Assessment of loss
23 For the purposes of assessing loss, Mr Payne relies upon the following affidavits, namely:
(1) an affidavit sworn by Mr Payne's solicitor, Mr Jim Palmos on 9 August 2021;
(2) an affidavit affirmed by Mr Payne on 12 August 2022;
(3) an affidavit sworn by Mr Palmos on 26 May 2023; and
(4) an affidavit sworn by Mr Palmos on 5 June 2023.
24 To that body of affidavit material is attached a suite of documentary evidence. Included therein are documents constituting Mr Payne's doomed claim against the Essential Super Policy (which, one presumes, was made before he became aware of the respondent's non-compliance with cl 20 of the Award) and the corroborating material that was provided in connection with it. As will shortly be seen, the latter comprises, in part, of written opinions prepared by various medical professionals, which purported to speak to their collective view that Mr Payne was totally and permanently disabled (at least for relevant insurance purposes).
25 The evidence makes clear that Mr Payne's claim against the Essential Super Policy (made in August 2018) was rejected (a few months later) on the basis that he had sought treatment for his condition before he became a member of the Essential Super fund. It might be noted that that was the sole basis for the rejection. By correspondence dated 12 February 2019, Essential Super wrote to Mr Payne (via his then solicitors) and noted that his "…Essential Super account was newly created on 26 June 2014." It acknowledged receipt from him of "…information relating to the nature of [his] disability", and then went on to record that Mr Payne had:
…sought medical advice for his Major Depression on April [sic] 2012 and Post Traumatic Stress disorder on 21 May 2014. Therefore, based on this information the claimant sought medical advice for both conditions…prior to the commencement of his insurance.
26 That Essential Super did not, in its correspondence of 12 February 2019, challenge Mr Payne's contention that he was totally and permanently disabled is plain enough; but so to acknowledge is not to suggest that that contention was accepted. The fact that Essential Super relied upon an issue of timing in rejecting the claim that Mr Payne advanced does not mean that it accepted that he was, in truth, totally and permanently disabled.
27 With that acknowledged, something might be said about the state of the evidence led in this matter about Mr Payne's condition and its connection to the events of 12 May 2014: namely, there wasn't any, at least none of an expert nature that was admissible for that purpose. Mr Payne did not attempt to establish by evidence - which is to say, by admissible, expert evidence - that he was, in fact and by reason of circumstances that transpired on or after 28 April 2014, totally and permanently disabled, or otherwise afflicted by a condition or conditions that would have sufficed to that end for the purposes of his doomed insurance claim. The evidence that he has led about the opinions of his medical advisers is not (and could not properly be) led for the purpose of establishing that their opinions are sound and should be accepted. Rather, it is led in aid of establishing that his claim against the Essential Super Policy would have been accepted but for the issue about the commencement of his Essential Super fund membership. Insofar as the latter is concerned, the medical opinion evidence is admissible for that non-hearsay purpose.
28 I should pause to note that there was perhaps some evidential basis for accepting that Mr Payne is, in fact, totally and permanently disabled. By a notice to admit that was served upon the respondent on 30 June 2022, Mr Payne invited the respondent to contest the following factual propositions, namely that:
…
8. The Applicant's total and permanent disablement was not caused directly or indirectly by any illness, injury or condition that the Applicant first became aware of during the period 28 April 2011 to 28 April 2014.
9. The Applicant's total and permanent disablement was not caused directly or indirectly by any illness, injury or condition that a reasonable person in the Applicant's circumstances would have first become aware of during the period 28 April 2011 to 28 April 2014.
10. The Applicant's total and permanent disablement was not caused directly or indirectly by any illness, injury or condition for which the Applicant sought, or intended to seek medical advice (including a referral to a specialist) during the period 28 April 2011 to 28 April 2014.
11. The Applicant's total and permanent disablement was not caused directly or indirectly by any illness, injury or condition for which the Applicant sought, or intended to seek medical treatment (including prescribed and non-prescribed medications) during the period 28 April 2011 to 28 April 2014.
