstances of the case unless
s 4.17(4) requires that the damages be reduced by a fixed percentage. The circumstances specified in s 4.17(4) do not arise in this case. Section 4.17(3) further provides that the court or Commission must state the reasons for determining the particular percentage.
Section 3B(2)(a) of the CLA provides that Divisions 1 - 4 and 8 of Part 1A (Negligence) of the CLA apply to motor accidents.
Section 5B(1) of the CLA provides that a person is not negligent in failing to take precautions against a risk of harm unless the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known); and, the risk was not insignificant; and, in the circumstances, a reasonable person in the person’s position would have taken those precautions.
Section 5B(2) of the CLA provides that in determining whether a reasonable person would have taken precautions against the risk of harm, the court is to consider the following (amongst other relevant things):
(a)      the probability that the harm would occur if care were not taken;
(b)     the likely seriousness of the harm;
(c)      the burden of taking precautions to avoid the risk of harm, and
(d)     the social utility of the activity that creates the risk of harm.
Whether there is any contributory negligence requires, pursuant to s 5R of the CLA, a determination of whether a reasonable person in the claimant’s position, would have walked in the location he did, how he did, knowing what he did or what he ought to have known. Section 5R of the CLA imposes an objective test.
In assessing the degree of negligence, I am required to weigh up the respective acts of negligence of the parties involved and determine an appropriate apportionment between them.
Podrebersek v Australian Iron and Steel Pty Ltd (1985) HCA 34 (Podrebersek) the High Court of Australia confirmed that the following considerations should be made when determining the apportionment of culpability between parties:
(a)     the culpability of both parties; that is, the degree of departure and standard of care of the reasonable man: Pennington v Norris (1956) 96CLR 10;
(b)    the relative importance of the acts of the parties in causing the damage;
(c)     the whole conduct of each negligent party in relation to the circumstances of the accident must be subjected to comparative examination, and
(d)     the significance of the various elements involved in such an examination will vary from case to case.
Ultimately, the apportionment becomes a matter of impression having regard to the circumstances of the location, the amount of traffic, the actions of each party.
I have weighed up the respective acts of negligence of the parties involved and referred to above. I have taken into account the Podrebersek considerations in determining the apportionment of culpability between the parties.
In considering the actions of the claimant and that of a reasonable person:
(a)      a reasonable person in the claimant’s position would not have been walking along the roadway approximately 1.7 to 2m from the lane edge, in the dark wearing dark clothing when there were safer areas on the traversable shoulders on both sides of the roadway to walk;
(b)     a reasonable person in the claimant’s position would have walked along the eastern traversable shoulder enabling sight of oncoming traffic;
(c)      the risks of serious injury to the claimant were foreseeable;
(d)     a reasonable person in the claimant’s position would have heeded the warnings of those around him not to walk on the roadway, and
(e)      a reasonable person in the claimant’s position with the level of intoxication and impaired capacity would not have undertaken the endeavour of walking home.
The conduct of the insured is considered in the assessment and whilst the insurer submitted their driver’s negligence was 40%, I consider this should be higher as the driver did not apply his brakes in the situation.
The apportionment of contributory negligence applied to the claimant’s conduct is greater than the claimant has contended as I have found the conduct of the claimant significantly contributed to his injuries in a greater degree than that conceded by the claimant.
The claimant’s contributory negligence is assessed at 50% in the circumstances. Damages will be adjusted to reflect the claimant’s percentage of contributory negligence so determined.

Assessment of damages
Injuries sustained

There was little dispute between the parties that the claimant suffered injuries as a consequence of the accident. The claimant sustained in the motor accident as follows:
(a) fracture of right lateral malleolus, and
(b) left knee injury requiring revision of arthroscopic anterior cruciate ligament reconstruction, a medial collateral ligament reconstruction and lateral meniscectomy on 5 March 2020.
His ongoing disabilities are reported as:
(a)    pain stiffness and restriction of movement - left knee;
(b)    radiation of pain along left leg;
(c)    left knee giving way from time to time;
(d)    necessity to ingest pain medication daily;
(e)    difficulty sleeping due to pain;
(f)    reduction of ability to undertake pre-accident social and recreational activities; including sport, running and surfing;
(g)    difficulty standing for prolonged period;
(h)    difficulty participating in pre-accident work related tasks;
(i)    necessity to undertake further surgery which includes knee replacement, and
(j)    loss of self worth.

