Checchia v Insurance Australia Ltd trading as NRMA Insurance

(i) Judgment for the plaintiff in the amount of $1,225,000;

(ii) Pursuant to s 100 of the Civil Procedure Act 2005, the defendant shall pay interest on the aforesaid amount, calculated on and from 10 November 2006, until the date of this judgment, and thereafter pursuant to s 101 of the Civil Procedure Act 2005; DECISION : (iii) The defendant shall pay the costs of and incidental to the proceedings, as agreed or assessed;

(iv) Either party is at liberty to apply for any special or additional order in relation to costs or interest, or to correct any arithmetic miscalculation, within 14 days of the publication of this order.

CATCHWORDS : TRAFFIC LAW - Motor Accidents Compensation Act 1999, s 18 - relief from liability - fraud, misleading or false conduct - financial benefit - purpose of conduct - relief from liability - fresh facts - no benefit obtained - purpose not to obtain financial benefit

Civil Procedure Act 2005 LEGISLATION CITED : Motor Accidents Act 1988 Motor Accidents Compensation Act 1999 Trade Practices Act 1974 (Cth)

Arnison v Smith (1889) 41 Ch D 348 Berrigan Shire Council v Ballerini [2005] VSCA 159 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Brown v Jam Factory Pty Ltd [1981] FCA 35; (1981) 53 FLR 340 Collector of Customs v Thorn EMI Lighting (NZ) Ltd (1988) 1 NZLR 705 Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 Federal Commission of Taxation v Turner (1984) 73 FLR 24 Kallouf v Middis [2008] NSWCA 61 CASES CITED : Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638 McWilliam's Wines Pty Limited v McDonald's System of Australia Pty Limited [1980] FCA 159; (1980) 49 FLR 455 Mountford v Crafter [1942] SASR 244 Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170; (1992) 110 ALR 449 News Ltd v South Sydney District Rugby League Football Club Ltd [2003] HCA 45; (2003) 215 CLR 563 Peate v Federal Commissioner of Taxation [1964] HCA 84; (1964) 111 CLR 443 Rejfek v McElroy [1965] HCA 46; (1965) 112 CLR 517 Sodeman v The King [1936] HCA 75; (1936) 55 CLR 192 Sweet v Parsley [1969] 1 All ER 347 Toubia v Schwenke [2002] NSWCA 34; (2002) 54 NSWLR 46

TEXTS CITED : Heydon, Cross on Evidence, 6th ed (2000)

PARTIES : John Checchia (Plaintiff) Insurance Australia Ltd (ABN 11000016722) t/as NRMA Insurance (Defendant)

COUNSEL : B J Gross QC / S Dixon (Plaintiff) J Poulos QC / V Heath (Defendant)

SOLICITORS : Young and Muggleton Solicitors (Plaintiff) Moray & Agnew Solicitors (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

15423/2007 John Checchia v Insurance Australia Ltd t/as NRMA Insurance

JUDGMENT 1 HIS HONOUR: These proceedings involve an allegation that the plaintiff, Mr John Checchia, engaged in knowingly false or misleading conduct for the purpose of obtaining a financial benefit in relation to a claim under the Motor Accidents Compensation Act 1999 ("the Act"). 2 On 21 January 2003, John Checchia had a car accident. He was cycling to work on a bike track, when a car pulled out of a Service Station and hit him, as a result of which he was knocked from his bicycle and thrown over the bonnet of the car. He initially had minor superficial injuries and was, at the time, able to move all of his limbs. He proceeded home. He later developed significant symptoms for which he sought and obtained medical attention. 3 Mr Checchia claimed compensation for the injuries sustained. The claim is covered by the Act. The driver of the motor vehicle was plainly at fault, and Insurance Australia Ltd, t/as NRMA Insurance ("NRMA") is the insurer responsible for dealing with the claim. 4 The injuries to Mr Checchia became progressively worse and in April 2003 he was admitted to Concord Hospital. On 24 April 2003, he submitted a claim for compensation in which claim Mr Checchia declared that he had no previous injuries or illnesses relating to the same part of his body. As is the encouraged outcome under the process created under the Act, NRMA accepted liability, and a settlement was reached at a settlement conference. The matter was settled for $1,225,000, inclusive of costs. 5 However, as a result of information received by NRMA, it determined that Mr Checchia had engaged in misleading or false conduct and declined to pay the amount due under the settlement. Mr Checchia sues for the amount and NRMA defends the proceedings on the basis of conduct it alleges to be false or misleading. 6 The issues with which the proceedings are concerned are the operation of the Act, particularly s 118 of the Act; whether Mr Checchia's relevant conduct, namely, the statement that he had no relevant previous injuries (or the failure to correct same), was knowingly false or misleading; whether Mr Checchia's conduct, including any of the representations, as to the extent of his injuries or his prior earnings was false or misleading; and whether, if there were relevantly false or misleading conduct (by act or omission), Mr Checchia engaged in that conduct for the purpose of obtaining a financial benefit and, if so, the extent of the financial benefit, if any, resulting from the conduct. The Motor Accidents Compensation Act 1999 7 The scheme established by the Act has been the subject of significant authority, mostly relating to the process of assessment. There is little authority on the operation of s 118 of the Act. 8 The purpose of the legislation was the establishment of a new scheme for motor accident compensation that, generally, did not involve curial proceedings. Medical assessors resolve differences between injured persons and the relevant insurer as to the extent of the injury and whether the alleged accident was the cause of the injury. There exists a right of appeal to a Review Panel (which also consists of medical assessors). 9 The insurer is obliged by the Act to endeavour to resolve the claim, by settlement or otherwise, justly and expeditiously. It is, in that context, required to give written notice of its attitude to liability no later than three months from the making of the claim. It is also an insurer's duty to make a reasonable offer of settlement (either a money amount for damages or a method of calculating same) within the later of one month from the stabilisation of the injury or two months from the provision of particulars by the claimant. It is required to cover hospital, medical and other expenses from the time of admitting liability (or having it determined) and also to take reasonable steps for the medical rehabilitation of the claimant. 10 On the other hand, the claimant is required under the Act to cooperate fully with the insurer (and insured) as to the claim, by providing enough information to satisfy the insurer as to the validity of the claim and in order to facilitate an early offer of settlement. Further, a claimant is required to answer any reasonable request for particulars and to provide copies of documents. 11 Generally, although some claims are the subject of court proceedings, Claims Assessors will assess claims in accordance with guidelines that have been promulgated. It is unnecessary, for present purposes, to discuss the details of the foregoing. It is sufficient to note the general scheme and the imposition of obligations on claimants and insurers. Further, it is a criminal offence (and often a breach of the licence conditions) for an insurer to contravene an obligation imposed upon it under the Act. 12 It is in that context that one must construe Part 4.6 of the Act. The scheme of the Act depends on (and obliges) cooperation. Fraudulent, false or misleading conduct (by either party) would render unworkable the scheme for assessment, particularly because of the level of informality and the general practice by Claims Assessors not to allow cross-examination before them. 13 For present purposes, the more relevant provisions of the Act are in the following terms: " 116 Licensed insurers to deter fraudulent claims A licensed insurer must take all such steps as may be reasonable to deter and prevent the making of fraudulent claims.

117 False claims A person who makes a statement knowing that it is false or misleading in a material particular: (a) in an accident notification form under Part 3.2, or (b) in a notice of a claim given to a person or an insurer under Part 4.2, or (c) in the course of the assessment of a claim under Part 4.4, or (d) when otherwise furnishing information to any person concerning a motor accident or any claim relating to a motor accident, is guilty of an offence. Maximum penalty: 50 penalty units or imprisonment for 12 months, or both.

118 Remedy available where claim fraudulent (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." 14 Section 118 of the Act, which, as will be discussed below, relevantly relieves the insurer from liability to the extent of any financial benefit obtained by false or misleading conduct, forms part of a trilogy of provisions that also requires the insurer to deter and prevent "fraudulent claims" (s 116 of the Act) and renders criminal the making of a statement that is knowingly false or misleading (s 117 of the Act). Interestingly, s 116 deals with "claims", s 117 with the "making of a statement" and s 118 with "conduct" or "omissions". It is only s 118 that refers to the purpose of obtaining a financial benefit as a criterion to be satisfied before the provision has effect. Neither s 116 nor s 117 requires a purpose of obtaining a financial benefit. 15 The predecessor to s 118 of the Act was s 66 of the Motor Accidents Act 1988, which was in identical terms to the most relevant subsections (i.e. s 118(1) and (2) of the Act). The predecessor provision was the subject of discussion in Toubia v Schwenke [2002] NSWCA 34; (2002) 54 NSWLR 46. After discussing the general law relating to the setting aside of judgments for fraud, Handley JA (with whom Heydon and Hodgson JJA agreed) said: "[6] Section 66 however allows a defendant to obtain restitution of benefits paid under a judgment without the need for that judgment to be set aside or varied.

[12] Mr Williams' submissions were based on the general law but the starting point in this case has to be s 66. If there is any inconsistency, the section must prevail.

[13] Plaintiffs bringing proceedings under s 66 must prove (where statements are relied on) that the defendant made statements for the purpose of obtaining a financial benefit and with knowledge that they were false or misleading. The then defendant established before the arbitrator that the then plaintiff had knowingly made false or misleading statements for the purpose of obtaining financial benefits, but the then plaintiff did not benefit from the fraud that was then exposed because the arbitrator allowed for it in making his award.

[14] The references in s 66(2)(a) and (b) to 'the financial benefit so obtained' require proof of a causal link between the false or misleading statement and the obtaining of the benefit. The causal link is that required under the general law to establish fraud, namely proof of inducement, that is that the representee accepted the representation as true and acted on that belief to his detriment.

[15] It must be established that the representee was deceived when he acted on the fraudulent misrepresentation. Knowledge of the truth at the relevant time would be an answer to an action under s 66. The relevant principles are summarised in Spencer Bower, Turner and Handley 'Actionable Misrepresentation' 4th ed at pp 116-7:

'A representee who knows or discovers the truth in time is not deceived. Such knowledge is a good answer to any form of proceeding based on the misrepresentation. A representee cannot be misled by a statement which he knew to be false. ... It is sufficient that the facts became known to the representee from whatever source before he altered his position; ... a representation normally continues during the interval between its communication and any alteration of position under its inducement. ... The representee's knowledge of the truth must be full and complete. Partial and fragmentary information, or mere suspicion will not do; "suspicion, doubt and mistrust do not have the same consequence as knowledge". '" 16 While often during these proceedings, and elsewhere, reference is made to misrepresentation, fraudulent or otherwise, s 118 of the Act operates on conduct (or omission), which, relevantly, includes a statement, and, in at least some circumstances, a failure to correct a known untruth. A claimant, who limps, in order to give the impression that he/she suffers an injury that does not exist, is doing (or omitting to do) something that is false or misleading. So too is a claimant who makes a knowingly false or misleading statement. As expressed by Handley JA above, and that which necessarily follows therefrom, for NRMA to succeed in its reliance on s 118 of the Act, it must prove:

