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[2012] NSWSC 72
Supreme Court of NSW
2011-10-04
Hall J
Original judgment source is linked above.
Judgment 1HALL J: The plaintiff insurer invokes the Court's jurisdiction pursuant to s69 of the Supreme Court Act 1970 in respect of a certificate issued by a claims assessor, Ms White, (the second defendant) made on 1 April 2011 pursuant to s94 of the Motor Accidents Compensation Act 1999 ("the Act"). 2The first defendant, Bradley Durkin, (herein after referred to by name or as the "the claimant") was injured in a motor vehicle accident on 2 April 2007. He made a claim under the Act in respect of injuries and disabilities arising out of the accident. Liability was admitted. The claim, accordingly, proceeded before the assessor as an assessment of damages only. 3The Motor Accidents Authority of NSW ("the MAA"), third defendant to the proceedings in this Court, undertook the assessment under the provisions of the Act. This involved, firstly, a medical assessment of Mr Durkin's injuries and of his permanent impairment by independent statutory medical officers, pursuant to Part 3.4 of the Act. Secondly, an assessment of the quantum of the damages by a "medical claims assessor" appointed pursuant to s99 of the Act. 4A claims assessor is empowered to assess claims under Part 4.4 - Claims Assessment and Resolution (ss88-121) and also in accordance with Chapter 5 of the Act: Award of Damages (ss122-156). 5The first and third defendants did not appear for the purposes of contesting the plaintiff's claim in these proceedings. Accordingly, there were only two active parties to the litigation, namely, the plaintiff insurer and Mr Durkin.
Facts 6Although the present proceedings do not, of course, involve a merits review it is necessary to refer to the facts and to some of the evidentiary materials before the assessor, in order to provide both context and to assist in identifying the matters in dispute and the nature of the issues pursued at the assessment hearing. 7The assessment hearing took place over two days on 17 December 2010 and 7 February 2011. Mr Durkin gave evidence in chief and in cross-examination. Two other witnesses also gave evidence. The parties relied on written submissions. On 1 April 2011 the claims assessor handed down an assessment in the amount of $2,917,108.50. 8The primary facts include the following matters. Mr Durkin was 49 years of age at the date of the assessment (date of birth 15 July 1960). 9From 1978 he had continuous employment as a Saturation Diver over a period of approximately 30 years. He pursued the occupation of a Saturation Diver, also known as a Bell Diver, in relation to oil field construction in overseas locations. For the purposes of the assessment he provided three statements:- (i)Statement dated 7 July 2010 (copy attached to the affidavit of Mr Cooper sworn 26 May 2011 - at p71). (ii)Supplementary Statement dated 19 November 2010 (copy attached to the affidavit of Ms Henderson sworn 3 August 2011 - at p8). (iii)Further Supplementary Statement dated 17 December 2010 (copy attached to the affidavit of Ms Henderson sworn 3 August 2011 - at p339). 10There was no dispute as to the defendant's experience, his expertise or his level of competency in his occupation as a Saturation Driver. It was accepted for the purposes of the assessment that he was, before the accident, an extremely experienced diver and was considered to be amongst an elite group in his field. 11He commenced working offshore in Bass Strait in 1979. In 1981 he took up saturation diving. Prior to that time he had completed an Air Diving and Underwater Working Course (1978). 12Between 1978 and at the time of the accident (April 2007) the evidence was that he had effectively been in continuous employment as a Saturation Diver (oil field construction) and had at times also undertaken short periods of time as a marine engine driver and a fishing master (described by him as "hobby jobs"). An extensive curriculum vitae was attached to his statement: pp82-91 of Mr Cooper's affidavit. It sets out 29 years of commercial sea-going experience as a Saturation Diver, as a Bell Bounce Diver, Surface Gas and Air Diver, Diving Supervisor, Assistant Life Support Technician, Marine Engineer Captain and Master and fishing vessel manager. 13In his first statement the defendant stated: "...by 2007 I had many years experience as a Saturation Diver and in this industry experience means everything. If you are experienced and have a good reliable work history, you will get work, and very highly paid work at that". (para 21). 14The defendant's evidence was that he was a member of a preferred group of divers regularly employed by a company with its head office in the United Arab Emirates, J. Ray McDermott SA (referred to as "JRM"). 15The assessor in her Reasons for Decision recorded the following:- 4.It was explained to me by various witnesses that saturation diving allows professional divers to live and work at great depth allowing for efficiency and greater economy of work and enhanced safety for the divers. The work is physically demanding and extremely dangerous. 5.This industry has experienced boom times in the last five years brought about by Hurricane Katrina which destroyed many ocean platforms in the Gulf of Mexico. The price of oil increased dramatically in late 2000 which opened up additional opportunities for saturation divers. 6.Due to the dangerous nature of the work, the oil industry is heavily regulated. Companies are required to adopt strict safety measures to avoid catastrophes. 7.Saturation divers must remain physically fit and in good health. They work long hours and spend much of their time separated from family as the work is predominantly overseas. The salary packages are attractive and there appears to be no shortage of employment. 8. According to his 19 November 2010 statement, at the time of the accident Mr Durkin was employed under a 12 month contract as a saturation diver with J. Ray McDermott, S. A. ("McDermott's"), a corporation organised and existing under the laws of the Republic of Panama. The company had its head office in the United Arab Emirates (also see attachment C-A and C-9 Mariano Rosetto's report). 9.Mr Durkin was a member of a group known as "The Purple Circle". The phrase was coined by those who are not in the group. It refers to the experienced hands, and the most competent divers, with good track records of working safely, efficiently and quickly. Those in "The Purple Circle" are more likely to be offered high paying work. They live in confined spaces (statement of Robert James McKay dated 9 April 2010). 10.For 10 years preceding the accident, Mr Durkin was employed by an overseas company, McDermott's. He also worked for other companies. When employed in Australia, he lodged income taxation returns and paid taxation to the Australian Taxation Office ("ATO"). 11.Income earned overseas, according to Mr Durkin, was paid to him after taxation. He says he assigned all his taxation liability to his employer and the salary paid to him was a net amount. 16There was no criticism and no challenge to the accuracy of the above paragraphs in the present proceedings. 17In relation to the defendant's "employment intentions" the assessor stated:- 63.At the end of February 2007 Mr Durkin returned to Australia, having completed his contract with McDermott's. Emails between McDermott's Australia and Mr Durkin suggests that Mr Durkin had applied for a position on the WA project which was to commence in late 2007. ... 65. Evidence from Mr McKay supports Mr Durkin's intentions that he would return to McDermott's and continue to work as a saturation diver and eventually as a supervisor. 66.Comparable employees such as Mr Fraser and Mr Higgins confirm that there is an abundance of work in the industry and Mr Durkin was a member of "The Purple Circle". He had no family ties and has for many years continually worked in this field earning high income with minimal expenses. 67.His health was excellent and he was well respected in the oil industry. He says in his 7 July 2010 statement that he intended to continue to work as a saturation diver or supervisor to age 70. 18There was an issue raised by the plaintiff insurer as to Mr Durkin's likely future employment (but for the accident), particularly the extent to which he would have remained in continuous full-time employment. His case was that he would have continued working in his field, in particular in later years as a supervisor, beyond the age of 60 years, and he said up to 70 years. 19There was no dispute as to the nature or the continuity of his employment up until the motor vehicle accident on 2 April 2007 or as to the fact that he worked hard and long hours in his occupation in overseas locations. 20There was also no dispute as to the fact that up until 2 April 2007 Mr Durkin was in excellent health. 21As claimant before the claims assessor Mr Durkin relied on evidentiary materials to support the proposition that in the oil industry there was and is a substantial volume of ongoing or available work, especially for Saturation Divers with a high level of experience and who had acquired and demonstrated a high level of competency. 22In the present proceedings the plaintiff sought to challenge the lawfulness of the damages award. In submissions it was noted that there is no statutory right of appeal under the Act (Plaintiff's Summary Submissions at [10]). 23In the grounds for judicial review set out in the Summons filed 6 May 2011, the plaintiff challenged the assessor's decision in relation to four alleged errors as identified below. PART B 24In the Summons, it was contended that there were a number of jurisdictional errors and/or errors of law on the face of the record in respect of the Statement of Reasons given by the claims assessor on 1 April 2011. These were purportedly given in accordance with Section 90(4)(5) of the Act and Clause 18.4 of the MAA's Claims Assessment Guidelines. Accordingly it was submitted the "Assessment Decision" of the assessor is invalid and should be set aside. 25Alternatively in Paragraph 4 of the Grounds of Judicial Review it is asserted that the claims assessor constructively failed to exercise her statutory power in making the assessment decision. The asserted errors were set out in Paragraph 5 of the Grounds of Judicial Review in the Summons. They may be summarised as follows:- The first alleged error (a)The assessor erred in awarding the sum of $87,560 in respect of future paid domestic care. It was contended that the assessor simply accepted the evidence of the claimant that he would be living in Thailand and would employ a housekeeper full-time. He claimed that the claims assessor failed to explain her reasons. It was asserted that there was an absence of any medical or other evidence that would suggest that such care was required. Reliance was placed upon the provisions of Section 94(5) of the Act and Clause 18.4 of the Guidelines relating to the obligation to give reasons. (b)It was further contended that it was impermissible for the Claims Assessor to make an expert determination about a medical matter in the absence of medical evidence. The second alleged error (c)The plaintiff asserted error in respect of the decision of the claims assessor to award past economic loss in the amount of $695,285. It was contended that whilst the assessor had said she had already made findings in her reasons on the question of past economic loss that she did not. It was contended that brief, but real written reasons were required. Again, reliance was placed upon the provisions of Section 94(5) of the Act and Clause 18.4 of the Guidelines. The third alleged error (d)As to the decision and award of damages for future economic loss, it was contended that the error lay in the fact that the claims assessor allegedly did not undertake the determination required of her, pursuant to Section 126 of the Act. In particular there was an obligation to disclose "assumptions" about the claimant's most likely future circumstances but for the injury but this was not done. Additionally the assessor was required to make obvious and transparent to the parties the adjustments to any amount of damages for future economic loss by reference to a medical 'percentage possibility' that future events might occur. There was, it was claimed, a failure by the assessor in these circumstances. It was contended that such failure to comply with legislative requirements meant that the assessor acted without power or ultra vires. Finally it was contended that the assessor avoided making determinations on what were described as "difficult questions of fact of law" which had to be resolved. The fourth alleged error (e)The alleged error was said to relate to the issue of the litigant's costs and disbursements. In that regard cost of a taxation advice by a barrister was allowed as an ordinary disbursement. The contention of the plaintiff however, was that the report was unrecoverable by reason of Clause 9 of the Motor Accidents Compensation Regulation 2005. It was asserted that the claims assessor failed to apply the regulations.