Statement of the claimant on injuries

The claimant produced two statements. In his first (A11) he reported his injuries as:
(a)    transverse right fibula fracture;
(b)    rupture left anterior cruciate ligament;
(c)    rupture left medial collateral ligament;
(d)    large effusion;
(e)    Grade I chondral damage of patellar medial/lateral facet;
(f)    Grade II/III chondral damage of lateral femoral condyle (acute);
(g)    Grade I chondral damage of lateral tibial plateau anterior horn, and
(h)    radial tear of lateral meniscus.
Pain stiffness and restriction of movement in right ankle continues. The left knee is a constant source of pain, stiffness and restriction of movement. He is constantly aware of knee instability.He now has a limp.
He reported tolerances of 45 minutes for standing, difficulty walking on uneven ground, driving impacts the level of pain, there is difficulty squatting and he cannot kneel.
In his oral evidence at the assessment conference, the claimant confirmed that he had a problem with alcohol and now does not imbibe at all. He found with an increase in depression he was drinking so much that on 26 January 2022 he made a decision to go dry. He had also had a driving offence which prompted seeking treatment for alcoholism.
He described ongoing difficulty performing activities around the home, the impact on his ability to undertake certain work tasks continued and would not change.
He described his work capacity was “work 1 hours and then rest”.
He reported ongoing loss of motivation which was impacted by his level of pain and “I am never pain free.” He expressed his disappointment in not being able to play ball sport with his daughters as he had done out the front of his home before.
He confirmed the impact on his social and recreational activities continued.
He feels sad, low and irritated and a sense of “hopeless" hovers over him all the time.

Statement of Kirrily-Kay McWilliams - claimant’s wife (A13)

She is the wife of the claimant. Her evidence was not tested as the insurer did not required her to be question at the assessment. She was available but was not called.
She reported the accident injuries had resulted ina “huge effect on his life, our marriage and home life”.
She confirmed his experience of constant pain, the way it impacted on his lack of ability to undertake recreational and sporting activites he had participated in before the accident.
The lack of socialisation with his mates, the inability to go camping now, something they had enjoyed.
In summary:
“Most of all he has lost his spark. He n o linger has any energy or drive. His thrist for life has gone.. he has gone from fun loving and always up for anything to distant, quiet reserved, moody,impatient and always tired.”
Further she recorded:
“His restrictions frustrate him no end, often to the point of anger. This is especially so in the shop where he has gone from a larger than life butcher leading the charge to sitting in the background supervising.”(CB108)

Statement of Chris James Bruton – employee (A14)

Mr Bruton is a qualified butcher who initially undertook his apprenticeship with the claimant.
He left after obtaining his qualification and commenced operation of a café. He returned to the employ of the claimant in February 2021.
During his association with the claimant, as an apprentice:
“he (the claimant) worked like a trojan in his butcher shops. He worked at 100 miles and hour for 11 hours plus days most days. He did everything from customer service to butchering and mentoring me. His passion and drive was nothing short of inspirational.” (CB109)
Upon returning to his employ in 2021 he noticed that the claimant often winced with pain and his left knee was a problem.
The difference between then and now is;
“like chalk and cheese...Now he can’t stand or walk for long and mostly sits down. And he is no longer the king of the customer, leaving most of the customer interaction to me. He gives me the impression of being sad and down and out – the complete opposite to the way he was before the accident.”
He reported his current duties as:
(a)      greeting customers;
(b)     taking orders;
(c)      cutting and preparing meat for sale;
(d)     weighing meat;
(e)      making sausages, and
(f)       stocking the counter displays and cleaning.
All of which require him to be on his feet.
The claimant’s role in butcher in the Tamworth shop was described as follows:
“peter’s role is now largely limited to ordering stock and supervising apprentice butcher. Occasionally, when the shop is busy he will stand and do butchering work to help out but he can’t do it for more than and hour as he has to sit for a couple of hours to rest and recover.”
In a closing comment he reported:
“The shop inst busy enough to employ two experienced butchers so if he could work as a butcher he wouldn’t need to employ me or at least only on the weekends so he could have a break” (CB111)

Medical evidence
The claimant’s reports

Dr Nepalati reported on 5 March 2023 that;
“since then he has had pain and disability but had to work to keep his business going. He confirmed “major psychological impact from the accident. He has residual disability and psychological scars and chronic pain and easy fatiguability. The event changed this man’s life forever.”(CB71)
Clinical records note that he continues to suffer from pain and disability in his left knee, it swells and “minimal insult or strain”. Pain occurs in right knee, ankle and back.
He report … “Has been through bad drinking and suicidality bouts and gambling issue post injury after DUI carge [sic] he has quit alcohol”.
Dr Hopcroft was qualified to give an assessment and his report of 11 October 2022 opined:
(a)    significant injury to right knee;
(b)    injury to left, and
(c)    due to the continued struggle with left knee he is forced to reduce the hours of work in his butcher shop.
In a supplementary letter of 8 November 2022 he commented:
“I believe it is likely that without successful total knee replacement surgery he is likely to be forced to retire from work as a butcher within 5 years.”

