Allianz Insurance Limited v Larriera

The Assessor's Decision

1. The factual narrative which follows is drawn directly from the Claims Assessor's reasons. The Mr Larriera was severely injured on 4th May 2012 when an oncoming vehicle "travelling at high speed, crossed onto the incorrect side of the road" and collided head-on with Mr Larriera's vehicle. The accident happened on the Appin Road in south-western Sydney. Mr Larriera was trapped in his vehicle from which he had to be rescued by police and ambulance. He was airlifted to Liverpool Hospital and found to be suffering from multiple orthopaedic and other physical injuries.
2. There was a very significant medical dispute about whether Mr Larriera had suffered a mild traumatic-hypoxic brain injury in the accident. The Claims Assessor reviewed and assessed the competing evidence about this issue over four pages of his 15 page statement of reasons: [12] - [27]. He accepted the evidence led and arguments advanced on behalf of the Insurer that Mr Larriera suffered no such injury ([14]). He did, however, find that Mr Larriera suffered a post-traumatic stress disorder in addition to his orthopaedic injuries, as well as anxiety and depression reactive to his physical injury ([23]).
3. Mr Larriera was hospitalised for three weeks and after discharge underwent "a long period of rehabilitation and ongoing treatment".

Findings made by the Claims Assessor relevant to past and future loss of earnings.

1. Mr Larriera was born in 1983 and was 32 years of age at the date of the assessment. Prior to the accident he was fit, attended a gymnasium and undertook vigorous sporting activities. He had other interests ([5]).
2. After leaving school he had undertaken courses at TAFE to further his education and became employed in the insurance broking industry. At the time of the accident he was employed by a brokerage firm as a personal lines executive selling domestic insurance products to existing customers. He worked on a full time basis. He was ambitious to progress in his profession to become a commercial insurance broker. At the date of the assessment he was studying for a Diploma of Financial Banking, also at TAFE ([6]).
3. The Claims Assessor clearly accepted the evidence of Mr Larriera ([34]). He did not believe he could perform the work of a commercial insurance broker because "he could only work to a capacity of 60 per cent of the usual business hours, and sitting at a desk causes tension, pain and aching in his legs. His concentration is not the same as prior to the accident and he is exhausted at the end of the day" ([6]). He continues to take pain killing medication.
4. The Claims Assessor found for the purpose of assessing non-economic loss (at [30]): "The claimant is still a young man. The injuries which he sustained in this accident were serious, his ongoing disabilities are severe and will remain with him for the rest of his life."

