Mark WOOD v Brad McKENZIE [2013] NSWDC 89

District Court New South Wales

Medium Neutral Citation: Mark WOOD v Brad McKENZIE [2013] NSWDC 89 Hearing dates: 27-31 May 2013 Decision date: 03 June 2013 Before: Murrell SC DCJ Decision: See paragraphs 70-74 Catchwords: CIVIL- Motor vehicle accident- non-economic loss- traumatic brain injury- impaired vision- residual earning capacity- whether Lifetime Care and Support Authority responsible for out-of-pocket expenses incurred prior to joinder- deductions from cost of fund management. Legislation Cited: Motor Accidents (Lifetime Care and Support Act) 2006, ss 3, 6, 7, 8 & 9 Motor Accidents Compensations Act 1999, ss 5, 126, 130A & 131-134 Cases Cited: Gray v Richards (No 2) [2011] NSWSC 1502 Hodgson v Crane [2002] NSWCA 276 Kallouf v Middis [2008] NSWCA 61 Knight v Government Insurance Office of NSW [1995] NSWCA 246 Purkess v Crittenden(1965) 114 CLE 164 Watts v Rake (1960) 108 CLR 158 Category: Principal judgment Parties: Mark Wood Brad McKenzie Representation: Mr Stone (Plaintiff) Ms James (Plaintiff) Mr Reynolds (Defendant) Mr O'Dowd (CGU) JMA Lawyers (Plaintiff) McInnes Lawyers (Defendant) File Number(s): 2012/53231

Judgment

Background 1On 4 September 2009, the plaintiff was a front seat passenger in a vehicle that was travelling on a work-related journey. The vehicle was involved in an accident with another vehicle. There was a heavy impact to the passenger side. As a result, the plaintiff sustained multiple injuries to his left side, including a severe traumatic brain injury. On 25 June 2012 he became an interim participant in the Lifetime Care and Support Scheme (LTCS) established under the Motor Accidents (Lifetime Care and Support Act) 2006 (the LTCS Act). By that stage, CGU Workers Compensation (NSW) Ltd (CGU), the workers compensation insurer for the plaintiff's employer, had met the plaintiff's out-of-pocket expenses of $189,726.00, including the cost of a left hip replacement. 2CGU was granted leave to intervene as a party. 3Liability was admitted. The Court was asked to assess damages.

Issues 4The contentious issues on the hearing were: * The quantum of non-economic loss. * Liability for the past out-of-pocket expenses of $189,726 that were paid by CGU prior to the plaintiff becoming a participant in the LTCS. * Having regard to the fact that the plaintiff suffered pre-existing osteoarthritis in his left hip, whether the defendant is liable for the cost of the plaintiff's left hip replacement. * Past and future economic loss, including whether the plaintiff has any residual earning capacity. * The cost of fund management. 5The defendant did not challenge the credit of the plaintiff or his partner. The defendant tendered surveillance film, which merely confirmed that the plaintiff spent his days in the manner alleged.

