Compulsory Third Party Insurance, Insurance

The need for evidence; proving the future

24 June, 2020

Can a Claims Assessor treat disputed projections of hypothetical income as “facts” in the absence of supporting evidence? Is a Claims Assessor obliged to provide adequate reasoning for their decisions? The Supreme Court recently explored these issues in Gordian Runoff Limited v Ozurumba [2020] NSWSC 774.

Author: Laurette Rizk
Judgment date: 19 June 2020
Citation: Gordian Runoff Limited v Ozurumba [2020] NSWSC 774
Jurisdiction: Supreme Court of New South Wales


  • A Claims Assessor must ensure that lawful, evidence-based justification is the foundation of an award of damages.
  • It is incumbent on a Claims Assessor to treat disputed projections of hypothetical income with caution by assessing the legitimacy and likelihood of those hypotheticals.
  • A Claims Assessor has a legal duty to provide adequate reasoning for their findings.
  • The assumptions which form the basis of an award for future economic loss must be articulated by a Claims Assessor pursuant to Section 126 of the Motor Accidents Compensation Act 1999 (NSW).


The Insurer sought judicial review of a Claims Assessor’s decision with respect to an assessment of damages for past and future economic loss. The Insurer sought orders setting aside the decision of the Claims Assessor and remittance to the State Insurance Regulatory Authority to re-assess the Claimant’s past and future loss of earnings.

The Claimant was involved in a rear-end collision on 5 July 2015. He allegedly sustained soft tissue injuries as a result. At the time of the accident, the Claimant was 41 years old and employed by Canterbury Hospital as a grade 1 clinical nurse specialist (“CNS-1”). His remuneration comprised of a base salary plus penalty and overtime rates applicable to night and weekend shifts.

The Claimant returned to work the day after the accident and was able to carry out his pre-injury duties with no restrictions. In October 2016, Canterbury Hospital assigned the Claimant to a hybrid role, performing sedentary duties as a diabetes educator and continuing on as a CNS-1 for part of the week. In September 2017, the Claimant was promoted to grade 2 (“CNS-2”) which was a Diabetes Educator role, attracting a higher base salary with an alleged loss of income from night and weekend work.

The Claimant asserted that, but for the accident:

  • He would not have been offered the hybrid role in the first instance.
  • He would not have physical restrictions that were allegedly the motivation behind his promotion as a Diabetes Educator.
  • He would continue in his CNS-1 role having penalty and overtime rates available to him which were uncommon as a CNS-2, despite a higher base salary.

The Claimant had provided a series of comparative schedules purporting “actual past earnings and “Potential (past) Earnings” but for the accident in comparison to his actual earnings.

The Claims Assessor accepted the Claimant’s schedule of “Potential Earnings” on the basis that, but for the accident, he would have accepted a role as CNS-2 and would have been rostered to weekend and night shifts calculated on a higher base salary. The Claims Assessor also accepted that the Claimant would not have been offered the hybrid role or the promotion to CNS-2 if it were not for the accident. In the same way, the Claims Assessor adopted the theoretical weekly rate proposed by the Claimant. The Claims Assessor awarded $186,712 in respect of past economic loss.

The Claims Assessor recognised that a “shortfall” in the Claimant’s income would ultimately follow and awarded $200,000 buffer for future economic loss. The buffer award was consistent with a “theoretical calculation” made by the Insurer’s forensic accountant. The assessment by the forensic accountant was based on whether the Claimant was found to have a diminution in future earning capacity.

The Insurer’s grounds for review concerned the overwhelming lack of evidence for the Claims Assessor’s findings and the failure of the Claims Assessor to provide adequate reasoning.

Specifically, the Insurer took issue with the following findings of the Claims Assessor (at [15]):

  1. That but for the accident, in FY16 and FY17 the Claimant’s earnings would have been at the weekly rates calculated by him in “Potential Earnings” schedules, and;
  2. That, but for the accident, upon the Claimant accepting a promotion to CNS-2 he would have been rostered to night and weekend shifts and overtime so that his earnings would have been increased by the application of penalty and overtime rates calculated on the higher base salary of a CNS-2.

The Insurer also argued that the Claims Assessor erred by not providing reasons in adopting the Insurer’s experts theoretical calculation for future economic loss.


Ultimately, Fagan J found that:

  1. There was no evidence to “substantiate the integers in the calculations” of the Claimant’s “Potential Earnings” because they were constructed on the assumption that the Claimant could work a full shift 365 days a year.
    *In fact, the evidence available to the Claims Assessor (the award conditions relevant to the Claimant’s role) left the assumption untenable.
  2. There was no evidence to support the Claimant’s calculations for “Potential Earnings” as a CNS-2 nor was there evidence to substantiate that “shift work would have been available at that classification” to support the assertion that the Claimant could receive penalty rates in that role. The Claims Assessor failed to give reasons as to why he unquestionably accepted the Claimant’s calculations.
  3. It was an error of law for the Claims Assessor to operate on the “unsupported premise” that the Claimant would have received a promotion to CNS-2 and worked night shifts and weekends when there was no evidence to that effect.
  4. Even if there had been adequate reasoning, his Honour concluded that “no sensible reasons could have been given for those conclusions”.
  5. The Claims Assessor had a legal duty to acknowledge the Insurer’s evidence and provide an explanation as to why it was not preferred to that of the Claimant. This duty was not discharged.
  6. A buffer award for future economic loss was contradictory in circumstances where the Claims Assessor adopted a theoretical figure for weekly loss, assumed a working life expectancy and applied a discount for vicissitudes.
  7. The Claims Assessor contravened Section 126 of the Act by not providing his assumptions for the award of future economic loss.

At [44] of the judgment, His Honour stated:

‘The assessor’s reasons manifestly fail to disclose a coherent, intelligible justification for his award. The reasons place a veneer over the complex absence of lawful, evidence-based justification for this significant award of $382,712’

Final result

The Supreme Court set aside the Claims Assessor’s decision with respect to past and future loss of earnings.

The matter was remitted to the State Insurance Regulatory Authority for reassessment of the economic loss portion of the claim by another Claims Assessor.

Why this case is important

This case affirms that a Claims Assessor must use the available evidence as a basis for their decisions.

The corollary is that a Claims Assessor will be deterred from making a substantial award for damages in the absence of supporting evidence to warrant acceptance of hypothetical projections made by a party.

This case also serves as a reminder to Claims Assessors of their obligations to provide adequate reasoning for their findings and subsequent assessment of damages.

Recent Insights

View all
Litigation and Dispute Resolution

Canadian Court elevates thumbs-up emoji to signature status

In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract.   Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed.   Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph [18], Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)."   Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and   The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and   The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter.   Judgment At paragraph [36], Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship.   Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph [63]: "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest.   What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.

Published by Foez Dewan
29 August, 2023

Venues NSW ats Kerri Kane: Venues NSW successful in overturning a District Court decision

The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane [2023] NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty.  The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.

Published by Leighton Hawkes
18 August, 2023
Litigation and Dispute Resolution

Expert evidence – The letter of instruction and involvement of lawyers

The recent decision in New Aim Pty Ltd v Leung [2023] FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.

Published by Justin Pennay
10 August, 2023