12. The Applicant's total and permanent disablement was not caused directly or indirectly by any illness, injury or condition for which the Applicant sought, or intended to seek medical care or services (including tests and other diagnostic measures) during the period 28 April 2011 to 28 April 2014.
13. The Applicant's total and permanent disablement was not caused directly or indirectly by any illness, injury or condition for which a reasonable person in the Applicant's circumstances would have sought medical advice, treatment, care or services during the period 28 April 2011 to 28 April 2014.
29 No notice of dispute was filed in response. The respondent must, then, be taken to accept that Mr Payne is totally and permanently disabled; and that his condition was not occasioned by any of the circumstances or things listed above. That might well suffice to establish that Mr Payne labours under a condition that should have led to his claim against the Essential Super Policy succeeding had he become a member of the Essential Super Fund on or prior to 28 April 2014. Whether it would have, though, is the key question presently.
30 The nature of the evidence that Mr Payne advances reflects the nature of his claim. The loss for which he seeks to be compensated is not the $100,000.00 insurance pay-out that he claims that he would have received had the respondent made superannuation contributions on his behalf in the manner that the Award required. Rather, Mr Payne's loss is one of opportunity: namely, the opportunity successfully to claim against the Essential Super Policy.
31 In assessing the value of that opportunity, the court is concerned to assess the likelihood that, absent the issue of timing upon which Mr Payne's doomed claim was rejected, Essential Super (or the administrator of the Essential Super Policy) would have instead accepted it and paid out the $100,000.00 benefit that Mr Payne had hoped to secure. That task does not require that the court should accept that Mr Payne is, in fact and as a result of events that transpired after 28 April 2014, totally and permanently disabled (or otherwise afflicted by relevantly analogous conditions). Rather, it requires an assessment as to how likely it is that, absent the issue of timing, Essential Super would have accepted that he was.
32 The court's task, then, is to assess the value of the opportunity that Mr Payne lost by reason of the respondent's contravention of s 45 of the FW Act. That value is to be assessed "…by reference to the degree of probabilities and possibilities of factual hypotheses that may require a process of estimation extending even to a degree of guesswork and may lie at any point within a broad range": Corum Systems Pty Ltd v Fred It Group Pty Ltd [2023] VSC 208, [481] (Osborne J, quoting Mal Owen Consulting Pty Ltd v Ashcroft (2018) 97 NSWLR 1163, 1184 [101] (Barrett AJA)).
33 In Malec v J C Hutton Pty Ltd (1990) 169 CLR 638, 643, Deane, Gaudron and McHugh JJ framed the task as follows:
If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring... But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability.
34 In crude terms, then, the value of a lost opportunity is equal to the amount that might have been realised had the opportunity not been lost, multiplied by the probability that it would have been realised: La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd (2011) 190 FCR 299, 321-322 [97]-[105] (Finkelstein J, with whom Jacobson and Besanko JJ relevantly agreed); Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120, [28] (Allsop CJ, Mansfield and Siopis JJ).
35 For present purposes, the value of the payout from which Mr Payne stood to benefit had his claim against the Essential Super Policy been accepted is known and uncontroversial: $100,000.00. At issue now is what is the likelihood that Essential Super might have accepted it had Mr Payne become a member of the fund on or prior to 28 April 2014.
36 On the evidence before the court, that likelihood seems very high. By way of summary, counsel for Mr Payne put it thus, namely that:
…the materials that the insurer had before it were just overwhelmingly in support of a finding of TPD [total and permanent disablement], and in fact, I don't think your Honour will see in the materials any doctor saying anything else. So it just would not have been open, in our submission [for the claim to have been rejected] on the basis that Mr Payne didn't satisfy the requisite threshold for disability.