Non-Economic Loss 6Subject to the damages cap fixed under the Motor Accidents Compensation Act 1999 (the MACA), the award of damages for non-economic loss is at large. No idea of proportionality is to be imported into ss 131 - 134 of the MACA. Section 5(1)(e) of the MACA indicates the purpose of preserving full compensation for those with severe injuries and ongoing impairment: Hodgson v Crane [2002] NSWCA 276 at [34]. 7The plaintiff was 46 years old at the date of the accident. He was living in a long-standing de facto relationship and working as a safety and first aid officer for a large construction company. 8In the accident, the plaintiff sustained a severe traumatic head injury. He suffered a decompressed skull fracture, an extradural haematoma, a subdural haematoma and an intra-cerebral haematoma. He experienced post-traumatic amnesia for 31 days. At one stage, his Glasgow Coma Score dropped as low as 6. He was airlifted from Orange Base Hospital to the Sydney Royal Prince Alfred Hospital. He remained in an induced coma for fourteen days and was then transferred to the Liverpool Hospital Brain Injury Unit. He was discharged on 22 October 2009 for outpatient treatment. While hospitalised he underwent a left frontal craniectomy and a cranioplasty. Initially he experienced right-sided paralysis but he recovered well from that condition. The plaintiff is now left with an obvious deformity to the left side of his skull (Exhibit C). 9The plaintiff also fractured fifteen ribs and suffered a punctured lung. 10During the initial period, the plaintiff experienced extreme physical pain and suffering. 11It is as a consequence of his cognitive and memory impairment that the plaintiff has qualified for participation in the LTCS. 12The plaintiff has permanent cognitive deficits. He is significantly impaired in relation to high-level executive functioning, including verbal fluency, conceptualisation, organisational ability and planning, the ability to generate ideas, cognitive flexibility and the capacity to comprehend abstract concepts. His information processing is slow. In 2011, Professor Fearnside, a neurological surgeon, reported that the maximum period that the plaintiff could concentrate was 20 minutes and that he finds it difficult to make decisions. Even simple decisions such as ordering from a menu. 13The plaintiff suffers from severe memory impairment. His memory is such that often he can't recall the activities that he has undertaken on the previous day. The plaintiff's partner described an occasion when the plaintiff forgot that he was to make his own way home from Bateman's Bay and waited four hours for her to meet him. He requires the assistance of whiteboard reminders in relation to organising his daily needs, including the preparation of meals and other domestic activities. It is difficult for him to participate in and follow moderately complex conversations, as he cannot recall what the other speaker said. He repeats himself (is perseverative). 14The plaintiff has undergone a "personality change". He is no longer cheerful and gregarious. He is easily frustrated and can become argumentative and difficult. The Court witnessed such behaviour. 15The plaintiff is very conscious of the fact that he has lost most of his independence. Importantly, he is unable to work and he is unable to drive a motor vehicle. The loss of the capacity to drive has been "shattering" to him, particularly as public transport on the South Coast is very limited. 16From mid-2010, the plaintiff consulted a psychologist. On initial consultation the psychologist noted that the plaintiff exhibited hopelessness and despondency. The plaintiff was suffering from severe depression. He commenced cognitive behavioural therapy and was prescribed antidepressant medication. The intensity of his depression eased. Unfortunately, the psychologist himself became unwell and was unable to continue treatment. The plaintiff continues to suffer from a chronic adjustment disorder with depressed mood. He is likely to have recurrent bouts of depression. The plaintiff's partner believes that he would benefit from further counselling for his adjustment difficulties and ongoing depression. 17Following the accident the plaintiff was unable to open his mouth and chew properly. The problem resolved gradually over a period of six to eight months. 18The plaintiff's skull fractures affected his left ear. As a result his hearing is permanently impaired. Initially, he undertook several procedures under anaesthetic to clear congestion from the ear. Surgery has now improved the hearing. He continues to suffer from tinnitus in the left ear and it is worse when he lies down. As a consequence of his hearing (and/or visual) impairment, the plaintiff's balance is affected. He has to walk slowly and carefully and is unable to climb a ladder. When ascending or descending stairs, he needs to use a handrail. 