Allianz Australia Insurance Limited v Yu

JUDGMENT

1. By way of Statement of Claim filed on 10 August 2020, the plaintiff Allianz Australia Insurance Limited (Allianz) claims damages from the defendant Mr Soo Yeon Yu in the tort of deceit or, alternatively, recovery pursuant to s 118 of the Motor Accidents Compensation Act 1999 (NSW) (MACA) based on false or misleading statements made to it by the defendant, which induced a settlement of a claim for personal injury damages pursuant to the MACA. The plaintiff claims that it is entitled to the difference between the true value of the defendant's claim for damages and the amount of the settlement agreement. In a Defence filed on 12 October 2020, the defendant admits that he made representations to the plaintiff and doctors qualified on his and the plaintiff's behalf to the effect that he was at all material times suffering from a severe and debilitating psychiatric injury caused by a motor vehicle accident. He denies that any of the representations were false and/or misleading.
2. For the reasons that follow, I am satisfied that the plaintiff has proved that the representations made by the defendant to the plaintiff and doctors as to the nature and extent of his alleged psychiatric injury were knowingly false and misleading, that they were made with the intention of inducing the plaintiff to act upon those representations, that they were made with the intention of obtaining a financial benefit in the form of personal injury damages greater than that to which he was entitled and that the representations were a material cause of the plaintiff agreeing to pay the defendant the settlement sum of $750,000 inclusive of costs and payments already made.
3. In my opinion the plaintiff has made out its claim in the tort of deceit and pursuant to s 118 of the Motor Accidents Compensation Act 1999 (NSW) (MACA) on the balance of probabilities.

Facts

1. The defendant was born in 1963 in Seoul, South Korea. He came to Australia in October 2005 and became an Australian citizen in about 2015. He is married, but is estranged from his wife. Both the defendant and his wife gave evidence in these proceedings. Although there was some dispute about the defendant's proficiency in English, it was his evidence that his English is limited, and he was assisted by an interpreter throughout the trial. The defendant's wife also gave evidence through an interpreter. I acknowledge at the outset that I have taken into account the inherent difficulties associated with the interpretation of the English language into Korean and vice versa.
2. The proceedings arise out of a claim made by the defendant in late 2013 which was settled in 2015. The claim was made after the defendant was involved in a motor vehicle accident on 31 July 2013. As a result of that accident, the defendant claimed that he suffered a severe deterioration in his mental health which caused him significant disabilities. On 16 October 2013, the defendant had an initial assessment with Dr Jung Sook Kim, a Korean-speaking psychologist. Thereafter, on 28 October 2013, he lodged a motor accident personal injury claim form. It appears that at about this time he had engaged Slater & Gordon Lawyers to act on his behalf in foreshadowed proceedings pursuant to the MACA. The defendant apparently attempted suicide in Korea in December 2013 and was hospitalised there for about four days. Upon his return to Australia, he had an admission as a mental health patient to Hornsby Hospital for about two weeks, and was then discharged.
3. Medical reports were served by both the defendant and the plaintiff. They include reports of Dr Joon Sook Kim dated 30 November 2013 and 19 August 2014, Dr Terrance Lim, psychiatrist, dated 4 April 2014 and 11 November 2014 and Dr Selwyn Smith, psychiatrist, dated 7 February 2014 (all on behalf of the defendant) and reports of Dr Andrew McClure, psychiatrist, dated 29 April 2014 and Dr Ted Cassidy, psychiatrist, dated 7 October 2014 (both on behalf of the plaintiff). Dr Cassidy assessed the defendant as having a 28% whole person impairment (WPI) on the basis of his examination for the purposes of the MACA. He was thus entitled to non-economic loss damages pursuant to s 131 of the MACA.
4. A consistent theme of representations weaves through the various reports. The defendant told medical practitioners that consequent upon the July 2013 motor vehicle accident, he experienced the following (which persisted):- 1. A lack of motivation, energy and confidence and a sense of powerlessness; 2. An inability to read or follow complex instructions and a cognitive impairment; 3. An inability to work as a result of very low levels of function and concentration; 4. An inability to drive, spending most of the time in his own room unable to meet his basic needs; 5. Poor personal hygiene and a requirement for a carer; 6. Assistance with activities of daily living (including washing, cleaning and eating); and 7. Little contact with people, including his family, other than his carer.
5. The predominant injury alleged by the defendant in the MACA proceedings was a severe and debilitating depression. This was confirmed by doctors relying on the defendant's self-report. At a settlement conference on 9 March 2015, the defendant through his solicitors prepared and relied on a schedule of damages which exceeded $1.6 million plus costs, based on the psychiatric condition allegedly caused by the motor accident in July 2013 and which reflected the representations he had made to medical practitioners as set out above. The claim was settled on that day for the sum of $750,000 inclusive of costs and payments which had been made pursuant to s 83 of the MACA (the settlement).
6. After the settlement, the defendant's wife Hyun Sook Chung brought her own claim pursuant to the MACA. She alleged a psychological injury arising out of her husband's motor accident. She was medically assessed by Dr John Baker, psychiatrist, on 11 October 2017. On the basis of what Ms Chung told Dr Baker, Allianz formed a view that the defendant had misrepresented his condition leading up to the settlement, for the purpose of enriching himself. Ms Chung disputed that the history recorded by Dr Baker was accurate notwithstanding the presence of an accredited Korean interpreter. In his report of 30 October 2017, Dr Baker noted that the defendant maintained a relationship with Ms Chung, that he provided all her basic necessities and oversaw the management of the six share residents in the house she lived in with her son. She told Dr Baker, inter alia, that her husband managed the family's finances and allocated her a fixed sum through an electronic bank account maintained and monitored by him. She deposited her pay from her part-time job into his accounts which he managed. Mr Yu attended the house on most days to check on the running of the house and the share residents who resided there. He organised all the family properties' rental arrangements. Ms Chung told Dr Baker that she had complied with all of her husband's requests to sign forms with respect to loan applications and renovations.
7. As a result, the plaintiff commenced enquiries and came to the view that the defendant had knowingly made false and misleading representations with respect to his psychiatric condition and that he had either suffered no psychiatric disability, or alternatively, that he had suffered a psychiatric condition of far less severity than he represented to Allianz leading up to and at the time of the settlement.
8. The plaintiff's case is that the defendant entered into the settlement for the purpose of achieving financial gain, with the intention (which was realised), that the plaintiff would be induced by and rely upon his representations. In these proceedings, the plaintiff adduced evidence from witnesses who had direct contact with the defendant approximate to the time of settlement, together with the evidence of a psychiatrist, Dr McClure. Various documents were also tendered to establish the allegations made with respect to the defendant's dishonesty and his likely damages at the time of the settlement but for his deceit.
9. The parties agree that for the purposes of these proceedings there is no practical difference between the tort of deceit and the statutory action pursuant to s 118 of the MACA, to the effect that if the plaintiff succeeds, it succeeds pursuant to both and that damages are the same.
10. There is also no dispute about the content of the representations that were made by the defendant to the plaintiff. They are well-documented in the medical reports. The issues for determination are whether or not the representations were false and misleading and if so, what is the quantum of the plaintiff's loss.

Tort of deceit

1. The parties agree that the elements of the tort of deceit were correctly stated by Johnson J in Jinhong Design and Constructions Pty Limited v Xu and Anor [2010] NSWSC 523 (Jinhong Design) at [97]. They are as follows:- 1. A representation of fact that is conveyed to the claimant by the representor's words or conduct; 2. Knowledge on the part of the representor that the representation is false or failing that, (i) the absence of a genuine belief that it is true, or (ii) recklessness as to whether it is true or false; 3. An intention on the part of the representor that the claimant (or a class including the claimant) should act upon the representation; 4. Action by the claimant in reliance upon the representations that was induced by the representation; and 5. Damage as a result of the reliance.
2. His Honour's decision was overturned on appeal, but not because of any error in his Honour's summary of the elements of the tort of deceit: see Xu v Jinhong Design Constructions Pty Ltd [2011] NSWCA 277.
3. The tort of deceit was considered by the High Court in Magill v Magill (2006) 226 CLR 551; (2006) 231 ALR 277; [2006] HCA 51 (Magill). In that case, Gummow, Kirby and Crennan JJ said at [114]:- "The modern tort of deceit will be established where a plaintiff can show five elements: first, that the defendant made a false representation; secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not; thirdly, that the defendant made the representation with the intention that it be relied upon by the plaintiff; fourthly, that the plaintiff acted in reliance on the false representation; and fifthly, that the plaintiff suffered damage which was caused by reliance on the false representation. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement..."
4. The elements, as set out in the previous paragraph, are as follows:- 1. The defendant made a false representation; 2. The defendant made the representation with the knowledge that it was false, or the defendant was reckless or careless as to whether the representation was false or not; 3. The defendant made the representation with the intention that it be relied upon by the plaintiff; 4. The plaintiff acted in reliance on the false representation; and 5. The plaintiff suffered damage which was caused by reliance on the false representation.
5. For present purposes, there is no material difference between the elements as set out in Magill or Jinhong Design.
6. In Insurance Australia Ltd t/as NRMA Insurance v Checchia (2011) 80 NSWLR 1; (2011) 58 MVR 145; [2011] NSWCA 101 (Checchia), Handley AJA at [213] said the following with respect to the tort of deceit in the context of s 118 of the MACA: "Since the section covers some cases of common law fraud, the position in the tort of deceit is relevant. Its constituent elements are a misrepresentation of fact made without an honest belief in its truth, with the intention of inducing the victim to act on it, which induces him to do so and suffer loss. The victim must believe that the fraudster intends him to act on the representation as true."
7. Mr Catsanos SC, who appeared for the plaintiff with Mr Necovski, also cited Hayward v Zurich Insurance Company plc [2017] AC 142; [2016] UKSC 48 (Zurich), which establishes that in making out the tort of deceit, it is not necessary to prove that the representee believed that the representations were true (at 151). Lord Clarke did not deny that an insurer who knew certain representations were clearly false would be precluded from arguing that it relied on those representations, but rather the consideration is whether the false statement was material in the sense that it was likely to induce the person to enter into a contract or agreement.
8. This appears to be the law in Australia: see David Rolph et al, Balkin & Davis Law of Torts (LexisNexis, 6th ed, 2021) at 810. A defendant cannot rely on the plaintiff's foolishness or lack of care or argue that the plaintiff ought to have taken an opportunity to verify a fraudulent misrepresentation. Whether a plaintiff was induced is a question of fact. In Gipps v Gipps (1978) 1 NSWLR 454 at 460, Hutley JA said: "The question whether a person has been induced by a statement made to him to enter into an agreement is, in my opinion, a single issue of fact. No doubt pre-contractual knowledge that the statement made is not wholly true has a very direct bearing on the resolution of this question of fact but it does not of itself necessarily provide the answer. To say that it does is to formulate a different question. To state that a person is induced by a statement is to affirm a causal relation which is a question of fact, not law. That being so, it is impossible to apply to any situation a rule which produces a final result. The trial judge or jury have to answer the question: Did the misrepresentation cause the representee to enter into the contract, it being understood that the representation, as was stated in Australian Steel and Mining Corpn Pty ltd v Corben [1974] 2 NSWLR 202, 207, 'was among the factors which induced the contract.'"
9. I accept that it is not relevant in making out a claim in the tort of deceit to ask whether the plaintiff might have discovered that a defendant's representation was false. That said, if the plaintiff knew the representation to be false, it could not be said to have caused the plaintiff to suffer the loss. The causation issue will be determined as a question of fact and will depend on the circumstances of each individual case.

Statutory Recovery

1. Section 118 of the MACA provides:- (1) This section applies to a claimant or insurer if it is established that, for the purpose of obtaining a financial benefit, the claimant or insurer did or omitted to do anything (including the making of a statement) concerning a motor accident or any claim relating to a motor accident with knowledge that the doing of the thing or the omission to do the thing was false or misleading. (2) If this section applies to a claimant - (a) a person who has a liability in respect of a payment, settlement, compromise or judgment relating to the claim is relieved from that liability to the extent of the financial benefit so obtained by the claimant, and (b) a person who has paid an amount to the claimant in connection with the claim (whether under a settlement, compromise or judgment, or otherwise) is entitled to recover from the claimant the amount of the financial benefit so obtained by the claimant and any costs incurred in connection with the claim. (3) If this section applies to an insurer, the claimant is entitled to recover from the insurer as a debt the amount of the financial benefit so obtained by the insurer and any costs incurred by the claimant in connection with the claim.
2. A plaintiff must first prove the elements in s 118(1). This is the threshold question. After the threshold is satisfied, a Court will consider s 118(2), which specifies the consequences that flow where the section is engaged: see Checchia at [39] per Beazley JA, McColl JA and Handley AJA agreeing.
3. Whilst the first instance decision of Rothman J (Checchia v Insurance Australia Ltd trading as NRMA Insurance [2009] NSWSC 1105) was the subject of the appeal in Checchia, the Court did not disapprove of his Honour's summary of the elements of s 118 at [16]: "(a) that Mr Checchia's conduct was false or misleading; (b) that Mr Checchia's false and misleading conduct was engaged in: (i) for the purpose of obtaining financial benefits; and (ii) with knowledge that the conduct was false or misleading; (c) that Mr Checchia's false and misleading conduct deceived NRMA (and continued to deceive it until the time of the execution of the settlement); (d) that Mr Checchia's false and misleading conduct caused Mr Checchia to obtain a financial benefit; and (e) to the extent that all of the foregoing are satisfied, it is for the Court to quantify the financial benefit obtained by the false or misleading conduct."
4. As I have said, in this particular case the plaintiff and the defendant agree that s 118 of the MACA provides a remedy additional to the tort of deceit. So much was held by Handley AJA in Checchia at [259].

Standard of Proof

1. These are civil proceedings. Accordingly, s 140 of the Evidence Act 1995 (the Evidence Act) applies:- (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account - (a) the nature of the cause of action or defence, and (b) the nature of the subject-matter of the proceeding, and (c) the gravity of the matters alleged.
2. Section 140(2) has been held to reflect the law as stated by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; [1938] HCA 34 (Briginshaw).
3. The plaintiff must prove its case on the balance of probabilities taking into account the factors listed in s 140(2). While the civil standard of proof remains the balance of probabilities, the strength of the evidence required to prove the case will vary depending on the s 140(2) factors. The strengths and weaknesses of the evidence will be assessed in accordance with the seriousness of the allegation (see Communications, Electrical, Electronics, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466; (2007) 242 ALR 643; [2007] FCAFC 132 at [30] per Weinberg, Bennett and Rares JJ). Each piece of evidence should be weighed up as to its strengths and weaknesses and then the whole of the evidence should be weighed up to determine whether the allegation is proved on the balance of probabilities.
4. Having regard to the tort of deceit, Gummow, Kirby and Crennan JJ noted in Magill at [114] that: "… the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation."
5. In other words, the nature and gravity of fraud is such that the allegations will not be made out, on the balance of probabilities, unless the plaintiff adduces sufficiently strong evidence. The seriousness of fraud calls for precise pleading and strict proof (Magill at [211] citing Briginshaw at 362).
6. In Jinhong Design, Johnson J said at [100] that the Court has to be reasonably satisfied, and that such satisfaction cannot be produced by inexact proofs, indefinite testimony or indirect inferences, citing Briginshaw; Helton v Allen (1940) 63 CLR 691; [1940] HCA 20; Rejfek v McElroy (1965) 112 CLR 517; [1965] HCA 46.
7. So far as s 118 of the MACA is concerned, Mr Catsanos submitted that there is no basis upon which to modify the plaintiff's burden of proof pursuant to Briginshaw or s 140(2). This is strictly correct as neither Briginshaw nor the Evidence Act create a third standard of proof: see Qantas Airways Ltd v Gama (2008) 167 FCR 537; [2008] FCAFC 69 at [110]. Nevertheless, as noted above, s 140(2) requires the Court to take into account certain factors when determining whether an allegation has been proved on the balance of probabilities. Section 118 of the MACA is substantially similar to the common law tort of deceit. Therefore, when assessing the strength of the evidence required to prove the allegations on the balance of probabilities, similar considerations apply.