PART C 26The first three of the four heads of claim to which the assessor awarded damages required the assessment of evidentiary statements of Mr Durkin and other witnesses, including those of his mother and sister, statements of employees who worked in the diving industry as well as other voluminous evidentiary materials including, in particular, the medical reports of a number of specialist medical practitioners and clinical psychologists relevant to the claims of economic loss. 27The claims for past and future economic loss involved issues concerning Mr Durkin's likely career prospects had he remained uninjured including the level of remuneration he would have received but for injuries he suffered in the accident. 28In determining the approach taken by the assessor and the adequacy of reasons for decisions in awarding damages it is important, as earlier discussed, to identify the extent to which the parties were in dispute on factual issues and whether there was or was not conflict in the medical opinions on the critical questions concerning Mr Durkin's level of disability and impairment and consequentially his loss of earning incapacity.
Principles 29The principles enunciated by the relevant case law in relation to s126 as noted in Kallouf v Middis [2008] NSWCA 61 (per McColl JA and Hall J) have been summarised by P.A. Leslie and M.M.G. Britts, Motor Vehicle Law in NSW, 4th edn (1993) at [13.7792] as follows:- (a)Assess the "most likely" of the possible future economic circumstances facing the claimant but for the accident (including type of employment, duration of employment and remuneration). (b)Assess the claimant's economic prospects as a consequence of the accident. (c)Compensate the claimant for the difference between (a) and (b), including, where appropriate, through the use of a buffer. (d)Adjust (c) by an appropriate percentage (including, where appropriate, by 0%) for vicissitudes to reflect the possibility that the claimant may not have achieved (a) even had the accident not occurred; and, (e)Include a statement of the assumptions made as to the claimant's most likely future circumstances and the appropriate percentage adjustments. 30In the present case in relation to (a) above the following factual matters were relevant to Mr Durkins' future economic circumstances. (i)He had for approximately 30 years pursued a specialist occupation as Saturation Diver/Supervisor. (ii)As noted above, his experience, skills and competency placed him in the first rank of Saturation Divers/Supervisors. (iii)The material before the claims assessor established that over his career he had no difficulty in securing ongoing employment contracts and that he consistently remained in employment. (iv)The remuneration paid to Saturation Divers/Supervisors was, and is, substantial. The evidentiary materials established that this operated as an incentive to Mr Durkin in pursuing his occupation. (v)The evidence also established that, in relation to infrastructure (in particular pipeline) development in the oil industry there has for many years been a strong demand for experienced and capable Saturation Divers/Supervisors. There was no evidence suggesting that that position was likely to change (in a negative sense) in terms of the availability of work for experienced personnel such as the claimant. (vi)At the time of the accident the claimant/defendant was a fit and healthy person having pursued his employment without health problems over many years up to that point. (vii)The defendant's personal circumstances were such that it enabled him to work overseas for he did not have a family or other ties or commitments that would have restricted him in that regard. 31In an assessment of damages for economic loss the following principles apply:- 1.It is loss of earning capacity and not loss of earnings that is the subject of compensation, the rate of wages of being earned and the rate of wages likely to be earned in the future affording a basis for assessing compensation for the loss of earning capacity. Expectation of working life is also an element in that assessment: Arthur Robinson (Grafton) Pty Ltd v Carter [1968] HCA 9; (1968) 122 CLR 649 at 658 per Barwick CJ cited in Kallouf v Middis, supra at [40]. 2.In a claim for damages for loss of earning capacity a determination must be made as to:- (a)what capacity has been lost and (b)what economic consequences will probably flow from that loss are specific matters to be determined. Kallouf v Middis, supra at [48]. It was observed in that case that only then will it be possible to assess what sum would put the plaintiff in the same position he or she would have been in if injury had not been sustained. Additionally:- "...what a worker earned in the past may provide very useful guidance about what would have been earned if that worker had not been injured. But the inquiry is one about the likely course of future events and evidence of past events does not always provide certain guidance about the future": Husher [1999] HCA 47; (1999) 197 CLR 138 at [7]-[8] per Gleeson CJ, Gummow, Kirby and Hayne JJ. 3.Any assessment in respect of the impairment of future earning capacity necessarily involves a consideration of possibilities. In some cases, it would be an error in treating as certain the fact that a plaintiff would lose wages for a period of years from the date of trial:- "...where incapacity is established as at the date of trial, what is to be evaluated is the extent of the possibility that the plaintiff may not work in the future or may lose time from work and determine the allowance of proper compensation in respect of that possibility. That evaluation will depend upon the evidence. Where there is no evidence to support a conclusion that, as a matter of certainty, an injured plaintiff would not earn monies for employment for a number of years post trial, then such a finding would involve an error of principle: Kallouf v Middis, supra at [49] citing Ahmedi v Ahmedi (1991) 23 NSWLR 288 at 302 per Clark JA, Handley JA agreeing. 32As noted in Kallouf v Middis at [50] in Magnou v Australian Wool Testing Authority Limited [2007] NSWCA 357, the Court (Tobias, McColl JJA and Handley AJA) at [20] accepted that the general principles that apply to an assessment of past and future economic loss were as set out by McColl JA (Handley and Bryson JJA agreeing) in Rabay v Bristow [2005] NSWCA 199 as follows:- "[73] Compensation for loss of earning capacity is awarded because the diminution in an injured plaintiff's earning capacity 'is or may be productive of financial loss': Graham v Baker [1961] HCA 48; (1961) 106 CLR 340 at 347. It is incumbent upon the plaintiff to prove the loss for which compensation is claimed (Todorovic v Waller [1981] HCA 72; (1981) 150 CLR 402 at 412) but, conversely, it is not incumbent upon the injured plaintiff to prove what employment he or she 'is not incapacitated from performing'. It is for a defendant which contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such a person: H Luntz, Assessment of Damages for Personal Injury and Death (4th ed) at 118 [1.9.20]. [74] The primary judge was entitled to take into consideration the fact that the respondent had an employment history which demonstrated a consistent pattern of full time employment in work which might fairly be described as having been of a heavy manual nature: Husher v Husher [1999] HCA 47; (1999) 197 CLR 138 at 143 per Gleeson CJ, Gummow, Kirby and Hayne JJ. .... [79] The assessment of damages for future economic loss involves reference to future or hypothetical events. It was described as 'the process of estimation of possibility' in Malec v J C Hutton Pty Limited [199] HCA 20; (1990) 169 CLR 638 at 643 per Deane Gaudron and Gummow JJ. This is, as Santow JA has pointed out, 'necessarily an imprecise matter of estimation, carried out within broad parameters ...': Donald v McKeown [2004] NSWCA 285 at [38]." 33When assessing a defendant's onus of adducing evidence on a question concerning incapacity of an injured person it was observed in Kallouf v Middis, supra at [52]:- "In Arthur Robinson (at 657) Barwick CJ observed that lost earning capacity "ought to be the subject of evidence and not of mere suggestion on the part of the judge or advocate", a remark interpreted by Malcolm CJ (Murray and Wheeler JJ agreeing) in Morgan v Costello [2004] WASCA 260 (at [99]) as supporting the proposition that "the defendant who contends the plaintiff has a residual earning capacity has the evidentiary burden of adducing evidence of what work the plaintiff is capable of performing and what jobs are open to a person with such capacity." 34The latter observation, in particular, is material in relation to the assessor's finding of incapacity. 35As has been observed, in the final analysis, at common law the onus rests on the plaintiff to prove that he or she is incapable of undertaking employment which medical evidence demonstrated he or she was capable of undertaking: Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120 (at 132-133) per Sugarman JA. In Kallouf v Middis it was stated that this position is not displaced by s126 of the Act notwithstanding that s126(1) imposes a requirement on a claimant to satisfy 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". As observed in Kallouf at [56] "[i]t is, of course, incumbent on the plaintiff in the first place to demonstrate lost earning capacity". 