37 Mr Payne's amended statement of claim identifies the criteria that needed to be satisfied in order that he might be considered totally and permanently disabled for the purposes of the Essential Super Policy. There were five, namely (errors original, references omitted):
(i) on the date of disablement he was at least 15 years old but not yet 65 years old or more;
(ii) when he suffered the disability, he was:
• a permanent employee who on average had worked more than 15 hours per week over the previous 6 months; or
• a casual employee who on average had worked more than 15 hours per week over the previous 13 months; or
• a self-employed person who on average had worked more than 15 hours per week over the previous 13 months;
(iii) as a result of illness or injury, he had been absent from all work for three consecutive months from the date of disablement;
(iv) the Insurer considered, on the basis of medical and other evidence satisfactory to it, that as a result of the illness or injury the insured member was unlikely ever again to be able to engage in any occupation for which he was suited by education, training or experience, whether or not for reward;
(v) he was likely to be so disabled for life…;
38 Plainly, the existence of those criteria is not challenged and they should be regarded as having been relevantly applicable. Satisfaction of the first three of them is likewise established by the amended statement of claim. Satisfaction of the remainder is the subject of the following pleas within the amended statement of claim, namely (particulars excluded):
22. The Insurer would or ought to have considered, on the basis of medical and other evidence satisfactory to it, that as a result of the illness or injury, the Applicant was unlikely ever again to be able to engage in any occupation for which he was suited by education, training or experience, whether or not for reward.
…
23. In the premises, a TPD benefit would or might have been payable by the Insurer to the Trustee in respect of the Applicant pursuant to the Policy, and that benefit would have been payable by the Trustee to the Applicant pursuant to the Deed and Rules.
24. In the premises, the Applicant suffered loss and damage.
39 Those pleas quite obviously contemplate a range of possibilities, including that Essential Super might not have accepted Mr Payne's claim even had he been a member of the fund from no later than 28 April 2014. That being so, it is necessary to make an assessment of what Essential Super would likely have done on the strength of the material with which it was furnished.
40 It is in that regard that the correspondence that was sent on Mr Payne's behalf in support of his claim against the Essential Super Policy - including the statements of medical opinion that were produced for him by various of his treating specialists - assumes some significance. It is to that material that attention should now turn.
41 Mr Payne's insurance claim was made under cover of correspondence that his then solicitors, Arnold Thomas & Becker lawyers, sent to Essential Super on 2 August 2018. By that correspondence (the "2 August 2018 Letter"), Arnold Thomas & Becker lawyers enclosed for the attention of Essential Super's "Claims Manager" a suite of documents that comprised Mr Payne's claim against the Essential Super Policy. It is prudent to examine those documents and the picture that they sought to paint as to Mr Payne's condition and likelihood of recovery.
42 Perhaps the primary attachment was a form entitled, "Claim for Total and Permanent Disablement Benefit". That form (hereafter, the "Completed Claim Form") comprised of a series of questions and requests for other information, which had been completed by the insertion of hand-written detail. In answer to the question "For what condition/disability are you claiming?", for example, a hand-written answer had been inserted, namely "psychological injuries".
43 Also attached to the 2 August 2018 Letter was a form headed "Medical Attendant's Statement". As with the Completed Claim Form, that form (the "Completed Medical Attendant's Form") comprised of a series of questions and requests for other information, which had been answered by the insertion of hand-written detail. It was purportedly signed by Dr Ricardo Peralta, a psychiatrist, and dated 23 July 2018.
44 In the Completed Medical Attendant's Form, it was noted that Dr Peralta had "been professionally acquainted" with Mr Payne since October 2016, and had diagnosed him with "post-traumatic stress disorder" and "major depression". Below the question, "If you believe the patient is permanently disabled as a result of the condition, on which date would this have first applied", the Completed Medical Attendant's Form recorded "2014".
45 The Completed Medical Attendant's Form also contained details about Mr Payne's "prior medical history". Specifically, it noted that Mr Payne had had "one previous episode of antidepressants prescribed due to unresolved grief from father's death." In answer to the questions, "Do you believe maximum rehabilitation has been achieved in each impairment?" and "Can the patient perform light/alternative duties?", the form recorded, respectively, "yes" and "no".
46 Later in the Completed Medical Attendant's Form, in answer to the question, "Do you believe this patient is ever likely to resume work in his/her own or any other profession?", it was noted that he (Mr Payne) would not, as doing so would "trigger another episode"; and, further, that Mr Payne "…is still symptomatic & has cognitive deficits [and that] retraining would not be achievable". In answer to the enquiry, "If you consider that the patient will never work ever again in any capacity, please provide a date that this applies from and provide your reasons in detail", the form recorded as follows:
Applies since 2014. Patient has suffered severe trauma & can't return to work or he will relapse. Has cognitive difficulties and can't retrain.