Reasoning in relation to the awards for past and future economic loss

1. It is important to bear in mind that the aforegoing findings made by the Claims Assessor in relation to Mr Larriera's injuries and disabilities are, of course, relevant to his assessment of past and future economic loss. This is because it is necessary to read the Assessor's reasons fairly and as a whole, applying a "beneficial construction": Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259 at 271 - 272.
2. The Claims Assessor's reasons for making the assessments he did in relation to the contentious heads of damage are found at [34] - [40] of his decision, which I set out in full: "PAST LOSS OF EARNINGS 34. After reading all the medical reports, statements and after having the benefit of having heard the Claimant at the General Assessment Conference, I am clearly of the view that the Claimant will continue in the future to find it difficult to work fulltime and his injuries and ongoing disabilities will always cause him to suffer a diminution in income from the time of the accident, up until the present time and for the remainder of his working life. He is intending to continue his studies, but I accept that his injuries and ongoing disabilities will prohibit him from working longer hours, obtaining promotion and bonuses in his particular profession, or any form of employment suitable to him, for that matter. I accept the submission made on behalf of the Claimant, but that for the accident, his level of remuneration would have increased to a sum of not less than $80,000.00 gross per annum. I therefore accept the calculations as set out in the Synopsis of Damages dated 4 September 2015. I have extended the period of calculation to 2 October 2015. I do note the Claimant's actual earnings have recently increased to $622.00 nett per week, but 1 accept the probable earnings but for the accident and the sum of $1100.00 net per week is a conservative figure (as stated in the period 18 March 2013 to 4 September 2015). I therefore accept the calculations for the following periods :- (a) 4 May 2012-9 December 2012 $30,430.00 (b) 10 December 2012-19 May 2013 $17,227.00 (c) 20 May 2013 to 3 June 2013 $933.00 (d) 3 June 2013-17 June 2013 $950.00 (e) 18 June 2013-18 November 2013 $9,288.00 (f) 18 March 2013-2 October 2015 $69,958.00 Total amount allowed for past economic loss $128,826.00 PAST SUPERANNUATION I have calculated past superannuation on 11% on the net figure of$128,826.00. This results in an amount of $14,171.00. Fox v Wood The parties have agreed the amount to be allowed for Fox v Wood calculation is $13,000.00. FUTURE ECONOMIC LOSS 35. I also accepted the submissions made on behalf of the solicitor for the Claimant regarding the most likely future circumstance for this Claimant would have been an income in the range of $120,000.00 -$150,000.00 gross per annum. I accept the adopted figure of $130,000.00 gross per annum is a conservative estimate. 36. The Claimant, prior to the accident, I believe, was a happy, hardworking individual with a determination to further his education. I accept both the physical and psychological injuries he has suffered as a consequence of this accident have caused him to suffer diminution in his earning capacity and for the remainder of his anticipated working life, which I note both parties agree would have been until the age of 67 years. 37. In the report of Professor Richard Chalmers dated 3 September 2014, who examined the Claimant at the request of the Insurer, he states (on page 7 of his report): "Manuel's vocational activities have been described and he believes that he could not work more than 24 hours a week. This may indeed may be correct and is based upon not only his symptoms but on his perceptions of impairment. Perhaps it would not be unreasonable to consider him appropriate for a regime of 30 hours per work in work as an Insurance Broker and in his preferred future in import and export. 38. I also refer to the report of Dr Noel Dan, Neurosurgeon, dated 30 April 2015, who examined the Claimant at the request of his solicitors. On page 5 of his report, under the heading "Fitness for Employment" he states as follows: "He is demonstrably fit for restricted duties. His ongoing losses with memory are likely to interfere with his continuing employment and it is unlikely that he will be able to undertake employment on the open market. His physical disabilities also suggest that he would have difficulties working fulltime ". 39. The solicitor for the Claimant submitted a present economic capacity of $534.00 net per week. I do not accept this submission. I believe a more appropriate economic capacity figure for this Claimant is the sum of $800.00 net per week, as I think he is motivated to try and increase his income and his hours of work in the foreseeable future. I have already agreed with the submission that, but for the accident, he would have achieved a gross income of $135,000.00 per annum. This amounts to $1,867.00 net per week, and after deduction of the capacity of $800,00 net per week, results in economic incapacity of $1,067.00 net per week for a period of 35 years. The multiplier is 875.6 and I will deduct 15% for vicissitudes. This results in an amount for future economic loss in the sum of $794,125.00. FUTURE SUPERANNUATION LOSS 40. The parties agreed on the calculation of 13.97% on the net amount, which results in a calculation of $94,298.00."

The Insurer's submissions

1. Ms Poljak of Counsel, who appeared for the Insurer, put what she said was a failure to comply with s 126(3) of the Act at the forefront of her submissions. Amongst the authorities cited were Allianz Australia Insurance Limited v Sprod [2012] NSWCA 281; 81 NSWLR 626 at [26] - [27] and Allianz Australia Insurance Limited v Habib [2015] NSWSC 1719. Her second point related to past economic loss. She acknowledged that s 126 in its terms did not apply to the assessment of that head of damage, but argued that the applicable common law was essentially to the same effect. She argued that the Claims Assessor failed to assess Mr Larriera's "actual loss", but determined "something else" (written submissions [40] - [41]). The asserted error was said to be the failure to provide adequate reasons for the assessments. Learned Counsel argued that the reasons provided did not explain the actual path of reasoning followed by the Claims Assessor in making his assessments. Particular complaint was made of his adoption of Mr Larriera's calculations from the written submissions filed on his behalf without further explanation or analysis.
2. Finally, Ms Poljak argued the Claims Assessor denied the insurer natural justice by failing to "consider, take into account, engage with the [insurer's] submissions and assessment of quantum in regards to future and past economic loss". It was emphasised that it was not said that the actual assessments made in respect of each contentious head of damage was not open on the material or information available to the Claims Assessor. Ms Poljak placed proper emphasis upon the judgment of Barrett JA in Sprod at [26] - [27].