The insurer’s reports

Dr Doig was qualified by the insurer. His report dated 10 March 2022. He confirmed the injury as:
“suffered an undisplaced, transverse fracture of the distal fibula at the right ankle, which has healed with no ongoing problems and an aggravation of pre-existing left knee condition, having undergone an anterior cruciate ligament repair 30 years prior and the development of post-traumatic degeneration.”
Due to the pre-existing degeneration indicated in a scan on MRI taken shortly after the accident, this condition predispoded the claimant’s left knee to swell and cause pain.
He considered the claimant to have:
“a 15-20 kgs lifting, pushing and pulling restriction with limited bending, twisting and squatting through the right leg. She should avoid working at heights, or uneven ground, as well as repetitive stair, hill and ladder climbing and kneeling. He may require breaks from prolonged standing walking and driving and he is unable to run. He has problems carrying out activities which exceed these restrictions.”
The injuries sustained in the motor vehicle accident “has caused further, traumatic, articular-cartilage damage to the knee joint”. (CB86)
When considering capacity and employment he opined:
“due to his right knee condition , he has problems standing and walking for any length of time which makes working as a Butcher difficult. The previously listed restrictions will pertain to his working conditions, In view of his age, education and previous work experience, he may require re-training to return to full-time employment in a more sedentary role.”
In repsone to a question of ongoing incapacity for work as a result of motor vehicle accident? The specialist responded “Mr Mcwilliams is fit for alternative duties with the previous listed restrictions in place. He will not be able to upgrade to pre-injury capacity in the future.” (CB88)

Assessment of combined whole person impairment was 16% representing:
(a)    right ankle 0%;
(b)    right knee 38% lower extremity, and
(c)    scarring 1%.

Submissions on non-economic loss
The claimant

The claimant drew my attention to the nature of the accident, a high speed impact between a motor vehicle and pedestrian. The injuries to the claimant a fracture of the right lateral malleolus healed well with ongoing pain and swelling.
Further surgery was undertaken on 5 March 2020 by way of a revision arthroscopic anterior cruciate ligament reconstruction, a medial collateral ligament reconstruction and a lateral meniscectomy. The claimant has confirmed that this surgery has not been particularly helpful.
He continues to suffer from pain radiating up and down his leg and he reports his knee gives way from time to time.
The pain prevents the claimant from sleeping and the claimant’s wife reported the claimant has lost his zest for life. He has limitation in his ability to undertake exercise and socilaise. He is unable to undertake activities such as camping and his love of surfing, running and playing sport is impacted by his injuries preventing his participation in such activities.
The impact on his family life and his ability to play sport with his daughters was described as “devastating”.
The change to his mood, which includes impatience, loss of libido, loss of motivation impacts upon his relationship with his wife.
The claimant is not pain free and the likelihood of further surgery which would include a total left knee replacement within the next few years and the impact for the remainder of the claimant’s life should not be disregarded.
The claimant submitted that having regard to the impact of his injuries upon his ability to undertake his work as a butcher, serve his customers and retain the clientele, the impact on his ability to function in the workplace should also be factored into the assessment of non- economic loss.
In these circumstances, the appropriate assessment is something in the order of $350,000.

The insurer

A concession was made that the claimant’s injuries to his left knee would exceed 10% whole person impairment and as a result he would be entitled to damages for non-economic loss. The sum of $200,000 was submitted and an appropriate amount.

Assessment of non- economic loss

Having considered the information before me, the evidence of the claimant and that of his wife, I accept that the nature of the claimant’s injuries have had a profound impact on the claimant.
He has sustained physical injuries which he is currently continuing to experience pain. His injuries to his left knee are ongoing and prevent him from participating in social and recreational activities as well as work related activities which prior to the accident were a source of pleasure.
The claimant had undergone surgery, it has not been as successful as hoped and he is likely to require further surgery into the future as confirmed by Dr Doig.
The claimant is unlikely to be pain free for the remainder of his life.
The impact of his injuries on his psychological wellbeing is also unlikely to diminish over time as he continues to experience physical symptoms which then impact on his mood and ability to socialise. He avoids social events and has become withdrawn.
I assess non-economic loss in the sum of $325,000.

Economic loss
Impact of injuries on claimant’s earning capacity

The claimant at the time of the accident operated a butchery in Tamworth.
Six months before the accident he sold a Port Macquarie business that he had operated since 2009.
As a consequence of the injuries sustained in the accident the claimant contends he has required replacement staff to be employed as he has been unable to undertake activities within the business as a consequence of his injuries.
There is dispute between the claimant and the insurer as to the impact of the injuries on the claimant’s earning capacity. Both parties retained forensic accountants to address the issues of calculation and method of establishing past and future economic loss.

