QBE Insurance (Australia) Limited v Lay

1. [1]

   This judgment involves a judicial review of a decision of a delegate of the Personal Injury Commission concerning a one vehicle accident where fault has been admitted by the plaintiff.

2. [2]

   The plaintiff is QBE Insurance (Australia) Limited (‘the insurer’). The first defendant is Peter Lay (referred to as the claimant below) (‘the driver’). The second defendant is Member Maurice Castagnet. The third defendant is the President of the Personal Injury Commission of New South Wales. The insurer was represented by J. Gumbert of counsel. The insurer relied upon a Court Book (‘Ex A’).

3. [3]

   There is no active contradictor, as all defendants have filed submitting appearances. Consequently, the insurer no longer seeks an order for costs against any of the defendants. Nevertheless, this Court has an obligation to satisfy itself as to whether these grounds of review constitute errors of law on the face of the record or jurisdictional errors.

4. [4]

   By summons, filed the 13 September 2023, the insurer seeks:

5. [5]

   In these proceedings, the insurer contends that each of the errors identified in the grounds section of the summons constitute:

6. [6]

   All that is required for the insurer to establish its case and so to enliven the Court's power to issue remedies is for the Court to find an error of law on the face of the record (the "record" is the written reasons - see, section 69(3) & (4) of the Supreme Court Act 1970 (NSW)). Errors of law on the face of the record need not be errors going to jurisdiction. [1]

7. [7]

   In Pham v NRMA Insurance Ltd [2] [3] it was held (per Leeming JA, with Tobias AJA agreeing) that under the Motor Accidents Compensation Act 1999 (NSW) (‘MAC Act’), both a claims assessor’s certificate and reasons form part of the record, by reason of the statute requiring reasons to be given. Here, the Member had an obligation to provide reasons, pursuant to section 7.13(4) of the Motor Accident Injuries Act 2017 (NSW) (‘MAI Act’). The reasons therefore form part of the record.

8. [8]

   As to the issue of jurisdictional error, the insurer has pleaded that the errors include a constructive failure to exercise jurisdiction. The Court of Appeal in Rodger v De Gelder [4] held:

9. [9]

   The real question is whether there is an established relevant error of law on the face of the record or jurisdictional error that warrants quashing the decision, should that step be determined to be taken in the Court’s discretion. That is the nature of judicial review proceedings as distinct from an appeal or review on questions of law, fact or discretion.

10. [10]

    The insurer seeks an extension of time in lodging judicial review proceedings in respect of the medical assessor’s decision. The reason for the delay is that the insurer was seeking a review of the decision within the Commission, thereby exhausting its remedies below. In Rodger v De Gelder [5] the Court of Appeal held that it may not be necessary to immediately challenge each administrative decision by way of judicial review and that it would be better for an applicant to first exhaust its existing remedies in the tribunal below before then troubling the Supreme Court in its supervisory jurisdiction.

11. [11]

    It is appropriate that the insurer exhausted the existing remedies before approaching this Court. Therefore, I grant an extension of time to file this summons up to and including 13 September 2023.

12. [12]

    Section 1.4 of the MAI Act defines “motor accident” as follows:

13. [13]

    Section 1.4 also defines “claim” as “a claim for statutory benefits or a claim for damages.” This definition removes the element of “fault” that was found in section 3 of the MAC Act.

14. [14]

    Section 1.9 of the MAI Act limits the application of the Act to “… death of or injury to a person that results from the use or operation of a motor vehicle only if the death or injury is a result of and is caused (whether or not as a result of a defect in the vehicle) during…” the circumstances listed in that section. This is in contrast to section 3A of the MAC Act which incorporated a requirement of fault [6] . The removal of the requirement of “fault” in the general definitions and scope of the Act facilitate the introduction of a no-fault statutory benefits scheme found in Part 3 of the MAI Act.

15. [15]

    However, the entitlement to claim damages under the MAI Act retains the need to establish fault in the causative use or operation of the vehicle by the owner or driver of the vehicle. Section 4.1 (in the Part of the Act dealing with claims for damages) provides:

16. [16]

    There is no further definition in the Act of what constitutes a “claim”, other than the definition in section 1.4. However, when regard is had to the authority that has considered the limits of a claim for damages under NSW Compulsory Third Party (‘CTP’) legislation (discussed below), it is apparent that a claim for damages must mean a common law claim for damages.