(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. 17 A further matter should be noted. The combination of the obligations on the insurer and the wording of s 118(2) of the Act results in a situation that an allegation of false or misleading conduct does not operate as a stay on the liability to which s 118(2) of the Act refers. The insurer is under an obligation to meet and/or to satisfy any such liability, until such time as it satisfies (i.e. establishes to) the Court that the conduct of the claimant was false or misleading and that the requirements of the section are satisfied, such as to relieve it of liability. 18 In this matter, little, if anything, in this substantive proceeding, seems to turn on the comment above. Neither party raises any issue concerning the nature of the proceedings before the Court, nor do they allege any breach of any obligation by the insurer. But it ought not be assumed that the Court accepts or condones the process adopted by the parties. Where an insurer considers (or suspects) that there has been conduct that would, under s 118(2) of the Act, relieve it of liability, in whole or in part, it is required to bring the matter before the Court and seek an order, the effect of which would be to relieve it of liability for the benefit (or so much of the benefit as is relevant). Otherwise, it is the insurer's obligation to provide the benefit. An order relieving a party of liability (in whole or in part) could, in some situations, be made on an interlocutory basis and on terms. 19 These proceedings have been commenced to enforce the settlement reached, to which s 118 of the Act has been pleaded as a total or partial defence. That procedure seems to reverse the proper course. Nevertheless, as earlier stated, there is no point taken by the parties and there is no utility in doing more, in these proceedings, than noting the issue. NRMA accepts the onus of establishing the facts that relieve it of liability. 20 It is unnecessary for the Court to discuss the meaning of false or misleading. As is made clear from the terms of s 118(1) of the Act, that which is false or misleading, whether a statement, or conduct other than a statement, must be done or omitted with the knowledge that its making or doing is false or misleading. In that sense, the Act requires the falsity to be known and/or wilful, and it is insufficient for the conduct or statement to be simply erroneous or incorrect: see Federal Commission of Taxation v Turner (1984) 73 FLR 24 at 26; Mountford v Crafter [1942] SASR 244 at 249; and Collector of Customs v Thorn EMI Lighting (NZ) Ltd (1988) 1 NZLR 705 at 708. 21 Because of the requirement that the false or misleading conduct (in these reasons for judgment "conduct" will be used to refer to "conduct or omission") must be engaged in "knowingly", much of the discussion as to "misleading conduct" in the context of consumer protection is irrelevant. The test prescribed by the Act will not be satisfied by a negligent misstatement. It is unnecessary to discuss whether recklessness may, nevertheless, suffice. The audience to which one looks in determining whether the statement was false or misleading is, in the case of Mr Checchia, the insurance company (or respondent below) and, ultimately, whether conduct is misleading or false is a matter for the Court: see McWilliam's Wines Pty Limited v McDonald's System of Australia Pty Limited [1980] FCA 159; (1980) 49 FLR 455; Brown v Jam Factory Pty Ltd [1981] FCA 35; (1981) 53 FLR 340 at 349; Crofter Hand Woven Harris Tweed Co Ltd v Veitch [1942] AC 435 at 444-445, per Viscount Simon LC; Peate v Federal Commissioner of Taxation [1964] HCA 84; (1964) 111 CLR 443 at 468. 22 The next matter, which an examination of the legislation necessarily raises, is the meaning of the term "purpose". The Act requires that the conduct that is said to be knowingly false or misleading is conduct "for the purpose of obtaining a financial benefit". The first aspect is the use of the definite article in qualifying "purpose". The use of the definite article does not mean that the purpose must be the only purpose of the conduct. However, there is no attempt by the legislature (cf Trade Practices Act 1974 (Cth), s 4F) to render any minor purpose sufficient to satisfy the requirements of the section. The purpose must be the dominant purpose for the conduct in question, and, in that sense, the obtaining of a financial benefit must be the operative reason underpinning Mr Checchia engaging in the misleading or false conduct. The Act requires an intention by, in this case, Mr Checchia to achieve a result desired by him, namely, the obtaining of a financial benefit: see Sweet v Parsley [1969] 1 All ER 347 at 363, 364, per Lord Diplock. Purpose, therefore, is the subjective purpose of the person who engaged in the false or misleading conduct and the effect the person sought to achieve by that conduct: News Ltd v South Sydney District Rugby League Football Club Ltd [2003] HCA 45; (2003) 215 CLR 563.

23 The purpose, envisaged by the Act, is a subjective purpose and requires evidence of the state of mind of the perpetrator of the false or misleading conduct. Direct evidence of the reason for conduct may not be forthcoming. In those circumstances, it may, and usually will, be inferred from the conduct itself and its likely effect. Further, the person, against whom false or misleading conduct is alleged, has very good reason to give evidence, as to their subjective intention, inconsistent with the required intention, and such evidence would, ordinarily, be treated with great caution. 24 One further matter should be clarified. The Act requires that the conduct (including an omission) that was false or misleading be done with the knowledge that it was false or misleading and be done for the purpose of obtaining a financial benefit. It seems that the proper construction of the requirements of the Act is that it is insufficient to prove that the conduct was knowingly misleading or false and, in one sense disjunctively, that the conduct was, together with other conduct, done for the purpose of obtaining a financial benefit. The purpose (of obtaining a financial benefit) must be the reason for the intention to mislead. In other words, assuming a claim is made for the purpose of obtaining a financial benefit and the claim includes a representation that is misleading or false, the provisions of s 118 of the Act require that the claimant mislead (or be false) in order to further the purpose of obtaining a financial benefit. It is not sufficient simply that the conduct is engaged in for the purpose of obtaining a financial benefit, it is necessary that the conduct was misleading for that purpose. 25 In the circumstances of these proceedings, the claim for compensation was arguably for the purpose of obtaining a financial benefit. That claim for compensation contained a false or misleading statement. Of itself, that combination of facts is insufficient. Leaving aside, for the instant purpose, the requirement for the conduct to be knowingly false or misleading, it is necessary to satisfy the Court that the false or misleading character of the statement was for the purpose of obtaining the financial benefit. 26 I turn then to the meaning of the term "financial benefit". The term "financial" needs no explanation. The Oxford English Dictionary defines "benefit" as meaning, "advantage or profit; gain". This definition is consistent with definitions in other dictionaries and its ordinary usage. An "advantage" is likewise defined as "the result of a superior or better position, an enhancement, increased well-being or convenience; so as to increase or augment the effect of anything; pecuniary profit." 27 It seems then, in its ordinary meaning in the context of s 118(1) of the Act, "financial benefit" means a gain, financially, to which the person would not otherwise have been entitled. Thus, if the purpose of the false or misleading conduct was to obtain money to which the person, against whom the allegation is made, would otherwise be entitled, the purpose of the false or misleading conduct is not the obtaining of a financial benefit within the meaning of s 118(1) of the Act. 28 Lastly, I deal with the issue of the burden of proof. As already stated, NRMA accepts that it bears the onus of satisfying the Court of the elements of s 118 of the Act. Notwithstanding the existence of s 117 of the Act, which renders the making of a statement, knowing that it is false or misleading, a criminal offence, the standard of proof in s 118 is the civil standard. NRMA is required to prove the elements on the balance of probabilities. That is not a process that involves (in a Bayesian or quasi-mathematical calculation) some exercise in an examination of probabilities of the events that have occurred, independent from the satisfaction of the Court. "The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences." Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361-362, per Dixon J. 29 The principle derived by reference to Briginshaw v Briginshaw, supra, does not involve anything other than two standards of proof and the issue to be determined in these proceedings is to be determined on the basis of a satisfaction on the balance of probabilities; see Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170; (1992) 110 ALR 449 at 449-450, per Mason CJ, Brennan, Dean and Gaudron JJ; Sodeman v The King [1936] HCA 75; (1936) 55 CLR 192 at 216, per Dixon J. Lastly, reference should be made to the judgment of the High Court in Rejfek v McElroy [1965] HCA 46; (1965) 112 CLR 517 in which the Court said: "No matter how grave the fact which is to be found in a civil case, the mind has only to be reasonably satisfied and has not with respect to any matter in issue in such a proceeding to attain that degree of certainty which is indispensable to the support of a conviction upon a criminal charge." (Per Barwick CJ, Kitto, Taylor, Menzies and Windeyer JJ at 521-522.) 30 It is necessary for the Court, as presently constituted, to be satisfied of that which is required to be proved. But the appropriate standard by which the Court would measure that satisfaction is the balance of probabilities and that requires satisfaction, on the evidence before the Court, of the matters alleged to have occurred being more likely than not: see Heydon, Cross on Evidence, 6th ed (2000) at 247. Evidence and Factual Contests 31 Essentially, NRMA submits that Mr Checchia knowingly engaged in conduct that was false or misleading for the requisite purpose, being:

(a) the failure to disclose, to NRMA and/or medical practitioners, a previous back injury (occurring in 1993), which affected the same area as was injured in the claim to which this proceeding relates, including uttering one or more statements denying the existence of said injury;

(b) the foregoing failure includes not only the fact of the previous back injury, but the existence of, and/or the extent of the existence of, symptoms associated therewith, including back pain, sciatic pain and restrictions on work;

(c) representations to NRMA of exaggerated amounts said to have been earned by Mr Checchia prior to the relevant injuries, including the production of false documents to "verify" those earnings or other false documents;