47 On the same date (23 July 2018), Dr Peralta appears to have signed a "Certificate of Permanent Incapacity" in respect of Mr Payne. That certificate - which was also attached to the 2 August 2018 Letter - noted that Mr Payne was (as, by then, he was) a member of "Essential Super", and contained the following acknowledgment:
I understand that the member is claiming payment of a superannuation benefit from the above Fund on the grounds of permanent incapacity.
I certify that:
• I am a legally qualified practitioner in a State or Territory of Australia.
• The member is suffering the following ill-health (physical or mental)…:
• Post-traumatic Stress Disorder.
Major Depression.
• In my opinion, because of his ill-health the member is unlikely to ever be gainfully employed in a capacity for which he or she is reasonably qualified because of education, training or experience.
48 Also attached to the 2 August 2018 Letter was correspondence purportedly sent by another psychiatrist, Dr Robert Kruk, to Dr Ayo Omidiora (who appears to have been Mr Payne's general practitioner). That letter, dated 24 May 2014, read as follows:
Thank you for referring this 44 year old security guard whom I previously assessed in August 2010 for Dr M. Elsiwy - please see the attached letter.
Terrence has been relatively well on Pristiq 200mg and Avanza 45mg until 12 May this year when he was assaulted at work. He was on duty at Caulfield Hotel when he noticed two patrons who were intoxicated and behaving in a disorderly manner. One of the men started a fight in the car park and later his accomplice, who was identified as a footballer, Toby Green, joined in and they together punched and kicked Terrence until he fell to the ground and later the assault continued. The police arrived and apprehended the culprits away from the venue.
After the assault, Terrence noticed lower back pain and was told by his GP that he also had a fracture of the left ring finger. He had head CT and pelvic and spinal X-ray done by the Alfred Emergency Department.
The incident hit the news and Terrence found himself in a very uncomfortable situation as the footballer denied taking part in the assault.
He has frequent flashbacks of it and feels very vulnerable in public. He has poor sleep, feels distressed and is unable to return to work.
He has symptoms consistent with acute trauma and I referred him to our psychologist, Elin Schwab for counselling. If there is no improvement within four weeks, then adding Seroquel XR 50-150mg for two to four months might be helpful.
I understand that the employer offered to pay for the psychologist and they would probably have to cover the cost of Seroquel as well.
49 Approximately 18 months later, Dr Kruk appears to have prepared further correspondence, this time addressed to Mr Payne's solicitors, Arnold Thomas & Becker lawyers. That correspondence (which, as might by now be presumed, was also attached to the 2 August 2018 Letter) was dated 28 February 2016 and read as follows (errors original):
Re: Terrence Payne
D. O.B. 09.07.1968
I am writing in reply to your letter dated 18 February 2016 in which you request a medical report with regard to my Payne's psychiatric condition.
Mr Payne was first referred to me in August 2010 by his GP Dr Mohamed Elsiwy. At the time he presented with a six year history of chronic depression complicated by suicidal thoughts. He was started on an antidepressant medication, Pristiq. At a later stage another antidepressant Avanza was added and he had a period of infrequent follow up until February 2012.
He returned in May 2014 following an assault on him on 12 May 2014 while he was on duty as a security guard in Caulfield. I saw him on 24 May 2014, 15 September 2014 and 24 October 2014. He failed to attend an appointment on 21 November 2014 but re- presented again on 30 April 2015, 15 June 2015 and 12 June 2015. I have not seen him for eight months and for this reason I cannot comment on his current mental state, prognosis or capacity for work.
He is a 47 year old man who lives with his wife and two sons. I understand that he's been off work since early April 2015. His last job in 2014 was as a security guard who patrolled a car park and the gaming venue of a hotel.