Economic loss reports
The claimant’s

The claimant retained the services of Mr Lee of Vincents a forensic accountant.
The report was based upon a number of assumptions as to how the claimant’s business operated pre-accident:
(a)    that the business operated in Calala Tamworth operated Monday to Friday from 8.00am to 6.00pm, Saturday from 8.00am to 4.00pm and Sunday from 9.00am to 4.00pm;
(b)    the claimant undertook Manager/Butcher duties for approximately five to six days weekly, operating two business until 30 June 2018. One in Tamworth and one in Port Macquarie;
(c)    the business engaged floor staff to service the butcher shop;
(d)    six months before the accident the claimant sold the Port Macquarie business;
(e)    from 2019 onwards, the business operated the Tamworth store only and one butcher was employed to work alongside him;
(f)    it was the intention of the claimant to maintain self-employment as a butcher until retirement, and
(g)    review of the tax returns of the claimant for the period 30 June 2016 to
30 June 2021 and business records were used in the provision of the report.
Post accident due to the injuries sustained in the motor accident:
(a)    the claimant was unable to return to work until January 2020;
(b)    he returned working three days per week but in a much reduced capacity;
(c)    he is unable to stand for prolonged periods and is unable to perform the hands-on butcher duties of breaking down and cutting meats for sales;
(d)    he is now restricted to predominantly manager duties;
(e)    the business has required an additional butcher to replace the services of the claimant, and
(f)    the business has suffered a loss of profits with the increased costs of external labour.
The opinion of Mr Lee in relation to past economic loss was the following:
(a)    “In my opinion, given that Mr McWilliams was exercising his earning capacity in the operation of the business at the date of the accident, it is not possible to draw any conclusions as to the loss suffered (if Any) based on simple review of his taxable income. I have reviewed the trading results of the business..”;
(b)    irrespective of the decrease in gross profit before labour margin has remained relatively stable (ie.the profit on sale has remained consistent (CB 121);
(c)    the claimant received wages from the business;
(d)    for the period 30 June 2019 to 30 June 2020 the external labour costs increased by $42,129;
(e)    in the period to June 2021 external labour cost increased to $57,072;
(f)    losses were identified as a reduction in the gross profit as a result of an increase in the external labour cost of the business during the 2020 and 2021 financial years “which accords with my instructions Mr McWilliams has hired additional labour to replace his duties in the business” (CB 125), and
(g)    Schedule C to the report (CB 136) provided the losses after tax in the sum of $116,136 as:
(i)$25,354 to 30 June 2020;
(ii)$35,637 to 30 June 2021;
(iii)$36,717 to 30 June 2022, and
(iv)$18,429 to 31 December 2022.
As to future economic loss the claimant would work to 3 November 2037, his 67 birthday and operate his business requiring external labour to replace duties he cannot perform;
(a)    Schedule D to the report (CB137) commenced losses at 1 January 2023 to
30 June 2023 amounting to $17,991;
(b)    1 July 2023 to 30 June 2024 in the sum of $34,698;
(c)    1 July 2024 to 3 November 2037 $353,110, and
(d)    Combined total $405,799.