Anthony Nehme

1. Mr Nehme was first called to give evidence. His statement of 7 February 2023 (with some objection) was tendered as part of exhibit 1. He was cross-examined by Mr Williams, who appeared on behalf of the defendant. To my observation, Mr Nehme gave his evidence candidly, and he did not attempt to embellish his recollections. Mr Nehme's evidence was particularly compelling because he had a good reason to remember his dealings with the defendant, as the defendant was his only client who had ever sued him.
2. Mr Nehme was the contractor engaged by the defendant to build his home at Thornleigh, New South Wales (the Thornleigh Property). He prepared the Home Building Contract, tendered as exhibit 3, which he signed as the qualified supervisor (on behalf of TBL Constructions Pty Limited of which he was a director). That contract was signed by the defendant on 7 September 2015 and by the defendant's wife, Hyun Sook Chung, on 8 September 2015. Mr Nehme said that he had dealings with the defendant from about August 2015 through to the completion of the construction in late 2016.
3. Mr Nehme said that he had had discussions with the defendant about the contract on the job site before construction commenced in about August 2015 (and in the months just after the settlement). He recalled that he had two or three discussions with the defendant about the contract prior to works commencing, and that the defendant negotiated the contract price "very, very firmly." Mr Nehme's evidence was that it was only the defendant who negotiated the contract price and that he had no direct dealings with the defendant's wife Ms Chung.
4. As to Mr Yu's demeanour during his conversations with him about the contract, Mr Nehme said that the defendant appeared professional and calm. Mr Nehme had no concerns about whether the defendant understood what he was saying in English during their conversations. He said that the defendant's appearance was normal, and that he was well dressed in casual clothing most of the time.
5. Mr Nehme recalled that the defendant, (and only the defendant), was frequently on site - about once a fortnight - and that he would regularly discuss progress of the construction works, including issues that arose such as a dispute in late 2015 as to the insertion of an indentation on the upper level. There were many discussions about costs variations because of that extra work. Mr Nehme said that the defendant was actively involved in those discussions, including the detail of the work which was to be done and in circumstances where the architect's plans were being looked at. With respect to the indentation issue, the defendant at one point engaged lawyers who advised Mr Nehme that the defendant was unhappy with the build, after which work ceased for about four months. Mr Nehme's evidence was that it appeared to him that the defendant always understood what was happening. He made decisions about the size of bathroom tiles and the location of light fixtures and power points. He recalled seeing Mr Yu drive a motor vehicle on many occasions. On one occasion, Mr Yu and Mr Nehme went to a bank where Mr Yu withdrew between $20,000 and $30,000 to pay him. He observed Mr Yu count the money before giving it to him.
6. Mr Nehme was cross-examined on the building contract, his business and his dealings with the defendant. Mr Nehme said that the defendant would "more often than not" come to the building site alone, and would always discuss the job with him when he came. Mr Nehme acknowledged that he had done the type of work that he did for the defendant many times during his career. Nevertheless, he said that he remembered the defendant because, throughout his entire career of about 20 years, he only had one legal action threatened against him, and that was by the defendant.
7. I accept Mr Nehme as a witness of truth. I observe that he was a disinterested witness in the sense that he had no interest in the outcome of these proceedings. I accept that from August 2015, some five months after the settlement, until the conclusion of the build in late 2016, Mr Yu was intimately involved in every aspect of the construction of his new home and displayed behaviour entirely inconsistent with the representations made to the plaintiff.

Anthony Weerakkody

1. Mr Anthony Weerakkody gave evidence on behalf of the plaintiff. His statement of 13 May 2022 was tendered (after several objections) as part of exhibit 1. Mr Weerakkody was a project coordinator at Boss Design Pty Limited (Boss Design) in January 2015 (prior to the settlement) when the defendant approached him to design a house for him at Thornleigh. Mr Weerakkody did the design and thereafter coordinated issues arising between the defendant and the builder.
2. In his statement, Mr Weerakkody said that he assisted the defendant to comply with a range of development requirements in order to get his building approved. Mr Weerakkody met with the defendant on multiple occasions to give him project management advice. The defendant refused Mr Weerakkody's offer to provide project management services to him, apparently for financial reasons, saying that he would project manage the construction himself. Nonetheless, the defendant continued to approach Mr Weerakkody for such advice. Mr Weerakkody recalled the defendant questioning each invoice issued by Boss Design.
3. With respect to his first meeting with the defendant, Mr Weerakkody recalled that it occurred in the offices of Boss Design in Surry Hills, and that the defendant wore ordinary clothes. Mr Weerakkody would sometimes communicate with the defendant with the assistance of a junior architect who spoke fluent Korean. His evidence was that he assumed that the defendant understood or agreed with what was being said (and interpreted) to him, as he would nod and not disagree with what he had been told. Mr Weerakkody continued his relationship with Mr Yu until the house was complete in late 2016, when Mr Yu invited him to see the finished product. He did not remember ever dealing with the defendant's wife.
4. In cross-examination, Mr Weerakkody agreed that the defendant was passive during their discussions, except when it came to conversations about money or the "bottom line". He conceded that the defendant blended into the great many clients with whom he has had dealings with over the years, and that there was nothing remarkable about him.
5. In my view, Mr Weerakkody was an honest and candid witness, but it was apparent that he had more difficulty recalling his precise dealings with the defendant than did Mr Nehme. During examination-in-chief, Mr Weerakkody struggled to recall the detail of conversations he had with the defendant. His answers often included statements about his usual practice with clients.
6. Like Mr Nehme, Mr Weerakkody was a disinterested witness. I accept that he had somewhat limited recollection of the defendant. However, I also accept that for a time prior to the settlement and immediately thereafter, the defendant exhibited behaviours (including instructing Mr Weerakkody either in English or Korean and negotiating invoices) that were inconsistent with the representations made to the plaintiff.

Matthew Seisun

1. Mr Seisun is a partner at Sparke Helmore. His statement of 2 December 2022 was tendered (after several objections) as part of exhibit 1. Mr Seisun has been practising in the area of motor accident compensation law since February 2005 and is the partner with carriage of these proceedings. He was first instructed to act on behalf of the plaintiff on 17 November 2014 when he was a partner at Curwood Lawyers. His evidence was a mix of lay and expert.
2. In formulating his advice to the plaintiff (copies of which were annexed to his statement), Mr Seisun said that he relied on Dr Cassidy's assessment establishing a 28% WPI and the representations made to Dr Cassidy by the defendant. He believed that on the basis of Dr Cassidy's assessment, and on the representations made by the defendant contained in the medico-legal reports of Dr McClure, Dr Lim and Dr Smith, that the defendant would establish that he had suffered a profound psychiatric injury as a result of the July 2013 accident. He advised the plaintiff to attempt settlement on best possible terms up to $700,000 inclusive of costs. Mr Seisun attended the settlement conference on 9 March 2015 when the matter settled, on instructions from Mr Daniel Tomas of the plaintiff, for $750,000 inclusive of costs and payments already made.
3. Mr Seisun told the court that he is confident, knowing what he does now (to which see below), that his likely advice at the time of the defendant's claim would have been to refer the defendant for further medical assessment. Mr Seisun said that he had experience in lodging "about a hundred applications for further assessment based on having obtained new evidence in matters over the years." His familiarity with case law in this area, and, by 2015, his years of experience in dealing with claims under the MACA gave him expertise with the medical assessment process.
4. Based on what he now knows, Mr Seisun said that he would have advised Allianz that the defendant's WPI would fall below 11%. Mr Seisun's evidence was that he would have advised Allianz as to heads of damage as follows:- 1. There would be no entitlement to non-economic loss damages; 2. There would be no change to past medical expenses, the amount of which ($26,105) included voluntary payments made by the insurer in circumstances where there had been an admission of liability pursuant to s 83 of the MACA; 3. There would be no entitlement to future medical treatment as there would be no need for further treatment based on the defendant's level of functioning; 4. Past economic loss would be allowed for the acute - sub acute period only; and 5. There would be no allowance for future economic loss.
5. Mr Seisun said that he would now advise Allianz that a figure of $30,000 plus costs or $50,000 inclusive of costs would be an appropriate sum to settle the defendant's claim.
6. In cross-examination, Mr Seisun was asked about the initial conduct of the matter. He said that when Sparke Helmore was retained, the insurer provided his firm with a claim file which contained elements of the plaintiff's file. He could not say if it contained all documents held by the insurer in respect of the matter.
7. Mr Williams asked Mr Seisun about his obligations to advise a client in a personal injury claim about the validity of the claim. Mr Seisun agreed this was one of the things about which he was obliged to provide advice. With respect to this matter, Mr Seisun agreed that he was aware that Dr McClure had been instructed to report on the defendant and that his report, dated 29 April 2014, addressed inter alia the validity of the claim, about which Dr McClure raised no issue. He said that he placed significant weight on Dr McClure's report in preparing the advice he gave the plaintiff in December 2014. Mr Seisun also agreed that he relied on Dr McClure's report to advise the plaintiff to settle the claim in March 2015.
8. However, Mr Seisun was reluctant to agree that the advice he provides insurers may be influenced by a consideration that a claimant might be malingering for the purposes of financial gain. Mr Seisun said that he would need strong evidence from an expert to conclude that a claimant was malingering.
9. In advice he provided Allianz, Mr Seisun advised that the evidence before him at about the time of the settlement made out the claim, and it was his advice to offer $700,000 all-inclusive to compromise the claim. With respect to the difference between the defendant's schedule of damages ($1.633 million plus costs and disbursements) and the amount for which the claim was compromised ($750,000 all inclusive), Mr Seisun's evidence was that the schedule and range of damages which he prepared represented what he perceived to be the range of damages that reflected the evidence at that time, which in his opinion was in the range of $614,120 to $982,070 plus costs. He said that he had regard to the evidence, which at face value showed that the defendant might never work again and was at risk of suicide. Mr Seisun said that once his client accepted the medical evidence, he then calculated his range of damages.
10. Mr Seisun said that his range of damages was guided by the opinion of doctors. Mr Williams took Mr Seisun to a discharge summary from Hornsby Hospital dated 20 January 2014 (tendered as a part of exhibit 1) after the defendant's admission as a psychiatric inpatient, as well as records from a psychiatric hospital in Seongnam City in Korea (tendered as part of exhibit 2) which identified that the defendant had been admitted for suicidal ideation and an attempted overdose in late 2013. The Hornsby Hospital discharge summary was not included in the chronology that Mr Seisun prepared for Allianz. However, Mr Seisun said that he would have relied upon it when giving his advice to Allianz. He agreed that it was corroborative, at face value, of Dr McClure's opinion.
11. Mr Seisun impressed me as a careful and thoughtful witness. Even allowing for the caution I must exercise when assessing a witness's evidence given with the benefit of hindsight, I accept that he relied on the defendant's representations contained in the medical material when advising the plaintiff in 2014 and 2015. On the basis of his considerable expertise in motor accident compensation law, I accept that Mr Seisun's assessment of damages was reasonable and proportionate at the time of the settlement based on the information that he had, and that his assessment based on his current assumptions is likewise reasonable and proportionate.

Gregory Stevens

1. Mr Stevens next gave evidence. His statement of 2 December 2022 was tendered (with some objection) as part of exhibit 1. Mr Stevens is the national manager, technical and speciality claims for Allianz. He had no involvement in the original claim which settled in March 2015.
2. In evidence-in-chief, Mr Catsanos asked Mr Stevens about the protocols implemented by the plaintiff in 2015 with respect to the management of claims. Mr Stevens explained that Allianz is a licensed insurer in the Compulsory Third Party (CTP) scheme for NSW, and that it owes obligations to the regulator as to how it manages claims. That means it must act justly and expeditiously, and that it must treat customers with respect.
3. Mr Stevens told the Court that significant reliance is placed on the claim forms completed by claimants because that is the first piece of information received. Reliance is also placed on the histories provided by claimants to medical practitioners, both treating and medicolegal. He said more reliance is placed on histories in claims with respect to psychological injuries (rather than physical injuries), because in the physical injury claims, claimants can be objectively tested. With respect to psychological injuries, history and symptoms reported by claimants and relayed to doctors are of "real significance" when assessing the claim.
4. As to the reliance placed by Allianz on the further and better particulars provided by solicitors on behalf of claimants based on histories, Mr Stevens said that significant reliance would be placed on such documents because further details of the claim, injuries and other losses help an insurer to assess the claim and to decide whether or not they require additional information.
5. Mr Stevens confirmed the content of his statement, i.e., that he would have assessed the defendant's claim to be about $30,000 plus costs absent allegations of psychiatric injury.
6. In cross-examination, Mr Stevens agreed that Allianz is always alive to the possibility of fraud. Mr Stevens confirmed that Dr McClure had been instructed to provide an opinion on matters including the validity of the claim, and he observed that Dr McClure had made no observations impugning the validity of the defendant's claim.
7. I found Mr Stevens to be an honest and candid witness. Even allowing for the caution I must exercise when assessing a witness's evidence given with the benefit of hindsight, I accept his assessment of the defendant's claim absent allegations of psychiatric injury.

Daniel Tomas

1. Mr Tomas was employed as a claims operation manager for Allianz in 2015 and had involvement with the defendant at that time. He swore an affidavit on 20 January 2023 which was read, and became part of exhibit 1.
2. In his evidence-in-chief, Mr Tomas confirmed that he had oversight of the file and provided instructions to Mr Seisun during the settlement of the defendant's claim in 2015.
3. When asked by Mr Catsanos about the significance that he placed upon the histories given by the defendant to doctors in medico-legal and treating contexts, Mr Tomas said that he relied on them "quite heavily because at the end of the day, that's the bulk of the evidence on a claim." Mr Tomas also told the Court that the same reliance is placed on information provided in further and better particulars submitted on behalf of a claimant.
4. In cross-examination, Mr Tomas confirmed that when preparing his affidavit, he had read the statements of Mr Nehme, Mr Weerakkody, the MAS assessment of Dr Ted Cassidy dated 7 October 2014 and an advice of Mr Seisun prepared 19 December 2014. He did not rely on the claims file to prepare his affidavit as he had not worked for Allianz since December 2020.
5. In re-examination, Mr Tomas confirmed that in coming to his conclusions during the 2015 settlement, including his instructions about the amount to be offered to compromise the claim, he had relied on the histories provided by the defendant to the various doctors who had provided reports in the earlier proceedings.
6. I accept Mr Tomas's evidence.