After the initial assessment in 2010 he remained relatively well until May 2014 when he was assaulted at work. He was on duty at Caulfield Hotel when he noticed two patrons who were intoxicated and behaving in a disorderly manner. One of the men started a fight in the car park and later his accomplice, who was identified as a footballer, Toby Greene, joined in and they together punched and kicked Mr Payne until he fell to the ground and later the assault continued. The police arrived and apprehended the culprits away from the venue.
After the assault, Mr Payne noticed lower back pain and was told by his GP that he also had a fracture of the left ring finger. He had head CT and pelvic and spinal X-ray done by the Alfred Emergency Department.
The incident hit the news and Mr Payne found himself in a very uncomfortable situation as the footballer denied taking part in the assault.
He had frequent flashbacks of it and felt very vulnerable in public. He had poor sleep, felt distressed and was unable to return to work.
He has symptoms were consistent with acute trauma and I referred him to our psychologist, Elin Schwab, for counselling.
When I reviewed him on 22 June 2015 he complained of becoming more withdrawn and depressed, had broken sleep, avoided going out and had flashbacks of the incident at work on 12 May 2014. He had no suicidal thoughts. I replaced Pristiq with Cymbalta 60mg, in addition to Avanza 45mg.
Mr Payne has no history of self-harm or psychiatric hospital admissions.
His medical history includes elevated cholesterol and hypertension,
His father died from a stroke. His son was diagnosed with schizophrenia.
In the past Mr Payne used cannabis and speed. His wife is a psychiatric nurse.
In summary
• Mr Payne is a 47 year old security guard who between 2010 and 2015 received treatment for chronic depression.
• In May 2014 he presented with post- traumatic and depressive symptoms following an assault on him on 12 May 2014 by a patron at Zagames Hotel in Caulfield.
• At the time he received the diagnosis of depression and post-traumatic stress disorder and was referred to Ms Elin Schwab for trauma specific therapy.
• His PTSD is solely attributed to the assault on 12 May 2014.
• His prognosis is uncertain but he is unlikely to return to work as a security guard.
Kind regards,
Dr. Robert Kruk
50 Also attached to the 2 August 2018 Letter was a report dated 9 July 2015 of a registered psychologist, Mr Michael Warner, concerning Mr Payne. That report noted that Mr Payne "…is suffering from symptoms that are consistent with Depression and Post Traumatic Stress Disorder (PTSD)" (emphasis original). It contained a detailed account of the assault that was perpetrated upon Mr Payne on 12 May 2014, the particulars of which needn't here be recorded. It concluded that "Mr Payne is experiencing clinically significant impairment in the social occupational domains of his life" and that his "…symptoms have been caused by the impact of trauma he has suffered from the assault".
51 Mr Warner expressed equivalent conclusions in a further report dated 24 February 2016, which was also attached to the 2 August 2018 Letter. There, it was also noted that Mr Warner was of the opinion that "…Mr Payne currently does not have the capacity to be employed because of his psychological condition" and that "…if he [Mr Payne] did resume security work…his condition is highly likely to regress because of the stress and potentially dangerous situations that occur in security work on occasions".
52 Also attached to the 2 August 2018 Letter was a report dated 9 March 2016 that was signed by Dr Timothy Entwisle, a psychiatrist who appears to have assessed Mr Payne in connection with a workers' compensation claim (for present purposes, nothing turns upon whether that is so). In that report, it was noted that Mr Payne:
(1) had "…a recurrent major depressive illness and features of post traumatic stress disorder";
(2) did "…not have a capacity for pre-injury, alternative duties…"; and
(3) appeared "…not to have a capacity for other employment based on his presentation and description of symptoms".
53 In addition to those conclusions, Dr Entwisle had occasion to record Mr Payne's "past psychiatric history". The following observations bear noting:
Mr Payne described a pre-existing psychiatric history. Following his father's death over ten years ago he was diagnosed with depression and he has been treated with various medications since then with Dr Kruk. His dad died in 2002. He believes that he felt guilty over his father's death. He was managed with Seroquel 50mgs, Avanza 45mgs and Pristiq 100mgs.