The insurer’s

The insurer qualified Tammy Lindsay to address the claimant’s claim for both past and future economic loss.
She opined that the losses claimed in Mr Lee’s reports were an overstatement. “It is very unlikely that but for the accident the business would have increased its profitability by more than three times in two years”. (IB309)
The “true profit” of the business in the years 2016 to 2018 when operating two shops was approximately $90,500. “It is inappropriate to suggest that the ‘one shop’ business would have generated a profit significantly higher that the average of the ‘two shop business’” .(IB310)
The mathematic calculations are in the Lee report accurate, however the assumptions are not agreed to.
The approach of Ms Lindsay was:
“The analysis of replacement labour did not factor in the extent of external labour used prior to the accident. “Given that my analysis indicated that the claimant has not retained additional labour (compared to the labour retained at the date of the Accident) for 5 September 2022 to 21 May 2023 and in the light of my instructions as to the medical evidence relating to the claimant.. I have not quantified ant future economic loss.”
Schedule 9 of her report provided the calculations of past economic loss. The calculations made were a blend of all employees in each individual period. Her conclusion was the claimant “has not employed any replacement labour since 2022 and up to May 2023”. This was based upon an analysis of the apprentices and paid staffing prior to the accident and the number of employees operating post accident.
In her supplementary report dated 20 September 2023 addressing the supplementary report of Mr Lee dated 31 July 2023 the following commentary was made:
(a)    The claimant’s amended statement in response to the first report asserts:
(i)from 2020 to 2022, he was in the shop for three days per week;
(ii)since February/March 2023 he has been in the shop on rotating basis for 4.5 days for two weeks and 2 days on the third week;
(iii)the claimant does very little butchering and spends most of his time watching on, and
(iv)the claimant’s proposition is that but for the accident, he would not have employed Chris Bruton a fully qualified butcher and would have relied on apprentice labour as he had done before the accident.
(b)    Ms Lindsay commented that Mr Bruton commenced employment some 17.5 months post accident. The business had operated up to that point with two apprentices to 23 March 2020. If a need existed for a managing butcher, there was no explanation why it took almost 1.5 years to employ such replacement.
(c)    The claim that the loss is the value of Mr Bruton’s salary, this is an overstatement of replacement labour cost as “it does not take into account the cost of the second apprentice which would have been used in any event, it is in this scenario the difference between the cost of Chris Bruton and an apprentice which is the additional cost”.
(d)    To suggest that the claimant would continue to terminate apprentices when they completed their qualification, is “unrealistic”. Normally businesses benefit from the continuation of experienced staff.
(e)    Mr Lee’s initial report was based on the assumption that the business at the date of the accident employed one butcher. This was found to be factually incorrect. The supplementary report of Mr Lee does not give a reason for why the corrected information does not change his assessment of the claimant’s loss.
(f)    The material difference between the approach taken by the claimant and insurer were:
(i)Mr Lee considered the reliance upon the business financial records for the six month period prior to the accident is a relatively short period;
(ii)during this period of six months from the closure of the Port Macquarie shop and the sole operation of Tamworth, the claimant’s business two apprentices were employed;
(iii)the business operated successfully during this period;
(iv)but for the accident, the business would have continued to employ two employees;
(v)the wage cost for this would amount to $40,000 for each plus superannuation;
(vi)Mr Bruton’s salary was $45,000 approximately plus superannuation. The costs of the more experience butcher was “not materially different” (IB339);
(vii)the hours on the job are likely to be the more significant driver of whether replacement labour has or has not been employed;
(viii)the increase cost of the apprentice upon qualifications being obtained would have resulted in an increased cost to the business in any event;
(ix)the cost of promotion are not damages attributable to the accident, and
(x)as to future economic loss:
1.Mr Lee opined that it is unreasonable to assume the business will not require labour to replace the duties the claimant is unable to undertake as a result of the accident-related injuries;
2.in response to this premise MS Lindsay commented:
a.for the first 18 weeks post accident to March 2022, the business continued with two apprentices and the claimant;
b.the average monthly sales pre accident for June 2019 to October 2019 were $54,674 and increase to $71,061 between December 2019 and March 2020 a 30% increase;
c.the business engaged a third employee in March 2020 to coincide with highest monthly sales since the close of the Port Macquarie shop in 2018;
d.between 5 September 2022 to 21 May 2023 the average monthly sales were 19% higher than that of the six month period immediately before the accident. Noting that the business operated on the same hours with the same headcount;
e.the external labour to gross income percentages for the 2022 year and the 9 motnhs to 31 March 2023 are 13.57% and 12.97% respectively compared to Mr Lee’s calculations for the same period of 14.9% and 14.2%, and
f.noting the financial year of the accident 12.5% and 13.8% in the 2021 year “corrected percentages indicate only a minor increase in labour costs in the 2022 year and the 9 months to 31 March 2023. It is unlikely there has been a material labour cost incurred by the

Submissions on economic loss

The claimant

The claimant submitted he had an impressive work history. By 2006 he had opened and operated a butcher shop in Tamworth. This was a successful business.
Then in 2009 whilst still operating the Tamworth business he opened another butcher shop in Port Macquarie. This operated seven days a week and due to increasing rental impacting on the profitability of the second business, the Port Macquarie butchery was closed in 2018.
The claimant was operating the remaining Tamworth business in what he described as “flat strap 5-6 days per week”. At paragraph 18 of written submissions the basis of the claimant’s claim:
“18. The claimant continued to live in Port Macquarie with his family, but he ran and operated the Tamworth business…The claimant employed an apprentice and occasionally a casual to assist with the cash register and cleaning. But this was always the claimant’s business. He was the face of it, and customers visited the business because of the claimant and the quality of his products; The success of the butchery depends almost entirely on the butcher’s ability to get on with his/her customers and provide their products that meet their needs and budget… The accident has changed his ability to maintain that business significantly.”
He relied upon the assumptions and calculations made by Mr Lee of Vincents forensic accountants. Mr Lee was unable to draw any conclusions as to the loss suffered based on a simple review of tax returns, he did identify a reduction in gross profits as a result of an increase in external labour costs.
Past losses claimed amounted to the sum of $116,136 which was rounded up to $125,000 to take into account the passage of time.
Future losses calculated amounted to $405,719 but did to account for the usual application of a reduction by 15% for vicissitudes. The claimant corrected this and the sum was reduced to $345,000 taking vicissitude into consideration.
In addition, to the claim for cost of replacement labour, a further claim was made to reflect losses attributable to early retirement. The claimant’s submission was:
“If the claimant is unable to continue runn ing his butcher shop, the only vocation he has ever pursued, his earning capacity will have been, for practical purposes eroded.”
An relying upon the likelihood of this event occurring an additional cushion of $150,000 was submitted “to take into account the very real prospect of a total loss of earning capacity.”