17. [17]

    This interpretation is supported by the Second Reading Speech of The Hon. Victor Dominello dated 9 March 2017. Throughout that speech, he refers to a claim for damages as a “common law claim for damages”, emphasising that it is only those people who have a common law entitlement to claim damage that will have a claim for damages. With apparent reference to section 3.12 of the Act, the Minister said:

18. [18]

    As in the MAC Act, there is the statutory provision to bring a claim for damages in certain circumstances where the accident is a “blameless” or “no-fault” accident, within the scope of Part 5 of the MAI Act.

19. [19]

    Section 5.1 of the MAI Act, which is relevantly the same as section 7A of the MAC Act, [7] provides:

20. [20]

    Section 5.2 of the MAI Act, which is relevantly the same as section 7B of the MAC Act, deals with deeming of fault in the case of no-fault accidents, and provides:

Background

1. [21]

   On 6 September 2019, the first defendant (‘the owner and driver of a motor vehicle (‘the driver’)’) was injured in a single vehicle motor accident on 6 September 2019 (‘the accident’), when the claimant was driving his own motor vehicle along the Hume Highway, and a tree fell on his car. No other vehicle was involved.

2. [22]

   The insurer is the CTP insurer of the driver’s vehicle.

3. [23]

   The insurer has had a number of prior decisions relating to the accident in the Personal Injury Commission prior to the decision the subject of this judicial review.

4. [24]

   The insurer brought a claim for statutory benefits against the insurer, on the basis of the injuries sustained in the accident, pursuant to Part 3 of the MAI Act. Section 3.12 of the MAI Act relevantly reads:

5. [25]

   On 9 August 2021, the insurer sent a letter to the plaintiff, indicating that his weekly payments would be terminated on 6 September 2021, being 104 weeks from the date of the accident, on the basis that he was precluded from making a damages claim given that his claim was a single vehicle no-fault accident claim for which there was no legally available common law claim for damages (CB-34).

6. [26]

   On 17 January 2022, the driver sought internal review of the decision of 9 August 2021 (CB-36).

7. [27]

   On 24 January 2022, the insurer issued a Certificate of Determination – Internal Review – with reasons, confirming its decision of 9 August 2021 (CB-39, CB-40).

8. [28]

   On 21 February 2022, the driver lodged with the Commission an application for assessment of a dispute regarding a “merit review matter” under Schedule 2(1)(b) of the MAI Act (CB-44).

9. [29]

   Schedule 2, clause (1)(b) provides that the relevant merit review matter is:

10. [30]

    The driver submitted that the relevant accident was a “no-fault accident” within the meaning of section 5.1 of the MAI Act (CB-51) and that the driver intended to make a claim for damages (CB-53).

11. [31]

    On 14 March 2022, the insurer lodged a reply to the driver’s application for assessment of the merit review matter (CB-59) submitting that a claim for common law damages could not be made and could not succeed because the driver could not bring a claim against himself or his own insurer (CB-62).

12. [32]

    On 12 April 2022, Member Castagnet (the second defendant) issued a certificate pursuant to section 7.13 of the MAI Act, affirming the insurer’s liability decision, on the basis that the driver had not in fact made an application for damages and therefore did not have a “pending claim for damages” (CB-63).

13. [33]

    The driver purported to lodge an application for common law damages with the insurer on 31 May 2022, on the basis that he had a “no-fault” claim pursuant to Part 5 of the MAI Act (CB-70).

14. [34]

    On 4 July 2022, the insurer issued a liability notice rejecting the claim for damages on the basis that the driver had no entitlement to recover damages due to an act or omission of the driver/claimant (CB-73).

15. [35]

    On 29 September 2022, the insurer issued a further notice denying liability for the driver’s claim for further weekly payments (CB-75).

16. [36]

    On 3 November 2022, the driver sought internal review of the insurer’s decision of 29 September 2022 (CB-78).