Dr Andrew McClure

1. Dr McClure is a psychiatrist with both a clinical and consultant practice. He saw the defendant on behalf of Allianz in May 2014 and prepared two reports. The first was prepared for the purpose of the defendant's claim and is dated 29 April 2014. The second was prepared for the purpose of these proceedings and is dated 26 August 2021. He gave evidence in these proceedings after the conclusion of all of the defendant's evidence (by agreement). He was examined and cross-examined. Prior to giving evidence in these proceedings, Dr McClure was provided with a transcript of the evidence of Mr Nehme and Mr Weerakkody by the plaintiff's solicitors.
2. Dr McClure's practice includes working two days a week providing medico legal reports, three days a fortnight at the Lithgow Correctional Centre and one day a fortnight of clinical practice at Blacktown. Dr McClure does not have any current practice attached to a hospital. He last practised in a hospital at Orange in about 1997. He has not worked in a psychiatric ward since 1993.
3. Dr McClure saw the defendant only once on 29 April 2014, assisted by a Korean interpreter. He took a history based on the defendant's self-report and the medical reports with which he had been provided. This history included that Mr Yu was unable to think straight and had difficulty with concentration and memory. He described the defendant as dishevelled, unclean, unshaven and appearing to lack motivation to maintain basic grooming, wearing clean clothes and showering. In Dr McClure's view, this indicated that Mr Yu's depression impaired his motivation and capacity to look after himself. He concluded that the defendant had a Major Depressive Episode caused predominantly by physical injuries sustained and his subsequent loss of employment, which had not stabilised. He was thus unable to provide an estimate of the defendant's WPI.
4. In his report of 26 August 2021, Dr McClure conducted a review of all the medical material served by the defendant in support of his claim leading up to the settlement. He was provided with a draft statement of Mr Weerakkody and emails between the defendant and Mr Nehme as well as some financial documents extracted from documents produced on subpoena (on which the defendant was cross-examined, to which see below). Responding to several questions posed by the plaintiff's solicitors, Dr McClure offered the following opinions:- 1. Having reviewed material relating to the building works at Thornleigh, Mr Yu objectively displayed cognitive abilities which were inconsistent with his self-description during their consultation; 2. Mr Yu was able to review and sign complicated contracts and applications for finance and was able to "multi-task", which was inconsistent with his self-report during their consultation; 3. The defendant's report to Dr Cassidy in October 2014 that his financial situation was dire was inconsistent with assets appearing in his bank accounts in October 2014 ($82,388) and January 2015 ($136,572); 4. Surveillance video showing the defendant driving in late 2013 and early 2014 was inconsistent with the defendant's report to Dr Cassidy that he had not driven since the accident; 5. Mr Yu's application for housing contained a medical section completed by his general practitioner which stated that his patient did not have a carer and was able to live independently without support. This was inconsistent with his general self-report that he had a low level of domestic functioning and that he required a carer; 6. Mr Yu's report that he had been unemployed since October 2013 was inconsistent with documents of Todos Silverwater Imports (Todos) indicating that he had been employed by that company since 2012 and that his employment was ongoing. That comment was made on the assumption that the documents were authentic. On the assumption that the documents from Todos were inauthentic and provided to Westpac Banking Corporation (Westpac) by him, Dr McClure says that the defendant's credibility would be so significantly impugned that he could not trust any self-reporting without corroboration; 7. Viewed retrospectively, had Dr McClure known about the matters noted above, he would not have regarded the defendant as a credible historian. He would also not have accepted that the defendant had diminished cognitive ability or that his depression was dysfunctional; 8. Viewed retrospectively on the basis of the new information, Dr McClure says that at the time he saw Mr Yu, he is unlikely to have suffered from a significant Major Depressive Episode, that he was capable of living independently and had no requirement for domestic or personal assistance, that he was capable of driving and that he was able to work; and 9. Viewed retrospectively, in Dr McClure's opinion Dr Cassidy's diagnosis of Major Depressive Episode and his assessment of 28% WPI could not be made out as both are inconsistent with the information now known. He would assess the defendant as having a WPI of 5% at most, and even that would require a valid accident-caused diagnosis.
5. Dr McClure referred to Dr Cassidy's MAS assessment of 7 October 2014, and in particular his observation that the defendant was forgetful, had poor concentration and had poverty of thought. Dr McClure observed that this demonstrated a slowing of cognitive processes that manifests in slow responses in conversation, an absence of response, and answers that are brief, monosyllabic and unelaborated. The histories and reports were consistent with how the defendant presented to Dr McClure in April 2014.
6. Dr McClure was asked by Mr Catsanos to assume that the defendant's only symptom that has improved to date is his suicidal thinking, and that his depressed mood otherwise continues, and he was asked about the significance of Mr Nehme's evidence. Dr McClure said that the totality of the evidence (on transcript) indicated that the defendant was an active participant from beginning to end in the process of building the extension onto his house, including actively negotiating with the builder for remedy of defects, changes in price and changes in design.
7. Dr McClure suggested that Mr Nehme's report of the defendant's participation indicated a level of complexity and sophistication of the defendant's cognitive process which was inconsistent, to a significantly large degree, with how Mr Yu presented to him, Dr Cassidy and Dr Kim.
8. Dr McClure commented on the significance of a conversation between the defendant and Mr Nehme about the need for an awning to be structured. Dr McClure said that this conversation demonstrated that the defendant had the ability for foresight, forward planning and cognitive processing around future plans. With respect to the emails between the defendant and his neighbour about a border dispute, Dr McClure said that they refer to a fairly complicated set of measurements. He said that if the defendant was able to spontaneously give responses, it meant that he was processing what was happening and was able to respond in a way that suggested that his cognitive functioning was at a sophisticated and normal level.
9. Dr McClure believed that Mr Nehme's description of the defendant's demeanour was confirmation that the defendant was then functioning at a normal level. Dr McClure said that if the defendant continued to have the symptoms that he had been having in 2014 without any improvement, then the level of functioning observed by Mr Nehme was inconsistent with the defendant's presentation to him and to Dr Cassidy and Dr Kim in 2014.
10. In Dr McClure's opinion, Mr Weerakkody's evidence suggested that the defendant was an active participant in negotiations, that he appeared to understand what was being put to him, and that he was able to ask appropriate questions and respond in an appropriate way. Dr McClure agreed that his evidence was of a similar significance to that of Mr Nehme and, for the same reasons, is inconsistent with the defendant's presentation when he saw him and is inconsistent with the observations contained in the reports of Dr Cassidy and Dr Kim.
11. Dr McClure was asked about the WPI assessment made by Dr Cassidy. In his opinion, based on the new information he was provided, the assessment would have been much lower. Taking into account Mr Nehme's and Mr Weerakkody's evidence, and applying Psychiatric Impairment Rating Scale (PIRS) criteria, Dr McClure said that he would assign the defendant a WPI of approximately 5%.
12. Dr McClure was asked about the transactions relating to the first Westpac loan, including the Todos wage payments (to which see below). Dr McClure said that assuming the transactions were suspect, they indicate a degree of complexity of cognitive processing for thought and planning inconsistent with Dr Cassidy's assessment of impaired cognitive functioning. Dr McClure said the same about a second construction loan from Westpac, assuming that the defendant was the first point of contact for the arrangement of that loan, that he dealt directly with the bank and was involved in putting into place the arrangements to obtain the second loan. This indicated to Dr McClure that the defendant must have had a level of cognitive ability that allowed him to negotiate a fairly complex arrangement, such that his level of cognitive functioning was minimally impaired by the accident. Dr McClure attached similar significance to evidence that the defendant was able to go to the bank and withdraw a large amount of cash, which likely included speaking with a teller and signing appropriate documents.
13. Dr McClure was taken to the defendant's Australian citizenship test documents. He was asked to assume that the defendant did not require any help with these documents. Dr McClure said that if the defendant was able to read, understand, interpret and answer each question, this would indicate normal cognitive functioning. He said that it would be significant if the defendant were able to pass an interview because a person impaired in the way alleged by Mr Yu would be unlikely to pass such a test without special assistance.
14. Dr McClure was next taken to an application by the defendant for housing assistance and a rent subsidy application. Dr McClure said that to fill out these documents would require a reasonably good level of cognitive functioning and was inconsistent with the way that the defendant presented to him.
15. Dr McClure also suggested that a person who is cognitively impaired would likely have trouble with internet banking.
16. Dr McClure was asked about a certificate prepared by a Dr Oh, general practitioner, in support of the defendant's housing application in 2014, which noted that Mr Yu was able to look after himself. Dr McClure said that this was in contradiction with the defendant's self-report that he required a carer to look after him and assist him with basic activities of daily living.
17. With respect to the transactions on the defendant's credit and debit cards, Dr McClure said that the fact that there was no change to Mr Yu's spending habits in 2014 and 2015 demonstrates that the defendant was going about his usual life, and that his activities of daily living had not changed significantly after the accident in July 2013.
18. Dr McClure was asked about the defendant teaching at a Korean school in early 2014. In his view this demonstrated that the defendant was able to make a commitment to teach, was able to travel and arrive promptly every week, was able to interact with young children, was able to understand what was required of him in the classroom, and that he could read a textbook with the children and answer any questions. In Dr McClure's opinion, these factors in combination suggest good cognitive functioning and thus the activity is inconsistent with someone who alleges that they stay in their room most of the time.
19. Dr McClure accepted that the defendant may have had a psychiatric problem in January 2014 in the nature of some depressive condition. He was asked about the medical certificate from Hornsby Hospital, which stated that the defendant would be fit to return to work eight days after the date of the certificate. Dr McClure said that this suggests that Hornsby Hospital considered that the defendant's depression had improved during his stay. He said that the discharge summary of 25 January 2015 from Hornsby Hospital is consistent with a fairly high level of functioning and not with the kind of impairment that the defendant reported to him at his assessment.
20. Dr McClure was cross-examined by Mr Williams. He was asked about a letter of instruction sent to him by Sparke Helmore. He agreed that he was furnished with a great many documents. He was taken to the defendant's affidavit dated 17 December 2021 and was asked if he had seen it before. Dr McClure said that he was familiar with some things in the document but could not say for sure that he had read the document in its entirety.
21. Dr McClure was asked about a distinction between a Major Depressive Disorder and a Major Depressive Episode. He agreed that the latter could be a single episode of variable duration which could occur after a period of remission, and that remission is possible. Improvement was the rule rather than remission. In his experience, patients are generally insightful as to the nature of their condition, which can vary in the throes of an episode of depression.
22. Dr McClure accepted that he was not in a position to make any personal observations about the defendant's condition in or after April 2014.
23. As to the defendant's admission to Hornsby Hospital, Dr McClure agreed that there were two attempts at self-harm. Dr McClure agreed that a ten-day observation period at the hospital would be valuable in working out whether an authentic condition was being experienced by the defendant. Dr McClure agreed that at that time the defendant was experiencing a serious depression.
24. Dr McClure agreed that if there had not been a real question about the defendant requiring in-patient care, he would not have been kept at the Hornsby Hospital for ten days. Dr McClure said that sometimes observation needs to continue for a period of time to establish a diagnosis.
25. Dr McClure was next asked about the validity of the defendant's condition. Dr McClure suggested that there was a validity issue with respect to the defendant's long-term memory. Dr McClure said that he does not use validity scales or tools because he is not trained in their use. Instead, he relies on clinical experience and the consistency between a patient's history and their mental state. Based on his considerable clinical experience, Dr McClure saw no issue about validity in 2014.
26. Dr McClure was asked about the documentary material he relied on with respect to the defendant's dealings with Mr Nehme and Mr Weerakkody. Dr McClure agreed that he did not know what sort of assistance the defendant may have had with documents prepared by them.
27. Dr McClure was asked about the statement in his 2021 report that the "work" Mr Yu was performing in managing the construction at Thornleigh was akin to part-time or full-time work. He said he came to this conclusion in an impressionistic way.
28. Dr McClure agreed that he did not know what the defendant's mental state was at the time that he signed the contract with Mr Weerakkody. He acknowledged that the defendant had said in his evidence that he would often sign things without much reference to them or not read documents closely. He agreed that this might have occurred with the contract with Mr Weerakkody, but he observed that Mr Weerakkody's evidence did not suggest that this happened.
29. Dr McClure agreed that there were limitations as to the opinion he could provide absent an in-person examination, including that he must impute from the documentation a claimant's level of functioning, and his ability to complete activities of daily living, process information and respond to questions. He agreed that he could not know the defendant's level of mood, affect or positive thought. He was also not in a position to say if the defendant was thought disordered, whether he was correctly oriented in place and time or if he had working memory. However, Dr McClure said that these things could in fact be inferred from the documentation that he had read to the effect that the defendant was not thought disordered, that he had working memory and that he was oriented to place and time.
30. Mr Williams asked Dr McClure what he meant when he wrote, in his April 2014 report, that he had reviewed the documents provided to him "to the extent possible in the available time". Dr McClure stated that he usually allocates an hour, and that he read what he could and what appeared to be relevant to his enquiries in an hour. For his 2021 report, Dr McClure confirmed that he had spent about 10 - 15 hours reading the approximately 750-800 pages briefed to him.
31. In re-examination, Dr McClure was asked whether, in coming to his conclusions, he had formed an opinion with respect to the defendant's level of understanding of the contract between him and Mr Nehme. Dr McClure said that he had formed the opinion that Mr Yu had read and understood the document he had signed.
32. I found Dr McClure to be a frank and candid witness. He made concessions as appropriate. I accept his evidence in its entirety, allowing for the caution I must exercise when a witness gives evidence with the benefit of hindsight.

Mr Soon Yeon Yu

1. The defendant read his affidavit affirmed on 17 December 2021 as his evidence-in-chief. He was then cross-examined by Mr Catsanos with the assistance of an interpreter.
2. With respect to the documents produced under subpoena from Westpac, Commonwealth Bank of Australia (CBA), the Department of Housing, Centrelink, the National Australia Bank (NAB) and the Roads and Maritime Service (RMS), I granted the defendant a certificate pursuant to s 128 of the Evidence Act.
3. The defendant maintained in his affidavit and throughout his evidence that since the motor accident, his mental health has been poor, and that he has suffered from a form of major depression. He denied that he has ever made any misrepresentations about his mental health or that he has exaggerated his symptoms in any way. He said that he was at all times truthful to his lawyers and to the various doctors he had seen from time to time for the purpose of advancing his claim. The defendant disagreed that he was able to communicate effectively with Mr Nehme and Mr Weerakkody, or that he was able to look after himself properly or manage his affairs including managing the construction of the Thornleigh Property. In his affidavit, Mr Yu said that the only improvement to his depression since 2013 was that his suicidal thoughts had decreased. I observe, however, that during cross-examination the defendant said that he felt that he was now able to "function better". In his affidavit, Mr Yu said that he is still under the care of Dr Lim, psychiatrist. He denied that the statements attributed to his wife to Dr Baker were accurate.
4. Mr Yu was cross-examined over three and a half days on a great variety of topics, only some of which I have set out below. Mr Catsanos confirmed that the cross-examination was to elicit evidence for credibility purposes only and not for tendency purposes and I direct myself accordingly (to which further see below).

Defendant's work with Allianz

1. The defendant was asked about his work with Allianz when he lived in Korea prior to arriving in Australia. Although he worked in life insurance, he denied that he had anything to do with claims. The defendant said that his job was in recruitment of salesmen only.

English literacy and the Australian Citizenship Application

1. From the outset and at various points of the cross-examination of the defendant, Mr Catsanos suggested that he was able to read, speak and understand English to a better degree than he claimed. It was put to Mr Yu that he was able to converse in English with Mr Nehme, Mr Weerakkody, and his lawyers. During his evidence, it was suggested at times that he was reading ahead or responding to questions before they were interpreted. Mr Yu maintained that he had trouble communicating with Mr Nehme, received assistance with written communication from his family, and otherwise made use of interpreters or Korean-speaking staff, such as a Korean-speaking colleague of Mr Weerakkody.
2. Mr Catsanos cross-examined the defendant on his completion of the Application for Australian Citizenship in about February 2015, and the paperwork concerning that test. The defendant stated that he did not need help with that application. That application required him to understand basic questions, which required truthful answers.
3. My impression of the defendant is that he had some significant fluency in the English language, but that he benefited from the assistance of an interpreter in the Court environment, with whom he conversed at length during his evidence. I have already accepted the evidence of Mr Nehme and Mr Weerakkody that the defendant was able to interact with them largely in the English language for the purposes of designing and constructing the house at Thornleigh.

