Hauraki v Steinhoff Asia Pacific Limited trading as Freedom Furniture [2021] ACTSC 54

Print Friendly, PDF & Email

By Scott Moloney, Partner and Kate Heremaia, Paralegal

On 12 April 2021, Crowe AJ of the ACT Supreme Court handed down a decision awarding a plaintiff $5.6 million in compensation for his catastrophic injury – the decision represents the largest assessment of general damages seen by the Territory to date.

Background

The plaintiff, Mr Adam Hauraki, was working as a storeman at Fantastic Furniture in Fyshwick. After the company lost access to its off-site properties, additional stock had been relocated to the Fyshwick warehouse causing it to become overcrowded and cluttered. The plaintiff had complained about the danger of the additional stock, but his employer had not instituted any additional safety measures.

On 26 September 2016, Mr Hauraki was loading a sofa onto a trolley when a nearby dining table was knocked over, hitting him on the right side of the head and shoulder. He bent forward to regain control of the trolley, experienced severe lower back pain and ended up being pinned underneath the dining table, which a colleague needed to lift off him. He was directed by his supervisor to lie on the floor until his wife came to collect him and took him to hospital.

Liability for his lower back injury was initially accepted by the workers’ compensation insurer, but was ceased in mid-2017 on the basis of an IME report that determined that he no longer had any physical restrictions.

In 2009, the plaintiff had been the victim of an assault.  He sought psychiatric treatment and had been taking anti-depressive medication ever since. After the insurer ceased liability for the physical injury, the plaintiff began to speak of suicide. It is reported that over the next few months his mental state deteriorated, and he engaged in self-harm at an increasing rate. The plaintiff was admitted to the adult mental health unit several times and experienced relationship difficulties and alcoholism related to his anger and depression.

The plaintiff eventually returned to full duties and increased his domestic activities, but continued to experience pain and psychiatric issues.

At the time of hearing, the plaintiff’s treating physicians were generally of the opinion that he suffered from mechanical lower back pain, chronic pain syndrome, and severe psychiatric conditions (including PTSD, generalised anxiety disorder and major depression (with suicidal ideation). His prognosis was considered to be generally poor.

The defendant submitted that the plaintiff suffered from somatic symptom disorder (with some disagreement between specialists as to the exact nature of the condition) and severe persistent depressive disorder with anxious distress. His prognosis was also considered to be poor, with Associate Professor Robertson considering that the plaintiff was ‘…likely to continue along a trajectory of profound psychosocial impairment and symptomatic disturbance.’

Submissions

Interestingly, the defendant did not put forth an argument as to liability, contributory negligence or causation. Instead it argued that the plaintiff’s poor prognosis and high risk of suicide meant that damages should be assessed by reference to a life expectancy of 5 years (totalling $1,778,862.00). In the alternative, the defendant submitted that should the Court allow for a life expectancy of 30 years, the amount awarded should be reduced by 50% on account of vicissitudes (approximately $2,510,960.00).

The plaintiff argued that discounts should be kept to a minimum, noted the large cost of medical expenses and attendant care services that he would require because of the severity of his conditions, and pointed to his plans to obtain alternate, higher-paying employment as the basis for the claim for loss of earning capacity and superannuation. The damages claimed totalled $9,216,100.00.

Decision

Crowe AJ considered that the plaintiff had experienced psychological disturbance following the 2009 assault but was functioning reasonably well in all aspects of life prior to the 2016 injury with the assistance of anti-depressive medication. Thus, the plaintiff’s physical injury:

‘Set in train a sequence of events which was catastrophic for the plaintiff. It has left him with the interrelated chronic pain and severe psychiatric conditions … I accept that the prognosis is such that the plaintiff’s chances of recovery to his pre-injury level of functioning are very low. He is likely to require ongoing medical treatment, intermittent hospitalisation and medications for the rest of his life.

In response to the defendant’s claim for a reduction in damages for vicissitudes, Crowe AJ said:

In relation to the possibility that something like the plaintiff’s current mental condition might have been triggered by some other event, I have no clear evidence with which to formulate that risk as a percentage on a scientific basis… While it is true that the plaintiff has suffered a number of specific aggravations of his condition by life events since the 2016 injury those aggravations have occurred in the context of his condition having spiralled out of control in 2017 due to that injury and its consequences… I do not accept either of the alternative approaches suggested by the defendant. It seems to me that the evidence falls well short of supporting either the assumption of a 5 year life expectancy or the alternative of a 30 year life expectancy combined with a discount for vicissitudes of 50%. Having regard to the approach required by Malec it seems to me that the risk of the plaintiff suffering an incapacitating “trigger” before the present time, assuming that the 2016 injury had not occurred, was fairly low.’

On this basis, Crowe AJ considered that there was no more than a 5% possibility of an intervening incapacitating event.

As to general damages, Crowe AJ considered that the ‘chronic pain which the plaintiff now suffers, combined with the extreme mental anguish which has led him to contemplate, and attempt, suicide on numerous occasions must sound in a significant award. This is particularly so given the uniformly bleak prognoses made by the medical experts. The plaintiff’s life has been fundamentally changed for the worse by the injury to his back and its consequences’.

The parties could not demonstrate any truly comparable Territory award, and so Crowe AJ assessed this head of damages at $350,000.00 plus interest.

In total, Crowe AJ awarded damages in the amount of $5,624,298.00 plus costs as agreed or assessed. The breakdown for the heads of damages are set out below:

Head of Damage Amount
General damages $350,000.00
Interest $15,750.00
Out of Pocket Expenses
Past $493,000.00
Interest
Future $1,839,338.00
Loss of earning capacity
Past $141,547.00
Interest $16,314.00
Future $600,171.00
Domestic Care/Assistance
Past $200,000.00
Interest $18,000.00
Future $1,866,189.00
Loss of Superannuation $81,589.00
Fox v Wood $2,400.00
Total $5,624,298.00

Conclusion

Traditionally, insurers have often been successful in denying liability or reducing damages for compensation for psychiatric injuries if a plaintiff has had a pre-existing history of mental illness. However, echoing modern sentiments, at least one justice of the ACT Supreme Court seems to no longer favour such arguments. This case confirms that it is no longer a barrier for a plaintiff to be engaging in active treatment for pre-existing psychiatric issues at the time of suffering a compensable injury to achieve compensation, so long as their prognosis and functional capacity at the time of the injury was reasonably good in all the circumstances. If a causal relationship can be drawn between the compensable injury and any later deterioration of the plaintiff’s pre-existing psychiatric state, then compensation may be payable – and the awards seem to be growing.

Get the latest news insights and articles straight to your inbox, simply enter your details.

    *
    *
    *
    *Required Fields

    Insurance

    Delays have dangerous ends for CTP Insurer - Bona v Jeffries & Anor [2021] QSC 84