Mr Larriera's submissions

1. Mr Robinson SC and Ms Grotte who appeared for Mr Larreira accepted that the Claims Assessor's reasons were "not perfect". However, "when read fairly and as a whole" the errors complained of were not made good. Such errors as might be identified were not "of sufficient importance or significance" to justify quashing the certificate. Learned Senior Counsel reminded me that "legality is the only issue". It was said that the Insurer's submissions invited the Court to indulge in impermissible merits review. Read beneficially, the Claims Assessor's reasons fully complied with the requirements of s 126 and the reasons given for the assessment of past economic loss expressly set out the Assessor's calculation of "actual loss". There was no failure to engage with the insurer's submissions. It is clear from the reasons that he substantially accepted Mr Larreira's submission and he was not obliged to give reasons for findings he did not make. What was required was the exposure of "the subjective thought processes of the decision-maker": Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; 206 CLR 323 at [68] McHugh, Gummow and Hayne JJ; see also Gleeson CJ at [10]; Allianz Australia Insurance Limited v Kerr [2012] NSWCA 13; 83 NSWLR 302 at [61]; Allianz Australia Insurance Limited v Habib [2015] NSWSC 1719 at [43].
2. As the Insurer relied upon jurisdictional error as well as error on the face of the record, Mr Larriera tendered the written submissions relied upon by the parties before the Claims Assessor to demonstrate that the Claims Assessor had engaged with the issues put forward for decision by the parties.
3. In reply Ms Poljak submitted that to resort to the written submissions before the Claims Assessor only served to demonstrate the inadequacy of the reasons.

Decision - Future Economic Loss

1. I am not satisfied that the Claims Assessor failed to discharge the duties imposed upon him "derivatively" by s 126 of the Act. The Claims Assessor has not expressed himself with great clarity. In applying a beneficial construction to the Assessor's reasons, it is permissible to fill gaps in expression "as a matter of necessary inference on a fair reading of the reasons": Zahed v IAG Ltd v T/as NRMA Insurance [2016] NSWCA 55. Adopting this approach, it is clear that the Claims Assessor accepted Mr Larreira as a reliable witness, as I have already said. From the findings at paragraphs [6], [34], [35], [36] and [39], it is also quite clear that the Claims Assessor found that Mr Larreira's most likely future circumstances, but for the injury, were that he would continue to work hard, and undertake courses to further his education and that by about the date of the accident he would have attained the position of a commercial insurance broker, earning "an income in the range of $120,000 to $150,000 gross per annum". The Assessor adopted the average of those figures, $135,000 (the reference to $130,000 at [35] was a slip), which he converted to a net, that is after tax, figure of $1,867 per week.
2. It is also worth bearing in mind that in Insurance Australia Limited v O'Shannessy [2015] NSWSC 1047; 72 MVR 1 at [59] and [71], Beech-Jones J held that the formation of the s 126(1) opinion "is itself a jurisdictional fact", enabling the Court to consider evidence which extends beyond the record.
3. As Basten JA pointed out in Nominal Defendant v Livaja [2011] NSWCA 121 at [40], there is a missing step between subsections (1) and (2) of s 126 (see also Amoud v Al Batat [2009] NSWCA 333). That missing step requires the identification of a claimant's residual earning capacity, as it is put. It is only if one identifies the residual earning capacity, assesses its worth in money terms and subtracts that amount from the earnings to be generated by the claimant's most likely future circumstances that one can calculate the amount of damages for future economic loss that may have to be adjusted for the purpose of s 126(2). This exercise was explicitly carried out by the Claims Assessor. He accepted the evidence of Mr Larreira that he could only work to a capacity of 60 per cent of usual business hours ([6]; [34]). He explicitly found that Mr Larreira "will continue in the future to find it difficult to work full time and his injuries and ongoing disabilities will always cause him to suffer a diminution in income from the time of the accident, up until the present time and for the remainder of his working life" ([34]). The Assessor recorded that it was agreed by both parties that the remainder of Mr Larreira's anticipated working life "would have been until the age of 67 years" ([36]).
4. He also accepted that Mr Larreira was a person with a determination to further his education. He thought he was "motivated" to try to do better. It was on this basis that he assessed the value of Mr Larreira's residual earning capacity as $800 net per week rather than at the average net actual earnings of $534 per week contended for by Mr Larreira's solicitors ([39]). That amount had recently increased to $622 net per week ([34]). Those findings were supported by expert evidence he apparently accepted from Professor Richard Chalmers (qualified by the Insurer) ([34]) and Dr Noel Dan, Neurosurgeon (qualified at the request of Mr Larreira's solicitors) ([38]).
5. The Claims Assessor's s 126(3) assumptions stated at [39] were spelt out in money terms at [39] of his reasons as was "the relevant percentage by which damages were adjusted" in accordance with s 126(2), as was the conventional discount of 15 per cent for the vicissitudes.
6. In my judgment, all of this sufficiently complied with the requirements of s126.