Claims process and evidence of doctors

1. On his CTP claim form completed in October 2013, the defendant did not indicate that he required interpretive assistance with the claim. He said that he was unsure why he answered the form in this way, and said that he always asked for an interpreter. He agreed that he could read and understand English to some extent but required assistance to understand some documents.
2. The defendant was asked what he understood about the claims process. He said that he did not understand that the doctors he saw on behalf of Allianz were seeing him for the purposes of the claims assessment. He agreed that he told doctors that he had difficulties looking after himself, that he had trouble driving and that he was unable to work.
3. Mr Yu agreed that he told his psychologist Dr Kim in 2014 that he had poor concentration, that he was feeling confused, that he had trouble thinking logically and rationally, that his mind was unclear, that he could not communicate with other people and that he had experienced a decline in his cognitive capacity. He agreed that he told Dr Kim that he was feeling fearful and anxious and was neglecting his appearance. He also agreed that he told Dr Kim that he had experienced psychological changes and was unable to attend to self-care, that he had ongoing thoughts of suicide, that he could not communicate with family normally, that he could not think straight, that he would forget things, that he was cranky and irrational and that he had no energy to do anything. He stayed at home and his relationship with his wife was deteriorating.
4. The defendant saw Dr Terrance Lim, consultant psychiatrist for treatment. In April 2014 Dr Lim recorded that the defendant had bad body odour, poor hygiene, that he was not washing and was unkempt and that he was not making good eye contact.
5. The defendant agreed that he told Dr McClure in 2014 that he had difficulties with memory and concentration. However, he said that he could not remember seeing Dr McClure, and that it was possible that he said the things that Mr Catsanos suggested that he told Dr McClure. Mr Yu said that this was the case with all other doctors. He could not really remember what he told them. He insisted that he could not remember if he was having difficulty with memory and concentration in May 2014. Mr Yu could not remember if he told doctors that he had difficulty driving. It was put to the defendant by Mr Catsanos that Dr McClure had recorded that the defendant's wife had taken the cars and was keeping them at her home to stop him from driving. Mr Yu agreed that if Dr McClure had recorded that, he may have told him so.
6. The defendant said that he told Dr Cassidy the truth. Dr Cassidy recorded that in October 2014 the defendant had not worked since the accident and was receiving Centrelink payments. Mr Yu agreed that he told Dr Cassidy that he slept excessively (about ten hours a day), and that he was depressed most days for most of the time. His agreed that his voice was slow and that he took time to answer questions. Centrelink had provided him with a carer because he could not look after his basic needs. Mr Yu agreed that he told Dr Cassidy that he rarely went to social events, that he never left the house, spent most of the time in his room, and had driven very rarely since the accident. The defendant also agreed that he told Dr Cassidy that his marriage had broken down due to his emotional situation, and that he saw little of his children and family. He agreed that he told him that he could not read or follow complex instructions and that he had problems with memory and concentration.
7. Mr Yu agreed that he told Dr Cassidy that his son was first appointed his carer, but that his wife was now his carer, for which she received a government allowance. He said that he needed a carer to help him with medication, prepare meals, to attend appointments, to do the washing and the dishes and to help with his personal hygiene. He said that this assistance was ongoing at the date of the hearing.
8. The defendant denied that some of the visits to doctors who prepared reports were for the purpose of them providing reports to the plaintiff in pursuance of the assessment of his claim. He said that he always believed that he was seeing those doctors for the purposes of treatment. I do not accept that the plaintiff believed that he was seeing medical professionals on behalf of Allianz for the purposes of treatment.

Authority to operate a bank account

1. The defendant was cross-examined on a document which he signed giving him authority to operate his daughter's CBA bank account (in the name of both her and her mother) in October 2014. He was asked if, in 2014, he felt that he had the mental capacity to operate someone else's bank account. He said that he was unsure if he could make decisions about money transfers, but that he was able to do the physical act of transferring. Although this was a small matter in the scheme of the proceedings, in my opinion the defendant's answers to questions on this topic were evasive and non-responsive. No convincing answers were given in response to questions about why the defendant would require the authority, or why he might transfer money out of the account. On its face, signing the authority is inconsistent with representations he was making to medical practitioners at about that time.

The Thornleigh Property

1. The defendant was then asked questions about the purchase of the Thornleigh Property. There was some disagreement as to when he first approached Boss Design to do work on the property. It was agreed that it was purchased in early 2015. The defendant was asked how, given his then financial circumstances, he thought that he would be able to pay for it. The defendant explained that the sale of his Gordon property left him and his wife with about $150,000 - $200,000, and that his wife's family in Korea also gave them money. He said that the rest of the money was obtained through a loan with a mortgage broker. The defendant was unsure how much money was borrowed by way of loan. He said that he was not actively involved in the purchase, but rather his wife organised the purchase of the Thornleigh Property. He agreed that he signed relevant documents, but his evidence was that he did not pay much attention to the documents when he signed them.

The Westpac Loan and Todos wages

1. Mr Catsanos took the defendant to documents produced on subpoena by Westpac, including documents concerning the loan for the purchase of the Thornleigh Property. It appears from those documents that an application for a loan to purchase Thornleigh was first made in March 2015, just after the settlement. On each relevant document the defendant's phone number appears. Mr Catsanos suggested to the defendant that he was responsible for directly dealing with a mortgage broker, and that he provided the broker with information for the purposes of securing the loan. The defendant denied that he had anything to do with the loan.
2. Mr Yu was taken to the Westpac loan application where his employment status was listed as "full-time" as of February/March 2015, and that he had been employed as a "manager - sales/marketing/advertising - since January 2012" by Todos at Lidcombe.
3. The defendant was then taken to documents produced by Westpac in response to a subpoena which suggested that in 2015 he was employed by Todos. He was shown letters on Todos letterhead confirming his employment as a full-time marketing director with a gross income of $130,000 per annum. The defendant denied that he was ever employed by Todos. He said that the first time he saw these documents was two or three years before the proceedings, when they were shown to him by his solicitors. CBA statements, also produced on subpoena, showed that, at the time, the defendant received transfers with the description of "Todos wage" into his account. These payments were weekly payments of $1,758, totalling $91,416 per annum, and emanated from Mr Yu's wife's bank account. When asked whether he had ever seen these statements, Mr Yu denied opening bank statements or letters because he never had any more than $200 - $300 in his account at any given time.
4. Mr Catsanos suggested to the defendant that he was not being honest and was deliberately involved in the fabrication of transfers into his account to make it look like he was being paid a wage by Todos for the purpose of securing a loan. It was put to him that this was done by arranging his wife to transfer money to him from a bank account that she controlled, as part of a carefully thought-out plan to mislead the bank into providing a loan to purchase the Thornleigh Property. The defendant vigorously denied this.
5. I have significantly abbreviated Mr Catsanos's cross-examination on this topic. The defendant appeared to be at once animated and evasive when answering these questions. The documents, on their face, demonstrate that the defendant was working at the time that he made the relevant representations to medical practitioners, which is inconsistent with those representations. Alternatively, the defendant was engaged in deceiving Westpac by representing to them that he was working at Todos at the relevant time, which required significant planning and is inconsistent with representations made to medical practitioners about his mental state at about that time. I do not accept the defendant's various explanations that he had no involvement in the loan application or that a mysterious third-party broker prepared the Todos documents in order to deceive Westpac.

The Terrigal Property

1. The defendant was asked about his wife's financial position in 2014 and 2015. He said that he never discussed it with his wife. His wife had purchased a property in Terrigal (the Terrigal Property) in early 2015 and Mr Yu was questioned about how his wife had the money to purchase that property. The defendant stated that she had used the money from the sale of the Gordon property. Mr Catsanos reminded the defendant that he had said the money from the Gordon property was used to purchase the Thornleigh Property and suggested that between the Terrigal and Thornleigh Properties, the purchase costs were about $1.8 million. The defendant was asked if he was concerned about the cost of both properties, but he said that he was not.
2. Mr Yu maintained that he had never made any payments relating to the Terrigal Property and that he had nothing to do with it, even when he was taken to a document that showed he was listed as the "primary borrower" on a mortgage from Suncorp for the Terrigal Property. He said that this was the first time he had seen the document. I reject that evidence.
3. Mr Catsanos then took the plaintiff back to the Westpac documents for the Thornleigh loan. He was asked if he had informed the broker about being the "primary borrower" for the Terrigal Property or if he knew that the bank had offered a loan of $944,000 for the purchase of the Thornleigh Property. The defendant said that he knew nothing about any of this.
4. Mr Yu was asked if he had read an "acceptance of loan offer" document from Westpac with respect to the Thornleigh Property before he had signed it. He said that generally he does not read such documents. He just signs them. He said that he was with a lawyer at that time, so he just signed it. He said that reading is "kind of annoying to me", so he did not read it, including the four words at the top of the document in bold, which said "acceptance of loan offer". His evidence was that he had no idea that the bank had made an offer and no idea that he had accepted the offer, although he did understand that he had a mortgage with a bank.
5. Mr Yu's evidence was most unsatisfactory on this topic. I do not accept that he had no idea that the bank had offered to loan him money for the purchase of the Thornleigh Property in early 2015.

Financing of building works

1. The defendant was then asked about approaching the bank to finance the building works at Thornleigh (the construction loan). He understood that the bank provided such funding. Mr Yu said that his wife was responsible for organising the construction loan and that, apart from signing, he had nothing to do with it. He agreed that prior to construction, he had dealings with Boss Design and paid invoices in relation to the proposed works. It was put to him that he must have had an understanding, in September 2015, as to what amount of money would be necessary to complete the work discussed with the architects, and he was shown a loan document which had his phone number listed next to his wife's name. It was suggested that he was pursuing this loan from the bank. The defendant denied this. The document states that he was employed by Todos. It was put to him that he provided documents contained in the documents produced on subpoena by Westpac on Todos letterhead, (and noting his employment with Todos in September 2015 since January 2012), to support his application for the construction loan. The defendant said that these documents were with the broker and he denied having provided them to the bank in support of the construction loan.
2. The defendant was taken to the construction loan application of October 2015. He agreed that he filled in the details as "person 1" including his phone number, address and other details.
3. I do not accept the defendant's evidence that he was not involved with the construction loan, and I find that he provided the additional Todos documents in pursuance of this loan.

Retraction of answers and other matters

1. In the next day's cross-examination, the defendant retracted his previous answers and said that he did not in fact sign the construction loan documents. He claimed that the signatures were not his, and in particular the signature on the "acceptance of loan offer" document with respect to the Thornleigh Property. He said that he had checked his licence and passport, and that the signature looked different to his usual signature. He also queried the authenticity of his signature on the Westpac construction loan application. It was suggested to Mr Yu that he was making up his answers, which he denied.
2. The defendant agreed that he had been sleeping at his wife's residence at Thornleigh since September 2022, including during the course of these proceedings. He denied ever speaking to his wife (who was a witness in this case), about the matter during the trial and during his cross-examination (which I do not accept).
3. Mr Catsanos put to the defendant that within a week or two of purchasing the Thornleigh Property he personally contacted Westpac to organise a further loan. The defendant denied this, and that he was being dishonest in doing so. The defendant was then taken to a Westpac document titled "Loan Authority", which was signed by him. The defendant maintained that he did not know how much money was being loaned by the bank. He denied having ever read the document, saying "usually I don't read." He said that whilst he knew he was signing the paperwork for the purpose of a loan, he was unsure as to why he and his wife were obtaining the loan. The defendant also denied that his signature appeared on a document requesting a transfer of surplus funds into an account that had been set up as part of the new loan.
4. Mr Yu was taken to another document entitled a "Request for Progress Payment" to TBL Constructions for putting down a concrete slab. He agreed his signature was on that document.
5. The defendant was taken to another document called "Verbal Payment Authority" giving him the authority to make progress payments over the phone. Mr Catsanos suggested to the defendant that on at least one occasion in 2015, he went with Mr Nehme to the bank to withdraw $20,000 to make a progress payment. Mr Yu agreed that this was possible and said that, while his wife may have told him that they needed a loan for construction work, he never knew how much the loan was for, how the structure of the loan worked and still, to this day, does not know how it worked.
6. An email was shown to the defendant that was sent from his personal email address to a Mr Wong at Westpac. In the email, the defendant said that he would like to change the investment loan to a residential loan, as the construction was completed. It was suggested to him that he had a good understanding of the loan structure. The defendant said that it was his wife who told him to change the loan structure and that he sent the email with help from his wife and son. In that email, the defendant wrote "please give me an advice the process for this" [sic]. It was put to him that he was the contact person rather than his wife. The defendant replied that his wife was working in a doctor's clinic and therefore could not receive any calls.
7. Mr Yu was asked why he was the only point of contact for the loan if he had no knowledge of the structure or the amount of the loan. He said that he assumed that as his wife was not available all the time, she had given his phone number to the bank. He reiterated that his wife was responsible for organising the Westpac loans.
8. Mr Catsanos then suggested to the defendant that his wife had also made a claim pursuant to the MACA alleging an injury that impaired her mental health arising out of his July 2013 accident. The defendant said that he was aware of her claim, but that he did not know the details of her claim or injury. On the defendant's evidence, at a similar time to making her claim, his wife was the sole person responsible for organising the Westpac loans. It was put to the defendant that he was not being honest about the Westpac loans, and that he had provided the Todos documents to the bank, which he vigorously denied.
9. As I have said, the defendant's evidence with respect to the Westpac loans was, in my opinion, entirely untrue.

Department of Family and Community Services Housing Documents

1. In April 2014, the defendant made an application for public housing. This was approximately one year prior to the settlement. He was shown a document titled "Application for Housing Assistance" that he had apparently completed. In order to complete this document, Mr Yu was required to confirm that he understood the questions. He denied that he understood the questions at the time that he filled out the form. I reject that evidence.
2. On 15 May 2015, the defendant completed a document titled "Rent Subsidy Application". This document was completed some weeks after the defendant had received his settlement payment, which was approximately $630,000 after various deductions. He acknowledged that he understood the questions on the form and was aware that the purpose of this document was to permit him to pay reduced rent for a property. Mr Yu had ticked "no" to the question "Does anybody in this household own or part-own any property including a house, etc?" At that time, the Thornleigh Property had not yet been purchased. The next question on the form asked if the defendant had any assets or savings to which he answered no. This answer was untrue as Mr Yu had by then already received his settlement money.
3. The defendant was then taken to a bank statement for the account into which the settlement money had been paid. The defendant denied knowing anything about it. He was then asked whether he was aware that he had a large sum of money in any bank account. He denied that he did, although at the time, he had over $70,000 in a NAB bank account in his name.
4. Mr Catsanos asked the defendant if he had been truthful when answering the questions in the housing documents. The defendant said he did not really read the questions "one-by-one" because there are "a lot of notes, so the one after one another, just to tick, 'No's"'. He said that at the time, it "was quite annoying" so he did not really read the document. If a question was short, he would read it. If it was not short he would not read it. While he agreed that he could read and understand the documents now (a significant change in his wellbeing), he said that in 2015 he had recently had cataract surgery and had poor vision such that he could not read long sentences. Mr Yu said that he still had trouble reading small letters. It was suggested to him that he had invented these explanations in an attempt to mislead the Court as to why he completed the document in the way that he did. It was suggested that he had intended to mislead the Department of Family and Community Services to obtain a rental subsidy, which he denied.
5. The defendant was then taken to another 'Rent Subsidy Application' document which was completed in February 2017. The defendant said that he was now able to read and understand the document but at the time he did not know what the form was and he had just completed it. He was asked if he read the declaration stating that he had understood the form and that all the answers given were true. He said that he did not, because reading caused him headaches. The defendant was asked on several occasions whether, in 2017, answering "no" to the question "Do you or anyone in the household own or part own any property including a house, unit, land or commercial property, either in Australia or overseas?" was a correct answer to the question, bearing in mind that at that time he owned the Thornleigh Property. The defendant would not answer Mr Catsanos's question. It was put to Mr Yu that the reason he would not answer was because he did not want to acknowledge that he had lied in 2017, which Mr Yu denied.
6. Mr Yu's answers to the questions on this topic were most unsatisfactory. I do not accept his denials or explanations. His evidence was entirely lacking in credibility.