36Reference was made in Kallouf to the judgment of Heydon JA (as his Honour then was) in the State of New South Wales v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 at [66]-[67] in which his Honour summarised the authorities concerning the extent to which evidence is required to support a significant award to a plaintiff for lost earning capacity as demonstrating that "where earning capacity has unquestionably been reduced but its extent is difficult to assess, even though no precise evidence of relevant earning rates is tendered, it is not open to the court to abandon the task and the want of evidence does not necessarily result in non-recovery of damages." 37It was as also observed in Kallouf at [57] that Heydon JA in Moss supra, explained that because the tribunal of fact is making a discretionary judgment involving assessing the value of a chance, it is appropriate "to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility." In that respect in arriving at the discretionary judgment, Heydon JA said, the "trier of fact ... must achieve satisfaction that a fair award is being made", echoing Barwick CJ's statement in Arthur Robinson (at 656) that in considering whether a verdict is excessive, the Court must bear in mind that the amount awarded "ought to be a fair and reasonable compensation for the injuries received." 38In the consideration of the grounds for judicial review relied upon by the plaintiff it has been necessary to:- 1.Identify the findings of fact made by the assessor; 2.Ascertain whether or not a necessary finding of fact required by s126 was made by the assessor. 3.Establish whether findings of the assessor referred to in 1 and 2 were made in accordance with the medical evidence described by the assessor as "the bulk of medical opinion at [87]. 4.Determine whether the findings of fact that were made supported the ultimate findings made by the assessor (in this case, in particular, as to economic incapacity and the need for future paid domestic care).
39The challenge to the reasons of the claims assessor proceeds upon the premise that the content of the Reasons for Decisions by the claims assessor were inadequate. 40In evaluating the adequacy or otherwise of the Reasons it is necessary to examine the context in which the relevant issues that fell for decision by the assessor in this case. 41The relevant case law emphasizes the need to consider the facts and content of the particular case. In Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at [442], Mason P stated:- "Just as the requirements to provide reasons depends on the particular matter, so too the content of the reasons depends on a particular circumstances of the matter being considered ......." 42The scope of the reasons to be given in a particular case is related to the function to be served by the giving of reasons: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 379 at 386 per Mahoney JA. In determining the adequacy or sufficiency of a decision maker's reasons, it is necessary to consider the reasons as a whole and in particular, if necessary, in the context of the evidence in the case in order to see if they give sense to what was intended in a way that achieves their required function and purpose: Garratt v Nicholson (1999) 21 WAR 226. 43In Habib v Minister for Foreign Affairs and Trade [2010] FCA 1203, (2010) 275 ALR 180 the Federal Court (Flick J) observed:- "[52]One purpose (for reasons for decision) is to inform a person who has been aggrieved by a decision to which the Act applies of the evidence or other materials that had been taken into account by a decision-maker; the findings on material questions of fact and the decision-maker's reasons for the decision reached ... [53]... [54]Another fundamental purpose is that the decision subject of review can be considered in context. The decision-maker's findings on material question of fact can be considered in the context of the evidence or other materials which were before him. In the manner in which the decision-maker applied the relevant statutory regime to those findings can be discerned". 44In Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 18 CLR 259 at 270, the High Court (Brennan CJ, Toohey, McHugh, Gummow and Kirby JJ) addressed the proper role of a reviewing court in judicial review proceedings. The Court referred to observations of the Full Court of the Federal Court in that case and in particular, the passage therein relating to the approach to the construction of reasons of the delegate as involving "a beneficial construction" of the reasons. 45The High Court stated:- "When the Full Court referred to 'beneficial construction', it sought to adopt an approach mandated by a long series of cases, the best example of which is Collector of Customs v Pozzolanic...in that case, a Full Court of the Federal Court collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be 'concerned with looseness in the language...nor with unhappy phrasing' of the reasons of an administrative decision-maker. The court continued: 'the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error. These propositions are well settled. They recognize the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinized upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed..." PP [272-273].
46The scheme of the Act was considered in Insurance Australia Limited v Hutton-Potts [2010] NSWSC 1446, (2010) 57 MVR 194 (Schmidt J). In that case her Honour referred to the scheme of the Act as discussed by Young JA in Allianz Australia Ltd v Ward [2009] NSWCA 240 at [48]-[51] who observed that the legislature doubtlessly considered that there would be a review for obvious error by an assessor but only for obvious error and provided no appeal to the insurer. 47The objects of the Act are set out in s5. Motor accident claims are dealt with in Chapter 4 of the Act and s94 provides that the Claims Assessor is to make an assessment, inter alia, as to "the amount of damages for (the) liability (being the amount of damages that a Court would be likely to award" s 94(1)(b). 48Guidelines for the conduct of assessments have also been issued pursuant to s69(1) of the Act. Sections 106(1) provides that claims assessments under the relevant Part of the Act are subject to the relevant provisions of MWAA Claims Assessment Guidelines relating to those assessments. 49Schmidt J in Insurance Australia v Hutton-Potts (supra) examined the provisions for the award of damages for economic loss in Part 5.2 of the Act. In particular, damages for future economic loss are dealt with in accordance within s126 of the Act. 50In Insurance Australia Limited v Hutton-Potts Schmidt J at [32] observed that while s122(3) of the Act required that an Assessor undertake an assessment of damages in the same way as a court, assessors were not obliged to provide reasons for the conclusions reached, in the way that a court was obliged to do given the provisions of s 94(5): see Insurance Australia Ltd v Helou (2008) 52 MVR 446; [2008] NSWCA 240 at [61]. 51Her Honour observed in the respect that, whilst elaborate reasons were not required to be given for the conclusions reached by an Assessor in relation to the assessment of future economic loss, he or she was subject to the obligation of identifying the assumptions on which the damages awarded were awarded for future economic loss. The reasons, her Honour stated, could be given concisely but they have to be given: at [33]. 52In that case, unlike the present, the claimant had a "patchy" file - work history and the amount awarded in that case ($500 per week) did not reflect the assumptions that had been made and there had been no explanation of the assumptions on which that departure rested [39] and [43]. PART F
Ground 1 - Future Paid Domestic Care 53The assessor posed the question as to whether future paid domestic care was "reasonable" and "necessary" and, if so, what was the level of care required (Reasons for Decision Issue 3 at [88]). The assessor's reasoning on the issue is set out at [88] - [91] and [105]. 54The assessor referred to evidence of the claimant (which included his supplementary statement on 7 February 2011) and of family members (including the statement provided by the claimant's mother which the assessor noted, was to the effect that her son lived in "appalling circumstances" (at [90]). According to the evidence he lived in a room which was "dirty and unkempt". His mother did his laundry. The assessor made a finding in these terms:- "He clearly cannot take care of his domestic chores due to his emotional disabilities." 55The assessor referred to the claimant's intention of purchasing a property in south-west Thailand, a country he was familiar with having often stayed there over the years. His plan was to employ a housekeeper which he estimated would cost $100 per week. Whilst the claim in final submissions was put at $200 to $300 per week, the assessor stated that the evidence did not support a claim in those amounts at [89]. 56The medical evidence relied upon in the case for the claimant included the opinion of Dr Stephen R Buckley, Consultant Physician in Rehabilitation Medicine. Dr Buckley noted in his report:- "I report as a physician managing acute trauma patients (brain and orthopaedic injury) at a major teaching hospital and in their on-going rehabilitation." 