17. [37]

    On 15 November 2022, the insurer issued a further notice to the driver to the effect that his claim for weekly payments was denied on the basis that weekly payments should, and did, cease at 104 weeks from the date of the accident, given that the driver has no cause of action for common law damages, in accordance with Whitfield v Melenewycz [2016] NSWCA 235 (‘Melenewycz’). (CB-82).

18. [38]

    On 1 December 2022, the insurer issued a Certificate of Determination – Internal Review – with reasons, in response to the driver’s application of 3 November 2022, confirming the previous liability decisions (CB-87, CB-88).

19. [39]

    On 28 December 2022, the driver lodged with the Commission a further application for assessment of a dispute regarding a merit review matter under Schedule 2(1)(b) of the MAI Act: whether for the purposes of section 3.12 (Cessation of weekly payments to other injured persons after maximum weekly payments period) an injured person's injury is the subject of a pending claim for damages (‘the merit review matter’) (CB-95).

20. [40]

    In the driver’s submissions that accompanied that application for assessment asserted that the driver did have a pending claim for damages because there was a lawful basis for lodging the application for damages. Those submissions argued, at page 6 (CB-106):

21. [41]

    Therefore, the driver’s argument regarding his entitlement to make a claim rested on the assumption that there was a lawful basis for lodging the application for damages.

22. [42]

    On 23 January 2023, the insurer lodged a reply to the driver’s further application for assessment of the merit review matter, disputing that the driver had a lawful basis for making his claim (CB-108).

23. [43]

    On 29 March 2023, a statutory decision was made purportedly pursuant to section 7.13 of the MAI Act, by merit reviewer Maurice Castagnet in his capacity as a Member of the Commission (the second defendant), setting aside the insurer’s liability determination and certifying that the driver’s injury is the subject of a pending claim for damages and that the insurer is not entitled to cease payment of weekly payments of statutory benefits under 104 weeks (the first decision under review – “the Member’s decision”) (CB-119).

24. [44]

    The Member summarised the insurer’s submissions at [24] to [32]:

25. [45]

    In the Member’s decision, he stated (CB-128):

26. [46]

    On 26 April 2023, the insurer applied to the Commission for the Member’s decision to be referred to a review panel of merit reviewers, pursuant to section 7.15 of the MAI Act. The basis for review was that the claim for damages has no basis in common law and that any claim for damages must be founded on a legal cause of action (CB-130).

27. [47]

    On 10 May 2023, the driver lodged a reply to the insurer’s application for review of the Member’s decision (CB-153).

28. [48]

    Section 7.15 relevantly provides:

29. [49]

    On 13 June 2023, the President’s Delegate dismissed the insurer’s application for review of the Member’s decision, purportedly pursuant to section 7.15 of the MAI Act (the second decision under review – “the President’s Delegate’s decision”) (CB-169).

30. [50]

    The insurer seeks relief from the whole of the Member’s decision and the President’s Delegate’s decision.

31. [51]

    The insurer observes that the only right being determined by the decisions under review is the right to receive extended statutory benefits. The “merit review matter” does not have any impact on any right to attempt to bring a claim for damages in Court (the insurer says the driver would be unable to do so by operation of law in any event).

32. [52]

    The operation of the relevantly identical MAC Act “blameless accident” provisions was considered by the Court of Appeal in Melenewycz. The Court there said, at [30] – [31] (per Meagher JA, Simpson JA and Sackville AJA agreeing):

33. [53]

    This distinction is critical as it explains that the no-fault provisions do not operate to create a new tort. Rather, the provisions deem one element of negligence (fault) on the part of the owner or driver, so as to bring the claim within the existing elements of a claim in negligence against the owner or driver (ie, existence of a duty of care being owed, breach of duty of care (ie, “fault”), and causation of damage).

34. [54]

    Therefore, in a no-fault accident claim, the driver still must prove the other elements of negligence, against that same owner or driver, in order to complete the elements of the tort, and must still have a claim that could be brought under the common law, once the element of fault is deemed. That means, being able to prove (relevantly) the existence of a duty of care being owed to the driver by the proposed defendant.