Centrelink payments

1. At the time of the accident, the defendant was working in a Parramatta warehouse for a company called Shoes & Sox, as well as working part-time as a cleaner. After the accident, he gave up his work. The defendant was shown a document titled "Centrelink Confirmation E-services", being a statement of Centrelink benefits that the defendant provided to the Department of Family and Community Services sometime after February 2014. This document reveals that the defendant began receiving Centrelink Newstart payments in April 2013 and that they continued through to September 2014. The defendant was therefore receiving Newstart benefits at the time of his accident. He was asked by Mr Catsanos if he was in fact working at the time of the accident. He replied that his employment was not yet formal and that he was on probation, and that he was working for a month or two before the accident, which he did not disclose to Centrelink.

Work at a Korean language school

1. Mr Yu agreed that he had worked as a teacher at a Korean school in Lindfield after the accident from February 2014 until about April 2014 on Saturdays only. He said that he was only paid $50 or $60 for travel expenses. His evidence was that he would drive about 30 minutes to and from the school and that he taught for a maximum of 40 minutes. Mr Yu was asked how he could do this work given his reported issues with concentration and memory, and in light of his report to Dr Cassidy that he spent most of his time in his room and was not active in the community or with personal engagements. I observe that it is also inconsistent with his apparent inability to drive. It was suggested to Mr Yu that at no point did he mention to any of the doctors assessing his claim that he was performing work at the Korean school. Mr Yu replied that the work was not difficult as it did not require significant amounts of concentration or engagement with the students and that he did not think to mention it.
2. The defendant's evidence on this topic was entirely inconsistent with the representations made to medical practitioners.

NAB accounts

1. The defendant was taken to statements of two NAB accounts, one in the joint names of the defendant and his wife and the other in his name only. With respect to the joint account, he was asked about a transfer of $101,322.82 on 9 October 2014. The defendant said that the money probably related to the sale of the Gordon property. He was then taken to a 15 October 2014 transaction of $82,388, which was transferred by his wife from the joint account into the account in his name only. Mr Yu said that he could not remember that happening and said that he never knew that it had occurred.
2. Further, on 12 November 2014 and 19 November 2014, three transactions of $10,000 each were credited into the defendant's account, each from Soo Chung. On 23 January 2015 there were three transfers of $20,000 (to his wife) and one transfer of $50,000 (to 'oneagency') debited from his own account. The defendant stated that he could not remember making the transfers and knew nothing about the payment to One Agency. It was suggested to him that at this time he was controlling his family's finances. He said that at the time, he and his wife shared the bank account. He was asked whether he knew that between October 2014 and January 2015 that he had a balance in his account always greater than $80,000, which at one point reached $136,000. He denied that he knew, and he denied that he was being untruthful to the Court.
3. The defendant was then asked about payments made into the joint NAB account that the defendant said were carer benefits paid to the defendant's wife. Mr Yu said that those payments were either to his son or to his wife and paid as carer benefits. He agreed that between 2014 and 2020, there were regular carer payments made into the joint NAB account.
4. With respect to the NAB account in his name only, Mr Yu was asked why he had opened it in October 2014. He replied that he thought it was an existing account. Mr Catsanos asked the defendant if he was aware that carer payments commenced being paid into that account on 30 October 2014. The defendant said that these payments were to his son as his carer. The defendant agreed that there was a time that both his son and his wife were getting a carer's benefit from Centrelink. The duties they performed were washing his clothes, making his meals and doing domestic tasks as a result of the problems with his emotional health. His wife provided additional support including transporting him and encouraging him to shower. He said that he had significant problems with his emotional health, including deficiencies in concentration, memory and thinking. Initially his son provided most of the care, but then his wife began providing the care. Mr Yu said that his wife and his son took him to medical appointments because he was not able to drive and because he needed assistance with organising getting to and from the appointments.

Mr Nehme and Mr Weerakkody

1. The defendant was cross-examined about his dealings with Mr Nehme and Mr Weerakkody. Mr Catsanos suggested that he had dealings with both in 2015, and that he was the person who principally dealt with Mr Nehme. The defendant said that it was his wife who dealt with Mr Nehme. He denied that he usually attended the building site alone and said that he attended the site with his wife. He denied that he discussed construction issues with the builder, including technical details such as the setback to the upper wall. It was put to Mr Yu that he made decisions about where power points were to be located, but he said that they were already on the drawings which he could not read. He denied that this occurred.
2. Mr Catsanos suggested to Mr Yu that he was able to respond spontaneously to questions asked by Mr Nehme, including engaging in discussions about cost. The defendant said that he could tell the builder about the budget. It was suggested that he would not have been able to do this if he did not know how much money he was getting from the bank. Mr Yu said that he believed that about half his settlement money would be used for the construction, that his wife had asked him for that money and that he transferred it to her account, although he could not recall the sum.
3. As I have already indicated, I accept Mr Nehme and Mr Weerakkody rather than the defendant.

Emails

1. Mr Yu agreed that all email correspondence with respect to the Thornleigh construction was addressed to him, and that all communications to Mr Nehme came from his email address. As to email communications with Mr Weerakkody, the defendant said that because his wife was working, he provided his email address and mobile number. Mr Yu said that as he was having problems with concentration and memory, his family assisted with reading and replying to emails. It was put to the defendant that he was in charge of matters with Mr Weerakkody and Mr Nehme. The defendant vehemently denied that this was the case.
2. Mr Yu was asked about emails between himself and his neighbour, Kim Godbout concerning an issue about the control point of a boundary line between their properties. It was put to him that this was an example of him dealing with a complex issue and engaging in a reasoned discussion about it. Mr Yu disagreed that it was a complex issue, and said that his daughter or his wife had assisted him by translating and composing emails which I reject.
3. The defendant was taken to another email where Mr Weerakkody had written "Further to our conversation today". Mr Yu said that this referred to a conversation between his wife and Mr Weerakkody, and that he was not involved in any conversations with him. It was put to Mr Yu that he was not being honest, and that he was able to communicate with both Mr Weerakkody and Mr Nehme. Mr Catsanos suggested that he was able to concentrate, understand without added explanation and that he had a comprehensive knowledge of the works, plans and details of the jobs that Mr Weerakkody and Mr Nehme were performing. The defendant denied all of this. I reject his denials.

Terrigal Property Rates

1. Mr Yu was then asked about the payment of council rates for the Terrigal Property. He maintained that he had nothing to do with the Terrigal Property. However, documents were shown to him which indicated that it was he who had paid rates for the property in August 2015 (and other dates). It was suggested that this was because he had a legal interest in the property. Mr Yu denied this. His evidence was that sometimes his wife would give him money to pay utility bills. Mr Yu could not explain why this occurred and he said that he paid the rates because his wife asked him to. He denied that he considered that the Terrigal Property belonged to both him and his wife.

Sundry bank records

1. As to numerous transactions on his debit card, it was suggested to Mr Yu that the transactions took place in disparate locations, and that his pre and post-accident spending patterns were substantially similar. The defendant said that his son would usually use this card. It was then (again) put to the defendant that in 2014 and 2015, he was in charge of the family's finances. Mr Yu disagreed. He denied that he sought the loans for the purchase and construction of Thornleigh and that he had falsified the Todos documents provided to the bank. He denied that the histories he gave to doctors who saw him were false. He denied that he had grossly exaggerated his mental health symptoms.

Licence Renewal Application and Infringement Notice

1. The defendant was taken to a licence renewal application dated 28 November 2016 which he completed and which was tendered as exhibit 7.
2. In answer to a question on the document "Do you have any medical, physical or mental disabilities which may affect your driving?" Mr Yu answered "no". He said that he later reported his mental problems. He was asked if it was truthful to answer "no" on this document, and he replied that at the time he had not read the document and had ticked "no". It was suggested that he only reported mental health issues after he received an infringement notice for driving an overloaded vehicle in 2017.
3. As to this infringement notice, on 29 June 2017 Mr Yu made representations to RMS for a review of the penalty. He informed the RMS that he had a WPI of 26% due to a psychological condition and that he was being treated by Drs Kim and Lim. The defendant said that at the time that he made the licence application, he felt well enough to drive. However, he began having some trouble following the speed limit and concentrating. He was able to manage short distances on roads with which he was familiar. He said that he had told Dr Cassidy that he was not driving regularly, which Dr Cassidy had misinterpreted as not driving at all.
4. Mr Yu said that he believed that in 2016 his condition had improved to some extent. Mr Catsanos took the defendant to his affidavit which said that the only improvement was suicidal thoughts, and suggested to the defendant that the purpose of providing the information to the RMS in 2017 was to avoid paying the fine. Mr Yu said that the purpose was to prevent future accidents. I do not accept the defendant's explanation.

Thornleigh tenants

1. The defendant was then asked about tenants at the Thornleigh Property. According to a Westpac bank statement in 2017, he had made deposits with the description "rent". It was put to him that he was supervising and overseeing the rental of the Thornleigh Property, that he was actively involved with those rental arrangements and that he would regularly discuss those rental arrangements with his wife. It was suggested that this required concentration, planning and memory. Mr Yu denied this and said that there was not much work to do with the rental arrangements because there were long term tenants in the property and they required no management.
2. I found Mr Yu to be a most unsatisfactory witness. His evidence is contradicted by an abundance of documents produced on subpoena, now in evidence, and by the evidence of Mr Nehme and Mr Weerakkody. I am unable to accept any of his evidence where it has been put in issue. In my opinion his credibility is so significantly impugned that I reject it in its entirety.

Hyun Sook Chung

1. Ms Chung next gave evidence through a Korean interpreter. She is the wife of the defendant. Ms Chung relied on her affidavit affirmed on 17 December 2021 as her evidence-in-chief. She was cross-examined by Mr Catsanos about various matters.
2. I observe that I granted Ms Chung a s 128 certificate with respect to questions and answers about the Terrigal Property, carer benefits payments by the Commonwealth Government, loan applications generally and all of the categories of documents on which the defendant was cross-examined.
3. In her affidavit, Ms Chung said that she separated from her husband in February 2014. She said that his personality and behaviour changed radically after his accident in July 2013. She said that she owns a property at Terrigal which she uses as a holiday house, which she purchased with a loan from Suncorp and with money borrowed from her family in Korea. With respect to the medical assessment of Dr John Baker on 11 October 2017, Ms Chung said that although she was assisted by a Korean interpreter, she believes that the interpreter was ineffective. Ms Chung said that the document is full of errors, including the date on which she separated from her husband. She said that while her husband did have a role in paying bills electronically, he had little means to pay those bills. She denied, inter alia, that he ever controlled her finances, that she deposited her earnings in an account for her husband and that she lived off an allowance given to her by her husband.

Bank accounts

1. Ms Chung was asked whether she believed her husband, given his mental illness, could operate a bank account and, if not, why there was CBA documentation authorising him to do so as a third party in October 2014. Ms Chung said that this was a family account that she operated. She could not adequately explain the provenance of these documents or why a decision had been made to allow her husband authority to operate her accounts at a time when she believed him to be mentally unstable.

Dealings with Boss Design

1. Ms Chung was asked about a contract from Boss Design and when it was signed. The document appeared to be signed on 14 January 2015 which would be consistent with work being performed in mid-2015 (as set out in invoices from Boss Design). Ms Chung insisted that it was signed in 2016, which is inconsistent with the evidence of Mr Weerakkody and documents produced on subpoena. I reject this evidence. She maintained that there were no dealings with Boss Design until about mid-2015, after the settlement. Ms Chung denied that she first knew that the Thornleigh Property was for sale in January 2015 and said that she first saw the house in April 2015. I reject that evidence as it is inconsistent with the documentary material.
2. Ms Chung was taken to the Boss Design "addendum to contract" document where her husband's details were noted. Mr Catsanos asked why her husband's contact details were given. She said that his details were provided because she was usually at work during the day and did not take calls during work hours. She said that she oversaw most of the work and went to most meetings with Boss Design.
3. Ms Chung said that she accompanied her husband to most of the meetings between him and the architect of the Thornleigh home. She agreed that she observed her husband having conversations with the architect throughout 2015 and 2016.
4. It is abundantly clear from the Boss Design documents that the initial contract was signed by Ms Chung in January 2015, and that work commenced in May 2015 at the latest.

Carer's benefits

1. Ms Chung was asked about the carer benefits that she was receiving from Centrelink. She stated that she began caring for her husband in 2014 and that she started receiving Centrelink carer benefits in about October or November 2014. She said that her son was also providing care, but that he stopped in about late 2015.
2. Ms Chung said that the care she provided to her husband during 2014, 2015 and 2016 included preparing meals, arranging doctor's appointments, cleaning, driving, shopping and washing his clothes.

Ms Chung's MACA claim

1. Ms Chung saw Dr Tarra Shaw on 5 November 2015 for her own claim for damages arising from the defendant's motor accident. The MAS certificate and assessment is annexed to Ms Chung's affidavit.
2. Mr Catsanos put to Ms Chung that she did not inform Dr Shaw about her work as a receptionist, which had continued into 2015. Ms Chung said that she was looking after her son and had stopped working at Dr Kang's office for a short time. It was put to her that she had told Dr Shaw that "I am not really well physically. I cannot work. I cannot control or manage my situation". She said that she could not remember what she told Dr Shaw on the day but because she is a mother and a wife, she had to endure the situation. She agreed that she had told Dr Shaw that she only showered when leaving the house and did not often brush her teeth. Ms Chung could not remember if she wore dirty clothes when she saw Dr Shaw, or if she made intermittent eye contact and largely gazed at the floor. She said that she told Dr Shaw the truth.
3. Ms Chung agreed that she told Dr Shaw that in November 2015 she was only eating uncooked noodles, that she could not remember the names or doses of the medication she was taking and that her Korean psychiatrist had recently organised for a share maid to live in the home without paying rent to help care for her and her ten-year-old son. At this time, she was receiving carer payments. She agreed that she told Dr Shaw that she rarely left the house apart from picking up her son or to go to appointments. She could not remember if she had told Dr Shaw that she could not do the shopping. Ms Chung said that she spent a lot of time lying down and that she had difficulty concentrating.
4. Ms Chung could not recall if she had told Dr Shaw that she had attempted to work as a babysitter, and that the job had come to an end because the parents had concerns about how she did the work. She disagreed that she told Dr Shaw that she did not prepare breakfast or lunch for her son.
5. Ms Chung was asked how she could look after her husband, given her own mental health issues at the time. Ms Chung said that she could still prepare meals and arrange her husband's appointments. Mr Catsanos suggested to her that she had not been honest with Dr Shaw, and that she was being dishonest about the kind of care that she was providing to her husband. It was suggested that she told Dr Shaw that she was no longer driving. Ms Chung said that she would not have said that, and that in fact she continued to drive short distances. It was put to Ms Chung that she deliberately lied about whether she had been working and that she did this in pursuance of her claim for damages, which she denied. She was unsure why she did not tell Dr Shaw that she was working as a receptionist for Dr Kang.