57Dr Buckley stated at p8 of his report dated 7 November 2009 ([p489] of the affidavit of Mr Cooper of 26 May 2011):- Diagnosis Mr Bradley Durkin has a traumatic brain injury in the "extreme severe" range. He continues to demonstrate significant deficits of behaviour, emotion and probable cognitive deficits consistent with such a traumatic brain injury. He had a measured post-traumatic amnesia of some 36 days and this appeared to be a reliable assessment. This places the traumatic brain injury in the "extremely severe" range with a statistical high degree of certainty of persistent deficits of higher cognitive function and/or behaviour. Earlier brain scanning identified bifrontal and temporal contusions. ... On the other hand, Mr Durkin demonstrates mild abnormal frontal release reflexes on physical neurological examination and these are organic. These are indicative of significant frontal lobe dysfunction. His agitated behaviour throughout my interview, and in subsequent communication from Mr Durkin, and demonstrated in the hospital files, is suggestive of severe frontal lobe impairment. ... 58At p[9] of his report (at 490 of Mr Cooper's affidavit) he addressed the issue of care as follows:- Requirements for Care It was apparent that Mr Durkin lives a fairly reclusive lifestyle in a garage under his mother's home. He rarely sees his mother, or anyone else. It seems likely that the most common reason for his emergence from the garage is attendance at medical appointments and assessments. His admitted behaviour is likely to be very disturbing to the neighbourhood community and given his physical size and strength, frightening. His affect in my room was frightening. Nonetheless, it would seem to me that his barely controlled behavioural instability, would be, at the present time, quite incompatible with accepting of any kind of supervised assistance. I think it is unlikely that he maintains routinely affected personal nutrition and hygiene, and effective domestic hygiene. He should therefore have provision for two hours a day of housekeeper assistance, the duties of the housekeeper to include shopping, cooking, cleaning, washing and so forth. 59Mr Buckley recommended psychiatric review twice annually in respect of the claimant's "behavioural abnormalities". In his summary Dr Buckley stated:- ... he has behavioural instability which in confrontation with Mr Durkin is quite frightening. He writes impulsive and threatening letters, and repeatedly expressed to me his extreme anger towards the person who drove the car he believes to be at fault in his motor vehicle accident. In my opinion, in a practical sense, given the level of behavioural impairment it would be very difficult to provide a care and support program for him. However, if the behaviour could be brought under control with, for example, a multi-disciplinary program, then he would benefit greatly from assistance at home to maintain his domestic hygiene and personal nutrition and hygiene, and assistance to obtain a proper activity program to replace his lost employment. In my opinion, these benefits should be made available to Mr Durkin in the hope that his behavioural difficulties can be controlled and a reasonable quality of life established for him (at pp11-12). 60It is not correct, as suggested in the summons (Ground 5(b)) that the claims assessor impermissibly made "an expert determination about the medical matter in the absence of medical evidence..." The assessor had evidence on the following:- (i)The opinion of Dr Buckley, who, inter alia, expressed the view that it was unlikely that the claimant could 'maintain routinely effective personal nutrition and hygiene and effective domestic hygiene" (ii)Dr Buckley's opinion stated that the claimant should have provision for two hours a day of housekeeper assistance, with the duties of the housekeeper to include shopping, cooking, and cleaning, washing etc. (iii)The medical evidence that established the nature and extent of the claimant's impairment due to the injuries sustained by him. 61There was accordingly both lay and medical evidence which supported the claim for domestic assistance. The claimant's mother and sister gave evidence as to the domestic services they had been providing. The assessor accepted the medical and lay evidence. No submission was made, or could have been properly made that she was not entitled to rely upon all of that evidence. 62The assessor explained the approach taken in estimating this head of claim. Reference was made in the reasons to the claimant's extensive association with south-west Thailand and she accepted his evidence that he wished to reside there. 63The claimant explained in cross-examination that $100 per week or 3000 baht was sufficient to secure a housemaid in Thailand. The assessor indicated when assessing this aspect that it was necessary that any damages allowed be both 'reasonable and necessary' .She then stated the basis for allowing the claim of $100 per week, noting the basis for Dr Buckley's assessment of domestic services, (on the basis of 14 hours per week), namely, '...he clearly cannot take care of his domestic chores due to his emotional difficulties"; at [90]. 64Accordingly:- There was both lay evidence and expert medical evidence before the assessor, supportive of:- (a)The fact of an accident- created need of the claimant for domestic services. (b)An exposition of the assessor's reasoning namely, the inability on the claimant to undertake domestic chores by reason of the 'disabilities' resulting from injury, acceptance of the claimant's plan to live in south-west Thailand and that $100 per week was both reasonable and necessary to meet the need for services assessed by Dr Buckley at 14 hours per week. (Mr Grey of counsel for the claimant referred in submissions to average earnings in New South Wales of, in excess of $20 per hour.) (Transcript, 4 October 2011 at p 43). In that case for 14 hours per week, at $20 per hour the cost would be more than double the $100 per week allowed by the assessor. 65The assessor made relevant findings referrable to this head of claim. Those findings were supported by the evidence. The assessor articulated the bases for the conclusions and the award made. 66In my opinion ground 1 has not been made out. There was no error of law. PART G The Claims for Past and Future Economic Loss and Costs Ground 2 - Past Economic Loss
(a) Plaintiff insurer's submission before the Claims Assessor 67In relation to the plaintiff's submission that the claimant had a residual earning capacity it was argued in that respect that he had an earning capacity of $500 per week from January 2008 resulting in, it was submitted, a loss of $400,000 (that is $295,285) less than the amount awarded of $695,285 on the bases of total incapacity to date of the assessment. 68In respect of future economic loss it was accepted that it was "clear that the claimant is medically unfit to his pre-accident work as a saturation diver". 69The likely retirement age, it was submitted on behalf of the plaintiff was 60 years rather than 65 years as determined by the assessor with his employment possibly involving service as a Bell Diver Supervisor (page 3). 70It was submitted for the plaintiff, in written submissions dated 4 October 2010 that there should be a discount for contingencies of 20%. The assessor fixed the discount at 15%. 71A future economic loss, it was argued for the plaintiff should be calculated on a 'basic figure' of $2757 x 412.9 x 0.80 giving a "raw figure" of $910,692.00 (p 3). The assessor awarded $1,784,323 being $873,361 more than the plaintiff insurer's "raw figure". 72The submission that the claimant had a residual earning capacity of $500 per week was based on two matters. First what was referred to as "the claimant's recovery." There was no definition or elaboration on that phrase in the written submissions or upon the nature of the recovery referred to. Second, that anger management and psychiatric treatment and appropriate medication would result in him being able to exercise his residual capacity. The basis for this submission was not developed in the written submissions. 73The plaintiff's submission that was that of an appropriate allowance for future economic loss was of $800,000 (p3). 74In the plaintiff's written submissions before the assessor it was conceded that the claimant "is suffering ongoing symptoms of his traumatic brain injury". (p 2) 75The plaintiff insurer stated in submissions that it did not concede that the claimant was not liable to pay tax on his income from the date of the accident to the date of the summons or into the future (p 2). The assessor determined otherwise. There is no challenge in these proceedings to that conclusion. (b) Analysis 76The heads of claim the subject of the assessment in this case were conventional claims in the sense that they were claims of a type commonly made in personal injury litigation. Aside from special damages such as medical and hospital expenses, Mr Durkin made a claim for past loss of earnings and for future economic loss on the basis of claimed total incapacity. 77In relation to the claim for damages for past economic loss the plaintiff insurer did not dispute or contest in any affirmative way the following:-