Decision - Past Economic Loss

1. It is fair to say, as the Insurer submits, that [34] of the Claims Assessor's reasons intermingles considerations relevant to future economic loss with the Assessor's reasoning for past economic loss. But a counsel of perfection is not required. It is clear, reading [34] with [6], that the Assessor accepted for the past, as well as for the future, that Mr Larriera had difficulty working full time and that his injuries and disabilities prohibited him "from working longer hours, obtaining promotions and bonus in his particular profession, or any form of employment suitable to him for that matter."
2. There may be some degree of factual disconnection between the finding that Mr Larriera's level of remuneration would have increased to not less than $80, 000 gross per annum for the past, and the Claims Assessor's decision that from the date of the assessment into the future a conservative figure was $135, 000 gross per annum. But I think it tolerably clear that the figure of $80, 000 represented the "level of remuneration" current at the date of assessment for his pre-injury work as a personal lines executive. This could have been spelt-out with greater clarity.
3. Again, it is tolerably clear that the Claims Assessor awarded a sum for past economic lost which represented the difference between "probable" and "actual" earnings over the period 4 May 2012 to 2 October 2005. In that regard, as I have said, he had adopted, as the "probable" figure, the amount Mr Larriera would have earned as a personal lines executive but for the injury. He did not factor into that figure the prospect that Mr Larriera's advancement to the position of a commercial insurance broker may have come sooner. This gives rise to what I have referred to as some degree of factual disconnection but in my judgment, is not suggestive of any legal error. Although in principle when assessing either past or future economic loss a court (and therefore, derivatively, a claims assessor) is awarding damages for impairment of earning capacity to the extent to which it is or may be productive of financial loss, "it has been found convenient to assess an injured plaintiff's loss by reference to the actual loss of wages which occurs up to the time of the trial and which can be more or less precisely ascertained and then, having regard to the plaintiff's proved condition at the time of the trial, to attempt some assessment of his future loss:" Graham v Baker [1961] HCA 48; 106 CLR 340 at 346-7 by Dixon CJ, Kitto and Taylor JJ.
4. The difficulty arises from the table set out at [34] referred to as "calculations during various periods until the 2 October 2005". Manifestly that table records an acceptance of the submissions made on behalf of Mr Larriera which are attached to the affidavit of Wendy Deborah Hunt of 26 February 2016, pages 53-54, admitted without objection. (The insurer's submissions are at pages 6-29.) The difficulty arises from the consideration that the Claims Assessor only set out the final figure for each relevant period rather than setting out the whole of the calculations.
5. The Insurer has failed to specifically identify the nature of the asserted error; that is, whether it amounts to error of law on the face of the record or jurisdictional error. its contention that the Assessor applied the wrong test by not assessing Mr Larriera's "actual loss" but "something else" implies reliance upon the species of jurisdictional error of the asking of the wrong question. It is therefore permissible for me to consider relevant evidence extending beyond the record: Kerr at 307 [15].
6. A consideration of the contentions before the Assessor in respect of past economic loss demonstrates that both parties accepted that Mr Larriera had suffered a diminution of his earning capacity, productive of actual financial loss from the date of the accident to the date of the assessment conference. They differed only about the amount of his "probable" and "actual" earnings during the period. It is clear from [34] that the Claims Assessor accepted the figures propounded on behalf of Mr Larriera. Permissible reference to the submissions resolves the apparent difficulty.
7. I am not satisfied that the Claims Assessor applied a wrong test or otherwise fell into jurisdictional error. I am not satisfied that the insurer has demonstrated an error of law on the face of the record in his assessment of this head of damage.