19One of the most serious impairments is a visual impairment. The plaintiff suffers from permanent right homonymous hemianopia, i.e. narrow "tunnel vision" and the almost complete loss of peripheral vision on the right side. He is unable to judge distances. It is dangerous for him to cross roads other than at traffic lights and he is unable to drive a vehicle or ride a bicycle. He has difficulty navigating and often bumps into objects. He has a tendency to bump into people when in a crowded environment and this agitates him to the extent that he is most reluctant to venture into such an environment. The Guide Dog Association has provided some training, including training in the use of a walking stick when in a crowded environment. The widespread and subtle impact of such a visual impairment is reflected in a whole person impairment of 62%. 20The plaintiff suffered a fracture at T3. He continues to experience cervical/ thoracic discomfort and restriction when he attempts to turn his head from side to side. He has undertaken physiotherapy, but the problem persists. 21The plaintiff sustained a painful lesion of the left ulnar nerve. On 7 December 2009 he underwent decompression neurolysis of the nerve, which resolved his left arm symptoms. 22Prior to the accident the plaintiff enjoyed outdoor activities including golf (his handicap was 11-12), rock fishing, surfing, walking and running. Since the accident, he has been unable to participate in any such activities. His vision is such that he is unable to play golf because he can't see the location of the ball. He can't enjoy rock fishing because he is unable to balance properly or judge danger. Before the accident the plaintiff was a keen handyman. He had an extensive garage workshop and possessed an impressive collection of power tools. It is now unsafe for him to use such tools and he has gifted them to others. 23The plaintiff's sole recreational activities are pottering around the home (for example, raking up leaves and doing minor weeding), walking to the local newsagent to buy a daily newspaper, occasionally walking into town (a distance of 5-6 kilometres) and watching the news and finance reports on television. His partner has encouraged him to take an interest in gardening and he maintains a herb garden in a specially constructed elevated garden bed. He tidies up the kitchen and stacks the dishwasher. He can shop for a few items but he lacks the organisational ability to undertake a substantial household shop. The plaintiff's energy levels are low. After an hour or two of pottering around, he needs to rest for an hour. He goes to bed early. 24The plaintiff cannot enjoy sedentary activities such as watching movies, DVD's and television shows. He is unable to concentrate and he lacks the short-term memory and judgment to follow a plot. He watches the television news and reads the newspaper. Prior to the accident, when time allowed, the plaintiff enjoyed reading novels. He would also use a computer. However, since the accident, he cannot face the challenge of using a computer. 25The plaintiff loved his work as a safety officer. He was well liked by his workmates. He has lost the enjoyment of a fulfilling work life, the camaraderie of workmates, and the status of being a breadwinner. 26At the time of the accident, the plaintiff enjoyed a good intimate relationship with his partner. The couple enjoyed an active social life and enjoyed sharing domestic activities such as shopping together. Since the accident, the plaintiff prefers to lead a very quiet and simple life. He does not enjoy socialising because he becomes anxious in large groups of people. He maintains only infrequent contact with formerly close friends. Reluctantly, he attends family gatherings. Otherwise, he is socially withdrawn and isolated. 27Since the accident there has been no intimate relationship between the plaintiff and his partner. Medication has been tried but with no effect. It was difficult for the plaintiff to discuss this matter. However, it is obvious that sexual dysfunction is a very substantial loss that should not be undervalued: Knight v Government Insurance Office of NSW [1995] NSWCA 246 per Kirby P. Sexual dysfunction has a significant indirect impact on feelings of self-worth and self-confidence. Further, it may challenge the continuation of personal relationships. 28For many reasons, since the accident the relationship between the plaintiff and his partner has changed fundamentally. The plaintiff's behaviour is unpredictable and difficult. He can make a substantial contribution neither in the domestic sphere nor in the social sphere. The relationship holds no promise of mutual sharing and support. It is a relationship of dependency that has survived to date only because of the loyalty and courage of the plaintiff's partner. 29The plaintiff is capable of living independently for short periods. He manages his own showering and dressing although his partner sometimes has to remind him to clean his teeth. It would be difficult for the plaintiff to live alone for an extended period. Recently, his partner was absent for three weeks. The plaintiff's mother moved in with him for part of that period and when she was not living with him, the plaintiff received support from friends, who helped with shopping needs and the like. 30The plaintiff's non-economic loss should be compensated in the sum of $425,000.

