Solicitors:
Vardanega Roberts (Plaintiff)
Masselos & Co Lawyers (First Defendant)
File Number(s): 2021/132812
[2]
Judgment (ex tempore)
Despite Ms Gumbert's able and courteous submissions, I have to come to the conclusion that this application must fail, for the following reasons.
On 25 May 2015, the first defendant Sione Tuitupou, to whom, for the sake of convenience, I shall refer as the claimant, was injured in a motor vehicle accident when a truck in which he was a passenger was involved in a collision with another vehicle which struck the truck from the rear. The present plaintiff, Gordian RunOff Ltd, is the CTP insurer of that other vehicle. The claimant made a claim for damages under Motor Accidents Compensation Act 1999 (NSW) ("MAC Act"), s 94. Liability was not in issue. On 12 February 2021, the third defendant, Alexander Bolton, an assessor of the then Claims Assessment & Resolution Service of the State Insurance Regulatory Authority, the functions of which are now vested in the Personal Injury Commission of New South Wales of which the second defendant is the President, awarded damages to the claimant of $1,869,846.46 plus costs. A replacement certificate was issued on 25 February 2021, to which reasons were attached as required. The award included components of $346,512.41 for past economic loss (including superannuation and Fox v Wood [1] damages) and $841,480.29 for future economic loss (including superannuation). By summons filed on 12 May 2021 and amended on 24 May 2021, the insurer seeks relief by way of judicial review of the assessor's award, alleging error of law on the face of the record and jurisdictional error in relation to the past economic loss and future economic loss components.
On those issues, the evidence before the assessor comprised the claimant's income tax returns for the six financial years preceding the accident which, as summarised helpfully in the insurer's submissions to this Court, revealed, nett weekly earnings of $458 in 2010, $857 in 2011, $973 in 2012, $850 in 2013, $998 in 2014, and $1068 in 2015. There were also two letters provided to the insurer by the claimant's employer.
The first, of 7 December 2016, stated that his earnings at the time of the accident were $846.22 gross plus overtime when applicable, and $717.22 nett per week. A document, apparently a print out from the employer's wage records entitled "Employee Previous Earnings", was attached. How the figures of $846.22 or $717.22 were in fact calculated when one has regard to the attached document was not explained to the assessor nor in this Court. The figures have no apparent correlation with the earnings disclosed in the claimant's income tax return for the year preceding the accident.
The second letter from the employer was dated 16 April 2018. It stated that the claimant's nett weekly earnings excluding overtime were $705.84 per week and that nett weekly overtime varied from zero to two hours per week. Again, to what period that related, and in particular whether it related to the period immediately prior to the claimant leaving employment, when he had been on light duties since the accident, is not clear. Again, how that sum related to the claimant's earnings at the date of the accident is not explained, and although it was cited by the insurer to the assessor as evidence of his earnings at the date of the accident, it does not appear to be so. The same letter also contained "[d]etails of wages/salary change since commencement of employment", and listed changes in the hourly rate of remuneration, essentially due to enterprise agreement increases, consistently over the period from 2010 to 2017.
Based on that evidence, the insurer submitted to the assessor as follows (citations omitted):
"56. The Insurer relies on the Claimant's tax records for the period 2010 to 2017 which indicate that prior to the subject accident, the Claimant had earnings of $705.84 net per week and could work up to two hours over time per week. At $750.84 (sic) per week, the Claimant had net earnings of $36,703.00 per annum.
…
58. The Insurer relies on the Claimant's employment records of Bradnam's Windows & Doors which indicate that there was minimal overtime available according to the records available to the Claimant that that if he did two hours of overtime a week, this would equate an additional to $2,000.00, say, $38,000.00 net per year. …
59. The Insurer expressly rejects the Claimant's claim that he was earning $1,175 per week.
60. At $705.84 a week the claimant had net earnings of $36,703.00 per annum. It seems there was minimal overtime available according to a letter we have seen from his employer, Bradnam's Window & Doors, dated 16 April 2018. If the claimant did two hours of overtime a week this would equate to an additional $2,000.00, say, $38,000.00 net per year."