(d) Mr Checchia's exaggerated representation (by statements and conduct) of the extent of his injuries arising from the relevant accident, and the diminution, also by statements and conduct, of the extent of his recovery and his capacities, following the relevant accident. 32 Much of the evidence adduced in the proceedings went to Mr Checchia's credit, and sought to suggest that Mr Checchia ought not be believed on his oath or in the statements he made in the course of giving his evidence. Some of the material related to issues (some of them otherwise minor in the overall proceedings), which were said, also, to go to issues of credit relating to Mr Checchia. 33 The starting point for any analysis of the evidence must be that a claim form was submitted that declared that Mr Checchia had no prior injury to his spinal area, injured in the accident, in circumstances where, plainly and uncontrovertedly, there had been an injury to the relevant area. Such a statement must, at least, be misleading and the only questions that arise are whether it was knowingly so, and the purpose for which it was made. 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. 35 It is necessary to deal with the credit of some of the witnesses, but not all of them. I will deal with the credit of Mr Checchia last, in the factual analysis. 36 NRMA called Mr Richard Najdzion, who was, at all relevant times, a Team Leader for NRMA and, subject to limitations on the upper limit of compensation that could be agreed by him, managed between 100 and 120 persons who controlled separate claims within the NRMA. 37 Mr Najdzion gave evidence as to what his conduct would have been, if he were to have been aware of the previous injury and the true state, as he understood it, of the disabilities continuing to be suffered by Mr Checchia. The reaction of Mr Najdzion to the information relating to the earlier injury, was given honestly, but must be taken with some caution, in the manner referred to earlier. Mr Najdzion gave evidence that the earlier injury, if known, would have been significant in determining the level of compensation that would have been offered and/or agreed. However, such a reaction depends significantly upon the true effect and severity of the earlier injury. 38 It is not totally accurate to suggest that there was no knowledge by NRMA of earlier spinal problems. Prior to the settlement being reached, NRMA was informed by Dr Matheson, Consultant Neurosurgeon, in his report of 6 October 2005, of a lesion at L4/5 in the following terms: "He [Mr Checchia] gives no history of a pre-existing condition in terms of symptoms but there is no doubt that the L4/5 calcific lesion was present prior to this fall. His continuing restrictions and need for treatment are partially attributable to the motor vehicle accident. In attempting to apportion between the motor vehicle accident and a pre-existing condition I would put a statutory 10% for a pre-existing condition and 90% to the motor vehicle accident in view of the outcome." 39 There is of course a difference between a pre-existing condition and the injury to the spine in the very area to which this injury relates. There is also a difference between a lesion and a prolapsed disc. Nevertheless, one must measure the reaction of NRMA to the claim of Mr Checchia, were there not to have been any misinformation, more by an analysis of the objective effect of the prior injury, rather than some hypothetical position to which Mr Najdzion attests. I am not critical of Mr Najdzion, or his evidence, but he displayed an understandable level of subjective annoyance at not being given the correct information and not being able to base his assessment on that information. The annoyance was directed towards Mr Checchia. 40 This subjectivity seemed to colour his assessment of the nature of the claim submitted and the capacity of Mr Checchia disclosed in DVDs that were unavailable to NRMA prior to the settlement being reached. 41 I turn then to the evidence of Mr Anthony John Grasso. Mr Grasso was called by Mr Checchia and is Mr Checchia's brother-in-law. He is a Real Estate Agent by occupation. Mr Grasso lived at his home with his parents in 1994, at which time Mr Checchia and his wife moved in to the home. That domestic arrangement applied for some years during which (from approximately 1996 through to 1998) Mr and Mrs Checchia were building their house. While contractors were engaged for significant work on the home, Mr Grasso's father, Alfred, who was a retired builder, performed a major part of the building work and Mr Checchia performed some of the labouring work. 42 Mr Grasso also gave evidence that he played indoor soccer with Mr Checchia, during the time that Mr Checchia lived at Mr Grasso's parents' home. That was, according to Mr Grasso, in or about 1994 or 1995 and 1996. There are a number of relevant aspects to the evidence of Mr Grasso, but importantly he testifies to the fact that Mr Checchia displayed no symptoms of the previous back injury from the time Mr Checchia was married, in or about 1994, until the date of the motor vehicle accident in 2003. Moreover, the lack of outward signs of a back injury included Mr Checchia performing builders' labourers' work (assisting with building work on weekends and in the evenings, from time-to-time) and playing rigorous sports with Mr Grasso. 43 I found Mr Grasso to be very believable, an honest and forthright witness, who neither exaggerated, nor prevaricated in his evidence. There were some matters upon which he could not give specifics, but they were matters upon which one would not expect him, without his memory being refreshed, to have specifics. He could nevertheless pinpoint the time during which Mr Checchia played sport by the period that Mr and Mrs Checchia lived in the same residence as Mr Grasso. I accept Mr Grasso's evidence completely. 44 Likewise I consider Mrs Gracie Checchia, the plaintiff's wife, to be a witness of truth and reliability. She was an extremely believable witness, who answered questions directly and to the best of her ability, and her evidence is accepted. Mrs Checchia corroborates the opinions expressed by Mr Grasso and testifies to the fact that, at least from 1994, from the time of their marriage, until the date of the motor vehicle accident in 2003, Mr Checchia displayed no symptoms of a back injury. This included periods during which he played sports, was involved in household chores, engaged in usual activities within the family, and assisted Mrs Checchia's late father in building their (Mr and Mrs Checchia's) house. 45 It was Mrs Checchia that completed the claim form and completed it in a manner, which was, in fact, misleading, namely, specifying that there had not been any previous injury to the L4/5 region injured in the 2003 accident. At the time Mrs Checchia completed the form, Mr Checchia was in pain from, it is alleged, the 2003 accident. 46 Mrs Checchia attests to the fact that, at the time that she completed the claim form, she did not recall the work accident in 1993 (at which time she and Mr Checchia were dating). As earlier stated, I accept Mrs Checchia's evidence. She was forthright, seemingly honest and prepared to give evidence that she seemed to assume was inconsistent with the interests of Mr Checchia. 47 I turn then to Ms Antoinette Mowad. Ms Mowad was the principal of the company that owned QVB Jet Café, which company, it is said, employed Mr Checchia immediately prior to the 2003 accident. Ms Mowad was called, by Mr Checchia, because of allegations that there was no bona fide employment by QVB Jet Café prior to the accident or, alternatively, that the employment did not result in a remuneration of the kind represented by Mr Checchia. Part of the basis for this allegation was some aspects of the tax returns filed for the years in question. 48 Ms Mowad is not related to Mr Checchia, or in any way connected with Mr or Mrs Checchia, save that she is the principal of the company or companies that employed him. A letter, Exhibit G, was shown to Ms Mowad and it was put to her that the signature over her name in the document was not hers. She accepted that it was not. She gave evidence that it was the handwriting of the Manager of the Café, Charles Armstrong, who, at the time, had her authority to sign, on her behalf, documents of the kind in question. Exhibit G purports to be the terms of the employment of Mr Checchia. It is a document dated 15 December 2002 and, it seems, signed on that date. An attachment confirmed, in the handwriting of Mr Checchia and, it seems, Mr Charles Armstrong, signed on 16 December 2002, that the letter set out the relevantly agreed terms and conditions of employment. 49 Exhibit G is an unexceptional letter of employment. It has significant aspects, which display that it is genuine, and I accept Exhibit G as the terms and conditions of employment to which QVB Jet Café and Mr Checchia were agreed. That letter provides that on average Mr Checchia would work 50 hours per week at $25 per hour, i.e. earn an average of $1,250 per week. That rate of pay included all ordinary hours, penalty rates, overtime and allowances due under the industrial award. The employment agreement included a probationary period of three months. The hours of work included public holidays and there was an express provision for termination of employment on 14 days' notice by either party, other than for serious misconduct, in which case summary dismissal could occur. Presumably, the terms of the Restaurant & Employees (State) Award, referred to in the employment letter, specified some other conditions. 50 Ms Mowad described the duties performed by Mr Checchia (Transcript page 649) and described him as a highly valued employee (Transcript page 694). Mr Poulos QC criticised the evidence of Ms Mowad on a number of bases, including certain alleged discrepancies in earnings, and a submission as to credit, which depended upon whether Mr Poulos QC considered Ms Mowad was "on-script" or "off-script". I do not consider those criticisms are justified. 51 Further, Mr Poulos QC sought to use Ms Mowad's lack of recollection as a means of undermining Mr Checchia's credit. As earlier stated, Ms Mowad described Mr Checchia's work and her understanding that he had commenced with QVB Jet Café prior to the date of the 2003 injury. Mr Poulos QC criticised the discrepancy in the classification of Mr Checchia in different circumstances. I do not consider there to be any discrepancy. It is usual for persons, particularly in employment with an employer of a small number of employees (i.e. say 15 employees or less), to be classified differently for different purposes. Mr Checchia's classification for award and/or formal purposes would be very different from his classification for internal purposes. 52 As to the suggestion that the letter of appointment is inconsistent with the payments made by QVB, a first payment of wages in the period 20 January 2003 is consistent with a commencement of employment some time prior to 20 January 2003 and possibly as early as the week commencing 2 January 2003. Given the time of year and a possible payment on a fortnightly basis, if Mr Checchia had commenced work on about 7 January 2003, he would not have been paid until the period commencing 20 January 2003. 53 The letter of appointment (Exhibit G) refers, in one of its dates, to a date in 2005. Mr Poulos QC submitted that the necessary inference was that the letter was a forgery. For the letter to be a forgery, I must find that Ms Mowad was lying and/or part of a conspiracy to support a false claim by Mr Checchia. The evidence that I accept does not allow the drawing of such an inference. It is far more likely that the reference to 2005 (in a date expressed as "23/12/05") is a typographical error. Every other date in the letter is accurate and the handwritten dates also refer to 2002. 54 Mr Checchia claimed, for the purpose of compensation, pre-injury earnings of $750 per week, which is less than the contracted amount in Exhibit G after tax. If, as is submitted, the contract of employment were wholly fabricated, the income would probably be more likely to match the claim made by Mr Checchia to NRMA. 55 Lastly, in this regard, reference should be made to the deposit, by QVB Jet Café, of $409 per week, immediately before and after the date of injury. Mr Poulos QC submits that this amount is inconsistent with the contract of employment (Exhibit G), and the stated earnings by Mr Checchia. However, the deposit is not necessarily inconsistent. Nor is it inconsistent with the statement by Ms Mowad that Mr Checchia was not paid in cash. It is notorious that café staff receive tips (or gratuities). The contract of employment seems to indicate that the $25 per hour is an all-inclusive rate. Gratuities received by staff, if pooled, may be taken and deducted from (or included in) the hourly rate. On that basis, the award rate of $409 (nett) per week would be paid into the account and the tips separately received; yet the employer would make no cash payment. And the rate received may still equate with the contracted amount. 56 Further, and most obviously, the contract of employment (Exhibit G) specifies an average number of hours per week. Necessarily, that average must be calculated over a period of more than one week, either, it would seem, over a month or over a year. In such circumstances, a lower payment ($409) for the short period prior to the injury (or for the period of probation) is not inconsistent with the contract. As Ms Mowad makes clear, each member of the QVB staff was employed on a casual basis and therefore their rates of pay could not be compared with the specified award rate to which Mr Poulos QC sought to refer. 57 I do not accept the criticism levelled at Ms Mowad and I do not accept the criticism of Exhibit G, the letter of appointment. I accept the evidence of Ms Mowad, who was an independent witness and who withstood a vigorous cross-examination, without in any way giving the impression that she was in the slightest untruthful or unreliable. Other Facts: The 1993 Injury and Beyond 58 The plaintiff was born on 19 April 1971 and completed high school at the end of 1990. He undertook architectural drafting studies at the Institute of Technology and in early 1993 started working at the fruit markets. On 22 March 1993, he commenced work as a shop assistant at The World of Fruit, Campsie and on 23 May 1993 he injured his back in that employment. The injury occurred when Mr Checchia fell between a truck and a loading ramp onto the corner of the concrete loading ramp. He hit his lumbar spine. He was taken to Western Suburbs Hospital by ambulance and x-rayed. The doctor at Western Suburbs Hospital referred Mr Checchia to an Orthopaedic Surgeon, Dr Warwick Bruce, at Concord. 59 On 24 May 1993, Dr Bruce attended on Mr Checchia, further x-rays were taken and Mr Checchia was transferred to Westside Private Hospital under the care of Dr Bruce. A CT scan was taken of the lumbar spine. Dr Bruce conducted a further examination. On 27 May 1993, Mr Checchia was discharged from Westside Private Hospital and thereafter had physiotherapy and some spa treatment for a few weeks. He saw Dr Bruce again on 2 June 1993, 7 June 1993, 24 June 1993, 19 July 1993 and 28 August 1993. On 28 August 1993, Dr Bruce certified that Mr Checchia was fit to resume work on light duties on and from 29 August 1993. At the end of August 1993, partly as a result of medical advice, Mr Checchia resigned from The World of Fruit, Campsie, and in early September 1993 he commenced work as a waiter. 60 Dr Bruce was Mr Checchia's treating surgeon and to whom the Western Suburbs Hospital referred Mr Checchia. Apart from an issue relating to a pain and lump in the right thigh and a report for the purposes of these proceedings, Dr Bruce did not have a continuing relationship with Mr Checchia. 61 On 19 July 1993, Dr Bruce examined Mr Checchia and described him as having: "a normal gait and could walk on his heels and toes. There is a restricted range of motion of the lumbar spine. There is decreased sensation in the right leg except for the foot. Straight leg raise is 20 degrees causing positive nerve tension signs. Power is normal within the limits of pain and the toes are downgoing." 62 His opinion in that report is to the following effect: "This patient continues to have discogenic back pain which is not unusual. 80% of people are better at 3 months, the other 20% may take 6 months to get better. He is to continue physiotherapy and prudent use of analgesics." At the time of that report, it had been something less than two months since the 1993 injury. 63 On 26 August 1993, Dr Bruce's report noted a normal gait and capacity to walk on his heels and toes. It is also noted that Mr Checchia had a decreased range of motion of the lumbar spine but no neurological signs in the lower limbs. Dr Bruce, as earlier stated, certified Mr Checchia fit for light duties starting the next day, discussed with him the pros and cons of manual labour and recommended (as distinct from prescribed) that, if Mr Checchia could avail himself of a long-term non-manual job, it would have been in his interests. By 27 September 1993, the pain was an occasional twinge and the lumbar spine restrictions were described as mild, with no neurological signs. Dr Bruce was "very happy" with Mr Checchia's progress. 64 On 7 December 1993, Dr Bruce examined Mr Checchia again in relation to the 1993 injury. His description of Mr Checchia's condition was that "his back is now good with no real discomfort and no right leg pain." He noted some report of pain in the right knee where there was no swelling and no giving way. He diagnosed an unrelated muscle tear for which he prescribed physiotherapy. 65 While Dr Bruce was treating Mr Checchia, Dr Robert Cameron, a Consultant Surgeon, also examined Mr Checchia. Because the injury occurred at work, there were workers' compensation aspects and Dr Cameron was qualified by QBE. In a report dated, wrongly, 17 September 1994 (the correct date being, it seems, 17 September 1993), Dr Cameron reported on his examination and confirmed the view of Dr Bruce. He noted that Mr Checchia had already commenced work, on an unpaid basis, as a waiter, working two or three-hour shifts about once per week. Dr Cameron reports: "Mr Checchia is expected to make a full recovery from his injury. There is no indication for surgical or other active medical treatment. Mr Checchia is now fit to return to work on a basis of graduated selected duties. He remains unfit for work involving heavy lifting or repeated bending, probably for the next six months. As Mr Checchia has resigned from his work with World of Fruit, a graduated increase of work as a waiter would be appropriate for the time being. A return to his architectural studies would also be appropriate. The prognosis is for full recovery without permanent impairment." 66 As is obvious from the summary of evidence from Mr Grasso and Mrs Checchia, above, Mr Checchia showed no signs of back injury from 1994 until the 2003 injury. He did however have pain and a lump in his right thigh in or about October 1995, on which account he saw Dr Berk, who referred him to Dr Bruce. A CT scan of the area was conducted and, after treatment with steroid and local anaesthetic, Dr Bruce surgically removed an osteoid osteoma (a bone spur). That operation was performed on 1 November 1995. On 7 November 1995, Dr Bruce noted that all pain in his groin had ceased; the wound was excellent, the stitches removed and the range of motion on the hip had improved. Mr Checchia was required to stay on crutches for a further six weeks. This operation and injury seems unrelated to the back injury that had occurred in 1993, as was an arthroscopy on his left knee that Dr Bruce performed on 6 November 1996. 67 Dr Bruce (now Professor Bruce) is the Clinical Professor, Concord Clinical School, The University of Sydney, and specialises in hip and knee surgery, joint replacement, arthroscopy and reconstructive surgery. He is not, on his version, a spinal specialist. He examined Mr Checchia on 30 April 2007 for the purposes of these proceedings. Because of his view that he was not a spinal specialist, he was unable to express a view as to whether the 1993 injury played any material part in his current condition. He noted: "However, it is not unusual with people with a disc injury to have recurrent episodes of discogenic pain during their lifetime. We can say that after his recovery from the 1993 accident he led a very active life and did not have back problems until the injury in 2003. Also recurrent pain from a disc injury usually occurs with lifting or twisting. The fact that he was in a bike accident being hit by a car is a different mechanism of trauma and the spinal surgeons that have operated on his back are the ones that can best comment on whether this is a different injury." 68 As earlier stated, having worked at a number of cafés, on 15 December 2002, Mr Checchia entered into a contract of employment with QVB Jet Café, a coffee/sandwich shop in the QVB Building in Sydney. The contract of employment provides for Mr Checchia to start work on 2 January 2003. Ms Mowad testified to the fact that she employed Mr Checchia on terms that are reflected in the letter. I accept that Mr Checchia commenced work some time in January 2003; the precise commencement date is irrelevant, except that it was clearly on a date prior to the date of the accident. I also accept, as I have earlier stated, that the terms and conditions under which Mr Checchia worked, included those contained in the letter, Exhibit G. 69 The circumstances of the 2003 accident have already been described. Notwithstanding the brief summary of the accident, that summary is sufficient for the purposes of these proceedings. There is no issue between the parties (and this may be the only issue of that kind) that the accident occurred in the manner described, that the driver of the motor vehicle was at fault and, consequently, that NRMA were liable for whatever damages may have been assessed. Medical Evidence 70 As already stated, I accept the evidence that Mr Checchia had no symptoms of the 1993 injury from about December 1993. While Dr Matheson suggests that it is more common for persons, who suffer an injury of that kind, to have continuing disabilities, the absence of symptoms in that period is consistent with the medical examination of Dr Bruce and Dr Cameron, and consistent with their prognoses. The evidence of no symptoms is derived from witnesses other than Mr Checchia. 71 Following the accident on 21 January 2003, the plaintiff, Mr Checchia, continued home and continued to work. He was suffering back pain and was treated by a chiropractor on six occasions on 4, 10, 13, 18, 24 and 28 February 2003. He was also treated through massage therapy on three occasions (13 and 20 March 2003 and 1 April 2003), following which the massage therapist recommended specialist medical advice. On 27 March 2003, Mr Checchia attended on Dr Nakhle, his general practitioner. Dr Nakhle referred Mr Checchia for an x-ray on the lumbar spine, which was performed on 1 April 2003. 72 On 9 April 2003, Mr Checchia was admitted to the emergency department of Concord Hospital and came under the attention of Dr Tim Steel, Consultant Neurosurgeon and Spine Surgeon at St Vincent's Hospital. In his report of 7 May 2003, Dr Steel notes the obvious pain being suffered by Mr Checchia. He records: "On examination straight leg raise precipitated a lot of pain at 30 degrees on the right. He found it difficult to stand on the ball of his right foot however ankle and great toe dorsiflexion was relatively preserved. The rest of the power in his lower extremities was normal. His reflexes were intact….