Left Hip Condition 31In 2006/2007 the plaintiff experienced symptoms of early primary osteoarthritis in his left hip. In 2007 he was advised that he would require a left hip replacement within five to ten years (i.e. 2012 - 2017). However, prior to the accident, the plaintiff's symptoms were few. He experienced discomfort in cold weather, which he managed with occasional anti-inflammatory medication. The left hip condition did not interfere with his ability to undertake employment, active leisure activities or domestic activities. Inter alia, he was able to scale scaffolding and climb ladders. He was able to golf, rock-fish and undertake handyman activities, including the reconstruction of a deck. But for the accident, it is likely that the plaintiff would be undertaking left hip surgery in the near future. 32After the accident the plaintiff was virtually immobilised for some time. When he was discharged from hospital, he found that his left hip was painful and he had difficulty walking. He could barely hobble from his front door to the letterbox. 33On 31 March 2010 he underwent an urgent left hip replacement by Dr Davison, an orthopaedic surgeon. The agreed cost of the surgery was $13,000. Dr Davison gave evidence. In his opinion, the plaintiff's pre-existing primary osteoarthritis and need for a hip replacement was significantly accelerated by the trauma of the motor vehicle accident. Dr Searle and Professor Nade concurred. The surgery was successful and the plaintiff recovered full use of his left hip. 34Because the science of hip replacement is relatively new and evolving, the life expectancy of the plaintiff's hip replacement is unknown. Hip replacements have an estimated life expectancy of 20 to 30 years (per Dr Searle). Professor Nade stated that there is a 95% chance of not requiring revision within ten years. It is quite likely that the plaintiff's prosthesis will last for his lifetime. 35The defendant disputed liability to pay for the surgery, contending that the plaintiff would have incurred the expense of a hip replacement in any event. The plaintiff conceded that, regardless of the accident, he would have required a left hip replacement. 36The plaintiff did not concede that he would have incurred the associated expenses. He argued that the defendant had failed to discharge its onus of proving on the balance of probabilities that he would have incurred associated expenses: Watts v Rake (1960) 108 CLR 158, Purkess v Crittenden (1965) 114 CLR 164. The plaintiff suggested that he may have avoided paying the expenses of a hip replacement, for example by relying on private health insurance or by utilising the public hospital system (he had plenty of advance notice that the replacement was required and, in the event that there was a lengthy waiting list, he could have put himself on the list well in advance). 37There was no evidence about whether the plaintiff had private health insurance. The plaintiff was not questioned about his pre-accident plans for left hip surgery. I am not satisfied that the defendant has proved on the balance of probabilities that, but for the accident, the plaintiff would have incurred expenses associated with a left hip replacement. However, he would have lost time from work.