Purchase of the Thornleigh Property

1. Ms Chung gave evidence that she and her husband were assisted by a broker for the purposes of obtaining a loan for the Thornleigh Property, who was the same broker who had assisted her with the loan for the Terrigal property. Ms Chung said that her husband did not deal with, or speak to the broker.
2. Ms Chung was asked how she came into contact with the broker. She said that she had told "Kenny's mum" that she wanted to purchase a property in Thornleigh. "Kenny's mum" had then relayed that information to a broker, who then called her. She said that she did not tell her husband about the Thornleigh Property until after she had discussed it with the broker. Mr Catsanos asked Ms Chung why she had nominated her husband as the primary person on the initial loan application. She said that this was done because her husband's income looked bigger, and so the broker suggested that he should be the primary person. She said that her husband's number was included as the only contact number, because she gave out her husband's number rather than her own.
3. Mr Catsanos asked Ms Chung whether she knew that it was stated in their Westpac loan application of May 2015 that her husband was working for Todos. Ms Chung was unable to give an intelligible reply to this question. When asked about the March 2015 letter from Todos confirming her husband's employment, Ms Chung said that she first saw this document at her solicitor's office many years after she had bought the Thornleigh Property. She said that she had heard the name Todos previously, as she had been told by the broker to use that name when she deposited some money into the bank account. She did not recall the name of the broker. After further questioning by Mr Catsanos, Ms Chung said that she believed the broker's name was Paul Li or Paul Lee. Ms Chung said that she understood that when she made the Todos deposits, it would appear that her husband was being paid wages. She admitted that her conduct was deliberately deceptive. However, she did not agree that at the time she knew that it was dishonest. Ms Chung said that she did not think about it, and that the broker had told her that everybody did it. She agreed that she had acted dishonestly, but she denied that she thought about it that way at the time. She conceded that she now knows that it was wrong. Ms Chung said that she did not know it was dishonest back then, but that she regrets it now. She insisted that the broker told her to do it.
4. Ms Chung agreed that she knew in 2015 that the broker was making representations to Westpac that her husband was earning income when he was not. However Ms Chung said that she was only doing what she was told by the broker so that she could get the loan approved. Ms Chung said that her husband did not know about these transactions, that she did not tell her husband about them and that she only asked him to sign papers for the loan approval, which he did.
5. In a piercing moment of the cross-examination, Ms Chung admitted that she had discussed the Todos wage transfers with her husband after she had given evidence about them, while she was still in cross-examination and contrary to my direction not to talk to anyone about her evidence. When asked about this by Mr Catsanos, she said that she told her husband that she did it, and that he did not have any reaction to it. Ms Chung said that she thought it was okay to talk to her husband because he was in court at the time that she gave that evidence, although she agreed that she knew that she was not supposed to talk to anyone - including her husband - about her evidence. She denied that she had any further discussion with her husband about any of her evidence. I find that difficult to believe.
6. Ms Chung was then asked about an account that her husband had opened in March 2015. She was asked if she had discussed the Todos wage issue with him then, given that she made the first Todos wage transfer on the same day. She denied that she had any such discussion with her husband or that he had made the transfers himself. Whilst Ms Chung agreed that her husband did do some internet banking, she was not sure if he was aware of her personal account or if he had ever transferred money into it. Ms Chung denied that she was being dishonest about her husband not knowing about the Todos transfers. Ms Chung repeatedly denied that her husband was aware of, and actively involved in the deception regarding the Todos transfers.
7. Ms Chung's account of the broker Paul Li or Lee and the Todos transfer is inherently not credible. She accepted that she had been dishonest with Westpac. This dishonesty affects all of her evidence.

Terrigal Property

1. It is not in dispute that an exchange of contracts on the Terrigal Property took place on 30 January 2015, with Ms Chung noted as purchaser. Ms Chung was taken to a Westpac document prepared by her which had Mr Yu listed as a primary borrower on the loan for the Terrigal Property from Suncorp Metway with an amount owing of $497,000. Ms Chung was unsure who completed this document, although I observe that as it is part of the Thornleigh loan application, it could only have been prepared by Ms Chung or Mr Yu. Ms Chung insisted that her husband had no interest in the Terrigal Property. It was suggested to her that this document indicated that her husband was the person responsible for the Terrigal mortgage. In a series of non-responsive answers, Ms Chung said that Paul Li or Lee was also the broker for the Terrigal Property.
2. Ms Chung was asked about her husband's account into which the Todos wages were paid. On 28 August 2015, a payment was taken out of his account to pay for Gosford City Council rates (with respect to the Terrigal Property). Ms Chung said that she made that payment. She was taken to other payments for Gosford City Council rates. Ms Chung said that she made all those payments out of her husband's account, and that her husband had nothing to do with them. She explained that she used her husband's account for the first payment, and so kept using the same account. Ms Chung said that she was in charge of the family accounts and that this was a family account in her husband's name. This evidence is unreliable and I reject it.
3. Ms Chung was taken to a money transfer made with respect to the Terrigal Property on 31 March 2015. Ms Chung denied that her husband made that transfer, and denied that any transfers with respect to Terrigal were made by her husband. When asked about a $2,200 payment on 18 May 2015 for a Gosford City Council survey, she said that she had requested this survey on the Terrigal Property, and that her husband had no involvement.

Loan Documents

1. Ms Chung was then taken to an email dated 21 May 2015 sent by her to her broker, Mr Heejun Sohn where she thanked him for introducing her and her husband to Westpac. Ms Chung said that she did not know who Heejun Sohn was and did not remember him as the broker for the May 2015 Westpac loan.
2. Ms Chung was asked about the construction loan for the Thornleigh Property. She said that the bank contacted her sometime between July and November 2015 and advised her to come to an arrangement with the bank for an offset loan to provide additional funds for construction. The call was to her husband's mobile which he answered, but Ms Chung said that she spoke to the person at the bank. Ms Chung said that she did not believe that her husband had any contact with the bank about the initial purchase loan or the construction loan.
3. Ms Chung was then taken to a Westpac loan application dated 24 September 2015 which was for the construction at Thornleigh. She first denied that she had signed this document but then said that she could not remember signing it. She then insisted that the signature was not hers. Mr Catsanos suggested to Ms Chung that if it was not her signature, then she had agreed for someone to sign it on her behalf. Ms Chung said that she did not know.
4. Ms Chung was asked about a rental appraisal of the Thornleigh Property from LJ Hooker dated 24 September 2015 which was provided to Westpac. She could not remember if she had obtained the document but said that her husband was not involved with any appraisal.
5. Ms Chung was then taken to other documents such as a certificate from Boss Design to the bank, and a certificate of insurance for TBL Constructions. Ms Chung disagreed that her husband obtained these documents for the purpose of securing a bank loan.
6. Mr Catsanos put to Ms Chung that it was the defendant who had all of the dealings with Mr Nehme during construction of the Thornleigh Property, and that her husband had paid Mr Weerakkody interim progress payments in 2015. She disagreed that her husband had all of the dealings with Mr Nehme and she said that they had paid Mr Weerakkody together, including on one occasion where they paid him cash.
7. As to the design plans by Boss Design, it was suggested to Ms Chung that her husband provided these plans to the bank to support the loan applications. Ms Chung disagreed and said that she provided them to Mr Paul Li or Lee, the broker. She also said that she had no idea that the loan application was going to suggest that her husband was working (which was inconsistent with her earlier evidence). Further, Ms Chung said that she never thought about whether the bank would require verification of income with respect to the additional construction loan.
8. I cannot accept Ms Chung's evidence on any of these matters. It is inherently unreliable and inconsistent with documents produced on subpoena, now in evidence.

Dealings with Mr Nehme and Mr Weerakkody

1. Ms Chung agreed that an important first step in organising the construction loan was calculating the cost for the job. She was shown the Home Building Contract, which she remembered. This document was signed by her for a contract price of $206,250. She agreed that the price had to be negotiated before the work commenced. However she denied that negotiations occurred between her husband and Mr Nehme, and that she was not involved in any discussions with Mr Nehme as to the contract price. Ms Chung said that she had received a price from Mr Nehme and then asked for a discount, and that both her and Mr Yu were present for this discussion. It was suggested that Mr Yu pressed quite strongly for a reduced contract price, but she disagreed. Ms Chung also disagreed that she was not there at all, which was why she could not recall the items which were excluded from the contract.
2. Ms Chung disagreed that her husband usually attended the building site alone, and also disagreed that details of the construction, such as tiles to be laid and positions of the power points were initiated by the defendant. Ms Chung was asked when she was on site at the Thornleigh Property with Mr Nehme and if anyone interpreted for her and her husband. Ms Chung said that she interpreted a bit because she speaks slightly better English than her husband. She disagreed that she did no interpreting in any of the conversations between Mr Nehme and the defendant.
3. Ms Chung was asked about the emails sent from their neighbour Ms Godbout to her husband about the fence. She agreed that none of those emails were addressed to her but she said that she was aware that Mr Yu had discussed the details of the fencing issue with Ms Godbout.
4. Ms Chung was aware of a series of emails between Mr Nehme, Mr Weerakkody and the defendant about the work at Thornleigh, none of which referred to her. Ms Chung said that she told Mr Weerakkody to send emails to her husband's email address and was unsure why there was no reference to her in relation to onsite discussions. She said that she had access to her husband's email and so had seen these emails before. One of the emails referred to a telephone conversation between the defendant and Mr Nehme. Ms Chung denied that she was not mentioned because she was not involved in that conversation. She also denied that her husband paid the builders himself, and that when problems arose on site, it was her husband who dealt with the construction issues. Ms Chung also said that there are no emails from Mr Weerakkody to her because she usually gave out her husband's or her daughter's email address. She maintained that because she had full access to her husband's email account, she believed that it was convenient to use it, rather than her own.

The Broker

1. Mr Catsanos suggested to Ms Chung that the name Paul Li or Lee does not appear anywhere on the Westpac documents as a broker (or at all), and that in fact there is no Paul Li or Lee at Westpac. She insisted that she had heard the broker's name was Paul Li or Lee. Ms Chung said that she currently has no way of contacting Paul Li or Lee or Kenny's mother (who referred her to Paul Li or Lee). She was asked if she had any concerns about involving Paul Li or Lee in the construction loan after he had asked her to make the Todos transactions for the purpose of securing the initial May 2015 loan. Ms Chung said that she did not think about it at the time and so she had no concerns involving Paul Li or Lee again.
2. Mr Catsanos suggested that if there was a person helping them obtain a loan, then her husband was fully aware and involved in submitting the Todos documents to the bank. Ms Chung denied this emphatically.

Dr John Baker

1. Dr John Baker, psychiatrist conducted an assessment of Ms Chung on 11 October 2017 and provided a MAS certificate on 30 October 2017. That document is contained in exhibit 2.
2. Ms Chung disputed some of Dr Baker's report. She did not agree that she told Dr Baker that she had separated from her husband in March 2013. She did not take issue with the suggestion that she and her husband had separated in 2014, or that she and her husband oversaw the management of six share house residents in the property where she lived with her son. However, Ms Chung said that her husband did not oversee the rental arrangements. She said that she did not tell Dr Baker anything that suggested that her husband had any control over the family finances after his car accident in July 2013.
3. Ms Chung agreed that she had an interpreter present when she saw Dr Baker. She agreed that her lawyers had advised her about what Dr Baker had said about her level of WPI, and what was said in the body of the report, including that Dr Baker had described her personal circumstances as involving her husband controlling all of the financial arrangements. She was aware that Dr Baker recorded that she was not involved in her husband's finances and that she would sign financial documents as and when her husband requested her to. She was aware that Dr Baker recorded that her husband still managed all of the family's affairs and the Department of Housing rental accommodation arrangements, that he regulated how much money she would receive and that he would oversee the rental arrangements at the Thornleigh Property. However, Ms Chung denied that she told Dr Baker these things. She said that she told her (Korean) lawyers that Dr Baker was incorrect, and that her lawyers said that they would pass her comments on to the plaintiff's solicitors. She said that nothing further happened.
4. Mr Catsanos suggested to Ms Chung that she had not told the truth about what she told Dr Baker, that she had not told the truth in relation to the loan arrangements for the purchase of Thornleigh, that she had not told the truth in relation to her dealings with Mr Nehme and Mr Weerakkody, and that she had done this to assist her husband's case. She disagreed.
5. To say that Ms Chung was an unsatisfactory witness is an understatement. I reject her evidence in its entirety. It is amply contradicted by the documentary evidence and the evidence of Mr Nehme and Mr Weerakkody which I accept.