These issues were dealt with in the assessor's reasons, relevantly as follows. Under the heading "Past Economic Loss", the assessor observed that the claimant's 2015 income tax return showed a taxable income of $72,293. Although the assessor said that he had only a copy of the income tax return, and not a copy of the notice of assessment, the evidence before this Court indicates that the assessor in fact did have a copy of the notice of assessment; however, in terms of taxable income, it was identical to the income tax return. The assessor proceeded to observe that $72,293 gross per year was approximately $1,390 gross per week, equivalent to approximately $1,100 nett week, and continued (emphasis added):
"64. The Insurer says that the Claimant's income should be $705.84 net per week.
65. With regard to the Insurer's calculation of past economic loss, the Insurer relies on an averaging of the Claimant's income and assesses an amount of $705.84 net per week. This averaging is not in my assessment sensible given that the Claimant had been employed for several years with his employer at the time of the accident and was in receipt of a steady and consistent income. The allowance claimed by the Claimant is not on my assessment unreasonable given that at the time of the accident, he was in receipt of approximately $1,100.00 net per week."
The assessor rejected the proposition that the claimant would have been in receipt of income of $2,000 nett per week, reasoning that his income would not have almost doubled over the five years since the accident, and continued (emphasis added):
"68. The Claimant did say that his income fluctuated over a number of years because his employer was at times facing extreme financial difficulties. Nevertheless, the employer seems to have remained solvent and has continued trading.
69. Based on the Claimant's income, taking into account his 2015 taxable income and allowing for CPI increases but taking a general average of income over five years, I allow the sum of $1,200.00 net week from the date of the accident to 16 December 2020."
The assessor then explained that that $1,200 nett per week related to the period from the accident on 25 May 2015 to the date of assessment as at 16 December 2020. Then, under the heading "Future Economic Loss", after dealing with questions of incapacity and ability to work, the assessor rejected the claimant's submission that his future loss of income should be quantified on the basis of $2,013 nett per week, and continued (emphasis added):
"95. I do not accept that a claim into the future of $2,013.00 net per week is reasonable given that the Claimant was earning approximately $1,100.00 net per week five years earlier. The basic progression would not have been to that extent and there is nothing to indicate that it would be the case that he or a comparable employee is earning over $2,000.00 per week."
The assessor then assessed future economic loss on the basis of $1,200 nett per week, and deducted vicissitudes of 15%.
Section 94(5) of the MAC Act, as it was at the relevant time, [2] provided that a claims assessor is to attach a brief statement to the certificate, setting out the assessor's reasons for the assessment. Section 104(4) provided that a claims assessor must take into account any written submission prepared by an Australian legal practitioner acting for a party to the assessment and submitted by or on behalf of the party. In particular, in respect of future economic loss, s 126(1) provides that a court cannot make an award of damages for future economic loss unless the claimant first satisfies the court that the assumptions about future earning capacity or other events on which the award is to be based accord with the claimant's most likely future circumstances but for the injury. Section 126(3) provides that if the court makes an award for future economic loss, it is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted. [3]
Before turning to the specifics of the argument, it is worth observing that s 94(5), which I have summarised above, requires a "brief" statement of reasons. Even in the context of judicial decisions, and as has recently been observed by this Court in Prouten v Chapman (citations omitted): [4]
"… the "minimum acceptable standard" for reasons is informed by the issues at trial, the nature of the evidence, the nature of the submissions, the scope of the appeal, and other relevant circumstances, the general scope of the duty to give reasons is to explain the decision, not to write an exhaustive treatise on every aspect of the trial. It is not necessary for written reasons to expose all of the detailed reasoning involved in arriving at the final judgment. A judge is not required to make express findings in respect of every matter of fact or law that has been raised in the proceedings. It is "plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected".
In this case, for the purposes of s 126, the relevant assumption was that the plaintiff would most probably earn in the order of $1,200 per week in the future. That same assumption provided the basis for the award of past economic loss. Reduced to its essence, the insurer's complaint was that the assessor did not give reasons that adequately explained why that assumption was adopted, and failed to engage with the insurer's submission that based on historical earnings and likely disruption to his employment in the future, it would have been less.