The insurer

The medical evidence supports the claimant returned to work as at January 2021 in full capacity working 40 hours weekly with a reduced income of $500 weekly thereafter. He reported to Shane Snowden physiotherapist his activities were restricted but he was putting in the hours. (IB276 to 280)
The CTP progress report provided by Rehab Co dated 26 February 2021 noted he was working up to 12 hours daily and completing all pre-injury duties. (IB 281-283)
The reported history to Move better for Life was that the claimant was “back working Monday to Saturday 70-90 hours per week full-duties”. (IB 284 to 288)
Tammy Lindsay of Forsensis Accounting was retained by the insurer to establish the quantum of loss suffered by the claimant. She forensically examined the claimant’s pre and post-accident financial records and concluded that replacement labour costs to the 2023 year amounted to a total of $32,242.
The insurer submitted an allowance of $75,000 would be appropriate to reflect past losses.
Whilst the approaches to the assessment of financial loss to the business differ considerably, the insurer submitted that their report of Tammy Lindsay should be preferred as it “more detailed and deals with the realities of how the business operated in the past. It should also be relied upon as the basis upon which the most likely circumstances but for the accident could be ascertained based upon how the business had operated prior to the accident.
The amount of $100,00 was submitted as an appropriate compensation for future economic loss. The claimant was self-employed and there should be no allowance for superannuation.

Evidence at the assessment

The claimant

The claimant was question as to his business operations both before and after the accident.
The claimant was questioned as to the staffing ratios and who was employed at each shop and the nature of the duties of the apprentices employed.
The claimant was questioned about his intention to operate the Tamworth business and the situation after the closure of the Port Macquarie Store.

Chris Bruton

Mr Bruton was questioned about his employment.
He was asked questions about his awareness of how the claimant operated his business and how often he had attended the butchery when he left to set up his café. He confirmed he regularly attended the shop as he purchase meat for himself.
He was asked questions on the claimant’s current participation level at the remaining Tamworth shop.
He confirmed the limitations of the claimant as it related to duties of a butcher.
As he had worked with the claimant both before and after the injury and now worked full-time as an employed butcher he confirmed his duties and those undertaken by the claimant.
He had seen tha conduct of the claimant at the store and how this differed to his participation before the accident.

The assessment of past economic loss

The claimant was unable to work for a period from the date of accident to his return to duties in January 2020 working 3 days a week on lighter duties.
The claimant has claimed the replacement costs of engaging additional staff to undertake duties where his injuries in particular to his left leg have impacted in his ability to stand for extended periods.
He but for the accident would have attended to the duties of a butcher as well as managed his business operations in Tamworth. I am satisfied that the claimant would after the closure of the Port Macquarie business focus on the Tamworth operation.
The claimant when operating two businesses regularly employed staff at front of house for sales and cleaning. He used apprenctices and received grants from the government to facilitate the training.
The evidence of the claimant was that he continued to live in Port Macquarie with his family after the sale of the Port Macquarie business in 2018 and intended to manage and operate the remaining store in Tamworth indefinitely.