Liability for Past Out-of-Pocket Expenses 38In its capacity as workers compensation insurer for the plaintiff's employer, CGU paid $189,726 in out-of-pocket expenses incurred between the accident in September 2009 and the plaintiff's acceptance as an interim participant in the LTCS Scheme in June 2012, including the agreed amount of $13,000 for his left hip surgery. 39The plaintiff claimed those expenses from the defendant. The defendant asserted that the plaintiff could not recover those sums as they were properly the responsibility of the LTCS Authority and not the defendant as CTP insurer. CGU supported the plaintiff's claim that the defendant is obliged to pay the expenses. 40The LTCS Authority has denied liability for the expenses on the basis that they were incurred before the plaintiff became a participant in the LTCS Scheme. 41Prior to amendments to the LTCS Act that commenced on 30 May 2012, the Act relevantly provided: 3. "insurer" of a claim means an insurer for the purposes of Chapter 4 (motor accident claims) of the Motor Accidents Compensation Act 1999 in relation to the claim "participant" in the Scheme means a person accepted as provided by this Act as a participant in the Scheme (either as a lifetime participant or as an interim participant). ... 6(1) The Authority is to pay the reasonable expenses incurred by or on behalf of a person while a participant in the Scheme in providing for such of the treatment and care needs of the participant as relate to the motor accident injury in respect of which the person is a participant and as are reasonable and necessary in the circumstances. ... 7(1) A person who has suffered a motor accident injury is eligible to be a participant in the Scheme in respect of the injury if the person's injury satisfies the criteria specified in the LTCS Guidelines for eligibility for participation in the Scheme. ... 8(1) An application for a person to become a participant in the Scheme in respect of a motor accident injury is to be made to the Authority and can only be made by or on behalf of the person or by the insurer of a claim made by the person in respect of the injury. (2) An application by an insurer does not require the consent of the person. ... 9(1) A person becomes a participant in the Scheme if the Authority is satisfied that the person is eligible to be a participant and accepts the person in writing as a participant in the Scheme, either as a lifetime participant or an interim participant (according to the person's eligibility). ... (emphasis added) 42Section 130A was a complementary provision within the MACA. It provided: 130A No damages may be awarded to a person who is a participant in the Scheme under the Motor Accidents (Lifetime Care and Support) Act 2006 for economic loss in respect of the treatment and care needs (within the meaning of that Act) of the participant that relate to the motor accident injury in respect of which the person is a participant in that Scheme and that are provided for or are to be provided for while the person is a participant in that Scheme. (emphasis added) 43The defendant contended that, on a proper construction of section 6, once a person becomes a participant in the Scheme, the Authority becomes liable for all reasonable treatment and care expenses of the person, regardless of whether the expenses were incurred before or after the person became a participant. The defendant contended that any other construction would have the unfair consequence that a catastrophically injured person would inevitably incur expenses before he or she was accepted as a participant, such as ambulance expenses. Injured persons who were insured might recover the expenses from the party at fault or from their insurer but persons who were at fault would be left to pay their own expenses. The defendant referred to the Second Reading Speech, submitting that the evident intent behind the LTCS Act was to relieve CTP insurers of all responsibility for treatment and care expenses of the catastrophically injured, including expenses incurred prior to such persons becoming participants. 44The interpretation for which the defendant contended is contrary to the plain words of s 6, which require the Authority to pay the reasonable expenses "incurred by or on behalf of a person while a participant in the Scheme". It is not participation in the Scheme per se which qualifies a participant to have his or her expenses paid. Rather, it is the fact that the expenses are "incurred" during the period of participation. One consequence is that the Authority is responsible for paying the reasonable expenses incurred by an interim participant, even if the person's participation is terminated because he or she fails to qualify as a lifetime participant within the prescribed two - year period. Section 6 sits comfortably with s 130 A, the complementary provision under the MACA, which confirms that expenses are not payable under the MACA where they arise from the motor accident that caused the relevant catastrophic injury and the expenses have been or will be provided for "while the person is a participant" in the LTCS Scheme. 45Under the LTCS Act, a person does not become a participant until he or she applies, is assessed and is found to be eligible because he or she fulfils the relevant criteria (satisfies a functional impairment measurement), and is accepted in writing by the Authority, either as an interim participant (for a period of up to 2 years) or as a lifetime participant and is accepted by the Authority. Once the person is accepted, the Authority develops a care plan. Treatment is delivered through approved providers. As one would expect in the case of such an expensive and extensive scheme, the Authority maintains control over treatment and payment. It would be contrary to the overall scheme of the Act if the Authority was obliged to pay for treatment expenses over which it had no control because the injured person was neither an interim participant nor a lifetime participant in the Scheme at the time when the expenses were incurred. 46The LTCS Act was introduced in the context of an existing fault-based scheme that provided catastrophically injured persons who were at fault with no entitlement to recover expenses. If, under the LTCS Scheme, such persons have no entitlement to recover their expenses before they become participants in the Scheme, then that does not represent the unfair loss of a former entitlement. 47I find that the defendant is liable for out-of-pocket expenses incurred prior to the plaintiff becoming a participant in the LTCS Scheme.