Facts relating to the past economic loss award 85Ground 2 asserts that the claims assessor did not make findings as to how or on what basis the claimant's past economic loss was awarded as a head of damages. It was submitted therefore that there was a failure by the assessor to state reasons in relation to the award of past economic loss. 86In relation to the damages awarded in the amount of $695,295 for past economic loss it is necessary to refer briefly to the basis upon which the damages were calculated. The amount of $3,191 per week, which was used by the assessor in calculating past economic loss, was based upon an agreed figure between the parties, namely the amount of $126,048.14 as representing the amount Mr Durkin had received in his overseas bank account in the period 1 July 2006 to 3 April 2007 (a period of 39.5 weeks). The amount of $126,048.14 divided by 39.5 produced a figure of $3,191 per week. 87The higher amounts on and after 1 January 2005 reflected increases in wages and would have been payable after the initial 90 weeks (being the period 7 April 2007 through to 31 December 2008). 88The evidence before the assessor included a report from Mariana Rossetto, forensic accountant, dated 22 November 2010, a copy of which was attached to the affidavit of Genevieve Henderson sworn 18 August 2011. The assessor referred to this report in her reasons for decision at [73]. In relation to increases in comparable earnings she noted that the report referred to the earnings of a Mr McKay in 2008 and to a Mr Higgins in April 2000. There was a considerable volume of material in relation to the earnings of comparable employees and to the existence of employment opportunities in the oil industry for divers. The evidentiary materials indicated that these opportunities had increased in the period since the accident to the date of assessment, as had the rates of pay. In particular, McDermott's letters of 12 August and 1 December 2008 demonstrated substantial increases. 89At [78] of the Reasons the assessor explained the approach taken. She calculated the loss of 240 days per year that Mr Durkin would have worked and 144 of those days, it was determined, would have involved engagement in saturation work but for the accident. The assessor examined evidence as to the holiday periods taken by the claimant. By reference to such periods the assessor reduced the amount of time that the claimant would have worked post-injury. She stated:- "I therefore do not agree with Mr Rossetto's calculation. Mr Durkin returned to Australia regularly and for lengthy periods. He examined his passport, he travelled extensively when outside Australia, suggesting that he had holidays overseas. Doing the best I can, I intend to calculate Mr Durkin's loss as 183 days each year that he would have worked but for the accident. I accept that the evidence supports the submissions that since 2009 there have been significant increases in the rates of pay. I intend to allow Mr Durkin $3,191.00 per week up to December 2008 and thereafter the statutory cap under s 125(2) of the Act" [78] to [80]. 90The substantial award for past economic loss in the amount of $695,285, as a matter of straight calculation, took into account the fact that Mr Durkin's pre-injury earnings were at a very high level. There was cogent evidence to support both the starting weekly rate of $3,191 and that, by reason of the escalation of wages after 2008, the statutory caps operated in the case, commencing on 1 January 2009 to 7 February 2011. Precise calculations were set out and the Reasons for Decision at [101]. The claimant's loss of earning incapacity 91In respect of grounds 2 and 3, the plaintiff contended that there was a failure by the assessor to make findings in respect of economic loss and a failure to disclose the assumptions about the most likely future circumstances. In respect of future economic loss the plaintiff contended that the assessor did not comply with the obligation under s124 (referred to as 'the legislative requirement') and she avoided making determinations on questions of fact and law required under the Act. 92Mr Grey of counsel for the claimant submitted that the assessor's reasons were 'quite transparent' and they were principally set out in paragraph [81]-[87]. Those paragraphs indicate the medical opinions therein referred to which formed the basis of the findings concerning the claimant's incapacity. The opinion of Dr Anderson, retained for the plaintiff (an occupational physician), was rejected for stated reasons. As noted in the submissions Dr Westmore was not required for cross-examination and there was no other evidence from any other psychiatrist to contradict or qualify the opinions which Dr Westmore expressed. In addition to the medical evidence, the assessor noted in the Reasons for Decision, the fact that the claimant had attempted work and she clearly accepted his evidence that he was unable to continue doing so. His inability in that respect was supported by the other evidence. 93It will be necessary to refer to the opinions expressed by medical specialists and by clinical psychologists in some detail below for the purpose, inter alia, of resolving the question as to whether there was or was not any real dispute between the experts as to the level of the claimant's incapacity. 94Although Dr Thompson stated that the claimant was physically fit for some forms of work he made it clear that he did not base his evaluation or opinion of the claimant's earning capacity upon any analysis by him of his cognitive, behavioural and emotional disabilities resulting from the frontal lobe damage. 95The expert medical evidence, however, did provide a consistent and cogent evidentiary basis for the finding by the assessor of total incapacity for work. That evidence is discussed below. 96The issue of the claimant's incapacity was addressed by the assessor under the heading of "Residual Incapacity" at [81]-[87]. That sub-heading reflects the fact that the matters considered there under were relevant to both past and future economic loss. The assessor's reasons dealt with submissions by way of contention made by senior counsel for the plaintiff insurer to the effect that the claimant had a residual earning capacity. The submissions made reference to the fact that the claimant was a highly "intelligent man", that he was able to retain his driver's licence and that he was capable of studying, undertake certain physical activities and he allegedly had the ability to control his anger. 97The assessor expressed her disagreement with these submissions when addressing the issue of earning capacity at para [83] to [87] in the Reasons for Decision. The assessor noted in the reasons that the claimant had suffered "very serious injuries in the accident" and that he continued "to live with these debilitating disabilities". She referred to psychological assessments undertaken on 9 May and 5 June 2007 (by Dr Conroy) and to the opinions of Dr Fearnside, Mr Rawlings and Dr Westmore at [84]-[85]. Medical opinion adduced by the plaintiff, from Dr Anderson was to the effect that the claimant was physically able to skipper and perform duties on a fishing boat. The assessor, however, noted that the claimant had already attempted work of that nature unsuccessfully and she discussed the reasons for rejecting Dr Henderson's reasoning at [86]. 98The assessor concluded:- "[87]Based on the bulk of medical opinion I accept that Mr Durkin has no residual incapacity. He has attempted to mitigate his economic loss but because of the severity of his physical and cognitive disabilities, he is unable to secure any suitable employment." The medical and other specialist evidence 99In order to examine the adequacy of the findings and the conclusions of the assessor in relation to the claimant's loss of past and future earning capacity as recorded in the Reasons for decision it is necessary to refer to the expert evidence. In this case, although counsel for the plaintiff submitted that the claimant had a residual capacity for work that submission was, apart from Dr Anderson's abovementioned opinion, otherwise without support. 100The Royal Rehabilitation Centre assessment report noted that the claimant had been involved in a motorcycle accident and had a loss of consciousness with a cranial CT scan revealed multiple front-temporal contusions. He underwent frontal burr hole surgery on 5 April 2007 and an extra ventricular drain inserted. It noted other physical injuries namely, fractures to his ribs, right clavicle, scapular and L1/L2 vertebrae and a right pneumothorax. Behavioural problems were noted at this early stage, including increased agitation and absconding behaviour. The report further noted post-traumatic amnesia testing results and stated: "... This would indicate that Mr Durkin sustained a very severe brain injury ...". 101The report stated that following assessment on 9 May and 5 June 2007 and formal testing, the claimant demonstrated very slow processing speed in relation to complex information, and impaired memory for verbal information. The report also noted "behaviourally he demonstrated poor insight into his cognitive functioning post brain injury and at times he was emotionally labile. The results of the assessment are consistent with disruption to the fronto-temporal network as demonstrated on imaging".