His lumbar spine MRI scan shows a large disc protrusion at the L4/5 level on the right hand side. I have suggested that he try a right sided L4/5 transforaminal steroid injection." Dr Steel was trying to avoid surgical intervention. Mr Checchia had been admitted to the Hospital on 9 April 2003 and was discharged on 21 April 2003. During that time, x-rays of the lumbar spine, a CT of the lumbar spine and an MRI of the lumbar spine were all performed. 73 On 7 May 2003, the plaintiff was again admitted to Concord Hospital and came under the care of Dr Richard Parkinson, Neurosurgeon. Dr Parkinson's report of 12 May 2003, in relation to Mr Checchia, notes: "Given that there appeared to be compression of the right L5 nerve route on the MRI scan and given that the patient showed improvement over a 12 week trial of conservative management and given the typical findings of an L5 nerve route radiculopathy I discussed various options with him including a surgical decompression and discectomy." 74 In those circumstances, Dr Parkinson proceeded with a surgical decompression on 12 May 2003. The report of that operation records the induction of general anaesthesia and the usual preparatory steps, at which point the report of the operation records: "A right sided sub periosteal dissection of the L4 and L5 laminae was performed using monopolar cautery. A repeat check x-ray confirmed the level. Inferior L4 and superior L5 hemilaminotomies were then performed with a high speed drill. The ligamentum flavum was then incised with a number 15 scalpel blade and reflected to expose the epidural fat…. The L5 nerve route and dura were then exposed. The L5 nerve route underwent an extensive rhizolysis to the pedicle of L5 and was confirmed as being free. Attention was then turned to the adjacent dural sac and a broad based disc herniation could be palpated at the L4/5 disc. Retracting the dura showed a large intra annular L4/5 disc protrusion with no evidence of any extruding fragment. This appeared to be compressing the L5 nerve route at its axilla. The postero lateral disc was incised with a number 15 scalpel blade and free fragments of disc were meticulously removed with great care ." (Emphasis added.) 75 Following the operation, Mr Checchia woke up in recovery with no new deficits and with resolution of his leg pain. On 28 May 2003, Mr Checchia was admitted to Concord Hospital with a wound collection and right-sided hip and buttock pain. A CT of the lumbar spine was performed and the next day an MRI was performed. The plaintiff was discharged on 29 May 2003. 76 On 6 June 2003, after referral by Dr Parkinson, Dr Arun Aggarwal, Consultant Physician in Neurology, Neurophysiology and Rehabilitation/Pain Medicine, attended on Mr Checchia. In a report provided to NRMA, Dr Aggarwal said: "On examination, Mr Checchia had limitation of lumbar spine movements mainly in extension. Straight leg raising was limited to 45 degrees on the right, due to pain, which also occurred on abduction. He was markedly tender over the right sciatic nerve in the buttock (piriformis) region, but also around the right sacro-iliac joint.

Mr Checchia has signs and symptoms suggested of a piriformis syndrome resulting in a sciatic neuritis with neuropathic pain and allodynia. Given his considerable distress, I performed a right sciatic nerve block in the region of the piriformis muscle." 77 Mr Checchia continued to see Dr Nakhle between other medical practitioners. On 13 June 2003, Dr Aggarwal again treated Mr Checchia with a sciatic nerve block with a steroid preparation. 78 It is unnecessary to set out all of Mr Checchia's medical treatment. It is clear that his medical treatment was extensive. Over the period commencing May 2003 and concluding 21 November 2005, he underwent three back operations (one to which reference has already been made; on 26 July 2004, Dr Steel redid this operation; and on 21 November 2005, Dr Parkinson performed another operation). In the last of them, Dr Parkinson redid the right L4/5 discectomy, the L4/5 and S1 rhizolysis, fat and bone grafting, the L4/5 laminectomies and the L4/5 pedicle screw fusion. During the same period, Mr Checchia had undergone a number of nerve blocks, MRI's, myelogram, a facet joint injection, CT scans and a number of examinations. He had sought to return to work on a number of occasions and had completed the ADAPT Program at the Royal North Shore Hospital, which is a pain management program and it assisted greatly in his capacity to manage. 79 Mr Checchia commenced an exercise program, as recommended by his medical practitioners, and this exercise program included walking, rowing, lifting weights and stretching exercises. 80 After November 2005, Mr Checchia undertook a series of pain management programs and physiotherapy. Dr Aggarwal undertook a nerve conduction study and in June 2006 Mr Checchia was assessed by the RPA Hospital Pain Management Centre and thereafter undertook treatment recommended by them. Mr Checchia was assessed by a rehabilitation physician, two occupational therapists, a psychiatrist, a vocational guidance consultant and, on 19 October 2006, was once more treated by the RPA Hospital Pain Management Centre. 81 On 20 October 2006, a settlement conference was conducted, pursuant to the Act, and the matter was settled, as earlier noted, for $1,225,000, inclusive of costs. 82 His treating surgeon was, as previously stated, Dr Richard Parkinson to whom he was referred by his general practitioner, Dr Nakhle. I have already set out the initial findings of Dr Parkinson and a summary of the three operations that were performed. Dr Parkinson was not retained either by the solicitors for Mr Checchia or the solicitors for NRMA. Nevertheless, he was requested to provide a report on Mr Checchia, commenting on the effect of the earlier injury. That report, dated 4 July 2007, includes the following comments: "Based on these reports [the medico-legal reports prepared by Dr Warwick Bruce, Dr Stern and Dr Robert Cameron], John suffered a self-limiting injury to his L4/5 disc and adjacent lower portion of the L4 vertebral body …

In particular, looking at Dr Cameron's report it is quite obvious (on page 2) that Mr Checchia was pain-free at rest with just an occasional twinge in his lower back with some altered sensation in his right leg. On page 3 in his diagnosis and opinion, Dr Cameron felt that 'Mr Checchia is expected to make a full recovery from his injury'. There is no indication for surgical or any other active medical treatment. On page 4 Dr Cameron felt 'the prognosis is for full recovery without permanent impairment'.

Based on this, and the fact that Mr Checchia went on to continue full employment following this injury and did not require any further treatment beyond what Dr Bruce had performed in 1993, that if Mr Checchia had suffered a chronic injury at that time, then it would have caused trouble for him in the 10 years in between the first accident and the second.

I am entirely of the opinion that Mr Checchia's trouble with his back and leg which are causing his current symptoms have resulted from the motor vehicle accident and secondarily from the treatment which has been required following it. This includes the spinal surgery which he has undergone.

I am not of the opinion that there is any pre-existing component to his current condition attributable to the 1993 incident, for the above reasons. Many people suffer self limiting back injuries which do not impact on their future life and I have no cause to believe that Mr Checchia would have had further problems attributable to the injury in 1993 if he had not suffered the subsequent injury in 2003. " (Emphasis added.) 83 Dr Parkinson, as earlier stated, was Mr Checchia's treating surgeon, he was called in evidence and cross-examined and I consider that his evidence disclosed an objectivity and reliability commensurate with his position as the treating surgeon and I accept this evidence without qualification. Despite a thorough and searching cross-examination, that opinion did not alter. In testing whether Dr Parkinson had understated the effect of the 1993 injury, Mr Poulos QC asked the following questions: "Q. They are really surrogate signs for what might have been damage to the outer ring of the disc? A. I'm not sure what you mean by surrogate.

Q. Well, you can't actually see the disc itself by visual inspection but on an x-ray you see some osteophytic sign. You might be able to say, well, that could well be an indication that there has been damage to the annulus? A. Again it's possible, but the causal link may be weak. For example, they may have taken a fall from a horse at the age of 10 and the damage might be there for the rest of their lives and they may be completely unaware of it. So yes, it may indicate damage but it may not indicate damage that's causing a problem. (Page 456.)