Past Domestic Care 48The plaintiff's partner took leave from her employment for a period of three months for the purpose of caring for the plaintiff. Thereafter, she worked a four-day week to enable her to take the plaintiff to medical appointments and attend to his other needs. She accepted a "demotion" at work so that it would be easier for her to take leave from work to meet the plaintiff's needs. 49It is agreed that the quantum payable for the voluntary care provided by the plaintiff's partner prior to the plaintiff becoming a participant in the LTCS Scheme and in relation to which no payment has, as yet, been made is $35,000.

Economic Loss 50The plaintiff completed Year 11 and undertook an apprenticeship. He moved to Queensland, where he worked on a fishing trawler as a deckhand and first mate. In the course of that employment, he lost the top of his right index finger. In 1998, the plaintiff joined the Navy and moved to the South Coast. In 2002, he left the Navy and began to work as an occupational health and safety officer within the construction industry. 51From 2005 the plaintiff worked for Zauner Constructions as an on-site safety and first aid officer. His employer undertook large-scale construction projects on the South Coast and elsewhere in NSW. In the period leading up to the accident he was employed on the construction of the Charles Sturt University at Orange. He was required to induct workers in OHS requirements, walk around the site to check for unsafe work practices, climb scaffolding up to three or four storeys in height and conduct work safety meetings. Overtime was often available. He received other allowances. He was provided with a company vehicle, a fuel card and a mobile telephone. He was a valued employee who related well to fellow workers. He loved his work. 52Between 2005 and 2009 the plaintiff was in continuous employment with Zauner Constructions. At the time of the accident his work at Orange was almost complete. There had been mention of working for Zauner at a site in Broken Hill. The plaintiff was prepared to "go anywhere". Mr Schoroburu, the manager of the employers South Coast Office, gave evidence that since 2009 the company has expanded its operations and has been continuously engaged on a number of large projects. Since 2009 the number of safety officers employed by the company has increased. Although there was a significant hiatus between the cessation of the Orange project and the commencement of the Broken Hill project, Mr Schoroburu was "certain" that, but for the accident, Zauner would have employed the plaintiff on a continuous full-time basis. However, the company had been obliged to terminate the plaintiff's employment because his disabilities rendered it unsafe for him to be on a construction site. 53It was agreed that, at the date of the accident, the plaintiff's net earnings including allowances were $970 per week. Payslips for the period leading up to the accident indicate that the plaintiff's net salary, excluding allowances, was a little over $900 per week. While working in Orange he often earned $1400 net per week, including allowances. 54When assessing past and future economic loss pursuant to s 126 of the MACA, a court must determine the plaintiff's most likely future circumstances but for the accident and deduct his or her residual earning capacity, then make a further deduction to allow for vicissitudes: Kallouf v Middis [2008] NSWCA 61 at [7]. 55I am satisfied that, but for the accident, the plaintiff's most likely future circumstances are that he would have worked continuously for Zauner Constructions until the usual retirement age of 67 years. Zauner was happy with the plaintiff's work and the plaintiff was very happy with his employer. Employment opportunities within the company have expanded and the number of safety officers employed by the company has increased since 2009. The plaintiff's colleague, Brian Owen, undertook similar work to the plaintiff at Orange. Mr Owen remains in employment with Zauner. Although the plaintiff's position involved him working on construction sites, it was a supervisory position that did not involve heavy work. He could have managed the work until 67 years of age. It is likely that the plaintiff would have worked on the South Coast. However, when work was not available on the South Coast, the plaintiff would have worked elsewhere in the State and been compensated by payment of the appropriate allowances. In the unlikely event of a hiatus in work opportunities, the plaintiff would readily have found employment with another employer or, in the case of short periods, could have taken paid leave. There was some prospect of promotion and the associated opportunity to increase earnings. 56The plaintiff's cognitive and vision impairments make it impossible for him to work in the building industry. He is unable to work at heights, he has difficulty navigating uneven ground or unfamiliar environments (per Dr Delaney, an ophthalmic surgeon), he cannot concentrate or solve problems of any complexity, his memory is poor, he cannot work under pressure and he has difficulty with social interaction. Further, it is difficult for the plaintiff to travel to work because he cannot drive and has little access to reliable public transport. 57As to the plaintiff's ability to undertake other employment, in June 2012, Ms Batchelor reported that: "It is my opinion that the totality of (the plaintiff's) acquired impairment is beyond that which any employer could realistically be expected to tolerate. He is extremely slow to complete even simple tasks, he has difficulty in learning and recalling information, his planning is poor, he has difficulty in generating verbal responses, he is slow to deduce the solutions to novel tasks and his thinking is perseverative." 58Similarly, in February 2013 Dr Jungfer, a psychiatrist, reported that personality and cognitive impairments deprived the plaintiff of "any capacity for open employment", and noted that his capacity was further restricted by his vision impairment. In 2011, Professor Fearnside reported that the plaintiff would probably never return to employment in an open marketplace. His poor memory and concentration rendered him "essentially unemployable". Dr Fitzsimons, a neurologist who provided a report to the defendant, agreed in general terms with Professor Fearnside's comments about employability. 59Professor Pryor provided a report to the defendant. He opined that the plaintiff was capable of work as a ticket seller, vending machine attendant, leaflet or newspaper deliverer, shelf-filler or product assembler. In cross-examination, it was suggested to the plaintiff that he could work in a plant nursery. 60Realistically, such occupations are not open to the plaintiff. He would have difficulty travelling to any job. Further, in any position, he would have difficulty accepting and remembering instructions. He could not cope with the social interaction and occasional pressure of working as a ticket seller. He could not travel from machine to machine, as would be required of a vending machine attendant. In addition, his eyesight would probably pose difficulties with such a position. He could not deliver leaflets or newspapers because his eyesight makes it very difficult for him to aim a leaflet into a letterbox. The work of shelf-filling or product assembly would be too physically arduous and the plaintiff could not maintain sufficient concentration. Even if nursery work was readily available on the South Coast (and the evidence suggests that it is not), the plaintiff would be in danger of tripping due to his impaired vision, and he could not cope with occasional social interaction with the public, such as answering questions. 61I am satisfied that the plaintiff has no residual earning capacity. The defendant has failed to produce any persuasive evidence that there is an occupation that the plaintiff is capable of performing and in which there is likely to be a position open for a person such as the plaintiff. 62The plaintiff has calculated past and future economic loss based on the agreed figure of $970 per week, and has indexed that figure for 3.66 years to obtain a current wage of $1100 net per week. I consider those figures to be conservative. As stated, I find that there was no real risk of a lengthy period of unemployment. I see no need to depart from the standard allowance of 15% for vicissitudes.