I have set out above the relevant parts of the assessor's reasoning, and I have summarised above the evidence which it addressed. The content of the duty to give reasons is informed, among other things, by the evidence in the case and by the issues between the parties. As it seems to me, the assessor, at [64]-[65] of his reasons, [5] directly engaged with the insurer's submission that the claimant's earning capacity should have been measured at $705 per week, and rejected it. He rejected it on the basis that averaging the claimant's income over the six years preceding his accident was "not … sensible". To my mind, that was a moderate and discreet way of rejecting a submission about which much stronger epithets might have been used. In the context of evidence of nett weekly earnings which, with the exception of the solitary year of 2013, had consistently increased between 2010 and 2015, of evidence that the claimant's hourly rate had consistently increased over the same period, and given the entirely orthodox approach of using a claimant's current weekly earnings pre-accident as the measure of a claimant's earning capacity, it would have been astounding if the assessor had decided that it was appropriate to average the claimant's earnings over the preceding six years rather than looking at what he was earning immediately prior to the accident. The assessor's conclusion at [65] of his reasons [6] was based on the fact that the claimant was in receipt of $1,100 nett per week at the time of the accident, and that it was "not … sensible" to reduce that on account of what he had earnt in previous years.
The insurer submitted that this failed to have regard to the circumstance that, as the assessor noted at [68], [7] the claimant accepted that his income fluctuated over a number of years. Exactly what the claimant said in that respect is not before this Court, but in the context of the evidence that is available to the Court, there was only one year in which the fluctuation was downwards; otherwise, the fluctuation was consistently in an upwards direction. On any sensible analysis of the claimant's pre-accident earnings, the trend was upwards, and a projection of his income in future years would have continued in an upwards direction. It was said that the downwards fluctuation was because his employer was "at times facing extreme financial difficulties". However, so far as I can tell, there was no evidence as to whether such difficulties were prevalent as at the date of the accident and subsequently. In any event, the assessor engaged with that submission and plainly considered that it was of limited, if any, significance to the claimant's earning capacity, by observing "nevertheless, the employer seems to have remained solvent and has continued trading".
A further indication that the assessor implicitly had regard to the upward trend in the claimant's income is to be found in his reasons at [69], [8] where the assessment was said to be "based on the Claimant's income" and "taking into account his 2015 taxable income" and then "allowing for CPI increases but taking a general average over five years". As a result, he allowed a sum of only $1,200 nett per week for the period between 2015 and 2020. Compared to the actual trends in his income over previous years, and given that implicit in what the assessor allowed is that $1,200 nett per week was a midpoint - that is to say, in about 2018 - that figure was a conservative projection of how the claimant's income might have tracked.
The same approach is apparent in dealing with future economic loss at [95] of his reasons, [9] where the assessor implicitly used that 2018 midpoint as the basis for the future economic loss calculation for the period commencing two years later in December 2020. In referring to "the basic progression", it seems to me that the assessor was referring to the way in which the claimant's salary had progressed in the past as an indication of how it might have progressed in the future.
Insofar as the assessor was required to explain why he preferred the approach he adopted to that urged by the insurer, the assessor did not choose between the insurer's approach, which frankly could not rationally have been accepted, and the claimant's approach, but, based on perfectly orthodox considerations, such as earnings immediately before the accident and the pattern of earnings in previous years pointing to an upwards trend, adopted a figure between those contended for by each party. In my judgment, given the obligation to provide a "brief statement of reasons", the reasons for the assessor adopting $1,100 nett per week are more than sufficiently clear.
The argument was alternatively put on the basis of jurisdictional error, specifically that the assessor failed to engage with and address the insurer's submissions. That argument overlaps the complaint of error of law by failure to give adequate reasons, and fails for the same reasons.
It follows that the summons should be dismissed with costs.
The order of the Court is that the summons be dismissed with costs.
[3]
Endnotes
(1981) 148 CLR 438; [1981] HCA 41.
Prior to the introduction of amendments to reflect the establishment of the Personal Injury Commission of New South Wales.
This provision applied equally to a claims assessor: see MAC Act, s 122(3).
[2021] NSWCA 207 at [32] (Brereton JA; Meagher and Leeming JJA relevantly agreeing).
See above at [7].
See above at [7].
See above at [8].
See above at [8].
See above at [9].
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Decision last updated: 23 September 2021