When questioned as to the feasibility of such travel and being away from his family for days at a time, he responded that the family duties had been shared and whilst his wife now operated her own veterinary clinic, there was no problem in him residing a few nights a week in Tamworth when undertaking his duties in the business.
Whilst the accident occurred within six months of the sale of the Port Macquarie business, I find that the claimant’s evidence on this point is pursuasive. Prior to the closure of the Port Macquarie business the claimant managed the Port Macquarie store but confirmed he also regularly travelled to Tamworth to check on the progress of the business. This evidence is also accepted.
Whilst it may seem onerous for the claimant to undertake such extended travel, this did not seem to bother him.
Post accident the claimant’s injuries prevented him for work because of physical restriction to early 2020.
Thereafter the reported history provided by the claimant to rehabilitation consultants confirnmed he had returned to extended hours but was not able to undertake the heavier roles such as meat preparation and butchering due to his difficulty standing for extended period of time.
Whilst the claimant’s business employed apprentices and staffed two before the accident, I accept that depending on the operation of the business the conduct of the staff and fluctuatings in the market place, he has had to employ some additional staff from time to time to assist.
The losses associated with the changes in staffing are in part attributable to the claimant not being able to undertake the work himself, as well and changes to the paygrades of those employed when their pay status changes due to completion of apprenticeships or increases pursuant to the relevant awards as the years of employment impact of pay grade.
I note that the way the business of the claimant operated, makes it difficult to precisely establish the losses as both Mr Lee and Ms Lindsay concluded that the taxation returned do not of themselves evidence economic loss.
The increase in profitability of the business and the changes to turnover were assessed against staff costs taking into consideration turnover and net profit. This showed a marginal increase in staff costing.
I accept that the injuries sustained in the accident have prevented the claimant from undertaking activities which if uninjured the claimant would have been able to participate in.
The impact to the claimant earning capacity cannot be particularised with precision and relying on the information contained in tax returns did not assist in particularing an exact loss. It is accepted that the claimant from time to time the claimant has retained the services of experienced staff to assist the running of the Tamworth butcher shop. Some duties of the additional staff have replaced other staff previously employed and staffing has included Mr Bruton an experience butcher.
Whilst apprentices have been retained before the accident, I accept that the shop could not run without an experienced butcher on the premises. Noting the claimant’s evidence that he has been unable to operate the business himself, the necessity to employ an experienced butcher is in part accident related.
I also find that the claimant’s evidence that he has had to change staff from time to time as there have been situations of conduct that has required the departure of staff. Whilst having the services currently of Mr Bruton, his experience has also reduced the need for other staff.
The changes in staffing and the need for additional staff against the background of the operation of the shops prior to the accident, makes a precise loss on a weekly basis difficult to ascertain. In the circumstances I consider a buffer appropriate to reflect additional costs associated with the necessity to hire additional staff from time to time. I allow a buffer in the sum of $100,000 for such loss.
In addition, the claimant’s losses pursuant to s 4.5(1)(d) for tax paid is on statutory payments made amounts to $9,615.
Total past loss amounts to $109,615.

The assessment of future economic loss

The claimant has sought damages on two bases. One the additional costs of operating his Tamworth business with a fully qualified butcher, Mr Bruton. The claim also included a further buffer that in the event the claimant could no longer participate due to a progression of his ongoing leg injury, he may have to retire early.
The claimed loss as it relates to early retirement noting the claimant’s ongoing physical problems is a possibility.
Should the claimant decide to sell the business in the future, he no longer has the capacity to manage a new store as he was able to do before the accident.
But for the accident, the claimant’s evidence is that he would work as a butcher until retirement. I accept this was his most likely circumstance.
The report of Mr Lee qualified by the claimant suggests the ongoing losses amount to the approximate costs of Mr Bruton wages, however his opinion does not factor in the usage of apprentices that would have converted to full-time qualified butchers as time went on.
The opinion of Ms Lindsay that there is little if any ongoing future economic loss as the claimant has the benefit of the experience of Mr Bruton and the increased profit in the business suggests he also contributes to the face of the business.
Ms Lindsay does not to take into account the claimant’s argument that had he not been impeded by injury he could have remained as the sole experienced butcher and not required the additional services of an experienced butcher and could have remained employing apprentices from time to time.
With the employment of Mr Bruton there is a benefit to the claimant’s business. It does not need two apprentices. However, should the claimant’s business sustain more growth, the claimant’s impairment to his earning capacity by not being able to undertake tasks in the cutting of meat, or serving of customers himself due to his ongoing injuries is likely to result in future economic loss to the claimant. He is unable to capitalise on his own serves within the business.
I note Dr Hopcroft’s opinion of early retirement being likely within five years relies upon the history provided by the claimant as at October 2022. His assessment was made at the time with the claimant reporting he was working 2- 3 days a week. The current evidence given by the claimant at the assessment conference is he is currently functioining with extended hours on a regular basis. This does not accord with Dr Hopcroft’s reported level of incapacity.
The insurer submitted that I should increase any vicissitudes based upon the noted degerative changes confirmed in an MRI of the claimant’s right knee shortly after the accident. This related to an injury and surgery which took place some 30 years prior. I am not satisfied that this reduction is appropriate where the claimant’s ability to function before the accident was not in any way compromised by the pre-existing condition of his right knee.
I consider noting the difficulties to extract a precise sum that a buffer should be awarded to reflect periods where the claimant due to his injuries cannot undertake tasks within the business and employs additional staff and that likelihood that where the claimant’s condition deteriorates as he ages, he may cease operating his business activities altogether.
The ongoing injuries sustained by the claimant will continue to impact on his ability to perform to his pre-accident capacity. This is likely to impact the claimant’s future earning capacity as he continues to struggle with restrictions on his ability to work as a butcher. He cannot stand for long periods and certain heavier tasks at work cannot be performed. His hours are likely to change and the need to employ staff to assist with the tasks he is no longer able to perform will continue. He is also likely to be off work when he undertakens further surgery for a knee reconstruction.
Taking all the above into consideration I assess future economic loss in the sum of $220,000.