Dr Michael Fearnside, Neurological Surgeon 102In his detailed report of 15 September 2008 Dr Fearnside noted the history that the claimant had not been able to return to pre-injury work as a diver and that although his previous employer had offered him a job as a bell diving supervisor, and he travelled to Singapore to attend courses in October 2007, he noted that Mr Durkin found it difficult to cope with both new and old information. It was noted that although he had been able to undertake a course of study and had attempted to work as a skipper in Western Australia on a fishing boat, he was only able to manage the work for two days. There was other evidence that his inter-personal conflict with fellow workers was a factor in him stopping work on the fishing boat. 103Dr Fearnside noted that the motorbike accident had had a major effect upon his ability to work and upon his activities of daily living (at [7.2]). He considered that his option for future employment seemed limited [7.2]). He expressed the opinion "In view of the pneumothorax and, I suspect his cognitive impairment, he is unfit to return to high technology, high intensity work such as that of a saturation diver. In view of his personality and emotional and behavioural impairment, Mr Durkin may well find difficulty in obtaining employment in other domains because of the likelihood of interpersonal conflict. This should be addressed by a psychiatrist." 104In his second report dated 28 September 2009 Dr Fearnside set out a very detailed review of relevant documentation. These included reports of psychologists and report of Dr Westmore. He expressed the opinion that the assessment of the claimant's emotional and behavioural impairment was difficult because there was a mixture of organic metastatic impairment and psychiatric impairment. He included the comment "Mr Durkin's poor memory and impaired organisational capacity would affect his mood", report of Dr Jane Rawling 27 August 2008. 105Dr Rawling, clinical psychologist, in her report recorded a history of mood swings that mainly involved angry outbursts. She also noted earlier neuropsychological assessments that had been undertaken at Royal Rehabilitation Hospital, and that they had identified deficits in memory, speed of information processing and some aspects of executive functioning. 106Tests showed erratic process over several learning trials. The information acquired by Mr Durkin had been poorly retained. Dr Rawling concluded that the head injury sustained in the accident "... was extremely severe in nature" [report p5]. 107She noted the claimant's confused nature and state whilst admitted to hospital. Although he had completed a course at a later stage after injury, he had failed a required medical examination. She noted that it was felt that his continuing physical limitations and the cognitive and personality changes arising from his brain injury were likely to adversely affect his ability to deal with emergency situations. 108Dr Rawling said that the "key assessment" would be about two years post injury [report p5]. 109In Dr Rawling's second report dated 7 August 2009 it was noted that at the cognitive level, the claimant said that he had on-going memory problems and difficulty in sustaining concentration and that this seemed to affect his decision-making processes. 110Dr Rawling also interviewed the claimant's sister and mother. 111She reported on neuropsychological test results. In her "summary and conclusions" she noted the extremely severe nature of the post-traumatic amnesia, that there had been CT scan evidence of bilateral, frontal and temporal lobe contusions. She further noted that from the outset the claimant was exhibiting "... the behavioural disturbance typical of frontal lobe dysfunction". She described the nature of the dysfunction. It was consistent, she said, with cognitive dysfunction associated with frontal lobe dysfunction. All the assessments identified deficits in processing speed, verbal fluency, planning and organisational skills and in verbal memory. Dr Rawling reported "the emotional and behavioural impairments have persisted and appear to constitute his major source of disability" [report p6]. 112Dr Rawling added "these emotional/behavioural and cognitive sequelae of the frontal lobe damage sustained in the accident represented a severe disability ...". 113Dr Bruce Westmore, Forensic Psychiatrist, in his report of 22 September 2008 listed the history of psychiatric symptoms and treatment. He reported problems which included mood swings, irritability, anger and depression. He noted that while alert and attentive in a general sense, the claimant repeatedly lost his train of thought during assessment. Dr Westmore observed [at p7] "Mr Durkin's mood changes, his irritability, his temper, his aggressiveness and his problems with focussing are all directly linked to the head injury which arose following the motor bike accident". 114Dr Westmore set out a summary of his observations concerning the claimant [at pp7-8]. He said that although he had been able to complete courses since the accident, he emphasized the observations of the psychologist as to concerns about his ability to learn new information. He observed:- "I am also concerned about his mood swings and his irritability. The probability that his behaviour and mood are both being affected by damage to his frontal lobes is quite high. Patients who have frontal lobe damage may demonstrate disinhibition, uncharacteristic impulsivity, aggression and hostility and they may demonstrate poor judgment ... At the time I assessed him I thought he was totally unfit for his previous employment. I note his attempts to gain employment in related areas but he was unsuccessful because of physical and psychological reasons. Because of his irritability, anger and moodiness, as well as his lapses in attention and concentration, I think this man is totally unfit for employment at this time. " (Emphasis added.) 115Dr Westmore provided a second report dated 1 October 2009 for which the claimant re-attended on 15 September 2009. Dr Westmore stated in his summary: "He has subsequently experienced mood changes, cognitive difficulties and personality changes. He has had damage to the frontal and temporal regions of his brain and damage to these areas of the brain can affect a wide range of a person's capacity including resulting in disinhibition, impairment in judgment, reduction in impulse control and a propensity to act aggressively. Mr Durkin appears to suffer all of these symptoms in different degrees." [at p5]. 116Dr Westmore also referred to the likelihood of improvement with counselling, observing:- "... his insight into the possible benefits of on-going treatment are limited. Although to balance that, further changes in his cognitive capacity or indeed in his behavioural problems is unlikely to occur now due to the passage of time since the original injury occurred." 117Dr Westmore concluded:- "... generally, his prognosis is poor because of the seriousness of the brain injury, the impact it has had on him and the unlikelihood of any significant changes or improvements over the next few years." [at p6].
Dr Stephen R Buckley, Consulting Physician in Rehabilitation Medicine 118Dr Buckley provided a report dated 7 November 2009. Dr Buckley's reported contained a comprehensive history together with the results of his examination and comments on investigations. He expressed the opinion that the claimant had a traumatic brain injury in the "extremely severe" range [report p8]. 119He stated that the claimant continued to demonstrate significant deficits which he detailed in his report. 120In relation to his diagnosis he observed:- "On the other hand Mr Durkin demonstrated marked abnormal frontal release reflexes on physical neurological examination and these are organic. These are indicative of significant frontal lobe dysfunction. His agitated behaviour throughout my interview, and in subsequent communication from Mr Durkin, and demonstrated in the hospital files, is suggestive of severe frontal lobe impairment." [at p8]. 121In relation to prognosis, Dr Buckley considered that as more than two years had elapsed since the accident, that the claimant's neurological deficits were permanent. 122In relation to his requirements for care Dr Buckley stated that he should have provision for 2 hours a day of housekeeper assistance, the duties of a housekeeper to include shopping, cooking, cleaning, washing. [report p9] 123On the subject of fitness for work Dr Buckley stated:- "In my opinion, Mr Durkin's behavioural abnormalities are so severe that any employer would find him intolerable. He is unemployable on the open employment market." (Emphasis added.) 124Dr Buckley commented on additional reports including, in particular, the report of Dr Rawling dated 7 January 2010. He stated that Dr Rawling's forensic neuropsychological assessment of 7 August 2009 was in line with clinical judgment to the effect that there was no change in his previously expressed opinion regarding the claimant's future requirements for care or the outcome of the accident and the extremely severe traumatic brain injury. Conclusions on the medical evidence 125The medical evidence produced on behalf of the claimant established that Mr Durkin suffered a combination of injuries and disabilities. The evidence established the following:- (i)That he sustained multiple fronto-temporal contusions to the brain as a result of the accident (ii)That he suffered from emotional, behavioural and cognitive impairment as a result of brain damage. (iii)Clinical tests and assessments that had been carried out were consistent with frontal brain damage. (iv)The claimant had suffered pneumothorax. That in itself would incapacitate him for his pre-injury work. (v)The consequential brain injury related impairment had resulted in both cognitive and personality changes. (vi) The brain damage had also caused memory problems including, in particular, the retention of new information, and a disturbance of concentration and behavioural problems consistent with frontal lobe dysfunction. (vii)The combination of the emotional/behavioural dysfunction and the cognitive sequelae of the frontal lobe damage, combined, amounted to a severe disability. (viii) That in the opinion of Dr Westmore, the claimant has undergone a personality change as a result of the traumatic brain damage itself. (ix)The claimant's general level of functioning had declined significantly in a number of areas as a result of the accident. (x)That the personality problems manifested themselves in a number of respects including mood changes, irritability, temper and aggressiveness, all of which were linked to the head injury. (xi)On the first psychiatric assessment, Dr Westmore considered the claimant to be totally unfit for his previous employment and that at the time of his first examination he was totally unfit for employment. (xii)That the absence of change or material improvement over the two-year period following the accident indicated that it was unlikely that the claimant's psychological and cognitive impairments would improve. (xiii)On Dr Westmore's last assessment Mr Durkin was unemployable on the open employment market. 126In determining whether the claimant's loss of earning capacity to the date of assessment and into the future was/would effectively be total it was necessary for the assessor to consider, in addition to the matters referred to in the preceding paragraph the following matters:- (i)The nature of the claimant's pre-injury employment. (ii)His experience and qualification (or lack thereof) for other forms of employment. (iii)The post-injury attempts made by the claimant to return and undertake other types of work. 127The evaluation of work capacity on the open employment market had to be undertaken in this case having regard to the fact, (together with other matters), the claimant had for many years worked in a specialised field and had suffered a multi faceted impairment, in particular, an emotional/behavioural/cognitive impairment due to the head injury and which had assessed as "extremely severe in nature" [report of Dr Rawling 27 August 2008 at p5]. 