35. [55]

    Melenewycz concerned a single-vehicle motorcycle accident where the driver of the motorcycle came to grief when a kangaroo jumped on the road in front of him. The issue was whether or not he was able to bring a claim under the blameless accident provisions of the MAC Act. The Court of Appeal held in that case at [35]—[40]:

36. [56]

    Member Cassidy in ACV v The Nominal Defendant (No 2) [2022] NSWPIC 634 on 17 November 2022 applied Melenewycz at [58]:

37. [57]

    The MAI Act is structured differently to the MAC Act, in that there is a new entitlement to statutory benefits that did not exist in the former scheme. However, per section 4.1, the entitlement to claim damages under the MAI Act retains the need to establish fault in the causative use or operation of the vehicle by the owner or driver of the vehicle. The deeming provision in section 5.2 refers to such a claim for damages. Accordingly, the requirement for causative use or operation of the vehicle is relevantly the same as in the MAC Act and as discussed in Melenewycz.

38. [58]

    The subject vehicle involved in the accident was owned and driven by the driver. It was a single vehicle accident. There is no other vehicle to bring a claim against. The only claim that the driver could hypothetically have would be a claim against himself.

39. [59]

    Recognising this, the driver attempted to bring a claim for damages against himself utilising the “no fault” accident provisions in Part 5 of the MAI Act.

40. [60]

    It was accepted by the insurer that the accident fell within the definition of no-fault accident. However, this in itself does not create any entitlement to claim damages, as section 5.1 is definitional and does not create or deem any liability.

41. [61]

    Given that the driver was both the owner and driver of the vehicle, his situation is the same as the situation that was described by the Court in Melenewycz at [31] above, where it was said that a driver cannot have a claim against himself.

42. [62]

    Therefore, the driver does not have the necessary foundations for a common law claim in negligence, that can be assisted by the deeming of fault that occurs by operation of statute.

43. [63]

    Even if fault could be deemed, and even if there was no bar on the claim by reason of the inability to sue oneself, the driver would still have to prove causative use or operation of the vehicle by the owner or driver (in the way the insurer was unable to do in Melenewycz).

44. [64]

    This causative use or operation requirement was considered further by Cavanagh J in QBE Insurance (Australia) Limited v Abberton [2021] NSWSC 588, the claimant in the Tribunal was referred to as AQQ, with his Honour finding, at [68] – [69]:

45. [65]

    If the driver cannot establish that there was use or operation of the vehicle that caused the injury, not only does he have no common law claim in negligence under the Act, there would be no “motor accident” within the definition of the Act, and therefore the Act would not apply and any claim would fall outside the CTP policy of insurance (section 2.3 of the MAI Act).

46. [66]

    Having regard to the circumstances of the driver’s accident, there is a significant issue as to whether or not there was any causative use or operation of the motor vehicle. However, given that there must have been causative use or operation of the vehicle, in order for the accident to be a “motor accident” at all, the only person who could have been using or operating the vehicle in such a way as to cause the accident is the driver.

47. [67]

    Furthermore, as set out above, in order to bring the claim within the damages provisions of the Act, there needed to be causative use or operation of the vehicle by the owner or driver (ie, the driver).

48. [68]

    There is no suggestion that there were any causative acts or omissions by the driver as owner of the vehicle that contributed to the occurrence of the accident.

49. [69]

    If there were any acts or omissions by the driver that contributed to the occurrence of the accident, it must have been as driver of the vehicle (albeit, without fault). The only way the driver can bring any hypothetical claim within the scope of the Act is to argue that he was operating the vehicle in such a way that it led to the occurrence of the accident. Therefore, on this hypothetical basis, the driving must have been a cause of the accident.

50. [70]

    Therefore, the entity against whom the claim would need to be made is the driver himself, as driver of the vehicle. There is then the fundamental problem that he has no legal right to claim in negligence against himself.

51. [71]

    There is no available common law claim for damages under the MAI Act available to the driver in the circumstances of this case. The driver’s submission below that he had a lawful basis for making a claim should be rejected. The asserted claim made by the driver is a legal nullity.

52. [72]

    For the reasons set out above, the insurer argues that the Member erred in the following ways:

53. [73]

    The Member made an error of law on the face of the record in failing to apply Melenewycz, and in finding that the driver had had a “pending claim for damages” when at law there was not and could not be any such claim.

