Zahed v IAG Limited t/as NRMA Insurance

1. [1]

   MEAGHER JA: I agree with Emmett AJA that the appeal should be dismissed. I also agree with the additional observations of Leeming JA.

2. [2]

   LEEMING JA: I agree with the orders proposed by Emmett AJA, and with the substance of his Honour’s reasons. I would add the following, essentially by way of elaboration rather than qualification, which presupposes familiarity with the background summarised in Emmett AJA’s judgment.

3. [3]

   Subsection 94(5) of the Motor Accidents Compensation Act 1999 (NSW) required the Assessor to “attach a brief statement to the certificate, setting out the assessor’s reasons for the assessment”. Further, cl 18.4.3 of the Claims Assessment Guidelines imposed an obligation that the statement of reasons set out, “as briefly as the circumstances of the assessment permit ... the reasoning processes that lead the Assessor to the conclusions made”. It was common ground that s 106(1) of the Act made the Claims Assessment Guidelines binding upon the Assessor. For completeness, it may be noted that neither party suggested that the obligations imposed by the Act and the Guidelines were inconsistent.

4. [4]

   Plainly enough, there may be a tension between the obligation to explain and the obligation to be concise. That is a familiar tension (for example, pleadings must “contain only a summary of the material facts on which the party relies”, and be “as brief as the nature of the case allows”: see now UCPR Pt 14 rr 14.7 and 14.8). The resolution of the competing obligations imposed by s 94(5) and cl 18.4.3 ought not to result in an unduly demanding burden of providing reasons. It is to be borne in mind that the objects of the Guidelines are “to provide a timely, fair and cost effective system for the assessment of claims” and “to assess claims and disputes fairly and according to the substantial merits of the application with as little formality and technicality as is practicable and minimising the cost to the parties” (cl 1.14), and the obligation to set out the reasoning process is to be construed accordingly. The obligation thereby imposed is less than that imposed on courts: see eg Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13; 83 NSWLR 302 at [53]-[59]; Pham v NRMA Insurance Ltd [2014] NSWCA 22; 66 MVR 152 at [29]-[31]. Further, as Basten JA’s judgment in Kerr indicates, by reference to authority, the nature of the Assessor’s task may mean that aspects are insusceptible of any detailed articulation of reasons.

5. [5]

   Applying that low threshold, it suffices in this appeal to focus upon the damages awarded for past care. The only paragraph in a lengthy statement of reasons which purports to do more than reciting background, evidence or competing submissions on that issue was paragraph 44:

6. [6]

   I would not accept the submission initially advanced by the respondent, which in effect was that nothing in the statement of reasons could be left to inference (transcript, 5 February 2016, p 18). True it is that the Assessor did not say in terms from where the amount of 6.76 hours of assistance for past gratuitous care assessed to be reasonable and necessary was derived. However, the amount corresponds precisely (to three significant digits) with Assessor Davidson’s assessment of the same head, and the Assessor stated that he was assisted by her summary recommendations. It is obvious that that must be the source of that conclusion. Ultimately, the respondent acknowledged that that must be so. The concession was properly made. If the only complaint were the failure to state expressly that the 6.76 hours was derived from the certificate of Assessor Davidson, then there would in my opinion be no breach of the obligations imposed on the Assessor. Although it is undesirable for the statement of reasons to leave important matters to inference, doing so does not necessarily breach the obligation to set out the Assessor’s reasons. The question is whether the reasoning process can be discerned, reading the reasons as a whole and applying a “beneficial construction” to which the High Court referred in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 271-272. At least where a gap may be filled as a matter of necessary inference on a fair reading of the reasons, I would consider that the obligation to set out the reasons has been discharged.

7. [7]

   However, the Assessor found that 6.76 hours per week of assistance was required until the date of assessment and until some stage in the future. That was inconsistent with the certificate of Assessor Davidson, who had found that most of the heads of domestic assistance ceased to be necessary or reasonable after 8 November 2011. It was also inconsistent with the views of Dr Maniam (who was of the view that the need would extend for the whole of Ms Zahed’s lifetime). What then was the reasoning process which led the Assessor to reject the opinions of all of the practitioners who gave evidence on this point and reach a different conclusion?

8. [8]

   The short point in this appeal is that the certificate discloses no reasoning process on that critical integer in the calculation of this head of damages at all.