128It is not correct to say, as asserted in ground 2 of the Summons, that the assessor failed to make findings in relation to past economic loss. The Reasons for Decision recorded the relevant findings and opinions established in the medical evidence, and made findings both as to the level of the claimant's impairment, the nature of the impairment and their impact on his earning capacity. The assessor on those bases made finding that he had been totally incapacitated from the date of injury until the assessment hearing. In doing so the assessor assessed and made findings as to the foundational matters on which damages for the loss was to be calculated. 129The Reasons for Decision adequately stated the reasoning process of the assessor in determining this head of claim on the basis of total incapacity and the bases for rejecting the plaintiff's submission that the claimant was only partially incapacitated for work on and after January 2008. 130No error of law has been established in respect to ground 2. That ground accordingly is dismissed. Ground 3 - Future Economic Loss 131The provisions of s126 of the Motor Accidents Compensation Act 1999 are as follows:- Future economic loss-claimant's prospects and adjustments (1)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. (2) When a court determines the amount of any such award of damages it is required to adjust the amount of damages for future economic loss that would have been sustained on those assumptions by reference to the percentage possibility that the events concerned might have occurred but for the injury. (3)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. (a) Analysis Findings in relation to s 126 matters 132The medical opinion evidence, which supported the fact of the claimant's total incapacity, has been outlined above. 133In addition to the evidence relating to the specialist medical opinion the assessment also required the assessor to take into account the factors relevant to determining the proper bases for estimating the quantum of the economic loss. These were referred to in the Reasons for Decision. They included the claimant's pre-injury work performance and skill, his pre-injury employment prospects, his past rate of earnings, the availability of future employment in the relevant industry the likely level of earnings for calculating future loss, the claimant's future employment intentions including, in particular, the issue of his likely retirement age and the need to allow for the vicissitudes or contingencies. 134These matters were referred to in paragraphs [19] and [20] of Mr Durkin's Written Submissions dated 22 August 2011. The Reasons for Decision addressed such matters at [63]-[80] and at [102]-[104] 135In relation to future economic loss and the provisions of s126, there was both evidence and findings made by the assessor on each of the matters (a), (b) and (c) referred to in paragraph 29 above. An adjustment for vicissitudes was made in terms of paragraph (d) in paragraph 29, namely 15%. I consider that the assessor sufficiently and adequately identified and stated the relevant findings and assumptions" made in relation to each of (a), (b) and (c) set out in the abovementioned paragraph. Evidentiary onus 136There was an evidentiary onus on the plaintiff insurer to adduce evidence as to establish any residual earning capacity it contended the claimant retained. As earlier noted, the only medical evidence in fact adduced by and relied upon the plaintiff on the question of 'capacity' was the report of Dr Anderson which the assessor rejected for reasons stated at [86] in the Reasons for Decision. 137The range of matters considered in Kallouf v Middis, supra, at [85] and [86] are similar to those in the present case. It was observed:- 85.Whilst the closed period of seven years in the present case is a lengthy one the primary judge was entitled to bring into account the respondent's consistent pattern of pre-injury full-time employment in work, the nature and content of his post-accident disabilities and his genuineness in seeking light work. This is especially so when there was effectively no change by the appellant to the respondent's attempts of rehabilitation and efforts to secure light work and no affirmative evidentiary case was raised by the appellant to establish that some lesser amount for past economic loss was appropriate. 86.Finally, in respect of the primary judge's assessment of the respondent's past economic loss in light of the events of the preceding seven years, there being no challenge to any particular finding of fact relevant to past economic incapacity and no demonstrated misconception of evidence, there is no basis for this Court to interfere on either bases. The appellant has not, in our opinion, established a gross disproportionality in the award made for past loss: Wilson v Peisley. 138In relation to (a) of paragraph 29 above, the assessor had evidence from the claimant and from other witnesses on the question of possible retirement ages of saturation divers (Mr McKay and Mr Higgins). 139The assessor referred to the evidence and made a finding as to the claimant's likely retirement age:- 72.Based upon the lay evidence, I am satisfied that it is more likely that Mr Durkin would have continued to dive or supervise until age 65 and not to age 70. 140The evidence, as earlier noted, established the on-going availability of work for saturation divers/supervisors. The assessor specifically considered that matter and made a finding based on it at [68] and [77]. 141The evidence established that such work would in all likelihood continue to be available at significantly high levels of remuneration. The assessor made a finding on the basis of the evidence at [79] as to the significant increases in rates of pay that had taken place since 2009. There was a strong evidentiary basis for the assessor's conclusion at [72], and in particular in relation to his pre-injury health, his skill and experience. Findings were made on such matters at [67] as well as on the likely employment that the claimant would have pursued but for the accident: at [68]. 142The Assessor considered the "most likely" future economic circumstances of the claimant but for the accident under the heading in the Reasons for Decision, "Employment Intentions" at some length: at [63] to [68]. 143Mr Durkin's evidence was supported by that of Mr McKay, as referred to in the Reasons for Decisions [65]. This included evidence as to the likelihood of the claimant returning to McDermott's and continuing as a saturation diver and eventually working as a supervisor. 144The assessor also referred to the evidence of Mr Fraser and Mr Higgins which supported the Assessor's findings that there was "an abundance of work in the industry" Reasons: at [66] (as earlier noted, the evidence was in fact that the availability of work had increased). 145The assessor additionally took account of the claimant's personal circumstances - including the absence of family ties which facilitated him working overseas as well as his employment history of having earned a high level of income with minimal expenses at [66]. A finding was made that he would have continued to work overseas: at [68]. 146The assessor's ultimate conclusion was that the claimant would have continued to work as a saturation diver or supervisor. That conclusion was well founded in the evidence. 147There is, in my respectful submission, no basis for the contention made on behalf of the plaintiff that the assessor did not provide a reasoned basis for reaching the conclusions she did as to "the possible future economic consequences" in terms of s 126. 148In relation to (b) referred to in paragraph 29 above, namely the economic prospects of the claimant as a consequence of the accident, this required the assessor to assess the evidence as to the accident-caused injuries, and their consequences in terms of the level of ongoing impairment and their impact on the claimant's earning capacity. The medical evidence on that issue has been referred to above in the discussion on ground 2. 149There was no dispute or issue but that the economic consequences to the claimant, as a result of the accident were far-reaching and serious. In particular there was no dispute that he had, as a consequence, lost his occupation as a skilled diver/supervisor because of his injuries and disabilities. 150In those circumstances the remaining issue in relation to ground 3 was whether or not the claimant had any residual capacity to earn remuneration in some other form of work in the future. 151The contentions made on behalf of the plaintiff before the assessor as to the existence of a residual capacity were more by way of assertion than as contention supported by evidence (as stated earlier Dr Anderson did not purport to evaluate the brain injury consequences on the claimant's ability to work, or on aspects of his life). The assessment of the evidence involved the assessor in an evaluative exercise. It is clear that the assessor did in fact evaluate the evidence. The assessor expressed her reasons for rejecting the submissions for the plaintiff, and she made and recorded the pertinent findings that supported the ultimate conclusion reached, namely the claimant had, since the accident been, and would remain, totally incapacitated for employment. 152The medical evidence available to the assessor, as discussed in relation to ground 2, addressed at considerable length the effects of brain injury upon the claimant apart from other physical injuries. 153The fact that the claimant retained some intellectual functioning and could undertake some activities as noted in the supplementary submissions for the plaintiff did not undermine the specialist medical opinions which focussed on the significance of the claimant's impairment. 154In summary, it is clear that the assessor addressed and determined a number of subjacent issues on the question of residual capacity in the Reasons for Decision. They included:- (i)The claimant's motivation to return to work and his previous (unsuccessful) attempts to return to work; (ii)The serious nature of the injuries and consequent "debilitating disabilities". (iii)The fact that the claimant's "cognitive difficulties" interfered with is ability to learn process and to remember new information. (iv)Specialist medical opinion (in particular that of Dr Fernside) that the claimant 's ability to obtain employment in other domains was impaired because of the likelihood of inter-personal conflict. (v)The results of neuropsychological testing in particular in relation to the following aspects:
(vi)Specialist psychiatric evidence (Dr Westmore) as to total unfitness for work owing to irritability, anger and moodiness. Confirmation in Dr Westmore's subsequent opinion (2009) that no improvement had occurred in the claimant's condition. (vii)Specialist rehabilitation opinion (Dr Buckley, reported 7 November 2009) that the claimant was unemployable on the open employment market. (viii)The opinion of Professor Richard Mattick, clinical psychologist, (retained by the plaintiff insurer) who doubted that Mr Durkin was fit for employment in terms of his behaviour if it was as he observed it [12.19] 155As to (i) to (vii) above see Reasons for Decision at [83] to [85]. 156Finally, the Assessor rejected the opinion of Dr Anderson for the reasons set out in the decision at [86]. (b) Conclusions on Ground 3, Future Economic Loss 157The reasons of the assessor sufficiently identified the basis for her ultimate conclusion that the claimant had no residual earning capacity (at [87]), in particular, the cognitive, emotional and behavioural dysfunction consequent on the brain injury sustained by him. 158The Reasons for Decision indicate that the assessor considered the submissions that had been made by counsel for the plaintiff including the argument put forward by senior counsel that the claimant had a residual earning capacity for work. 156 Relevant findings were made on the only substantive issue in contest, the issue as to whether the claimant's incapacity was total or partial. The matters upon which findings were made were recorded in the Reasons for Decision. Those matters were fundamental to the resolution of that issue. No submission was or could have been that the evidence did not permit or support the ultimate conclusion reached by the assessor on the issue of incapacity. 159The matters required to be considered by s126 were fully considered by the assessor, findings were made on each of them and such findings were recorded in the Reasons for Decision. 160In my opinion no error of law in respect of ground 3 has been established. That ground should be dismissed.