54. [74]

    The Member asked himself the wrong question when he determined that it could not be said that the claim for damages was no longer pending just because liability had been denied or the insurer had asserted that it was doomed to fail, and that “Liability for the claim will be determined by others” (at [42] – [43]).

55. [75]

    The relevant question was not whether liability had been denied but whether there was a lawful basis for the claim in the first instance.

56. [76]

    In asking himself the wrong question, the Member fell into jurisdictional error. [8]

57. [77]

    The Member failed to respond to the substance of the substantial and clearly articulated argument advanced by the insurer (in its submissions before the Member – CB-112), based on established facts, that there was no pending claim for damages because there was no lawful basis for the claim at all.

58. [78]

    In Allianz Australia Insurance Ltd v Cervantes, [9] Basten JA said at [19]-[20]:

59. [79]

    In Rodger v De Gelder, [10] the Court of Appeal held that the review panel in that case had failed to respond to a substantial argument raised by the driver, stating at [109]:

60. [80]

    The insurer’s submissions were not responded to in substance by the Member. This was a constructive failure to exercise jurisdiction and denial of procedural fairness.

61. [81]

    The President’s Delegate’s decision is invalid because it relies for its validity on the existence of an initial decision of the merit reviewer. On the basis that the decision of the Member is void due to legal error, the decision of the President’s Delegate is also void.

62. [82]

    Further and in the alternative, the insurer submits that the decision of the President’s Delegate should be set aside on the following grounds.

63. [83]

    Review proceedings in respect to the determination of the Delegate “are limited to determining whether the delegate’s opinion has been properly formed according to law”. [11] Critically the issue is “whether the determination was irrational, illogical and not based on findings or inferences of fact supported by logical grounds”. [12] The “state of satisfaction” that the Delegate must reach need not rise above a “state of unease” about the decision of the Assessor. [13]

64. [84]

    The test in section 7.15(3) is relevantly the same as the test in section 63 of the Motor Accidents Compensation Act 1999 (NSW). Section 63 was considered by the Court of Appeal in Meeuwissen v Boden (2010) 78 NSWLR 143; 56 MVR 453; [2010] NSWCA 253. In that case, Basten JA (Beazley JA and Sackville AJA agreeing) observed at [19]:

65. [85]

    An error of law is sufficient to satisfy the test in section 7.15(4).

66. [86]

    The President’s Delegate erred in failing to be satisfied of reasonable cause to suspect that the Member’s decision was incorrect in a material respect, on the basis of the submissions that were made to the Delegate by the insurer. Such decision was illogical and irrational. This was a jurisdictional error.

67. [87]

    Further, the President’s Delegate erred in determining the substance of the merit review matter for himself, including questions of statutory interpretation, rather than performing the statutory task set out at section 7.15(3) of the MAI Act, which was to consider whether there was reasonable cause to suspect that the decision of the Member was incorrect in a material respect. This is particularly evident at [10]–[11] of the Delegate’s decision, where he said:

68. [88]

    The determination made by the Delegate required the application of legal expertise which he did not possess and which did not fall within the scope of his statutory power.

69. [89]

    In Oeding-Erdel v Allianz Australia Insurance Limited, [14] McCallum JA held at [37]:

70. [90]

    In purporting to determine the substance of the merit review matter rather than determine the statutory question in section 7.15(3), the Delegate committed jurisdictional error.

71. [91]

    I am satisfied that the insurer’s submissions are correct. I agree that the second and third defendants have committed error of law or fallen into jurisdictional error or have constructively failed to exercise their jurisdiction in respect of each of or any of or a combination of the above grounds of judicial review and the decisions under review are accordingly invalid and should be set aside.

72. [92]

    There is no utility in remitting the proceedings back to the Personal Injury Commission as no other conclusion can be reached.

73. [93]

    THE COURT ORDERS THAT:

    1. (1)

       The decision of the second defendant, Member Maurice Castagnet dated 29 March 2023 be set aside.

    2. (2)

       The decision of the President’s delegate, the third defendant dated 13 June 2023 be set aside.

    3. (3)

       The decisions are not to be remitted to the Personal Injury Commission for determination according to law.

    4. (4)

       There be no order for costs.