Economic loss claim slaughtered: “capable and intelligent” manager likely only to earn $1.2k/week

A mother with an impressive employment history and a string of occupational qualifications has been ruled by the Supreme Court as likely only to have earned average wages but for the serious injuries she sustained in a motor accident at Mudgeeraba in February 2015.

Kate Sutton had completed year 12 and then worked for Cue Design progressing to store manager after 5 years. She then worked for Jeans West as a manager for three years and then in a car dealership as a finance manager for two years.

Her four year stint in real estate after gaining her real estate licence was paused to raise her two sons born in 2005 and 2010.

The injuries she sustained in the 2015 accident resulted from the impact of a rear end accident that was so heavy, both vehicles were written off.

Allianz – as insurer for at fault driver Lauren Hunter – admitted liability for the accident but disputed the extent of Kate’s damages for the resulting psychological injury when the matter came before Justice Paul Freeburn in September.

Psychiatrists Alfred Chung, Jon Chalk and Trevor Lotz each offered differing opinions. Dr Chalk concluded Kate could return to work for up to 20 hours per week. Dr Lotz – her treating psychiatrist who she saw monthly – considered her “a prisoner in own home” who he believed to be unemployable.

Observing that a treating psychiatrist has a conflict between “saying the right thing for the patient” and giving objective expert evidence, the judge gave greater weight to the views of Dr Chalk whose views were consistent with his own impression of Ms Sutton as “impressive”, “capable and intelligent”.

The court allowed an ISV of 13, yielding general damages of $21k.

Kate’s loss of income case relied on the formulation in a report from forensic accountant Michael Lee which was found to be based on unproved assumptions as to roles she would likely have taken on and the income she would have received, but for the accident.

“Mr Lee has no particular expertise in the labour market or in education, training and expertise for particular positions,” Justice Freeburn ruled. And even if he did, he did not analyse “Ms Suttton’s qualifications, expertise and experience” as against those required for the positions on which he had based his calculations.

With the report unable to be relied on, His Honour was invited to make a “global award”, an approach that he considered inconsistent with the Civil Liability Act s 55 obligation that requires a court to state the assumptions on which an award is based and the methodology used.

“It is doubtful that the court is entitled to adopt a global approach to economic loss,” he observed before embarking on a longhand assessment based on findings that Kate would have returned to work as an employee on a part-time basis earning the average after-tax weekly wage of $1.2k/week.

His Honour rejected the submission she would likely have been recruited as “business development manager” earning a far higher income because the qualifications for such a role – which she did not possess – included a degree in finance or law “with working knowledge of the stock market and takeover regulations”.

Past economic loss of $240/day for 2-3 days/week for 5 years was awarded at $212k.

Future loss of income was assessed at $91k over four years to 2025 by which time she was assumed – according to Dr Chalk’s evidence of likely achieving a “relative recovery” – to be able to resume full-time work. That sum was reduced by 15% for contingencies.

The gratuitous care claim was the next to come under the judge’s scrutiny.

Care was claimed for 442 hours at 17 hrs/week for the first 26 weeks, such information being derived from a “guesstimation” compiled by her husband two years after the accident.

The guesstimation indicated all of the household tasks he performed for the family of four with 25% of the total said to have been performed for the benefit of the plaintiff.

His Honour was not satisfied that such methodology was sufficiently precise. Neither did he consider a claim for 17 hours/week for “watching her medication” to be realistic or claimable as a “service” in the absence of any medical evidence that observation of that nature was required to be performed.

He declined to accept the invitation to adjust the figure claimed downwards, rather ruling that the legislative requirement in CLA s 59 not having been met, no award for gratuitous services – past or future – could be made.

The resulting damages award totalled $314k.

Sutton v Hunter [2021] QSC 249 Freeburn J, 7 October 2021

source https://cartercapner.com.au/blog/economic-loss-claim-slaughtered-capable-and-intelligent-manager-likely-only-to-earn-1-2k-week/