Ground 4 - Cost of Legal Advice 161A legal expert on taxation law, Mr Brett Young, Barrister, was engaged on behalf of the claimant. As the assessor observed at [111] "he provided an interpretation of certain provisions of the Income Tax Assessment Act 1997 (Cwth) and certain taxation implications of those provisions with respect to earnings of the claimant overseas." 162A copy of Mr Young's report advice is at pages pp 586-637 of Mr Cooper's affidavit. It is entitled "Expert Report". As recorded in the introduction, it was prepared as an Expert Report in order......"to provide assistance to a Cars Assessor to provide a step by step approach of what are six (6) taxation questions in relation to the claim..." Mr Young stated he had read the Expert Witness Code of Conduct and agreed to be bound by it; at [6]. The report was an extremely detailed one. Mr Young also provided a "Supplementary Expert Report" dated 29 November 2010 (page 632) of Mr Cooper's affidavit. 163The assessor listed the issues in dispute at [12] of the Reasons. In it, it was stated:- 12.The major issues in dispute are:- 12.1Was Mr Durkin's income, prior to the accident, subject to the Income Tax Assessment Act 1997 (Cth) ("the Tax Act")? If so, is he protected by a Double Taxation Agreement" 164The assessor considered in detail the above issue at [13]-[54] (of her Reasons). At [37] she determined:- 37.I am satisfied based upon Mr Higgins' payslips and the evidence of Mr McKay and Mr Durkin that any tax liability is payable by McDermott's and not by its employees." 165The assessor stated that she accepted the construction of the contract put forward by the claimant for reasons set out in the Reasons for Decision at [37.1]-[37.7]. 166The assessor relied upon Mr Young's Report. See, for example, at [43] and [52] on the issues of residency tests and the issue of double taxation respectively. 167The tax liability issue was resolved in the claimant's favour. The plaintiff in the present proceedings argued that the cost of Mr Young's Expert Report, namely $10,490.91, was unrecoverable by reason of Clause 9 of the Motor Accidents Regulation 2005. The contention on behalf of the plaintiff in this respect was:- "the claims assessor failed to apply the applicable regulations": Plaintiff's Summary Submissions at [57]. 168Reliance was placed in this regard on Clause 9, which is in the following terms:- 9.Fixing of maximum costs recoverable by legal practitioners (1)The maximum costs for: (a)legal services provided by a legal practitioner to a claimant or to an insurer in any motor accidents matter, and (b)matters that are not legal services, but are related to proceedings in a motor accidents matter, are the costs set out in Schedule 1, except as otherwise provided by this Part. 169Chapter 6 of the Act, Costs, provides in Section 149 of the Act for the making of Regulations fixing maximum costs recoverable by Australian legal practitioners. 170Section 149, Regulations Fixing Maximum Costs Recoverable by Australian Legal Practitioners, provides, in part:- 149.1The regulations may make provision for or with respect to the following:- (a)fixing maximum costs for legal services provided to a claimant or to an insurer in any motor accidents matter, (b)fixing maximum costs for matters that are not legal services, but are related to proceedings in any motor accidents matter (for example, expenses for investigations, for witnesses, or for medical reports. 171The key phrase in Section 149 (1) (a) is the expression "legal services". It is noted above that Schedule 1 of the above Regulation is entitled "Schedule 1 Maximum Costs for Legal Services". 172"Legal services" is defined in s4 of the Legal Profession Act 2004 as meaning "work done, a business transacted, in the ordinary course of legal practice." The word "costs" is defined in s302 of that Act as including disbursements. 173Clause 1 of Schedule 1 sets out two tables, Table A and Table B. In respect of Table A, column 1, there are descriptions of "legal services", but it is apparent from the terms of Column 1 that that description refers to specified services (as stated) that are provided by a legal practitioner who acts for a claimant. In this respect, for example, in respect of "Stage 1 there is reference to "for assistance in completing an accident notification form" and at Stage 2 "from the acceptance of the retainer to the preparation and service of a Notice of Claim ..." 174It is clear that the phrase "legal services" in context refers to "services" that are rendered or have been rendered by a legal practitioner under or pursuant to a retainer entered into between him or her and the client giving rise to the relationship of solicitor and client. It does not, in my opinion, on a proper construction, refer to services provided by an expert witness (as for example an expert on issues of law who provides services in that capacity under a contract entered into between the expert and a legal practitioner who acts for the client, the purpose of the expert providing material being for use in an assessment under the Act. 175The distinction, of course, is critical particularly in terms of the legal consequences. Generally speaking, absent extraordinary or unusual circumstances, a legal expert witness in the situation referred to above would not, by virtue of the contract by which he or she is engaged, be in a solicitor/client or a barrister/client relationship with the person for whom the legal representative acts. 176Retainers for the provision of legal services, may, of course, be express or implied:- "Proof of an implied retainer rests on proof of facts and circumstances sufficient to establish a tacit agreement to provide legal services..." (Lawyers Professional Responsibility, Professor G E DalPont). 177In the present case, the facts and circumstances make it clear that Mr Young was acting in the capacity of an expert witness and only in that capacity. He did not provide legal services to Mr Durkin in a lawyer/client relationship as discussed above. The provisions of clause 9, which fixes maximum costs recoverable by legal practitioners, does not, contrary to the argument on behalf of the plaintiff insurer, operate in respect of the amount paid to Mr Young for his expert reports. 178Accordingly, it is clear that the fundamental premise upon which legal error has been asserted on behalf of the plaintiff does not exist. 179I am of the opinion that no error of law has been established. Ground 4 in the Summons in relation to Costs is without merit and should be dismissed. 180I make the following orders:- 1.Summons dismissed. 2.In the event that the plaintiff does not within 14 days of today wish to contend by written submission to the contrary, the usual order, namely, a costs follow the event order will be made. Subject thereto, I make an order, to operate on and after the above mentioned 14 day period, that is the plaintiff is to pay the first defendant's costs of the proceedings on the ordinary basis.
Amendments 30 August 2012 - The words: ""Medical Assessment Certificate"" changed to "certificate" Amended paragraphs: 1 30 August 2012 - The name: "Dr Henderson" changed to "Dr Anderson" Amended paragraphs: 98 30 August 2012 - The name: "Dr Henderson" changed to "Dr Anderson" and the name "Mr Rowlands" changed to "Mr Rawlings" Amended paragraphs: 97 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 August 2012
QBE INSURANCE (AUSTRALIA) LIMITED
DURKIN & ORS
[1961] HCA 48
[2004] WASCA 260
(1968) 122 CLR 649
(2010) 275 ALR 180
(1997) 48 NSWLR 430
(1999) 21 WAR 226
(2010) 57 MVR 194
(2008) 52 MVR 446
(1996) 18 CLR 259
(1999) 197 CLR 138
(1991) 23 NSWLR 288
(1961) 106 CLR 340
(1981) 150 CLR 402
(1990) 169 CLR 638
(2000) 54 NSWLR 536