Fox v Wood 63The Fox v Wood component was agreed to be $7600.

Fund Management 64Professor Fearnside reported that the plaintiff is incapable of managing a large investment portfolio. Dr Jungfer reported that the plaintiff's lack of judgment renders him unable to manage his financial affairs, and Ms Batchelor stated that he is incapable of effectively managing a large sum of money. 65On one occasion, when left to his own devices, the plaintiff gambled the (fortunately, limited) contents of his bank account on poker machines. Since then, the plaintiff's partner has overseen the plaintiff's everyday expenditure and ensured that he cannot access substantial sums. 66The plaintiff is able to undertake everyday personal banking, but he describes his financial ability as "not good". He has made the sensible decision that his award of compensation should be managed by a professional fund manager. 67There is uncontested evidence that IPAC, the fund manager preferred by the plaintiff and his partner, would charge $320,000 to manage a fund of $1M over the plaintiff's lifetime. 68The defendant contended that the quantum to be managed and the associated fund management cost would be affected by a number of factors. First, the superannuation aspect of the compensation award might be invested in a separate superannuation fund. Second, a substantial amount would be deducted for solicitor/client costs. Third, the plaintiff might contribute a substantial lump sum to the purchase of a future residence (the plaintiff's partner indicated that the couple might "downsize"). Fourth, moneys might be expended on overseas travel (although the plaintiff's partner was doubtful that she could manage the plaintiff on a trip of any magnitude). Finally, the funds might run out by the time that the plaintiff attained the retirement age of 67 years. 69Similar arguments were considered and rejected in Gray v Richards (No 2) [2011] NSWSC1502 (under appeal). Justice McCallum noted that a funds manager has an obligation to manage a fund so that it lasts for a plaintiff's lifetime and the Court should be slow to pre-empt the decisions of a trustee charged with the prudential management of a large sum of money. She noted that the payment of capital costs (in that case - house modification) was speculative. She could not confidently predict the impact on the fund of the future deduction of solicitor/client costs. Consequently, she was not satisfied that it was appropriate to deduct any sum from the verdict for the purpose of calculating future fund management costs. The circumstances of the present case are not relevantly distinguishable. I am bound by Her Honour's decision and I declined to make any deduction from the fund management costs on the bases identified.

Damages Non-economic loss $425,000 Past out-of-pocket expenses paid by CGU $189,726 Past voluntary care (agreed) $35,000 Past loss of earning $201,825 4.9.09 - 4.6.13 - 195 weeks av $1035 net pw ($1100 - $970 = $1035) Fox v Wood (agreed) $7,600 Past loss of superannuation $17,760 11% x 80% x 806 x 116 Future economic loss $540, 320 17 years x $1100 pw- multiplier to 67 yo - 592 less 15% vicissitudes $553,520 less 3 months off work re hip replacement (12 weeks at $1100 net) $13,200 Future loss of superannuation $ 59,219 13.7% x 80% x $540,320 Fund management on $1M $320,000 ($1.476M - workers compensation payback $450,000) Total $1,796,450

Orders 70Verdict and judgment for the plaintiff in the sum of $1,796,450. 71After deductions, defendant to pay the balance of the judgment monies into Court to be held in an interest-bearing account pending appointment of a trustee. 72Defendant to pay the plaintiff's costs. 73Liberty to all parties to apply in relation to any other order for costs. 74Liberty to approach the Registrar to make orders for payment of the funds held in Court to a duly appointed trustee. 75Exhibits to be retained.

********** 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: 13 June 2013