Assessment of damages summary

Under s 7.36, I am required to make an assessment of the amount of damages for that liability that a court would be likely to award.
I assess the claim as follows on the findings set out above:
Non-economic loss  $325,000
Economic losses
·    Past Economic losses  $ 109,615
·    Future Economic losses  $ 220,000
Total of economic losses and non-economic loss            $ 654,615
Deduction of 50% representing the claimant %
contributory negligence   $327,307.50
Total Damages Assessed  $327,307.50
The claimant’s economic loss is to be reduced by, and the insurer is to have credit for, the following payments:
Statutory benefits paid - $60,390.86
(I note the insurer did not make any deduction to reflect the percentage of contributory negligence when making weekly payments. To reduce the credit by 50% would improperly advance the claimant.)

Costs and disbursements

The insurer upon receiving a draft of the reasons submitted in response dated 28 November that a caulderbank offer in the sum of $350,000 plus costs of $50,000 was made on 5 October 2023 and noting the determination of $327,307.50 plus costs there should be no costs awarded for the period beyond 6 October 2023.
The claimant upon receiving the insurer’s submissions submitted on 30 November 2023, that costs should follow the event. That the insurer’s offer was only slightly higher that the determination and the actual costs claimed are higher than the $50,000 allowed for by the insurer. Further, the insurer did not properly address the sums to be deducted and the payments to be deducted are materially higher, over $60,000.
In addition to the discrepancies, the claimant submitted the offer was made very late and was not open for a reasonable period of time, effectively 4 buiness days in total. The claimant submitted that even had the offer been accepted, noting the costs currently claimed in the sum of $58,833.26 inlcusive of GST and the increased deductible, the difference between the offer and determination is negligible.
Having regard to the additional submissions, the insurer confirmed on 30 November 2023 that it would not make any further submission.
Having reviewed the matter, I am inclined to agree with the claimant on the issue of costs that the offer was made very late in the matter and that the final determination is 6.4% less than the offer as to damages alone. The costs allowed by the insurer is $8,833.26 lower and taking this sum from the damages, the difference is 3.9%.
I consider that the offer was not made leaving a reasonable time for the claimant to consider noting the proximity to the allocated date of the assessment conference and whilst the claimant’s determination is below that offered by the insurer, I propose a reduction in some costs claimed, but do not agree that the claimant should be denied all costs post 6 October 2023.
(a)The claimant was required to have experts available for the hearing and these fees would have been incurred in any event. Noting the circumstances, I propose to reduce the some of the claimant’s claimed costs as follows:
(i) I disallowed the travel claimed at $1,345.12 including legal representatives travel costs and overnight claim.
(ii) I reduced the legal representation fee to from $3599 to $2000 for representation at the assessment. The claimed amounts have been allowed for other items contained in the claimant’s schedule.
The remainder of the costs claimed were allowed and the costs and disbursements in accordance with Part 8 of the MAI Act and Regulations.
I rely on the attached Costs Calculator which amounts to the sum of $ 55,382.75

Conclusion

On the issue of liability for the claim, Allianz’s insured owed a duty of care to the claimant, admitted it breached that duty of care and the claimant sustained injury loss and damage as a result of that breach.
There was 50% contributory negligence on the part of the claimant.
Under ss 7.36(3) and 7.36(4) of the MAI Act, I specify the amount of damage for this claim is $327,307.50.
The claimant’s economic loss is reduced by $60,390.86 and the insurer is to have credit for the payments made by the insurer pursuant to s 3.40(1)(b).
The amount of the claimant’s costs, taking into account the amount of damages assessed in respect of this claim, assessed in accordance with the Act is $55,382.75 inclusive of GST.

Legislation

In making my decision I have considered the following legislation and guidelines:
·        Personal Injury Commission Act 2020;
· Personal Injury Commission Rules 2021;
·        MAI Act;
·        MAI Act regulations, and
· CLA.

[2023] NSWPIC 646

1 December 2023