9. [9]

   I would not regard it as necessary for the Assessor to explain why he disagreed with aspects of each of the practitioners’ opinions. However, it is necessary for the statement of reasons to explain why the 6.76 hours per week for past gratuitous care was regarded by him to be necessary to the date of the assessment. The reasons need not be long. Indeed, there will be many cases, of which I suspect this is one, where a single sentence would suffice. But to say merely that all of the conflicting evidence was taken into account is, in the facts of this case, insufficient. The matter may be tested against the parties’ rights of review: how are the parties to know whether the reasoning is affected by judicially reviewable error of law?

10. [10]

    The critical paragraph reproduced above includes the words “making some allowance for the deduction of time spent on childcare”. In another case, qualifying words of that nature might suffice to discharge the obligation to set out the reasoning processes; it will depend upon the nature of the particular reasoning process in the particular case. But in the present case, those words provide no explanation of the reasoning process. If anything, they add to the opacity of the reasoning. Assessor Davidson’s determination of hours included no amount for childcare. Dr Maniam did include an unspecified amount for childcare (it was 8 hours per week for “assistance for child minding, cleaning, scrubbing and shopping”). How then could some allowance for childcare result in precisely the same number of hours per week as had been determined by Assessor Davidson without regard to childcare, as well as being extended for a longer period of time?

11. [11]

    It follows that the primary judge was correct to conclude that the requirements of s 94(5) and the Guidelines had not been met, resulting in error of law on the face of the record warranting quashing the decision: Allianz Australia Insurance Ltd v Sprod [2012] NSWCA 281; 81 NSWLR 626 at [39]. For those reasons, as well as those given by Emmett AJA, the appeal must be dismissed.

12. [12]

    EMMETT AJA: The question in this appeal is whether the second respondent (the Assessor) failed to give adequate reasons in making an assessment under s 94(4) of the Motor Accidents Compensation Act 1999 (NSW) (the Compensation Act) in relation to a claim made by the appellant, Ms Asmahen Zahed (the Claimant), against the first respondent, IAG Limited (the Insurer). The Assessor is a party in his capacity as a claims assessor of the third respondent, the State Insurance Regulatory Authority (the Authority).

13. [13]

    The Insurer brought proceedings in the Common Law Division of the Supreme Court against the Claimant, the Assessor and the Authority, seeking an order under s 69 of the Supreme Court Act 1970 (NSW) that an assessment made by the Assessor on 14 October 2014 (the Assessment) be set aside. On 29 May 2015, for reasons published on that day, a judge of the Common Law Division (the Primary Judge) ordered that the Assessment be set aside and that the Claimant, the Assessor and the Authority be prohibited from acting on or taking any further steps in reliance on the Assessment. The Primary Judge remitted the matter to the Authority for determination of the Claimant’s application according to law. His Honour also ordered that the Claimant pay the Insurer’s costs of the proceedings.

14. [14]

    By notice of appeal filed on 24 June 2015, the Claimant appealed from the orders of the Primary Judge under s 101 of the Supreme Court Act. The amount of the Assessment was $114,979.45. While the complaint made by the Insurer concerned only $86,280.38 of that amount, the order of the Primary Judge was that the decision be set aside and that the matter be remitted to the Authority for determination by a different claims assessor, and according to law. The consequence of the terms of the orders is that the amount in issue in the appeal exceeds $100,000 and, accordingly, the Claimant is entitled to appeal to this Court as of right.

15. [15]

    An amended notice of appeal was filed in court on 5 February 2016, without objection, to reflect the fact that the State Insurance Regulatory Authority is the successor of the Motor Accidents Authority of New South Wales. It is not readily apparent why, on remitter, the matter should be dealt with by a different claims assessor. However, no ground was raised concerning that aspect of the orders of the Primary Judge.

The Assessment

1. [16]

   On 27 October 2010, the Claimant was involved in a motor vehicle accident when a vehicle insured by the Insurer collided with the rear of a vehicle being driven by the Claimant. The Claimant experienced shock and abdominal pains. Thereafter, she experienced lower back pain, neck pain and other symptoms, which continued. She made an application to the Insurer for compensation. The Insurer admitted liability.

2. [17]

   The Assessor concluded that, as a result of the accident in question, the Claimant sustained a whiplash injury affecting her lower back, resulting in a chronic muscular-ligamentous condition. The Assessor found that the Claimant suffers from persistent neck pain with associated headaches that, on the balance of probabilities, were caused by the accident. The Assessor also considered that the Claimant developed an adjustment disorder as a result of the accident [Black 395].