54 There was next attached to the 2 August 2018 Letter a "Psychiatric Assessment Report" signed by a different consultant psychiatrist, Dr Matthew Tagkalidis. That report, dated 19 March 2018, made reference to the events of 12 May and 30 August 2014, which it described respectively as the "first traumatic incident" and the "second traumatic incident". It concluded that:
(1) Mr Payne was "…currently suffering from Post Traumatic Stress Disorder and a partially abated Major Depressive Disorder";
(2) "[t]he first traumatic incident contributes approximately 70% of his current emotional distress and the remaining 30% of his current emotional distress relates to the second traumatic incident";
(3) Mr Payne was "not fit for any employment on the basis of his psychological state, with particular regard for the depressive and anxiety state with reduced energy levels, poor concentration and frequent forgetfulness, poor stress tolerance, irritability, significantly impaired judgement, lack of motivation and drive, impaired problem solving under external stressors, and the high likelihood that he would decompensate into a more anxious and depressed state with more frequent panic episodes, flashbacks and nightmares under normal workplace stresses"; and
(4) Mr Payne's symptoms "…would result in major functional limitations such that [he] could not perform any duties on a reliable and consistent basis".
55 As Dr Entwisle had in 2016, Dr Tagkalidis also had occasion to record in his report some details about Mr Payne's "Past Psychiatric History". To that end, the following observations were recorded:
The claimant stated that he first became depressed in or around 2003 after his father died of a stroke in late 2022, the family having relocated to Australia in May 2002. He said that he was treated with the antidepressant Citalopram via his General Practitioner and stayed on this for around 7 years.
He said that in 2009 or 2010 he started deteriorating into a depressive state again with passive suicidal thinking in relation to feeling dissatisfied in general in his long term job and that he was referred to a psychiatrist in this context in 2010 and was treated with the combination of the antidepressants Desvenlafaxine and Mirtazapine. He said that this was of genuine benefit and that in the 2-3 years prior to starting work at the relevant workplace he was in a stable and very settled mood state, was able to genuinely enjoy his life and felt good.
56 The evidential summary given by counsel for Mr Payne at the hearing (above, [36]) was fair. The material with which Essential Super was furnished for the purposes of assessing Mr Payne's claim against the Essential Super Policy was close to overwhelming. It painted a very clear picture that Mr Payne, as a result of what occurred on (and, perhaps to a degree, after) 12 May 2014, had suffered a psychiatric injury that was (or psychiatric injuries that were) apt to qualify him as totally and permanently disabled.
57 In my estimation, it is very likely that Essential Super would have accepted as much. But so to acknowledge is not to accept that it was a foregone conclusion. There was at least some material - most notably relating to Mr Payne's "past psychiatric history" - that could conceivably have led Essential Super to a different conclusion, or perhaps to avenues of enquiry that might have put Mr Payne's claim in a slightly less flattering light. In particular, the evidence affords some scope for concluding that Essential Super might have taken the view that Mr Payne's condition pre-dated, or partly-pre-dated 28 April 2014. Indeed, the correspondence by which Mr Payne's claim was rejected (above, [25]) suggests at least some possibility of that (although, to be clear, I regard it as unlikely).
58 Mr Payne rightly conceded that the prospect that Essential Super would have accepted his claim but for the issue of the timing of his membership could not be set as high as 100 per cent. By his counsel, he accepted that it would be necessary for the court to make an assessment of that likelihood and that, in doing so, "…there is necessarily an element of artificiality". Perhaps a better turn of phrase is "educated guesswork".
59 Ultimately, Mr Payne submitted that the court ought to assess that there was an 80 per cent likelihood that his claim against the Essential Super Policy would have succeeded but for the timing of his membership. Assessing that likelihood at that level would, it was said, take account of the significance (howsoever limited) of Mr Payne's psychiatric history; and would acknowledge that there must always be some prospect that Essential Super might not have formed the view that Mr Payne urged upon it.
60 I accept that submission. It is, of course, impossible to say with certainty what would have occurred in the hypothetical scenario with which the court is engaged. Nonetheless, in my estimation, the likelihood that Essential Super would have accepted Mr Payne's claim but for the issue of timing should be assessed as 80 per cent. An assessment at that level suffices to recognise that the evidence with which Essential Super was furnished was compelling; but also that it wasn't wholly free from doubt.