Q. That is at least a weak spot that will be in the annulus? A. It's an area of damage. Once again, whether or not it is weak is something that is also somewhat debated in that, for example, formation of an osteophyte is thought to stiffen up a vertebra by removing it. So it is a response to an injury. Yes, the vertebra will never be the same as a normal vertebra but the definition of a weakened vertebra is, I think, a little more difficult. (Page 457.)

Q. One of the scientific theories behind it was that you could have a disc which was disorganised and causing, because of disorganisation, leakage of contents so that the nerve roots became irritated? A. Yes, that's correct. Equally you could have an equally disorganised disc which wasn't causing any symptoms at all. (Page 459.)

Q. If a person with a known prolapsed disc and, if you like, with the addition of a change to the end-plate at the disc? A. Yes.

Q. You would agree that that person is ill advised if he was to return to heavy lifting work? A. In the short term, yes. Once again as I previously mentioned what you see in damage on a CT scan you would, is a clue that you need to put in clinical context. Yes, a damage to a disc that has caused a problem would lead you to say heavy lifting is probably not a great idea and if you do need to lift heavy things then you need to be careful. I don't, I wouldn't say it would be a blanket rule that heavy lifting or lifting is not physically possible because that is not the case.

Q. Would you agree with this proposition, that isolated heavy lifting may not be as risky as repetitive lifting? A. Again, no. Again that is a complex question and one I could not give a short answer to. Both heavy lifting and repetitive lifting are probably not great for a damaged back that is causing symptoms. Again for somebody who is asymptomatic and who has a stable problem, that may not be an issue and I have many patients in that situation."(Page 465-466.) There are two comments that ought to be noted in relation to the above questions and answers, and generally concerning Dr Parkinson. Again, I accept Dr Parkinson unqualifiedly. Some of the occasions in which Dr Parkinson answered "yes", either as a total answer or as part of a larger answer, he did so on a basis that was obviously very pensive and that, in the manner it was given, qualified the certainty that the printed word would seem to give. He was an extremely impressive witness, who answered honestly, thoughtfully, directly and was generally understated. 84 A number of questions were put to Dr Parkinson based upon what was said to be demonstrated from DVD footage at various times and on various occasions. That footage was of Mr Checchia performing activities of normal living: walking, driving, standing, sitting, and carrying and putting down pieces of palm tree. Mr Poulos QC read to Dr Parkinson either the description of the investigator or the description of one or other of the medical practitioners or occupational therapists that had described the DVD footage. Dr Parkinson had seen some of the DVDs prior to giving evidence. Dr Parkinson's reaction was in the following terms: "Q. Is it one [the view expressed by another medical practitioner], if the video is accurately described by him, that is open? A. It's possible. I would like to tell you one thing if I may, though, is I don't view videos of people performing activities of daily living as part of my evaluation. I do not consider myself qualified to make the kind of comments that this physician has done based on the fact that I'm sure he does it a great deal more often than I do. If his assessment is consistent with a function of [read: functional] state then I don't think it would be appropriate for me to counter that." (Transcript page 482.) 85 Dr Parkinson remarked that videos are unreliable, because one is unaware of the medication (either medication for the purpose of improving his condition or analgesic medication) that was taken immediately before the activity in question or after it. Ultimately Dr Parkinson took the view that the DVD material did not alter his description and opinion. So did most of the other medical practitioners whose evidence I accept. Dr Parkinson took the view that Mr Checchia had significantly worsened and described the risk of disc material re-herniating after a fusion operation, often for no apparent reason, as between 5 and 10% and degeneration at adjacent levels as between 10 and 15%. 86 I discount, to a large degree, the opinions of Dr Nakhle and of Dr Matheson. I make no criticism of either one of them. But Dr Nakhle has a continuing relationship with Mr Checchia as his general practitioner and Dr Matheson disclosed a degree of unexplained antipathy. Nevertheless, each of them gave evidence that is necessary to take into account, but to the extent that their opinions conflict with Dr Parkinson, and to a lesser degree Dr Bowers, I would not accept them. In Dr Matheson's case, I accept the criticism, relevant to both the 10% and 25% figures, of Dr Matheson's approach being one that seems to treat every subsequent injury as a temporary aggravation of the pre-existing injury, regardless of the particular circumstances. Further, Dr Matheson seems to ignore the subsequent symptoms and is at odds with other medical practitioners. 87 Dr Matheson, notwithstanding his general antipathy to Mr Checchia, accepted that if Mr Checchia were to have displayed no symptoms of the 1993 injury from the end of 1993 until his injury in 2003, then the overwhelming cause of his current situation would be the 2003 injury. He assessed that as 75% contribution from the 2003 injury and 25% contribution from the 1993 injury. As already cited, he had, in 2005, assessed the contribution from the pre-existing injury (which, it must be stated, was not known from anything that Mr Checchia had said at that time, and was based on less information as to the nature of the injury) at 10%. Dr Matheson viewed the videos of 2 September 2005, 3 September 2005, 6 October 2005 and 8 July 2006. There is a divergence in the manner in which Dr Matheson suggests these DVDs "assisted". Dr Matheson agreed, in examination in chief, that the DVDs assisted in determining whether or not there is a non-organic presentation of the plaintiff and said: "It shows mostly normal walking activity, on one occasion a bit of a limp and a twist. There are inconsistencies between that and reported presentations to Doctors at other times." (Transcript page 630.) 88 Dr Matheson (Transcript page 643), in an exchange with Mr Poulos QC, in re-examination, says: "Q. If you had been aware at the time you saw Mr Checchia in October 2005 that the video of his activities of 2 September 2005 and the video of 3 September 2005 had been in existence and they were available to you for comparison would they have assisted you in evaluating Mr Checchia at the time you saw him? A. Probably not.

Q. Why is that? A. Well, I don't find videos terribly useful. I mean, occasionally they are very useful when you see patients doing things which they say they can't do, but the average video taken of a patient going to a shopping centre having a cup of coffee and wandering around the street doesn't tell you very much about whether they have a back disorder or not." (Transcript page 643.) 89 The above opinion was reiterated in an exchange with Mr Poulos QC (Transcript page 644) in the following terms: "Q. So if you had seen the video of 2 and 3 September 2005 in which he was shown to be walking briskly and freely, would that piece of history given to you by the patient have been consistent or inconsistent? A. Well, I have to say consistent on the grounds that I don't find videos very helpful." (Transcript page 644-645.) 90 It was suggested, during the course of objection to what was alleged to be cross-examination by Mr Poulos QC of his own witness, that the witness had misunderstood what was disclosed in the DVD of 2 September 2005 and 3 September 2005. However that plainly is not the case which is evidenced by the following exchange in cross-examination by Mr Gross QC, referring to Dr Matheson's Report of 26 August 2008: "Q. I'm looking at that video and I know your Honour will read the report for what it says, but in that paragraph on page 2 starting with 'The final film starts on 2 September 2005' you did observe that the plaintiff did seem to have a little difficulty with putting down these pieces of wood and always bent his knees, is that right? A. Yes.

Q. I know you thought they might be cables of wire rolls but would you assume they are actually slices of palm tree? That is, a relatively light tree? A. Yes, I am happy to assume that.

Q. But in any event you, as an observer of people who have back disabilities, saw signs of back disability from the way in which he put these pieces of timber down, is that right? A. Yes.

Q. And you go on to say in the third last line of that paragraph, 'It did indicate that he can do some physical work and lifting.' What you mean there is he did indicate there that he could then do the physical work that he was performing, is that right? Lifting these pieces of, or carrying these pieces of chopped up palm tree? A. Yes, he could do that.

Q. And as for his capacity beyond that, the video itself doesn't enable you to say; is that right? A. That's correct." (Transcript page 629-630.) 91 Dr Bowers, a Specialist Rehabilitation Physician, attached to Royal North Shore Hospital, was qualified by NRMA. He consults in the field of orthopaedic and neurosurgeon rehabilitation and pain medicine. Dr Bowers was shown the DVDs on which NRMA relied and was aware of Mr Checchia's medical history. Generally, Dr Bowers, like most of the medical practitioners, whose evidence is accepted, took the view that DVDs were not inconsistent with the injury to Mr Checchia and/or were not capable of altering the opinion otherwise formed. (To the extent that a medical practitioner opined that the DVDs were significant, for reasons relating to demeanour, relationship and other reasons already mentioned, including the weight of opinion, the evidence is not accepted.) In particular, Dr Bowers accepted the appropriateness of the restrictions on work that were placed by Dr Nakhle at particular times and, notwithstanding the activities that Mr Checchia was shown to be performing on the DVDs and/or generally could perform, Dr Bowers was of the opinion that Mr Checchia was suitable only for sedentary work. The following exchange, in re-examination, occurred, the questions being asked by Mr Poulos QC: "Q. If his tolerances, his ability to do things, were greater than he was in fact reporting to the FMA consultant, then ipso facto would his capacity for work return have to be reconsidered? A. It's a good question. In my opinion in reality it wouldn't matter what he said or what the FMA consultant says, it would not change my opinion about his work capacity. He has had two spinal operations. He should only ever do sedentary work. [In fact, Mr Checchia had three spinal operations.]

Q. So if he was to be given sedentary work as a supervisor and manager, would that be suitable to him? A. It would depend on the workplace, ensuring that his employer was compliant with what was requested by his treating team, but yes.

Q. So you would be looking to a task for him where he could use his experience and organisational skills and managerial skills? A. Yes, something suitable to his training, unless he retrained.

Q. If he was to get that kind of work, would it be necessary to evaluate him from time-to-time to see whether or not his hours could be increased? A. Yes.

Q. And would you be dependent on the subjective elements in assessing his employability at that time? A. I would look at all elements.

HIS HONOUR: If in fact Mr Checchia was able to walk for, say, a half hour or an hour to the gym, for example, does that alter your opinion in relation to the kind of work that he ought to do? A. In reality, no. He has got to be cautious with his back over a working lifetime so he should only do sedentary work." His reference to hours of work is a reference to his opinion, expressed in his report of 11 July 2006, that, over his lifetime, he would be suitable to return only to three-quarters of the normal hours of work. 92 I have dealt with Dr Bowers' evidence so far only from the perspective of its effect, if any, on the condition of Mr Checchia and the allegation that he is engaged in false and misleading conduct in exaggerating his disabilities. Dr Bowers also attests to Mr Checchia's employability and a number of other matters. These issues will be dealt with later in the judgment. Likewise, there are many other medical reports and much evidence as to Mr Checchia's physical condition. The foregoing is outlined because, essentially, it is relevant to the determination of objective facts, which, in turn, inform the assessment of Mr Checchia and whether his conduct has been false or misleading. 93 I turn then to the opinion of Dr Mills. Dr Mills was qualified by MLC and the Court has before it a report of Dr Mills of 1 September 2008 (Exhibit 28). In that report, Dr Mills describes the video surveillance, some of which has been the subject of earlier comments. Dr Mills is a medical practitioner specialising in occupational and environmental medicine and deals with the capacity to work. He describes his observations on the DVDs that were supplied to him and comes to the conclusion that his presentation is not "consistent with him suffering from a chronic disabling back condition of sufficient severity to prevent him from maintaining employment." Further, he expresses the opinion that "Mr Checchia was understating his true activity tolerance at the time of my assessment of 23 August 2005. The history I had obtained from Mr Checchia should thus be considered to have been unreliable." 94 Notwithstanding that which, by implication, was said to have been the history obtained from Mr Checchia by Dr Mills in answer to a question posed to him and answered in the report (Exhibit 28), Dr Mills expressed the following view: "Q. … Having viewed the DVDs from September 2005, October 2005, 2006 and March 2008 do your observations of the Plaintiff on those DVDs change your previous opinion? A. At the time of my assessment of 23 August 2005 I had stated that 'Mr Checchia's presentation at this assessment is not consistent with his reported level of disability. He was noted to be exaggerating disability at his assessment, indicating that his true level of activity is likely to be significantly greater than reported.' … My observations of your supplied DVDs confirm my above stated opinion, with my opinion remaining unchanged." 95 Further, Dr Mills expressed the view that "his physical work capacity did not appear to have substantially changed between 2005 and 2008, and has been unaffected by his fusion operation of 2005". 96 Dr Mills was of a sanguine view as to the employability and capacity of Mr Checchia. He was of that view in 2005, prior to the settlement, and he was of that view in 2008. The DVDs of Mr Checchia engaging in daily activities did not alter Dr Mills' opinion. This approach was confirmed in cross-examination (see Transcript pages 421, 422 and 424), and in both the reports of 23 August 2005 and of 1 September 2008, Dr Mills opined that Mr Checchia should be fit to perform duties within restrictions. Those restrictions included no prolonged or repetitive bending or stooping; no heavy pushing or pulling; no prolonged sitting; and no prolonged standing. Further, he would need to avoid lifting more that 10kg from bench-height, occasionally, or otherwise lifting more than 5kg. Further, both reports express or imply a restriction that any work in which Mr Checchia engaged would have to avoid exposure to whole body impact and vibration forces. 97 While Dr Mills has an extraordinarily dismissive approach to Mr Checchia's disabilities, to which I will refer when later dealing with Mr Checchia's employability, Dr Mills' assessment of the employability of Mr Checchia, and his disabilities, was not affected by the DVDs. And it must be said, nothing that Mr Checchia has done affected the opinion that Dr Mills expressed as to Mr Checchia's employability and disabilities. 98 From the foregoing, the following facts are the most relevant criteria in determining, objectively, whether Mr Checchia has been involved in misleading or deceiving NRMA, and, if so, to what extent. The facts established by the evidence are:

(i) In 1993, Mr Checchia fell at work and injured his back at L4/5; (ii) From December 1993, at the latest, there were no symptoms suffered from that 1993 injury; (iii) For all practical purposes, in terms of symptoms, the 1993 injury was wholly resolved; (iv) In 2003, Mr Checchia was involved in the motor vehicle accident, which caused significant injuries to the L4/5 vertebrae; (v) The injuries currently suffered by Mr Checchia are wholly, or overwhelmingly, the result of the 2003 injury, or the treatment of it; (vi) NRMA was misinformed as to the existence of the 1993 injury; (vii) Notwithstanding some indication from medical practitioners of a pre-existing condition to L4/5, NRMA relied on the representation that there had been no previous injury to that area of the back. 99 I turn then to the evidence of Mr Checchia. Mr Checchia's Evidence 100 Mr Checchia was not a particularly believable witness. His evidence in chief was generally satisfactory, and his demeanour was such that it would not be possible, on that basis alone, to determine that Mr Checchia was untruthful or prevaricating or dissembling. Nevertheless, there were some aspects of his behaviour that were concerning. While there are experts who have testified as to Mr Checchia's medical condition, my own observation of Mr Checchia in the witness box and in the courtroom was that he tended to exaggerate his discomfort. I do not, by the foregoing, suggest that he was not suffering pain and/or discomfort, only that there were times when the outward signs of that pain and/or discomfort seemed disingenuous. 101 Further, there were some aspects of Mr Checchia's evidence that seemed highly improbable. I am prepared to accept that, given his complete recovery from symptoms of his 1993 injury, he may, while he was in pain from the 2003 injury, have not recalled his injury or the details of it. That may explain the statement in his claim form. However, it does not explain the statement at [5] of his statement before the MAS, filed and served on about 29 September 2006. In that statement, referring to the 2003 injury, Mr Checchia states: "I had no prior problems with my back or legs." 102 It is difficult to accept, and highly improbable, that when compiling the statement for Dr Ryan, he simply forgot his earlier back injury. Further, it is difficult to accept that the injuries that he did recall, when giving his medical history to practitioners, could be recalled because of scarring and/or wounds. 103 While it is possible that a number of the doctors took his history from earlier statements without specifically enquiring of Mr Checchia, the medical reports of Dr Mills, Dr Perla and Dr Matheson (Exhibit 28 page 5, Exhibit 2 pages 219 and 239 respectively) make clear that Mr Checchia had denied any such previous injury. The other medical reports (Dr Rowe [Exhibit 2 page 204], Dr Lawson [Exhibit 2 page 226], and Dr Maguire [Exhibit 2 page 309]) were ambivalent as to whether Mr Checchia was specifically asked as to the existence of previous injuries. Dr McMahon (Exhibit 2 page 234) seemed to rely on the history from other reports. Most interestingly, on enquiry from Dr Maguire, Mr Checchia mentioned his father's fruit business, but did not recall an accident that occurred in a fruit market. One would have thought, even though the accident occurred at a business other than his father's, that the mention of the fruit business would trigger some recollection of the accident that occurred in 1993. 104 On the other hand, I accept that Mr Checchia genuinely tried to return to work and genuinely undertook activities that he hoped (on the basis of medical opinion) would restore his health. He made clear to all or most of the doctors that he was engaged in an exercise regime that had been prescribed or recommended for him and, as earlier stated, involved walking, lifting weights, rowing, stretching exercises and the like. Mr Checchia sought to return to work and for a short time was successful in so doing. He sought to return to work on a number of occasions and sometimes performed light duties. I accept these attempts as genuine, and I accept, corroborated by the medical practitioners to whose reports I referred earlier, that the state of his injury prevented him from a return to permanent full-time unrestricted work. 105 Much was made, in extensive written and oral submissions, of the withdrawal of sums of money from various hotels over a period of time. Mr Poulos QC submitted that these activities were inconsistent with Mr Checchia's evidence as to the activities he could undertake after the various operations. Mr Poulos QC also submitted that these activities went to issues of credit. I reject both submissions. It was never suggested by Mr Checchia (or anyone on his behalf) that he was incapable of sitting, walking or driving. Often there were difficulties with each; and each could be undertaken for limited periods. But, assuming, as was submitted by Mr Poulos QC, that Mr Checchia was attending hotels for the purpose of gambling, by playing poker machines, there is nothing inconsistent with that activity and the injuries from which Mr Checchia says he suffers. It is difficult to imagine a less physically taxing task than driving to a local hotel (or even one slightly further away), withdrawing some money from an ATM, and pushing a button on a poker machine. Such an activity would allow Mr Checchia to sit for short periods, walk around when in pain, or stand as an alternative. 106 To the extent that the suggestion is made that the bank records disclose an income earning capacity, that suggestion is rejected. If, in fact, Mr Checchia were earning money, there is no evidence of him being paid any amount. Moreover, if he were being paid in cash, he would not need to withdraw from the ATM. Further, the hours of his attendance at a hotel would not seem consistent with the performance of work, and the hotels attended were so varied as to make it unlikely that Mr Checchia was working. There seems little difference in activity between sitting at home, presumably watching television or reading a book, and travelling to a pub and playing the poker machines, or watching football or other sport. It is difficult to understand what it is NRMA says Mr Checchia should have been doing, if he were as injured as Mr Checchia claims. 107 I have already discussed the issues surrounding the allegations relating to the drafting of the letter of appointment (Exhibit G). It is necessary to recount the circumstances of the 2002 tax return. Mr Checchia alleged that in the tax year ending June 2002 he worked for Blues Point Café and Bar Cupola. Mr Checchia filed a tax return that disclosed an income significantly less than he claimed he was earning. In 2008, Mr Checchia filed an amended tax return for the year in question in which he claimed to have earned a further $27,900, being the difference in earnings from Blues Point Café, originally stated to be $7,800 and by amendment said to be $35,700. 108 It is necessary to examine the submissions relating to the creation and existence of Exhibit 19. Exhibit 19 is the PAYG payment summary for Blues Point Café relating to Mr Checchia for the year ending June 2002. It is on an Australian Taxation Office form and discloses an income of $35,700 from which a total of $6,732 tax was withheld. Previously (see Exhibit 23), the PAYG summary disclosed an income of $7,800, from which $1,040 was withheld as tax. Each form purports to be signed by Mr Colosi, although the signatures appear to be, at least partially, different. The typed explanation in the amended tax return, submitted by Mr Checchia is to the following effect: "When I did my original tax return I received the wrong payment summary from Blues Point Café. When I received the correct payment summary I was in hospital recovering from an accident which has become an ongoing issue which made me forget to amend my 2002 tax return." 109 The amended PAYG summary is on a form with the notation NAT 46-01.2005. The material before the Court explains that such a notation means that the form was created by the ATO in 2005. It is dated 2 October 2002. On the material before the Court, such a form could not have been dated on the date specified. Further, the handwriting of the date differs, to some extent, from the previous summary (on a form published in 2001). 110 There is no evidence that Mr Checchia forged the document. It may be that Mr Colosi completed a new summary in about 2005, but dated it consistently with the original. There are certainly inferences available consistent with the genuineness of the document and inconsistent with dishonesty on the part of Mr Checchia. But that is not the test. These are not criminal proceedings. It is sufficient that I am satisfied, on the balance of probabilities, that the "amended" payment summary is not genuine. Nevertheless, there are a number of possibilities that explain these inconsistencies. To me, the most probable inference is that the initial tax return understated (deliberately or otherwise) the income received, either because significant amounts were paid in cash or, on a less likely basis, there may have been two payment summaries issued and one of them may have been lost then reissued. 111 It is not unknown for applicants for compensation to have understated their income. The courts will generally not accept an income greater than disclosed in the tax returns and, as a consequence, such applicants often, in those circumstances, amend their tax returns. The issue of such tax returns is a matter between the applicant, in those circumstances, and the Australian Taxation Office. It seems to me that the foregoing is the most probable explanation for these occurrences. 112 Because of these proceedings (including the Assessment proceedings that were settled), Mr Checchia sought and obtained a payment summary that disclosed his real income. Alternatively, Mr Checchia had earlier received a PAYG Summary reflecting the higher income but feigned its loss in order to procure another. He then lodged an amended income tax return that reflected his true income. The PAYG Summary lodged with the ATO reflects an amount of tax deducted. It is most implausible that the ATO, who have received this document, would not know with certainty whether it was accurate, at least as to the tax said to be deducted. 113 Notwithstanding the foregoing "innocent" explanations, it still says much about Mr Checchia's honesty. Ultimately, I am not satisfied, even on the balance of probabilities, that the income was overstated in the claim form. Further, the settlement was based on a claimed income of $750 per week, and, on the basis of the QVB contract, which I have accepted as genuine, his earnings were required to be assessed on at least that basis. Although, without evidence of prior earnings, the QVB earnings, alone, may have given rise to uncertainties in continued earnings that would need to be factored into any calculation of damage. 114 The next major issue to which NRMA refers in relation to Mr Checchia is the allegation that his conduct was false and misleading in his depiction of his injuries, either by statement or motions, to the medical practitioners and, through some of them, to NRMA. As earlier remarked, NRMA tendered a number of recordings of Mr Checchia undertaking various activities. Some of those recordings were taken by NRMA prior to the settlement, but other persons took some of them, and some of them were taken after the settlement and some originally for a different purpose. 115 A DVD was tendered showing, amongst other things, Mr Checchia undertaking activities including carrying a piece of palm tree and placing it on the ground. It was suggested that this DVD showed Mr Checchia conducting activities inconsistent with his injuries. I do not agree. 116 The DVD shows Mr Checchia walking very upright (more so than is normal) and carrying a piece of wood in a manner which would be unusual for anyone not protecting their back or some other injury. He shows himself to be very tentative about putting down the timber, he walks while carrying, the weight being taken, it seems, in his arms, he seems to bend with difficulty and, at another juncture, hold his lower back fleetingly. He seems to lift with his left arm, using his elbow, rather than his back, or even his legs. The date of that occurrence is 2 September 2005 at approximately 9:31 a.m. 117 On the same DVD Mr Checchia is shown, on 3 September 2005 at approximately 8:06 a.m., walking, it seems to an auctioneer's rooms. In this DVD, he is shown driving, smoking, talking and leaning on one foot. 118 In the second DVD (Exhibit 5), Mr Checchia is originally shown in Macquarie Street near the corner of Bent St. His movements are initially less fluid; he is then shown standing around after which he walks slightly better than before, but with a slight limp. On 9 October, he is shown, on this DVD, standing by a car talking, driving and at the fish markets. While he is shown bending to look at a wine cabinet, there seems little difference between his activity disclosed in this recording and his activity shown on the first recording, described above, which was taken by MLC. 119 The third DVD was taken by Quantum for MLC. It shows Mr Checchia carrying a large paper/plastic screen (i.e. to show movies) i.e. carrying a mobile movie/video screen on a stand. The item is extremely light, as is clear from the DVD. 120 Exhibit 7 is a DVD taken by NRMA and covers the period 2 November 2006 and following. In this, Mr Checchia is shown driving, walking (relatively easily), carrying a large toy horse (for five-year-olds) and other activities. He is shown going to the Leisure Centre, leaving the centre with a towel over his arm, and filling the car with petrol, during which he raised his arm to rest it on the pump. Mr Checchia, during these activities, moves relatively freely and holds his arm up. 121 Exhibit 8 is a further DVD covering the period 19 March 2008 and following. During the course of this recording Mr Checchia is shown driving, walking, moving relatively freely, and he bends his back (arching). The DVD also shows Mr Checchia kicking a paper so that his wife could pick it up, presumably because he was unable so to do, or had some difficulty so doing. He tentatively stretches his back and he gets up and down from the seating position constantly and tentatively. 