3. [18]

   Relevantly for present purposes, the Assessor had before him certificates under Part 3.4 of the Compensation Act from two medical practitioners, being a certificate dated 7 May 2013 from Dr Nigel Marsh and another dated 16 July 2013 from Dr Judith Davidson. In addition, the Assessor had reports from Dr Vijay Maniam, who treated the Claimant.

4. [19]

   Dr Marsh considered that the injuries suffered by the Claimant, particularly the injury to his lower back, gave rise to a need for domestic assistance from 27 October 2010 to the date of his assessment. He also considered that they may give rise to a need for domestic assistance from that date and for the balance of the Claimant’s life expectancy, of approximately 57 years.

5. [20]

   Dr Davidson, on the other hand, certified that only a limited number of hours per week of domestic assistance from 27 October 2010 to the date of assessment, and from the date of the assessment for the balance of the Claimant’s life expectancy, were reasonable and necessary in relation to the injuries sustained. Dr Davidson stated that the specific details of the care that was considered reasonable and necessary were as follows:

6. [21]

   Dr Davidson gave detailed reasons for those opinions and included a summary of the care that she determined was reasonable and necessary covering the three periods from the date of injury to 8 November 2011, from 8 November 2011 to the date of Assessment and from the date of Assessment into the future (the Davidson Summary). The Davidson Summary apportioned the hours specified above to various kinds of assistance.

7. [22]

   The Assessor assessed the Claimant’s entitlement to damages in the sum of $114,979.45, made up as follows:

8. [23]

   The complaint by the Insurer was that the Assessor failed to give adequate reasons for his determination in relation to past gratuitous care and future commercial care. In the reasons for the decision appended to the Assessment, the questions of past care and future care were relevantly dealt with as follows:

The Reasons of the Primary Judge

1. [24]

   In its amended summons filed on 19 December 2014, the Insurer sought to impugn the Assessment on several grounds. One of the grounds was that, in dealing with the issues of past and future care, the Assessor failed to provide adequate reasons for his decisions and conclusions concerning past and future care.

2. [25]

   Section 94 of the Compensation Act relevantly provides for the making of an assessment by a claims assessor of claims under Part 4.4, and requires a claims assessor to issue to the parties relevant certification. More specifically, s 94(5) requires the claims assessor to attach a brief statement to the certificate, setting out the reasons for the assessment. In addition, under s 106 such assessments are subject to the relevant provisions of guidelines relating to those assessments.

3. [26]

   Section 69 of the Compensation Act authorises the Authority to issue guidelines for motor accident claims assessments with respect to Part 4.4. The Interpretation Act 1987 (NSW) applies to such guidelines in the same way as its provisions apply to statutory rules. Motor Accidents Claims Assessment Guidelines have been issued by the Authority under s 69 (the Guidelines). Clause 18.4 of the Guidelines relevantly provides that a certificate under s 94 must have attached to it a statement of the reasons for the assessment that sets out, as briefly as the circumstances of the assessment permit:

4. [27]

   In his reasons, the Primary Judge observed that to succeed in setting aside a claims assessor’s decision, a party must establish jurisdictional error, a constructive failure to exercise jurisdiction or legal unreasonableness. In particular, his Honour said that, given the requirements of s 94(5) of the Compensation Act and clause 18.4 of the Guidelines, an assessor’s failure to provide reasons could constitute such an error: see Campbelltown City Council v Vegan [2006] NSWSC 284; 67 NSWLR 372. His Honour observed that legal unreasonableness encompasses circumstances where a decision maker has failed to give adequate weight to a relevant factor of great importance, or has reasoned illogically or irrationally, where a decision lacks evidence and intellectual justification and where it is not apparent how a conclusion was reached, but the decision itself bespeaks error: see Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332 at [363].