Failure to consider contentions seriously advanced

1. The substance of the Insurer's complaint under this heading is that the Claims Assessor failed to engage with its submissions but accepted Mr Larriera's submissions. Although if made good this ground is a species of jurisdictional error, it is obviously aligned with the question of the adequacy of the Claims Assessor's reasons. Inadequacy of reasons is usually characterised as an error of law on the face of the record: Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43; 252 CLR 480 at 501 [55].
2. The reasons I have expressed in [31]-[32] are sufficient answer to the contention that the Claims Assessor failed to consider the insurer's arguments about the calculation of past economic loss. I repeat, in my consideration of the submissions, the difference between the parties was confined to the integers for calculation of the actual loss suffered by Mr Larriera. From his reasons, it is clear that the Assessor accepted Mr Larriera's approach. Implicitly he rejected the Insurer's. No more was required of him to discharge his duty of fairness to the Insurer, however one categorises the putative error: Yusuf at 331[10]; 338[37]; 346 [68]; Wingfoot at 502 [56].
3. The Insurer argued in relation to the assumptions to be made about Mr Larriera's most likely future circumstances but for the injury, that the Assessor should accept Dr Spira's view that if Mr Larriera could come to terms with what Dr Spira regarded as primarily psychological or psychogenic issues, he may be able to work full time as a commercial broker. Even so, the Insurer conceded that he would continue to suffer an actual loss of $215 net per week less 15 per cent for vicissitudes. It further argued that the sum of $158, 245 should be rounded up to $200,000 to take account of other adverse possibilities. No percentage discount other than the conventional 15 per cent was suggested.
4. It is clear from the findings affirmatively made that the Claims Assessor rejected these submissions. He accepted Dr Spira's view that Mr Larriera suffered no brain damage but must be taken to have otherwise rejected his opinion because he expressed a preference for the views of Dr Jungfer, Professor Chalmers and Dr Dan. All of this is clear on the face of his decision.
5. Again, he accepted the figures put forward on behalf of Mr Larriera in preference to those propounded by the Insurer. There is no legal or jurisdictional error in this approach.

The adequacy of reasons

1. The obligation of a Claims Assessor to give reasons for an assessment is imposed by s 94(5) of the Act. As has been frequently pointed out, the content of the obligation is to be as brief as the circumstances of the claim permit. It was accepted by the parties that s 106 of the Act and cl 18.4 of the Claims Assessment Guidelines (Version 5, effective 1 May 2004) provide additional content to the statutory obligation. In my judgment, the Claims Assessor's reasons set out his findings on material questions of fact; by implication, his understanding of the applicable law is apparent; likewise the reasoning process that led to his conclusions; and he has specified the amount of damages and the manner of determining it.
2. It largely follows from what I have already said at [33] - [37] that I am of the view that the Claims Assessor's reasons for his assessment are legally adequate. This is not the occasion for a detailed exposition on the obligations of a claims assessor to give reasons. The obligation is less onerous than that imposed on judges and its specific content in a given case is likely to be case-sensitive: see Zahed at [3]-[4] by Leeming JA.
3. There may be a difference between the obligation imposed on an expert medical panel and the obligation imposed on an experienced lawyer acting as a claims assessor. However, it remains that a claims assessor is under no obligation to explain why he or she did not reach a conclusion contended for by one party provided the conclusion actually reached is clear and the actual path of reasoning by which the assessor in fact arrived at the conclusion reached is made sufficiently clear "to enable a court to see whether the [conclusion] does or does not involve any error of law.": Wingfoot at 501 [54] - 502 [56].
4. The argument that the assessment is vitiated by illogicality or irrationality was but faintly pressed in oral argument. I am satisfied for the reasons I have given that it is not.
5. My orders are: 1. Proceedings dismissed; 2. Plaintiff to pay the first defendant's costs on the ordinary basis forthwith after they have been agreed or assessed. 3. Amend the record so that the first defendant's surname is rendered Larriera throughout.

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 2016