122 The medical evidence, and the statements of Mr Checchia, discloses that Mr Checchia was not, prior to the settlement, in constant pain. He was in pain from time-to-time, often and regularly. Often the pain was much worse than other times. The mere fact that a recording would show Mr Checchia moving freely is not inconsistent with his representations and conduct. There is sufficient evidence in the recordings that have been tendered to show the tentativeness and care with which Mr Checchia was moving, from time-to-time, and his discomfort at sitting for any length of time. 123 As earlier stated, Mr Checchia disclosed his exercise regime to each of his medical practitioners, or medical practitioners appointed by NRMA, and, as such, was not suggesting that he was incapable of doing everything all the time. Nor was he suggesting that there were not times when he could move freely or times when he would not be in pain. Most medical practitioners attested to the fact that the DVDs made no difference to their assessment. I accept that opinion. I should, for abundant caution, mention that NRMA did not tender all of the surveillance records of Mr Checchia that it held. 124 The foregoing is not intended to suggest that there were not times when Mr Checchia exaggerated, deliberately, the symptoms from which he was suffering, at that particular time. However, it seems that the symptoms that he disclosed on medical examination were symptoms that he, in fact, suffered, even if they were not being suffered at the time of the examination. In other words, the conduct did not give a false impression or misleading impression of the symptoms that Mr Checchia suffered or of the pain that he endured. A fortiori is that the case, when it is taken together with the information that his symptoms varied and that he was able to participate in an exercise regime. 125 I do not consider that Mr Checchia's conduct, or any statement, concerning his disabilities was misleading or false. Nor do I consider that this aspect of his conduct was intended to be misleading or false. On the balance of probabilities, Mr Checchia intended to represent only that which he was suffering. 126 Overall, I do not consider Mr Checchia a witness of truth or reliability. Some of his answers were disingenuous and dissembling. But not all of them were. For example, the explanation given for his answer to the Oswestry Disability Questionnaire cannot be believed. On the other hand, his response to the vigorous cross-examination on the issues of the disability he was suffering and on his previous employment earnings was, in most respects, extremely believable, unsophisticated, and unrehearsed. There were aspects of that questioning that clearly made Mr Checchia nervous. But an analysis of that demeanour, and the questions that were being asked, suggests that the nervousness was a reaction to his embarrassment at failing to declare his full income, and the issues associated with it, rather than a consciousness of guilt as to the claims to NRMA of his prior earnings. 127 The findings that I have made as to his false or misleading conduct, while partly relying on Mr Checchia's oral evidence, have been made largely on the basis of objective material. However, even liars and rogues are entitled to the benefits of the law, to the extent that the facts support the cause of action for which they contend. 128 I have found that Mr Checchia engaged in misleading and/or false conduct insofar as he misinformed NRMA as to the existence of a prior injury in 1993. Further, to the extent that it adds to the foregoing, his conduct in maintaining that assertion of fact or failing to correct it was false and/or misleading and was knowingly false and/or misleading. Whether the initial statement was knowingly false or misleading does not seem to add to the effect and it is unnecessary for me to determine it finally. I have made that finding, on the balance of probabilities. 129 I am not satisfied, even on the balance of probabilities, that Mr Checchia's conduct (some of it possibly fraudulent, at least in his dealings with the ATO) in asserting a prior rate of earnings (and supporting the assertion with questionable documents) was false or misleading. Nor, on the balance of probabilities, am I satisfied that Mr Checchia engaged in false or misleading conduct, or, more accurately, misled NRMA, as to the state of his disabilities, his injuries, his capacity, or his pain, at least in the period ending on the date of the settlement. Purpose 130 There remains, on the question of liability, one aspect that must be determined. That aspect is whether Mr Checchia engaged in the misleading conduct, namely, the factual assertion and/or failure to correct the assertion that there had been no relevant prior injury (hereinafter "the misleading conduct"), for the purpose of obtaining a financial benefit. 131 As one would expect, the only evidence directly affecting subjective purpose was the evidence of Mr Checchia. Indeed, in this case, there is little evidence indirectly affecting the existence of the contended subjective purpose. Some of the evidence that points to a purpose that would satisfy the contention of NRMA is the evidence of dissembling and misleading or false conduct to which reference has already been made. 132 On the other side of the ledger, there is significant evidence of the conduct of Mr Checchia that displays a genuine attempt to return to work, to improve his disabilities and/or incapacities and thereby to minimise what may otherwise have been payable under any compensation arrangement. Those attempts were unsuccessful, at least in the long-term. My assessment is that Mr Checchia genuinely sought to return to work and genuinely sought to improve his position. Those are factors that, together with the acceptable evidence of Mr Checchia, compel me, on the balance of probabilities, to find that his conduct was not done for the purpose of obtaining a financial benefit. While he may have sought to forestall an enquiry that would delay or complicate a settlement that appropriately compensated him for the injury, he did not do so for the purpose of preventing a rejection of his claim or for obtaining a claim to which he was not entitled. 133 That raises an interesting question as to the subjective purpose necessary to relieve an insurer of liability under the Act. On one view, if claimants engaged in false or misleading conduct for the purpose of obtaining what they considered to be their just entitlements, such claimants would not be engaging in the conduct for the requisite purpose. I do not accept that view. It seems that a construction consistent with the purpose of the Act requires that the purpose of the misleading conduct be for the obtaining of a financial benefit, as objectively determined. Claimants do not escape the effect of s 118 of the Act by having a subjective view as to their entitlements that is greater than, in reality, is the case. 134 I hasten to add that it is for NRMA to satisfy the Court, on the balance of probabilities, of the requisite purpose. As the foregoing seeks to make clear, NRMA has not satisfied that burden. On the contrary, I am satisfied to the opposite effect. As a consequence of that finding, it is strictly unnecessary for me to deal with the level of damages. NRMA has failed to establish to the Court one of the elements necessary to relieve it of the liability imposed upon it by the settlement. The settlement is binding and judgment will issue for Mr Checchia. 135 In some respects, such an outcome is a little galling, because a person who has misled an insurer, and, on one view, undermined the purpose of the Act, is to receive full compensation under the Act. Nevertheless, Mr Checchia was injured, a driver of a motor vehicle for whose negligence NRMA is responsible through its insurance policy caused the injury, and the scheme of the Act is that Mr Checchia ought be appropriately compensated for that injury. Further, Mr Checchia may yet face criminal proceedings under s 117 of the Act. The criminal provisions apply, whether or not there has been a purpose of obtaining a financial benefit, and a harmonious construction of the different provisions of the Act, and the overall scheme of the Act, requires that persons who are injured be properly compensated, even if they are otherwise subject to criminal sanctions. 136 Notwithstanding the lack of necessity to deal with damages, I will deal, very briefly, with some of the findings I would make were damages to be assessed. The process to be undertaken is slightly different from the assessment of damage absent a settlement agreement. These proceedings seek to enforce a contract. Damages are being assessed for the purpose of ascertaining whether the amount agreed in the settlement included a "financial benefit", i.e. resulted in an outcome greater than that to which Mr Checchia was entitled. As a consequence, more than the settlement sum cannot be awarded. 137 Further, because one is ascertaining whether a financial benefit has been obtained and, if so, the amount of any such benefit, it may not be necessary to determine the level of damages, under some heads of damage, on a basis other than reciting, under that head, that which NRMA concedes is appropriate. Damages 138 As earlier stated, when dealing with the nature of the injury suffered, I accept Dr Parkinson and the opinions he expressed, without qualification. On that basis, I would consider that the injuries and disabilities currently suffered by Mr Checchia were entirely caused by the 2003 accident. 139 Notwithstanding that finding as to current disabilities, there is a possibility, for which some account must be made, that the pre-existing 1993 injury, notwithstanding its outward resolution, might flare up and cause injury. It is most unlikely that the injury, in that hypothetical situation, would be the severity of that now suffered by Mr Checchia. Nevertheless, I would, in accordance with the principles in Malec v JC Hutton Pty Ltd [1990] HCA 20; (1990) 169 CLR 638, take that possibility into account. On the material before me, it seems the possibility of the 1993 injury degenerating and causing problems is extremely low. There was no operation in or after 1993, as a consequence of the 1993 injury. Mr Checchia was also asymptomatic. There are two distinct issues. 140 Firstly, one must assess the likelihood of degeneration from the 1993 injury. For the purposes of transparency, I would assess that risk, in this case, as most unlikely and certainly as less than the risk of degeneration at an adjacent site following surgery and, therefore, at 10%. 141 Secondly, if there were to be degeneration, the likelihood of the problem so caused being of a kind that would prevent work, or prevent work to the same extent, must be assessed. I would assess that further risk (of it affecting work capacity), if degeneration were to occur, as between 30% and 40% and the probability of the 1993 injury affecting Mr Checchia's capacity to work (i.e. the combined likelihood of degeneration and consequential incapacity, partial or total) at between 3% and 4%. [Probability is usually expressed as a fraction between 0.0 and 1.0 representing, respectively, certainty of an event not happening and of an event happening.] I would account for these issues by increasing the allowance for vicissitudes to 20%. 142 The aforesaid rate of 20% for vicissitudes includes the discount rate to which s 127 of the Act refers. Otherwise, in terms of the assessment of damages for economic loss, it is necessary to pay regard to the provisions of Chapter 5 of the Act and, although it may be trite, I make clear that the damages, that I would otherwise assess, would not include the first five days (s 124 of the Act) and the earnings of Mr Checchia do not exceed $2,500 per week, so that the provisions of s 125 of the Act do not apply. 143 Given the evidence of Ms Mowad as to the value of Mr Checchia as an employee (Transcript page 657 line 36 et seq), and other evidence upon which one could base such an assessment, there is (with the exception to vicissitudes, to which reference has already been made) no reason to qualify the capacity of Mr Checchia as to his future earning capacity and, were it not for the fact that damages are not strictly an issue before the Court on the earlier findings, I would determine that the future earning capacity of Mr Checchia would accord with, at least, that which was being earned prior to the accident at QVB. The original award claimed $750 per week. I would assess damage on the basis of $650 to ensure a degree of conservatism in the assessment of damage, but make clear that a proper analysis of the evidence would give rise to a finding that the earning capacity would be higher, not lower, than the $650 to which I have referred: see the evidence of Ms Mowad at Transcript page 656 line 40. 144 In the discussion on the question of vicissitudes, I have already determined the amount of any such award and adjusted the amount (or given the basis in calculation for adjusting the amount) of future economic loss by reference to the percentage possibilities that the events concerned might have occurred but for the injury. 145 Likewise, the foregoing, and that which now follows, will state the assumptions on which the award would have been based and the relevant percentage by which the damages would have been adjusted. The current process is, to some extent, artificial. As earlier determined, the requirements of s 118 of the Act have not been established to the satisfaction of the Court, such that NRMA is relieved of its liability under the settlement. Further, even if the requirements of s 118 of the Act had been satisfied, it would be for NRMA to show the financial benefit that was obtained by the misleading and deceptive conduct. The process currently being undertaken is a process in which the Court is determining damages it would award, if the matter were proceeding by way of a personal injury claim under the Act, and the burden was on the plaintiff, subject to the earlier comment relating to assessing minimum amounts: see [137]. 