5. [28]

   The Primary Judge considered that it was not a compliance with s 94(5) or clause 18.4 of the Guidelines merely to refer to some or all of the relevant evidence, assert that it had been taken into account and then state a conclusion. His Honour considered that to do so did not amount to reasons within s 94(5) or a reasoning process or a manner of determining an amount. His Honour observed that a statement of reasons must explain the actual path of reasoning by which a decision maker in fact arrived at the opinion formed on the question referred to the decision maker. A statement of reasons must explain the actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the medical panel formed its opinion, the legal effect of the opinion can be removed by an appropriate order. If a statement of reasons fails to meet that standard, the failure is itself an error of law on the face of the record of opinion, on the basis of which an appropriate order can be made removing the legal effect of the opinion: see Wingfoot Australia Partners Pty Limited v Kocak [2013] HCA 43; 252 CLR 480 at [55].

6. [29]

   Having observed that the reasons of a claims assessor should not be scrutinised over zealously, the Primary Judge concluded that the Assessor had not revealed his reasoning process and provided no reason why he selected the figure of 6.76 hours per week. His Honour said that, although it might be possible to infer that the Assessor simply adopted Dr Davidson’s figure, he provided no reasons as to why he did so for the whole of past care, or why he rejected Dr Davidson’s view that the figure should be at 3 hours per week for some of that time.

7. [30]

   The Primary Judge accepted that in the assessment of damages, there is a place for informed intuition and speculation, and that the question is largely one of impression. Nevertheless, his Honour said that in cases where intuition, speculation or impression founded the basis for a conclusion, that of itself did not provide reason for the conclusion reached. His Honour concluded that the Assessor did not comply with the requirements of s 94(5) or the Guidelines and that there was an error of law on the face of the record such that the Assessor’s decision in issuing the Assessment should be set aside. In the light of that conclusion, his Honour did not give any consideration to the other errors relied upon by the Insurer.

The Appeal

1. [31]

   While the grounds stated in the Claimant’s notice of appeal are somewhat discursive, they appear to amount to a complaint that the Primary Judge erred in holding that the Assessor did not comply with the requirements of s 94(5) of the Compensation Act or the Guidelines. In particular, it is contended that the Assessor is not obliged to provide a statement of reasons as to why he may have accepted or rejected some of the evidence touching upon the claims for past and future care and was not obliged to provide reasons as to why he rejected Dr Davidson’s view that the Claimant’s need for domestic care after 8 November 2011 was reduced to 3 hours per week.

2. [32]

   Since the Insurer had accepted liability, the function of the Assessor was to make an assessment of the amount of damages for which the Insurer was liable in respect of the claim by the Claimant. The assessment was to be of the amount of damages that a court would be likely to award. Such an assessment is to be made having regard to such information as is conveniently available.

3. [33]

   An assessment is to specify an amount of damages and the claims assessor must, as soon as practicable after an assessment, provide the parties with a copy of a certificate as to the assessment. Critically, under s 94(5), a claims assessor is to attach a brief assessment to the certificate, setting out the claims assessor’s reasons for the assessment.

4. [34]

   In making an assessment of the future need for domestic services, precision is almost impossible. Such a question is largely one of impression: see Wener v Krahe [2002] NSWCA 168 at [27]. Nevertheless, at least in relation to assessing past needs, the reasons given by a claims assessor must explain the actual path of reasoning by which the claims assessor in fact arrives at the opinion that the claims assessor in fact forms on the question. The statement of reasons must explain the actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law: see Wingfoot Australia Partners Pty Limited v Kocak [2013] HCA 43; 252 CLR 480 at [55].

5. [35]

   In paragraph 38, the Assessor observed that, in the Davidson Summary, Dr Davidson had set out the specific number of hours that she considered were reasonable and necessary. The Assessor said that the Davidson Summary was “strictly part of her reasons for her certificate” and was therefore not binding. That observation is curious in light of the form of the document produced by Dr Davidson. The document contains the heading “Certificate” and is followed by a statement as to various hours of treatments that were not reasonable and necessary in the circumstances. The Assessor appears to have accepted that that part of the document was binding, as I indicated above. Immediately following that part of the document, still under the heading “Certificate”, is a statement by Dr Davidson of the specific details of the care that she considered reasonable and necessary. That part of the document ends with the following statement:

6. [36]

   That is followed by a heading “Reasons”. The “Reasons” contain several headings as follows:

7. [37]

   The Assessor concluded that he was not bound by that part of Dr Davidson’s certificate that stated that the care that was considered reasonable and necessary was limited to 6.76 hours per week from 27 October 2010 to 8 November 2011, to 3 hours per week from 8 November 2011 until the date of assessment, to 3 hours per week from the date of assessment for 2 years and to 1 hour per week from 2 years following the assessment for a maximum of 3 years. The Insurer did not dispute the correctness of that conclusion although it is not clear why the parties accepted that Dr Davidson’s statement of the specific details of the care that were considered reasonable and necessary were not part of her certificate. Nevertheless, the appeal has proceeded on the basis that the Assessor’s conclusion was correct.