Plaintiff's submissions

1. Mr Catsanos submitted that:- 1. The defendant suffered some type of psychiatric condition as a result of the motor accident in July 2013; 2. The defendant recovered or substantially recovered from that psychiatric injury at least by the time that he completed an Application for Housing Assistance on 15 April 2014; 3. The defendant made representations to the plaintiff which he knew to be untrue, those representations being that he was suffering from a severe and debilitating psychiatric injury; 4. Those representations were made with the intention that the plaintiff would rely upon them in settling the defendant's claim for damages; and 5. The plaintiff acted in reliance on those representations in settling the defendant's claim and suffered loss as a result.
2. The representations that were made are not in dispute and are admitted in the Defence, and were confirmed by the defendant in his evidence. According to the defendant, he had a severe and debilitating psychiatric condition. There is no issue therefore, that up to the settlement of his claim, the defendant made representations, inter alia, that he had difficulty thinking logically and rationally, that he suffered a decline in short-term memory and problem-solving ability, that he was unable to attend to self-care and required a carer to help him with activities of daily living, that he was unable to communicate normally to his family due to feelings of anger and frustration, that he had difficulties travelling, that he had trouble concentrating and suffered confusion, and that because of these matters he was unable to work.
3. Mr Catsanos submitted that it was those representations which led to the medical support the defendant received, and in particular the assessment of 28% WPI made by Dr Cassidy, consequent upon a diagnosis of Major Depressive Disorder. The defendant admitted that in settling his claim he relied on that assessment which was reflected in a Schedule of Damages at the settlement conference.
4. Mr Catsanos submitted that the defendant's position (set out in his affidavit) that he continues to be plagued by the same debilitating psychiatric restrictions reflected in his presentation throughout 2014 and 2015, save for suicidal ideation, is inconsistent with Mr Nehme's and Mr Weerakkody's evidence. For example, according to the defendant, his psychiatric condition was so debilitating that he required a carer. Mr Nehme's evidence (unchallenged in cross-examination) was that Mr Yu was able to make decisions, have conversations and firmly bargain on the price of construction of the Thornleigh Property.
5. Mr Catsanos submitted that Mr Nehme's evidence that the defendant's appearance, presentation, mental acuity, ability to interact and actively engage in negotiations and discussion, to concentrate, process and problem solve, as well as his regular attendance at the building site (more often than not alone) cannot sit with the representations made by the defendant of impoverished mental faculties, being barely able to function and requiring a carer for the most basic daily activities. He observed that Mr Nehme was not challenged on his evidence that:- 1. The defendant discussed the details of the contract at the Thornleigh Property; 2. The defendant signed the contract in his presence, and various aspects of the job were discussed with the defendant including the construction of the kitchen, bar, bathrooms and windows; 3. The defendant filled out required fields in the contract himself; 4. Mr Nehme dealt directly with the defendant particularly in relation to discussions about price, in which the defendant negotiated very firmly; 5. The defendant had no difficulties understanding Mr Nehme, although they spoke in English; 6. The defendant expressed a requirement that the construction of an awning at the property should be structural so as to allow for an extension in the future; 7. The defendant approached Mr Nehme raising an issue with indentation and a complaint about the house being built incorrectly; 8. The defendant communicated with Mr Nehme via email; 9. Most of the time, the defendant came to site alone. Mr Nehme once saw the defendant on the second floor of the premises when there was no staircase, meaning that he must have accessed it by a ladder; 10. Mr Nehme had direct dealings with the defendant and not his wife; 11. The defendant was able to discuss aspects of the property design, including tile choices and sizes; and 12. The defendant's appearance was always normal, and he was casually dressed.
6. Mr Catsanos observed that Mr Nehme denied that the effluxion of time may have affected his recollection. Rather, he said that he remembered his dealings with the defendant, because he was the only client who had ever threatened legal action against him.
7. As to the evidence of Mr Weerakkody, Mr Catsanos acknowledged that Mr Weerakkody could not recollect the precise content of conversations he had with the defendant, but he submitted that he was not challenged on a number of substantive issues or the veracity of what he said.
8. It was Mr Weerakkody's evidence that his first dealings with the defendant occurred in January 2015, which is confirmed in the Boss Design contract and which was conceded by the defendant. Whilst the defendant suggested that his dealings occurred in 2016, Mr Catsanos submitted that the documentary evidence, including invoices and payment slips, confirms that there were many interactions throughout 2015.
9. It was submitted that Mr Weerakkody gave unchallenged evidence that:- 1. He met the defendant in 2015; 2. At that time, the defendant was inquiring about building a two storey house and he was alone; 3. The defendant looked like any other client; 4. A boundary dispute arose with the defendant's neighbour. The defendant did not wish to pay for the full cost of a survey and asked him whether the neighbour should pay half; 5. The defendant went through the plans and drawings with Mr Weerakkody, including sections and elevations; 6. He could not recall the defendant's wife ever attending his office; and 7. He would meet the defendant on site to deal with issues that arose, including issues about foundations, footings and garage fire ratings.
10. It was submitted that it was never suggested to Mr Weerakkody that the defendant's wife was the person liaising with the architects.
11. Mr Catsanos submitted that the evidence of both Mr Nehme and Mr Weerakkody and contemporaneous documents in the form of contracts, emails and the like provide overwhelming evidence of the defendant's active involvement in navigating the demands of the building project in 2015 and 2016. He observed that both were independent witnesses who provided a factual account in a dispute in which neither had any interest.
12. As to the evidence of Dr McClure, Mr Catsanos submitted that Dr McClure was unequivocal in his opinion that the evidence of Mr Nehme and Mr Weerakkody was inconsistent with the defendant's presentation to doctors, as were the documents pertaining to Australian citizenship, his ability to use internet banking, and his teaching at the Korean school. It was observed that Dr McClure was not challenged on his interpretation of the evidence from a psychiatric perspective. The defendant called no medical evidence, as was open to him, to reconcile the defendant's behaviour as observed by Mr Nehme and Mr Weerakkody with the profound psychiatric restrictions that he said afflicted him at the time of settlement. It was submitted that this amounts to powerful, independent and unchallenged evidence which gives rise to an irresistible conclusion that the defendant knowingly misrepresented the existence of psychiatric problems in pursuance of a claim to which he was not entitled.
13. Mr Catsanos argued that the credibility of the defendant had been "destroyed" in cross-examination and that the Court ought to have serious doubts about all of his affidavit evidence and his evidence in cross-examination. Mr Catsanos submitted that much of the evidence to do with the defendant's deception goes directly to his capacity to conceive, plan and implement financial arrangements (including fraudulent financial arrangements) and that this is direct evidence as to the inconsistency between the defendant's representations to medical practitioners in 2014 and 2015 and his actual mental state.
14. Mr Catsanos submitted that the defendant was specifically involved in a deception perpetrated against Westpac (the Todos wage transfers). He submitted that the reason that the defendant was nominated as the contact to the bank was because he was in fact in control, and best placed to provide information and make decisions.
15. Mr Catsanos submitted that it is highly unlikely that the defendant only found out about the Todos documents years after they were given to Westpac as part of the loan application, because a bank account under his name was opened on the day shortly after the loan application documents dated March 2015. He withdrew money soon after, which Mr Catsanos submitted implies that the defendant knew that there was money in the account.
16. Mr Catsanos submitted that the defendant was the primary force behind the family's finances. The documents disclose that it was he who spoke with a Dan Kim at Westpac in relation to the second loan on 6 July 2015, without his wife. This is contrary to the defendant's and Ms Chung's evidence that there was no broker for the construction loan.
17. Mr Catsanos also relied on the cross-examination about the rent subsidy documents as evidence of the defendant's lack of credibility. For example, when Mr Yu was asked a question in those documents about his assets, savings and investments as at the time shortly after he had been paid the settlement money, he could not give a straightforward answer and would not admit that he had done this to deceive the government.
18. Mr Catsanos submitted that there was collaboration between the defendant and his wife about their evidence. He relied on Ms Chung's suggestion, without prompting, that the defendant was the point of contact with the bank. Ms Chung later admitted that she had discussed her evidence during her cross-examination, despite the caution that was given by me.
19. Mr Catsanos submitted that like the defendant, Ms Chung was a witness of no credit. He observed that when Ms Chung made her own claim, she said that she was having trouble looking after herself when at the same time, she was apparently a paid carer for her husband. Mr Catsanos asked rhetorically, how could this make sense, particularly as she said that she was also in charge of the construction at Thornleigh?
20. Mr Catsanos also pointed to the history taken by Dr Baker, much of which Ms Chung refuted. He submitted that it was hard to believe that Dr Baker had taken an entirely incorrect history and invented an account that the defendant had control and manipulation of the family finances. Mr Catsanos said that it is more likely that Dr Baker accurately recorded what Ms Chung told him, which is consistent with the evidence given by Mr Nehme and Mr Weerakkody.
21. Ultimately, Mr Catsanos submitted that both the defendant and his wife were witnesses of little credit such that I ought not to accept their evidence where that evidence conflicts with the evidence of other witnesses and documents.
22. In Mr Catsanos's submission, each element of the tort of deceit and s 118 of the MACA was easily made out on the balance of probabilities.

Defendant's submissions

1. Mr Williams submitted that the key issue in this case is a temporal one. While the plaintiff asks the Court to infer much from the conduct of the defendant, he observed that the relevant time period in which the defendant was making the representations to the plaintiff and medical practitioners is April 2014 to March 2015.
2. Mr Williams submitted that the Court should not take a "black and white" approach, and instead have regard to questions of degree which arise with respect to mental illness, including the capacity for variable presentation and ambiguity arising from the use of interpreters.
3. As to the credibility of Mr Yu and Ms Chung, Mr Williams submitted that it would be clear to the Court that they experienced difficulties in communication, even with the assistance of an interpreter.
4. Mr Williams submitted that the Court has not been given any clear basis to find that, notwithstanding the evidence adduced in the trial, Mr Yu does not have a WPI of greater than 10% (so that he would have an entitlement to non-economic loss).
5. Mr Williams said that the Court should be cautious in dealing with evidence from witnesses who say what they would have done now that new facts have emerged. He relied on Rothman J's statement at [34] in Checchia v Insurance Australia Ltd trading as NRMA Insurance [2009] NSWSC 1005, where his Honour said: "[34] Because these proceedings deal with the effect of past events on conduct that has already occurred, issues arise as to the manner in which one should treat evidence of the effect of newly discovered material. One should treat with caution evidence from a witness as to what that witness would, or would not, have done, if different circumstances or facts were before the witness at the time that the original conduct occurred: Berrigan Shire Council v Ballerini [2005] VSCA 159 per Nettle JA; Arnison v Smith (1889) 41 Ch D 348 at 369. In these proceedings evidence was adduced from the insurance company and witnesses for the plaintiff as to what they would or would not have done had they known or had they been informed of the earlier (1993) injury and/or the true state of affairs. It is not a lack of truthfulness, or a desire to mislead, that would result in a witness assuming that the facts or circumstances would be significant and would have an effect beyond that which might otherwise have been the case. Nevertheless, the evidence, notwithstanding any caution with which one may approach it, must stand or fall on its own merits."
6. I observe that the general law has always been circumspect about statements that are made with the benefit of hindsight.
7. The defendant submitted that there were significant issues with Dr McClure's evidence. Many of the assumptions that he relied upon in his report of 26 August 2021 were no longer pressed by the plaintiff by the time he gave evidence. Mr Williams also submitted that there were significant limitations relying on Dr McClure's opinion, as he did not examine Mr Yu.
8. Further, Mr Williams submitted that rejecting a witness's evidence in part or in whole, does not prove what the opposing party cavils for. The plaintiff at all times carries the onus of proving its contentions to the requisite standard, and in this case on cogent evidence.
9. Mr Williams submitted that it is clear and uncontroverted that the defendant was an inpatient at Hornsby and in South Korea in mental health facilities, at the end of 2013 and the beginning of 2014, and that at that time had a significant mental illness.
10. As to Mr Yu's dealings with Mr Nehme, Mr Williams observed that this began in August 2015, after the settlement. Mr Williams submitted that if the defendant's depression was episodic, it was not present at the time of the defendant's dealings with Mr Nehme (notwithstanding the absence of any medical evidence). Further, he submitted that the observations of a licenced builder about the possible manifestations of mental illness by observation should carry little weight. What can be drawn from Mr Nehme's evidence is that his interactions with the defendant were remote in time. For example, when the defendant was sorting out the design fault with the second storey, it was February 2016, almost a year after the settlement.
11. Mr Williams took issue with other aspects of Mr Nehme's evidence such as what, if any, significance attaches to the execution of contracts that involve basic details and signatures, the fact that the relationship between the defendant and Mr Nehme was episodic in nature, and the fact that Mr Nehme was unable to say if any assistance was given to the defendant during their communications. Further, although Mr Nehme said that he remembered the defendant well because the defendant was the only person who had ever sued him, Mr Williams submitted that his recollection may have nonetheless been affected by the effluxion of time, and that he may not have been entirely neutral given Mr Yu had threatened to sue him (which was not suggested to him).
12. As to the evidence of Mr Weerakkody, Mr Williams submitted there were some significant issues. For example, he said that Mr Weerakkody's recollection was poor, demonstrated by him only being able to describe Mr Yu as wearing "normal" clothes and behaving like a "normal" client. Further, Mr Weerakkody could only remember things in general terms, he assumed Mr Yu's agreement from silence, he lacked detailed recollection of conversations, he accepted that the defendant was passive on all issues except for negotiations on price and his evidence relied primarily on what was his usual practice.
13. Mr Williams submitted that it was apparent that the cross-examination of the defendant in these proceedings was difficult due to communication issues. He submitted that this should be extrapolated to presume that the doctors who conducted examinations in 2014 and 2015 likely had similar issues.
14. Mr Williams submitted that the applicable standard of proof is the Briginshaw standard. He cited Edwards v State of NSW [2021] NSWSC 181 per Walton J at [20]-[32], and submitted that a court must be mindful of the forensic context in coming to an opinion as to its satisfaction about matters in evidence. It is not for the plaintiff to exclude any hypothesis that is available or open on the evidence before finding an unfavourable one proved. He submitted that there must be more than conflicting inferences of equal degrees of probability for a plaintiff to succeed.
15. Mr Williams also submitted that at all material times the plaintiff was concerned with "validity issues" with respect to the defendant's claim. Whilst this issue was pursued somewhat in the cross-examination of Mr Seisun and Mr Tomas, my understanding of Mr Williams's ultimate submission is that the compromise of $750,000 plus costs achieved at settlement reflected real-founded suspicions on the part of the plaintiff in March 2015. I reject that submission. The defendant's case run at trial was that he did not misrepresent his psychiatric condition, and that there were no "validity issues". I accept Mr Seisun's and Mr Tomas's evidence that the settlement reflected a value of the plaintiff's claim assuming that the defendant's representations were true. In any event, such a submission is contrary to the decision in Zurich, to which see above and below.

Plaintiff's submissions in reply

1. Mr Catsanos submitted that the difficulty with the temporal issue identified by Mr Williams as the key issue in these proceedings is that it does not accord with how the defendant put his case. The defendant stated in his affidavit that between the representations that were made in 2014 - 2015 and the present day, the only significant change to his psychiatric condition is his suicidal ideation. Furthermore, Mr Yu and Ms Chung maintained that position in their evidence.
2. In Mr Catsanos's submission, all the doctors' evidence was congruent. Mr Yu presented to them as someone who could not function normally and as someone who could not do things in order to live, work and care for himself. Mr Catsanos submitted that the defendant "spoke on his feet" about the episodic nature of the condition, but no evidence was adduced that the condition was one which ever waxed and waned.