146 In ordinary circumstances, the assessment of damage under the Act would be calculated in accordance with Chapter 5 of the Act, and may not be calculated in any other way (s 123 of the Act). The relevant heads of damage applicable to Mr Checchia are non-economic loss (Part 5.3 of the Act, capped, in accordance with s 134), past out-of-pocket expenses, which amount to $166,700; future out-of-pocket expenses which, according to NRMA, would be no less than $67,685; past economic loss; future economic loss; superannuation related losses; past care (which according to NRMA is no less than $41,600); future care, either on a paid or voluntary basis, and special equipment. 147 In determining future economic loss, it is necessary for the Court to assess the most likely future economic circumstances that Mr Checchia would have enjoyed but for the 2003 injury. It is then necessary to compensate Mr Checchia for the difference between those most likely economic circumstances and the economic prospects that he "enjoys" as a result of the 2003 injury, including, if appropriate, the use of a buffer. It is necessary, as earlier stated, to allow for vicissitudes: see Kallouf v Middis [2008] NSWCA 61 at [7]. 148 Mr Checchia was employed by Ms Mowad at the time of the accident. He was entitled to earn on average over $750 (nett) per week and there is an extremely high probability that, given her estimate of his earning capacity, he would continue to be employed. Ms Mowad (either through QVB Jet Café or other such establishments) had been in business for some time, and continues in business. The prospects of Mr Checchia's continued employment, on a full-time basis, earning amounts at least as great as that to which reference has been made, were extremely good and it was highly unlikely that he would not be employed on that basis, save for the matters that would otherwise be covered by vicissitudes, to which reference has already been made. 149 The genuineness with which Mr Checchia sought to obtain employment and return to work has already been noted. It has been a significant factor in the determination that Mr Checchia sought only that which was due to him as compensation for the injury that he had suffered. But that experience is also relevant to the issue of Mr Checchia's income earning capacity and to the assessment of future economic loss. It is clear, from Mr Checchia's medical history, that he was simply unable to continue to work as he had sought to do. As at 11 July 2006, Dr Bowers, qualified by NRMA, noted that Mr Checchia had been variously fit and unfit for work and that, at that date, he remained unfit for work. It is that report that refers to Mr Checchia's ability to return to suitable sedentary work for three-quarters of the normal hours expected. 150 Dr Bowers, having noted that Mr Checchia had undergone three operations on his back, made it clear that the only work that Mr Checchia could manage would be "suitable sedentary work". Reference has already been made to some of these comments. Such suitable sedentary work did not include any work, of which Dr Bowers was aware, in a busy city café. Dr Bowers made clear that a number of the assessments of work that might be available to Mr Checchia were inappropriate in circumstances of the history of treatment of his back and, as earlier noted, it mattered little whether Mr Checchia could walk, bend, drive, or the like. 151 Likewise Ms Mowad made it clear (see Transcript page 704 and 705) that she, as an experienced café proprietor, was unaware of any position that was generally sedentary and/or otherwise complied with the requirements that would be necessary to enable Mr Checchia to work. It would be impossible, it seems, on Ms Mowad's evidence, for an employer to provide seating arrangements even for a cashier. In her view (Transcript page 705) she would never have anybody employed who was sitting down, except patrons, and she would never put a seat behind the cash register. 152 Likewise, Dr Matheson restricted Mr Checchia's work capacity to sedentary or semi-sedentary work. He also made it clear that he faced the risk of further future operations on his back (Transcript page 639). 153 There is a point at which one must be practical about the capacity of an employee to obtain work in circumstances where the employer must be informed of the difficulties the employee will necessarily face in performing work. Even sedentary work would involve limitations. It would require breaks, because Mr Checchia cannot sit for an extended period of time. It would require restrictions on lifting and other work. It is difficult to imagine an employer taking on an employee with the kind of restrictions that Mr Checchia displays and voluntarily undertaking the risk of an aggravation of the injury, either through lack of ergonometric seating or the work requirements of even a sedentary position. 154 That is not to say that Mr Checchia does not have, hypothetically, an earning capacity. It does mean that, as a matter of practicality, his ability, after the 2003 injury, to obtain work of any substantial earning is, at best, minimal and probably non-existent. 155 As earlier stated, a future economic loss based upon $650 per week, as is suggested by Mr Gross QC on behalf of Mr Checchia, is an appropriately conservative figure, which takes account of the minimal earning capacity that, as a matter of practicality, Mr Checchia possesses. 156 NRMA submit that it may be possible for Mr Checchia to be self-employed, presumably in the catering and/or restaurant business. Firstly, there is no evidence that Mr Checchia is capable of running his own business. Secondly, such an undertaking requires significant capital input and involves a significant risk in terms of capital. Thirdly, and importantly, such a proposal is essentially irrelevant, unless there is a history of self-employment. If Mr Checchia were to establish a business, i.e. catering and/or restaurant, then, in the interests of that business, presumably the same decisions would be made as would be made by any other businessperson. In other words, such a business ought not employ a person with a predisposition to injury and who would be more concerned with the pain that he was suffering than with attending to the business at hand. In those circumstances, and even if employment or work were undertaken at the premises, the net effect would be that he would be earning only that which could be earned by an investment in the business, of the monies otherwise capable of being invested, and running a greater risk than if an employee, not susceptible to injury, were employed instead. 157 Lastly, I should comment that any assessment based upon the proposition that, but for the 2003 injury, Mr Checchia would need to retire from the restaurant industry at the age of 44 is simply unacceptable. There seems no reason why a person would need to retire at 44, unless they were suffering significant injury. Given my assessment of the lack of likelihood of any other injury, including a recurrence of anything arising from the 1993 injury, such an assessment cannot be accepted. Moreover, the likelihood of further injury and/or degeneration, arising from the 1993 injury, have been taken into account in the higher vicissitudes that have been used to calculate the level of damages. 158 I turn then to the question of personal care. Once more, I take an extremely conservative approach. I assume that the care would be voluntary care and I assess that it would be required for 12 hours per week, not 17 hours per week as claimed by Mr Checchia. Otherwise, I accept the reports of Ms Judith Davidson. 159 I referred earlier to the report of Dr Mills. Frankly, I consider Dr Mills to have been poorly briefed. Dr Mills relied, for his assessment, on a history that was supplied by NRMA's legal team. It seems that he did not access any documentation of the treating surgeons for that purpose. The briefing that was done by the legal team was oral, for which there are no notes. (See Transcript page 429.) Further, Dr Mills concedes that he made no real attempt to inform himself as to the clinical progress and presentation of the plaintiff as seen by his treating doctors before writing his report of 23 August 2005 (see Transcript page 425 line 40 and following). 160 There is no doubt, as all the medical practitioners, except perhaps for Dr Mills, concede, Mr Checchia suffers and has suffered significant injury. His incapacity is entirely or almost entirely a result of the 2003 injury. He has been, on any analysis of the evidence, in significant pain. His work life, his social life, his family affairs and his relationship with his family and friends have significantly suffered. While he is not entitled to non-economic loss at the highest level, he is entitled to a significant amount in non-economic loss and I assess that at $150,000. 161 As earlier stated, past out-of-pocket expenses have been incurred and they amount to $166,700. Utilising the future out-of-pocket expenses assessed by NRMA (the bottom of their range), that would be $67,685. I would, on the foregoing, calculate past economic loss (214 weeks up to 17 November 2008, the date upon which schedules were put to the Court) at $750 per week, being an amount of $160,500. The future economic loss I calculate to the age of 65 (utilising multiplier 822) at $650 per week which is $534,300 less vicissitudes of 20% giving an amount of $427,440. The nett economic loss (both past and future) amounts to $587,940, which figure, again as a matter of conservatism, I will use as the base for the calculation of superannuation losses, being the amount of $52,914.60 (at 9%). Superannuation is generally paid on gross wages and this figure significantly underestimates the amount of superannuation that would otherwise be payable (assuming that Mr Checchia earned the amount otherwise recorded "on the books"). 162 Again, I would utilise the NRMA assessment, bottom of the range, for past care, which is an amount of $41,600 and for future care, as previously stated, I assess at 12 hours per week at $20 per hour (with a multiplier of 944.5), which calculates as $226,680. There is a need for special equipment, for which I allow $5,000. The total damage assessed at a minimum basis, as if Mr Checchia were required to prove damage and have it assessed, would therefore be $1,298,519.60. 163 In turn, that figure must be compared with the settlement. For obvious reasons, like must be compared with like. The settlement of $1,225,000, reached on 20 October 2006, included an amount of $40,000 in costs, as a consequence of which the damages aspect of the settlement amounted to $1,185,000, a figure less than the assessment of damage reached above. On that basis, even assuming there had been, in the misleading conduct, a purpose of obtaining a financial benefit, that purpose was not effected. Mr Checchia significantly compromised that which he could have obtained by way of damages, had the matter proceeded to hearing. Even if there had been misleading conduct for the purpose of obtaining a benefit, and if the true position (i.e. the position based on the true facts) would have resulted in an assessment lower than would have been the case if the facts represented were true, the true position is an amount greater than the settlement actually reached and NRMA is not entitled to relief from any part of the settlement. 164 This is not an unexpected or extraordinary result. The material before the Court makes clear that the claim was settled at a conference in circumstances where the claim by Mr Checchia was compromised in a bargaining situation. An examination of the legal advice received by NRMA before settlement (Exhibit 2 Tab 2) and the negotiated settlement discloses that the settlement is for an amount less than the sum total of each of the heads of damage in NRMA's advice, and it would therefore not be unexpected that the settlement figure reached was an amount significantly lower than (on the facts then known) would have been awarded, and, as it turns out, lower than the amount even on the true facts subsequently discovered. Conclusion 165 Mr Checchia had no symptoms of his prior back injury between 1993 and the date of the motor vehicle accident in January 2003. As a consequence, even those doctors qualified by NRMA, which I accept on this question, concede that his impairment for the purposes of compensation under the Act is entirely due to the motor vehicle accident in January 2003 (Dr Matheson at Transcript page 641 line 45). 166 I have accepted that Mr Checchia was employed by QVB Jet Café and was earning on average $750 (nett) per week. Mr Checchia, however, misled NRMA as to the existence of a prior injury to the same area of the back. I have found that the misleading conduct was not done for the purpose of obtaining a benefit to which Mr Checchia was not otherwise entitled. Indeed, on the assessment of damage, I have determined that, had the matter gone to hearing, Mr Checchia, on the true facts, would have received more than that for which the claim was settled. 167 An issue arises as to the payment of interest. Interest on damages is regulated by the provisions of s 137(4) of the Act. However, the Court is not now dealing with an award of damages under the Act. It is dealing with the enforcement of a contract that settled the claim under the Act. In those circumstances interest would seem to be capable of being awarded in the ordinary way and would be calculated in accordance with s 100 of the Civil Procedure Act 2005, from the date the settlement monies were due, namely, 10 November 2006. That, however, is a preliminary view on which I will hear the parties, if they submit otherwise. 168 The requirements of s 118 of the Act have not been satisfied and NRMA have not established that the purpose of the misleading conduct was the obtaining of a financial benefit. Even if it were, no financial benefit has been obtained. 169 In those circumstances, the settlement, being a contract binding on the parties, is required to be observed and the Court makes the following orders:

(i) Judgment for the plaintiff in the amount of $1,225,000;

(ii) Pursuant to s 100 of the Civil Procedure Act 2005, the defendant shall pay interest on the aforesaid amount, calculated on and from 10 November 2006, until the date of this judgment, and thereafter pursuant to s 101 of the Civil Procedure Act 2005;

(iii) The defendant shall pay the costs of and incidental to the proceedings, as agreed or assessed;

(iv) Either party is at liberty to apply for any special or additional order in relation to costs or interest, or to correct any arithmetic miscalculation, within 14 days of the publication of this order.

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