8. [38]

   Clearly, the Assessor rejected the opinion of Dr Davidson as to the period during which care was considered reasonable and necessary. Rather, the Assessor appears to have accepted the opinion expressed in the certificate of Dr Marsh that domestic assistance from the date of the accident and continuing for the balance of Claimant’s life expectancy related to the injuries caused by the motor accident. However, Dr Marsh did not specify the extent of domestic assistance required.

9. [39]

   In his reasons, the Assessor appears to have adopted some aspects of the opinion expressed by Dr Davidson, namely that for a limited period, 6.76 hours per week was reasonable and necessary. However, the Assessor concluded that such a degree of domestic assistance was reasonable and necessary for a period extending well beyond that specified by Dr Davidson. The Insurer’s complaint was that the Assessor simply gave no reasons for that conclusion.

10. [40]

    On the hearing of the Appeal, counsel for the Claimant sought to support the Assessor’s determination on the basis that his reasoning could be inferred in some way from the conclusion. Thus, it was suggested that the Assessor accepted the assessment made by Dr Davidson in respect of the period up to 8 November 2011 but rejected her opinion in respect of any period after that date. Dr Maniam expressed the opinion that the claimant would require assistance for child minding, cleaning and scrubbing for a few years but did not provide a breakdown.

11. [41]

    In his reasons, the Assessor said that he took into account all the expert opinions, including those of Dr Davidson and Dr Maniam, and made some allowance for the deduction of time spent on childcare. It is not clear to what the Assessor was referring when making an allowance for the deduction of time spent on childcare or what allowance was necessary in relation to Dr Davidson’s assessment. The Assessor also said that his determination was made with the assistance of the summary of Dr Davidson to which I have referred above. That, at least, makes clear that the figure of 6.76 adopted by the Assessor was derived from Dr Davidson’s reasons, if not her certificate.

12. [42]

    It may be that the Assessor adopted Dr Davidson’s assessment of hours and then projected that number by reference to the opinion of Dr Marsh (that domestic assistance from 27 October 2010 and continuing for the balance of Claimant’s life expectancy related to the injuries she suffered in the accident). However, Dr Marsh simply makes no assessment of the extent of the domestic assistance that was reasonable and necessary. It is not possible to discern from the Assessor’s reasons the actual path of reasoning by which he arrived at the result stated in the Assessment. It does not explain the actual path of reasoning in sufficient detail to enable a court to determine whether his decision does or does not involve an error of law. The Assessor did not comply with the requirement of s 94(5) that he set out his reasons for the Assessment. He did not comply with s 106 in so far as the Assessment was subject to the provisions of clause 18.4 of the Guidelines in requiring that his statement of reasons attached to his certificate set out, albeit as briefly as the circumstances of the assessment permit, the reasoning process that led the Assessor to the conclusions made.

13. [43]

    A fine line is sometimes to be drawn between the grant of relief under s 69 of the Supreme Court Act by reason of inadequate reasons (as in this case), and what is ultimately, in substance, merits review. The grant of relief in a case such as this should not be taken as an encouragement to challenge administrative decisions of the nature of that made by the Assessor in this case. As the Primary Judge observed, quite correctly, the reasons of a claims assessor should not be scrutinised over zealously. While the reasons required are not necessarily those which may be expected of a judge, the reasons must demonstrate the path of reasoning that leads the claims assessor to a conclusion as to the amount of damages that a court would be likely to award. In order to make an assessment of the amount of damages that a court would be likely to award, a claims assessor must have regard to the reasoning process that the court would be required to adopt in awarding damages. Again, a fine line is to be drawn between the reasons that might be given by a court for making an award and the reasons of a claims assessor for making an assessment for the amount of damages that a court might be likely to award. The former is a more burdensome task than the latter. However, the Assessor did not in this case, satisfy the latter burden. That is the conclusion reached by the Primary Judge.

Conclusion

1. [44]

   There was no error on the part of the primary judge in reaching his conclusion and granting relief by way of setting aside the Assessment. The Appeal should be dismissed with costs.