Tendency and credibility evidence and credibility findings

1. Section 97 of the Evidence Act provides: 97 The tendency rule (1) Evidence of the character, reputation or conduct of a person, or a tendency that a person has or had, is not admissible to prove that a person has or had a tendency (whether because of the person's character or otherwise) to act in a particular way, or to have a particular state of mind unless - (a) the party seeking to adduce the evidence gave reasonable notice in writing to each other party of the party's intention to adduce the evidence, and (b) the court thinks that the evidence will, either by itself or having regard to other evidence adduced or to be adduced by the party seeking to adduce the evidence, have significant probative value. (2) Subsection (1) (a) does not apply if - (a) the evidence is adduced in accordance with any directions made by the court under section 100, or (b) the evidence is adduced to explain or contradict tendency evidence adduced by another party.
2. In Hughes v R (2017) 263 CLR 338; [2017] HCA 20 Gageler J said at [70]: "Applied to evidence of past conduct, tendency reasoning is no more sophisticated than: he did it before; he has a propensity to do this sort of thing; the likelihood is that he did it again on the occasion in issue."
3. Tendency evidence has also been described as indirect evidence that acts as a stepping stone to prove that a person acted in a certain way: Elomar v R; Hasan v R; Cheikho v R; Cheikgo v R; Jamal v R (2014) 300 FLR 323; [2014] NSWCCA 303 at [359]-[360].
4. In civil proceedings, evidence of the character or conduct of a person is not admissible to prove that a person has or had a tendency to act in a particular way unless notice has been given, and a court determines that the evidence will have significant probative value. In the instant proceedings, a tendency notice was not served pursuant to s 97(1)(a) of the Evidence Act and the plaintiff expressly stated that it did not rely on propensity reasoning, and in particular with respect to the evidence adduced about the defendant's alleged (other) acts of dishonesty.
5. Rather, the defendant and his wife were cross-examined on credibility pursuant to s 103 of the Evidence Act, on the assumption that the evidence adduced in cross-examination - which was realised - would substantially affect the assessment of their respective credibility.
6. Mr Catsanos submitted that the cross-examination on credibility was relevant to two matters. First, it was direct evidence with respect to the issue of the defendant's capacity at the material time (for example, to manage his financial affairs). Second, it was indirect evidence going to both the defendant's and his wife's credibility and to what extent they ought to be believed. I accept that this is an appropriate way to use the evidence adduced in cross-examination of the defendant and his wife. In this case, the cross-examination of the defendant and his wife was devastating to their respective credibility.
7. The plaintiff relied on some evidence of occurrences in 2016 and beyond, and submitted that this evidence was of significance because of the defendant's assertion in his affidavit that his condition has not improved (save for a decrease in suicidal thoughts).
8. As I have said, I accept the evidence of each of the plaintiff's witnesses. In particular, I accept the evidence of Mr Nehme and Mr Weerakkody as to their recollections, which match up with documents created at the time. I prefer their evidence as to their observations of the defendant and about their interactions with the defendant and his wife. Having made that finding, I accept the evidence of Dr McClure as to how his opinion would have been different had he known about their observations in 2015 and 2016.
9. I make adverse credibility findings against the defendant and his wife. These findings are not based solely on demeanour, but rather are based largely on the documentary evidence which contradicted their evidence in this Court. I find that they were not candid in their evidence in Court, and that they collaborated during the course of their respective cross-examinations in an effort to present as cohesive a story as possible when faced with documents which implicated them both in fraudulent conduct, including purposefully lying in documents to obtain finance with Westpac, to secure public housing and to receive government benefits to which they were likely not entitled. As a result, I do not accept any substantive matter to which they depose in their affidavits, including as to the defendant's condition at the time of the settlement and thereafter. I reject their evidence in this Court in its entirety.
10. Further, I do not accept that Dr Baker made any mistakes in his report of 2017, and I accept that he accurately recorded the history as recounted by the defendant's wife. I find that as early as April 2014, the defendant was actively misleading a government department to secure housing benefits, and from that time onward he was entirely capable of, and was indeed managing his and his family's financial affairs. I do not accept that the defendant did not understand the purpose of the medico-legal examinations, but find that he knowingly made false representations to doctors, both treating and medico-legal, in pursuance of a claim for damages to which he knew he was not entitled. In anticipation of a settlement, the defendant engaged an architect to design construction drawings for a property he anticipated purchasing with settlement funds. Immediately after settlement, and after he believed that he would not need to see doctors for the purpose of his claim, he exhibited normal behaviour as recounted by Messrs Nehme and Weerakkody. Further, the defendant's position was that he had a limited grasp of the English language. However, I find that he was able to speak, converse and negotiate with Mr Nehme in about June 2015 and Mr Weerakkody in January 2015.
11. I find that for approximately one year - from April 2014 until settlement on 9 March 2015 - the defendant, aided by his wife, knowingly and falsely misrepresented his psychiatric condition to the plaintiff and medical practitioners.
12. I reiterate that I do not make these findings based on the witnesses' demeanour alone. I acknowledge the "fallibility of judicial evaluation of credibility from the appearance and demeanour of witnesses in the somewhat artificial and sometimes stressful circumstances of the courtroom": see Kirby J in State Rail Authority of New South Wales v Earthline Constructions Pty Limited (in liq) (1999) 106 ALR 688; [1999] HCA 3 at 88. I make these findings largely based on the documentary evidence which could not be satisfactorily explained by either the defendant or his wife.

Zurich

1. Mr Catsanos submitted that Zurich is relevant for two reasons. First, its facts are analogous to the current case, and second, it is relevant to the issue of causation.
2. The facts in Zurich were (briefly) as follows. The claimant Hayward alleged that he had suffered an injury due to the negligence of his employer. When making his claim, he dishonestly exaggerated the extent and consequences of his injury and as a result, Zurich Insurance Company paid out significantly more than the claim was worth. At the time of the claim, the insurer had surveillance evidence that suggested that the defendant was exaggerating the extent of his injuries. The defendant's neighbours later approached the insurer with evidence of the claimant's dishonesty. The insurer took out recovery proceedings and was successful. The defendant then appealed. The only issue for the UK Supreme Court was whether causation could be established, given that the plaintiff had the surveillance evidence prior to its settlement with the defendant.
3. The facts in the instant case are analogous. At trial in Zurich, the claimant denied any suggestion that his condition was anything other than genuine. He maintained throughout that he was a seriously disabled individual whose disability arose from the original accident and was such that ever since the accident, he had not been able to work or carry out normal activities of daily living without assistance. Similarly, the defendant in this case maintains that the only symptom of his depression that has improved is his suicidal ideation, and that he is otherwise (still) incapacitated. In Zurich, the insurer had surveillance evidence that demonstrated that there were validity issues with the claim. In this case, the plaintiff obtained some surveillance that arguably raised questions about the validity of Mr Yu's claim. The Court found at [40] that even if a party has suspicions about a claim, this will not nullify inducement.
4. Zurich is a decision of the apex appellate court in the United Kingdom. Its decisions are persuasive but not binding on this Court. However, it has been suggested that in claims such as the present one, the position in Australian law is the same, and a defendant cannot argue that the plaintiff ought to have taken an opportunity to verify what may have been fraudulent representation: see David Rolph et al, Balkin & Davis Law of Torts (LexisNexis, 6th ed, 2021) at 810. This has a good basis in policy, as an insurer administering a statutory scheme ought to be able to take a plaintiff at face value in pursuance of its statutory objects.

Checchia

1. The plaintiff relies on Checchia as binding authority with respect to the operation of s 118 of the MACA, as well as being analogous to the facts in this case. In Checchia the respondent/plaintiff Mr Checchia had been involved in an accident when his bicycle was struck by a motor vehicle and he sustained an injury to his back. As a result of his injury, he underwent multiple back surgeries as well as other medical treatment, and made a claim pursuant to the MACA. When filing his claim, he ticked "No" to the question "Have you had any other injuries or illnesses - before or since the accident - to the same part(s) of the body?" and to another question as to previous claims for personal injury compensation. The claim was compromised, but prior to payment of the settlement sum, the appellant/defendant insurer NRMA, discovered that Mr Checchia had suffered a previous work-related back injury in 1993, and therefore refused to pay the settlement on this claim on the basis that the claim was fraudulent within the meaning of s 118 of the MACA. Mr Checchia sued NRMA for the settlement amount, and at first instance he was successful, with Rothman J finding that Mr Checchia had failed to disclose his 1993 back injury. However, his Honour held that this was not for the purpose of obtaining a financial benefit within the meaning of s 118. The decision was appealed by NRMA, with the construction of s 118 being the central issue in the appeal.
2. The Court of Appeal held that the correct approach in applying s 118 is that s 118(1) specifies the circumstances in which the section is engaged and thus is a gateway to s 118(2). At that stage, there is no need to quantify the claimant's true entitlements. The Court must work out whether the natural and probable result of the defendant's misrepresentations was to induce the insurer to act in some way to its financial detriment, for the benefit of the defendant. Thereafter, s 118(2) is engaged. The plaintiff must prove that the defendant made his misrepresentations with the knowledge that they were false and misleading. In this respect, s 118 is narrower than the tort of deceit, which may be established if a misrepresentation is made without an honest belief in its truth.
3. The matter was remitted for retrial and Hall J found for Mr Checchia according to law: Checchia v Insurance Australia Ltd t/as NRMA Insurance (2013) 64 MVR 36; [2013] NSWSC 674.

Did the defendant breach s 118 of the MACA?

1. As already stated, a claim under s 118 will be made out if: 1. A claimant does or omits to do anything concerning a motor accident or any claim relating to a motor accident; and 2. For the purpose of obtaining a financial benefit; and 3. With the knowledge that the doing of the thing or the omission to do the thing is false or misleading; and 4. The other party is induced into acting to its financial detriment; and 5. The claimant obtains a financial benefit.
2. The first element is not in dispute. The defendant made representations to the plaintiff, being the representations about his mental health. Whether the defendant made those representations for the purpose of obtaining a financial benefit is also satisfied. As to "purpose", Handley JA in Checchia in the Court of Appeal at [38], citing Lord Diplock in Sweet v Parsley [1970] AC 132 at 165, pointed out that purpose connotes an intention by some person to achieve a result desired by him. It is subjective. However, there will rarely be direct evidence of a person's intention, and the plaintiff in this case has not adduced any such evidence. The plaintiff submits, correctly in my view, that "purpose" is to be inferred from the whole of the evidence admitted at the trial: Woolmington v Director of Public Prosecutions [1935] AC 462 at 481; Peters v The Queen (1998) 192 CLR 493 at 550 [134]; [1998] HCA 7.
3. Having regard to s 118 of the MACA, "purpose" will be made out if the claimant knowingly made a misrepresentation to an insurer that would be likely, viewed objectively, to induce it to act to its financial detriment: Checchia at [218]. The principles of inferring "purpose" from circumstances are derived from the tort of deceit: see Checchia at [220].
4. The defendant was asked about his understanding of the claims process. He admitted that the things he told the doctors who assessed him, which are found in their reports, were things that he either remembered telling them or accepted that it was possible he told them. He did not dispute their accuracy. However, when asked by Mr Catsanos as to what he understood to be the purpose of those visits, the defendant denied that he knew it was for the purpose of his claim. The defendant denied that he knew, at the time of the doctor's visits, that the insurance company would rely on the information provided by the doctors who assessed him. As I have said, I reject this evidence.
5. In Checchia, Handley JA said at [222]: "The finding of deliberate exaggeration compels the inference that the claimant did this for the purpose of obtaining a financial benefit, no other purpose for knowingly making the misrepresentations is plausible. Otherwise why not tell the truth?"
6. My findings as to the defendant's credibility in my opinion support the conclusion that the defendant cannot be believed when he says that he did not know that the doctors who saw him were providing information to the insurance company in relation to his claim. I cannot accept that in 2014 the defendant did not understand the purpose of medico-legal examinations. Therefore, the second element is satisfied, if it can be shown that the defendant's statements were deceptive.
7. The majority of the evidence on which the plaintiff relied goes towards the third element: the defendant must have knowingly made the false and misleading representation: Checchia at [217]. It is necessary also to prove that the claimant made the misrepresentation "with the knowledge" that it "was false or misleading", suggesting that there is a higher bar to prove a claim under s 118 than one in the tort of deceit, which is established if a misrepresentation is made without an honest belief in its truth.
8. The plaintiff submits that Mr Nehme's and Mr Weerakkody's evidence does not sit comfortably with the defendant's representations being true. The plaintiff submits that the representations made by the defendant represented a gross misrepresentation of his condition. As I have noted, Mr Nehme gave the following evidence which I accept: 1. He was the contractor for the build of the Thornleigh Property and had dealings with the defendant from August 2015 onwards; 2. The defendant had signed the building contract and had negotiated the contract price "very, very firmly"; 3. The defendant was professional and calm; 4. The defendant did not have trouble communicating with Mr Nehme; 5. The defendant was well dressed in casual clothes; and 6. The defendant was actively involved in discussions about the construction work going on at the property and was able to make decisions about things such as the size of the bathroom tiles and the placement of light fixtures and power points.
9. I accept Mr Nehme's evidence with respect to each of the six propositions above. I reject the plaintiff's evidence on this topic, and to the extent that it corroborates her husband, Ms Chung's evidence. Mr Nehme's evidence is largely contemporaneous with the plaintiff's settlement of the claim. He had a good reason to remember the plaintiff.
10. Mr Weerakkody's evidence was consistent with that of Mr Nehme. In summary, he gave evidence that: 1. He met the defendant on multiple occasions commencing in January 2015; 2. The defendant was "more or less our average client"; 3. The defendant dressed in ordinary clothes; 4. Mr Weerakkody felt like the defendant was able to understand him with the help of a Korean-speaking architect; and 5. The defendant was concerned about the bottom line.
11. Although Mr Weerakkody had more trouble recalling the defendant, his evidence was consistent with that of Mr Nehme. The evidence of these two disinterested witnesses paints a different picture to that described by the defendant and his wife, that he was someone who was struggling with his emotions and thought process to the extent that he needed a carer because he could not attend to basic self-care. This is supported by the evidence of Dr McClure in his report of 26 August 2021 who, on page 22, suggests that the defendant's "objectively-displayed cognitive abilities are inconsistent with his self-description to me."
12. Other documents dating back to 2014 (set out above), amply support the plaintiff's contention that the defendant was able to conduct himself in largely a normal fashion, without cognitive impairment or assistance, in 2014 and up to settlement in 2015.

Was Allianz induced into acting to its financial detriment?

1. The focus is on the claimant, but the claimant will only obtain a financial benefit (and therefore be able to recover) if the insurer has relied on the act or statement of the claimant. Therefore, there is a question of inducement.
2. As noted above, this is a question of fact.
3. Several witnesses gave evidence that in this case (as expected) the insurer relied heavily on the medical assessments made by doctors. Mr Seisun gave evidence that he relied on the medical reports. Similarly, Mr Tomas gave unchallenged evidence that the medical reports formed the basis of the assessment and settlement of the claim. I am satisfied that the plaintiff was induced into acting to its financial detriment.
4. That the defendant received a financial benefit is not in dispute.
5. In my opinion, the cause of action contained in s 118 of the MACA is made out on the balance of probabilities bearing in mind s 140(2) of the Evidence Act. In this case, in my view, the evidence is sufficiently strong to prove fraud.

Tort of deceit

1. For reasons already stated, I find that the following elements of the tort of deceit are also made out and on the same standard:- 1. A representation of fact was conveyed to the plaintiff by the defendant's words and conduct; 2. The defendant knew that his representations were false; 3. The defendant intended that the plaintiff would act upon his representations; 4. In reliance upon the representations that were induced by the representation, the plaintiff acted upon them; and 5. The plaintiff suffered damage as a result of that reliance.

Damages

1. The plaintiff submitted that the damages to which it is entitled for the tort of deceit is the difference between the true value of the plaintiff's claim for damages and the sum of the settlement agreement. As for the s 118 claim, the Court of Appeal in Checchia rejected the true value theory (i.e., akin to a personal injury claim) and said that damages are to be assessed by the settlement value theory. The settlement value theory calculates damages by determining the amount for which the plaintiff would have settled the claim had the defendant not engaged in false and misleading conduct.
2. In this particular case, there is no practical difference between the damages in the tort of deceit claim and pursuant to s 118 of the MACA. As already noted, the parties agreed that this was the position.
3. I assess damages as follows, on the basis that the defendant was entitled to the following financial benefits absent his false and misleading representations.
4. I accept the evidence of Dr McClure that the defendant's WPI would have been 5%, and that he would not have been entitled to any non-economic loss damages.
5. As conceded by the plaintiff, the defendant was entitled to his past medical expenses pursuant to s 83 of the MACA in the amount of $35,000.
6. I accept Mr Tomas's evidence that he would have allowed $5000 for future medical expenses.
7. I accept Mr Tomas's and Mr Seisun's evidence that an allowance of $10,000 for past economic loss is reasonable.
8. I accept Mr Tomas's evidence that an allowance of $25,000 by way of a buffer for future economic loss is reasonable.
9. I accept Mr Tomas's evidence that $80,000 inclusive of costs is the amount to which the defendant would have been entitled, absent his misrepresentations.
10. The plaintiff having paid the defendant $750,000, it is therefore entitled to recover $670,000 plus interest. I direct the parties to provide my Associate with an agreed schedule of interest so that the final interest sum can be determined.

Orders

1. I make the following orders: 1. Judgment for the plaintiff in the amount of $670,000. 2. I allow interest as agreed in the amount of $200,000. 3. The defendant is to pay the plaintiff's costs as agreed in the amount of $230,000. 4. The parties are to bear their own costs of the motion filed by the plaintiff on 16 February 2024.

Amendments 08 March 2024 - Amendment to orders to reflect consent orders as to costs. 15 April 2024 - The amendment on 8 March 2024 was to reflect consent orders as to interest and costs. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 15 April 2024